The telehealth provider Hims & Hers delivered impressive third-quarter 2025 results on November 3, 2025, yet simultaneously announced an unexpected executive reshuffling that has captured market attention. While the company’s revenue substantially outpaced projections, its profitability metrics told a more concerning story, revealing potential challenges ahead for the fast-growing digital health firm.
Profitability Pressures Emerge Despite Record Sales
Hims & Hers reported $599 million in quarterly revenue, representing a substantial 49% year-over-year increase that comfortably exceeded analyst expectations of $580 million. The company’s subscriber base expanded to 2.47 million paying customers, marking 21% growth, while average monthly revenue per user climbed 19% to reach $80.
Beneath these robust growth figures, however, emerged troubling signs regarding the company’s bottom line. Adjusted earnings per share came in at just $0.06, significantly below the projected $0.10. More alarmingly, the gross margin contracted from 79% to 74%—a five-percentage-point decline within a single year. Market observers attribute this margin compression primarily to intensified competitive pressures following Amazon’s entry into the telehealth sector in November 2024.
Unexpected Management Reshuffling Raises Questions
Coinciding with its earnings release, Hims & Hers disclosed significant leadership changes that have prompted scrutiny from investors. Chief Operating Officer Nader Kabbani, who had joined the company as recently as May 2025, transitioned immediately into an advisory capacity. His responsibilities will be assumed by Mike Chi, previously Chief Commercial Officer, who now consolidates oversight of operations, marketing, product development, and commercial segments under his leadership.
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The timing of this executive transition raises important questions about the company’s strategic direction. Why would a COO depart operational leadership after merely six months, particularly as the company navigates international expansion and increasing regulatory complexity? While CEO Andrew Dudum emphasized Chi’s expertise and leadership capabilities, the abrupt nature of this change suggests potential strategic disagreements within the executive team.
Cautious Guidance Despite Ambitious Long-Term Targets
Looking ahead to the fourth quarter of 2025, Hims & Hers provided revenue guidance ranging between $605 million and $625 million. The company projected EBITDA margins of 9% to 10%, representing a decline from the 13% achieved in the third quarter. Although management reaffirmed ambitious long-term targets including $6.5 billion in annual revenue by 2030, current margin pressures and organizational turbulence cast doubt on the achievability of these goals.
Market valuation reflects significant growth expectations, with shares trading at approximately 32.5 times projected 2026 earnings. Whether Hims & Hers can deliver on these expectations while competing against Amazon and other established players entering the telehealth space remains a critical question for upcoming quarters.
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