0001773751-26-000076
SEC filingRevenue grew 4% YoY to $608M, but net loss widened to $92M due to restructuring charges and fair value losses, while international revenue surged 969%.
For Q1 2026, Hims & Hers reported total revenue of $608.1 million, a 4% increase from $586.0 million in Q1 2025. However, the company swung to a net loss of $92.1 million from net income of $49.5 million in the prior year, driven by significant non-recurring charges. Gross margin contracted sharply to 65.2% from 73.5%, reflecting a shift to shorter shipping cadences for weight loss offerings, higher fulfillment costs, and $28.5 million in inventory write-downs related to the 2026 US WL Announcement. Operating expenses jumped 27% to $475.1 million, including $33.5 million in restructuring charges, $15.0 million in legal settlement costs, and $13.4 million in acquisition-related costs. These items, combined with $27.3 million in fair value losses on equity securities and liabilities, resulted in an operating loss of $78.3 million versus operating income of $57.9 million a year ago. Adjusted EBITDA fell to $44.3 million (7.3% margin) from $91.1 million (15.5% margin).
Revenue growth was entirely driven by international expansion. U.S. revenue declined 8% to $529.9 million, primarily due to a shift to shorter shipping cadences for weight loss offerings, which altered the timing of revenue recognition. The Hers brand continued to represent approximately 40% of U.S. revenue, with GLP-1s and dermatology as key drivers. In contrast, Rest of World revenue soared 969% to $78.2 million, fueled by recent acquisitions including Zava (Germany/UK/EU) and Medici (Canada). Subscribers increased 9% to 2.6 million, while monthly revenue per average subscriber decreased 6% to $80, reflecting the mix shift toward shorter cadences.
Management expects gross margin to continue declining through fiscal 2026, primarily due to the ongoing impact of the 2026 US WL Announcement and investments in new offerings. Long-term, they anticipate gross margin stabilization as the business scales. Operating expenses are expected to remain elevated as the company invests in fulfillment capabilities, marketing, and technology. The acquisition of Eucalyptus (up to $1.15 billion) is expected to close in mid-2026, expanding the company's geographic footprint into Australia and Japan. No specific quantitative guidance was provided.
Hims & Hers ended Q1 2026 with $222.3M in cash and cash equivalents and $528.6M in short-term marketable securities, totaling $750.9M in liquid assets. Total debt stood at $974.1M, primarily the 0% convertible senior notes due 2030 (net carrying amount), with no borrowings under the $175M revolving credit facility. Shareholders' equity declined to $446.2M from $540.9M at year-end 2025, driven by a $92.1M net loss and $39.2M in tax withholdings on equity awards. Deferred revenue increased 30% to $165.1M, reflecting growth in prepaid subscription offerings, particularly weight loss.
Non-cancelable purchase obligations (excluding leases) totaled $36.9M as of March 31, 2026, primarily for cloud-based software and inventory minimums. Payments are scheduled as follows: $6.9M in remainder of 2026, $11.7M in 2027, $7.9M in 2028, $5.1M in 2029, and $5.3M in 2030. Operating lease commitments (Note 10) added $231.5M in gross lease payments, with $157.9M present value, including a signed but not yet commenced lease of $21.2M. Additionally, contingent earn-out liabilities from acquisitions (YourBio, Medici, C S Bio) are measured at fair value, with $10.5M in Level 3 liabilities remaining after resolution of Zava earn-outs.
The company did not repurchase any shares in Q1 2026, leaving $225M available under the $250M buyback program authorized in November 2025 (expires November 2028). Dividends were not declared. Capital expenditures totaled $36.3M (6.0% of revenue), including $29.8M for property, equipment, and intangibles and $6.5M for website development/internal-use software. No new debt was issued or repaid; the convertible note carrying value increased $1.5M due to amortization of discount. Cash used in investing activities was $15.4M, primarily for the YourBio acquisition ($137.9M) offset by $170M in maturities/sales of investments.
The company operates as a single segment. Geographic revenue: United States $529.9M (87.1% of total) declined 8.4% YoY, while Rest of World revenue surged to $78.2M (12.9% of total) from $7.3M, driven by recent acquisitions (Zava, Medici, Eucalyptus pending). Service revenue remained below 10% of consolidated revenue.
Net income was -$92.1M, while CFO was $89.4M, reflecting large non-cash charges (stock compensation $36.9M, depreciation $22.0M, restructuring $28.5M) and significant working capital inflows. The biggest driver was a $167.6M increase in accounts payable, partially offset by a $116.2M increase in receivables. Capex of $36.3M represents 40.6% of CFO, indicating moderate capital intensity. Financing activities used $77.9M, including $39.2M for tax withholdings and $43.7M for earn-out payments. Free cash flow is not explicitly stated but CFO less capex implies $53.0M. Overall, cash generation was positive despite net loss, supported by non-cash adjustments and vendor financing.