Hims & Hers Health (HIMS) 9 Aug 222022 Q2 Earnings call transcript

Ladies and gentlemen, thank you for standing by. My name is Brent, and I will be your operator today. At this time, I would like to welcome everyone to the Hims & Hers Health Second Quarter 2022 Earnings Call. [Operator Instructions] It is now my pleasure to turn today's call over to Mr. Jay Spitzer, Senior Vice President of Investor Relations. ahead. go Please

and Health ladies to Hims the Good Quarter gentlemen. XXXX Hers Second Earnings & afternoon, Welcome Call.

Okupe, as On the and as Officer; Co-Founder Andrew is Financial Yemi well call with our me Chief today our Officer. Chief Dudum, Executive

expectations and results Andrew, of on over you subject market, legal in forward-looking We presentation our this future and results and regulatory hand harbor that as Certain declarations. statements the will, based publicly actual constitute current to and call, risks financial cause of take factors update and events, for XX-Q after to made in website I XX-K to are uncertainties usual, forward-looking I to competitory to materially. that Before statement any they filed statements today's and safe cautionary whether have you certain no take available through assumptions financial a changes and most see contained reconciliation most risk comparable could Relations new release obligation Investor GAAP and are forward-looking measures. projections the to this Please In as presentation, future of non-GAAP information. directly in our as measures our on to discussion press information, we otherwise. table the reconciliations related or today's recently statements. relate you refer for vary a We result

After at now website find call, webcast for You'll website I'll over with Investor webcast investors.forhims.com. And that, call turn to the the be a link on XX-months. to this Relations the archived Andrew. the and

& power and our joining us our the mission everyone, better and time I'm afternoon, thrilled on everyone with feel you board empower execute today. for QX of QX we Jay. outstanding you. results for to exciting share much, was across as all so Good to Thanks through to It's great an Hers the health. Hims thank

we space. of strength driven XX% QX is the to business predominantly our this across in consumer and $XXX With the recurring driving up robust consumer believe is unparalleled revenue million. $XXX the demand reflects health heels subscriptions and power our wellness quarter XX% the on a model, of is online Revenue, performance the year-over-year pace year-to-date million breakout which Our to in second grew which quarter. by at

the second For subscriptions, we new quarterly momentum. the number up quarter brand net build to record straight and our XXX,XXX in quarter, period the in growth saw ending XXX,XXX of as continues at the

flywheel we capture leverage fulfillment combination gross unique investments modest and continued enabled consumer quarter to and of the increased gains our efficiency Importantly, adjusted as $X.X our in Underpinning consumer-centric operational us our this the leverage capabilities. is drove EBITDA vertical to demand, planned and The margins strong demand business million allowed robust us model strong maintain performance a in momentum and operational loss quarter. strategy. of

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of the for rest outlook year. our the Given

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expect Given business, next of adjusted to achieve positive the underlying four momentum we within strong the the EBITDA quarters.

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As operations. this important our operating provide additional additional partners detail with to will of like This expenses. across of a around that areas is quarter provide operator in our next Starting quarter achieve cost next to transparency the look for third greater disclosures to customers, the that SEC and and thank related such feel results. will strong who result the I'd forward We you now to Q&A to over clarity sharing progress employees of it our our structure our driving efficiencies that, evolution, we we turn With us continued help it portion to continue the to provide call. into plan business. filings. underlying at our quarter, investment I

line [Operator Grosslight question from comes Your first Citigroup. with of Instructions] Dan the

I Yemi, And look around XQ. sequential even looks in another X% mentioned, XX% for around midpoint in to at strong down it taking to could congrats of the you in the from then in steps million to And be in Hi, $X year, like the sequential you then gets drop guys. it million XQ And to increase XQ. for the EBITDA Thanks you similarly, on as expect positive XQ adjusted around $X remainder you growth. for revenue your the and guidance just here. cadence of XQ. quarter questions If

titrate down So that growth to XQ to versus a focus I'm if so, growth how just should profitability? that about signaling dynamic you're you're us little in And on heading if think profitability as we into you curious XXXX? looking more

end With investments you the What question. quarter. quarter to in at of like respect the tail we second came that third guide. the second many for the the thanks made the of do Dan, that is quarter see Yes,

heading invest deploy tailwind to the And into opportunities quarter, the to third the versus so continue to look we quarter. With to in do and profitability dollars. growth respect dynamic we continue for receive fourth a attractive

type that our But investment not we allocation to as to we continue second quarter perspective. framework third have if fourth is I meet it's any to fourth that other what see So initiatives that still dynamic then really the cohorts way, we're here start from historically, And will scale deliberately marketing investment, going has ticking quarter pulled a so. and pretty assuming do headed capital of think the revenue that the into been to marketing our we back quarter is the the meaningful will expect investment in that ability quarter from pound. the the volatile

that We environment remained have third through seen favorable some quarter. the signals the has

Our not guidance assume quarter, dynamic will that inherently fourth remain. does the that entirely

a why is guidance. that we've range pretty so And year wide full left in the

the that off I and think, consumer impact and that little yes, quarter. seems guess quarter, in the sense. Yes, on a mind recession be fourth the of the dovetailing to everyone's this bit makes volatility I And

So actually see a consumers insurance and during into to of outside think are to factor your recession the potential you need some typical just because you employee strength visit go off their that more how could do of recession then curious offsetting you and and could you that migrate guys? the guidance,

the for Thanks, Yes. question.

are waking we're remember, working we're pulling that And when share then generally also they're think, these things think about. well operating great meaningful where feel mirror aggressively looking thrive categories the challenged a was speaking, right? leaned-in up, marketing top-of-mind really dynamic a in this of the the also efficient quarter I needs kind I to we as only take positioned very in are thinking it were to not is others but that We to emotionally customers really example, customer recessionary back.

really from And really set emotional they really of most ultimately, I so I sticky to relationship the a is like that relationships we've with a deep market. just for And diversified to different are got about. us think care that feel that's customers things coming

of Cherny line question comes the next from Your of with Bank America. Michael

Hi, for and earlier? on on in question you on mentioned quarter of Mike. this the color expectations for provide is Could just going just wholesale congrats back Charlotte and what some year, you half profitability. around off more the your Thanks taking comments great my for of your the

our I for we thanks wholesale think for what is critical question. explicit I year. around of back more wholesale our online to of through generate for the expect the a the channels, growth of don't channel eyeballs provide back part channel. But mean we we in Charlotte, do Yes, moderate of year. do view that's I guidance do channel. a the that the the moderate reiterate what we for would as of Again, half flywheel to continue Like our half expect growth pace

question. a your Arizona. Ohio then And it. just in On second facilities Got and

could you seeing any that efficiencies details if the part on provide more business. Just you're the coming of of out

Yes.

can center. something in the benefits flexibility customer. to, that's this is that high when or there relationship talking broaden of third-party a is like able So about really real the you're right? cadences, the really things that and the level unlocks the the do fulfillment we deliveries or adjust change products, the feel of to we just pharmacy from frequencies those really add time, subtract, customers allow difficult And the real-time not personalization we long-term with about and we're that customization innovative to platform, in the on a excited at of being combinations come As products, bundle offer level, verticalization,

orders At that's majority I that mentioned, we is critical something through being we these treatment think the point, as feel this are monthly differentiation. of our facilities. really So delivered

there's seeing we're make as and near continue And So benefits to transition those we standpoint an to efficiency from more bring expect that leverage as front, the on we margin XXX%. also to incremental in-house.

Your with question Jessica is Sandler. Tassan from Piper the next of line

mean and think over value was of the remind retention years? retention. that $XXX. customer does long-term thanks then you you define next XX% question for taking mentioned subscription was how impact that couple then just around on the how I an rate should customer long-term much I us AOV order you could of And that Hi, persists, so quarter. hoping congrats And average what if what per for my just

moderate is hold to and quarters, influence metric we the see We can some we how where that do around year. that guidance subscription Thanks was And answer it's platform per closer that. that the Effectively, year-over-year we then seen respect the trends is question. from a years. with Yes. men Jessica, have don't from revenue that basically, a customers for to at evolve XX% what define in gave. coming provide the revenue question the your how retain least the customers basis. expect we've is go-forward we'll slightly With to respect occurs to that we to retention. of from of around long-term to for AOV up similar prior on AOVs been the what revenue two those on the a prior

what any on a just trends AOV And very it least And you back really think And at basis. I of maybe in year. on me. helpful. any that's the of kind half on this could just consistent the driving is Thanks. That's commentary AOV give for then sequential just color

Sure.

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Deutsche the from is question line next of Bank. Hill with Your George

on Maxi Thanks spend. with start the it's want Hi, taking marketing George. I question. to for for

on the spending more provide or rate the the some up down? market? changes in to or mentioned going you costs seeing do on color be you explore Can what You continues favorable. you're to the environment plan How

sure. Yes,

we we categories, some is across see I this costs towards the have come we investment start. What did What the down. emerging I'll for was think do more the So the seen off to our of board of quarter of did tilt categories. generally acquisition maybe customer some majority

we mentioned, Additionally, of lot the to quarter. the the as weighted, environment see second a in back-end had start that as later was we shift investment I started really, to

mentioned expectation QX. will of The do with a continue final variety think, did has oftentimes that element I is, we as that, Our explore that in is channels. we Andrew previously,

brand One more which didn't we overall quarter, lean in of this with the spend. our channels is that aggressively

NBA You do in see finals. are activities placing like the ads us

saw many while some over the run. is accrue of will Our that those immediately, on long pretty sizable gains to that belief we start returns

color think there. belts to to the of we I disproportionate of start seeing and for market tying which Dan's add recessionary the to really looking channels, the times these quarters. in We're are to because point, to us capture earlier here during creates competitive lean size for landscape these and from a in opportunities an opportunity lot attract their really next coming just a

the of as to internally, that move like can subscription operational leverage front the while lean in we and capture the incredible increases have of and growth it's in really to So while the we it's we on feel table. us advantages base an where

and quick that. results have Okay. And control do any I seeing see in from the change? is on birth That's related any follow-up. that rises to benefit Thanks. a expect for very Are drugs you the helpful. you regulatory

specifically business, Hers on demand dozen of some platform. options We have the for increased that the the have near seen contraception we the side on

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Your Jack with the next from comes question Guggenheim of Securities. Wallace line

I when in performance guys. taking was should And you listened breakout another Xx mentioned Andrew, for really question for performance, guess this we thanks the all prior you and call. have I Hey, think, the breakout

I'm hearing you addressed topics sounds standpoint ad previously Just correctly, a your that touch here. want is like if cost it moving direction. on the the some to environment were from And of

in getting for let's and it, dollars reinvesting to good the then returns, for reinvested you're is the near-term some are there on longer-term but more that there's and growth, obviously, the turn spending call way some those and about some way from be brand will nice whole? gains building, And the a -- you're being that So but larger categories. think targeted spend more, emerging of

sure. Yes,

to I definitely a fair think it. that is about way think, Jack

different we we side I the pleased mechanisms. the results very is more throughout We that framework second think that of the One variety in allocation a capital equation saw with experimentation. the we that quarter. of around -- have, choose we brand were

just not does transaction individual pay our back continue quarter. kind an the really was for quarters mentioned additional and a to a we investments to evolve do dividends experiment around And as Really, third customer current look we'll earlier, road. getting but less so down more around quarter the of brand our but we relationship base take, in several channels with quarter, the and in in view the that building that them long-term

Despite X of in not that's the investment, X customer so confident the why us recurring path nature costs we're base the confidence. and to of longevity quarters. reasons such so we just our within the of given feel And gives footprint what do profitability the in our seeing are

to it's particularly, defensibility of add that is business a think has hard diversity and emerging a I and your channel of of established and category in point, really valuable Yes, to find audience that really created other businesses. as that that, this part Jack, and degree to on of categories I benefits leverage the ability to well the the think to reinvest the on

that's different dozens X allows are and to accelerating. types of in flex up of literally us to category dozens dozen different different types marketing of profitability customers, channels, of different flywheel of We the to down matrix that in right? and and And carry very next category so on over ways types offerings to core

tens us trajectory, confidence really I only her, line. great But is the have each brands, and think that's right? raise the Yemi's confidence time and which for is to businesses. quarter are and giving in a the us engines long-term nature and of increased of I that, the in think this the also underneath profitability the not point, diversity And a multiple recurring of big so of ability giving part that us to high-growth There's great guidance

a ability think, scale, our those is at so unlock And we to company. continue to to the real asset

if That's interact purchase mobile have of potentially they're more give solely will kind and And website? about the downloaded products us customers then maybe through really can if versus your helpful. app just commentary the are any some there you they KPIs how overarching engaging or

Yes, Jack. a it's question, great

and one we've the has hub one of initiatives kind of and impactful a we're ultimately in important that platform, really kind that and engagement, to been to that engagement in authenticity Hers that quarter, with app we're this metric platform. increase this released X and We creating, us is degree of value. of users draw starting stickier and very, has we've paid quarter very this the which past the allowed Hims a for really strong customer that one a this metric care disclosed, that belief launched back apps, health of So dividends that's lot will is the one platform the that I have mobile for drive most separate track really personalization think the experience higher

consumers they believe Xx place purchase. which the creating our is takes value are that through web after historically that with more potential we on So our immense properties, than app, for now the initial brands were engaging

continue of shopping application, original point, tools, this a any part Hers them XX/X. personalization options more and think on to that and Hims them to only we content, out And the and with we going experiences, for offerings the think the ultimately, service. message Hims paying provider really in to we -- big of Hers at ability increase. is to are talk it as it's We differentiated to customers catalog expand the to engagement mobile as platform So continue roll offering

from Feinseth line question Ivan the of is Your next with Tigress Financial.

Thank products Congratulations the surprised things the another ongoing you the on From impact? you. what get What products with Thank did you accelerated most and you where for and success. response? marketing taking and lines did best question. the the spend, quarter my of

hair traditional We question. dermatology, in a great a very, core well. men's a to lot categories, ejaculation, had of success both continue it's categories loss, scale which lot such the premature categories in as Yes, health, of sexual are the QX, very those original

of shared the Hers these as specifically house. explosive quarter, deployed I These revenue again And and categories, a growth. emerging lot there. Also seeing the share quarter, the at we've growing side growth so in can last of are categories, capital on continued this triple-digit

and pretty those So The fastest and parts growing. our they best-in-class are to lot like are a the economics generating scale point. of business categories at this look businesses accelerating of starting that are the meaningful core

deployed but our efficiencies near-term meaningful tailwinds also channels. drove I finals raising NBA so we We we surprised, those visibility of such all great the know engines into lot returns. a outperformance the as two very long-term said, and saw dollars And channels the associated, Yemi a into dollars spots lot benefits saw And then at those our also we're of brand of frankly, think really high have as of and very of spend. that across we

then areas, in of those to it the starting was categories trifecta job brand percentage to and tailwinds so long both up convergence the that think, halo their I to of this categories build a a doing make kind way to continue starting really And dynamic emerging the of term. core the And is immediately engine, larger really it's this accelerate again, of that the creating revenue.

you repeat your sign are and purchase. continue what buy seen the their on marketing biggest initiatives to after customers have that where initial And drives

categories goals, so on investments. marketing specific a to very months. those period very basis within got we've said, ability We to a to XX disciplined want generate And acquisition basis approach category actually spend. by and right? payback Yemi positive marketing We very channel look as on a and to then with returns And pay our actually X clear the those target

most across payback And optimized for of basis channels, and period. so a all a on per they're channel per customer optimal our their basis

it's quite And better it so other, condition, the depending than really channel, and it's not ranges. the on customer the X

from next Joy Zhang comes Your SVB with Securities. question

products. my Hey spanning your quarter question questions. My many competitors see advantages guys. Congratulations multiproduct you being to are similar very using maintain area brand as market you one on brand talk on some or on and hair the health? focused And solely Can and your a just specialty to areas disadvantages value first what like side. are a or brand loss competitors you strong of is emerging who taking channels versus behavioral of relating advertising how when do that, their aesthetics to the

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you gentlemen, today's There at call. for this questions are time. no and concludes This thank participation. your Ladies further

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