HIMS Q3 2025 Earning Analysis Report
Quarterly double beat but Q4 sequential slowdown forecast and guidance cut raises questions for the call.
HIMS Q3 2025 Earnings Analysis: “Hollow Beat” as Guidance Cut Overshadows Q3
Stock: $HIMS (Hims & Hers Health, Inc.)
Quarter: Q3 2025
1. Executive Summary
Hims & Hers ($HIMS) reported Q3 2025 results that beat consensus targets for both Revenue and Adjusted EBITDA and this is driving the stock after hours. However, this beat is somewhat overshadowed by questions raise with a sequential decline in profitability, a cut to full-year Adjusted EBITDA guidance and an implied signficant slowdown in Q4 revenue growth, which now sits below market expectations.
Result: Revenue of $599.0M beat your $580M consensus (+3.3%). Q3 Adjusted EBITDA of $78.4M also beat your $68M target (+15.3%).
Profitability Concern: The “beat” masks a worrying trend. Adjusted EBITDA fell 4.6% sequentially from $82.2M in Q2, despite a 10% sequential increase in revenue. This indicates significant negative operating leverage.
Growth Momentum: Top-line growth remains strong at +49.2% YoY, but this is a deceleration from Q2’s 73% YoY growth.
Management Commentary: The narrative has shifted aggressively from “building” to “expanding.” Management announced a strategic GLP-1 price cut, new specialty launches (Testosterone, Menopause), a strategic investment in GRAIL (cancer detection), and “active discussions” with Novo Nordisk to offer branded Wegovy.
Guidance Implications: Management’s full-year revenue guidance midpoint ($2.35B) is in line with your $2.342B consensus. However, the new full-year Adjusted EBITDA midpoint ($312M) is a reduction from prior guidance and misses your $317M consensus, which will force downward analyst revisions.
Conclusion: HIMS is successfully executing an aggressive platform expansion, but Q3 results reveal this growth is costly and non-linear. The market is now forced to reconcile the positive Q3 beat with a negative sequential profit trend and a pessimistic full-year outlook.
2. Performance Highlights & Quantitative Analysis
Consensus Comparison
Quarterly Performance Table
*Note: Q3 2024 Net Income included a large, one-time $61M tax benefit, making YoY comparisons misleading. The Adjusted EBITDA growth is a more accurate measure of operational performance.
Key Business Drivers (Q3 2025)
Subscriber Growth: Total subscribers reached nearly 2.5 million 1, a 21% YoY increase222. Management noted that excluding the on-demand sexual health transition, subscriber growth was over 40% YoY3.
Subscriber Quality: Adoption of higher-value personalized plans grew 50% YoY4. Subscribers using multi-condition plans grew over 80% YoY5.
Engagement: Monthly Online Revenue per Average Subscriber (ARPU) rose 19% YoY to $806.
Margin Contraction: Gross Margin fell to 74% 77, down 500 bps from 79% in Q3 202488. This was attributed to “shorter shipping cadences for certain weight loss offerings, and... increased fulfillment costs”9.
Marketing Leverage: Marketing spend as a percentage of revenue improved, falling to 39% 10101010from 45% in the prior-year quarter11111111.
3. Management Discussion & Analysis (MD&A) Comparison
Management Discussion (Current Quarter - Q3 2025)
Management emphasized the platform’s evolution into a “trusted health and wellness partner”12. The narrative was heavily focused on strategic execution and future growth levers13. Key highlights include the successful launch of new specialties (Testosterone and Menopause) 14, strategic price reductions in GLP-1s to drive accessibility 15, and significant international expansion with the ZAVA integration and Spain launch16. There is also a major new focus on proactive and preventative care, with the upcoming launch of comprehensive lab testing 17and a strategic investment in GRAIL for cancer detection18. Management also disclosed “active discussions” with Novo Nordisk to make branded Wegovy available19.
Management Discussion (Prior Quarter - Q2 2025)
The Q2 discussion focused on delivering “personalized, high-quality care at scale”20. The core themes were platform momentum and precision medicine21212121. Management highlighted strong customer outcomes, particularly in weight loss, citing low discontinuation rates222222. The narrative centered on vertical integration, specifically the acquisition of a blood testing lab 2323to support upcoming categories and a new CTO’s “ambitious” vision for a unified data and AI platform24242424. International expansion was also mentioned via the ZAVA acquisition25252525.
Tone Shift Analysis
Sentiment Delta: More Aggressive (+2.0 vs. Q2)
Summary: Compared to Q2, management’s tone in Q3 became more expansive and aggressive. Q2’s discussion was foundational, focused on building capabilities (new CTO, lab acquisition) 26262626and proving the existing model27. In Q3, the narrative has shifted to executing strategic expansion. This is evidenced by the launch of the hormone categories 28, a strategic GLP-1 price reduction 29, a major new partnership discussion (Novo Nordisk) 30, a strategic investment in preventative care (GRAIL) 31, and new market entry (Spain)32.
4. Guidance Evaluation and Consensus Implications
Management’s new full-year profitability guidance is the most critical takeaway, as it misses your consensus target and will force analyst downgrades.
5. What Is Missing? (Key Market Concerns)
The Profitability Disconnect: The biggest issue is the contradiction between the Q3 EBITDA beat ($78.4M vs. $68M) and the simultaneous cut to full-year EBITDA guidance (which now misses your $317M target). Management needs to explain what is causing the massive Q4 margin compression they are forecasting ($60M midpoint).
Sequential Decline: Why did Adjusted EBITDA fall 4.6% sequentially while revenue grew 9.9%? This negative operational leverage is a major red flag that was not fully explained.
Gross Margin Details: The 500 bps drop in gross margin is alarming33333333. Management’s explanation (”shorter shipping cadences”) 34 is vague. The market needs to know how much of this is from the strategic GLP-1 price cut vs. fulfillment costs vs. the ZAVA integration.
Novo Nordisk Economics: The “active discussions” 35 are a major development. The market is missing any detail on potential economics or how offering branded Wegovy (a lower-margin product) would impact the highly profitable compounded GLP-1 business.
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The Novo Nordisk partnership discussion is the real wildcard here because branded Wegovy access would legitimize HIMS but also compress margins significantly compared to compounded GLP-1s. The sequential EBITDA decline despite revenue growth suggests the GLP-1 price cuts are already eating into profitability faster than management anticipated. If NVO is serious about this partnership, they're probably trying to recapture market share lost to compounders without undermining their direct sales channels. The Q4 margin compression guidance makes sense only if they're prebaking the economics of a lower-margin branded product mix, which investors need clarity on befor the call.
The Q4 guidance cut is defintely concerning but I think the market is overreacting a bit. Management's strategy to invest in new verticals like menopause and cancer screening through GRAIL shows they're thinking long term beynd just GLP-1s. The Novo Nordisk partnership could be huge if they can negotate favorable terms. Yes margins are compressing now but this feels more like an investent phase than a structural problem. The 49% revenue grwoth shows the underlying demand is still there.