How Hims & Hers Makes Money, and What a Smaller Telehealth Brand Can Copy

From Hims & Hers' SEC filings through its Q2 2026 report (filed August 10, 2026) unless noted. Not investment advice.

The numbers

*2024 includes a one-off tax benefit. Marketing percentages are our calculation from the filed figures. Sources: FY2023 release, FY2024 release, FY2025 release, FY2021 release.

2026 so far. Q1 revenue was $608.1 million (+4%), with a $92.1 million net loss, as Hims reset its weight-loss business. Q2 was $753.2 million (+38%), with a $86.3 million net loss and gross margin down to 64%. Subscribers reached 2.89 million, with $92 a month of revenue per average subscriber. In August it guided to $3.1–3.3 billion of revenue for 2026, and its long-term target is at least $6.5 billion by 2030 (Q2 2026 release, Q1 2026 release).

How the model works

What it sells. Sexual health, hair loss, hormone health (testosterone and menopause, added in 2025), weight loss, dermatology and mental health, plus lab testing from late 2025 and a range of white-labeled over-the-counter products (10-K FY2025). The Hers brand was nearly 40% of US revenue in 2025.

How it charges. Most US revenue is subscription purchases of prescription products. Customers pick a cadence from 30 days up to 360 days, auto-renewing and billed on each shipment. Hims's filings say longer cadences mean fewer shipments and higher gross margins, and that a recent shift toward shorter cadences has hurt margins (10-Q Q2 2026).

Personalized plans. Treatment plans "developed by licensed providers to meet the specific needs of individual customers and may include certain compounded formulations" made up over 70% of US revenue in 2025, up from about half in 2024. Even so, a majority of US revenue came from non-GLP-1 products (10-K FY2025).

Owned infrastructure. Hims owns two licensed 503A pharmacies, a 503B outsourcing facility (bought for $31 million in 2024), a peptide manufacturing facility and a lab. "The majority of prescriptions" go through its own pharmacies. Abroad, it bought Zava (Europe), Medici (Canada) and Eucalyptus (Australia and others, up to about $1.15 billion, closed June 2026).

The medical group structure

Hims's 10-K is a clear public example of the model covered in our friendly PC and MSO guide:

• "Due to the prohibition on the corporate practice of medicine adopted by a majority of states," Hims contracts with Affiliated Medical Groups, separate professional corporations "owned solely by licensed physicians."
• The groups "were incorporated and established with our assistance" to serve patients only through the Hims & Hers platform.
• Hims is their exclusive administrative services provider under ten-year agreements, for a fixed administrative fee.
• "The Affiliated Medical Groups retain sole control of clinical decision-making." Hims doesn't employ US clinicians.

A small brand gets the same separation off the shelf by using a clinician network's medical group (partners compared).

How it acquires customers

Marketing is Hims's biggest cost, and it calls marketing "a core strength." In 2025 it spent $919.3 million, of which $798.5 million was paid customer acquisition across display, search, streaming and linear TV (including a Super Bowl campaign), affiliates, radio and podcasts (10-K FY2025). Marketing fell from 76% of revenue in 2019 to about 35% in Q2 2026, and the company expects it to keep falling.

The only acquisition metric Hims publishes is payback. It targets a period of less than one year for cumulative gross profit from a cohort of new customers to exceed what it cost to acquire them (Q4 2024 letter). It also credits brand advertising with driving "direct type-in traffic and organic online search traffic."

The weight-loss saga

The lesson isn't that GLP-1s don't work. It's that a model built on mass compounding of an approved drug's copy was fragile, and Hims moved to branded drugs plus a membership. More in our 503A vs 503B guide.

The risks it carries now

• FTC lawsuit (July 29, 2026). The FTC, Utah and Los Angeles County sued, alleging Hims shared health information and customer lists with ad platforms "including Meta and Snap," enrolled and charged customers before a provider consultation, and made cancelling hard. Hims says it will defend itself and has booked about $60 million for the matter (FTC, 10-Q).
• Securities class action over its statements about the 2025 Novo partnership, pending.
• An FDA warning letter to its 503B facility in December 2025 over adverse-event reporting.
• Structural risks it lists itself: dependence on medical groups it doesn't own, compounding law, ad-platform and privacy rules, and influencer marketing, which is banned for prescription drugs in the UK, EU and Canada.

What a niche brand can copy

1. Subscription cadences. Offer 30, 90 and 180-day plans and encourage longer prepaid ones. Hims's own filings tie longer cadences to higher margin. Make refill timing clear and cancelling as easy as signing up; that's the heart of the FTC case.
2. Multi-condition plans. Revenue per subscriber rose from $54 in 2023 to $92 in 2026 largely through mix and multi-condition plans. Pair adjacent needs, such as hair and skin, or weight and labs.
3. Stigma-first positioning. Hims started with ED and hair loss: treatments people would rather not discuss in person. Any "quiet" niche works the same way.
4. Payback, not just acquisition cost. Track how many months a cohort takes to repay its acquisition cost, per channel. Model it in the profit calculator.
5. A clean clinical structure. Keep clinical decisions with a physician-owned medical group and pay it a fixed, fair-market fee.
6. Approved and branded drugs where compounding is contested. Hims's 2026 reset shows the model survives without mass compounding.
7. Content and organic search. Hims credits organic and direct traffic. For a small brand, it's the one channel that scales without a Super Bowl budget.

What only works at scale

• Owning pharmacies, a 503B facility, an API plant and a lab. That's tens of millions of dollars and direct FDA exposure. Use partner pharmacies, and keep a second one ready.
• TV, Super Bowl and large affiliate programs. They amortize over roughly $800 million a year of acquisition spend.
• "Personalized" compounding at volume. FDA has called templated personalization pretextual. It's risky at any size.
• Retargeting with health data through ad pixels. The FTC case shows this is a liability for anyone. Use consented, server-side measurement reviewed by counsel.

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