Hims & Hers Health (HIMS) 26 Feb 242023 Q4 Earnings call transcript

Ladies and gentlemen, thank you for standing by. At this time, I would like to welcome everyone to the Hims & Hers Fourth Quarter and Full Year 2023 Earnings Conference Call. Please note that this call is being recorded. [Operator Instructions]

Thank you. to Investor call Relations. like Newby, to now of Director would turn over today's Bill I Bill, go please ahead.

Earnings the Good investors.hims.com. afternoon, first you Quarter XXXX can Fourth Hims ever & Today, everyone, and copy our welcome and to shareholder letter, find Full of released on closed, we market the a Hers Call. our after which Year at website

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

it We Certain actual or hand I a recently results as call, to that no and for take discussion subject are projections and obligation vary to I to among constitute result Andrew, this Before XX-Q over harbor and factors they forward-looking filed events, of things, could risks a in on, need to relate based presentation to future other remind of future cause publicly competitors after to regulatory safe forward-looking our statements. the as legal expectations whether reports and of are market, uncertainties statements made most forward-looking this Please information, see and you changes statements of results in statement cautionary that materially. XX-K any declarations. risk and update otherwise. new assumptions current

today's the in presentation, we contained to tables reconciliation the to release measures. financial financial most letter. you measures today's In comparable refer will also non-GAAP and use We directly GAAP shareholder certain press

on for months. as call, webcast today's at the webcast find website this this to XX information archived be investors.hims.com. You as well link a can will After the

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

health. continue and against world & million. a to for Growth of our a Revenue year-over-year remains bottom was power resulted to to we both year of Strong financial increased & ability result users through the helping the feel Hers the retain execution top line. Thanks, of to XX% better as robust strategy of in continue success Hims mission our on draw Bill. Hims Hers our as great XXXX the transformative and deliver to $XXX platform.

of the disciplined Over end scaling line We've incredibly a bottom quarter to meaningful representing our as platform positive and first and our at on were ability to XX%. a X.X is our always scale platform, of quarter million increase positive income on year-over-year XXXX, well. of approach taken of success translating subscribers efficiently of net I'm on our our organization's proud platform the adjusted to our X-year EBITDA. of that anniversary first the deliver

to across instance, and Throughout and brick-and-mortar a view and excel our as culmination with well issues is core leadership to solutions are singular sustainable access, on our position as few XXXX, the or, we continued access access appropriate requires an at on capabilities hours in days is in generic belief some or weeks to months and as providers to consumers access platform for challenged a My providing that clinically transform specialties ability opposed our We success with. deliver believe focus users treatments in that our to as table more. intentional diagnosis dimensions. of stakes to

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will Yemi greater over our financials to With pass I to that, through detail. walk in

Andrew's performance Thanks, Andrew. our expand start will our comments fourth then outlook. financial future quarter overview an related by to of and I on providing

incredibly the us proud into made how positions the progress are in excited of XXXX the a are by of solutions that business for in provider transforming and personalized leading future. We

users are end. is of access to by provide delightful results from personalized backed strategy, to and sound is strong affordable result Our which to but that the that attractive, simple and are an our execution solutions of high-quality with beginning powerful experience

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that Our greater that trying us this secondly, on users of treatment; of increasing through, broader foreseeable us continue the platform. future a for consumers firstly, enable the belief is the to longevity share impacted and seek drive capture of to a robust are audience lastly, enabling to will treatment; condition by to a growth currently users seeking

At drive which and placed the attractive are core both believe to at demand solutions our these stronger will points, that strategy continue of ensuring price we is retention.

pricing actions to us XXXX. implemented affiliated of toward offset allowed in impact pharmacies shift Our margin strategic the

platform a unlock efficiencies affiliated XXXX orders a pharmacies. Even will points. at more attractive better exited they fulfilled We is over provide us price that provide to experience to more even XX% exciting of that enable via consumer with

in single-digit to a maintain parties levels to is purposes. expectation of Our high redundancy orders through low the going third double-digit share for

and expanded year-over-year costs support. almost Investments even as quarter costs have margins Affiliated these as full points across XX% X to logistics, to the to provided well efficiencies XX%, pharmacies made the gains. in drive foundation as across us allow expanded able and were and for pharmacies in product efficiencies. key as the customer efficiency affiliated we both such year capture and identify Gross fourth respectively, capabilities

to continue will Greater scale us across drive our efficiency operation. allow to

each reductions and experience, will convenience the we mentioned, price enable in long-term we end-to-end form to consumers targeted a across our believe the of ways leadership position these core combined portion believe market of are a previously We actively that specialties. additional will that several in our services. with As pricing, mass years This back cement of the us of accretive. may to pass gains over be next value-added

operations Leveraging DNA is extends Hims of the actively a embedded is Hers. trait scale capturing & core and and that in efficiencies beyond

percentage the improving as leverage X a Over of improving of point percentage as costs a course with areas percentage the revenue X a support across we costs revenue of as cost and points. X of revenue point, G&A cost operations marketing XXXX, gained and majority of improving

Adjusted of profitability. which million. in and Disciplined in our more increased quarter of cost to EBITDA resulting in the rigorous step improvements than almost growth relative are to positive was This quarter first increase year, Xx quarter last $XX fourth EBITDA. XX% management adjusted represents quarter-over-quarter change fourth the a

On first the net of as the and adjusted generated organization. income. In strength across EBITDA, our of thrilled our of our Attainment evidence milestone as X-year $X.X quarter, first capital quarter of quarter have of this was the strategy million. is well positive execution income allocation excellent fourth anniversary framework to positive net of we're important our

Our treatment believe barriers capture. that share result address will consumers we we which market focus remains to specialties from greater that for continuing on in prevent serve, seeking

reflect that cash disclosing We way period. a a will cash provide each generated focus, flow. is we this and free positive have to started flow free do in path disciplined in better generate To so

sheet and generated for year In on the ended driving investments from our flow, cash solutions to This XXXX. $XX higher efficiency personalized the $XX as to end XXXX. the as pharmacies balance is of the as short-term with expenditures quarter up of the $XXX cash a well improve in over as to year affiliated of XXXX, in capital operating X the the million. $XX continue leverage our course to expand full to over strength over our balance of million well of flow We reflected cash years. intend million of We portfolio the to million the as of we sheet, scale they free continue fourth of X next

personalized offerings growth Our market expectation gains share the future. near and the evolution of continued is drive will in that

of the XXXX. first a in like million to In outlook XX%. we that increase anticipating $XXX XX% our quarter, for to $XXX million, revenue I'd backdrop, With are the range to of representing year-over-year detail

$XX and EBITDA an midpoint expect We million, representing of $XX both X% EBITDA ranges. adjusted to adjusted be million at margin between of the

of midpoint million. imply XX% XXXX will to adjusted billion are representing $XXX adjusted between between million revenue and year-over-year and a $X.XX $XXX the For X% It ranges. at XX%. that the anticipating both our of to of full These adjusted ranges revenue margin EBITDA year, expectation $X.X of be we EBITDA EBITDA increase billion, an is

line early. Our floors and million outlook to for a year of XXXX $X.X billion achieve of of $XXX XXXX EBITDA provides our of revenue sight adjusted

continued specialties our previously, penetration mentioned remains of As addressable our focus. across core large markets

to continue these allocation disciplined a With it positive in XXXX our our priorities, that of adheres framework. is net We scale rigorous execution that income. successful capital way of our first full year to generating continued will be expectation

for of looks long-term a While not EBITDA progress our orientation. the was XX%. more, Andrew moment be to to company XXXX I'll provide if color has that on XXXX exciting, a has goals long-term to additional phenomenal XX% always expectations of margin attainment a year equally, adjusted on and spirit, take the In our as mentioned,

is of to later at margin by long-term be than Our mid-teens EBITDA low XXXX. adjusted least expectation XXXX achieve within margins range will and that our we no

occur will of forward subscribers the millions expansion we of bringing platform. onto continue Margin of charting our as tens ambition a toward path

costs G&A come to operations of as a from marketing. and is such and leverage substantial is expected expected further portion While support, leverage across

will expectation be that as Our revenue XXXX. a marketing is XXs low the to of mid-XXs percentage by in

over conviction us marketing time. ability drive leverage give factors in Several to our

brand First, to earlier consideration a course XXXX to becoming our increasingly semi-fixed greater of and their and over of share broad-based spend spend brand users scaled XXXX, meaningfully intended in our journey. life is awareness in we cycle in more In investment drive nature. of the

are starts to XXXX, on we leverage it our in get As greater spend. in maturity ability confident hit to the

high-quality can solutions. Second, consumers conversion is personalized belief our that increase we retention and offering by

early especially price placed the We the are is have enables on longevity they at increase convert true as of This attractive success XXXX. well of solutions as second that users signs better offering we quarter us seen as already personalized their platform. in points, when saw to

place evolve As as both as our scale conversion retention. see will to to factors continue form at and gains attractive treatments more our them is personalized we and well encompass multi-condition to solutions continued points, expectation us new price that in enables

marketing a recurring revenue acquisition business towards of and on users. Lastly, our based new is model, the goes spend of majority the

platform we leverage As increases, X expected per gain leverage on to leverage. and our points base mature to our These user average the X show expectation is users that year, are between continues to tenure of marketing starting with will the as dynamics XXXX. of drive to early as

an be as was exceptional to for year into Hims head Momentum XXXX Hers. ever than we looks stronger XXXX. &

success high strategy solutions access personalized are that is to coming end experience providing position to affordable have for years. of We high-quality users by conviction beginning and will from an with us that the our backed continued in that delightful

partners helping the & us customers Our ability and results the would of health. keeping on Hims to great our shareholders world the them dedication that drive to and support through as better these not the without well across We be updated employees hundreds strong Hers. in look like possible progress. to thank support feel forward of I'd appreciate as our power mission of our our you of of

that, I With questions. the over turn now to operator it will for

[Operator America. Allen Lutz Instructions] line of Your of comes question from from first the Bank

of cross-sales? indication platform, just much to how treating? that budget that, you percent revenue line is each -- how you're mental that? health is which in specific million more expect to $XXX just your getting gives patients what than curious, you Andrew, of to derm, I'm related much Hers and can into weight you deliver each the then that be And do Hims what loss of mentioned And XXXX. to sight marketing versus

and the question. jump can Allen. I'll on marketing the half, Maybe Thanks, Good take first side. Yemi

personalized is think right? I in We're of for offerings categories, those the seeing really treatments categories. and exciting, emerging this massive custom adoption

category, with weight mentioned of our adopting treatments. I adopting of treatments. personalized those And newest of XXX% north those people dermatology, think we of Hers people XX% nearly personalized are loss, are types

of regards term. great retention a patients engagement, individual's seeing providers an where that relationship offering really So will stickier long more nuance an to type needs think a can stickiness, cater We to customers. that, result in with high those dynamic and high with much

in million And the we the to and size to be given in which pricing XXXX, term. future a those live, will I long and contributor personalized are be enormous, unique able the so plus. think the in market gives believe to amount after absolutely markets, $XXX just as not-too-distant year has a emerging of that very loss it just even tremendous this to meaningful those contribute map growth know, category weight a approach, of conviction us categories gone those But

tenured a So starting new meaningful personalization long-term really excited categories to the result accelerating contributions to by of both categories also the but emerging some show very as the growth.

the both your of for we've thanks question. Allen, second ads. part targeted well as I'll hit broad as question. the Historically, had

social many in So as retail like things still draw able that areas that direct such we mid to oftentimes through cycle, about. response Earlier that traditionally spoken investments tend life and be partnerships funnel. company's we the make was in later were the eyeballs, and consumers' on to we've the but of

As of scale some brand XXXX, to the broad-based make conditions started of users holistic in aware and that really we we offered. mentioned set of we spend to XXXX the

more respectively. So to a them that's for specific overall brands, engaging and introducing the less Hims user condition around with and Hers the

spend that in portion get spend is things gives this semi-fixed in confidence in That's XXXX, really year XXXX towards more of also XXXX, to and come nature. that. be you so us to into tends a that, leverage the and saw that greater ability And the of one

you maturity. rapid you're scaling to start of a certain and level channels, as a pace into not necessarily of you once implement reach As integrate

for one Yemi. another you, then And Great.

we about into reported seems the As affiliated profile margin that the like margin percentage XQ in gross to pharmacies think line, the margin stay and XXXX, going consistent. think I'm the relatively we it you on through scripts trajectory curious is about going of

changed the last quarter. that think versus I

a talk you to can the get to So not decision going bit your about little XXX% pharmacies? through affiliated

Yes.

we want up. I have maintain really flexibility purposes to redundancy think and always set

view to very relationships in much near maintaining we as And so midterm, strategic. the those

to take probably look that It affiliated experiments gross unlocks mentioned, to going very the pharmacies, the to high few As we pass going we're likely a a as to look going consumers, to run to We margins well. We'll greater view balance years thoughtful to as is but value we we back drive those over more just of that the mid- time, XXs. to Hims terms sheet result not us of are giving do ability pharmacies, to well in can for that as it get that back in way. dedicated we to leverage our process in consumers are there efficiencies higher but we also opportunities because as to ensure consumers, just value long-term that Hers. scale to the & to will now, in both as, that affiliated have there drive margins the look for only the as

question Daniel next Your of Citigroup. from from the line comes Grosslight

to on to you leverage obviously coming the far. see their and a one they that strong out your the And going side, efficiency. the in mentioned on mental more to start curious, in stick beyond. I here. are health mostly 'XX of decline the all so are I'm But details marketing Yemi, marketing that want question. I you've seeing And appreciate competitors, results given Congrats with

this seems the seeing investment majority away curious to is 'XX which brand a going your a beyond. And user you building, user, from from mentioned like as becomes going guess and then of it get line that, with be proportion if a you're broad efficiency you're degradation similar I'm in your recurring items. naturally greater marketing to marketing efficiency in base your I Yemi, So additional of that

user years would what stats I'm platform now around for of retention or is the there's you rates, on churn So any provide of base helpful. your curious if can be percent X months amount very rates,

Yes.

maintain our than a the Really, take the the seen fluctuate still of We've reasons few CACs really I'll part point a we and question, period year, to norm, to Dan. able Thanks that. first do. have less which question. is across for focal there's behind of anything of quarters. the around out So do not payback been continuing the tend to

that of to our is is some And it just positioned. unique platform way the

interconnect first of and channels broad The a experimenting we another. new as narratives channels as consumers, constantly oftentimes with we're across one to diversify with is new well set messages, really the

as other in in to marketing so some our And channels. invest started in efficiency of seeing things broad-based of we're terms campaigns, up like that show we

combination The that our drive the the ecosystem products second is to to specialties able to entire we the capital just the ability rotate really greater message of having of ecosystem. We're really users. diversified a set that can across efficiency enables across across

both seeing base. we're really a greater and well are drawing set as our offering what as lastly, in of the differentiated solutions with And resonates And user personalized bringing greater those users. is we're products, as

platform, And which the the to so seeing, across the we're we're users many in share greater actually ecosystem. capture either resulted instances, has in drawing

second part majority the around our we're customers. overall around spend new the your towards of actually vast acquisition question thinking marketing of of the goes To the how ecosystem, leverage just

base are results a tenured to on leverage. in and result, the And as that build of larger continue a larger users more as that existing inherently so we platform,

is getting it what we that personalized with we historically are seeing platform products stickier changes year, particularly than was. and even of made pricing some more And last the is so that the

not And to result as we'll so that And Andrew, us if the leverages gives even anything you to that add start there's that, to receive as well. this sure call early a to conviction of that the wanted fact year.

Yes. Thanks, Daniel.

out. to thing one medial point the On side, health

to treatment quite the on better to and is a think clinical is category, mental comes with specifically brutal. the that to in that of trial lot able with respond with our to AI how going be excellence side obviously, a predict health there investment patient And capabilities error medications. and I be continues MEDMATCH different

going customers, trust relationship think, I see increased So the those brand, a I to we're in increased think in brand. confidence with time, stickier the over

be highest so lean past, in potential the And And continue to we to treatment to and of category personalized lean continue expand the that specialties, shared an fairly opportunity think continue like continues as to I to there's efficacy meaningful into take triple side for our option, growing digit. share. growing one clinical market the we us and in

Yes. investments app quarter Makes should investments think the sense. and read beyond? on And per Yemi, million CapEx and you've should affiliated about XXXX PP&E in mentioned that? -- on right then needed kind the a you accounted the Is website? of some in follow-up, PP&E, an we about in $X.X we as you're thinking pharmacies be for that majority $X.X website of making a runway and your million XQ made to your How for How and in quarter. purchase big this increase of the

Yes, great question, Dan.

I across think it's going to quarter-to-quarter. probably vary

So it's neat a just not like be investment. necessarily going to

we just it. is and capabilities X there's or X One around think think that ways that expanding areas capacity. I

broader have of that to So personalized offerings investment. area is of as look we to start platform, a the one evolution on

that in The -- show currently and the players likely to that's other around area HX, early different really likely level we other most scale to relative of with is big more up have a investment HX, late market. in profile

sheet to the start to the the us affords balance automate affiliated ability within pharmacies. That leverage processes to

but quickly as degradation. to very without makes margin or back consumers effectively And that pass result, pretty the then ecosystem enables limited us a also back pays to more value so overall efficient,

the of from Cowen. Jonna line comes question from next Your Kim TD

guidance, guidance? of what product your Just is curious in could And in and baked how new in launches upside opinion, drive your downside much potential to there?

we well. can it then can and Andrew as to over Maybe hand I start,

is I have evolve. continues we like assuming across that effectively inherently, we offerings think all what of specialties personalization to that our the are

adopt And now so things to drawn some result adoption the a are That we we've what rapid anticipated. last upside. than out users seen over we could in happens way subscriber years across the XX% meaningful we've with products personalized hard saw it is than faster a rolled of faster overall upside that adoption new there or The a base when on further we in of product. mints, products, could drive as we are very rolled that that that year seeking out anticipate to

really days we've are The potential to of and said the see for months if very much -- management. that to categories, you there's the be platform from it last Historically, also to early signs is but We're to of XX meaningful brought offering not will Andrew, is early anything in seeing contribution to will weight XX takes to add that we there evolve. that traction. continue That that. And sure forward. wanted

penetration are X% plus about The only thing the this right? is those that penetration X%, to rate. year We right, and million outlined. rate. on You're large exceptionally specialties focus, talking the I'd add massive, on there's a people when really XXX the you focus They're I X%, with depth, believe we think, core look at total TAM

still stigma of or why or getting or many education price there's treated, whether choice. for lack barriers so not or that's So are access a not people or personalized

offerings to see consumer's get you we And Hers, & access strengthen can best to segmentation the think offer but portfolio focus can and get [ you specialties on. at core of for think confidence that not Hims and wellness you'll So to order only perspective the we're health the clinically specialties. ] that care capabilities from us in the great a actually across product selection range a wider go as well as and (sic) technology selectment continuing deeper I I capabilities core and in

question. Got it. And just more one

you And In in you the for did rate, terms other see of in, the next terms year? baking what of retention any quarters? retention are improvement to compared rate

Yes.

personalized very we're excited think products. adoption I So by the of

Across look has. shift that platform greater a with we as to of of some we is historically have will stickier retention tenured specialties, into of be belief than those As success products, many XXXX, more on the offerings. seen the share our users personalized some the

and in we're the second QX effects pricing as of last lap to the primarily year. we start of and personalized points, And price switching at of effects mix. longer-duration was protracted price different the a to year offerings drove many early users we've is breakeven The -- more subscriptions what the put seen from really we'll ability lapping new some composition last is signals the what around

for because that the things improve the those excited users XXXX. very very the do throughout higher confidence the that price for well see users is at also gives the retention XXXX And as that of products and we're uniquely by just existing they're came those that on us potential are point. as to differentiated, retention What in even cost-effective on will platform are combination a continue we

into As -- result of stronger that is that reflected guide. that, the of some a

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

Just it of to as emerging like the us with driver the there's math guidance. Because the the the thinking in Is us 'XX? differently doing for contribution you seems the looks be contributions step-up unpack a help for pretty relative about just kind give a ask how a it here, those Can and in we're categories, significant outlook? meaningful to the did wanted to there just can categories help those any a baseline categories. way little you if regards question I'm

the businesses, customers, indications more right? early around some of a our of of products seeing essentially into aggregate weight personalized Hers of think signs reflects instinctively the exceptional those business, those engagement and stickiness profile Yes, I Jack, the products. have loss, I XX% of Yemi dermatology, bit high personalized go we're You emerging I'll really And adoption detail, correct, categories, adopting tenured of rate great right? question. I the of show but the let think of momentum. think

dermatology have On and management. nearly XX-plus in the new you emerging categories, Hers weight in percent XXX%

that the relationship. it's stickiness So customer, type the of I of reflective of think

think of the moving that look very large and the when lot is we composition I emerging of composition more which towards more you growth, at a of think new categories, TAM. are

that portfolio seen With we've adopted offers. personalized acceleration blend they've think tenured said, I as in wider the the with new categories the also more of

XXXX to pull us, definitely with the EBITDA $X.X year And tenured there's combination think able guide happening a categories. of of So giving that I the of the range, confidence ramp-up success, emerging to with and high early. regards end in billion a in lot more a to, at million be forward the $XXX it's

in from exciting So we're seeing of beginning very that really year. the I think already everything the

Yes.

success to emerging Jack, as we I there, as of color -- mentioned, just think some XXXX well both the tenured more the as saw I think provide across Andrew ones. additional specialties,

of really, across to specialties, portfolio. started out personalized within the products those saw so as of roll some products we And new we rapid adoption many the of tenured

And across drive so tenured offerings. that continues the to success

different the rapidly the we're of beauties more model able marketing, have operate historically and emerging million we're newer is the pace into we have some result, that over a and as categories. one like get segmentation, even learnings to what able think also And of our fact that the is many faster X.X these and deploy platform to now some efficiencies learnings and that so already and I tenured to take because things newer them are and across take offerings. gotten that overall with we we've on of we how the run seeing oftentimes, to just scale subscribers that able across specialties, forth personalization historically of given are we than messaging, continue embed that the scale across that categories the and an of many more at

guessing then and the outlook of subscriber are going inside going you to explicitly, That's just that subscriber part the guide, algorithm the response thing helpful. in and some didn't for updating base. wondering And there's strong I jockeys results to maybe the forward. model there's our change if growth is growth outlook, your And per in between is potential revenue quarter as fourth your one cross-selling be hear say maybe but I'm any

subscriber our this on remains expanding the still focus base. time, At Yes.

as as mentioned serve think specialties in I remarks his as previously, are TAMs overall that the one the we in prepared the well Andrew I massive. across think questions of

specialties X.X And there's in that we're million from the these or form with country impressed the on across while so the fashion. are over subscribers platform, some million reality XXX suffering is having users

much barriers the the so in is we capture we're so And very those to of, view and growth innings ability the something subscriber will early down focus. break and that be

the treated out potential treatments. things that, we ensuring primary to subscriber you are but do pretty the to across is a simply the remains start user where and specialties, And us unlock, on primary said, there like a through with things. be that as I consumers that experience, think starting think for things today will sizable starting That the what like metric. focus growth We're to offerings we're and starting innovate roll get personalized see are also multi-condition MEDMATCH, that to offerings can multiple of each an have amazing

Jack, add thing there. maybe just I'll one

as concept weight dual-action capabilities we're pharmacy Yemi I offering. on in underlying the we're The maybe weight holistic improve, towards many a little company's conditions for way, think treating, bit and is and more from or I launching capabilities, care continues in the platform, simplistic example, some of triple-action away moving of single more causes said, cross-sell gain. the to capabilities, the as think, that of loss at

a for relationship is very also that personalized in is So we risk much we multiple conditions, but a a men's stickier for cleanly cardiovascular cross-sell categories, simple treating sexual you believe be not much the relationship. with as ultimately, that might customer might is health, and capabilities a treating into dual-action we're deeper you And multiple cross-category way with offering a offering fall it's much but profile.

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

lot you're you're as It could because And you. of each weight for it's that some offering kind that nice that surprise of sounds here. and to you traction terms like more curious bit been potential a the doing like GLP-Xs, like product little bit. I'm how it have curious, upside here? pricing like you're you getting of actually the exuberance I eventually about for to start around want and of to one sounds a sort loss initial sounds Andrew, down. of I'm I the with But some sell died it a you. talk personalized a and you're it us you're products of And give in kind for that of sounds treatments, doing little how

your right? used very more dynamic causes at of to of insulin could eating obesity the a high-end We're excited is as launch. of pricing to of things traditional and per your is specialist holistic Craig that care confidence $XX which what been the meaningful personalized offering, the something a believe couple is can find not clinical the also cash weight things depressive I by then helping period have efficacy the that specialist, treating and think the refining only offering binge interaction clinical also quarters stay mass-market a directly, we're of you Primack weight in brought great is and have the platform, like resistance, for access, because have we of by and great range a We understanding and gain. hood a management we what treatments offering, something who time. That into really those under partnered to repeatedly be shed think, has somebody This I people and which of excited delivered back since in Dr. we're underlying metabolic really goes habit, company the the treatment as disorders, well simple weight price long that's obesity sustainable in month, addition your you the adjustments but on that that constant it's door. something to a compounded

valuable. and application it's the and content, a We think really has holistic compelling is incredibly of the including mobile think lot we So the offering, efficacy.

by the for contribute We business. and those say by think, the energizing very to offering we market But ultimately, years It's, expect I massive portfolio meaningful And believe, this those in as to brought to is growth. excited a the that contributor category it's to the first we see not efficacy to the still of those. would also the iteration growth expect to to pretty very very GLP-X. a not expand and to that continue we're to to the going be the be platform plan model much are excited on and and expand coming

are I by say response us thus that. think encouraged very far the to we allows that

a it's amount With people. to opportunity of the help struggling, very clearly people a lot really of big

was ticked Yemi, order super value, subscriber. up that to meaningfully I But the if monthly bit online little about ticked rev a just average ask That's look and helpful. year-over-year down sequentially. wanted It up you also pretty the per at sequentially.

if could a data sort points. anything changing price wondering of X X with subscription mix duration anything for just or So and you respect reconcile maybe that would sense is or data to or give those us those I'm points reconcile

I it's think a great Glen. Yes, question,

outlined. the a it's factors think I combination of you that had

longer-term really go customers order rate. baskets to longer-duration lower also higher generally see to a average tend an commitment, those exchange have a we monthly that as to for with subscriptions, come tend think but I

sign up so you rates. monthly you so at And more once lower for get a

the happened, movements course we're tend are just is of and some within share relatively QX, are changes pricing result the of nature. -- in We stable adjustments a last just overall say longer And over then as of that lot duration of in to of that looking seeing, subscriptions users made product we there a there's mix. opting greater from the be been quarter-to-quarter, seeing for that the that would are at it's But we the couple a normal, quarters. of

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

and trend. on and balance Congrats around cash My strong quarter sheet guide. a question first flow

to your about related you're XXXX share on capital How short-term And investments. You and free willing your investments Just the expectations. $XXX just flow balance wanted of cash? to I thoughts your to talked do think million get on wondering deployment, sheet. cash you deploying if internal that, cash

any Just focus to capabilities the M&A. comes curious and when back on to it plans you if to are you in get certain mix if areas or have M&A there plan

the Jailendra. for question, Thanks

of is with said, meaningfully that north optionality like cash delivered as like we're the operating do flow we're well think that cash generating million operating the the year. pretty on I that accelerate flow as flow cash last provides seeing sheet. generating we we $XX free reality the That the that are balance of cash think I

both I mentioned, the around the as broader opportunity form the meaningful capacity priorities, affiliated as offerings see new to think set in of introduce ecosystem. we across into the in a as of additional personalized well of capabilities think we how pharmacies do terms

going We're for for is M&A. is to a also see opportunity And do high hold what the that. there then then bar we

personalized be of types the we deals opportunity, that what capabilities/capacity, to capabilities that M&A, we've revenue. going expanding but a automation that And acquisition pharmacies. followed as where of increase for a to similar it's the think opposed look be the be efforts be to will leverage around primarily would I would in across what think would opportunistic done by or to the the the efficiency of some I we to lastly, of past, of extending around consider centered where order expansion that provided. offerings, balance new then it's new overall we Apostrophe talked similar the with capability the potentially profiles But would new sheet the to we probably

That's Can comments 'XX the competitive helpful. to will with environment to your the And help guide. do focus better you then these your respect related adjustments to metrics future. adjustments also my key some your or remaining as trends decision you flexible in incremental of follow-up is us trying with to I'm around of assumptions pricing around your on the in future? understand part around

it's Yes, great a question.

dynamics resulted some we ecosystem, we're users seeing. of took many letter, in some which did share the into that greater And that enabled are pleased by in into we I the provide in draw that quite us visibility capture. effectively of think market our actions to XXXX the competitive we So shareholder new

up LTV more to draw the users we what to able degradation present more comes than that the is a we're end goes mix day, individual into of several for like a are offset the we factors. the across each higher likely at in consider ecosystem. the the user form user or does we of on ultimately, where look And yield like decisions, value a net make looking or different As pricing pricing But higher category. retention it to

reflection the we to quarters changes last of saw of were the couple that a right. quarter testing that of second so get of year a And in really

be the is And expected any But to identify to it is so mix accretive generally specialty to through we're that those what continuously actions experimenting that to like to consumers. some NPV given we of now have. right value pass

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

take any try guess action like get at I kind you just looking on guys more is talk that with should of we about I same pricing trying don't which we line kind as of evaluate know market action are Jailendra's wanted color there, the I and of I'm so there Is guys the if cash I can to think are I'm the retail questions dynamics I you of the piggyback to kind benchmark? just generic about evaluate any how guys guess, is do. pricing prices to what love I taking, on we way give the to what's mean, like around as the think you happening guess it's comparable prices? in Is that way pharmacies. of it more it costs? drug like decisions. would just information could underlying the inputs us pricing that you

Yes.

external environment. what's experimentation the less the think I more ecosystem. with running I happening think And around across it's it's around really

and of behavioral the able types to resulting patterns with we're with what any beauty in ability is gives of we that that likely teams, having on subscribers the model million determine that, us point the given I experiments -- able is to be now see. And accretive also science run That the time. the long-term the at From how to X.X we're those much. in platform. did changes then estimate are data to our several think

trying platform And different. versus and add to sure it's Andrew, to really there into our external of experimentation you so because the really of anything if I bringing increasingly that not And is compare wanted also across we so that opportunities there's to offering to well. market as are factors think leaning then more

to thing costs that's access mean cost content, to specific drug a the really to the I treatment, pricing think, whole is to I a offering iteration I said, with focus that really the of the No, treatment, getting incomparable unlimited from Yemi or regard of or specific right. because, as paid George, for not there's lot holistic provider, drug maybe visits, think patients that delivery cash in constant treatment. are generics

value speaking lifetime just there's understanding around very million think perspective are addition experimentation principle the we I to, was optimization longevity and to a also operate kind analysis, specialties people that a in think XXX in of Yemi plus of suffering. core there I the which first in,

that can want understanding XX where million platform, the you you right, an that after when we bring mass-market don't and we as you experience offering, on and for on into there's a tent. XXX,XXX we be are mass to opportunity, them to back efficiency subs so to the bring aim into pocket, unlocking And different flexibility high us and see expanding on people think the demographics million give customer's portfolio to the just and X the as platform, that both segments. your well scale subs as new more the experience leverage more premium you'll And end aim the as market on a of new go welcome bring or expand of I

That's super helpful. have If follow-up, quick I could just a Yemi.

guys of with you card pay Just what know either do the card? subscription percentage for FSA an HSA or users

think time. direct have at this that we visibility I don't

previously, I do think stated the have vast majority as our insurance. users, of we

split And an but are card. many have the HSA so we how or FSA using don't of I -- direct think

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

what here expectations really you're kind a bit margin for quarter. touch want the gross on XXXX. good and to of Congrats embedding I a on again into

other benefits things but are some have and you're taken you seeing that pricing So scale actions, some offsetting. also

and 'XX the about down that Or assume then be we that So XX% should maybe moving how margin expanding is fair towards trajectory thinking talking be start that you're should there? to term and about? gross it long still contracting in

Yes.

ability to a -- a So to around us efficiency, from just happen multiyear and well the as not get front our do also to scale. in mid process volume like journey. continue definitely we across looking form just We negotiated as whether probably kind be some the is those couple like that's to of I going quarters. guided have that we've that's see continued opportunities course of the the the over drive of or think or the to ecosystem pretty of more in automate more improvements path to to of to mid-XXs of supply rates more going that efficient to Like amazing chain

continue to take identify mentioned, do we're like that most course quarters/years. our does evolve actively then give to to opportunities, time time We'll several But and to we're But to that looking consumers. take to of as like the over that. for ways the what optimal are back going

XX course And to It's is quarters so over the path going even the X or year. X or happen not likely a journey. to a be of to multiyear

I Got it's know then it. of wholesale the the notably. a this grow Very did any piece you pretty business, it provide helpful. there revenue but And is on can color small quarter?

call going So off is weaker model QX forward it there? as run a then of? anything out to the kind build and be should forward, Or rate bit of little proper look forward? And we to

Yes.

I more think in the us. wholesale is that strategic one remains channel nature for

that But to eyeballs form just of the platform. small have do very important, I bringing not impact degree still it other think same brand percentage view for the we it's started necessarily it a as of to is We still much mechanisms, relatively the was. spend, business. namely as of the historically the found in while strategic that to

looking want an what active where supplier rapidly to not can so is guidance and or seeking QX some think our was a said, new that is there are proactively. a we're the a merchant that boost of new that That we so of one channel of to necessarily provide saw we in offerings, And But that that. to might that we're expand. I that expand not actively channel result periods

question from Financial of from the Ivan next Feinseth line comes Your Tigress Partners.

and year great on Congratulations great another and the outlook. quarter

to feel like provider cross-selling products them manage feel or do say, doctor to to these? is do and start food to you how GLPs -- -- intake, protein let's start to introduce their And nutritional work How it's deficiencies. you caloric significantly using reduce patients as that? you are you reduce products people recommending the going or what your As with would foresee, even create opportunity the that help and

Thanks, Ivan.

for -- components what for a I needed I that these has different believe we the think set think great that. of think a of categories can success. necessities the we bring likely I holistically market to categories is true of of it's each for We And question. each

basic that water easier. obesity protein nutritional think pharmaceutical mental and it caloric a your movement sleep. very health There's and necessity. There's necessities. There's I wide there's make helps point, often in management, pretty There's intervention There's to range. There's clear supplementation. intake.

time, subscribers approached WeightWatchers a for You north the X for been think a of right? about it think of business it's long components. like a decades, and couple million around with business very at that I that's

think be able I the with we to wide a brand range. go offerings to have holistically consumer-oriented really privilege market as and ourselves these building to a

& So I could supplementation absolutely imagine Hers offerings, food having Hims replacement offerings. having

core the fairly obesity holistic that of nutritional guidance. information and we part recipe, a launched, As offering there's

you makes think all on there's hands to and be successful. often puzzle or really really category this deck, where together what I and X X that components So is one need come

the us offering to scale evolve of see lot and offering to you'll those think a I expand fill this so the And we needs. different continue to as

products share great could ramp subscriber the one cetera? much how a change they data products, how as they how purchases, see as far percentage how their more what et on once kind to one Then X subscriber from have any is, the you question. you when go Do you joins, -- of growth. -- year-over-year year-over-year up the Congratulations subscriber

it's Yes, great a question.

specific anything disclosed haven't on We that.

give like would categories personalized. part expanded to think personalization I the with include I the XX% you on is probably We've most being solutions that the of of to the personalized treated XXX% loss platform gone I often adoption. newer point say dermatology the and X north and essentially personalized those for subscribers and offering the best weight probably XX% value. could guidance between

dosages. They triple of counter the multiple mobile supplement some patient side or or action or or effect action might include dual of concern dosages or that type custom

for to this really I the affordable of treatment at the very patients are, recommitment new that platform that the platform us are many think rapid a exciting platform the of so adopting the situations, and personalized prices. on vast very, to upselling coming And indicator of for the offerings adoption is market and commitment in

Your line next from Partners. the Michael of question from Cherny comes Leerink

mid- downside want number have leverage back whether is drive in why been outlined, It's of on the or effect. settle to see to long-term Just A on more kind bit little I to lot pathway get to that margin of you that And way But level why the XXs right the of mine high harp terms addressed, just of the a that you gross of have a towards kind I operating customer potential before that? guess there understand scaling variability to towards the great that in upside Yemi. you there margins, but as side. the pricing and that number is as benefits? beyond trying the landing right you're the is into you And tie fits or number, broader on there, level? the the you how

Michael. Thanks, Yes.

think question. I great a it's

Star, across scenarios to a improvements which think as time we as model call to do give lands. our of that well lot consumers, on optimal like as equilibrium running North a back do the effectively So we is teams different spend what of variety our where

we at fact tens on looking different fundamentally offering different or the looking that's so offerings points given is as something having is another onto us. subscribers, placing or And a that do we're to what segmented is, for to platform, that million of million see not eventually our important mentioned, Andrew we're add XXX,XXX X users price bring to subscribers the

lands mass the that can in that end scenarios, at previously, mid-XXs. that we've will we as And run premium view profile that to take the as margin mid market so a end offer mentioned and Like the at both end, time. some we the holistic suite started different

periods that. to like as as see critical similar time, year is we view in unlock may well actually element you'll think get pathway margins of the a advance last a to having over millions tens offering I market to expand subscribers, efficiencies we like But of to of where mass that.

queue have today's you disconnect. may your call. conference this does at that further you time. And for in Thank questions participation. We conclude now no our And