Hims(HIMS)2024-11-04 21:17Revenue and Profit Growth - Revenue for Q3 2024 increased to $401.56 million, up 77% from $226.70 million in Q3 2023[13] - Gross profit for Q3 2024 rose to $317.89 million, a 70% increase from $187.31 million in Q3 2023[13] - Net income for Q3 2024 was $75.59 million, compared to a net loss of $7.57 million in Q3 2023[13] - Total comprehensive income for Q3 2024 was $75.99 million, compared to a loss of $7.44 million in Q3 2023[13] - Net income attributable to common stockholders for the three months ended September 30, 2024 was $72.665 million, compared to a net loss of $7.265 million for the same period in 2023[116] - The company's total revenue for the three months ended September 30, 2024, was $401.6 million, with online revenue contributing $392.6 million and wholesale revenue contributing $9.0 million[40] - For the nine months ended September 30, 2024, total revenue was $995.4 million, with online revenue at $967.2 million and wholesale revenue at $28.2 million[40] Expenses and Costs - Marketing expenses for Q3 2024 were $182.28 million, up 57% from $116.08 million in Q3 2023[13] - Technology and development expenses for Q3 2024 increased to $21.09 million, up 72% from $12.27 million in Q3 2023[13] - Total operating expenses for Q3 2024 were $295.51 million, a 51% increase from $195.86 million in Q3 2023[13] - Stock-based compensation increased to $67.97 million for the nine months ended September 30, 2024, up from $48.29 million in the same period in 2023[20] - The company incurred $1.3 million in acquisition costs related to the MedisourceRx acquisition, recorded within general and administrative expenses[52] - Operating lease costs for the nine months ended September 30, 2024, were $2.2 million, up from $1.7 million for the same period in 2023[69] - Payments to related-party company Vouched totaled $2.6 million for the nine months ended September 30, 2024[112] - Payments to former related-party company Terminal, Inc. totaled $3.3 million for the nine months ended September 30, 2023[113] Earnings Per Share and Shares Outstanding - Basic net income per share for Q3 2024 was $0.35, compared to a loss of $0.04 per share in Q3 2023[14] - Diluted net income per share for Q3 2024 was $0.32, compared to a loss of $0.04 per share in Q3 2023[14] - Weighted average shares outstanding (diluted) for Q3 2024 were 235.07 million, up from 210.13 million in Q3 2023[14] - Diluted net income per share for the three months ended September 30, 2024 was $0.32, compared to a net loss per share of $0.04 for the same period in 2023[116] - Weighted average shares outstanding, diluted, for the three months ended September 30, 2024 was 226.691 million, compared to 201.757 million for the same period in 2023[116] - RSUs excluded from the computation of diluted net income per share for the three months ended September 30, 2024 totaled 237,328, compared to 15.506 million for the same period in 2023[117] Cash Flow and Investments - Net cash provided by operating activities was $164.70 million for the nine months ended September 30, 2024, compared to $51.50 million in the same period in 2023[20] - Total cash, cash equivalents, and restricted cash increased to $166.37 million as of September 30, 2024, up from $58.85 million as of September 30, 2023[20] - The company invested $8.73 million in website development and internal-use software for the nine months ended September 30, 2024[20] - Purchases of property, equipment, and intangible assets totaled $17.14 million for the nine months ended September 30, 2024[20] - The company acquired a business for $15.40 million during the nine months ended September 30, 2024[20] - Cash and cash equivalents and short-term investments totaled $254.1 million as of September 30, 2024, an increase from $221.0 million as of December 31, 2013[201] Assets and Liabilities - Accumulated deficit increased to $369.42 million as of September 30, 2023, compared to $344.63 million as of December 31, 2022[18] - Total stockholders' equity increased to $328.56 million as of September 30, 2023, up from $311.74 million as of December 31, 2022[18] - Inventory increased to $49.11 million as of September 30, 2024, up from $22.46 million as of December 31, 2023, with finished goods rising to $28.14 million from $15.22 million[59] - Total prepaid expenses and other current assets grew to $23.19 million as of September 30, 2024, compared to $21.61 million as of December 31, 2023[60] - Property, equipment, and software, net increased to $52.14 million as of September 30, 2024, from $36.14 million as of December 31, 2023, with depreciation and amortization expenses of $8.6 million for the nine months ended September 30, 2024[61] - Intangible assets, net rose to $44.82 million as of September 30, 2024, up from $18.57 million as of December 31, 2023, with amortization expenses of $2.4 million for the nine months ended September 30, 2024[64][65] - Accrued liabilities increased to $43.22 million as of September 30, 2024, compared to $28.97 million as of December 31, 2023, with marketing expenses rising to $17.77 million from $12.33 million[67] - Future minimum lease payments under non-cancelable operating leases subsequent to September 30, 2024, total $14.58 million, with a present value of $11.36 million[71] - Total financial assets measured at fair value as of September 30, 2024, were $143.64 million, including $54.23 million in money market funds and $59.18 million in U.S. Treasury bills[75] - Total assets as of September 30, 2024, amounted to $167.666 million, with cash and cash equivalents at $42.492 million, short-term investments at $63.833 million, and restricted cash at $856 thousand[76] - The company has non-cancelable purchase obligations totaling $23.5 million, with $2.4 million payable in 2024, $8.8 million in 2025, $7.0 million in 2026, and $5.3 million in 2027[78] Share Repurchase and Equity Plans - Under the 2023 Share Repurchase Program, the company repurchased and retired 3,632,123 shares of Class A common stock for $48.0 million, fully utilizing the $50.0 million authorization[82] - The 2024 Share Repurchase Program authorizes the company to repurchase up to $100.0 million of Class A common stock, with $30.0 million already utilized and $70.0 million remaining as of September 30, 2024[83][84] - During the nine months ended September 30, 2024, the company released 5,068,997 gross shares of Class A common stock upon vesting of RSUs, with 1,780,064 shares withheld for employee taxes[85] - As of September 30, 2024, the company had 54,360,277 shares of Class A common stock reserved and 15,131,669 shares available for grant under the 2020 Equity Incentive Plan[87] - Under the Employee Stock Purchase Plan (ESPP), the company issued 366,524 shares of Class A common stock during the nine months ended September 30, 2024, with $1.8 million withheld via employee payroll deductions[88][90] - The intrinsic value of vested options exercised during the nine months ended September 30, 2024, was $33.6 million, with $8.6 million of unrecognized stock-based compensation expense related to unvested stock options[95][96] - Outstanding stock options as of September 30, 2024 totaled 11,044,000 shares, with 8,395,000 shares exercisable[98] - Unvested RSUs as of September 30, 2024 were 16,919,000 shares with a weighted average grant date fair value of $10.60[100] - Unrecognized stock-based compensation expense related to unvested RSUs was $167.8 million, expected to be recognized over 2.94 years[101] - Performance RSUs granted on March 1, 2023 had a total grant date fair value of $12.9 million[102] - Performance RSUs granted on February 28, 2024 had a total grant date fair value of $16.2 million[104] - Unrecognized stock-based compensation expense related to unvested PRSUs was $25.3 million, expected to be recognized over 1.98 years[105] - Outstanding Class A common stock warrants as of September 30, 2024 were 462,335 with a weighted average exercise price of $1.75 and aggregate intrinsic value of $7.7 million[106] - Stock-based compensation expense for the nine months ended September 30, 2024 totaled $67.97 million[111] Acquisitions and Goodwill - The company acquired MedisourceRx for $31.0 million, including $15.5 million in cash and $15.5 million in Class A common stock, with $1.8 million recorded as goodwill[50][55] - The 503B pharmacy license acquired in the MedisourceRx acquisition was valued at $28.6 million and will be amortized over ten years[54] - Goodwill of $1.8 million was acquired in 2024, with no impairment recorded for the three and nine months ended September 30, 2024, and 2023[35] Impairment and Valuation - The company recognized $0.1 million and $0.4 million in impairment charges on long-lived assets for the nine months ended September 30, 2024, and 2023, respectively[36] - The company recognized a one-time income tax benefit of $60.8 million during the three months ended September 30, 2024 related to the release of its domestic valuation allowance[121] - The effective income tax rate was (220.4)% for the three months ended September 30, 2024, compared to (9.4)% for the same period in 2023[119] - The company determined that a valuation allowance against its domestic deferred tax assets was no longer required as of September 30, 2024, primarily due to sustained tax profitability[120] Risk and Exposure - The company believes there will be no associated material exposure to interest rate risk due to the short-term nature of its investments[201] - The company does not have a material exposure to foreign currency risk as of September 30, 2024, but may increase exposure in the future with international expansion[202] Service Revenue and Refunds - Service revenue represented less than 10% of consolidated revenues for the three and nine months ended September 30, 2024, and 2023[42] - The company estimates refunds using the expected value method based on historical refunds, with the estimate updated at the end of each reporting period[45] VIEs and Related-Party Transactions - VIEs charged $129.9 million for services rendered for the nine months ended September 30, 2024, compared to $71.5 million for the same period in 2023, generating a net loss of $16.9 million[74]