Key Takeaways
- Gross margin at Hims & Hers has fallen for eight straight quarters, from 79% in September 2024 to 64% in the quarter ended June 2026, even as revenue grew 40% year over year in that same latest quarter.
- Reported EBITDA margin turned negative in the March 2026 quarter and stayed there in June, at negative 8.8%, a sharp contrast with the 8% “adjusted” EBITDA margin management presented on the August earnings call.
- CTO Mohamed ElShenawy’s AI-native care platform, rolled out in July across the Hers weight loss business, is the mechanism management is counting on to close that gap, with a 12- to 18-month payback and a Q4 guide that implies adjusted EBITDA margin near 12%.
Hims & Hers Stock Leans on AI to Answer a Margin Question It Can No Longer Dodge
On Q2 2026 earnings call, Andrew Dudum stood in front of investors and called the quarter “about a single word: proof.” Behind him sat two years of a chart moving in one direction.
Gross margin at Hims & Hers had opened fiscal 2025 near 79%. By the quarter he was describing, it had slipped to 63.8%, the eighth consecutive quarterly decline pulled straight from the company’s own income statement.
The slide was not subtle, and it was not new. It ran through the branded weight loss pivot in March 2026, through the Eucalyptus acquisition that closed in June, through international markets in the UK, Australia and Germany that are still priced to grow rather than to earn. Revenue climbed 40% year over year to $753 million in the June quarter. Gross margin fell anyway, another 600 basis points in three months alone.
What changed this quarter was the explanation. CTO Mohamed ElShenawy described an AI-native platform built into the Hers weight loss experience since early July, one he said is already cutting nonclinical support tasks in half and pushing customer messaging volume up threefold, with AI answering 80% of incoming questions itself. Management expects the investment to pay for itself within 12 to 18 months, with savings partly redirected into lower prices and international expansion.
It is a specific claim, tied to a specific number, and it deserves to be tested against something sturdier than the language used to present it.
The Real Test Is Whether the Efficiency Shows Up Before the Cash Runs Thin
The number that actually settles the question is not the 8% adjusted EBITDA margin the company presented on its call. It is the unadjusted figure sitting one line above it.
Reported EBITDA margin turned negative in the March 2026 quarter, at negative 4.3%, and fell further to negative 8.8% in June. That is two consecutive quarters of the reported profitability line moving the wrong way while management’s adjusted version tells a story of gradual improvement, up a full point sequentially to 8%.
The gap between those two numbers is not a mystery. Management stripped out roughly $81 million in the June quarter alone, covering Eucalyptus acquisition costs, restructuring tied to the weight loss pivot, and legal accruals from the FTC lawsuit filed in late July. Some of that genuinely is one-time. Deal costs do not repeat every quarter. But the reported margin had already gone negative in March, months before Eucalyptus even closed, which suggests the underlying business was carrying real cost pressure before a single acquisition dollar hit the books.
That is the actual bet embedded in this stock right now. Management is asking the market to look past two quarters of negative reported profitability and trust that AI-driven efficiency, still just three months old in one product line, scales fast enough to deliver the roughly 12% adjusted EBITDA margin implied by fourth quarter guidance. If it does, the gap between adjusted and reported profitability should start closing on its own as the one-time costs roll off and the AI savings compound. If it does not, the “proof” Dudum described in August starts to look more like a hope than a result, and the next earnings call becomes the one that actually needs to show it.
Should You Invest in Hims & Hers Health, Inc.?
The only way to really know is to look at the numbers yourself. TIKR gives you free access to the same institutional-quality financial data that professional analysts use to answer exactly that question.
Pull up HIMS stock and you’ll see years of historical financials, what Wall Street analysts expect for revenue and earnings in the quarters ahead, how valuation multiples have moved over time, and whether price targets are trending up or down.
You can build a free watchlist to track Hims & Hers Health, Inc. alongside every other stock on your radar. No credit card required. Just the data you need to decide for yourself.
Access Professional Tools to Analyze HIMS stock on TIKR for Free →
Looking for New Opportunities?
- See what stocks billionaire investors are buying so you can follow the smart money.
- Analyze stocks in as little as 5 minutes with TIKR’s all-in-one, easy-to-use platform.
- The more rocks you overturn… the more opportunities you’ll uncover. Search 100K+ global stocks, global top investor holdings, and more with TIKR.
Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!
