Hims & Hers Charts a New Strategic Course Amid Record Growth

Hims & Hers shifts strategy, exiting some weight-loss drugs to focus on core health categories and global expansion via acquisition, despite near-term margin pressure.

The telehealth company Hims & Hers Health is undergoing a significant transformation, shifting its identity from a domestic startup to a comprehensive global health platform. This strategic pivot comes as the firm reports record annual revenue but simultaneously tempers near-term expectations by exiting a specific segment of the weight-loss medication market. International acquisition activity and a key executive appointment are central to this long-term repositioning.

Profitability Pressures Amid Expansion

Hims & Hers concluded its 2025 fiscal year with impressive top-line growth, posting a 59% revenue increase to approximately $2.35 billion. Its subscriber base also expanded, surpassing 2.5 million users. However, a closer look at fourth-quarter figures reveals emerging pressures on profitability. While gross profit increased, the gross margin contracted by nearly five percentage points to 71.9%. This compression was attributed to significantly higher development and administrative costs, coupled with the initial investments for international expansion.

Management's guidance for the first quarter of 2026 projects a more modest revenue growth rate of just 2% to 7%, a forecast that fell short of certain analyst expectations. This cautious outlook is directly linked to a strategic shift: the company is gradually withdrawing from the business of compounded GLP-1 medications. The new focus will be on strengthening its core, established categories—including dermatology, sexual health, and menopause care—to build a more resilient business foundation.

To accelerate its global footprint, Hims & Hers announced in February 2026 the acquisition of Eucalyptus. This move fast-tracks its entry into key international markets such as Australia, the United Kingdom, and Germany, though it contributed to margin pressure in the final quarter of the previous fiscal year.

Leadership Strengthened for New Phase

The corporate overhaul is being supported by a strategic hire. The company has brought on board Kathryn Beiser, a former communications executive with experience at firms like Eli Lilly, as its new Chief Communications Officer. Her expertise in navigating highly regulated industries is viewed as a strategic asset for both the international rollout and the company's positioning within the sensitive weight-loss pharmaceutical sector.

On Wall Street, a recent legal settlement with Novo Nordisk has been met with relief. Following the resolution of this legal hurdle, several investment banks revised their assessments of the company:

• Barclays: Raised its price target to $29 (Overweight rating)
• Needham: Set a new price target of $30
• Citi: Upgraded from "Sell" to "Neutral," with a $24 price target

The foundation for the company's future development rests on its base of roughly 1.6 million users on personalized treatment plans. These tailored offerings foster stronger customer loyalty and helped drive the average monthly revenue per subscriber up by 11% to $83 in the fourth quarter. With a robust cash position of nearly $578 million and the legal dispute with Novo Nordisk now settled, management believes it has the necessary financial and strategic flexibility to execute its international platform strategy throughout the coming year.