Q1 2024 Hims & Hers Health Inc Earnings Call

Operator: Ladies and gentlemen, thank you for standing by. At this time, I would like to welcome everyone to the Hims & Hers First Quarter 2024 Earnings Conference Call. Please note that this call is being recorded. All lines have been placed on mute to prevent any background noise.

Ladies and gentlemen, thank you for standing by at this time I would like to welcome everyone to the him then Her's first quarter 'twenty 'twenty four earnings conference call.

Please note that this call is being recorded.

All lines have been placed on mute to prevent any background noise.

Operator: After the speaker's remarks, there will be a question and answer session. If you would like to ask a question, please press star followed by the number one on your telephone keypad. To withdraw your question, please press star one a second time. I would now like to turn today's call over to Bill Newby, Head of Investor Relations. Please go ahead.

After the Speakers' remarks, there will be a question and answer session.

If you would like to ask a question. Please press star followed by the number one on your telephone keypad to withdraw your question. Please press star one a second time.

I would now like to turn today's call over to Bill Newby head of Investor Relations. Please go ahead.

Unknown Executive: Good afternoon, everyone, and welcome to the Hims & Hers Health first quarter 2024 earnings call. Today, after the market closed, we released this quarter's shareholder letter, a copy of which you can find on our website at investors.hims.com. On the call with me today is Andrew Dudum, our Co-Founder and Chief Executive Officer, as well as Yemi Okupe, our Chief Financial Officer.

Unknown Executive: Good afternoon, everyone and welcome to the Amgen herself first quarter 2024 earnings call today. After the market closed we released this quarter's shareholder letter a copy of which you can find on our website at investors <unk> Dot com.

Unknown Executive: On the call with me today is Andrew <unk>, our co founder and Chief Executive Officer, as well as EMEA Recouping, our Chief Financial Officer before I hand, it over to Andrew I need to remind you of legal safe Harbor and cautionary declarations.

Unknown Executive: Before I hand it over to Andrew, I need to remind you of legal safe harbor and cautionary declarations. Certain statements and projections of future results made in this presentation constitute forward-looking statements that are based on, among other things, our current market, competitors, and regulatory expectations and are subject to risks and uncertainties that could cause actual results to vary materially. We take no obligation to update publicly any forward-looking statement after this call, whether as a result of new information, future events, changes in assumptions, or otherwise.

Certain statements and projections of future results made in this presentation constitute forward looking statements that are based on among other things our current market competitors and regulatory expectations and are subject to risks and uncertainties that could cause actual results to vary materially.

Unknown Executive: We take no obligation to update publicly any forward looking statement. After this call whether as a result of new information future events changes in assumptions or otherwise.

Unknown Executive: DCR recently filed 10-K and 10-Q reports for a discussion of risk factors as they relate to forward-looking statements. In today's presentation, we have certain non-GAAP financial measures. We refer you to the reconciliation tables to the most directly comparable GAAP financial measures contained in today's press release and accompanying letter. You can find this information, as well as a link to today's webcast, at investors.hims.com. After the call, this webcast will be archived on the website for 12 months. And with that, I'll now turn the call over to Andrew.

Unknown Executive: Please see our most recently filed 10-K and thank you reports for a discussion of risk factors as they relate to forward looking statements.

In today's presentation, we have certain non-GAAP financial measures. We refer you to the reconciliation tables to the most directly comparable GAAP financial measures.

Unknown Executive: And in today's press release and shareholder letter.

Unknown Executive: You can find this information as well as a link to today's webcast at investors <unk> Dot com.

Unknown Executive: After the call is webcast will be archived on the website for 12 months.

Unknown Executive: And with that I'll now turn the call over to Andrew.

Andrew: Thanks Bill.

Andrew Dudum: Our first quarter results mark an outstanding beginning to the year. The momentum we built in 2023 is continuing as we further advance our mission to help the world feel great through the power of better health. The underlying strength of our business is propelled by an unwavering dedication to delivering the highest quality, personalized care possible across each of our five core specialties, men's and women's dermatology, mental health, sexual health, and weight loss. Strong execution of our strategy is drawing more consumers to our platform than ever before, translating into robust financial performance. In the first quarter, subscribers grew by a record 172,000, quarter over quarter, to over 1.7 million.

Andrew: Our first quarter results Mark an outstanding beginning to the year the.

Andrew: The momentum we built in 2023 is continuing as we further advance our mission to help the world Bill great to the power of better health.

Andrew: The underlying strength of our business is propelled by an unwavering dedication to delivering the highest quality personalized care possible across each of our five core specialties men's and women's dermatology mental health sexual health and weight loss.

Andrew: Strong execution of our strategy is drawing more consumers to our platform than ever before.

Andrew: <unk> is leading into robust financial performance.

Andrew: In the first quarter subscribers grew by a record 172000 quarter over quarter to over one 7 million.

Andrew: Personalization continues to resonate with users the.

Andrew Dudum: Personalization continues to resonate with you. The number of subscribers opting for a personalized subscription has nearly tripled over the course of the last year to north of 600,000 subscribers, representing just over 35% of subscribers on the platform. Our ability to efficiently acquire and retain users resulted in revenue increasing 46% year-over-year to $278 million, while also generating $32 million of adjusted EBITDA. We believe that our expanding portfolio of personalized solutions, combined with the ability of our brand to reach and resonate with consumers at multiple stages of their health and wellness journeys, are driving forces behind our continued success. I'd like to start by providing additional insight into how we see each of these evolving over the year.

Andrew: The number of subscribers opting for personalized subscription has nearly tripled over the course of the last year to north of 600000 subscribers, representing just over 35% of subscribers on the platform.

Andrew: Our ability to efficiently acquire and retain users resulted in revenue increasing 46% year over year to $278 million, while also generating 32 million of adjusted EBITDA.

Andrew: We believe that our expanding portfolio of personalized solutions combined with the ability of our brand to reach and resonate with consumers at multiple stages of their health and wellness journeys are driving forces behind our continued success.

Andrew: To start by providing additional insight into how we see each of these evolving across the year.

Andrew: Starting with our portfolio of personalized solutions.

Andrew Dudum: Starting with our portfolio of personalized solutions, we leverage hundreds of thousands of interactions on our platform to facilitate an understanding of key consumer concerns and challenges that may prevent individuals from reaching optimal outcomes. Partnerships with leading medical institutions and experts within each of our specialties then enable us to provide access to tailored clinical solutions that are crafted with a focus on safety, efficacy, and top concerns identified by our customers. This allows providers on our platform to meet their patients' clinical needs at an individual level, targeting things like side effects and adherence through personalized dosages, a variety of product form factors to drive adherence, and the ability to address multiple health conditions with one

Andrew: We leveraged hundreds of thousands of interactions on our platform to facilitate an understanding of key consumer concerns and challenges that may prevent individuals from reaching optimal outcomes partnerships with leading medical institutions and experts within each of our specialties, then enable us to provide access to tailored clinical solutions there.

Crafted with a focus on safety efficacy at top concerns identified by our customers.

Andrew: This allows providers on our platform to meet their patients' clinical needs at an individual level targeting things like side effects in adherence their personalized dosages of variety of products form factors to drive adherence and the ability to address multiple health conditions with one solution.

Andrew: Our infrastructure and scale provides us the ability to equip providers with a breadth of personalized treatment options at mass market prices.

Andrew Dudum: Our infrastructure and scale provide us with the ability to equip providers with a breadth of personalized treatment options at mass market prices. Continued expansion and refinement of our personalized portfolio will be a critical component behind our success in 2024 and beyond. In areas like weight loss and dermatology, we'll aim to improve the customer experience with more user-friendly form factors and eventually a broader selection of multi-action offerings. Just as with hard mints and heart health, our upcoming offerings will be focused on various customer needs and use cases across demographics through tailored treatment.

<unk> expansion and refinement of our personalized portfolio will be a critical component behind our success in 2024 and beyond.

Andrew: In areas like weight loss in dermatology will aim to improve the customer experience with more user friendly form factors and eventually a broader selection of multi action offerings.

Andrew: Just as with hardness and heart health, our upcoming offerings will be focused on various customer needs and use cases across demographics through tailored treatments.

Andrew Dudum: Our recent launch of SexRx plus Climax Control is a great example of this type of innovation. A two-in-one offering designed to help men address multiple aspects of their sexual health without the need to take multiple pills.

Andrew: Our recent launch of sex Rx plus climax control is a great example of this type of innovation a two in one offering designed to help men address multiple aspects of their sexual health without the need to take multiple pills.

Andrew: In the coming years, we expect the vast majority of our subscribers will be utilizing one or more of our personalized offerings.

Andrew Dudum: In the coming years, we expect the vast majority of our subscribers will be utilizing one or more of our personalized offerings. Our brand has historically played a critical role in our success. Early on in our company's lifecycle, we built trust and awareness with our customers by making conditions more approachable and driving awareness of these solutions. Traditionally, these efforts were targeted at consumers that were already being impacted by a condition within one of our specialties.

Andrew: Our brand has historically played a critical role in our success and early on in our company's lifecycle, we built trust and awareness with our customers by making conditions more approachable and driving awareness of these solutions.

Andrew: Traditionally these efforts were targeted at consumers that were already being impacted by a condition within one of our specialties.

Andrew Dudum: Our aspiration is to make Hims & Hers synonymous with high-quality, personalized, affordable solutions. And as part of that ambition, we've started to focus our efforts on reaching consumers earlier in their journey with a narrative that resonates. In recent years, we have significantly increased our investments in channels that enable us to reach a broader set of consumers at different phases of their journey with a condition. This includes TV and other brand campaigns aimed at consumers during the most culturally relevant moments across society. These efforts are not aimed at immediate user acquisition.

Andrew: Our aspiration is to make him an earth synonymous with high quality personalized affordable solutions and as part of that ambition. We started to focus efforts on reaching consumers earlier in their journey with a narrative that resonates.

Andrew: In recent years, we have significantly increased our investments in channels that enable us to reach a broader set of consumers at different phases of their journey with the condition.

Andrew: This includes T V and other brand campaigns aimed at consumers during the most culturally relevant moments across society.

Andrew: These efforts are not aimed at immediate user acquisition.

Andrew Dudum: Rather, they are centered on raising awareness of our brand and platform capabilities early in an individual's journey with the condition, sometimes even before those journeys formally begin. A multi-specialty platform enables us to do this in an efficient manner, as we're able to speak to consumers broadly about a platform of capabilities versus an individual condition. It is clear to us that these efforts are starting to pay off. We are seeing users actively seek us out, either by visiting our website directly or through other cost-effective channels.

Rather they are centered on raising awareness of our brand and platform capabilities early in an individual's charity with the condition, sometimes even before those journeys formally begin.

Andrew: Our multi specialty platform enables us to do this in an efficient manner.

Andrew: We're able to speak to consumers broadly about a platform of capabilities versus an individual condition.

Andrew: It is clear to us that these efforts are starting to compound we're seeing users actively seek us out either by visiting our website directly or through other cost effective channels. We.

Andrew Dudum: We believe this is happening as users associate the Hims & Hers brand with the treatment of a breadth of conditions and are seeking treatment on our platform, either as the result of recalling prior messaging that they saw or increasingly through word of mouth from friends and associates.

Andrew: We believe this is happening as users associate the HIMSS Linhares brand with the treatment of a breath of conditions and are seeking treatment or a platform either the result of recalling prior messaging that they saw or increasingly through word of mouth from friends and associates.

Andrew Dudum: The growth and efficiency gains we saw in the first quarter are a direct result of these improving dynamics and solidify our conviction in our ability to achieve our long-term adjusted EBITDA margin targets of 20 to 30 percent, while simultaneously maintaining an attractive growth profile. This is an incredibly exciting time for our business. In a very short period, I believe we have established Hims & Hers as the clear leader for accessing high-quality, personalized care, and the efficiency gains we are seeing throughout our model ensure we can continue to build upon that position for years to come.

Andrew: The growth and efficiency gains we saw in the first quarter are a direct result, these improving dynamics and solidify our conviction and our ability to achieve our long term adjusted EBITDA margin targets of 20% to 30%, while simultaneously maintaining an attractive growth profile.

Andrew: This is an incredibly exciting time for our business in a very short period I believe we have established terms and hers as the clear leader for accessing high quality personalized care and the efficiency gains we are seeing throughout our model ensure we can continue to build upon that position for years to come.

Andrew Dudum: There are three underlying components of this model that allow us to bring this differentiated value proposition to market. First, our technology platform, which serves as the backbone of our innovation process and allows us to seamlessly integrate structured data and direct feedback from both consumers and providers, offering invaluable insights into our users' preferences and needs. This provides us with critical insights into customer behavior, why users adopt certain solutions, why they may switch to another, and why they adhere to particular products.

Andrew: There are three underlying components of this model that allow us to bring the differentiated value proposition to market.

Andrew: First our technology platform, which serves as the backbone of our innovation process and allows us to seamlessly integrate structured data and direct feedback from both consumers and providers offering invaluable insights into our user preferences and needs.

Andrew: This provides us with critical insights into customer behaviors why users adopt <unk> solutions why they may switch to another and why they adhere to particular products.

Andrew Dudum: Importantly, we also recognize the sensitivity of this data, and we take significant steps to prioritize customer trust and safety through our commitment to data privacy and security, compliance with applicable privacy laws, and transparency about how we use data. Second, our team of internal medical experts oversees this entire process.

Andrew: Importantly, we also recognize the sensitivity of this data and we take significant steps to prioritize customer trust and safety through our commitment to data privacy and security and compliance with applicable privacy laws and transparency about how we use data.

Andrew: Second our team of internal medical experts oversee this entire process.

Andrew Dudum: With expertise across each of our core specialties, these individuals help ensure that each offering aligns with the highest standards of clinical excellence. And finally, our affiliated pharmacies help ensure that every step of production, from formulation to packaging, upholds the integrity of our brand and meets the exacting standards of our customers. This enables us to offer access to a wide array of personalized solutions, solutions that historically were only available to the wealthiest segments of society at truly accessible prices.

Andrew: With expertise across each of our core specialties. These individuals' help ensure that each offering aligns with the highest standards of clinical excellence.

Andrew: And finally, our affiliated pharmacies help ensure that every step of production from formulation to packaging upholds the integrity of our brand and meets the exacting standards of our customers.

Andrew: This enables us to offer access to a wide array of personalized solutions solutions that historically were only available to the wealthy segments of society at truly accessible prices.

Andrew: Investments across these key pillars are fundamental to our ability to meet growing demand, we are experiencing and fuel future growth.

Andrew Dudum: Investments across these key pillars are fundamental to our ability to meet the growing demand we're experiencing and fuel future growth. In the near term, this means additional investments in our affiliated pharmacies. Enhancements in both breadth and capacity will position us to further accelerate market penetration while ensuring a best-in-class experience for our customers. Through the integration of robotics and specialized software, we aim to build the necessary infrastructure to bring our unique offering to tens of millions of individuals.

Andrew: In the near term this means additional investments in our affiliated pharmacies in.

Andrew: Enhancements in both breadth and capacity will position us to further accelerate market penetration, while ensuring a best in class experience for our customers.

Through the integration of robotics and specialized software, we aimed to build the necessary infrastructure to bring our unique offering to tens of millions of individuals.

Andrew Dudum: These investments will allow us to continue deploying a strategy that focuses on offering a diverse range of solutions that our providers can use to effectively meet individual needs. As we expand these capabilities, we are thrilled to announce that several new and exciting solutions will be launching on our platform in the coming weeks. I look forward to sharing more details as these solutions become available later this quarter. Before I close, I want to thank our teams for their outstanding levels of execution to start the year. We have created a platform that delivers a seamless and comprehensive customer experience by providing an expanding portfolio of personalized solutions at compelling prices.

Andrew: These investments will allow us to continue deploying a strategy that focuses on offering a diverse range of solutions that are providers can use to effectively meet individual needs.

Andrew: As we expand these capabilities, we are thrilled to announce that several new and exciting solutions will be launching on our platform in the coming weeks I look forward to sharing more details as these solutions become available later this quarter.

Andrew: Before I close I want to thank our teams for their outstanding levels of execution to start the year.

Andrew: We've created a platform that delivers a seamless and comprehensive customer experience by providing an expanding portfolio of personalized solutions at compelling prices.

Andrew: I take extreme pride in how we serve our customers and look forward to extending this experience to an ever growing audience in 2024.

Andrew Dudum: I take extreme pride in how we serve our customers, and I look forward to extending this experience to an ever-growing audience in 2024. Before passing to Yemi, I'd like to reiterate a clarification I shared yesterday. The last few days have been a disheartening reflection of just how divisive a time we live in, and my words have been misconstrued by some. I in no way condone or support acts or threats of violence, anti-Semitism, or intimidation, and there is absolutely no justification for violence on our campus.

Speaker Change: Before passing to Jimmy I would like to reiterate a clarification I shared yesterday.

Jimmy: The last few days have been a disheartening reflection of just how device at a time, we live in in my words had been misconstrued by some.

Jimmy: I in no way condone, nor support acts or threats of violence, anti Semitism or intimidation and theres absolutely no justification for violence on our campuses.

Jimmy: Every student deserves to feel safe without fear of harm or being targeted for who they are.

Andrew Dudum: Every student deserves to feel safe without fear of harm or being targeted for who they are. I am deeply saddened that my support for peaceful protest has been interpreted by some as encouraging violence, intimidation, or bigotry of any kind. I do believe deeply in the right for people to use their voices in peaceful protests to drive change. This right is critical to our democracy and must be protected. Our world today is more just because students throughout history have courageously taken to their campuses and used their voices to force change.

Jimmy: I'm deeply saddened that my support for peaceful protest has been interpreted by some as encouraging violence intimidation or bigotry of any kind.

Jimmy: I do believe deeply in the right for people to use their voices in peaceful protests to drive change. This right is critical to our democracy and must be protected.

Jimmy: Our world today is more just because students throughout history have courageously taken to their campuses and use their voices to force change.

Andrew Dudum: Generations of Americans have engaged in nonviolent protests, and these movements have led to some of the most important changes in our country's history. As a father whose children are both the descendants of Palestinian refugees who fled the Nakba in 1948 and the descendants of Holocaust survivors from Poland, as I've previously shared, I have a personal appreciation for the different perspectives people have, which I live with daily at my dinner table. I hope and pray for peace and for an end to violence everywhere. With that said, I will pass it over to Yemi to walk through our financials in greater detail.

Jimmy: Generations of Americans have engaged in non violent protests and these movements have led to some of the most important changes in our country's history.

Jimmy: As a father, whose children are both the descendants of Palestinian refugees, who fled the knock in 1948 and the descendants of Holocaust survivors from Poland. As I've previously shared I have a personal appreciation from a different perspective people have which I live with daily at my dinner table.

Jimmy: I hope and pray for peace and for an end to violence everywhere.

Jimmy: With that I will pass it over to Amy to walk through our financials in greater detail.

Amy: Thanks, Andrew I.

Yemi Okupe: I will start by providing an overview of our first quarter financial performance and then discuss our updated outlook for 2024. 2024 is off to an exceptional start.

Amy: I will start by providing an overview of our first quarter financial performance and then discuss our updated outlook for 2024.

Amy: 2024 is off to an exceptional start our.

Yemi Okupe: Our position as a leader for accessing high-quality, personalized care has never been more evident, and we are seeing cascading improvements throughout our business as more and more individuals find success on the Hims & Hers platform. We believe we are just scratching the surface of what our platform can do and the number of individuals we can help. Continued robust momentum in the first quarter serves as confirmation of that. Revenue grew 46% year-over-year to $278.2 million. This growth was driven by the ongoing expansion of our subscriber base. Subscribers grew 41% year-over-year to 1.7 million.

Amy: Our position as a leader for accessing high quality personalized care has never been more evident and we are seeing cascading improvements throughout our business as more and more individuals find success on the HIMSS in her platform.

Amy: We believe we are just scratching the surface of what our platform can do and the number of individuals we can help.

Amy: Continued robust momentum in the first quarter serves as a confirmation of that.

Amy: Revenue grew 46% year over year to $278 2 million.

Amy: This growth was driven by the ongoing expansion of our subscriber base subscribers grew 41% year over year to $1 7 million.

Yemi Okupe: The first quarter represented a record level of quarterly-over-quarter subscriber additions on our platform as we added 172,000 net new subscribers. Our strategy of equipping providers with high-quality personalized solutions at mass market prices is a significant driving force behind our success. In just two years, the number of subscribers that have opted for a personalized subscription has increased over 6X to north of 600,000 subscribers. With this continued transition, we believe several benefits will emerge in the future. The first benefit is improved retention.

Amy: But first quarter represented a record level of quarter over quarter subscriber additions on our platform as we added 172000 net new subscribers.

Amy: Our strategy of equipping providers with high quality personalized solutions at mass market prices as a significant driving force behind our success.

Amy: And just two years the number of subscribers that have opted for a personalized subscription has increased over six acts to north of 600000 subscribers.

Amy: With this continued transition we believe several benefits will emerge in the future.

Yemi Okupe: We are receiving signals across several specialties that retention for personalized products is higher alongside a stronger user preference for them relative to generic alternatives. This does not come as a surprise to us, as feedback from user interactions and behavior is one of the key ingredients in the development of our offering. We expect continued placement of personalized treatment options at increasingly mass market prices to compound this benefit. Additionally, we see opportunities for improved efficiency.

Amy: But first is improved retention.

Amy: We are receiving signals across several specialties that retention for personalized products as higher alongside a stronger user preference for them relative to generic alternatives.

Amy: This does not come as a surprise to us as feedback from the user interactions and behavior is one of the key ingredients and development of our offerings.

Amy: We expect continued placement of personalized treatment options at increasingly mass market prices to compounded benefit.

Amy: Secondarily, we see opportunities for improved efficiency.

Yemi Okupe: Benefits from economies of scale with our personalized offerings are expected, similar to what we have observed in other areas of our operations in the past. We are confident that these benefits will compound as we continue to expand our portfolio of personalized offerings over the course of 2024. Margins remain robust as we continue to leverage strong execution with economies of scale. Gross margins expanded two points a year in the first quarter to over 82%, relatively flat when compared with the prior quarter.

Amy: <unk> from economies of scale with our personalized offerings are expected similar to what we have observed in other areas of our operation in the past.

Amy: We are confident that these benefits will compound as we continue to extend our portfolio of personalized offerings over the course of 2024.

Amy: Margins remain robust as we continue to leverage strong execution with economies of scale.

Amy: Gross margins expanded two points year over year in the first quarter to over 82% relatively flat when compared with the prior quarter.

Yemi Okupe: Our team continues to leverage affiliated pharmacies and other areas of our network to drive efficiencies across key costs such as logistics, raw ingredients, and customer support. We continue to experiment with the highest value ways to pass this value to our consumers, and we are excited to continue to enhance the value they receive in the future. As our platform scales, we continue to see G&A leverage. G&A improved four points year-over-year to 12% of revenue in the first quarter. Cost as a percentage of revenue associated with operations and support, as well as technology and development, were both relatively flat on a year-over-year basis.

Amy: Our team continues to leverage affiliated pharmacies and other areas of our network to drive efficiencies across key costs, such as logistics raw ingredients and customer support.

Amy: We continue to experiment with the highest value ways to pass this value to our consumers and we are excited to continue to enhance the value they receive in the future.

Amy: As our platform scales, we continue to see G&A leverage.

Amy: G&A improved four points year over year to 12% of revenue in the first quarter.

Amy: Cost as a percentage of revenue associated with operations and support as well as technology and development were both relatively flat on a year over year basis.

Yemi Okupe: At the foundation of the Hims & Hers platform is a delightful end-to-end experience for our consumers across multiple specialties. We believe we can continue to drive robust growth with personalized solutions by firstly drawing a broader audience of consumers impacted by a condition to seek treatment and, secondarily, attracting a greater share of users currently seeking treatment within the specialties Hims & Hers covers.

At the foundation of the HIMSS <unk> platform is a delightful end to end experience for our consumers across multiple specialties.

We believe we can continue to drive robust growth with personalized solutions through firstly, drawing a broader audience of consumers impacted by condition to seek treatment.

Amy: Secondarily, attracting a greater share of users currently seeking treatment within the specialty at HIMSS <unk> covers and lastly, increasingly longevity of users on the platform.

Yemi Okupe: And lastly, increasing the longevity of users on the platform. A multi-specialty platform with unique personalized offerings and a compelling end-to-end experience has provided us with increased confidence to invest in reaching users early in their lifecycle journey. As Andrew mentioned, our aim over time is to make Hims & Hers synonymous with high-quality personalized solutions.

Amy: A multi specialty platform with unique personalized offerings and a compelling experience has provided us with increased confidence to invest in reaching users early in their lifecycle journey.

Amy: As Andrew mentioned, our aim over time is to make him and her synonymous with high quality personalized solutions.

Yemi Okupe: In the first quarter, we saw meaningful benefit from reaching a broader audience with a compelling experience and suite of offerings. Marketing as a percentage of revenue improved more than 400 basis points on both a sequential and year-over-year basis in the first quarter to 47%. Stronger retention combined with increased acquisition of users through lower cost channels drove leverage. We are pleased to see this amount of leverage during a time of robust growth and record-level additions of net new subscribers as it serves as a proof point of our ability to maintain strong growth while driving leverage.

Amy: In the first quarter, we saw a meaningful benefit from reaching a broader audience with a compelling experience and suite of offerings.

Amy: Marketing as a percentage of revenue improved more than 400 basis points on both a sequential and year over year basis in the first quarter to 47%.

Amy: Stronger retention combined with increased acquisition of users through lower cost channels drove leverage we are pleased to see this amount of leverage during a time of robust growth and record level of additions of net new subscribers because it serves as a proof point of our ability to maintain strong growth while driving leverage.

Yemi Okupe: Our expectation is that we will continue to opportunistically utilize marketing as a discretionary lever to continue to reach consumers at various points in their journeys, ensure awareness for unique value propositions and capabilities on the platform as they emerge, and accelerate awareness for newer personalized offerings. As a result, we expect there to be some fluctuation in marketing levels on a quarter-to-quarter basis as we utilize marketing as a discretionary lever to drive the aforementioned goals.

Amy: Our expectation is that we will continue to opportunistically utilize marketing as a discretionary lever to continue to reach consumers at various points in their journeys ensure awareness for unique value propositions and capabilities in the platform as they emerge and accelerate awareness for newer personalized offerings.

Amy: As a result, we expect there to be some fluctuation in marketing levels on a quarter to quarter basis, as we utilize in marketing as a discretionary lever to drive the aforementioned goals.

Yemi Okupe: However, we have high conviction in our ability to drive 1-3 points of leverage per annum and achieve our North Star Adjusted EBITDA margins of 20% or more no later than 2030. Strong execution and adherence to the principles behind our capital allocation framework are driving record profitability levels. Adjusted EBITDA in the first quarter was $32.3 million, as adjusted EBITDA margins expanded over three points, quarter over quarter, to close to 12%.

Amy: However, we have high conviction in our ability to drive one to three points of leverage per annum and achieve our northstar adjusted EBITDA margins of 20% or more no later than 2030.

Amy: Strong execution and adherence to the principles behind our capital allocation framework are driving record profitability levels.

Amy: Adjusted EBIT in the first quarter was $32 3 million as adjusted EBIT margins expanded over three points quarter over quarter to close to 12%.

Amy: Net income was $11 1 million in the first quarter up almost 10 X from last quarter elevating our conviction that 2024 will be our first year of GAAP profitability.

Yemi Okupe: Net income was $11.1 million in the first quarter, up almost 10x from last quarter, bolstering our conviction that 2024 will be our first year of gap profitability. Before providing additional insight into our outlook for the remainder of the year, I'd like to drill into how we allocated capital in the first quarter and our guiding principles for the remainder of the year. Free cash flow generation continues to remain strong. We generated $11.9 million of free cash flow in the first quarter as cash flow from operations exceeded investment in fixed assets within our affiliated pharmacies by $10.6 million.

Amy: Before providing additional insight into our outlook for the remainder of the year I'd like to drill into how we allocated capital in the first quarter and our guiding principles for the remainder of the year.

Amy: Free cash flow generation continues to remain strong we generated $11 9 million of free cash flow in the first quarter as cash flow from operations exceeded investment in fixed assets within our affiliated pharmacies of $10 6 million.

Amy: Over the course of the first quarter, we saw what we believe to be a meaningful disconnect in our market value relative to our intrinsic value.

Yemi Okupe: Over the course of the first quarter, we saw what we believe to be a meaningful disconnect in our market value relative to our intrinsic value. We believe this was the result of natural shareholder rotation driven primarily by members of our pre-IPO shareholder base, as well as general market volatility. We repurchased approximately 2 million shares in the first quarter as a result of these dynamics. At the end of the first quarter, $20 million remained within our $50 million share repurchase program. As a result of these actions, cash and short-term investments decreased by approximately $17 million in the first quarter.

Amy: We believe this was the result of a natural shareholder rotation driven primarily by members of our pre IPO shareholder base as well as general market volatility.

Amy: We repurchased approximately 2 million shares in the first quarter as a result of these dynamics.

Amy: At the end of the first quarter $20 million remain within our $50 million share repurchase program.

Amy: As a result of these actions cash and short term investments decreased by approximately $17 million in the first quarter.

Yemi Okupe: As of the end of the first quarter, $204 million of cash and short-term investments remain on our balance sheet. Looking forward, our priorities for capital deployment are as follows. Our highest priority remains positioning our business for growth. We expect meaningful deployment of capital in our affiliated pharmacies over the course of the next three years. Consumer feedback has been resoundingly positive, and we expect future investment will enable us to continue expanding the breadth and capacity of personalized offerings across each of our five core specialties.

Amy: As of the end of the first quarter $204 million of cash and short term investments remained on our balance sheet.

Amy: Looking forward our priority for capital deployment are as follows.

Amy: Our highest priority remains around positioning our business for growth.

Amy: We expect meaningful deployment of capital and our affiliated pharmacies over the course of the next three years.

Amy: Consumer feedback has been resoundingly positive and we expect future investment will enable us to continue expanding the breadth and capacity of personalized offerings across each of our five core specialties are.

Yemi Okupe: Our aspiration is to have tens of millions of subscribers on our platform, and we expect the majority will subscribe to a personalized solution. Additionally, our expertise allows us to make positive ROI investments in our facilities that we expect will increase our ability to offer solutions to consumers at a mass market price. These investments can come in the form of automation, as well as incremental operations in logistically advantageous locations.

Amy: Our aspiration is to have tens of millions of subscribers on our platform and we expect the majority of it will subscribe to a personalized solution.

Amy: Additionally, our scale allows us to make positive ROI investments in our facilities that we expect will increase our ability to offer solutions to consumers that mass market prices.

Amy: These investments can come in the form of automation as well as incremental operations and logistically advantageous locations.

Yemi Okupe: Our next priority is capitalizing on a moment when we feel there are meaningful disconnects between our market value and intrinsic value, the repurchase of shares. Lastly, we will continue to take the opportunity to utilize our CASLA generation profile to further strengthen our balance sheet. We believe this will provide additional option value for opportunities in the future. We are grateful and confident that the strength of our balance sheet and cash flow generation profile will enable us to do each of these things in the coming years concurrently. With that in mind, I'd like to detail our updated outlook for 2024.

Amy: Our next priority is capitalizing on a moments when we filled a meaningful disconnect between our market value and intrinsic value through the repurchase of shares.

Amy: Lastly, we will continue to take the opportunity to utilize our cash flow generation profile to further strengthen our balance sheet.

Amy: We believe this will provide additional option value for opportunities in the future.

Amy: We are grateful and confident that the strength of our balance sheet and cash flow generation profile will enable us to do each of these things in the coming years concurrently.

Amy: With that backdrop I'd like to detail our updated outlook for 2024.

Yemi Okupe: In the second quarter, we are anticipating revenue in the range of $292 to $297 million, representing a year-over-year increase of 40 to 43%. We expect Adjusted EBITDA to be between $30 to $35 million, representing an Adjusted EBITDA margin of 11% at the midpoint of both ranges. For the full year, we are anticipating revenue of between $1.2 to $1.23 billion, representing a year-over-year increase of 38 to 41 percent. Lastly, we expect 2024 adjusted EBITDA to be between $120 and $135 million. These adjusted EBIT and revenue ranges imply an adjusted EBIT margin of 10% at the midpoint of both ranges.

Amy: In the second quarter, we are anticipating revenue in the range of 292 to 297 million, representing a year over year increase of 40% to 43%.

Amy: We expect adjusted EBITDA to be between $30 million to $35 million, representing an adjusted EBITDA margin of 11% at the midpoint of both ranges.

Amy: For the full year, we are anticipating revenue of between one point to 212 3 billion, representing a year over year increase of 38% to 41%.

Amy: Lastly, we expect 2024, adjusted EBITDA will be between 120 and $135 million.

Amy: These adjusted EBIT and revenue ranges imply an adjusted EBIT margin of 10% at the midpoint of both ranges.

Operator: Strong momentum in the first quarter has strengthened our conviction that we will exceed not only our 2025 targets a year early but our revenue targets as well. Our ability to concurrently drive record growth while achieving meaningful levels of marketing leverage reinforces our conviction in reaching our goal of long-term adjusted even margins north of 20% by 2030. Our ability to drive these incredible results would not be possible without the dedication of hundreds of employees across Hims & Hers.

Strong momentum in the first quarter has strengthened our conviction that we will exceed not only our bottom line 2025 targets a year early but our revenue targets as well.

Amy: Our ability to concurrently drive record growth, while achieving meaningful levels of marketing leverage reinforce our conviction in reaching our goal of long term adjusted EBITDA margins north of 20% by 2030.

Amy: Our ability to drive these incredible results would not be possible without the dedication of hundreds of employees across Hampton Hertz.

Operator: I'd like to thank them, as well as our customers and partners who support us in our mission of helping the world feel great through the power of better health. We appreciate the support of our shareholders and look forward to keeping you updated on our progress. With that, I will now turn it over to the operator for questions.

Amy: I'd like to thank them as well as our customers and partners that support us in our mission of helping the World Cup right through the power of better health.

Amy: We appreciate the support of our shareholders and look forward to keeping you updated on our progress with that I will now turn it over to the operator for questions.

Speaker Change: Thank you we will now begin the question and answer session.

Operator: Thank you. We will now begin the question and answer session. If you have dialed in and would like to ask a question, please press star 1 on your telephone keypad to raise your hand and join the queue. If you would like to withdraw your question, simply press star 1 again. If you are called upon to ask your question and are listening via loudspeaker on your device, please pick up your handset and ensure that your phone is not on mute when asking your question. Again, please press star 1 to join the queue. Your first question comes from Allen Lutz with Bank of America. Please go ahead.

Speaker Change: If you have dialed in and we'd like to ask a question. Please press star one on your telephone keypad to raise your hand and joined the queue.

If you would like to withdraw your question simply press Star one again.

If you are called upon to ask your question and our listening via loud speaker on your device. Please pickup your handset and ensure that your phone is not on mute when asking your question.

Speaker Change: Again, Please press star one to join the queue.

Speaker Change: Your first question comes from Allen Lutz with Bank of America. Please go ahead.

Allen Charles Lutz: Good afternoon, and thanks for taking the question Andrew you mentioned that consumers are seeking out <unk> and the way that you've framed it made it seem like this is really the first time that youre seeing such significant efficiency gains I guess as we think about this in the context of the 2024 guidance did this come to a surprise to you in the quarter.

Allen Charles Lutz: Good afternoon, and thanks for taking the questions. Andrew, you mentioned that consumers are seeking out HIMS, and the way that you framed it made it seem like this is really the first time that you're seeing such significant efficiency gains. I guess as we think about this in the context of the 2024 guidance, did this come as a surprise to you in the quarter? What do you think's driving this? And then why is it happening now?

Andrew: What do you think is driving this and then why is it happening now and I guess as we think about the marketing as a percent of revenue clearly there was a nice step down there just trying to think through what we saw in the first quarter is sustainable.

Allen Charles Lutz: And I guess as we think about marketing as a percent of revenue, clearly, there was a nice step down there. Just trying to think through if what we saw in the first quarter is sustainable. Thanks.

Speaker Change: Thanks, Alan Great question, maybe I'll take the first part and let me hit the second.

Andrew Dudum: Thanks, Allen. Great question. Maybe I'll take the first part and let Yemi handle the second.

Andrew Dudum: You know, I think what's been happening in the past quarter is a continuation of the last couple of quarters, which is as we've expanded the suite and portfolio of personalized products across the categories, both historical core categories and some of the newer ones like weight loss and women's dermatology and others. That's just bringing a much more diverse set of customers to the company, right? We are getting better at segmenting the types of people that live within each of these categories and offering products that are maybe countering concerns they otherwise had and otherwise were barriers for them to adopting treatment.

Alan: I think what's been happening in the past quarter is a continuation of the last couple of quarters, which is as we've expanded the suite and portfolio of personalized products across the category, both historical core categories and some of the newer ones like weight loss and women's dermatology.

Alan: And others.

Alan: Just bringing a much more diverse set of customers to the company. We are getting better at segment hating the types of people that live within each of these categories and offering products that are maybe countering concerns they otherwise had and otherwise where barriers for them adopting treatment.

Andrew Dudum: And so I think as we continue to increase the breadth of choices, you're going to see a continuation of people coming to the platform. And on top of that, which has added extra leverage, we continue to increase the accessibility of those personalized products, right? We're dropping prices strategically. These are very attractive products and attractive prices that are often compared to traditional generic treatments, prices essentially side to side.

Alan: And so I think as we continue to increase the breadth of choices, you're going to see a continuation of people coming to the platform I think on top of that which has added extra leverage we continue to increasing increase the accessibility of those personalized products right.

Alan: <unk> dropping prices strategically these are very mass market attractive products.

Alan: An attractive prices that are often compared to the traditional generic treatments price essentially side.

Andrew Dudum: And so the combination of personalization and the attractive price point is something that's just been growing. From a continuation standpoint, I think generally those trends are to be expected, Alan, because we continue to expand the portfolio. But I think there are also dynamics from a marketing leverage standpoint that Yemi can speak to with regard to when we push a little bit heavier and when we pull back.

Alan: So I decide and so the combination of the personalization and the attractive price point I think is something that has been growing.

Alan: From a continuation standpoint, I think generally those trends are to be expected Alan because we continue to expand the portfolio, but I think there are also dynamics from a marketing leverage standpoint that <unk> can speak to with regard to when we push a little bit heavier than when we pull back.

Yemi Okupe: Yeah, thanks for the question, Allen. I think the way that we think about it is that there will be periods of time where marketing will fluctuate from time to time. We'll use it as a discretionary lever to lean into a variety of different initiatives, whether it's a new category launch or the launch of a new personalized product. But, as we mentioned in the prepared remarks, over the course of, like, on an annual basis, we do see the ability to continue to gain leverage just as a result of more and more consumers coming to the platform, loving the products, staying on the platform for a longer And so that gives us the confidence that each year over the course of the coming years, we have the ability to get leverage and, at the same time, concurrently maintain growth.

Speaker Change: Yes. Thanks for the question Alan I think the way that we think around it is there will be periods of time, where marketing will fluctuate from time to time.

Speaker Change: We'll use it as a discretionary lever to lean into right.

Speaker Change: Variety of different initiatives, whether it's a new category launch our launch of a new personalized product.

But as we mentioned in the prepared remarks over the course of like on an annual basis, we do see the ability to continue to gain leverage as a result of more and more consumers coming to the platform.

Speaker Change: Loving the product being on the platform for a longer period of time as well as Andrew mentioned more consumers coming to us organically and so.

Speaker Change: That give us the confidence that each year over the course of the coming years, we have the ability to get leverage and at the same time and currently maintain growth.

Speaker Change: Very helpful. And then just a quick follow up on the personalized solutions I think you mentioned, 35% of subscribers are now taking personalized solutions today.

Allen Charles Lutz: Very helpful. And then just a quick follow-up on the personalized solutions. I think, Yemi, you mentioned 35% of subscribers are now taking personalized solutions today. How should we think about the size of the retention improvement from maybe where the company was a couple years ago versus what personalized solutions are doing currently? Is there any way to frame the improvement quantitatively? Thanks.

Speaker Change: Should we think about the size of the retention improvement from maybe where the company was.

Speaker Change: A couple of years ago versus what personalized solutions are doing currently is there any way to frame the improvement quantitatively.

Yemi Okupe: Yeah, I think we can give you some guiding principles around what we've been seeing across categories. I think various categories are at different stages in their life cycle.

Speaker Change: Yes, I think we can give you some guiding principles around what we've been seeing across categories. I think various categories are at different stages in their lifecycle.

Andrew Dudum: Broadly, what we do see is that personalized solutions enable us to do a few things. One is just given that there are not similar products, often cases, in the market out there for them. We are seeing more and more consumers sign up for not only personalized products but also sign up for them for longer durations. Given the fact that many of these products do fundamentally go to the heart of consumer preferences and consumer needs, our belief is that these will be the catalysts that enable consumers to stay on the platform for years or even decades.

Speaker Change: Broadly what we do see is that personalization personalize solutions enable us to do a few things.

Speaker Change: One is just given that there are not some similar products often cases in the market out there to them.

Speaker Change: We are seeing more and more consumers sign up for not only the personalized products, but also sign up for them at longer durations and given the fact that many of these products do fundamentally go to the heart of.

Speaker Change: Consumer preferences and consumer needs. Our belief is that these will be the catalyst that enables consumers to stay on the platform for years or even decades.

Speaker Change: We're starting to see that show up across many specialties in the form of much stronger retention that we've seen with the generic alternatives and a doctor if theres anything that you wanted to add there as well, yes. The other thing Alan just maybe to give you some color on.

Andrew Dudum: We're starting to see that show up across many specialties in the form of much stronger retention than we've seen with the generic alternatives. Andrew, I'm not sure if there's anything that you wanted to add there as well. Yeah, the other thing, Alan, just maybe to give you some color on how this plays out.

Speaker Change: How this plays out a lot of customers will cancel overwhelmingly because the treatment itself is not perfectly personalized to that right. Maybe the form factor is not a form factor that they love using right, maybe it's a topical spray and it makes their hair sticky and so they performed they prefer an oral solution.

Andrew Dudum: A lot of customers will cancel overwhelmingly because the treatment itself is not perfectly personalized to them, or maybe the form factor is not a form factor that they love using. Maybe it's a topical spray and it makes their hair sticky, and so they prefer an oral solution, or maybe vice versa. Or, there might be a side effect component, which is common among different treatments, that the customer is trying to balance. I think the way you can think about it is that we like to dive deep into the data to understand why customers are canceling and try our best to address them directly with the next level of personalization launches.

Speaker Change: Or maybe vice versa.

Speaker Change: Or there might be a side effect component, which is common among different treatments that the.

Speaker Change: The customer is trying to balance and so.

Speaker Change: I think the way you can think about it is that we like to dive deep into the data of understanding why customers are canceling and try our best to address them directly with the next level of personalization launches and so very often they are.

Andrew Dudum: Very often, they are directly attacking some of the side effect concerns that we see or some of the form factor concerns we see, et cetera. I probably can't speak to the magnitude, but definitely something that we've seen pretty consistently and would expect.

Speaker Change: Directly attacking some of the side effect concerns that we see or some of the form factor concerns, we see et cetera, and so.

Speaker Change: Probably can't speak to the magnitude, but definitely something that we've seen pretty consistently and we would expect to continue.

Speaker Change: Thank you.

Speaker Change: Your next question comes from Maria <unk> with Canaccord. Please go ahead.

Maria Ripps: Your next question comes from Maria Ripps with Canaccord. Please go ahead.

Andrew Dudum: Great. Thanks so much for taking my questions and congratulations on the strong quarter. First, I just wanted to ask about your pricing philosophy. It's been about a year since you introduced lower prices. Can you maybe give us a little bit more color on your near-term approach to refining pricing from here? Are there any specialties or maybe products where you've seen particularly higher price elasticity?

Maria: Great. Thanks, so much for taking my questions congrats on the strong quarter.

Maria: Firstly, just wanted to ask about your pricing philosophy, it's been about a year since you sort of introduced lower prices can you maybe give us a little bit more call out when you set up near term approach to refining pricing from here and are there any sort of specialties that maybe products, where you've seen particularly higher sort of price elasticity.

Speaker Change: Yes. Thanks for the question Maria I think just our fundamental approach is as we continue to see benefits for from scale.

Yemi Okupe: Yeah, thanks for the question, Maria. I think our fundamental approach is, as we continue to see benefits from scale, we're consistently running experiments with respect to how we pass forward some of the value back to consumers, which we feel will increase longevity on the platform. I think with respect to some of the price dynamics, we would lack many of those in the Q2 quarter. And so we expect to see the benefit from that in the second quarter.

Speaker Change: Quickly running experiments with respect to how do we path forward some of that value back to consumers, which we feel will increase the longevity on the platform I think with respect to some of the pregnant Amex, we would lock many of those in the Q2 and the Q2 quarter and so we expect to see the benefit from that in the second quarter.

Speaker Change: That said I think thats the way that will pass value to consumers is not just in the form of price you can expect additional features or other other creative solutions that we're experimenting in and so I think over the course of the year.

Yemi Okupe: But that said, I think that the way that we'll pass value to consumers is not just in the form of price. You can expect additional features or other creative solutions that we're experimenting with. And so I think over the course of the year, embedded in our guidance is the flexibility to do that, whether it's with respect to pricing or incremental features that consumers get, really with an eye toward addressing their needs and keeping them on the platform for longer.

Speaker Change: Embedded in our guidance with the flexibility to do that whether it's with respect to pricing or incremental features that consumers get really with an eye towards addressing their needs and keeping on the platform for longer.

Andrew Dudum: And I think maybe just to add, Marie, that philosophically, we aim to build a platform where, you know, there are tens of millions of customers across Hims & Hers and believe that the suite of categories and specialties we offer today, as well as the ones we'll continue to expand into, are categories that affect nearly every household in the country. And so continuing to find leverage in operational efficiency or automation or throughout the business and give that back to customers is the core philosophy in order to continue to make those price points accessible in a way that you can truly target those multi-tens of millions of customers.

Speaker Change: Maybe just to add I think philosophically, we aim to build a platform where there are tens of millions of customers across <unk> and horizon and believe that the suite of categories and specialties, we offered today as well as the ones, we will continue to expand into.

Speaker Change: Our categories that affects nearly every household in the country and so continuing to find leverage in the operational efficiency or automation or throughout the business and give that back to customers is the core philosophy in order to continue to make those price points accessible in a way that you can can truly target that multi <unk>.

Speaker Change: Tens of millions of customers.

Speaker Change: Got it that's very helpful. And then can you maybe give us a little bit more color on your targeted investments in our affiliated pharmacies.

Maria Ripps: Got it, that's very helpful. And then can you maybe give us a little bit more color on your targeted investments in affiliated pharmacies? You talked about sort of expanding automation capabilities through robotics and software. So more color on additional capabilities you're able to share.

Speaker Change: <unk> talked about sort of expanding automation capabilities to robotics and software so any more color on additional capabilities, you're able to share and then are you planning to add more affiliated pharmacy locations. At this point and then lastly, how is this going to how are we going to see this sort of flow into your P&L.

Speaker Change: This largely capex or operating expenses.

Speaker Change: Yes. Thanks for the question Maria I think that there's a few areas that we would like to invest and I think that what's becoming overwhelmingly clear that the strategy of personalization is fundamentally work in and so there are a few areas, where we will fundamentally invest.

Yemi Okupe: And then, are you planning to add sort of more affiliated pharmacy locations at this point? And then lastly, how is this going to, how are we going to see this sort of flowing through your P&L? Is this largely CapEx? Or operating expenses?

Yemi Okupe: Yeah, thanks for the question, Maria. I think that there are a few areas that, you know, that we would like to invest in. I think that what's becoming overwhelmingly clear is that the strategy of personalization is fundamentally working. And so there are a few areas where we will fundamentally invest. One is just around the breadth of solutions that we offer across each of our specialties. And so, over the course of the next year, we'll invest to make sure that we can continue to expand the number of different conditions and concerns for consumers that we address in the form of more SKUs.

Speaker Change: One is just around the breadth of solutions that we offer across each of our specialties and so over the course of the next year, we will invest to make sure that we can continue to expand.

Speaker Change: A number of different conditions and concerns for consumers that we address in the form of more skus as part of that.

Yemi Okupe: As part of that, you know, much of the first half of this year and into the early half of next year, we'll also expect to just ensure that there's deeper capacity to fundamentally meet those needs. The capacity and breadth solutions will be growth-dependent.

Much of the kind of the first half of this year and into the early half of next year.

We will also expect to just ensure that theres deeper capacity.

Speaker Change: Fundamentally.

Speaker Change: Those needs the capacity and breadth of our solutions will be corrupt dependent we don't want to get too far ahead of our Skus as we were invested in so we'll continue to watch those.

Yemi Okupe: We don't want to get too far ahead of our skis as we're investing, and so we'll continue to watch those. With respect to where that money will show up, you can expect it to primarily be capital expenditures. And then, you know, starting from the really back half of this year to early next year, our facilities run incredibly efficiently today, but with greater scale, we're uniquely positioned to progressively increase the automation in those facilities.

Speaker Change: With respect to where it will show up you can expect that to primarily be capital expenditures.

Speaker Change: And then starting from like the really the back half of this year to early next year.

Speaker Change: Our facilities run incredibly efficiently today, but with greater scale, we are uniquely positioned to progressively increase the automation in those facilities and so we expect to start that.

Yemi Okupe: And so we expect to, you know, start that process in the back half of the year. That, again, would show up in the form of CapEx, but we do expect many of those initiatives to be ROI positive and incrementally drive higher margins that we have the ability to do so.

Speaker Change: <unk> in the back half of the year that again, which up in the form of Capex, but we do expect many of those initiatives to be ROI positive and incrementally drive higher margins that we have the ability to as Andrew mentioned, that's mentioned mentioned before both off.

Speaker Change: If we pass through to consumers.

Speaker Change: Got it. Thank you so much for the color.

Maria Ripps: Got it. Thank you so much for the call.

Speaker Change: Thank you. Your next question comes from Daniel <unk> with Citi. Please go ahead.

Daniel R. Grosslight: Your next question comes from Daniel Grosslight with Citi. Please go ahead.

Andrew Dudum: Hey guys, thanks for taking the question. I was hoping to get an update on the weight loss program. I'm really curious about the demographics of the folks that are coming to your platform.

Daniel: Hey, guys. Thanks for taking the question I was hoping to get a <unk>.

Daniel: On the weight loss.

Daniel: Program.

So really curious on the demographics of the folks that are coming to your platform.

Daniel R. Grosslight: Have they tried GLP-1s? Are they a little bit wary of trying GLP-1s and would therefore rather kind of go with you first? And then, as we think about GLP-1s and potentially bringing those to your platform, it would be great to get an update on your thinking there, and in particular around compounded GLP-1s and your ability to do that within your facility.

Daniel: They tried <unk> ones are they.

Daniel: A little bit wary of triangle be ones, and therefore would rather kind of go with your first and then as we think about GSE ones and potentially bringing those to your platform that would be great to get an update on your thinking there and and and in particular around that.

Daniel: Compounded DLP ones and your ability to do that within your facilities.

Okay. Thanks, and great question. So I think overwhelmingly really excited by what we've seen on weight loss you are talking about over 100 million people suffering I think the offering we have is excessively priced affordable.

Andrew Dudum: Thanks, Dan. Great question.

Daniel: <unk>.

Speaker Change: And then put it well on target to hit that $100 million in 2000 25 million. We said I think we will continue to expand that portfolio and expect to launch <unk> soon as we've talked about in the past.

Daniel R. Grosslight: So I think I am overwhelmingly really excited by what we've seen with weight loss. You know, you're talking about over 100 million people suffering. I think the offering we have is excessively priced, affordable, safe, and has put it well on target to hit that 100 million in 2025, as we said. I think we will continue to expand that portfolio and expect to launch GLP-1 soon, as we've talked about in the past. Regarding compounding, I think there will probably be more to come in the future, so probably not too much to share on that today. But it is something we're watching really carefully and wrapping our heads around, and the clinical team and the pharmaceutical team are solidifying some perspectives on that that we should be able to share shortly.

Speaker Change: Compounding I think probably more to come in the future.

Speaker Change: So youll, probably not too much to share on that today, but it is something we're watching really carefully and wrapping our heads around in the clinical team and the pharmaceutical team.

Speaker Change: Solidifying some perspectives on that that we should be able to share shortly.

Speaker Change: Got it thank you and Andrew.

Andrew Dudum: Got it. Thank you.

Speaker Change: Andrew You mentioned that you have one of your one of your goals.

Andrew: Getting folks on more than one personalized products.

Andrew: Hoping to get it maybe.

Andrew: Maybe some more details on on how many folks right now are on more than one and maybe any kind of qualitative or quantitative.

Andrew: That you can provide on those folks people, who have more than one versus just one versus no product no personalized products.

Daniel R. Grosslight: And, you know, Andrew, you mentioned that, you know, you have one of your goals is getting folks on more than one personalized product. I was hoping to get maybe some more details on how many folks right now are on more than one, and maybe any kind of qualitative or quantitative benefit you can provide for those folks, people who have more than one versus just one versus no product, no, no personalized product. Yeah, it's a great question.

Speaker Change: It's a great question, I think more and more where we're thinking.

Daniel R. Grosslight: You know, I think more and more we're thinking more about the concept because I think when you think of more than one, it's really this cross sell, right, this e-commerce concept. And I think, as we watch customer behavior, what's becoming clear is personalized versus non personalized is really where we're focusing, because in a lot of situations, personalized often means cross category, right. So when you think about our heart health category and our sexual health category, you know, that's a single personalized treatment that treats both sexual dysfunction as well as cardiovascular disease, right in a single personalized pill.

Speaker Change: You know more about the concept because I think when you think of more than one it's really this cross sell right. This e-commerce concept and I think as.

Speaker Change: As we watch customer behavior, and what's becoming clear is personalized versus non personalized is really where we're focusing because.

Speaker Change: And a lot of situations personalized often means cross category right. So when you think about our heart health category in our sexual health category. That's a single personalized treatment that is treating both sexual dysfunction as well as cardiovascular disease in a single personalized pill and so I think as a business.

Daniel R. Grosslight: And so I think as a business, we're not really focused on, you know, cross-category conversion as much as personalized human-centric treatment of an individual holistically. And I think as you start to see some of our categories overlap, you know, for example, in the weight loss category, there is a lot of overlap with mental health and depressive eating in the mental health category, same thing overlaps with obesity. These categories are not siloed.

Speaker Change: We're not really focused on.

Speaker Change: Cross category conversion as much is personalized human centric treating an individual holistically and I think as you start to see some of our categories overlap.

Speaker Change: For example on the weight loss category.

Speaker Change: A lot of overlap with mental health and depressive eating on the mental health category same thing overlap with obesity.

Speaker Change: These categories are not not siloed and so trying to think of a personalized solution that treats all underlying factors of the symptoms are concerned that a patient is having is really the predominant focus and what we've seen overwhelmingly if you do that really well there are multiple reasons that a patient has to continue treatment.

Daniel R. Grosslight: And so trying to think of a personalized solution that treats all underlying factors of the symptoms or concerns that a patient is having is really the predominant focus. And what we've seen overwhelmingly is that if you do that really well, there are multiple reasons that a patient has to continue treatment. And some of those reasons might be more cosmetic. And some of those reasons might be more clinical and serious. But the combination, you know, surely is increasing the stickiness and the retention and the reasons people kind of remind themselves to pull it out of the cabinet or off the shelf and form that habit.

Speaker Change: And some of those reasons might be more cosmetic and some of those reasons might be more clinical in serious but the combination surely is increasing the stickiness and the retention and the reasons people kind of or remind themselves to pull it out of the cabinet or off the shelf and build that habit.

Speaker Change: Got it thank you.

Speaker Change: Thank you.

Jack Dawson Wallace: Your next question comes from Jack Wallace with Guggenheim Securities. Please go ahead.

Speaker Change: Your next question comes from Jack Wallace with Guggenheim Securities. Please go ahead.

Jack Dawson Wallace: Hey, Thanks for taking my questions and congrats on a great start to the year.

Andrew Dudum: Hey, thanks for taking my questions. And congrats on a great start to the year. Andrew, I just wanted to give you an opportunity to, and thank you for addressing your comments from last week. And, and over the weekend, I just wanted to give you an opportunity to give us some idea of how the public response reaction to your comments had any observable impact on the business and thinking more specifically around attention, or excuse me, attrition, and retention, new customer acquisition, as well as employee attention, attrition, and inbound resumes. Thank you.

Jack Dawson Wallace: Andrew I just wanted to give you an opportunity to.

Jack Dawson Wallace: And thank you for addressing your comments from from last week.

Jack Dawson Wallace: And over the weekend just wanted to give you an opportunity to just.

Give us some idea for how.

Jack Dawson Wallace: The public response reaction to your comments at any observable impact to the business and taking more specifically around attention or excuse me attrition and retention new customer acquisition as well as employee attention attrition.

Speaker Change: And inbound resumes thank you.

Speaker Change: Thanks, Jack Yeah, Great question.

Jack Dawson Wallace: Thanks, Jack. Yeah, great question. You know, so no material impact that we expect in the business. The guidance that we shared today reflects all of the latest thinking. And so, you know, we don't expect that to be a big concern at all going forward.

Jack Dawson Wallace: So no material impact that we expect in our business the guidance that we shared today reflects all of the latest thinking and so.

Jack Dawson Wallace: So we don't expect that to be a big concern at all going forward.

Speaker Change: Great. Thank you and then.

Yemi Okupe: Great, thank you. And then, you know, just wanted to get a little more color on the CAPEX investments, Yemi. Should we think of the first quarter's CAPEX number being a fair, kind of jumping off point into the second half of the year? And I appreciate your response to the prior question. And then, in terms of the therapeutic categories, sounds like maybe weight loss is getting some additional attention with the expanded capabilities there. But are there any other categories existing that might be getting some extra attention as well as preparation for new categories? Thank you.

Speaker Change: I just wanted to get a little more color on the Capex.

Speaker Change: Investments.

Speaker Change: Should we think of the first quarter's capex number being a.

Speaker Change: Fair.

Speaker Change: Kind of jumping off point into the second half of the year and I. Appreciate your response to the prior question and then second in terms of the therapeutic category. It sounds like maybe weight loss is getting some additional attention.

Speaker Change: With the.

Speaker Change: Expanded capabilities, there, but any other categories existing that might be getting some extra attention as well as preparation for new categories. Thank you.

Jack Dawson Wallace: Yeah, I can start with the first part of the question. Maybe we'll throw it over to Andrew for the second half.

Speaker Change: Yes, I can start with the first part of the question, maybe I'll turn it over to Andrew for the second half.

Yemi Okupe: I think what we really see, you know, Jack, as mentioned kind of in the prior question, we'll look to calibrate the capital expenditures relative to the growth that we are seeing. I think historically, you know, if you rewind two years ago, capital expenditures were fairly minimal in the low $1 to $2 million range. Over the course of the next three years, we expect just more intensity in the CapEx.

Andrew: I think what we really see Jack as I'd mentioned kind of in the prior question.

Andrew: We'll look to calibrate the capital expenditures relative to the growth that we are seeing I think historically, if you rewind two years ago capital expenditures were fairly minimal in the low $1 million to $2 million range over the course over the next three years, if we do expect.

Andrew: More intensity in the Capex, we don't expect to return to those levels for the next three years, but it will fluctuate.

Yemi Okupe: We don't expect to return to those levels for the next three years, but it will fluctuate as we start to invest in machinery or expand capabilities in the facilities. So it's hard to give an exact quarter-to-quarter number, but we do expect it to be, you know, elevated, similar to what we've seen kind of in the latter part of last year to last quarter.

Andrew: As we start to invest in machinery or expanding capabilities in the facilities.

Andrew: So it's hard to give an exact quarter to quarter number, but we do expect it to be elevated.

Andrew: Similar to what we've seen kind of Mb.

Andrew: The latter part of last year or two.

Last quarter.

Andrew Dudum: And I think a lot of these capabilities are centered around pharmaceutical complexity, so you can imagine form factor variation. We've got a number of form factors across the breadth of specialties and portfolio today, but there are quite a few more that we can be bringing to market. There's complexity in specific ingredient compounding, so there are actually necessary processes for more complex ingredients that are more challenging to put together into these form factors.

Andrew: And I think a lot of these capabilities are centered.

Andrew: Around both pharmaceutical complexity. So you can imagine form factor variation, we've got a number of form factors on the on the breadth of specialties.

Andrew: Portfolio today, but theres quite a few more that we can be bringing to market. There is complexity in specific ingredient compounding so theres actually necessary processes for more complex ingredients.

Andrew: Are more challenging to put together into these form factors and then obviously there are categories that we are excited by that we've talked about in the past.

Andrew Dudum: And then, obviously, there are categories that we are excited about that we've talked about in the past: hormonal balance, menopause, testosterone, pain management, insomnia, right? These are categories we've always talked about and believe in, believe there are a lot of people struggling with and an opportunity to deliver hyper-personalized treatments at very affordable prices. And so a lot of that CapEx investment is not only going towards some of the near-term categories but is building the foundation for what's going to be necessary a couple of years from now.

Jack Dawson Wallace: Great! Thank you so much.

Andrew: Hormonal balance menopause testosterone pain management insomnia right. These are categories, we've always talked about and believe and believe there is a lot of people struggling and an opportunity to deliver hyper personalized treatments at very affordable prices and so a lot of that Capex investment is not only going towards some of the near term categories and building the foundation.

Andrew: For what's going to be necessary a couple of years from now.

Speaker Change: Great. Thank you so much.

Speaker Change: Thank you.

Speaker Change: Your next question comes from John Kim with TD Cowen. Please go ahead.

Jungwon Kim: Your next question comes from Jonna Kim with TD Cowan. Please go ahead.

Jungwon Kim: Thanks for taking my question just wanted to get a better understanding of sort of what changed in terms of the full year, but full year guidance.

Yemi Okupe: Thanks for taking my question. I just wanted to get a better understanding of sort of what changed in terms of the full year bit, full year guidance in the first quarter versus how you got it in the fourth quarter. And I'm just curious which areas deliver upside versus your original expectations and also what changed in terms of your second half expectations. Any color will be helpful there. And just another question is, have you seen any change in consumer behavior by different income cohorts across your categories? Thank you so much.

Jungwon Kim: The first quarter versus how you've got it in the fourth quarter, and just curious which areas deliver upside versus your original expectations and also what change in terms of your second half expectations any color will be helpful. There and just another question is have you seen any change in consumer behavior by this.

Jungwon Kim: Income cohorts across your categories. Thank you so much.

Jungwon Kim: Okay.

Andrew Dudum: Maybe I can start with the first part of the question, you know, on the guide, and then, you know, can turn it over to Andrew for broader clarification around what we're seeing with the consumer. I think really, you know, Jonah, like what we did see in the first quarter is just record-level momentum, both in terms of the magnitude of consumers that were coming onto the platform relative to what we were expecting, as well as the frequency with which they were opting for personalized products. As we mentioned, those typically do carry higher retention levels.

Speaker Change: Maybe I can start with the first part of the question.

Speaker Change: And then.

Speaker Change: We can turn it over to Andrew for broader clarity around what we're seeing with the consumer.

Andrew: Jonathan what we did see in the first quarter is just record level of momentum.

Both in terms of the magnitude of consumers that are coming onto the platform relative to what we were expecting as well as the frequency of which they are opting for our personalized products.

As we mentioned, there's typically do carry higher higher retention levels and so.

Yemi Okupe: And so really, what's embedded in our guidance is just the strong momentum that we've seen. And we're seeing that across, you know, pretty much all of our specialties, given the fact that we've innovated the suite of products, whether it's sexual health, you know, dermatology, or the new weight loss weight category, we're seeing continued strength across each of our specialties. And we expect to continue to innovate with a very attractive pipeline for each of those specialties.

Andrew: Really whats embedded in our guidance is just the strong momentum that we've seen and we're seeing that across.

Andrew: Pretty much all of our specialties.

Andrew: Given the fact that we've innovated.

Andrew: The suite of products, whether it's sexual health.

Andrew: Dermatology or the new kit.

Andrew: Category.

Andrew: Seeing continued strength across each of our specialties and we expect to continue to.

Andrew: Innovate with a very attractive pipeline on each of our specialty is and so really that's what's embedded in the guide is a very strong pipeline of things to come.

Yemi Okupe: And so really, that's what's embedded in the guide is a very strong pipeline of things to come. The strong uptick in consumer acquisition in the first quarter, and then just the adoption of personalized products.

Andrew: The strong uptick in consumer acquisition in the first quarter and then just the adoption of personalized products.

Andrew Dudum: Yeah, regarding consumer confidence, you know, I think we continue to see strength across the demographics of income levels, you know, probably because of a couple of things. And this has happened historically when consumer confidence has dropped and others have struggled in traditional consumer channels, and our business has remained resilient. You know, I think you're talking about categories and products that are incredibly emotionally responsive and core to the wellbeing of the consumer, right?

Andrew: Yeah, and then regarding consumer confidence I think we continue to see strength across the demographics income levels I think probably.

Andrew: Because of a couple of things and this has happened historically when consumer confidence has dropped and others have struggled and traditional consumer channels and our business has remained resilient I think youre talking about categories and products that are incredibly emotionally residents and core to the well being of the consumer right there products that when the customer wakes up in the morning.

Andrew Dudum: They're products that when the customer wakes up in the morning and looks in the mirror, are highly impactful on how that day goes and how they show up in the world. And so I think they are very, very sticky in that way. On top of that, I think the strategic pricing initiatives from the last year have continued to make those even further affordable such that we have not seen any type of concerns about consumer strength whatsoever.

Andrew: It looks in the mirror, our highly impactful to how that day goes and how they show up in the world and so I think very very sticky and that way on top of that I think the strategic pricing initiatives from the last year have continued to make those even further affordable such.

Andrew: Such that we have not seen any types of concerns and consumer stress.

Strength whatsoever.

Speaker Change: Got it thank you so much.

Speaker Change: Your next question comes from Aaron Kessler with Seaport Global Please go ahead.

Jungwon Kim: Okay, thank you so much. Your next question comes from Aaron Kessler with Seaport Global. Please go ahead. Great, thanks.

Aaron Kessler: Your next question comes from Aaron Kessler with Seaport Global. Please go ahead. Great. Thanks, guys. Congratulations on the quarter. A couple of questions.

Aaron Kessler: Great. Thanks, guys. Congrats on the quarter a couple of questions. One maybe you can update us on the womens kind of performance of the <unk> performance in the quarter. I think you noted pretty strong growth last quarter and then just on the mental health side, maybe an update there. Thank our recent survey were showing pretty high rates of depression is particularly among younger adults just curious kind of what youre seeing there as well.

Yes.

Speaker Change: Thanks, Erin and great to have you on.

Andrew Dudum: Thanks, Erin, and great to have you. On the Her side of the business, continuing to see it be one of the fastest growing parts of the business. And this is comprised of Her's dermatology, Her's hair, the Her's weight loss category, as well as the mental health business. All of those are growing very robustly, and I think are really pulling the company ahead in a dramatic way.

Speaker Change: On the her side of the business continuing to see it be one of the fastest growing if not the fastest growing parts of the business and this is comprised of hers dermatology or his hair her weight loss category as well as the mental health business all of those are growing.

Speaker Change: Robustly and I think really pulling the company ahead in a dramatic way when we look at some of the penetration rates that the business has in those categories. It's quite small youre talking 1% to 2% penetration rates in very very massive market and so we suspect that the brand.

Andrew Dudum: When we look at some of the penetration rates that the business has in those categories, it's, it's quite small; you're talking about one 2% penetration rates in very, very massive markets. And so we suspect that the brand and the investments in the brand that we've been making in the last year or two are really just starting to unlock the awareness levels necessary to start taking massive share. But we believe strongly that from what we can tell, we've got strong product market fit in those three or four categories.

Speaker Change: The investments in the brand that we've been making in the last year or two are really just starting to unlock the awareness levels necessary to start taking massive share, but we believe strongly that from what we can tell we've got strong product market fit in those three or four categories. The breadth of portfolio of offerings is expanding very rapidly.

Speaker Change: Many products in the last quarter in many to come in the next couple in a way that gives us confidence that that growth rate will be able to be sustained for quite some time.

Andrew Dudum: The breadth of the portfolio of offerings is expanding very rapidly. Many products in the last quarter and many to come in the next couple in a way that gives us constant confidence that that growth rate will be able to be sustained for quite some time.

Speaker Change: Great. Thank you.

Speaker Change: Thank you.

Speaker Change: Your next question comes from Glen Santangelo with Jefferies. Please go ahead.

Glen Joseph Santangelo: Your next question comes from Glen Santangelo with Jeffreys. Please go ahead.

Yemi Okupe: So, yeah, thanks for taking my question. Hey guys, I just wanted to sort of unpack some of the numbers here, maybe a couple financial questions if I could. I mean, the subscriber growth of 41% in the quarter was almost equivalent to the sort of revenue growth you drove. But when I sort of peel back the layers a little bit, it looks like the monthly sales per average subscriber were flat, but yet your average order value was up 21%, which maybe suggests that you're continuing to have some success booking multi-month subscriptions.

Glen Joseph Santangelo: Hey, Thanks for taking my question, Hey, guys I, just sort of unpack some of the numbers here, maybe a couple of financial questions. If I could I mean the.

Glen Joseph Santangelo: Subscriber growth of 41% in the quarter was <unk>.

Glen Joseph Santangelo: Equivalent with the sort of the revenue growth.

Glen Joseph Santangelo: Zero, but what are you sort of peel back the layers a little bit it looks like the the monthly sales per average subscriber were flat, but yet your average order value was up 21% which may be.

Glen Joseph Santangelo: Just that youre continuing to have some success booking multi month subscriptions I was wondering if you could just give us a little bit more.

Yemi Okupe: I was wondering if you could just give us a little bit more, you know, a little bit more meat on both those two numbers, because I think what some of us are trying to assess as well is we get the churn question a lot, and so I'm just trying to make sure I understand how all these metrics sort of play off of one another.

A little bit more meat.

Glen Joseph Santangelo: On both those two numbers because I think what some of US who are trying to assess as well.

Glen Joseph Santangelo: As we get the churn question a lot and so im just trying to make sure I understand how all these all these metrics sort of play.

Glen Joseph Santangelo: Play off one another.

Speaker Change: Yeah sure. Thanks for the question Glenn.

Glen Joseph Santangelo: Yeah, sure. Thanks for the question, Glen.

Speaker Change: We've stated in the past would be the primary growth lever that we're focused on as a company is around subscriber growth and so a lot of the strategic initiatives, whether it's around personalization or some of the pricing elements, we've talked historically in the past.

Yemi Okupe: I think we've stated in the past that the primary growth lever that we're focused on as a company is around subscriber growth. And so a lot of the strategic initiatives, whether it's around personalization or some of the pricing elements we've talked about historically in the past, those are geared towards both making it attractive to consumers to come to the platform, as well as keeping consumers on the platform for multiple years, if not even decades.

Speaker Change: Those are geared towards both making it attractive to the consumers to come to the platform as well as keeping consumers on the platform for.

Yemi Okupe: And so our performance this quarter was primarily driven by subscriber growth, as you mentioned. We expect that to continue to be the case. And then with respect to the monthly average revenue per subscriber slash AOV, really, our focus is, as you mentioned, continuing to make sure that the Multi-month bundles are attractive, and we can see continued success there. With respect to some of the movement that you see in AOV, it is driven primarily by that, as well as some of the product mix dynamics as well as the wait for it coming online.

Speaker Change: Multiple years, if not even decades and so largely our performance. This quarter was primarily driven off of the subscriber growth. As you mentioned, we expect that to continue to be the case and then with respect to the monthly average revenue per subscriber loss.

Speaker Change: Really our focus is as you mentioned and continuing to make sure that the most.

Speaker Change: <unk> bundles are attractive and we see continued success there.

Speaker Change: With respect to some of the movement that you see at <unk> and is driven primarily by that as well as some of the.

Speaker Change: The product mix mix dynamics as well with the way we're coming on line.

Glen Joseph Santangelo: And Yemi, maybe just one more quick question on the guidance. If I sort of look at the adjusted EBITDA margin you put up in 1Q and what you're sort of implying for 2Q, it seems to suggest a reasonable step down in the back half of the year, you know, to be consistent with your sort of full year guidance. And I was wondering, is that some level of conservatism you're building in, or are there some, you know, you've talked on this call about some planned investments that may ultimately be made. So I'm just trying to make some sense of why we should expect the margin in the back half of the year to go down. Yep, I think it's a great class.

And maybe just one more quick question on the guidance, if I sort of look at the.

Speaker Change: The adjusted EBITDA margin, you put up in <unk>, and what you're sort of implying for <unk>.

Speaker Change: It seems to suggest a reasonable step down in the back half of the year.

Speaker Change: Being consistent with your sort of full year guidance I was wondering is that some level of conservatism you're building in or are there some.

Speaker Change: You've talked on this call about some planned investments that may ultimately be made so I'm just trying to make some sense of why we should expect the margin in the back half of the year to go down.

Speaker Change: Yes, I think that's a great question I think Q1 was definitely.

Yemi Okupe: I think that's a great question. I think Q1 was definitely a phenomenal quarter for us, and we are very excited about the remainder of the year ahead. Really, what we are doing is we're leaving ourselves flexibility. As we've mentioned, we do continue to look for ways to pass value back to consumers, whether that's the case of leaning back into marketing as we start to have new categories come online or new products come online.

Speaker Change: A phenomenal quarter for us and we are very excited by the remainder of the year to come.

Speaker Change: Really what we are doing is we are leaving ourselves enough flexibility as we've mentioned we.

Speaker Change: Due to continuously look for ways to pass value back to consumers.

Speaker Change: Whether thats the case of leaning back into marketing as we start to have new new categories come online.

Speaker Change: Starting to products come online.

Speaker Change: We will look to opportunistically have the flexibility to invest there and then as we mentioned before or over the course of several quarters. We do run experiments identifying what are the most accretive ways to pass value back to consumers, we're very close to finalizing some of those experiments and excited by those and so do you want to leave ourselves flexibility in the guide.

Yemi Okupe: We will look to opportunistically have the flexibility to invest there. And then, as we mentioned before, over the course of several quarters, we do run experiments identifying what are the most accretive ways to pass value back to consumers. We're very close to finalizing some of those experiments and excited by those. And so, we do want to leave ourselves the flexibility in the guide to have the capability to roll out some of those.

Speaker Change: Two.

Speaker Change: Have the capability to ultimate us.

Okay. Thank you.

Speaker Change: Your next question comes from Jay Linda Zhang with <unk> Securities. Please go ahead.

Jailendra P. Singh: Your next question comes from Jailendra Singh with Truist Securities. Please go ahead.

Jailendra P. Singh: Thank you and thanks for taking my questions and congrats on a strong quarter. First couple of clarification questions on the subscribers using personalized solutions 1Q at 35%. What was this figure among the new members you added in 1Q in terms of using a personalized solution? And second, part of the question is like, what is your outlook in terms of this figure by end of the year?

Speaker Change: Thank you and thanks for taking my questions and congrats on a strong quarter.

Speaker Change: First a couple of quick clarification questions on the.

Speaker Change: Subscribers using virtualized solution <unk> at 35% what was the figure out among the new members added in <unk> in terms of using a personalized solution and second part of the question is like what is your outlook, reflecting in terms of this figure at the end of the year.

Speaker Change: Yes, I think maybe I can start with some of the more granular details.

Yemi Okupe: Yeah, I think that maybe I can start, you know, with some of the more granular details and then, you know, can hand it over to Andrew to add some of the broader strategic questions. We didn't explicitly guide to, you know, basically a new number specifically.

Speaker Change: Got it over to Andrew to add some of the broader strategic question, we didn't explicitly guide to basically a.

Andrew: New numbers, specifically, what we do see is if the adoption for new subscribers of personalized products tends to be higher just because I think many of those users for the first time when they come to the platform are identifying the attractiveness of our personalized solutions is also we do see is that in many of the newer categories the adoption rate.

Andrew Dudum: What we do see is that the adoption rate for new subscribers of personalized products tends to be higher, just because I think many of those users, you know, for the first time when they come to the platform, are identifying the attractiveness of personalized solutions. It's also what we do see that in many of the newer categories, the adoption rate is quite strong, just because the vast majority of the user base is disproportionately oriented towards new users.

Andrew: It was quite strong.

Andrew: The vast majority of the user base is disproportionately oriented towards towards new users.

Andrew Dudum: And so we do expect, you know, that number to basically creep up, you know, each quarter, and alongside it, we're excited by the potential that that means for retention. And then Andrew, not for business.

Andrew: And so we do expect that number to basically creep up.

Each quarter on alongside it we're excited by the potential that that means for for retention and then Andrew I'm not sure, but just wanted to maybe just at a high level I think we expect the.

Yemi Okupe: Yeah, Andrew, maybe just, I mean, at a high level, I think we expect the vast majority of business in the coming years to be on and being treated with a personalized offering. It's, you know, the underlying relationship these customers have with the platform, the stickiness, the degree of choice and customization that they're provided, the flexibility tools that they have are just meaningfully more powerful than a traditional generic treatment. So we expect the vast majority of businesses in the coming years to move toward those types of treatments.

Andrew: The vast majority of the business in the coming years to be on edge being treated with a personalized offering.

Speaker Change: The underlying.

Speaker Change: Relationship these customers have with the platform the stickiness the degree of choice and customization that they are provided the flexibility tools that they have or are just meaningfully more powerful than a traditional generic treatment. So we expect the vast majority of business in the coming years too.

Speaker Change: Move towards those types of treatments.

Jailendra P. Singh: Okay. And then my quick follow-up, just trying to better understand your comment around pricing adjustments and flexibility in 24. Has there been any change in your thought process given what you've learned about consumer behavior and the competitive environment so far this year, in terms of getting more or less aggressive with those changes this year, and what kind of data points will you be watching or focused on which will drive your decision to make these adjustments? Yeah, I think we can go.

Speaker Change: And then my quick follow up just kind of trying to better understand your comment around pricing adjustments flexibility in 2004.

Speaker Change: Has there been any change your thought process, given what you've learned about the consumer behavior competitive environment. So far in the year in terms of getting more or less aggressive with those changes in the year and what kind of data points will you be watching or focused on which would drive your decision to make these adjustments.

Speaker Change: Yes, if we can go a bit into just like what is the philosophical approach behind some of the changes that we make and so I think that.

Yemi Okupe: Yeah, I think we can go a bit into just like, what is the philosophical approach behind some of the changes that we make. And so I think that, you know, as a management team and as a company, we're less focused on what's happening, you know, quarter to quarter. As Andrew mentioned, we've seen the consumer remain very resilient, just given the types of conditions that we're oftentimes serving. They tend to be more resilient in nature.

Speaker Change: As a management team that as a company I think we're less focused on whats happening in a quarter to quarter as Andrew mentioned, we've seen the consumer remains very resilient just given the types of conditions are oftentimes surveyed.

Speaker Change: Tend to be more resilient in nature, and so really when we think around whether it's pricing or other mechanisms that we used to pass value back to consumers what will drive the decision to do that it will be primarily just around the data that we receive and experiments and identifying which categories, which areas and which types of vehicles.

Yemi Okupe: And so really, you know, when we think about whether it's pricing or other mechanisms that we use to pass value back to consumers, what will drive the decision to do those will be primarily just around the data that we receive in experiments in identifying which categories, which areas, and which types of vehicles result in the highest ROI. And so that will be more of the governing factor versus any given concern or opportunity in a quarter.

Speaker Change: Results in the highest ROI and so that will be more of the governing factor versus.

Speaker Change: Can you give any concern or opportunity in the quarter.

Speaker Change: Great. Thanks, a lot.

Your next question comes from Karen <unk> with Piper Sandler. Please go ahead.

Korinne N. Wolfmeyer: Your next question comes from Korinne Wolfmeyer with Piper Sandler. Please go ahead.

Karen: Hey, good afternoon, guys congrats on the quarter and thanks for the question.

Yemi Okupe: Hey, good afternoon, guys. Congratulations on the quorum. Thanks for the question. To touch on the churn question kind of in a different way, I think what we're all struggling with is that it hasn't been quantified very clearly, like what's changing with retention in churn levels. So I guess, is there any way you can give us better color on like how many of your multi-month subscribers are ending up doing reorders after their first initial order and how many are falling off, and then any other detail you can give us there? Thank you.

Karen: Touch on the churn question kind of in a different way I mean, I think what we're all struggling.

Karen: Haven't been quantified very clearly.

Karen: What's changing with retention and churn levels.

Karen: I guess is there any way you can give us better color on like how many of your multi month subscribers are doing reorders. After their first initial order and how many are falling off and then any other detail you can give us there. Thank you.

Karen: Yes.

Korinne N. Wolfmeyer: Yeah, I think we can. What I'd point to, Korinne, is that I think it's a great question. I think there are a few data points. One is just like the previous guidance that we've given around long-term retention levels north of 85%. I think those hold true. And if anything, I think the hope for us would be that that gets stronger. We did see across Q1, it really is just a record level of additions of net new subscribers.

Speaker Change: What I'd point to occur and I think it's a great question I think our for you a few data points. One is just like the.

Speaker Change: Previous guidance that we've given around long term retention levels north of 85% I think it's a dose hold true.

Speaker Change: I think the hope for us would be the cutback that gets stronger we did see across Q1 really is just a record level of additions of net new subscribers and that's a function of <unk>.

Korinne N. Wolfmeyer: And that's a function of both efficiency on acquisition but also just some of the benefits and longevity. As we continue to pass value back to consumers in the form of pricing experiments or other value added to consumers, we do expect retention to improve in the coming quarters, but it's very difficult to give exact quantification numbers around that.

Speaker Change: Efficiency on acquisition, but also just some of the benefits and longevity as we continue to pass value back to consumers in the form.

Speaker Change: Experiments or.

Other value adds to the consumers, we did expect retention to improve and improve in the coming quarters, but it's very difficult to give.

Speaker Change: Exactly no quantification numbers around that.

Speaker Change: Got it. Thank you really appreciate it and then I think you guys have kind of hinted towards some new product launches and I think Andrew you said potentially it <unk> down.

Yemi Okupe: Got it. Thank you. I really appreciate it.

Speaker Change: When you laid out the guidance how much of the improvement in the guidance is coming from new product launches and is anything getting pulled forward sooner than anticipated and then any detail you can give us.

Korinne N. Wolfmeyer: And then I think you guys kind of hinted at the new product launches. And I think, Andrew, you said, you know, potentially GLP-1 soon. When you laid out the guidance, how much of the improvement in the guidance is coming from new product launches, and is anything getting pulled forward sooner than anticipated? And then any detail you can give us on the timing of GLP-1s, and is that a this year thing or maybe a next year thing? Any color there would be great. Thank you.

On timing of <unk> and is that a this year thing or maybe a next year thing any color there would be great. Thank you.

Speaker Change: Yes on the <unk> side definitely this year, so I would expect them expect them as soon as we've talked about.

Andrew Dudum: Yeah, on the GOP side, definitely this year. So I would expect them to expect them soon, as we've talked about. Yeah, and then with respect to the question around, you know, guidance.

Speaker Change: With regard to the other side of it.

Speaker Change: Let me tackle and then with respect to the question around guidance correct I think that really.

Yemi Okupe: Yeah, and then with respect to the question around, you know, guidance, Korinne, I think that really that's, you know, less of a function of a specific categorical launch or product launch and really it's more of a function of as we expect continued strong demand from consumers that is similar to what we saw in the first quarter. And we do expect, you know, a continued uptick in personalized products. We're very excited about the portfolio to come, but historically, with our guidance philosophy, we generally roll forward what we have certainty and visibility into. And so, reflected in the guide is what we can see based upon today and some of the inputs that we have around the products that have already launched or are imminently coming.

Speaker Change: Less of a function of a specific categorical launch or product launch it as it relates to what it's more of a function of as we expect continued strong demand from consumers.

Speaker Change: Similar to what we saw in the first quarter.

And we do expect a continued uptick in personalized products, we're very excited about the portfolio to come here.

Speaker Change: Historically with our guidance philosophy.

Speaker Change: We generally roll forward, what we have certainty and visibility into.

Speaker Change: And so reflected in the guidance is what we can see based upon today and some of the effects that we have around the products that are already launched or are imminently coming.

Speaker Change: Great. Thank you.

Speaker Change: Your next question comes from George Hill with Deutsche Bank. Please go ahead.

George Robert Hill: Your next question comes from George Hill with Deutsche Bank. Please go ahead.

George Robert Hill: Good afternoon, guys and thanks for taking the questions I have a kind of one big picture, one and one small picture one Andrew and Yummy I guess the small picture. One is do you guys have an opinion kind of at what price point.

Andrew Dudum: Good afternoon, guys, and thanks for taking the questions. I have kind of one big picture one and one small picture one, Andrew and Yemi.

Yemi Okupe: I guess the small picture one is, do you guys have an opinion kind of at what price point GLP-1s are most attractive for you from a subscription and volume perspective? And I ask that as somebody, you know, from the drug supply chain side. We see pretty significant price competition in that space and discounting in that space. So, prices are coming down pretty significantly. And then my follow-up question to that is, Yemi, in response to your comments when you talked about wanting to grow a business that had tens of millions of subscribers. Which disease states and product categories do you think are most important for getting to that goal?

George Robert Hill: Q1's, inflect for you from a subscription and volume perspective, and I ask that is if somebody from the drug supply chain side, we see pretty significant price competition in that space and discounting in that space. So prices are coming down pretty significantly and then my back my follow up question to that is any of your comments when you talked about wanting to grow a business that has tens of millions of subscribers.

George Robert Hill: Scrubbers.

George Robert Hill: Which disease states in product categories. Do you think are most important for getting to that goal. Thank you.

Speaker Change: Thanks, George on the GOP, one side I'm not sure we probably have a perspective to share on that at this point, but agree a very interesting question and definitely.

George Robert Hill: Thanks, George. On the GLP-1 side, I'm not sure we probably have a perspective to share on that at this point, but I agree, a very interesting question and definitely dynamic, right? Changing pretty rapidly time. So I think we'll be able to share more on that shortly. Yemi, I'll let you take the second half. Yeah, I'm

Speaker Change: Dynamic bright changing pretty pretty near near time.

Speaker Change: So I think we'll be able to share more on that shortly.

Speaker Change: Let me I'll, let you take the second half and then with respect to the categories I think George I think the benefit of our platform is that it's both comprehensive but at the same time.

Andrew Dudum: Yeah, I mean, with respect to the categories, I think, you know, George, I think the benefit of our platform is that it's both comprehensive, but at the same time, we were very focused on the five core specialties that we operate in. Within each of those specialties, there are tens of millions, if not hundreds of millions, of subscribers for us to go after. And so I think that we are confident in each of those specialties.

Speaker Change: We are very focused on.

Speaker Change: <unk> four specialties that we operate in and within each of those specialty theres tens of millions if not hundreds of millions of subscribers for us to go to go after.

Andrew Dudum: You know, they have the ability, as we mentioned in the past, to be at least $100 million or more in revenue by next year. Even that said, I think across many of these, we're just scratching the surface through continued innovation on the personalization side, as well as continuing to broaden the product suite at different price points. We do feel very confident in our ability to have each of these be multi-hundred million dollars. Okay.

Speaker Change: And so I think that we are confident in each of our specialties. They have the ability as we mentioned in the past to be.

Speaker Change: At least $100 million.

Speaker Change: Dollars dollars or more of revenue by next year.

Speaker Change: Even that said I think across many many of these were just scratching the surface through continued.

Speaker Change: Innovation on the personalization side as well as <unk>.

Continuing to broaden our product suite at different price points, we do feel very confident in our ability to have each of these be multi multibillion dollar businesses.

George Robert Hill: Okay, I don't know if there's time for a quick follow-up, but I would ask one more about GLP-1s where brand seems to be very important in that category, and name brand is very important in that category, where name brand is kind of less important, like your name brand, Hims & Hers, is important in your kind of product sets. Is that something that you view as kind of different or like something that you can conquer? I don't know if you can talk about how you address the marketing aspect of that category and how it's different from what you guys have done historically. Yeah, probably can't get too much there.

Speaker Change: Okay.

Speaker Change: There's time for a quick follow up but I would ask one more about <unk>, where brand seems to be very important in that category and name brand is very important that category were named brand is kind of lessen your name brand him his and hers is important.

Speaker Change: In your in your kind of product sets is that something that you view as kind of different or like something you can conquer or I don't know if you can talk about how you would address the marketing aspect of that category and how it's different from what you guys have done historically.

Speaker Change: Yes, probably.

Andrew Dudum: But I do think that, you know, when you're talking about GLP-1s, and specific even to Dan's question earlier around compounded GLP-1s, the safety profile and the clinical excellence around those are critical, and I think there's a wide range of offerings in the market with a wide range, probably, of clinical best practices. And I think when we bring things to market, as we've kind of said in the past, we don't necessarily believe we ever need to or should be the first to market, but we should be the best in the market.

Speaker Change: Too much there, but I do think that.

Speaker Change: When you are talking about <unk> and specific even to Dan's question earlier around compounded <unk>.

Speaker Change: Safety profile and the clinical excellence around those.

Speaker Change: I think it is critical and I think there is a wide range of offerings in market with a wide range probably of clinical best practices.

Speaker Change: And I think when we bring things to market as we've kind of said in the past, we don't necessarily believe we ever need to or should be the first to market, but we should be the best in market.

Speaker Change: That's the way we approach this category and this launch of being able to ensure customers that the offering and the products are.

Andrew Dudum: And I think that's the way we'd approach this category and its launch, being able to ensure customers that the offering and the products are of the highest quality, undergo the highest testing, and have a degree of safety and clinical excellence that is really unmatched, and they know that.

Speaker Change: The highest quality the highest testing.

Speaker Change: I have a degree of safety and clinical excellence that is really unmatched remainder of that.

Speaker Change: Great. Thank you.

Speaker Change: There are no further questions at this time this will conclude today's conference call. Thank you all for your participation you may now disconnect.

Operator: There are no further questions at this time. This will conclude today's conference call. Thank you all for your participation. You may now disconnect.

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Speaker Change: Yes.

Speaker Change: [music].

Speaker Change: Okay.

Speaker Change: [music].

Speaker Change: Okay.

Speaker Change: [music].

Speaker Change: Okay.

Speaker Change: [music].

Okay.