Hims & Hers Health Inc. (HIMS) saw its shares tumble roughly 10% in after-hours trading Monday following a disappointing first-quarter earnings report that revealed an unexpected net loss and a revenue shortfall. The results overshadowed an upward revision to the company's full-year sales guidance, as investors focused on the financial strain of transitioning its weight-loss drug portfolio away from compounded medications toward branded alternatives.
For the quarter ended March 31, 2026, Hims & Hers reported a net loss of $92.1 million, or $0.40 per share, a sharp reversal from net income of $49.5 million in the same period last year. Revenue rose 4% year-over-year to $608.1 million, falling short of Wall Street estimates. The company's subscriber base grew 9% to 2.584 million, but average monthly revenue per subscriber declined to $80 from $85, signaling weaker spending per user.
Chief Financial Officer Yemi Okupe described the period as a "strategic pivot" toward branded GLP-1 receptor agonists, including Novo Nordisk's Wegovy and Eli Lilly's Zepbound. This shift follows the FDA's warning that compounded versions of these popular weight-loss and diabetes drugs are not approved and must be discontinued once shortages subside. The regulatory tightening has forced Hims & Hers to abandon its lower-cost compounded offerings, which had been a key driver of its previous growth.
The pivot came at a significant cost. Gross margin contracted to 65% from 73% a year earlier, while operating expenses surged to $475.1 million, up from $372.8 million. The expense jump was attributed to restructuring charges, legal settlements, and merger-and-acquisition costs, including the company's $1.15 billion deal to acquire Australian digital-health firm Eucalyptus, announced in February. U.S. revenue specifically fell 8% to $529.9 million, underscoring the domestic headwinds.
Investor skepticism was palpable. While Hims & Hers raised its 2026 revenue forecast to a range of $2.8 billion to $3.0 billion, up from the prior $2.7 billion to $2.9 billion, it simultaneously lowered its full-year adjusted EBITDA guidance to $275 million to $350 million, down from $300 million to $375 million. For the second quarter, the company projects revenue of $680 million to $700 million, which would top analysts' expectations, but the mixed signals left many questioning the sustainability of earnings amid rising costs.
The competitive landscape is intensifying. Novo Nordisk and Eli Lilly are aggressively defending their obesity-drug franchises as lower-cost generics loom on the horizon. Hims & Hers now offers branded GLP-1s like Wegovy alongside prescriptions tied to Zepbound, broadening its menu but also compressing margins. Should demand for these branded drugs cool or regulatory pressure on compounding escalate further, the company's rosy revenue outlook could be undermined by a weaker profit profile.
Looking ahead, a potential regulatory easing on peptide compounding could provide a tailwind. In April, Leerink Partners analyst Michael Cherny flagged a possible FDA softening on certain rules as a "clear positive" for Hims & Hers, though he cautioned it is unlikely to become a near-term revenue driver. The company's international expansion through the Eucalyptus acquisition aims to boost its presence in Australia, Japan, the UK, Germany, and Canada, but the core question remains the future of compounded GLP-1s.
CEO Andrew Dudum called 2026 "a defining year" for the company, a sentiment that resonated through Monday's report. The stock's decline suggests investors are still weighing whether the strategic shift can deliver durable profits or merely chase subscribers at the expense of margins. With a softer profit outlook and a market still recalibrating, the path forward for Hims & Hers remains uncertain.
