Hims & Hers Health, Inc.

Good afternoon. My name is Emma, and I will be your conference operator today. At this time, I would like to welcome everyone to the Him and Hers Health Fourth Quarter 2021 Earnings Results Conference Call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, again, press the star one. Thank you. Jay Spitzer, Senior Vice President, Investor Relations. You may begin your conference.

Good afternoon, ladies and gentlemen. Welcome to the Hims and Hers Health fourth quarter and fiscal year 2021 earnings call. On the call with me today is Andrew Dudum, co-founder and our chief executive officer, as well as Demi Okupe, our chief financial officer. Before I hand you over to Andrew, I will, as usual, take you through the legal and safe harbor and cautionary declarations. Certain statements and projections of future results made in this presentation constitute as forward-looking statements that are based on our current market competitive and regulatory expectations and are subject to risks and certainties that could cause actual results to vary materially. We undertake no obligation to update publicly any forward-looking statement after this call, whether as a result of new information, future events, changes in assumptions, or otherwise. Please see our most recently filed 10-K and 10-Q or discussions of risk factors as we relate to forward-looking statements. In today's presentation, we use certain non-GAAP financial measures. We refer you to the reconciliation table contained in today's press release available on our Investor Relations website for reconciliations to the most directly comparable GAAP financial measures and related information. You'll find a link to the webcast on our Investor Relations website at investors.forhims.com. After the call, this webcast, we archived on the website for 12 months. And with that, I'll now turn the call over to Andrew.

Thank you, Jay. Hims and Hers achieved so many milestones in 2021, for which I'm proud. By year end, we had over 600,000 subscriptions. We grew revenue 83%. We extended our market leadership, invested in building out our management teams, and grew our omnichannel presence to over 20,000 retail locations. This past quarter was no different, with accelerations and strong execution across our core and emerging categories. Revenue accelerated to $84.7 million in the fourth quarter, a 104% increase year over year. Subscriptions grew from 312,000 to 609,000. a 95% increase from year end 2020. As a result of healthier retention, new customer cohorts acquired since 2020 now reach a cumulative gross profit in excess of their paid marketing expense within just two quarters. In terms of brand awareness and traffic, our digital properties grew to over 11 million visits in the fourth quarter, a 90% increase year over year. while decreasing customer acquisition costs per new sub 13% over the same time period. We meaningfully expanded our omnipresent strategy through existing and new long-term partnerships with some of the largest retailers in the United States, including Target, Walgreens, CVS, Bed Bath & Beyond, Vitamin Shop, and more. And in combination, our core and emerging categories are contributing to an acceleration in revenue diversification, giving us confidence in our ability to deliver robust growth for many years to come. We invested heavily in strategic infrastructure this year. This infrastructure both supports the accelerated growth in our core categories, but also lays the foundation for improved customer experiences in our emerging businesses. Improved customer experience is key to our company's ongoing success. and creating a loyal customer base. For that reason, we continue to invest in infrastructure verticalization across every aspect of our business. Whether the ultimate benefit be speed, price, quality, or selection, we believe these strategic investments will ultimately accelerate our ability to delight customers, drive increased profits, and ultimately stronger returns on invested capital. Our distribution and pharmacy fulfillment centers expanded significantly with our compounding pharmacies in Arizona expanding from 1,700 square feet to nearly 25,000 square feet. In addition, our Ohio pharmacy facility now is fully utilizing over 300,000 square feet. Clinical capabilities expanded dramatically with expansion of our EMR's breadth of services to include broadened specialties in dermatology, psychiatry, therapy, and general medicine, powering over 2.4 million visits versus 1.6 million the previous year, and with nearly 25,000 clinical quality reviews compared to 12,000 in 2020. Our iOS mobile platform was launched successfully nationwide. Our initial tests see 60% of new members downloading the app in their first week of beginning a treatment on our platform. unlocking a whole new level of patient engagement. And lastly, our dedicated team grew to nearly 400 full-time employees versus 181 at the end of last year, strengthened by our expanded management team, including our new CFO and Chief Growth Officer. While so much has happened this past year, the reality is that we are in the earliest chapters of our company's life. Today, a small fraction of healthcare is delivered online. But what was true for e-commerce in the 90s is true today for digital health. The wave is just beginning and only growing. Platforms like hims and hers are at the forefront of making people's lives easier, giving them access to treatment and services, doctors and specialists that many people are not otherwise able to obtain at transparent prices and at a level of care and respect often not found in the traditional health system. We believe HIMSS and HERS has the potential to be synonymous with this next generation of healthcare. We are accelerating the discovery and personalization of treatment options and ultimately empowering people with choice, information, and better outcomes. Consumers are eager to interact with healthcare in these new ways, but want to do so with brands that they recognize and trust. The world is changing and our market is moving fast. We are near the front of this race and well positioned, but recognize we're in the early laps. We believe our ability to resonate with young customers, establish relationships with many of the nation's top retailers, build trust and brand loyalty, and drive selection and breadth of services will allow us to solidify and extend this leadership position. Given the scale of this opportunity, we are rigorously focused on creating shareholder value over the long term. At the core of this strategy is an internal focus on our simple yet powerful flywheel. This equation is our North Star. We believe in the power of its compounding benefits and are rigorous in our daily tracking of metrics and analytics, such as engagement, thickiness, acquisition costs, and retention, to ensure we are innovating towards improvements. Here are the basic elements. To begin, we generate brand awareness and trust through authentic marketing and omni-channel distribution. We accomplished a lot on this front through our ability to scale new campaigns with paid marketing dollars of 39% from the first quarter to the fourth quarter, while maintaining relatively flat customer acquisition costs per new sub throughout the year. Tied to this was our ability to scale through our retail partnerships to reach over 20,000 total physical locations, unlocking deeper trust, awareness, and ultimately customers. This increased demand then unlocks our second core element of the flywheel, our ability to broaden access to high-quality medical providers and treat more conditions on our platform. This was a big one for us in 2021. with the launch of new and innovative treatments and services in dermatology, sexual health, mental health, wellness, and primary care. This expansion of medical expertise and broadened treatment selection leads to better engagement, better experiences, and more trust. Ultimately, in turn, restarting the flywheel and bringing in more customers once again. I woke up on New Year's Day and told my wife I'd never been more excited to start a new year. Our business is stronger than it has ever been, our team more committed than ever before, our brand more well-known, our products lining more shelves, our selection and innovation and treatments more diverse, and our ambitions bigger. And most importantly, our customers are happier and healthier. I'm proud of the results we share with you today and of our team's dedication to our mission. Before handing it off, I'd love to take a quick moment to introduce you to one of our newest leaders and Chief Financial Officer Yemi Okupe. Yemi brings to the HIMSS and HERS leadership team a wealth of experience successfully scaling some of the most disruptive technology companies of the last two decades. Uber, Braintree, Google, eBay and PayPal. Yemi's superpowers have already begun to accelerate the pace of innovation, growth and efficiency within our business. I'm honored to welcome him and energized by his early contributions. At this point, I'll now turn the call over to Yemi for a more detailed review of our results.