Hims & Hers Health Q2 Results Miss Estimates, Shares Fall 9%, Amid Ongoing Compounded Drug Controversy

In after-hours trading on Monday, Hims & Hers Health Inc. experienced a 9% decline following the release of its second-quarter results, which fell short of analyst expectations for revenue.

The telehealth company reported a 73% year-over-year increase in quarterly revenue to $315.6 million, with a net income of $42.5 million or 17 cents per share, compared to $13.3 million or 6 cents per share during the same period last year.

For the upcoming third quarter, Hims & Hers anticipates reporting revenue between $570 million and $590 million, while analysts projected an average of $583 million. The company expects its adjusted EBITDA for the quarter to range between $60 million and $70 million, versus the expected $77.1 million according to StreetAccount polls.

Recent controversy surrounds Hims & Hers due to the continued sale of compounded GLP-1s, unapproved versions of popular diabetes and weight loss drugs. Although the U.S. Food and Drug Administration announced in February that ongoing supply issues had been resolved, some telehealth companies still offer these compounded medications under specific circumstances, such as cases where patients are allergic to a branded product’s ingredient. Hims & Hers maintains that consumers may still be able to access personalized doses through its platform if clinically applicable.

In June, a partnership with Novo Nordisk ended prematurely, causing Hims & Hers shares to plummet more than 30%. Novo Nordisk accused Hims & Hers of violating laws that prohibit mass sales of compounded drugs under the guise of personalization.

Despite these challenges, Hims & Hers reported an adjusted EBITDA of $82 million for the second quarter, surpassing last year’s figure of $39.3 million and expectations of $73 million by StreetAccount.

Hims & Hers will hold its quarterly call with investors at 5 p.m. ET.