Hims & Hers Health (HIMS) 8 May 232023 Q1 Earnings call transcript

Ladies gentlemen, thank you for standing by. At this time, I would like to welcome everyone to the Hims & Hers First Quarter 2023 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. [Operator Instructions] Thank you.

pleasure President today's of my Alice over now Vice Lopatto, Investor is to call turn to It Relations. Ma'am, please go ahead.

and XXXX Good Health everyone, welcome Hims the afternoon, & First Quarter Earnings Call. to Hers

Dudum, our today, our as will by Executive On the Officer. Co-Founder Yemi prepared Chief Okupe, call and as Financial be remarks presented Andrew Chief well Officer

vary of in cautionary I subject and that of uncertainties, legal you presentation I Before could declarations. statements statements based to Certain need to that get made and market, and it things, on over remind and future and materially. forward-looking actual constitute among are cause projections harbor regulatory risks expectations this our to and results competitors Andrew, are to safe current other results

no most statements update assumptions and as filed take to future obligation whether call, forward-looking new our forward-looking statements. in XX-Q events, for factors result discussion changes this see recently relate any a Please publicly of they after of risk or a as XX-K reports otherwise. information, to We

comparable reconciliations and we the today's our measures. to you Investor refer available contained non-GAAP website press reconciliation certain related tables Relations information. for In We the in directly on measures financial most today's have GAAP presentation, financial release to

and You'll for website XX After webcast a webcast find link at archived to on the months. Investor investors.forhims.com. will website Relations the the be call, this

currently on and Before jumping leave is into our to paternity Andrew results, I prepared that prerecorded. remarks wanted our are note

the will Following these remarks, live Q&A. host Yemi

the And with to I'll call Andrew. over turn now that,

the feel business momentum health. an at made to mission immense trusted an and of of power technology, you off leader is emerge significant great incredible as us we brands, through for as is model our a stronger The Thanks, joining world Alice. the helping products us. to strategic thank our and our services excellence ever. across innovative enabling the Welcome progress in leading of towards clinical more draw and of is Strong everyone start, pillars opportunity. and better four forefront execution than consumers XXXX

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Through enabling number that insights love. innovative products expanding our customers us that of generates the and an scale, are deliver services platform to power of

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quarter, we as Dr. to Finally, of solutions oversee SVP this the mental addition critical every maintain make. and view first to platform integrity Mental as innovative our psychiatry we working we excellence towards the customers. of ensure excellence wellness will deepened medical on decision our Dan more the offering Health. bench work In clinical as for strategy, Lieberman to high clinical with our we the Lieberman Dr. of continues

are set a confident conditions. access treatment in broader ability of help across We to our users' platform's

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first to new our SVP of quarter, further leaders our welcomed In of functions. and product across we a augment each continued

in leading years consumer Old over and and Additionally, Navy retail Christiane customer-centric brands, Victoria's leader Christiane is experience with a track Pendarvis Board Directors. global a of brands helping joined our growth. and of drive proven Secret, brings XX record including

currently Chief we world for a and Christiane's a period, significant focus health. for inclusivity. Merchandising In as apparel expertise revolutionary Rihanna's intimate has great She's feel just value power Co-President on short work the known and better to the Savage help its Fenty, Design through added brand of the Officer

business our progress continue made to growth. in and ability long-term drive significant facets and all tremendous We expand position QX of the leadership have our in market to confidence across

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financials XXXX. Yemi more Now, provide I'll for detail outlook over to on turn the to and the increased discuss call our

financial I'll providing Thanks, expand and performance additional upon and comments joining Andrew. start into past today. to Hello related everyone, for and our color thank outlook. feature our you performance us by Andrew's

and in which revenue showcased EBITDA. across our and work at of are ability both our our through four drive first higher the results proud to pillars it, our of flywheel quarter, power We the adjusted

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user interest with to continue multi-month base subscribers to to share our XX% The are the We see all-time express of of long-term us. high establishing quarter. relationships an pleased in in first increased

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nature. longer these term of are Many in investments

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of in with Operations in costs XX% first fourth as at excluding came compensation quarter support revenue a quarter. the stable and percentage stock-based the

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X of revenue the year-over-year from improvement first a XXXX. stock-based impact XX% representing the in Excluding compensation, quarter, were costs point G&A of

reality the to will organization grow. platform, need our also Given growth our the is of

will way. we disciplined a and grow to However, in continue thoughtful

opportunity As in on G&A see the we such, future. further our leverage for expenses

and us an execution disciplined XXXX. X were the Solid representing X EBITDA X% quarter, quarter relative $X.X of the a prior EBITDA to improvement adjusted to expense point $X.X million in Adjusted to the in million management quarter. the margins to first increase quarter-over-quarter first first improvement point quarter enabled

to in our and $XXX flow from a This in in cash Our us investments excess increase our million resulted adjusted quarter-over-quarter performance of short-term cash drive capital $X.X million. EBITDA to enabled operations expenditures.

only off continues brand. result More a increase. & strength our of is than XXXX are consumers trusted as ever to The choosing mentioned, of Hims an previously flywheel start. incredible As Hers our to

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last of our business Given in performance on the model changed first all the perspective of and nature relative XXXX meaningfully strong aforementioned in our recurring the the business quarter, the trajectory dynamics of our has quarter. to

select million substantial the revenue have these quarter, our to increase to of in will the XX% now changes XX%. $XXX through. year-over-year We outlook which dynamics, to made walk XXXX I $XXX million, representing second In to a anticipating we are of range

bottom-line, midpoint $X EBITDA EBITDA adjusted of of representing adjusted ranges. $X expect million both to to the we margin be an the On million X% at between

the our between For mentioned $XXX previously representing $XXX of range updated XX% over reflecting higher of the than midpoint we $XX growth anticipating range, our million, year, revenue XX%. a is full million are year to prior The year million rate to dynamics.

adjusted reflecting by and customer market XXXX resulting our range of top million efficiency improvements range take EBITDA ranges. increased The behind at to remain midpoint increased experience. our opportunities to narrowed million line margin our revenue balanced to to full These We of advantage and $XX EBITDA and year higher EBITDA the unchanged. adjusted $XX outlook assumptions of have X% investment adjusted in both

able to rates traction term portfolio that are year will throughout product launch we we on achieve investments expect to these start and XXXX. -- an of retention reminder, to marketing continue one see with a personalized of XX%, on above the to we we expanding As and we our continue are maintain periods long payback services

momentum. with such powerful to kick off pleased are the year We

ability signal you drive and and a Our forward across profitable with we capital look is magical and progress our growth are flywheel our forming performance clear pillars. our updating a strategies progresses, strong year combination allocation the to on continued to strategic as

thank I'd to employees we our Our support results, continuing results deliver forward like outstanding on ability us. and update to and for you to helping progress. these look our is strong to powered by that those us customers, partners, drive

the this as is be will As hosting Q&A quarter a paternity Andrew currently on reminder, leave. I

to over questions. With the now operator that, call turn the open I'll it to to

with Your first Wallace of line Instructions] Jack [Operator the question Guggenheim from is Securities.

is line Your open.

more Kristen a Bell, some digital amazing from family. on wondering be targeted his very Congrats quarter brand towards TV six four brought thinking us the have quarters, and Yami, away the to including the could that color over shift trended Andrew online, and on about if on awareness campaigns, That's ads would helpful? that congrats yields just to any and great the give mix and some the ambassador news. color you of you say how spend CACs your blast, from

Hey, Jack, Thanks for the question.

natural become to from through as part throughout did the I -- year of early quite this quarter think for to year. fluctuate as last it's We well late quarter CACs favorable. see

we result that, half of the and last we a back leaned of around As in year. talked how

we're continue quarter We year, in of but this is in. really the that starting we're what do rectify that the channels first of to now number to do to

what so to do as the brand awareness us ambassadors expect time can more campaigns. the into over you to is increasingly to as And lean for continue well

maintain generally to said, That belief we're still the to I long-term think payback longer our period. are back more a collectively those the Our in competent investments. one take ability going to year pay time

the in their just some that leaning people channels been so far the favorable, we've has environment And other proactively with respect we're seen into in XXXX, bring life cycle. it quite to to thus but of earlier

throughout continue We also year that period. one the the do payback year to while maintaining to expect

proprietary of existing the customers appropriate of products the on for are products, an you're your that products where can some then, being And as do well switching legacy your prescribed mix say, to uptake about as your customers. the you us give thinking idea the versus,

Yes, think a that's great I question.

proprietary the this opting In do quarter category. space. of many some in think actually tenured in users that I rolled have health products of be we our for categories for in first of majority QX, dermatology and longer products the proprietary the present, products so sexual where out the see those been is would those we the

more we adoption we we the the we as quarter I some year. not business believe expected. this in launch throughout the-- but to do continue the we'll see that across hair of new faster substantially success health, same users, newer only Hers we for launch Shortly, offerings expect And think was to And in saw sexual expect offerings to than well.

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

Your line is open.

This is from Dan Clark on Mike.

of wanted we've seen anywhere starting folks Just there a in utilization benefit outside saw from other can would from sense that color in season to a that? Thanks. out, increase across lot your products if around, like any sort you utilization a Is exists? of core the say you Like you get of healthcare. quarter, parse

our across I of to we've what is seen increase. continue Yes, user environments multitude different think products demand for

And just offer to users cycle, we environment, as agnostic think are life on product. continuing broader so, to early given our conviction the the are our in I how

excellence. And to both Building to trusted so, strategic brand, the I think -- users with products talk technology and and execution continuing enable that a technology providers about. more from our that and we to belief that across has personalized with clinical thrive really the access it offering is do pillars

the that driving revenue elements is across seen Our those strong as well the we've as it's the the that platform on thus execution belief in growth really are users far. that

should here? on trajectory, just new think the the meaningful we guide Thanks. it. targets change the up about with of XXXX And Thanks. Got taking then guidance, and how change XXXX 'XX in the sort just

question, think Dan. a that's I Yes, great that really

set think more targets. this targets time, XXXX of as the I like we at long-term

that targets target it's explicit that probably the have that so QX. in if continued we we've were The far for performance with both in as quarters to we thus well more floor we've like versus think way revenue of think as I exceeding in a increases target. think that see and the the those EBITDA ceiling seen QX, continue pretty a I we the to seen conviction about

comes from question of Glen Santangelo with Jefferies. line next the Your

is Your line open.

I think margin of lot there's a for. that on be to the and guided going lot you a focus reported

right? right? fiscal I of think it midpoint revised revenues sort If the think only marketing, by EBITDA at And you you people look yet on about experience. the XX customer guidance, raised 'XX range a midpoint where's So by operating bit, little leverage? but the to going raised of X.X You incremental incremental million, in at the you expenses your are question, of talking quarters I improving million, touched the

to level throughout the the for one should we revenue really get a the into try operating gross And be sense now base how three to the so, of I'm built that may of year remaining time of growth. to about better of versus margins think what quarters trying cadence of or is sustain sort year, the incremental expenses current the

Sort of helpful? any commentary around that would be

question, great Glen. Yes,

an Like think I just the opportunity this in us. flexibility. for want maintain pretty ahead like at do to were see of year, early amount we and ally time, we're immense on

And so our of continue to more really, as see to think we growth take orientation investments, many opportunities different just and platform. drive to across longer-term the facets we so a I

both whether on on deploy even whether marketing, that's offerings. to greater the as foundations think new experience, scale see lawful by that's room some we where laying in the that now the promoting different I scope have so framework, opportunities so, incremental products, we getting focus just the in categories. of abiding users comes the newer of is of the whether right many And consumer And our or as well allocation form capital, it's our primarily of pipeline for our capital platform,

targets we clarity areas the given XXXX would why think is longer-term platform reasons the provides through That also the different said, explore of that actively I where of throughout look year. going. one lot to is There's the for a that we've

in exceed EBITDA XXXX, in target those so, the ability And to $XXX the I unchanged. confidence XXXX still make remains meet through think or we'll investments while million our

follow maybe just Okay, one perfect. if up on. could ask I And

the goal disproportionate categories you probably sort more We recently think and mental on management. one therapeutic add health questions year. to added So to of I weight here two amount a is of Company's got a

I weight in precursor one the that Is added management, and and experts in mentioned board the management obviously remarks, menopause Andrew of in sort ultimately your Thanks. sort -- prepared the medical around cardio a focused to moving consistent but price drugs into you think health. the doesn't like that those cash just people your those comments of of be is model? think So that, with provide are on, helpful? given I you and pay sort metabolic categories, that weight could clarity of seem high those would I was wondering, if some

sure. Yes,

users we we as exciting, very is then that with say, And management characteristics whether category the of nature. as that's a women's it also the offering Weight expanding or do as on think categories our carries see of across resonant we do and platform. emotionally on is men's many chronic there exciting, the that in that's conditions health. view the I health platform, several

and And so, as we to of experts going point ourselves you will are the to do we update innings thoughtful disciplined I entering will standards so pretty and enable there. very it's eventually do clarity way continue that The category early enter in to to platform. of that us our And effectively. at get more the a we that Again, adheres category. think we see recruitment some

comments. the for Thanks

from Korinne Piper of line Wolfmeyer Sandler. Your is next with question the

open. is Your line

that some much like just for that? Good outlook year. different just that that touch we on growth should expect in for you monthly of subscribers increasing sequential How from question. Yemi, subscriber sequential just as about subscriber just progress? taking expect versus come on of thinking deceleration nicely? the the about, like, drivers we kind growth, you revenue I'd the Thank cadence per we then think to of as the to touch first, we behind should on the seems expand thanks throughout the Can of for afternoon and should be we pretty year, cadence, the the top line rest if of think as about how base the to growth sort we be and you. And can

Yes.

element the of the started we on first strong. very off equation, think I year the So think I that

subsequent in the we the the revenues I so percent a of in throughout from XX momentum the majority quarters of the as plus think nature cascade built foundation momentum naturally inherently given see year, we vast get so some are in just QX, recurring and fact we And result the to going that QX. that, into the strong that of that will have

we at are that many can of see seen of products, the subscriber new categories that just are that adoption some an offerings across there, front. the And continued confident in have across of sort user we that of the dynamics seen growth throughout As in look uptick just categories talked we also some we some of coming have with we as on the the year. that respect already we with to proprietary around we such earlier overall

expectations. the so to conviction guidance the And us elevate that gave

we count, With respect to that. guide subscriber subscriber, don't kind to of explicitly

to inherently the the primary the year is driver subscriber Throughout growth. that think will it way about primarily move, going is the growth. revenue of be the subscriber, think number to I but on

bit Very helpful. on bit then And little Thank deeper. gross touch just a I I on you. a dive to I'd touched if earlier. this But could the like know margin. we

the pressure I a really mean, really a of range. good. to are of And we been products heavier quarter on seeing in have you little kind this XXs the innovation we mid some see head the be impact do just that sort to going that? a XX% talking that, kind as to 'XX bit, gross and you should 'XX about more adding start touch when going is You event? or into margin Thank you. from year that mean, pressure could Could is I later start like on the in of

more not on I is and think year that We dynamic margins to see host margins, operation more margins, to maintain X still were over factors year, you only continue can efficient that pressuring year last as was to expect got actually same have throughout there gross whole significant see what where but points. is, a of had opportunity the gross that expanded efficient. we but gross get do operations did there we our the

what going And will necessarily it's XX%. just the to the us straight probably proactively to that time, to are line so time platform. the complete It take to a down time be from are will most opportunities identify not to margins

happen that's this is so a or to two. in not And quarter something going necessarily

take will place it think I over over, several quarters.

think that's we platform. saving we to the to take our do we I acc as back targets come use by is want that to long-term we will start those in that think to that thoughtful also definitely just our a effectively way target around to you pass as And the consumers identify while framework will and opportunities. and down time margins creative then doing the some do

from question next of Your Instructions] Citi. [Operator line the Higuera Luismario is with

Your line open. is

just This to is among ask, subscribers? what Grosslight. Luis I current been more for wanted have your to Daniel additional levers drive engagement pulling tenured

I don't I think caught the Louis. sorry question. I'm

a for minute off cut me. to You

subscribers? drive -- are that. be current about question you to going your like, levers additional more sorry engagement My tenured is Yes, what pulling to

organically tenured can many around adopt subscribers are how this we get you think to more that users those bring start as think, the across to platform? over focus enable more the platform I in more particularly that's why the offerings, subscribers I to nature current as is personalized we've is start in what at seen more do point time really we time, expect

think now, offerings, are probably of base pair things we identifying the subscribers of can enabling platform off we're a there think certain bit that, dynamics. well it's bundling that other focus I types do, might that of a ways as Again, or that offerings. choices. I little just creative basically that them those a any Right on as is doing driving from additional to primarily the ways of broader whether

think that start to then do opportunities naturally I as will we up-sell emerge.

Singh line Truist from comes question with next Your Securities. of the Jailendra

is line Your open.

all they're Is and your category. to new I up of a What all color your Jenny subscribers have these approach economics is on understand some more the us on on aggressive will make drugs? that? of and would follow help can does company's the it This Jailendra. brand management you considering there? consumers for And wanted on considering platform change about competitors getting work how more been you weight

I would number into category the us so one. that, go elements Yes, that that actively the make be think would

we of as Like we ways for safe add advisors, in and can do I what Hims that overall looking me we category. too, & it, we're really the also and not a to it something where be because both distinct bring is capabilities just the Hers to competitive to the think to way is enable platform we're differentiated. but just to have ways that's want a, the after just offering the way value that's effective set

it. consumers more we ultimately, drive we'll feel to And

I it's ways the around specifically would researching but think how something in it. to point diligence, do and bit economic early multitude time, this work. of speak It's at little to a there too we're are that

think story. we're in innings the I very of much that early

we consumers. when path a that that time It over have to do the And ensure a adheres our feel longer that framework. so, to with more we it and be successful do lands And probably will that launch view ultimately, strategy we we duration.

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

line open. Your is

taking George. Can Hi, for the incorporate update Maxi us with for timeline system question. on still planning reimbursement your for on it? into payers? an the you conversation Thanks you. Thank and what's your Are you it's to give insurance

Thanks, for question. Yes. Maxi the

to insurance, I and think that, something payers that continue it's explore. to need we

invest we could the also all it I alongside think goes of avenues that in. different

form in at offering time, that's products. the other personalized of form avenues in or think of point the whether in I we've some investment, this in of campaigns, categories the form the pursue to of exploration branded of that's So, of whether opted

specific we'll I assess continue think, there's timeline. something quarter-to-quarter, but no to it's that

think that relative in to I that the to we really the depend we feel how going what the in. to opportunities is it's stack that up business coming other will invest quarters have case on

Ladies today's and conference you thank call. gentlemen, This for participating. concludes

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