Q4 2021 Hims & Hers Health Inc Earnings Call
Good afternoon. My name is Emma and I will be your conference operator today at this time I would like to welcome everyone to the hand in hers health fourth quarter 2021 earnings results conference call all.
All lines have been placed on mute to prevent any background noise.
After the Speakers' 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 presses star one thank you.
Jay Spitzer Senior Vice President of Investor Relations you May begin your conference.
Good afternoon, ladies and gentlemen, welcome to the Hyndman hers health fourth quarter and fiscal year 2021 earnings call on the call for me today is Andrew <unk>.
Founder and our Chief Executive Officer, as well as Jenny <unk>, our Chief Financial Officer before I hand, you over to Andrew I was usual take you through the legal safe Harbor and cautionary declarations.
Certain statements and projections of future results made in this presentation constitute as forward looking statements that are based on our current market competitive and regulatory expectations and are subject to risks and uncertainties that could cause actual results to vary materially.
We undertake no obligation to update publicly any forward looking statements. 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 for discussions of risk factors as it relates to forward looking statements in today's presentation, we use certain non.
non-GAAP financial measures, we refer you to the reconciliation table contained in today's press release available on our Investor Relations website for reconciliations to the most directly comparable GAAP financial measures and related information, you'll find a link to the webcast on our Investor Relations website at investors got Moorhens dotcom.
After the call. This webcast archived on the website for 12 months.
I'll now turn the call over to Andrew.
Thank you Jay.
Hinson hers achieved so many milestones in 2021 for which I am proud.
At year end, we had over 600000 subscriptions, we grew revenue, 83%, we extended our market leadership.
Invested in building out our management team and grew our omni channel presence to over 20000 retail locations.
This past quarter was no different with acceleration and strong execution across our core and emerging categories.
Revenue accelerated to $84 7 million in the fourth quarter of 104% increase year over year.
Subscriptions grew from 312000% to 609095% increase from year end 2020.
As a result of healthier retention new customer cohorts acquired since 2020 now reach a cumulative gross profit in excess of their paid marketing expense within just two quarters.
In terms of brand awareness and traffic our digital properties grew to over 11 million visits in the fourth quarter, a 90% increase year over year, while decreasing customer acquisition cost per new sub 13% over the same time period.
We meaningfully expanded our omni present strategy through existing and new long term partnerships with some of the largest retailers in the United States.
Including target Walgreens, Cvs bed, Bath, and beyond vitamin shop and more.
And didn't combination our core and emerging categories are contributing to an acceleration in revenue diversification, giving us confidence in our ability to deliver robust growth for many years to come.
We invested heavily in strategic infrastructure. This year. This infrastructure both supports the accelerated growth in our core categories, but also lays the foundation for improved customer experiences in our emerging businesses.
Improved customer experience is key to our company's ongoing success in creating a loyal customer base.
That reason, we continue to invest in infrastructure vertical innovation across every aspect of our business.
Whether the ultimate benefit would be speed price quality of selection. We believe these strategic investments will ultimately accelerate our ability to delight customers and drive increased profit and ultimately stronger returns on invested capital.
Our distribution and pharmacy fulfillment centers expanded significantly with our compounding pharmacies in the Arizona expanding from 1700 square feet nearly 25000 square feet. In addition, our Ohio pharmacy facility now it's fully utilizing over 300000 square feet.
Clinical capabilities expanded dramatically with expansion of our EMR breadth of services to include broadens specialties in dermatology psychiatry therapy, and general medicine powering over $2 4 million visits versus $1 6 million in the previous year.
With nearly 25000 clinical quality reviews compared to 12000 in 2020.
Our iOS mobile platform was launched successfully nationwide our initial test the 60% of new members downloading the app in their first week of beginning of treatment on our platform unlocking a whole new level of patient engagement.
And lastly, our dedicated team grew to nearly 400 full time employees first 181 at the end of last year strengthened by our expanded management team, including our new CFO and Chief growth Officer.
Well so much has happened this past year. The reality is is that we are on the earliest chapters of our company's life.
Today, a small fraction of health care is delivered online, but what was true for E. Commerce in the nineties is true today for digital health.
The wave is just beginning and only growing.
Platforms like Hyndman hers, we're at the forefront of making People's lives easier.
Access to treatment and services doctors and specialists that many people are not otherwise able to obtain a transparent prices. It has a level of care and respect often not found in traditional health system.
We believe him his and hers has the potential to be synonymous with this next generation of health care, we are accelerating the discovery and personalization of treatment options and ultimately empowering people with choice information and better outcomes.
Consumers are eager to interact with health care and these new ways, but want to do so with brands that they recognize and trust.
The world is changing and our market is moving fast we are near the front of this race and well positioned but recognize we're in the early labs.
We believe our ability to resonate with young customers established relationships with many of the nation's top retailers build trust and brand loyalty and drive selection and breadth of services will allow us to solidify and extend this leadership position.
Given the scale of this opportunity we are rigorously focused on creating shareholder value over the long term.
Core of this strategy is an internal focus on our simple yet powerful flywheel.
This equation as our North Star, we believe in the power of its compounding benefits and a rigorous in our daily tracking of metrics and analytics, such as engagement stickiness acquisition costs and retention to ensure we are innovating towards improvement.
Here are the basic elements.
So again, we generate brand awareness and trust through authentic marketing and omni channel distribution.
We accomplished a lot on this front through our ability to scale new campaigns with paid marketing dollars up 39% from the first quarter to the fourth quarter, while maintaining relatively flat customer acquisition costs per new sub throughout the year.
Hi to this was our ability to scale through our retail partnerships to reach over 20000 total physical location.
Unlocking deeper trust awareness and ultimately customers.
This increased demand then unlocks our second core element of the flywheel, our ability to broaden access to high quality medical providers and treat more conditions on our platform.
This was a big one for us in 2021 with the launch of new and innovative treatments and services in dermatology sexual health mental health wellness and primary care.
This expansion of medical expertise and broad and treatment selection leads to better engagement better experiences and more trust ultimately in turn restarting the flywheel and bringing in more customers once again.
I woke up on new year's day, and told my wife, I've never been more excited to start a new year.
Our business is stronger than it has ever been our team more committed than ever before our brands more well known our product slanting more shelves, our selection in innovation and treatments more diverse and our ambitions bigger and.
And most importantly, our customers are happier and healthier.
I'm proud of the results, we shared with you today and of our team's dedication to our mission.
Before handing it off I'd love to take a quick moment to introduce you to one of our newest leaders and Chief Financial Officer, Yeah Me a coupe.
He brings to the HIMSS and her leadership team a wealth of experience successfully scaling some of the most disruptive technology companies over the last two decades.
<unk> Braintree, Google ebay and Paypal.
Do you have any superpowers have already begun to accelerate the pace of innovation growth and efficiency within our business.
Im honored to welcome him and energized by his early contributions this.
At this point I will now turn the call over to Yummy for a more detailed review of our results.
Thank you Andrew.
Hi, everyone. Thank you for your time today I look forward to engaging with you further in the near future.
Any way to join him some hurt, especially an exciting moment in the company's lifecycle.
Over the course of the last decade technology is disruptive to the way that consumers engage with companies across numerous industries.
Would that be how they move around in the world, except to remit payments acquired goods, where consume media content.
Health care is an industry that is in the early innings of similar disruption.
I firmly believe we have the components necessary to be at the forefront of this disruption.
This includes a strong brand that consumers recognize and increasingly trust as well as in an outstanding team that has the ability to execute against our mission, providing greater access to high quality convenient and affordable health care.
I'll now take you through our fourth quarter and 2021 results.
Following that we will provide guidance and insight into our underlying assumptions for the first quarter of 2022 and the full year.
We are delighted by last year's performance was surpassed expectations outlined in our previous guidance.
Fourth quarter revenue was $84 7 million up 104% year over year.
Revenue for 2021 was $271 $9 million up 83% compared to 2020.
When excluding the impact of M&A transactions fourth quarter revenue grew 89% year over year to $78 $5 million.
Full year 2021 revenue grew 75% year over year to $259 $7 million when excluding the impact of M&A transactions.
Several factors contributed to our success in 2021.
Online revenue growth continued to remain robust in 2021.
84% year over year $259 million.
Growth came primarily from subscriptions, which increased 95% year over year to 609000.
Subscriptions on our platform enable us to surpass 1 million net orders in the quarter for the first time in our company's history.
Strong execution and increased awareness of our brand provided us with the opportunity to increase our marketing investment through the year, while holding cost per new subscriber roughly flat throughout 2021.
This is notable as it.
So our ability to increase customer acquisition velocity without materially compromising our principles around disciplined investment.
97% of online revenue comes from subscriptions, which is a core source of recurring revenue.
In the fourth quarter, we continued to successfully expand our omnichannel presence via partnerships with leading retailers across the country.
Wholesale revenue grew $12 7 million in 2021 at $6 $4 million about revenue coming in the fourth quarter.
This represents an increase of 58% and 365% for 2021 and the fourth quarter respectively.
Wholesale growth was driven by continued success with current partners such as target as well as the Onboarding of new partners, such as Cvs and Walgreens.
Gross profit margin was 75% for 2021, which represents an increase of about 160 basis points year over year.
Gross profit margin declined 70 basis points from the third quarter to 73% from the fourth quarter as we anticipated.
Sequential quarterly decline was primarily driven by a shift in mix or more wholesale revenue, which carries lower margins than our online business.
Retail partnerships deliver value in ways that extend beyond the financial benefits.
We felt that partnerships with the country's top retailers drive higher brand awareness and further establish trust with consumers.
As our products drive value for our current retail partners demand as spark for new partnerships, which helps once again further generate additional brand awareness and trust with consumers.
This is one element of our strategy that we believe has contributed to our ability to maintain cost per new subscriber in a year, where there has been increased cost pressure across several marketing channels.
Pivoting to our operating expenses.
Administrative expenses increased from 44% of revenue in 2020% to 67% of revenue in 2021.
This is largely the result of an increase in stock based compensation related to the earn out consideration and other onetime costs that stemmed from our initial public offering.
Excluding stock based compensation G&A as a percentage of revenue was 46% in 2021 and 41% in 2020.
This increase was related to additional costs that came as a result of our transition to a public company.
We anticipate that we will gain leverage on G&A expenses going forward.
Marketing as a percentage of revenue increased 10 points year over year to 50% in 2021.
This was primarily the result of a proactive decision to increase investment in marketing.
This decision was made to Opportunistically take advantage of our ability to bring more subscriptions onto the platform at similar levels of spend efficiency throughout 2021.
The difference in cost per new subscriber between the most and least expensive quarter in 2021 was less than 5%.
Hey, diversified set of acquisition channels combined with the continued scaling of our brand were the primary drivers behind our success on this front.
Quarterly new customer cohorts now typically deliver cumulative gross profit in excess of paid marketing cost and less than two quarters.
This gives us confidence that the incremental customers acquired in the second half of 2021 will drive incremental value for years to come.
Adjusted EBITDA loss was $7 1 million in the fourth quarter and $31 million across all of 2021.
We continue to receive benefits from previously launched products, such as multi month ordering and saw gains in operational efficiency.
These factors have meaningfully improved the unit economics in Europe cohorts.
The 12 month cumulative gross profit from subscribers acquired in 2020 with nearly four times that of the 2019 cohort.
With 2021 cohort of subscribers following a similar trajectory as of 2020 cohort.
Through 2021, we made a deliberate decision to reinvest a portion of the efficiency gains and the acquisition of additional customers increasing retention rates and the recurring nature of the majority of our revenue combined with faster payback periods provides us with the conviction that the investment in our platform as a sound decision.
For context in 2021 return close to 80% of 2020 online revenue from cohorts acquired prior to 2020.
2021 was an exemplary year for him and her.
We continue to grow our customer base and revenue footprint across our core online categories made meaningful progress in the development of our emerging categories. Further expanded the footprint of our strategic wholesale channel and welcome two new teams apostrophe and honest health and they think of the portfolio.
We enter 2022 with a robust balance sheet that has $247 million of unrestricted cash and short term investments and zero debt.
Additionally, the lifetime value of newly acquired subscribers with the highest it has been which will allow us to progressively improve our adjusted EBITDA margins and continued to invest in the expansion of our platform in a prudent manner.
I would now like to take the time to provide additional color on our outlook for 2022.
Starting with the first quarter, we are anticipating revenue to be between $90 million to $93 million, representing a year over year increase of between 72% to 78%.
A few factors are powering our growth, which included the continued revenue benefit from customers acquired as a result of the marketing investments you made in the second half of 2021 incremental revenue from the honest health an apostrophe transactions that were not completed until June and July of 2021, respectively and.
<unk> continued momentum from our wholesale partnerships, most notably the recently announced partnership with Walmart.
Adjusted EBITDA losses are expected to be between negative $12 million to negative $10 million in the first quarter.
In the early weeks of 2022, we are continuing to see attractive investment opportunities that we are confident will pay off in future quarters.
Looking to the full year.
We are anticipating full year 2022 revenue to be between 365 $380 million, which.
A year over year increase of 34% to 40%.
This range is above our previously stated target of 30% year over year growth, reflecting confidence in our ability to roll forward 2021 dynamics resulted in healthy growth.
We expect M&A transactions closed in the second half of 2021 to contribute between 10 to 15 points of year over year growth in the first half of 2022.
Got effect will dissipate in the second half of the year as we start to lap the completion of these transactions.
We are confident the apostrophe, an honest health will be significant contributors and delivery of both our strategic and financial objectives.
Early signs of success from our new categories higher retention rates of new cohorts and new learnings from marketing experiment gave a strong conviction in our ability to maintain a growth rate of at least 30% for the foreseeable future.
Quarter to quarter volatility may exist, given how quickly our business is evolving combined with the challenges of estimating the exact timing for when a specific catalyst will accelerate.
Anticipated impact from IRS changes, that's been factored into our guidance based on learnings in 2021.
We look forward to updating you at developments during our quarterly earnings calls.
With the launch of Walmart and higher sales velocity among top retailers, we are anticipating substantial wholesale revenue growth in 2022.
Online gross profit margins are expected to remain relatively stable, however, wholesale growth carries lower margins than our online business.
As a result, we are expecting gross profit margin degradation at a portfolio level similar to what we saw in the fourth quarter of 2021.
As previously mentioned, our wholesale partnerships drive greater consumer awareness of our brand, which we feel benefits our acquisition efforts and other channels.
Looking towards the bottom line, our expectation is that 2022, adjusted EBIT losses will be between negative $30 million to negative $20 million.
The midpoint of the adjusted EBITDA and revenue range, resulting in an adjusted EBITDA margin of six 7%, which represents more than four percentage point year over year improvement from 2021.
Our belief is that establishing a leadership position across multiple categories will allow us to provide consumers a broad selection quality health care offerings, which can be a significant point of differentiation.
We expect to continue to invest in the development of new categories as well as in solidifying our position in our current core categories.
Continued leverage from our Omnichannel strategy, hopefully customer retention patterns and continued refinement of our capital allocation framework provides us confidence in our ability to make these investments in any way that does not compromise the high standards set forth in our historical allocation of capital.
One was an incredible year, and we remain more optimistic than ever and the future outlook of the business in 2022 and beyond.
I'll now turn it back to the operator to start the Q&A portion of the call.
At this time I would like to remind everyone in order to ask a question Press Star then the number one on your telephone keypad.
First question today comes from the line of Michael Cherny with Bank of America. Your line is now open.
Good afternoon. Thanks, so much for the color and Jay.
Jay Welcome obviously, it's the first call today.
I want to talk a little bit about you made a comment regarding marketing spend some of the targeted marketing that you put in place and how it's already paying dividends in terms of new customer growth as you think about some of the category expansion you've had thinking with some of these marketing partnerships in the wholesale revenue.
What does the next couple of years of targeted marketing spend.
Potentially incremental campaigns dovetail against an eventual pathway towards building to EBITDA breakeven.
Yes, sure I can take this one this is Jeremy.
And what we would say.
S equity will given our balance sheet, we will continue to lean into.
Marketing investment, while the opportunities remaining doses.
While we would point to.
We are able to breakeven on newer cohorts within two quarters.
While there are attractive investment opportunities, we will continue to invest in those but what we are seeing is the fact that.
The philosophy.
But of course, our returning value is accelerating as a result of that we did see in Q4 as cash flow from operations was down to roughly <unk> <unk>.
Negative $3 1 million.
And so we do have the flexibility to continue to decide I want to make these investments again, given the balance sheet and the already strong performance with the coronary training.
Got it and then just in terms of thinking about.
'twenty two guidance clearly the net order growth has been remarkably strong <unk> has kind of trended in a fairly similar trajectory over the course of 'twenty. One how should we think about that metric for 'twenty two and what are the puts and takes that you would expect especially as the subscription growth continues to build.
Yes, I would say, we expect <unk> to be flat to slightly up.
Through the course of time.
Thanks, Joe.
Okay that does it for me for now thank you so much.
Your next question comes from the line of Matthew <unk> with Piper Sandler Your line is now open.
Hey, guys. Thanks for the question and congrats on another strong quarter.
I appreciate the commentary that the iOS changes are incorporated into guidance, but curious if you can provide any colors on some of the new channel marketing channels, you've invested in beyond the retail partnerships any kind of.
Relative efficiency gains you have within those and plan to continue investing in any of those channels youre able to provide more color around.
Thanks, Matt.
Is it a little bit on the front end.
We don't really disclose breakdowns of channels, but as we've talked about in the past.
<unk> marketing dollars.
Don't go to any one channel more than let's say, 20% and so theres really powerful diversification taking place within the business on where we're deploying capital and then also increased diversification when it comes to the categories for which we are deploying capital. So you can think of.
Even in simple terms seeing.
Advertisements of Jennifer Lopez for postmenopausal hair loss as well as advertisements with Miley Cyrus for early 20th female dermatology and then Rob Gronkowski for let's say men in their <unk> suffering from anxiety and depression. So theres. This diversification taking place on a channel and category category level.
That I think to <unk> point has allowed us to continue to scale marketing investments, while maintaining that customer acquisition cost efficiency. So if you look over the last year, we've increased marketing spend from Q1 Q4 by close to 40%, but the actual variance in acquisition cost per subscriber went up or.
Down no more than just a couple of points.
And so there is a ton of innovation and a ton of experimentation.
Experimentation taking place at the channel level at the category level to continue to deliver these results.
But it's probably the accumulation of a tremendous effort and a large team effort within the company, making it possible.
Got it that's super helpful.
And then my understanding is the target exclusivity kind of expiring as what's opened up these relation or the ability to have these relationships with all of these other retailers. So curious where that target relationship stands today, whether theres any channel conflict with your working with target and Walmart and whether its fair to expect.
More retail partnerships going forward.
Yes, the relationship with target is exceptionally strong.
They're contributing a large part of that that.
That growth in the retail channel that we mentioned year on year.
But we've been able to branch out and the demand I think on the retail side has really been energizing for all of us whether it would be cvs or walgreens, or Walmart or GNC bed Bath and beyond vitamin Shoppe amidst there's just an incredible demand for the products and those retailers are coming to us with an energy that I think is very rare.
Thank you to our earlier statements. We believe in those retail channels as brand building is trust building and ultimately kind of the first leg of our flywheel that helps accelerate customers to the online platform and so we will continue to be investing in those channels for that strategic reason.
That come in the door from them are obviously gravy on top that we enjoyed better I think the strategic benefit from an efficient marketing holistic strategy and the omni present trust that comes with those relationships with customers is really what we where we prioritize more than anything.
Got it. Thank you congrats again guys.
Yes. Thank you.
Your next question comes from the line of Linda Singh with Credit Suisse. Your line is now open.
Hi, This is Adam on for Julien today, Thanks for taking the question congrats on the results.
Just wanted to go back and look at the guidance for 2022 for a bit and I was just comparing the 34% to 40% revenue growth versus the thoughts around the <unk> call it 30% growth.
Just curious if you could elaborate a little bit on what do you attribute that raised two in and just maybe more of a high level question in terms of like the level of conservatism around the guidance for 2022 has that changed at all as we think back is is when you guys put guidance fourth last year for 2021.
Sure Hi, Adam This is Jim I'll go and take take that one.
I think that there is a few key factors going on so one is the.
Mentioned the investment on the fiber that we made in the second half of 2021, we are seeing some of those dividends start to pay off in 2022, and so given the fact that we have.
Larger base that we exited in 2021 that does give us the conviction to increase and elevate the range.
What I would say that we are focused on sustaining.
Sustaining reputed growth not just for one year for multiple years and so given many of the dynamics that we've seen but Andrew mentioned previously we do have some conviction in our ability to maintain the long term growth rate north of 30% again, just given the large temporary happens some of our smaller categories as well as from the early similar addition merchant categories gives us that conviction.
Got it and then just a question on the <unk> 19, and 121 cohort comparison presentation should we think about the 121 cohort is kind of a new normal for the business moving forward and how much of a benefit that the multi month purchases.
Contribute to the 121 cohort performance compared to the <unk> 19.
Sure.
Factors.
And the overall Matt.
Some of it as you mentioned is the multi month ordering we also did see operational efficiencies.
All higher retention rates.
That results in per unit economics across the cohorts given the fact that we've seen this not just occur with just the Q1 'twenty one cohort, but several repeat cohorts since then reject.
We do have the conviction.
As a sustainable trend.
Stable trend on a go forward basis.
Got it thanks, a lot congrats again.
Thank you.
Your next question comes from the line of Danielle <unk> with Citi. Your line is now open.
Hey, guys. Thanks for taking the question.
Your competitors have branched out into diagnostic testing in the treatment of higher acuity conditions.
You noted that product expansion will be a driver of growth, but perhaps more of a medium term driver can you provide more details around which additional kitchen conditions youre looking to expand into first and then.
In mind for that expansion.
Yes, I can take that thanks, thanks Danielle.
I think as we've shared the combination of the core categories and emerging categories is really what's helping us accelerate that revenue diversification and unlock that 30% confidence on a long term basis and so I think what you can expect from us in the future is similar to what <unk> seen from us in the past, which is one to two major cash.
<unk> expansion is every couple of quarters.
This is what we've done essentially since we launched the company four plus years ago and I think this is the strategy on a go forward basis, we're not a team that is going to be doing dozens of expansions and dozens of new categories every quarter I think we'd like to focus on one or two and you didn't really right.
Every few months and so I think thats kind of a timing dynamic what you can expect from an actual categories. There's a lot that the team is always looking at one that we believe are very well suited for the platform that we spend.
Time investing in and researching our categories, such as insomnia pain management weight management fertility hypertension, and Hyperlipidemia and those are those are categories that we believe are very <unk>.
Very well suited on the platform and the platform is today really well equipped to tackle and there are also categories frankly that effect.
Tens and tens of millions of people in the country and so we know that they are high impact when it comes to general health care through <unk> for the aggregate population.
That hopefully price a little bit of guidance on <unk>.
Where the focus is and maybe what the timing of those rollouts could look like.
Yes that makes sense and then on gross margins for 2022, you mentioned, we should see a bit of.
Degradation.
This year due to the mix shift to wholesale.
Apart from this shift are you seeing any cost pressures from shipping rates from wage inflation as you build out your pharmacy any other.
Cost pressures, you're seeing in that line item.
Hi, Dan This is EMEA, thus far we have not seen any incremental pressure beyond just the product mix that we mentioned.
Given trends that we saw in the back half of Q4 2021, we've rolled forward many of those assumptions into 2022.
What I would say to you is that we do have.
We're very excited to have several opportunities to continue to increase our overall operational efficiency.
That does give us the flexibility to potentially accommodate.
Any additional fluctuation, but we'll constantly keep a pulse.
For how the market evolves on that front.
Got it thanks for the color and congrats on the quarter.
Thank you.
Okay.
Your next question comes from the line of Ivan <unk> with Tigress Financial Partners. Your line is now.
Thanks for taking my question and congratulations on another great quarter, and great year, and congratulations CME and Jay of joining for joining the team.
My first question on.
On your retail partnerships do you have the same products available across all of them are you segmenting in any way or do you envision segmenting your product line and retail for specific retailers.
Thanks, Kevin I.
I appreciate the question I think generally speaking we have a lot of consistency across retail partnerships.
Both the hands in hers brands, whether it's dermatology products sexual health.
Hair care products vitamins and supplements a lot of consistency we are seeing however.
Desire from retailers to focus and lean into specific verticals within the company and I think the flexibility that <unk> offers the breadth of services and treatments that we offer allow us to work with these retail partners on a fairly personalized basis. So I think there is an increased level of.
Personalization, taking place on the shelves, but more so than not you have a lot of consistency in those 20000 physical retail retail locations nationwide.
And when you bring on or new retailer brings you on are they.
Covering all the Onboarding costs are you sharing any or are there any onboarding costs.
Yes.
Given the fulfillment center that we built out in Ohio and.
The simplicity of the logistics that we have here having done this with target for quite a while its relatively low cost for us to get these going witches, which has some nice leverage of the business.
Okay, and then switching to categories without specifically, saying, where do you see the biggest opportunity in the next couple of categories.
That could you could take advantage of.
Yes, it's great question, I mean, I think I would probably echo what I shared with Dan.
We're really excited about the categories both in the core and emerging markets that we're in today whether that be <unk>.
Battology sexual health mental health.
So big investments in those categories as mentioned in the new categories things like insomnia pain management that weight management, and then more chronic conditions such as Hyperlipidemia.
Our areas that we get we get really energized by so that that's why I think we can kind of point to for some of the categories. We believe could be coming down that pipeline.
And then how do you feel that the brand equity that you have created since the launch of your company can help you to penetrate those new categories.
I think what we're seeing is that the consistent investment in that Omnichannel brand.
The diversity of the brand and true it's targeting and the audience is that I think has trust and relationships with us as paying tremendous dividends right. I think this is why when you look at Q4 and last year 2021, we've been able to increase our investment dollars customer acquisition, we've been able to nearly double our.
<unk> members on the platform.
However, we've been able to keep that cost per customer in the acquiring cost for each subscriber relatively flat or improved on a year over year basis. I think there are incredible dynamics in the market iOS 14 privacy dynamics that a lot of people have struggled with and I think the brand equity of the Omnichannel presence and the diversity of the offering.
We have has really helped us surpass those those challenges and drive really consistent and accelerated growth.
Hi, This is all great and one last question where are you in your views and progress on insurance reimbursement for let's say some other treatment categories.
It's a great question I'm glad you asked we are continuing to invest in that integration on the insurance side.
Believe that that's a critical part of having a cost effective platform for a very wide range of conditions. So I think it's something that you can look to hear from us with confidence in the coming months on where we stand, but very energized by the team's progress on that initiative.
Very good thank you and congratulations again and I look forward to another successful year.
Thank you Evan.
Again, if you'd like to ask a question press Star then the number one on your telephone keypad.
For just a moment.
Correct any last Q&A.
Yeah.
At this time there are no further questions.
Mr. Jay Spitzer I'll turn the call back over to you.
Perfect. Thank you Anna and thank you everyone for listening in today, we look forward to continue engaging with you. If you have any questions. Please reach out to myself Andrey <unk> and have a good afternoon and thank you very much.
This concludes today's conference call you may now disconnect.
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