Hims & Hers: Taking the Long-Term View

As we noted in our earnings release, we are in active discussions with Novo Nordisk to make Wegovy injections and once FDA approved Novo's oral Wegovy available through our platform to continue advancing consumer options. Earlier in the quarter, we announced a partnership with Marius Pharmaceuticals, which will allow our customers to access one of the few FDA-approved oral testosterone treatments in 2026. We expect these solutions, combined with consistent provider support and the ability to seamlessly track hormone levels via the Hims app can help redefine how millions of men access effective hormonal care. And most recently, we made a strategic investment in GRAIL, the company behind what we believe is the most advanced multi-cancer early detection test on the market.

Generally, I think breadth and assortment and choice for patients is the winning formula. So we're excited to be able to reengage with Novo about the Wegovy pill that is hopefully to be FDA approved as well as the commercial dosing. I think they and others will have more and more innovation coming. There's also obviously advancements in biotech that are in Phase II and Phase III trials that have next-generation GLP-1, GIP dual and tri-agonist opportunities. So our stance is that breadth and assortment and choice ultimately gives each individual more personalized abilities to just have great outcomes. And so you'll see us continue to pursue a wide range of treatments here. I think generally, it's inevitable that partnerships like this where we are the largest consumer distribution platform in health care and others are the best in bringing new therapeutic innovations to market, those types of companies should be working together ultimately. So I think you're going to see more of that in the ecosystem, but it's definitely something that we have a lot of brain power on and are making sure that as advancements in the next generation comes, we have great relationships with the teams and they understand the opportunities that we can have together.

Gross margins declined over two points quarter-over-quarter to 74% as tailwinds from continued growth in non-weight loss specialties were offset by lower intra-quarter revenue recognized per shipment from certain weight loss offerings due to shorter shipping cadences. G&A costs were also pressured as a result of the ZAVA integration, as well as additional expenses related to the hiring of new leadership talent. G&A as a percentage of revenue increased two points year-over-year. A similar dynamic was seen in operations and support costs. Technology and development costs as a percentage of revenue increased nearly two points year-over-year to 7%, reflecting ongoing investment in engineering and product talent across the organization. We expect to continue investing in this area over the coming quarters as these initiatives enhance the customer experience and drive long-term financial returns.

We believe these investments will pay back over the mid to long term in the form of reduced costs from greater efficiency, but more importantly, through unlocking new growth factors for the company in the future. Our priorities center around long-term free cash flow generation, and each of the investments we are making today set the foundation for greater free cash flow generation in the future.

We plan to launch comprehensive whole body lab testing before year-end, which will represent a significant step forward in this evolution. By scaling capabilities like blood testing, we're thrilled to help more customers affordably access the insights they need to monitor, maintain and improve their overall health. We envision these capabilities empowering consumers to proactively address health concerns such as vitamin deficiencies, unoptimized hormonal levels and genetic risk factors while also identifying early indicators of more serious conditions like cancer and cardiovascular disease. Historically, people have come to us to manage existing conditions. Soon, we'll help them take a more proactive role in managing their health and in doing so, can potentially impact millions of lives. Our goal is to one day help identify and manage risks associated with heart disease, metabolic disorders, neurodegenerative diseases and cancer, long before symptoms appear. We believe our platform is uniquely positioned to make this possible. We have the lab testing capabilities to give customers and providers deeper health insights. We have the provider network and compounding infrastructure in place to help take action against those insights, and we have a strengthening data feedback loop that can help measure, adapt and refine care at scale. We believe that combination positions Hims & Hers to do what few others in health care can, turn data into tailored action for millions of people.

I mean this is a set of tests that historically cost me and my family upwards of anywhere from $5,000 to $10,000 for this type of comprehensive testing, and we'll be bringing it to market for an absolute fraction of that cost. So really an incredibly powerful opportunity for true equalization for anybody out there to be able to get a sense of where their body is at, where their family is standing and the people that they love, making sure that they're getting ahead of any issues that they're unaware of. I think this testing lays the foundation for the longevity specialty that we mentioned, which, again, is a really exciting new category. This specialty will be coming to market in 2026, and will include a really wide range of treatments from on-market peptides, coenzymes, GLP, GIP treatments, all that will be designed and blended with performance, recovery, cardiometabolic longevity markers as the core optimization of choice.