The telehealth sector’s standout performer, Hims & Hers Health, continues to deliver explosive revenue growth, yet investors are growing increasingly concerned about the mounting costs of this expansion. The company’s latest financial results present a complex investment case, leaving market participants to determine whether current challenges represent temporary growing pains or signal deeper structural issues.
Financial Performance Reveals Diverging Trends
Hims & Hers reported third-quarter 2025 revenue surged by an impressive 49% to reach $599 million, exceeding market expectations. Their subscriber base expanded to 2.47 million customers, with each subscriber spending approximately 19% more on average compared to the previous year. However, these robust top-line figures mask concerning developments beneath the surface.
The company’s net income experienced a dramatic 79% contraction, while gross margins declined from 79% to 74%. More alarmingly, operating expenses accelerated by 46% year-over-year, outpacing even the substantial revenue growth. This disproportionate cost increase has raised questions about the sustainability of the current expansion model.
Strategic Expansion Amid Financial Pressure
Despite these profitability challenges, Chief Executive Andrew Dudum maintains an aggressive growth strategy. The company is broadening its service offerings with new women’s health solutions targeting menopause and expanding men’s testosterone treatments. Their recent acquisition of European telehealth provider ZAVA establishes footholds in key markets including Germany and France.
Should investors sell immediately? Or is it worth buying Hims & Hers?
Potentially most significant are ongoing discussions with pharmaceutical giant Novo Nordisk regarding distribution of Wegovy injections and their anticipated tablet version through the Hims & Hers platform. Such a partnership could fundamentally transform patient access to sought-after GLP-1 medications while potentially accelerating the company’s growth trajectory.
Market Reaction and Future Outlook
Investors responded decisively to the mixed results, with shares declining approximately 6% in after-hours trading. The stock currently trades around €35, representing a nearly 50% decline from its February peak of €66. This substantial correction reflects growing market apprehension about the company’s path to profitability.
Management remains optimistic, reaffirming ambitious 2030 targets of $6.5 billion in annual revenue and $1.3 billion in adjusted EBITDA. The central question for shareholders is whether Hims & Hers can successfully balance its aggressive expansion initiatives with the need to restore healthy profit margins, or whether its growth-at-all-costs approach will ultimately undermine financial stability.
Ad
Hims & Hers Stock: Buy or Sell?! New Hims & Hers Analysis from November 7 delivers the answer:
The latest Hims & Hers figures speak for themselves: Urgent action needed for Hims & Hers investors. Is it worth buying or should you sell? Find out what to do now in the current free analysis from November 7.
Hims & Hers: Buy or sell? Read more here...
