Hims & Hers Health shares dropped 5% after the company reported second-quarter revenue that fell slightly short of analyst expectations. For the quarter ending June 2025, the digital health platform recorded revenue of $545 million, representing a robust 73% increase year over year. However, this result missed Wall Street’s consensus estimate by about 1.2%.

Despite this minor shortfall, the company continues to show significant progress in scaling its business. Adjusted EBITDA more than doubled in the quarter, a clear sign of improved profitability. The company’s subscriber base grew by 31%, and nearly 1.5 million customers are now using personalized treatment plans, reflecting an 89% jump from the previous year. Notably, more than 500,000 customers now benefit from plans that address multiple conditions—a growth of nearly 170%.

While revenue growth is impressive, gross margin contracted from 81% to 76%, and free cash flow swung negative due to higher investment in inventory and infrastructure. Hims & Hers is investing heavily to transition from a telehealth provider to a more comprehensive, personalized health and wellness platform. Recent additions to its leadership team and expansion into new areas like lab testing and hormone health illustrate this strategic evolution.

Looking forward, these investments are designed to enhance the company’s capabilities and deliver a more unified and personalized healthcare experience. While near-term margins may be pressured, Hims & Hers appears focused on building a foundation for long-term growth as it aims to broaden the scope of conditions covered under its membership model. Investors will be watching closely to see if the company can translate rapid top-line growth into sustained profitability.