Hims & Hers Navigates Growth Amidst Regulatory and Guidance Headwinds

Hims & Hers reports 59% revenue growth for 2025 but faces cautious 2026 outlook, an SEC probe, and a major $1.15B international acquisition to expand its telehealth reach.

The telehealth provider Hims & Hers continues to post impressive expansion, yet its latest outlook and regulatory challenges are applying pressure. The company's strategic moves, including a significant international acquisition, are unfolding against this complex backdrop.

International Ambitions Fueled by Major Acquisition

A key development emerged alongside its financial results: Hims & Hers announced a definitive agreement to acquire Eucalyptus, an Australian telehealth platform. The deal, disclosed on February 19, carries a potential total value of up to $1.15 billion. Pending regulatory approvals, the transaction is slated for completion by mid-2026.

The acquisition structure involves an upfront cash payment of approximately $240 million, with the remainder consisting of deferred and performance-based considerations. Strategically, Eucalyptus provides immediate access to over 775,000 customers. Management expects the move to accelerate market entry and expansion in Australia and Japan, while also deepening the company's presence in the United Kingdom, Germany, and Canada.

Strong Financials Meet Cautious Forward Guidance

The company's recent financial performance demonstrated robust growth. For the full year 2025, revenue reached $2.35 billion, representing a 59% year-over-year increase. Fourth-quarter revenue came in at $617.8 million, up 28%. On a GAAP basis, earnings per share were $0.08. The subscriber base, a critical metric, surpassed 2.5 million, indicating the business model continues to scale effectively.

However, the forward-looking guidance struck a more cautious tone. For the first quarter of 2026, management projects revenue between $600 million and $625 million. This range incorporates an estimated negative impact of roughly $65 million related to adjustments in the shipping of compounded medications. For the entire 2026 fiscal year, the revenue forecast is set at $2.7 billion to $2.9 billion.

Regulatory Scrutiny and Operational Metrics

Regulatory oversight remains a persistent concern for the digital health sector, and Hims & Hers is directly in the spotlight. The company disclosed an SEC investigation concerning statements about its compounded GLP-1 weight-loss medications. Concurrently, it faces a patent lawsuit from Novo Nordisk. In response to these developments, Hims & Hers has withdrawn a previously offered oral GLP-1 pill.

Operationally, there were positive signs. The marketing cost ratio declined by seven percentage points year-over-year to 39%. Furthermore, the new weight loss segment achieved a $100 million revenue run-rate in under seven months. Despite these gains, free cash flow was negative in the fourth quarter, although the company maintains it holds a strong cash position.

Market sentiment has reflected this mixed picture. After significant declines in recent weeks, the stock price recently stood at €13.85, marking a single-day gain of 5.49%.

Capital Return Program Continues

The company also maintains an active capital return initiative. A share repurchase program authorizing up to $250 million was approved on November 17, 2025, and will run until November 11, 2028. This follows the completion of a previous $100 million buyback program.