Hims & Hers Raises Full-Year Guidance to $3.3 Billion as AI Platform Cuts Support Costs in Half, But FTC Now Suing Rather Than Settling
Q2 2026 earnings call, August 10, 2026
Hims & Hers Health delivered a quarter that management framed around a single word, "proof," and the numbers largely backed that up. Revenue grew nearly 40% year-over-year to more than $753 million, subscribers rose to almost 3 million after adding 300,000 in the quarter, and the company raised its full-year 2026 revenue outlook to a range of $3.1 billion to $3.3 billion, implying growth of 32% to 41%. Full-year adjusted EBITDA guidance now sits at $275 million to $325 million. For the third quarter, the company guided to revenue of $880 million to $900 million, roughly 47% to 50% growth, with adjusted EBITDA of $75 million to $95 million. Underneath the headline beat-and-raise, however, sits a company simultaneously fighting the FTC in court, absorbing gross margin compression from its international and branded weight-loss mix, and burning cash in the quarter even as it raised over $800 million in new financing.
AI-native platform is already cutting costs, not just talk
The most concrete new data point on the call came from Chief Technology Officer Mohamed ElShenawy, who detailed the early results of an AI-native care experience rolled out to Hers weight-loss customers beginning in early July. Customers on the new platform are sending three times as many messages, with AI now answering 80% of those questions, and the company says AI has cut nonclinical tasks such as order updates and side-effect questions handled by human support staff by nearly 50%. ElShenawy said the results were strong enough that the company is "meaningfully reduced how much we rely on agentic AI customer support vendors" and expects to "roll off them completely" over time. CEO Andrew Dudum was explicit about the strategic intent behind the investment: "Other health companies major in the minor. They tack on minor improvements to the existing system while we're making our platform completely AI-native." The company plans to open an AI R&D lab in Menlo Park and says it expects the AI investment to pay for itself within 12 to 18 months, per CFO Yemi Okupe, with savings redeployed into lower prices for weight-loss subscribers and faster international expansion.
FTC now in litigation, not settlement
Perhaps the most consequential disclosure came almost in passing. Okupe told investors that after nearly three years of cooperation with an FTC investigation and "several months of good faith settlement negotiations," the agency filed a formal complaint on July 29. "We were not prepared to accept the terms we do not believe reflect the facts or the law," Okupe said, adding the company is "confident in our position and intend to defend it vigorously." This is a shift from settlement talks to active litigation, and it came with real financial impact: the $81 million of nonrecurring costs excluded from adjusted EBITDA this quarter included legal contingency accruals tied to the case, on top of Eucalyptus acquisition costs and restructuring charges from the weight-loss pivot. GAAP net loss for the quarter was $86 million. Investors will want detail on the complaint's substance and potential remedies, none of which were provided on the call.
Testosterone scaling faster than any specialty outside weight loss
Dudum highlighted testosterone therapy as a proof point for the company's ability to move into complex categories quickly. Only three quarters after launch, he said, testosterone is "scaling faster than any other specialty outside of weight loss" and is on track to become the company's sixth U.S. specialty to cross a $100 million annual revenue run rate in the coming quarters. The company plans to add injectable and oral TRT before year-end and has hired Dr. Anant Vinjamoori, previously a voice at the FDA's PCAC hearing, as Chief Medical Officer to build out protocols for hormonal health, longevity medicine and peptide therapy. This matters less for the direct revenue than for what it signals: the company believes its lab-testing and data infrastructure lets it identify and convert cross-sell opportunities inside its existing weight-loss base far faster than a new entrant could replicate.
Peptides: still waiting on the FDA, but building supply chain in the meantime
Following July's PCAC hearing that recommended six of seven reviewed peptides for the FDA's Category 1 compounding list, Hims & Hers said it has already begun stability and validation testing on active pharmaceutical ingredients for those peptides at its Menlo Park facility, so it can move quickly if and when the FDA formalizes rulemaking. Management was explicit that the company will not sell the PCAC-recommended peptides until the FDA completes full rulemaking, a process that could take six to twelve months, rather than moving on the strength of the committee recommendation alone. In the interim, the company plans to launch already-permitted wellness peptides, including sermorelin, glutathione and NAD+, before the end of the year.
Eucalyptus deal reshapes the international story
The company closed its acquisition of Eucalyptus in June, calling it the largest deal in company history, and international revenue grew more than 17-fold year-over-year to $131 million, with Eucalyptus contributing roughly $40 million of that in its first partial quarter. The underlying international business, excluding the acquisition, still grew 13% quarter-over-quarter organically. The U.K., Australia and Germany are each already running above $100 million in annualized revenue, and management expects the total international business to generate at least $600 million in 2026 revenue, though it will run at or near breakeven on an adjusted EBITDA basis as the company prioritizes market share over profitability. Okupe confirmed Eucalyptus itself was running at breakeven to modest losses prior to the deal and is expected to remain roughly breakeven going forward as the company reinvests domestic cash flow into international scale.
Margins compress as mix shifts, cash flow dips before expected rebound
Gross margin fell to 64%, down about six points quarter-over-quarter, which management attributed to the growing share of branded weight-loss products and international revenue, both lower-margin than the historical core business. Adjusted EBITDA margin was 8%, up a point sequentially. Operating cash flow was negative $36 million and free cash flow was negative $68 million in the quarter, driven by working capital needs tied to the branded weight-loss ramp. To manage that, the company established a $400 million receivables facility and completed a convertible debt raise of over $400 million since the end of the first quarter. The company ended the quarter with more than $840 million in cash and short-term investments, after paying roughly $225 million upfront for Eucalyptus, and still has $225 million remaining on its share buyback authorization. Management said it expects to resume free cash flow generation in the second half of the year, with the compounding of weight-loss cohorts acquired earlier in the year driving a step-up in adjusted EBITDA dollars.
2030 targets reaffirmed, but margin trajectory beyond this year stays vague
Management reiterated its 2030 ambition of at least $6.5 billion in revenue and $1.3 billion in adjusted EBITDA, implying a roughly 20% margin at that point, well above the 9% midpoint implied by 2026 guidance. When pressed by Barclays analyst Glen Santangelo on the margin trajectory into 2027, Okupe declined to give specifics, saying only that the near-term philosophy prioritizes "strong free cash flow generation as well as strong EBITDA dollar generation on an aggregate basis" as cohorts from the weight-loss pivot mature and newer specialties like testosterone scale. Investors modeling the path from today's high single-digit margins to the 2030 target will need more detail than was provided on this call.