Hims & Hers Health, Inc.

Ladies and gentlemen, thank you for standing by. At this time, I would like to welcome everyone to the Hims and Hers second quarter 2024 earnings conference call. Please note that this call is being recorded. 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'd 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. I would now like to turn today's call over to Bill Newby, Head of Investor Relations. Please go ahead.

Good afternoon, everyone, and welcome to the HIMSS and HRSS Health second quarter 2024 earnings call. Today, after the market closed, we released this quarter's shareholder letter, a copy of which you can find on our website at investors.himss.com. On the call with me today is Andrew Dudum, our co-founder and chief executive officer, as well as Yemi Okupe, our chief financial officer. Before I hand it over to Andrew, I need to remind you of legal safe harbor and cautionary declarations. Certain statements and projections of future results made in this presentation constitute forward-looking statements that are based on, among other things, our current market, competitors, and regulatory expectations and are subject to risks and uncertainties that could cause actual results to vary materially. We take 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 reports for a discussion of risk factors as they relate to forward-looking statements. In today's presentation, we also have certain non-GAAP financial measures. We refer you to the reconciliation tables to the most directly comparable GAAP financial measures contained in today's press release and shareholder letter. You can find this information as well as a link to today's webcast at investors.hims.com. After the call, this webcast will be archived on the website for 12 months. And with that, I will now turn the call over to Andrew.

Thanks, Bill. The second quarter marked one of the most exciting points in our company's history, as momentum continued to rapidly accelerate in the fulfillment of our mission to help the world feel great through the power of better health. The long-term trend toward the consumerization of healthcare continues, and the belief is that this trend will only accelerate. Consumers are increasingly expecting the same quality and level of service that technology has unlocked across other areas of their lives. This includes speed, convenience, transparency, affordable pricing, and a personalized experience. I'm excited by the progress we have made on our platform in unlocking these capabilities for consumers across a broader set of conditions and specialties. We believe that our platform is capable in the long term of delivering a new type of healthcare where consumer preference and needs, insights and data, is at the foundation of a hyper-personalized set of offerings, treatments, and care. We're more energized than ever to deliver this innovation on behalf of the hundreds of millions of people trying to live their happiest and healthiest lives. Several elements continue to come together in the second quarter to bring us one step closer in making this vision a reality. First, we brought in the number of personalized offerings across our specialties, with four out of five specialties now carrying at least 10 personalized solutions. Second, We expanded our weight management offering with the launch of GLP-1s. Weight is a particularly strategic category for us, and that enables us to scale the value that comes from personalized solutions to over 100 million potential consumers. Lastly, we brought on world-class talent across multiple levels of the organization, from the board to ML leaders that will enable us to further refine our capabilities and scale them to increasingly broader audiences. Christopher Payne, who most recently served as President and COO of DoorDash, brings a great depth of experience helping organizations scale their operations globally. Our ambition is to make the world feel great through the power of better health. Foreign policy and regulatory expertise from Anya Manuel will help us broaden the geographic scope of our platform in the coming years. And Cora Schultz brings over three decades of experience in the pharmaceutical industry, that can help us effectively navigate the challenges that higher acuity and more complex specialties, inclusive of weight, may present. Our platform has rapidly scaled from thousands of interactions to millions. And with greater personalized capabilities comes the ability to leverage, as appropriate, our structured data to further refine and improve our customers' experience on the platform. We recently kicked off our search for a CTO with expertise in AI and machine learning. We believe this hire will help put us at the forefront of the many exciting opportunities AI can bring in healthcare. Strong progress across these areas are translating into incredible business performance. During the quarter, revenue increased 52% year over year to $316 million, yielding $39 million of adjusted EBITDA. The primary driver of our growth continues to be the expansion of our subscriber base. We ended the quarter with nearly 1.9 million subscribers, adding more than 155,000 net new users to the platform. Our focus on providing access to high-quality, personalized solutions at an affordable price continues to resonate with consumers. Over 40% of subscribers in the second quarter were utilizing a personalized solution, representing close to a 30-point increase in just two years. An evolving portfolio of personalized offerings that providers can utilize to meet the unique needs of individual consumers was a key catalyst behind this expansion. This innovation is informed in part by feedback from our users, and development occurs through collaboration with our internal specialists, leading medical organizations, and external advisors. Increasingly, we are driving value for consumers across a broader set of specialties. Consumer feedback has been resoundingly positive. As we've launched access to treatments that address multiple concerns within a specialty, and even more exciting, we now have solutions that span across specialties. This shows up in the ability to target multiple sexual health concerns, support cardiovascular health through a more simplified daily routine, or address concerns across our most popular specialties concurrently in one solution. The combination of these multi-condition capabilities and access to a broader set of form factors is having a profound impact on the value we can provide to consumers. In dermatology, providers can prescribe users personalized sprays, serums, or oral medications based on their unique needs. These capabilities enable us to cover a broader spectrum of user profiles. The individual seeking to proactively prevent hair loss and an individual seeking to actively regrow hair each now have access to a distinct set of solutions that better meet their needs. As a result, more than 85% of new subscribers in our dermatology specialty were utilizing a personalized solution in the second quarter. The impact of personalization extends beyond simply consumer preference. By addressing the needs of different user profiles, we're able to remove barriers to treatment for a broader set of individuals, ultimately yielding stronger customer acquisition. Additionally, we expect stronger retention of consumers on these offerings. especially as they continue to be placed at more mass market price points. Investment in the expansion of these offerings will increase in the second half of the year. We expect to launch access to new multi-condition treatments with a particular focus on those that are inter-specialty or enable expansion into adjacent markets. Additionally, new form factors across our specialties are expected in the second half. We believe this will allow us to scale our new verticals even faster. while also maintaining robust growth for even our longest tenured specialties. Our strong financial profile has enabled us to capitalize on unique opportunities in order to position our platform for future growth. In 2021, we acquired Apostrophe, an Arizona-based 503 facility. This acquisition provided compounding capabilities and expertise that serve as the foundation for many of our personalized offerings today. We're excited to have recently signed an agreement to purchase an FDA-registered 503 facilities. Over the long term, this acquisition will present additional opportunities across specialties such as hormonal therapy and other treatments that require sterile compounded medications. In the near term, this further enhances the durability of our supply chain for compounded GLP-1s and positions us to improve accessibility as we verticalize these operations. Prior to signing this acquisition, we expanded the capabilities of our weight loss specialty with the launch of compounded GLP-1s across 21 states in the second quarter through a partnership with an FDA-registered 503 facility. Since then, we've expanded access to the offering to more than 30 states, covering over 60% of the U.S. population, and we anticipate nationwide availability before year end. We believe that our platform was already having a meaningful impact across society prior to this launch by helping close to 2 million consumers access treatment for many of the most emotionally resonant conditions. We expect that the value we bring to consumers within our weight loss specialty will further enable us to have a transformative impact on society. Over 100 million individuals suffer with weight-related challenges in the US alone. And those challenges don't simply impact an individual's appearance. These challenges can also erode confidence and lead to serious health-related conditions, including cardiovascular disease, diabetes, and cancer. Given the impact obesity can have on an individual and the severity of conditions it can lead to, we expect weight loss as a specialty to be foundational over the coming decade in the way HIMS and HERS impacts the lives of our consumers and the way we influence the healthcare industry. Historically, weight-related challenges have been viewed simply as a matter of lifestyle preference. GLP-1s have driven broader awareness that weight-related issues can also be a medical condition. This has empowered more consumers to actively seek treatment, even when GLP-1s are not the right fit. In the fourth quarter of last year, we launched our weight loss specialty with personalized oral-based solutions. This offering utilizes different combinations of personalized compounds, to address the underlying conditions clinically tied to obesity, including metabolic disorders, depression, and overeating habits. It has been incredibly successful. Within less than a year, it has scaled to a run rate of 100 million in annual revenue, becoming our fastest specialty ever to do so. Our approach centers on equipping providers with the ability to offer consumers access to a breadth of personalized solutions. And we expect the ability to personalize oral formulations will remain central to our weight loss offering and continue to evolve. We also believe our ability to provide consumers with access to personalized GLP-1 solutions will offer an experience and level of service that today is only available to the most privileged segments of our society. This approach is informed by Dr. Craig Primack, our SVP of weight loss. who have seen firsthand in a Scottsdale clinic the impact a personalized care model can have on providing a more sustainable path for a wider spectrum of consumers to reach the desired outcome. Side effects and misalignment of expectations drive a meaningful reduction in adherence for these solutions, alongside issues like cost and accessibility. We believe adherence to these medications can be improved considerably through consistent communication between providers and consumers to manage expectations. personalized titration schedules, and personalized end dosing to mitigate side effect concerns. Each of our subscribers has the ability to communicate concerns to a licensed provider and receive a response in a timely manner for no extra charge across all of our specialties today. Personalization for GLP-1 solutions will be supported by two fundamental components. The first is the breadth of products offered on the platform. Recently, we launched personalized dosages for compounded semaglutide that providers can prescribe in response to side effect concerns and desired levels of weight loss. Patient feedback to their provider during the titration process can inform the appropriate end-state dose for users. Additionally, we're excited to expand the scope of offerings available on the platform, and we'll look to add terzepatide and liraglutide to the existing compounded semaglutide offering in the near future. We expect this portfolio of solutions will be inclusive of branded offerings when supply allows. The second component is continuing to scale our technology investments across weight loss by activating MedMatch by HIMSS and HERS for providers in the specialty. Machine learning and AI models anchored on consumer preferences and prior experiences across our provider network have been built for weight loss. We are also moving toward integrating explainability into the EMR, further empowering providers with these groundbreaking tools. The value of this technology will be vital as the range of solutions, dosages, and treatment options continue to expand over the coming quarters. With scale, we expect these models will continue to improve, helping providers to optimize initial medication selection, titration schedules, and end-state dosing to help each user reach their desired outcome. By leveraging this approach, we are providing a weight loss program that can continuously improve over time. Having said that, we've already started. Based upon self-reported data from approximately 12,000 customers subscribed at holistic HIMS and HERS weight loss offering, customers report having lost on average 10.2 pounds while on compounded GLP-1 injections and 6.3 pounds while on compounded oral medication kits between their initial weight loss consultation and their first check-in approximately four weeks later. During the same period, less than 10% of customers using our compounded GLP-1 offering have reported side effects that they feel they can't tolerate. This progress underlines the importance of a holistic approach, as each of our subscribers has access to personalized treatment plans based on lifestyle, eating pattern, health history, and weight loss goals. and includes medications in addition to diet, exercise, and weight loss counseling and support. We believe these figures are just the starting point for what we can help our customers achieve. By continuing to invest strategically in our technological infrastructure and further refining our approach, we believe we can deliver access to better outcomes than any other in-person or digital provider over the long term. We are in a transformative moment in healthcare delivery in this country, and Hims and Hers is uniquely positioned to meet that moment and set the standard for what truly personalized care can look like for every household in the United States. We believe that we are transforming the way that consumers engage with their health, and I look forward to extending this experience to an ever-growing audience in the second half of 2024. With that, I will pass it over to Yemi to walk through our financials in greater detail.