Hims(HIMS)2024-08-05 20:15Revenue and Profit Growth - Revenue for Q2 2024 increased to $315.648 million, up 51.8% from $207.912 million in Q2 2023[12] - Gross profit for Q2 2024 rose to $256.613 million, a 50.8% increase from $170.158 million in Q2 2023[12] - Total revenue for the three months ended June 30, 2024 was $315.6 million, with online revenue contributing $306.8 million and wholesale revenue $8.8 million[29] - Online revenue increased by 52.5% year-over-year to $574.6 million for the six months ended June 30, 2024[29] Net Income and Comprehensive Income - Net income for Q2 2024 was $13.297 million, compared to a net loss of $7.157 million in Q2 2023[12] - Total comprehensive income for Q2 2024 was $13.291 million, compared to a loss of $7.304 million in Q2 2023[12] - Net loss for the six months ended June 30, 2023 was $17.2 million, compared to net income of $24.4 million for the same period in 2024[18] - Basic net income per share for the six months ended June 30, 2024 was $0.11, compared to a net loss per share of $0.08 for the same period in 2023[91] Operating Expenses - Marketing expenses for Q2 2024 were $144.922 million, up 35.2% from $107.219 million in Q2 2023[12] - Total operating expenses for Q2 2024 increased to $245.583 million, up 36.9% from $179.394 million in Q2 2023[12] - Operating lease costs for the six months ended June 30, 2024 were $1.4 million, up from $1.2 million in the same period of 2023[51] Stock-Based Compensation - Stock-based compensation for Q2 2024 was $24.672 million[14] - Stock-based compensation expense was $31.0 million for the six months ended June 30, 2023, increasing to $43.1 million for the same period in 2024[18] - Total stock-based compensation expense for the three months ended June 30, 2024 was $24.042 million, compared to $16.845 million for the same period in 2023[86] Stockholders' Equity and Accumulated Deficit - Total stockholders' equity as of June 30, 2024, was $361.966 million[14] - Accumulated deficit decreased to $343.750 million as of June 30, 2024, from $368.175 million at the end of 2023[14] - Total stockholders' equity increased from $311.7 million as of December 31, 2022 to $320.1 million as of June 30, 2023[16] Cash Flow and Investments - Net cash provided by operating activities was $26.3 million for the six months ended June 30, 2023, increasing significantly to $79.4 million for the same period in 2024[18] - Cash, cash equivalents, and restricted cash increased from $66.3 million as of June 30, 2023 to $130.2 million as of June 30, 2024[18] - The company invested $6.2 million in website development and internal-use software for the six months ended June 30, 2024, up from $4.1 million in the same period of 2023[18] - Purchases of property, equipment, and intangible assets increased from $5.3 million in the six months ended June 30, 2023 to $13.8 million in the same period of 2024[18] - Cash and cash equivalents and short-term investments totaled $227.3 million as of June 30, 2024, compared to $221.0 million as of December 31, 2023[168] Share Repurchases and Equity Plans - The company repurchased $48.0 million of common stock during the six months ended June 30, 2024, compared to no repurchases in the same period of 2023[18] - The company repurchased $48.0 million worth of Class A common stock during the six months ended June 30, 2024, fully utilizing its $50.0 million share repurchase program[63] - The Board of Directors authorized a new share repurchase program in July 2024, allowing the company to repurchase up to $100 million of Class A common stock[95] - 21,000,000 shares of Class A common stock were reserved under the 2020 Equity Incentive Plan, with an additional 19,000,000 shares potentially added from the 2017 Plan[66] - As of June 30, 2024, 54,332,951 shares of Class A common stock were reserved under the 2020 Plan, with 14,625,499 shares available for grant[67] - The Employee Stock Purchase Plan (ESPP) reserved 4,000,000 shares initially, with 6,047,919 shares reserved and 4,692,982 shares available for issuance as of June 30, 2024[68] - $0.6 million was withheld via employee payroll deductions for ESPP participants as of June 30, 2024[69] - $3.4 million of unrecognized stock-based compensation related to the ESPP is expected to be recognized over 1.60 years[70] - The CEO was granted 3,246,139 and 1,623,070 stock options in 2020, with a grant date fair value of $16.6 million[72] - As of June 30, 2024, $10.8 million of unrecognized stock-based compensation expense related to unvested stock options is expected to be recognized over 1.69 years[75] - $179.8 million of unrecognized stock-based compensation expense related to unvested RSUs is expected to be recognized over 3.16 years[78] - $25.1 million of unrecognized stock-based compensation expense related to unvested PRSUs is expected to be recognized over 2.28 years[80] - 462,335 Class A common stock warrants were outstanding and exercisable as of June 30, 2024, with an aggregate intrinsic value of $8.5 million[81] - The company granted 2,332,557 restricted shares with a grant date fair value of $24.2 million in connection with the acquisition of YoDerm, Inc. (Apostrophe), with vesting contingent on continued employment[85] Assets and Liabilities - Short-term investments as of June 30, 2024 totaled $98.0 million, with U.S. Treasury bills accounting for $68.2 million[39] - Inventory increased by 80.7% to $40.6 million as of June 30, 2024 compared to December 31, 2023[41] - Property, equipment, and software net value increased by 37.1% to $49.5 million as of June 30, 2024[43] - Depreciation and amortization expense for property, equipment, and software doubled to $2.8 million for the three months ended June 30, 2024 compared to the same period in 2023[43] - Intangible assets net carrying value was $17.1 million as of June 30, 2024, with a weighted average remaining useful life of 6.9 years[45] - Intangible assets net carrying value as of December 31, 2023 was $18.6 million with a weighted average remaining useful life of 7.3 years[47] - Amortization expense for intangible assets was $0.8 million for the three months ended June 30, 2024, down from $1.0 million in the same period of 2023[47] - Future amortization expense for intangible assets is projected to be $17.1 million over the remaining life of the assets[48] - Total accrued liabilities as of June 30, 2024 were $28.9 million, slightly down from $29.0 million at the end of 2023[49] - Present value of net future minimum lease payments under non-cancelable operating leases is $11.5 million as of June 30, 2024[52] - Total financial assets measured at fair value were $141.5 million as of June 30, 2024, down from $167.7 million at the end of 2023[57][58] Impairment Charges - Long-lived assets impairment charges were less than $0.1 million for the three months ended June 30, 2024, compared to no impairment in the same period in 2023[28] - The company recognized $0.1 million and $0.4 million of impairment charges on long-lived assets during the six months ended June 30, 2024 and 2023, respectively[28] Related-Party Transactions - The company recorded $1.5 million in payments to Vouched, a related-party company, for the six months ended June 30, 2024, compared to $1.0 million for the same period in 2023[87] Tax and Other Financial Metrics - The effective income tax rate for the six months ended June 30, 2024 was 5.4%, compared to -2.2% for the same period in 2023[93] - Other comprehensive loss for Q2 2024 was $6 thousand[14] Business Operations and Acquisitions - The company operates in five core specialties: sexual health, men's and women's dermatology, mental health, and weight loss[20] - The company executed a purchase agreement in July 2024 to acquire a 503B compounding outsourcing facility for approximately $31 million in cash and stock consideration[94] - VIEs generated $72.1 million in revenue for the six months ended June 30, 2024, up from $46.4 million in the same period of 2023[55] Foreign Currency Risk - The company does not have significant foreign currency risk as it operates primarily in the United States, with minimal operations in the United Kingdom[169] Service Revenue - Service revenue represented less than 10% of consolidated revenues for both the three and six months ended June 30, 2024 and 2023[31] Deferred Revenue - Deferred revenue increased significantly from $0.6 million for the six months ended June 30, 2023 to $13.3 million for the same period in 2024[18]