Hims & Hers Cuts EBITDA Outlook as Margins Compress 17 Points

Hims & Hers Health lowered its full-year adjusted EBITDA guidance to a range of $257 million to $277 million on Nov. 9's Q3 report, down from $275 million to $325 million, after posting a $33 million net loss on gross margins that fell to 57%. The cut landed alongside a double earnings-and-revenue miss and an FTC lawsuit that gained five new states. The stock's near-9% rebound on Wednesday, Nov. 11, did little to repair the damage: shares remain roughly 47% below the July 6 year-to-date high and 71.5% below the all-time peak set in 2025.

The week was brutal even before the rebound. Shares dropped nearly 12% ahead of Monday evening's report, then fell another 16.6% on Tuesday after the numbers disappointed.

How bad was the Q3 miss?

EPS of three cents came in at half the analyst consensus of six cents. Revenue of $890.4 million rose 49% year over year but slipped under the roughly $893 million analysts expected.

The pattern is now familiar. The EPS miss was the third in a row and the fifth in six quarters. The revenue miss was the third in four quarters.

Subscribers told a mixed story. The company ended Q3 with nearly 2.8 million subscribers, up 13% year over year but about 100,000 fewer than in Q2. Analysts had modeled 3.04 million.

Management blamed reduced U.S. weight-loss marketing and international brand migrations. CEO Andrew Dudum said on the earnings call that the company is trading "near-term subscriber growth for a stronger position in the years that follow."

Other quarter figures:

• Net loss of $33 million, or a GAAP loss of 14 cents per share, versus net income of $15.8 million in Q3 2025
• Gross margin of 57%, down from 64% in Q2 and 74% a year earlier
• Free cash flow of $26 million, down sharply from $79.4 million a year ago
• Full-year revenue guidance tightened to $3.13 billion-$3.15 billion, from $3.1 billion-$3.3 billion

The EBITDA cut reflects planned pricing and marketing investments in the United Kingdom and Germany, plus the timing of deferred weight-loss membership revenue.

What still works for the business?

Monthly revenue per average subscriber climbed 30% year over year to $105. Revenue outside the United States surged 321% to $233.3 million, though roughly $135 million of that came from the Eucalyptus acquisition.

Management reiterated confidence, first expressed in August, in its 2030 targets of at least $6.5 billion in revenue and $1.3 billion in adjusted EBITDA. Dudum said the company's AI-native infrastructure positions it "to launch treatments of increasing complexity, including testosterone replacement therapy [in Q4] and our Peptides+ offering later [in November]." Hers-branded revenue is approaching $1 billion in 2026, supporting scaled dermatology and menopause businesses.

Pharma partnerships anchor the weight-loss strategy. Eli Lilly's Nov. 6 agreement lets patients complete virtual consultations, receive prescriptions and buy Zepbound and Foundayo directly on the platform, replacing the old detour through LillyDirect. Novo Nordisk has offered Wegovy and Ozempic on the platform since March 2026 and agreed to dismiss its patent-infringement lawsuit over compounded semaglutide without prejudice.

The catch: branded GLP-1 medications and international expansion carry lower margins, and that shift drives the gross-margin compression. Investors must weigh a larger customer base against the challenge of restoring profitability.

Why is legal pressure mounting?

On Nov. 10, the FTC announced that Arizona, Florida, Nebraska, Ohio and Wisconsin joined its lawsuit against the company. The agency originally filed on July 29 with the Utah Division of Consumer Protection and Los Angeles County Counsel on behalf of California, alleging privacy and billing violations.

The complaint alleges Hims & Hers shared sensitive health information with third-party advertising platforms, including Meta Platforms and Snap, despite promising patient privacy. It also alleges the company made subscriptions hard to cancel, processed initial refill charges 10 days before consumers' selected cadence, and charged for prescriptions almost immediately after intake-form submission despite telling consumers they could first consult a medical provider about a treatment that is "right for them."

Separately, a securities class action filed Sept. 1 covers shareholders who bought stock between Aug. 4, 2025, and July 29, 2026. It alleges violations of the Securities Exchange Act of 1934 through materially misleading statements that failed to disclose the regulatory risk posed by the company's privacy and billing practices. Hims & Hers disputes the FTC's allegations and says it will vigorously defend itself.

Management expects reduced U.S. weight-loss marketing to keep weighing on subscriber growth in Q4, with a renewed marketing push planned for Q1 2027. The test ahead is simple: whether new treatments and pharma partnerships can restore subscriber momentum without further eroding margins and cash flow.