Alright, let's dive into Hims & Hers' Q3 2025 numbers. The headline is undeniably good: revenue up 49% year-over-year, hitting nearly $600 million. Net income is positive, almost $16 million. Adjusted EBITDA? A cool $78 million and change. Subscriber growth is solid at 21%, pushing them close to 2.5 million users. Looks like smooth sailing, right?
Peeling Back the Layers
Not so fast. As any seasoned analyst knows, the devil's in the details. Gross margin, for instance, took a hit, dropping from 79% in Q3 2024 to 74% this quarter. A five-point drop isn't catastrophic, but it's a trend to watch. What's driving that decline? Are they spending more to acquire customers, or are costs increasing? The report doesn't explicitly say, but it is worth noting that revenue is growing faster than their gross profit.
Then there's the guidance. They've narrowed their full-year revenue outlook to $2.335 billion to $2.355 billion. That's a tightening of the range, which usually signals increased confidence. Adjusted EBITDA guidance also narrowed, landing between $307 million and $317 million. This all sounds pretty good, but what's driving this growth? And is it sustainable?
Here's where things get interesting: monthly online revenue per average subscriber jumped from $67 to $80. That's a substantial 19% increase (I did the math for you), and it suggests they're either upselling existing customers or successfully implementing price increases. Or, and this is the part of the report that I find genuinely puzzling, it suggests a shift in the mix of subscribers. Are they attracting wealthier customers willing to pay more? If so, what does that mean for their long-term growth potential?
The Wegovy Wildcard
The elephant in the room is the potential partnership with Novo Nordisk to offer Wegovy on their platform. They're in discussions, but no deal is finalized. This could be a game-changer, obviously. Wegovy is a blockbuster drug, and tapping into that demand could send Hims & Hers into hyper-growth. But it's not a done deal. And even if it happens, what cut will Hims & Hers take? Will it cannibalize their existing offerings?
I read through some online forums (purely for anecdotal data, mind you) and the reactions are all over the place. Some see it as a brilliant move, opening up a massive new market. Others worry about Hims & Hers becoming too reliant on a single drug. Hard to quantify the sentiment, but it feels like a 60/40 split in favor of the deal, with the caveat that "it depends on the terms."
Let's talk cash flow. Net cash from operating activities jumped from $85.3 million to $148.7 million. That's a healthy increase. Free cash flow, however, remained flat at $79.4 million. This discrepancy—the difference between operating cash flow and free cash flow—suggests they're investing heavily in something. Capital expenditures, perhaps? Again, the report is silent on the details, which is a bit frustrating.
As of September 30, 2025, they're sitting on a comfortable $345.8 million in cash and equivalents, plus another $284 million in short-term investments. That gives them plenty of runway to pursue growth initiatives or weather any potential storms. But it doesn't tell us how they plan to deploy that capital. Are they eyeing acquisitions? Expanding into new markets? The possibilities are endless. The details of these results can be found in the Hers Health, Inc. Reports Third Quarter 2025 Financial Results - Hims Investor Relations.
A Dose of Reality
So, what's the verdict? Hims & Hers is growing rapidly, but there are some warning signs lurking beneath the surface. The declining gross margin and the reliance on increased revenue per subscriber raise questions about long-term sustainability. The potential Wegovy deal is a massive wildcard, but it's far from a sure thing. Until they provide more clarity on their cost structure and capital allocation plans, I'm not entirely convinced this growth spurt is anything more than a sugar rush fueled by aggressive marketing and short-term trends.
