NEW YORK, Aug 10 (Reuters) - Hims & Hers Health on Monday posted a bigger-than-expected second-quarter loss as the telehealth company's shift to branded weight-loss drugs drove up costs.
Shares of the company were down 5% in after-hours trading, even though Hims raised its annual revenue forecast.
Hims has previously said that its pivot to FDA-approved treatments such as Novo Nordisk's Wegovy helped drive engagement and traffic across its platform, although it pressured margins.
The company's quarterly
gross profit margin of 64% was down from 76% a year ago.
Hims said in May that it would move away from lower-cost compounded GLP-1 treatments that had helped drive growth to branded versions after the FDA moved to restrict the sale of copycat weight-loss drugs.
The company announced a partnership with Novo in March to offer Wegovy on its platform, ending a legal dispute between the companies over patent infringement following Hims' launch, and then cancellation, of a $49 copy of Novo's obesity pill.
Hims reported a second-quarter net loss of 37 cents per share compared with analysts' average estimate of a loss of 1 cent per share, according to LSEG data.
The company had previously said that the transition to branded GLP-1 weight-loss drugs resulted in restructuring costs of about $33 million, and that it expects to return to profitability in 2027.
It, however, raised its full-year revenue guidance to $3.1 billion to $3.3 billion from $2.8 billion to $3 billion previously.
Hims said that the forecast raise included Eucalyptus, an Australian digital health company that Hims agreed to acquire in February.
"Even if you pull out Eucalyptus (from the guidance), the domestic business and the existing international business were already ahead of our guidance range," Yemi Okupe, chief financial officer, told Reuters.
Hims said it was confident about reaching its goal of $6.5 billion in revenue by 2030.
"The results/guidance was not a complete surprise to us, as core growth did appear solid," said Leerink Partners analysts, adding that it was unclear if consensus included the Eucalyptus acquisition in their estimates.
The company's subscriber base increased to nearly 2.9 million in the second quarter, up 19% from a year earlier, while monthly online revenue per average subscriber climbed 21% to $92.
Hims has been shifting its strategy toward personalized treatments amid tightening regulatory scrutiny.
(Reporting by Amina Niasse in New York and Sneha S K in Bengaluru; Editing by Shinjini Ganguli)
