Hims & Hers Q2 2026: Growth Up, Margins Down

Hims & Hers accelerated revenue growth while gross margin fell twelve percentage points. Management calls the quarter proof that the model can scale. The income statement asks for patience.

In this episode of Quarters, Andrew Dudum argues that Hims can expand access to care and remain profitable. CTO Mo Elshenawy describes the company’s AI as load-bearing, not decorative, while insisting that clinicians remain in charge. CFO Yemi Okupe names the cost: gross margins are likely to remain below historical levels.

Revenue reached $753.2 million, up 38%. Gross margin fell to 64% from 76%, and the company posted a net loss of $86.3 million. Growth is the proof. Margin pressure is the price of admission.

Transcript

SPEAKER_00 0:00

Welcome to Quarters. Public Earnings Calls. Only the human part. I'm Terry, hims and hers, Andrew Dudum, August 10th. Revenue accelerated. Gross margin fell 12 points. Management calls the quarter proof. The income statement says, not so fast. Here's the call.

SPEAKER_01 0:17

This quarter we made significant progress on building a first of its kind health experience that proves it is possible to deliver access to world-class care on a global scale at a reasonable price. As our customer base grows and our influence on the industry deepens, we are showing that a business can both take care of people and be profitable.

SPEAKER_00 0:39

Take care of people and be profitable. Good goal. Ugly scoreboard, real quick. Revenue, $753.2 million, up 38%, nearly 2.9 million subscribers. Gross margin 64%, down from 76%. Net loss $86.3 million. Adjusted EBITDA, $60.3 million. 8% margin down from 15%. Third quarter revenue guide, $880 million to $900 million. Growth up, margins down. Then the CTO has the line of the call.

SPEAKER_03 1:22

Our AI-centered technical strategy is the difference between adding a feature and reimagining the entire customer experience. We are making AI load-bearing, not decorative. We are replacing the traditional telehealth model with something entirely new for our industry. A unified care experience where customers' care team lives in a single platform that already knows them. No portals, no starting over, no explaining yourself to a tool that can only give you one size fits all advice. Just care that is built for you, guided by data, delivered by clinicians, and powered by seamless technology.

SPEAKER_00 2:01

Load-bearing, not decorative. Great line, also a line that needs a handrail. Five minutes later, he adds one.

SPEAKER_03 2:08

Importantly, we're not doing this to replace providers, but instead to elevate them. We feel strongly about always keeping clinicians in the loop and in charge of clinical decisions. At Hims and Hers, AI takes the routine work off clinicians' plates so they can spend their time on judgment, complexity, and the person in front of them. Our AI is bound by clinical protocols and guidelines developed by our medical experts, not the open internet.

SPEAKER_00 2:37

Not replace elevate, clinicians in charge, routine workout, judgment stays. That's the architecture, now the bill.

SPEAKER_02 2:45

Gross margins in the second quarter were 64%, down approximately six points quarter over quarter on an adjusted basis. This compression reflects deliberate strategic action to scale the specialties and markets that we believe will drive the long-term value of our platform. We do not believe anyone else in consumer health has the scale, infrastructure, and balance sheet to invest in this way. As branded weight loss products and international revenue become a larger portion of the business, we expect gross margins will remain below the levels we have historically achieved. What matters to us is that the underlying unit economics of the platform remains strong.

SPEAKER_00 3:19

Below historical, that is the part to keep, box score, line of the quarter, AI, load-bearing, not decorative, quirk. A health company says other health companies major in the minor. Thing that means something. AI already answers 80% of questions in the new experience and cuts non-clinical support work nearly 50%. Management says the investment pays back in 12 to 18 months. So this is not really a chatbot story. It is a cost structure story, wearing a lab coat, no tips, human ending. Doodum sounds like growth is proof. The margins sound like the price of admission, both can be true. They just cannot stay this far apart forever. If you like this, please subscribe to Quarters, no stock tips, just the human part. See you next, print.