How Does Hims & Hers Make its Money?
Hims & Hers Health is a telehealth company that provides direct-to-consumer access to treatments for conditions that people often find uncomfortable to discuss: hair loss, erectile dysfunction, skincare, mental health, and weight loss. The company operates through its platforms at hims.com and hers.com, connecting consumers with licensed healthcare providers for online consultations and delivering prescription and over-the-counter products directly to their doors.
Founded in 2017, the company went public via SPAC in January 2021. What started as a men’s health brand has expanded significantly into women’s health, mental wellness, dermatology, and — most recently — the booming GLP-1 weight loss category.
Revenue Breakdown
Hims & Hers generated $1.97 billion in revenue in 2024, a remarkable 65.3% increase from $1.19 billion in 2023. This makes it one of the fastest-growing healthcare companies in the public markets.
| Revenue Stream | 2024 | 2023 | YoY Growth |
|---|---|---|---|
| Online Revenue | $1,907 | $1,175 | 62.3% |
| Wholesale Revenue | $63 | $17 | 270.6% |
| Total | $1,970 | $1,192 | 65.3% |
All values in millions USD.
Online Revenue — The Subscription Engine
The online segment is the heart of Hims & Hers, representing 96.8% of total revenue. This includes revenue from:
- Subscription consultations and treatments: Users sign up for ongoing treatment plans (e.g., monthly finasteride for hair loss, or ongoing skincare regimens). These subscriptions provide predictable, recurring revenue.
- One-time purchases: Some users purchase individual products without committing to a subscription.
- Personalized compounded medications: Hims & Hers has invested in its own compounding pharmacy capabilities, allowing them to create customized medications at lower costs.
The subscription model is particularly powerful because many of the conditions Hims & Hers treats — hair loss, skin aging, mental health — are chronic. Customers who see results tend to stay for years, driving strong lifetime value.
Wholesale Revenue
The wholesale segment, while small, grew 270.6% year-over-year to $63 million. This represents products sold through retail partners. As the brand gains mainstream recognition, wholesale distribution provides an additional growth avenue.
Income Statement Breakdown
| Item | 2024 | 2023 |
|---|---|---|
| Total Revenue | $1,970 | $1,192 |
| Cost of Revenue | $668 | $449 |
| Gross Profit | $1,302 | $743 |
| Operating Expenses | $1,134 | $744 |
| Operating Income | $168 | -$1 |
| Net Income | $126 | -$22 |
All values in millions USD.
Gross Margin and Unit Economics
Hims & Hers achieved a 66.1% gross margin in 2024. For a company that ships physical products (medications, skincare), this is an impressive margin that reflects several advantages:
- Direct-to-consumer model: By cutting out intermediaries, the company captures more of the value chain
- In-house compounding pharmacy: Manufacturing their own compounded medications reduces reliance on third-party suppliers
- Digital-first approach: Online consultations are far cheaper to deliver than in-person medical visits
Turning Profitable
2024 was a landmark year for Hims & Hers: the company swung to profitability with operating income of $168 million, compared to essentially breakeven (-$1 million) in 2023. Net income reached $126 million, up from a $22 million loss. Revenue grew 65.3% while operating expenses grew 52.4%, demonstrating meaningful operating leverage.
Key Financial Metrics
Gross Margin: 66.1% — Strong for a company with physical product fulfillment, reflecting the power of the D2C and telehealth model.
Operating Margin: 8.5% — Hims & Hers has crossed into profitability, and operating margins should continue expanding as revenue scales faster than fixed costs.
Revenue Growth: 65.3% — Exceptional growth driven by the expansion into weight loss (GLP-1 medications) and continued strong demand in existing categories.
The GLP-1 Opportunity
The weight loss category has been a significant growth catalyst for Hims & Hers. The company began offering compounded semaglutide (the active ingredient in Ozempic and Wegovy) at significantly lower prices than branded alternatives. While there is regulatory uncertainty around compounded GLP-1 medications, the demand has been enormous and has driven a wave of new subscribers to the platform. This category alone could represent a multi-billion dollar opportunity if regulatory conditions remain favorable.
What to Watch Going Forward
- GLP-1 regulatory risk: The FDA’s stance on compounded semaglutide could impact a major growth driver. Hims & Hers has been diversifying its weight loss offerings to mitigate this risk.
- Subscriber retention and LTV: As the subscriber base grows, maintaining strong retention rates will be critical to sustaining revenue growth.
- Category expansion: The company continues to expand into new health categories. Each new condition addressed broadens the total addressable market.
- Margin expansion: With the business now profitable, investors will watch for continued operating margin improvement as the company scales.