Q2 2024 Hims & Hers Health Inc Earnings Call
Speaker Change: In the name of the Father, and of the Son, and of the Holy Spirit. Amen.
Operator: Ladies and gentlemen, thank you for standing by. At this time, I would like to welcome everyone to the Hims & Hers second 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.
Speaker Change: Ladies and gentlemen, thank you for standing by. At this time, I would like to welcome everyone to the Hims & Hers 2nd Quarter 2024 Earnings Conference Call. Please note that this call is being recorded.
Speaker Change: All lines have been placed on mute to prevent any background noise.
Speaker Change: After the speaker's remarks, there will be a question and answer session.
Speaker Change: If you would like to ask a question during this time, simply press star followed by the number 1 on your telephone keypad.
Operator: After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press the star followed by the number one on your telephone keypad. If you would like to withdraw your question, again, press the star number one. I would now like to turn today's call over to Bill Newby, Head of Investor Relations. Please go ahead.
Speaker Change: If you would like to withdraw your question, again, press the star 1. I would now like to turn today's call over to Bill Newby, Head of Investor Relations. Please go ahead.
Bill Newby: Good afternoon, everyone, and welcome to the Hims & Hers Health second quarter 2024 earnings call. Today after the market closed, we released our quarterly 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.
Bill Newby: Good afternoon, everyone, and welcome to the Hims & Hers Health second 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.
Bill Newby: 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. Before I hand it over to Andrew, I need to remind you of legal safe harbor and cautionary declarations.
Bill Newby: 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.
Bill Newby: 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.
Bill Newby: 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.
Bill Newby: VCR 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 also have certain non-GAAP financial measures. We refer you to the reconciliation tables to the most directly comparable gap financial measures contained in today's press release and shareholder 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 will now turn the call over to you.
Speaker Change: Please see our most recently filed 10-K and 10-Q reports for a discussion of risk factors as they relate to forward-looking statements.
Speaker Change: In today's presentation, we also have certain non-GAAP financial measures. We refer you to the reconciliation tables for the most directly comparable GAAP financial measures contained in today's press release and shareholder letter. You can find this information as well as a link to today's webcast at investors.hims.com.
Speaker Change: After the call, this webcast will be archived on the website for 12 months.
Andrew Dudum: The second quarter marked one of the most exciting points in our company's history, as momentum continued to rapidly accelerate in the fulfillment of our mission to help the world feel great through the power of better health. The long-term trend toward the consumerization of health care continues, and the belief is that this trend will only accelerate. Consumers are increasingly expecting the same quality and level of service that technology has unlocked across other areas of their lives. This includes speed, convenience, transparency, affordable pricing, and a personalized experience.
Speaker Change: And with that, I will now turn the call over to Andrew.
Andrew: Thanks, Bill. The second quarter marked one of the most exciting points in our company's history, as momentum continued to rapidly accelerate in the fulfillment of our mission to help the world feel great through the power of better health.
Andrew: The long-term trend toward the consumerization of healthcare continues, and the belief is that this trend will only accelerate.
Andrew: Consumers are increasingly expecting the same quality and level of service that technology has unlocked across other areas of their lives.
Andrew: This includes speed, convenience, transparency, affordable pricing, and a personalized experience.
Andrew Dudum: I'm excited by the progress we have made on our platform in unlocking these capabilities for consumers across a broader set of conditions and specialties. We believe that our platform is capable, in the long term, of delivering a new type of health care, where consumer preference and needs, insights, and data are at the foundation of a hyper personalized set of offerings, treatments, and care. We're more energized than ever to deliver this innovation on behalf of the hundreds of millions of people trying to live their happiest and healthiest lives. Several elements continue to come together in the second quarter to bring us one step closer to making this vision a reality.
Andrew: I am excited by the progress we have made on our platform in unlocking these capabilities for consumers across a broader set of conditions and specialties.
Andrew: We believe that our platform is capable in the long term of delivering a new type of health care.
Andrew: where consumer preference and needs, insights, and data sit at the foundation of a hyper-personalized set of offerings, treatments, and care. We're more energized than ever to deliver this innovation on behalf of the hundreds of millions of people trying to live their happiest and healthiest lives.
Andrew: Several elements continue to come together in the second quarter to bring us one step closer in making this vision a reality.
Andrew Dudum: First, we increased the number of personalized offerings across our specialties, with 4 out of 5 specialties now carrying at least 10 personalized solutions. Second, we expanded our weight management offering with the launch of GLP-1. Weight is a particularly strategic category for us because it enables us to scale the value that comes from personalized solutions to over 100 million potential consumers. Lastly, we brought in world-class talent across multiple levels of the organization, from the board to ML leaders, that will enable us to further refine our capabilities and scale them to increasingly broader audiences. Christopher Payne, who most recently served as President and COO of DoorDash, brings a great depth of experience helping organizations scale their operations globally.
Andrew: First, we brought in the number of personalized offerings across our specialties, with 4 out of 5 specialties now carrying at least 10 personalized solutions.
Andrew: Second, we expanded our weight management offering with the launch of GLP-1s. Weight is a particularly strategic category for us in that it enables us to scale the value that comes from personalized solutions to over 100 million potential consumers.
Andrew: Lastly, we brought on world-class talent across multiple levels of the organization, from the board to ML leaders that will enable us to further refine our capabilities and scale them to increasingly broader audiences.
Christopher Payne: Christopher Payne, who most recently served as President and COO of DoorDash, brings a great depth of experience helping organizations scale their operations globally.
Andrew Dudum: Our ambition is to make the world feel great through the power of better health. Foreign Policy and Regulatory Expertise from Anya Manuel will help us broaden the geographic scope of our platform in the coming years. And Cora Schultz brings over three decades of experience in the pharmaceutical industry that can help us effectively navigate the challenges that higher acuity and more complex specialties, inclusive of weight, may present. Our platform has rapidly scaled from thousands of interactions to millions, and with greater personalized capabilities comes the ability to leverage, as appropriate, our structured data to further refine and improve our customers' experience on the platform. We recently kicked off our search for a CTO with expertise in AI and machine learning.
Andrew: Our ambition is to make the world feel great through the power of better health.
Speaker Change: Foreign Policy and Regulatory Expertise from Anya Manuel will help us broaden the geographic scope of our platform in the coming years.
Speaker Change: And Cora Schultz brings over three decades of experience in the pharmaceutical industry that can help us effectively navigate the challenges that higher acuity and more complex specialties, inclusive of weight, may present.
Speaker Change: Our platform has rapidly scaled from thousands of interactions to millions, and with greater personalized capabilities comes the ability to leverage, as appropriate, our structured data to further refine and improve our customers' experience on the platform.
Speaker Change: We recently kicked off our search for a CTO with expertise in AI and machine learning. We believe this hire will help put us at the forefront of the many exciting opportunities AI can bring in healthcare.
Andrew Dudum: We believe this hire will help put us at the forefront of the many exciting opportunities AI can bring to health care. Strong progress across these areas is translating into incredible business performance. During the quarter, revenue increased 52% year-over-year to $316 million, yielding $39 million of adjusted EBITDA.
Speaker Change: Strong progress across these areas are translating into incredible business performance.
Speaker Change: During the quarter, revenue increased 52% year-over-year to $316 million, yielding $39 million of adjusted EBITDA.
Andrew Dudum: The primary driver of our growth continues to be the expansion of our subscriber base. We ended the quarter with nearly 1.9 million subscribers, adding more than 155,000 net new users to the platform. Our focus on providing access to high-quality, personalized solutions at an affordable price continues to resonate with consumers. For example, over 40% of subscribers in the second quarter were utilizing a personalized solution, representing close to a 30-point increase in just two years.
Speaker Change: The primary driver of our growth continues to be the expansion of our subscriber base.
Speaker Change: We ended the quarter with nearly 1.9 million subscribers, adding more than 155,000 net new users to the platform.
Speaker Change: Our focus on providing access to high-quality, personalized solutions at an affordable price continues to resonate with consumers.
Speaker Change: Over 40% of subscribers in the second quarter were utilizing a personalized solution, representing close to a 30-point increase in just two years.
Andrew Dudum: An evolving portfolio of personalized offerings that providers can utilize to meet the unique needs of individual consumers was a key catalyst behind this expansion. This innovation is informed in part by feedback from our users, and development occurs through collaboration with our internal specialists, leading medical organizations, and external advisors. Increasingly, we are driving value for consumers across a broader set of specialties. Consumer feedback has been resoundingly positive.
Speaker Change: An evolving portfolio of personalized offerings that providers can utilize to meet the unique needs of individual consumers was a key catalyst behind this expansion.
Speaker Change: This innovation is informed in part by feedback from our users, and development occurs through collaboration with our internal specialists, leading medical organizations, and external advisors.
Speaker Change: Increasingly, we are driving value for consumers across a broader set of specialties.
Andrew Dudum: As we've launched access to treatments that address multiple concerns within a specialty, and even more exciting, we now have solutions that span across specialties. This shows up in the ability to target multiple sexual health concerns, support cardiovascular health through a more simplified daily routine, or address concerns across our most popular specialties concurrently in one solution. The combination of these multi-condition capabilities and access to a broader set of foreign factors is having a profound impact on the value we can provide to consumers.
Andrew Dudum: In dermatology, providers can prescribe users personalized sprays, serums, or oral medications based on their unique needs. These capabilities enable us to cover a broader spectrum of user profiles. For example, the individual seeking to proactively prevent hair loss and an individual seeking to actively regrow hair each now have access to a distinct set of solutions that better meet their needs.
Andrew Dudum: As a result, more than 85% of new subscribers in our dermatology specialties were utilizing a personalized solution in the second quarter. The impact of personalization extends beyond simply consumer preference. By addressing the needs of different user profiles, we're able to remove barriers to treatment for a broader set of individuals, ultimately yielding stronger customer acquisition. Additionally, we expect stronger attention from consumers on these offerings. Specially as they continue to be placed at a more mass market price.
Andrew Dudum: Investment in the expansion of these offerings will increase in the second half of the year. We expect to launch access to new multi-condition treatments with a particular focus on those that are inter-specialty or enable expansion into adjacent markets. Additionally, new form factors across our specialties are expected in the second half.
Andrew Dudum: We believe this will allow us to scale our new verticals even faster, while also maintaining robust growth for even our longest-tenured specialties. Our strong financial profile has enabled us to capitalize on unique opportunities in order to position our platform for future growth. In 2021, we acquired Apostrophe, an Arizona-based 503A facility.
Speaker Change: Our strong financial profile has enabled us to capitalize on unique opportunities in order to position our platform for future growth in.
Speaker Change: In 2020, one we acquired apostrophe in Arizona based 503 a facility.
Andrew Dudum: This acquisition provided compounding capabilities and expertise that serve as the foundation for many of our personalized offerings today. We're excited to have recently signed an agreement to purchase an FDA-registered 503B facility. Over the long term, this acquisition will present additional opportunities across specialties such as hormonal therapy and other treatments that require sterile compounded medication. In the near term, this further enhances the durability of our supply chain for compounded GLP-1s and positions us to improve accessibility as we verticalize these operations.
Speaker Change: This acquisition provided compounding capabilities and expertise that serve as the foundation for many of our personalized offerings today.
Speaker Change: We're excited to have recently signed an agreement to purchase an FDA registered 500 <unk> facility.
Speaker Change: Over the long term this acquisition will present additional opportunities across specialties, such as for mono therapy and other treatments that require sterile compounded medications in.
Speaker Change: In the near term. This further enhances the durability of our supply chain for compounded GOP ones and positions us to improve accessibility as we verticalizing operations.
Andrew Dudum: Prior to signing this acquisition, we expanded the capabilities of our weight loss specialty with the launch of compounded GLP-1s across 21 states in the second quarter through a partnership with an FDA-registered 503B facility. Since then, we've expanded access to the offering to more than 30 states, covering over 60% of the U.S. population, and we anticipate nationwide availability before year-end.
Speaker Change: Prior to signing this acquisition, we expanded the capabilities of our weight loss specialty with the launch of compounded GOP ones across 21 states in the second quarter through a partnership with an FDA registered 500 <unk> facility.
Speaker Change: Since then we've expanded access to the offering to more than 30 states covering over 60% of the U S population and we anticipate nationwide availability before year end.
Andrew Dudum: We believe that our platform was already having a meaningful impact across society prior to this launch by helping close to 2 million consumers access treatment for many of the most emotionally responsive conditions. We expect that the value we bring to consumers within our weight loss specialty will further enable us to have a transformative impact on society. Over 100 million individuals suffer with weight-related challenges in the U.S. alone, and those challenges don't simply impact an individual's appearance.
Speaker Change: We believe that our platform was already having a meaningful impact across society. Prior to this launch by helping close to 2 million consumers access treatment for many of the most emotionally resident conditions.
Speaker Change: We expect that the value we bring to consumers within our weight loss specialty will further enable us to have a transformative impact on society.
Speaker Change: Over 100 million individuals suffer with weight related challenges in the U S alone and those challenges don't simply impacted individuals' appearance. These challenges can also road confidence and lead to serious health related conditions, including cardiovascular disease diabetes and cancer.
Andrew Dudum: These challenges can also erode confidence and lead to serious health-related conditions, including cardiovascular disease, diabetes, and cancer. Given the impact obesity can have on an individual and the severity of conditions it can lead to, we expect weight loss as a specialty to be foundational in the way Hims & Hers impacts the lives of our consumers and the way we influence the healthcare industry over the coming decade. Historically, weight-related challenges have been viewed simply as a matter of lifestyle preferences.
Speaker Change: Given the impact of BCD can have on an individual and the severity of condition that can lead to we expect weight loss is a specialty to be foundational over the coming decade in the way <unk> impacts the lives of our consumers and the way we influence the health care industry.
Speaker Change: Historically weight related challenges have been viewed simply as a matter of lifestyle preference GOP ones have driven broader awareness that weight related issues can also be a medical condition.
Andrew Dudum: GLP-1s have driven broader awareness that weight-related issues can also be a medical condition. This has empowered more consumers to actively seek treatment, even when GLP-1s are not the right fit. In the fourth quarter of last year, we launched our weight loss specialty with personalized oral based solution. This offering utilizes different combinations of personalized compounds to address the underlying conditions clinically tied to obesity, including metabolic disorders, depression, and overeating habits. It has been incredibly successful.
Speaker Change: Is empowered more consumers to actively seek treatment, even when GOP ones are not the right fit.
Speaker Change: In the fourth quarter of last year, we launched our weight loss specialty with personalized oral based solutions.
Speaker Change: This offering utilizes different combinations of personalized compounds to address the underlying condition clinically tied to obesity, including metabolic disorders depression and overeating habits.
Speaker Change: It has been incredibly successful within less than a year. It is scaled to a run rate of $100 million in annual revenue, becoming our fastest specialty ever to do so.
Andrew Dudum: Within less than a year, it has scaled to a run rate of $100 million in annual revenue, becoming our fastest specialty ever to do so. Our approach centers on equipping providers with the ability to offer consumers access to a breadth of personalized solutions, and we expect the ability to personalize oral formulations will remain central to our weight loss offering and continue to evolve. We also believe our ability to provide consumers with access to personalized GLP-1 solutions will offer an experience and level of service that is today only available to the most privileged segments of our society.
Speaker Change: Our approach centers on equipping providers with the ability to offer consumers access to address a personalized solutions and we expect the ability to personalize oral formulations will remain central to our weight loss offering and continue to evolve.
Speaker Change: We also believe our ability to provide consumers with access to personalized G. L. P. One solutions will offer an experience and level of service that today is only available to the most privileged segments of our society.
Andrew Dudum: This approach is informed by Dr. Craig Primack, our SVP of weight loss, who has seen firsthand in a Scottsdale clinic the impact a personalized care model can have on providing a more sustainable path for a wider spectrum of consumers to reach their desired outcomes. Side effects and misalignment of expectations drive a meaningful reduction in adherence for these solutions, alongside issues like cost and accessibility. We believe adherence to these medications can be improved considerably through consistent communication between providers and consumers to manage expectations, personalize titration schedules, and personalize end dosing to mitigate side effect concerns.
Speaker Change: This approach is informed by Dr. Craig <unk>, our SVP of weight loss, we have seen firsthand in Scottsdale clinic, the impact of personalized care model can have on providing a more sustainable path for a wider spectrum of consumers to reach their desired outcome side.
Speaker Change: Side effects and Miss alignment of expectations drive a meaningful reduction in adherence for these solutions alongside issues like cost and accessibility.
Speaker Change: We believe adherence to these medications can be improved considerably through consistent communication between providers and consumers to manage expectations personalized titration schedules and personalized and dosing to mitigate side effect concerns.
Andrew Dudum: Each of our subscribers has the ability to communicate concerns to a licensed provider and receive a response in a timely manner for no extra charge across all of our specialties today. Personalization for GLP-1 solutions will be supported by two fundamental components. The first is the breadth of products offered on the platform. Recently, we launched personalized dosages for compounded semaglutide that providers can prescribe in response to side effect concerns and desired levels of weight loss.
Speaker Change: Each of our subscribers is the ability to communicate concerns with license provider and receive a response in a timely manner for no extra charge across all of our specialty today.
Andrew Dudum: Additionally, we're excited to expand the scope of offerings available on the platform, and we'll look to add terzepatide and liraglutide to the existing compounded semaglutide offering in the near future. We expect this portfolio of solutions will be inclusive of branded offerings when supply allows. The second component is continuing to scale our technology investments across weight loss by activating MedMatch by Hims and Hers for providers in the specialty.
Speaker Change: <unk> for <unk> solutions will be supported by two fundamental components.
Speaker Change: The first is a breath of products offered on the platform reached.
Speaker Change: Recently, we launched personalized dosages for compounded some magnetite the providers can prescribed in response to the side effect concerns and desired levels weight loss pay.
Speaker Change: Patient feedback to their provider during the titration process can inform the appropriate end state dose for users.
Speaker Change: Additionally, we are excited to expand the scope of offerings available in the platform and we'll look to add to his appetite and their glu tied to the existing compounded magnetite offering in the near future.
Speaker Change: We expect this portfolio of solutions will be inclusive of branded offerings when supply allows.
Speaker Change: The second component is continuing to scale, our technology investments across weight loss by activating med matched by hamson hearse for providers in the specialty <unk>.
Andrew Dudum: Machine learning and AI models anchored on consumer preferences and prior experiences across our provider network have been built for weight loss. We are also moving toward integrating explainability into the EMR, further empowering providers with these groundbreaking tools. The value of this technology will be vital as the range of solutions, dosages, and treatment options continues to expand over the coming quarters. As these models scale, we expect these models will continue to improve, helping providers to optimize initial medication selection, titration schedules, and end-state dosing to help each user reach their desired outcome.
Speaker Change: Machine learning and AI models anchored on consumer preferences and prior experiences across our provider networks have been built for weight loss. We are also moving toward integrating explain ability into the EMR further empowering providers with these groundbreaking tools.
Speaker Change: The value of this technology will be vital as the range of solutions dosages and treatment options continue to expand over the coming quarters.
With scale. We expect these models will continue to improve helping providers to optimize initial medication selection titration schedules and end state dosing to help each user reach their desired outcome.
Andrew Dudum: By leveraging this approach, we are providing a weight loss program that can continuously improve over time. Having said that, we have already started to see some very exciting results. Based upon self-reported data from approximately 12,000 customers who subscribed to a holistic Hims & Hers weight loss offering, customers report having lost on average 10.2 pounds while on compounded GLP-1 injections and 6.3 pounds while on compounded oral medication kits between their initial weight loss consultation and their first check-in approximately four weeks later. During the same period, less than 10% of customers using our compounded GLP-1 offering have reported side effects that they feel they can't tolerate.
Speaker Change: By leveraging this approach we are providing a weight loss program that can continuously improve over time.
Speaker Change: <unk> said that we have already started to see some very exciting results.
Speaker Change: Based upon self reported data from approximately 12000 customer subscribes to a holistic HIMSS <unk> weight loss offering customers report, having lost on average 10.2 pounds, while on compounded G. L. P. One injections and $6 three pounds, while on compounded oral medication kits between their initial weight loss.
Patients and their first check in approximately four weeks later.
Speaker Change: During the same period less than 10% of customers using our compounded GL purion offering have reported side effects that they feel they can't tolerate.
Andrew Dudum: This progress underlines the importance of a holistic approach, as each of our subscribers has access to personalized treatment plans based on lifestyle, eating patterns, health history, and weight loss goals, and includes medication in addition to diet, exercise, and weight loss counseling and support. We believe these figures are just the starting point for what we can help our customers achieve. By continuing to invest strategically in our technological infrastructure and further refining our approach, we believe we can deliver access to better outcomes than any other in-person or digital provider over the long term.
Speaker Change: This progress underlying the importance of our holistic approach as each of our subscribers as access to personalized treatment plans based on lifestyle eating pattern health history and weight loss goals and includes medications. In addition to diet exercise and weight loss counselling and support.
Speaker Change: We believe these figures are just the starting point for what we can help our customers achieve.
Speaker Change: By continuing to invest strategically in our technological infrastructure and further refining our approach. We believe we can deliver access to better outcomes than any other in person or digital provider over the long term.
Andrew Dudum: We are in a transformative moment in healthcare delivery in this country, and Hims & Hers is uniquely positioned to meet that moment and set the standard for what truly personalized care can look like for every household in the United States. We believe that we are transforming the way that consumers engage with their health, and I look forward to extending this experience to an ever-growing audience in the second half of 2025. With that, I will pass it over to Yemi to walk through our financials in greater detail.
Speaker Change: We are in a transformative moment in health care delivery in this country.
Speaker Change: At HIMSS in hers is uniquely positioned to meet that moment and set the standard for what truly personalized care can look like for every household in the United States.
Speaker Change: We believe that we are transforming the way that consumers engaged with their health and I look forward to extending this experience to an ever growing audience in the second half of 2024.
Speaker Change: With that I will pass it over to Jamie to walk through our financials in greater detail.
Yemi Okupe: Thanks, Andrew. I will start by providing an overview of our second quarter financial performance and then discuss our updated outlook for 2024. In the second quarter, we continued to strengthen our leadership position across our specialties, mental health, sexual health, men's and women's dermatology, and weight loss. Our strategy of democratizing access to high-quality personalized solutions on our platform at an affordable price continues to resonate with consumers. A rapidly evolving weight loss specialty that is inclusive of personalized oral solutions tailored to the underlying drivers behind an individual's weight challenges and the recently launched compound GLP-1 Offering is serving as an accelerant to what was already a phenomenal trajectory.
Jamie: Thanks, Andrew I'll start by providing an overview of our second quarter financial performance and then discuss our updated outlook for 2024.
Jamie: In the second quarter, we continue to strengthen our leadership position across our specialties.
Jamie: It'll health sexual health men's and women's dermatology and weight loss.
Jamie: Our strategy of democratizing access to high quality personalized solutions on our platform at an affordable price continues to resonate with consumers.
Jamie: A rapidly evolving weight loss specialty that is inclusive of personalized oral solutions tailored to the underlying drivers individuals' weight challenges and the recently launched compounded <unk> offering is serving as an accelerant to what was already a nominal trajectory.
Yemi Okupe: In the second quarter, we were able to drive north of $300 million of revenue from our suite of offerings outside of GLP-1. Fully consolidated revenue in the second quarter grew 52% year-over-year to $315.6 million, representing a six-point acceleration in year-over-year growth relative to the prior quarter. Expansion of our online subscriber base continues to be the primary catalyst behind our incredible growth. Our subscriber base grew 43% year-over-year to 1.9 million.
Jamie: In the second quarter, we were able to drive north of $300 million of revenue from our suite of offerings outside of DLP ones.
Speaker Change: Well, we consolidated revenue in the second quarter grew 52% year over year to $315 6 million, representing a six point acceleration in year over year growth relative to the prior quarter.
Speaker Change: The expansion of our online subscriber base continues to be the primary catalysts behind our incredible growth.
Speaker Change: Our subscriber base grew 43% year over year to $1 9 million.
Yemi Okupe: Growth in our subscriber base is being powered by two primary drivers. The FIRST is an evolution of personalized solutions that continues to attract a broader base of consumers to the platform, as well as offer unique value propositions to our existing consumer base. As our offerings expand to encompass more multi-condition solutions, a broader set of form factors, and customized dosages, we are seeing an increasing number of our existing subscribers switch to a personalized solution.
Speaker Change: Growth in our subscriber base is be empowered by two primary drivers with.
Speaker Change: The first is an evolution of personalized solutions continues to attract a broader base of consumers to the platform as well as offer unique value propositions to our existing consumer base as.
Speaker Change: As our offerings expand to encompass more multi condition solutions, a broader set of form factors and customize dosages, we're seeing an increasing number of our existing subscribers switch straight personalized solution.
Yemi Okupe: Additionally, we are seeing new customers overwhelmingly utilize these options, with more than 55% of new users in the second quarter subscribing to a personalized solution. This has not only driven stronger retention across several specialties but has also enabled higher engagement levels than others. Prior to the launch of personalized solutions in sexual health, over 95% of consumers on the platform were using an on-demand solution reflective of broader market dynamics.
Speaker Change: Additionally, we are seeing new customers overwhelmingly utilize these options with more than 55% of new users in the second quarter subscribing to a personalized solution.
Speaker Change: This is not only driven stronger retention across several specialties, but has also enabled higher engagement levels and others. Prior to the launch of personalized solutions and sexual health over 95% of consumers on the platform, we're using an on demand tuition reflective of broader market dynamics.
Yemi Okupe: During the second quarter, stronger value propositions resulted in over 40% of new sexual health users subscribing to solutions oriented around building a daily habit. Continued innovation and launches of new capabilities that will continue in the second half of the year give us conviction that there is a long runway of durable growth across even our most tenured specialties. A second primary driver of growth is our ability to combine our brand, breadth of personalized capabilities, and past learnings to more rapidly scale new specialties. Our historical time frame for a new category to reach meaningful scale has been one and a half to two years.
Speaker Change: During the second quarter stronger value propositions resulted in over 40% of new spectrum up users subscribing to solutions oriented around building a daily habit.
Speaker Change: Continued innovation and launches of new capabilities that will continue in the second half of the year gives us conviction that there is a long runway of durable growth across even our most tenured specialties.
The second primary driver of growth is our ability to combine our brand breadth of personalized capabilities and past learnings to more rapidly scaling. These specialties are historical timeframe for a new category to reach meaningful scale has been one five to two years in the fourth quarter of last year, we launched our weight loss specialty with a personalized set of oral <unk>.
Yemi Okupe: In the fourth quarter of last year, we launched our weight loss specialty with a personalized set of oral-based treatments designed to address the underlying root cause of an individual's weight gain. Almost 100,000 consumers have subscribed to our weight loss offering in just over 7 months since launch. In the middle of the second quarter, we expanded this offering with the launch of compounded GLP-1 injections on the platform. We expect meaningful contributions from this entire suite of solutions as we continue to evolve personalized, oral-based solutions, as well as our GLP-1 office. We believe that we are in the early innings of utilizing our platform to have a transformative impact on the way consumers receive treatment for some of the most emotionally responsive conditions.
Speaker Change: Based treatments designed to address the underlying root cause of an individual's weight gain.
Speaker Change: Almost 100000 consumers have subscribed to our weight loss offering and just over seven months since launch.
Speaker Change: In the middle of the second quarter, we expanded this offering with the launch of compounds <unk> injections on the platform, we expect meaningful contributions from its entire suite of solutions as we continue to evolve the personal lines oil based solutions as well as our <unk> offering.
Speaker Change: We believe that we are in the early innings of utilizing our platform to have a transformative impact on the way consumers receive treatment for some of the most emotionally resonate conditions.
Yemi Okupe: As a result, we continue to invest in growth but remain committed to adhering to our rigorous capital allocation framework. We believe that adherence to this framework will enable us to continue to scale our platform while also expanding margins over the long term. Our performance in the second quarter is a sound demonstration of our ability to do so. In the second quarter, adjusted EBITDA was $39.3 million. Adjusted EBITDA margins expanded 6 points year-over-year to north of 12% as efficiency gains in operating expenses offset a slight degradation in gross margins.
Speaker Change: As a result, we continue to invest in growth, but we remain committed to adhering to our rigorous capital allocation framework.
Speaker Change: We believe that adherence to this framework will enable us to continue to scale our platform, while also expanding margins over the long term.
Speaker Change: Our performance in the second quarter as it sound demonstration of our ability to DSO.
Speaker Change: In the second quarter, adjusted EBITDA was $39 3 million.
Speaker Change: Adjusted EBITDA margins expanded six points year over year to north of 12% as efficiency gains in operating expenses offset a slight degradation in gross margin.
Yemi Okupe: Gross margins were 81% in the second quarter. However, the addition of GLP-1s and growth of our broader weight loss specialty resulted in slight margin degradation. Early in a new offering lifecycle, margins are typically less favorable than the expected steady-state margin profile. However, as we scale, we continue to see gains in efficiency on our cost structure. G&A costs improved two points a year per year to 13%, and operations and support costs improved one point a year per year to 13%.
Speaker Change: Gross margins were 81% in the second quarter.
Speaker Change: The addition of <unk> and growth of our broader weight loss specialty resulted in slight margin degradation.
Speaker Change: Early in a new offerings lifecycle margins are typically less favorable than we expected steady state margin profile.
Speaker Change: As we scale, we continue to see gains in efficiency on our cost structure.
Speaker Change: G&A costs improved two points year over year to 13% in operations and support costs improved one point year over year to 13%.
Yemi Okupe: We expect continued efficiency gains in these areas over the mid to long term. Marketing as a percentage of revenue improved nearly six points year-over-year to 46%, marking the lowest point in our history as a public company.
Speaker Change: We expect continued efficiency gains in these areas over the mid to long term.
Speaker Change: Marketing as a percentage of revenue improved nearly six points year over year to 46%, marking the lowest point in our history as a public company.
Yemi Okupe: A shifting mix toward personalized solutions, combined with the seizing of newer cohorts on favorable pricing, is yielding stronger retention. We also continue to benefit from customer acquisition through lower-cost channels as our brand continues to strengthen, and we scale in categories that consumers are more open to speaking with others about. Outstanding execution across the organization is resulting in strong free cash flow. This has allowed us to simultaneously strengthen our balance sheet, strategically invest, and return capital to shareholders. Free cash flow in the second quarter was $47.6 million, exceeding the entire amount of free cash flow generated in 2020.
Speaker Change: Shifting mix toward personalized solutions combined with the seasoning of newer cohorts unfavorable pricing is yielding stronger retention.
Speaker Change: We also continue to benefit from customer acquisition through lower cost channels as our brand continues to strengthen and we're scaling categories that consumers are more open to speak with others about.
Speaker Change: Outstanding execution across the organization is resulting in strong free cash flow.
Speaker Change: This has allowed us to simultaneously strengthen our balance sheet strategically invest and return capital to shareholders free.
Speaker Change: Free cash flow in the second quarter was $47 6 million exceeding the entire amount of free cash flow generated in 2023.
Yemi Okupe: Cash and Short-Term Investments expanded $24 million quarter over quarter to $227 million as a result. Before going into our outlook for the remainder of the year, I'd like to reiterate our capital allocation priorities and give additional insight into how we intend to utilize our balance sheet. As previously mentioned, we believe we are in the early innings of the adoption curve of a market with over 100 million potential users in the U.S. alone.
Speaker Change: Cash and short term investments expanded 24 million quarter over quarter to $227 million as a result.
Speaker Change: Before going into our outlook for the remainder of the year I'd like to reiterate our capital allocation priorities and give additional insight into how we intend to utilize our balance sheet.
Speaker Change: As previously mentioned, we believe we are in the early innings of the adoption curve of a market with over 100 million potential users in the U S alone.
Yemi Okupe: As such, our first priority will remain on ensuring that our platform has the ability to serve tens of millions of users across an expanding set of specialties. In addition to scaling overall capacity, this can take the form of many investments. Investments in affiliated pharmacies can unlock the ability to enable capabilities such as additional form factors, multi-condition treatments with greater manufacturing complexity, and a broader set of personalized dosages on the platform. Scale allows us to automate affiliated facilities, and we are excited to embark on the next phase of that journey in the second half. Automation drives greater efficiency, enabling us to unlock more value for consumers on the platform and further strengthen our competitive position.
Speaker Change: As such our first priority will remain on ensuring that our platform has the ability to serve tens of millions of users across an expanding set of specialties.
Speaker Change: In addition to scaling overall capacity just can take the form of many investments investments in affiliated pharmacies can unlock the ability to enable capabilities such as additional form factors multi condition treatments with greater manufacturing complexity and a broader set of personalized messages on the platform.
Speaker Change: Scale allows us to automate affiliated facilities and we are excited to embark on the next phase of that journey in the second half.
Speaker Change: Automation drives greater efficiency, enabling us to unlock more value for consumers on the platform and further strengthen our competitive position.
Yemi Okupe: Lastly, we will unlock new specialties and capabilities on the platform through both organic and inorganic means. The bar for M&A will remain high for us, but we are willing to deploy our balance sheet toward high-value assets that we feel will accelerate the execution of our broader corporate strategy. As Andrew mentioned, we have entered into an agreement to acquire an FDA-registered 503B facility. This sets the foundation for us to efficiently enter new specialties that require sterile compounded injectable and oral medications, while also providing optionality for increased efficiency in the cost structure for compounded GLP-1.
Speaker Change: Lastly, we wouldn't lock new specialties and capabilities on the platform through both organic and inorganic means.
Speaker Change: The bar for M&A will remain high for US we are willing to deploy our balance sheet towards high value assets that we feel will accelerate execution of our broader corporate strategy.
Speaker Change: As Andrew mentioned, we have entered into an agreement to acquire an FDA registered 500 <unk> facility.
Andrew: This sets the foundation for us to efficiently enter new specialties that requires sterile compounded injectable and oral medications, while also providing optionality for increased efficiency in the cost structure for compounded <unk>.
Yemi Okupe: Our expectation is that the deal will close by the end of this year. A rapidly expanding free cash flow profile will enable us to efficiently return capital to shareholders. In November of last year, we announced a $50 million share repurchase program. Market Dynamics enabled us to repurchase 3.9 million shares at an average price of just under $13 since the inception of the program. In the second quarter, we purchased 1.6 million shares at an average price of $12.39.
Speaker Change: Our expectation is that the deal will close by the end of this year.
Speaker Change: A rapidly expanding free cash flow profile will enable us to efficiently return capital to shareholders in November of last year, we announced a $50 million share repurchase program market dynamics enabled us to repurchase three 9 million shares at an average price of just under $13 since the inception of the program.
Speaker Change: In the second quarter, we purchased one 6 million shares at an average price of $12 39.
Yemi Okupe: Completely completing the program. The momentum of the business has enabled us to establish a new share repurchase program of $100 million to be utilized over the course of the next three years. This program will enable us to partially offset the effect of dilution from stock-based compensation as well as continue to take advantage of moments when we believe our share price is disconnected from its intrinsic value. We are confident that we can deliver on each of these objectives while also continuing to strengthen our balance sheet.
Speaker Change: Fully completing the program.
Speaker Change: The momentum of the business has enabled us to establish a new share repurchase program of $100 million to be utilized over the course of the next three years.
Speaker Change: This program will enable us to partially offset the effective dilution from stock based compensation as well as continue to take advantage of moments when we believe our share price is disconnected from its intrinsic value.
Speaker Change: We are confident that we can deliver across each of these objectives, while also continuing to strengthen our balance sheet.
Yemi Okupe: With that backdrop, I'd like to detail our updated outlook for 2025. For this third quarter, we are anticipating revenue in the range of $375 to $380 million, representing a year-over-year increase of 65 to 68 percent. We expect adjusted EBITDA to be between 35 to 40 million, representing an adjusted EBITDA margin of 10% at the midpoint of both ranges. For the full year, we are anticipating revenue of between $1.37 and $1.4 billion, representing a year-over-year increase of 57% to 61%. Lastly, we expect adjusted EBITDA will be between $140 and $155 million. These adjusted EBIT and revenue ranges imply an adjusted EBIT margin of 11% at the midpoint of both ranges.
Speaker Change: With that backdrop I'd like to detail our updated outlook for 2024.
Speaker Change: In the third quarter, we are anticipating revenue in the range of $375 million to $380 million, representing a year over year increase of 65% to 68%.
We expect adjusted EBITDA to be between $35 million to $40 million, representing an adjusted EBITDA margin of 10% at the midpoint of both ranges.
Speaker Change: For the full year, we are anticipating revenue of between $1 37 to $1 4 billion, representing a year over year increase of 57% to 61%.
Speaker Change: Lastly, we expect adjusted EBITDA will be between 140 and $155 million.
Speaker Change: These adjusted EBIT and revenue ranges imply an adjusted EBITDA margin of 11% at the midpoint of both ranges.
Yemi Okupe: In the second half, we expect to have a broader set of personalized capabilities across our specialties. As a result of this, and a more comprehensive weight loss offering, we anticipate more strategic investment in marketing in the back half of the year. However, this investment will still maintain our typical standard of a one-year payback period.
Speaker Change: In the second half, we expect to have a broader set of personalized capabilities across our specialties.
As a result of this and a more comprehensive weight loss offering we anticipate more strategic investment in marketing in the back half of the year.
Speaker Change: This investment will still maintain our typical standard of a one year payback period.
Yemi Okupe: Our guidance last quarter of $1.2 to $1.23 billion of revenue and $120 to $135 million of adjusted EBITDA in 2024 was, in our view, already ambitious. Given this is a meaningful revision from that, I will spend a brief moment outlining some of the underlying assumptions behind that revised outline. We anticipate continued consumer adoption of personalized solutions for the remainder of the year. Our expectation is that we will have north of 1 million subscribers with a personalized subscription by the end of the year, close to the total number of subscribers we had on the platform just two years ago.
Our guidance last quarter of one point to you to 123 billion of revenue and 120 to 135 million of adjusted EBITDA in 2024 was in our view already ambitious.
Speaker Change: Given this is a meaningful revision for Matt I will spend a brief moment outlining some of the underlying assumptions behind our revised outlook.
Matt: We anticipate continued consumer adoption of personalized solutions through the remainder of the year.
Speaker Change: Our expectation is that we will have north of 1 million subscribers with a personalized subscription by the end of the year close to the total number of subscribers. We have on the platform just two years ago.
Yemi Okupe: Our Weight Loss Specialty will continue to evolve throughout the year to leverage both our technology and personalized capabilities. As this happens, we expect rapid growth across the entire portfolio of offerings within this specialty. Utilization of third parties and other dynamics is expected to result in near-term gross margin erosion of 3-4 points that we expect to revert over the midterm. However, long-term revenue retention is expected to remain north of 85%, ensuring durability while we scale the platform. Line of sight toward our first full year of net income profitability is becoming increasingly clear. As of the end of 2023, we held a tax valuation allowance of $70.5 million.
Speaker Change: Our weight loss specialty will continue to evolve throughout the year to leverage both our technology and personalized capabilities.
Speaker Change: As this happens we expect rapid growth across the entire portfolio of offerings within the specialty youth.
Speaker Change: Utilization of third parties and other dynamics are expected to result in near term gross margin erosion of 3% to four points that we expect to revert over the midterm.
Speaker Change: Long term revenue retention is expected to remain north of 85% ensuring durability, while we scale the platform.
Speaker Change: Line of sight toward our first full year of net income profitability is becoming increasingly clear as.
Speaker Change: As of the end of 2023, we held a tax valuation allowance of $75 million.
Yemi Okupe: If our financial trajectory holds, it is likely to result in the reversal of the vast majority of this allowance as more certainty around profitability and our ability to utilize our deferred tax assets will negate the need for this allowance. This is apt to drive a significant one-time increase in net income later this year. This will not impact any of the previously discussed items.
Speaker Change: If our financial trajectory holds it is likely to result in a reversal of the vast majority of this allowance as more certainty around profitability and our ability to utilize our deferred tax assets when they get the need for this allowance.
Speaker Change: This is after drive a significant one time increase in net income later this year.
Speaker Change: This will not impact any of the previously discussed ranges.
Yemi Okupe: 2024 is setting a strong foundation for the attainment of our midterm goals and fulfillment of our longer-term mission. Investments today give us conviction that we will achieve our goal of adjusted EBITDA margins of at least 20% no later than 2016. What is exciting is that this extraordinary momentum increases our ability to have a transformative impact on society by bringing the value of our platform to tens of millions of consumers. All of this would not be possible without the hard work and dedication of our employees across Hims & Hers.
Speaker Change: 2024, setting a strong foundation for the attainment of our mid term goals and fulfillment of our longer term mission.
Speaker Change: Investments today give us conviction that we will achieve our goal of adjusted EBIT margins of at least 20% no later than 2030.
Speaker Change: More exciting is that this extraordinary momentum increases our ability to have a transformative impact on society by bringing the value of our platform to tens of millions of consumers.
Speaker Change: All of this would not be possible without the hard work and dedication of our employees across his and hers.
Yemi Okupe: I'd like to thank them, as well as our shareholders, for helping us fulfill our mission of helping the world feel greater, the power of better health. With that, I'd like to turn the call over to the operator. Thank you. We will now begin the question and answer session. If you 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. We ask that you please limit yourself to one question and one second.
Speaker Change: I'd like to thank them as well as our shareholders for helping us fulfill our mission of helping the world feel great to the power of better health.
Speaker Change: With that I'd like to turn the call over to the operator for questions.
Operator: Thank you. We will now begin the question and answer session. If you would like to ask a question, please press star one on your telephone keypad to raise your hand and join the queue. If you would like to withdraw your question, simply press star one again. We ask you please limit yourself to one question and one follow-up. Your first question comes from a line from Maria Ripps from Canaccord. Your line is open. Great. Thanks so much for taking the time.
Speaker Change: Thank you we will now begin the question and answer session. If you would like to ask a question. Please press star one on your telephone keypad to raise your hand, who joined the queue. If you would like to withdraw your question simply press Star. One again, we ask that you. Please limit yourself to one question and one follow up.
Yemi Okupe: Thanks for the question, Maria. This is Yemi.
Maria Reps: Our first question comes from the line of Maria reps from Canaccord. Your line is open.
Maria Ripps: Great. Thanks, so much for taking my questions and congrats on the strong performance here.
Maria Reps: I appreciate the color around your guidance it sounds like your core business continues to do really well.
Maria Reps: Is there any color you can able to share with us in terms of projected GOP Redskins contribution for the second half of the year that's embedded in your full year outlook.
Speaker Change: Then secondly.
Maria Reps: This acquisition of <unk>.
Speaker Change: The outsourcing facility impact your gross margins and sort of unit economics longer term.
Yemi Okupe: I'd say overall, I think we're very excited by how the core business is performing. In the second quarter, as mentioned, the core business, excluding GLP1, delivered north of $300 million in revenue. What we're expecting in the second half of the year is that we'll continue to innovate on the suite of personalized offerings across the core business. And so we do expect the momentum to remain strong from there. With respect to GLP1-specific contributions, I think we're very much in the early days of the GLP1 launch being less than three months out from the launch. In the second quarter, we did see very strong momentum.
Armen: Thanks for the question Maria. This is this is the army and I'd say overall I think we're very excited by how the core business is performing in the second quarter as mentioned the core business, excluding <unk> celebrity North of 300 million of revenue what we're expecting in the second half of the year, we'll continue to innovate.
Armen: The suite of personalized offerings across the core business and so we do expect the momentum to remain strong from there.
Speaker Change: With respect to GOP, one specific contributions I think were very much in the early days.
Speaker Change: Okay G L P. One launch being less than three months out from the launch.
Speaker Change: In the second quarter, we did see very strong momentum I think it's too early at this point to provide definitive guidance around a specific specialty or product, but were very pleased also with the initial launch in.
Yemi Okupe: I think it's too early at this point to provide definitive guidance around a specific specialty or product. But we're very pleased with the initial launch, and the confidence in the momentum for that specific vertical is very strong as we roll out the product nationally. With respect to your second question around gross margins, I think that typically, as we do see specialties and products within specialties scale, we historically look for opportunities to optimize the margin for those products.
Speaker Change: The confidence in the momentum for that specific vertical is very strong as we roll out the product nationally.
Speaker Change: With respect to your second question around gross margins I think that typically as we do see specialties and products within specialty scale, we historically look for opportunities to optimize the margin for the for those products that can be in the form of processes that we change or increasingly.
Yemi Okupe: That can be in the form of processes that we change or, increasingly, as you see across other specialties, verticalization. And so I think that the acquisition that we mentioned around the 503B facility will do a few things. I think it will unlock the ability to enter additional specialties in the future. But also, I think it does provide an opportunity for us to optimize the cost structure on the compound that GLP-1 is offering.
Speaker Change: As you see across other specialties, the vertical <unk> I'm, sorry thinks that the acquisitions that we mentioned around the five or three b facility that will do a few things I think it will unlock the ability to.
Speaker Change: And is there additional specialties with in the future, but also I think it does provide opportunity for us to optimize the cost structure on the compounded G. L. P. One chip offering.
Speaker Change: Got it thank you so much gentlemen.
Speaker Change: Yes.
Operator: Your next question comes from the line of Allen Lutz from Bank of America. Your line is open.
Speaker Change: Your next question comes from the line of Alan <unk> from Bank of America. Your line is open.
Operator: Hi, good afternoon, and thanks for taking the questions. One for Yemi: you talked about more strategic marketing investment in the back half of the year. Can you talk about just generally, as we think about the total investment in the second half of the year, potential impacts from the election, how should we think about where those marketing dollars are going in GLP-1s versus the core? And then you also mentioned 30 states are live today for GLP-1s; you expect that to get to 50 by the end of the year.
Alan: Hi, good afternoon, and thanks for taking the questions one for you.
Alan: You talked about more strategic marketing investment in the back half of the year can you talk about just generally as we think about the total investment in the second half of the year potential impacts from the election, how should we think about where those marketing dollars are going in GOP ones versus the core and then you also mentioned 30 states are live today.
Speaker Change: For <unk> do you expect that to get to 50 by the end of the year, how much of the incremental marketing spend is going to new states just really trying to understand the breakdown as we think about the next six months how much of your marketing dollars are going toward the <unk> business.
Operator: How much of the incremental marketing spend is going to new states? Just really trying to understand the breakdown as we think about the next six months. How much of your marketing dollars are going towards the GLP-1 business? Thanks.
Speaker Change: Yes. Thanks for the question Alan I think it's a really good question I think the way that we think around marketing as I think there are a few dimensions.
Yemi Okupe: The way that we think around marketing is I think there are a few dimensions. You know, there is a component that can be GLP-1 specific that's in the form of traditional paid channels.
Speaker Change: There is a component that can be G. L. P. One specific that's in the form of traditional pay channels, but just stepping back I think one of the beauties of this platform is the fact that we have.
Yemi Okupe: But just stepping back, I think one of the beauties of the Hims & Hers platform is the fact that we have a multi-specialty offering. We have the ability to connect with users across a multitude of specialties. And so I think a lot of the investment will come as we start to broaden the range of personalized solutions that we have even across the core set of specialties, as well as in our weight loss offering.
A multi specialty offering we have the ability to connect with users across multiple specialties.
Speaker Change: And so I think a lot of the investment will come as we start to broaden the aperture of the number of personalized solutions that we have even across the core set of specialties as well as in our weight loss offering increasingly you will see a meaningful portion of the spend and go towards speaking to the multi condition capabilities that you see across Simpson hers. We've also left ourselves some room just given the fact that we are at.
Yemi Okupe: Increasingly, you'll see a meaningful portion of the spend go towards speaking to the multi-condition capabilities that you see across Hims & Hers. We've also left ourselves some room, just given the fact that we are in an election year and this is new, some flexibility in that dimension.
Speaker Change: In an election year and this was new some flexibility on that dimension, we do anticipate a meaningful portion of that spend to come more in the form of speaking to consumers around the broader capabilities of the platform.
Yemi Okupe: We do anticipate a meaningful portion of the spend to come more in the form of speaking to consumers around the broader capabilities of the platform, weight, and GLP-1, inclusive of that. I think that kind of just provides a frame of reference for how we think about it. I think we will still be very disciplined with the overall spend structure. It will maintain the one-year payback period.
Speaker Change: Wait in GOP, one inclusive of that.
Speaker Change: I think that kind of just provided from a reference for how we think around it I think we will still be very disciplined with the overall spending structure. It will maintain the one year payback period. We will also look to position ourselves from economies of scale and so I think it's a similar dynamic to what we saw in the back half of 2022 and the front half of 2023, whereas we started a senior.
Yemi Okupe: We'll also look to position ourselves from economies of scale. And so I think it's a similar dynamic to what we saw in the back half of 2022 and the front half of 2023, where as we started to see new capabilities at platform scale, we leaned in to a variety of different channels. I think we're expecting to do that in the second half and then, you know, expect to see leverage of the one to three points that we mentioned on a per annum basis in marketing for the next couple of years.
Speaker Change: Capabilities and the platform scale, we leaned in to a variety of different channels I think we're expecting here to that in the second half.
Speaker Change: And then expect to see leverage of the one to three points that we mentioned on a per annum basis on marketing for the next couple of couple of years.
Operator: Great. And then one for Andrew.
Speaker Change: Yes.
Speaker Change: Great and then one for Andrew can you just talk about the broader <unk> strategy I think it's obvious we've gotten a lot of questions around the durability.
Andrew: This opportunity how should we think about him the ability to stay in the <unk> one market in a scenario where these drugs are taken off the shortage list.
Operator: Can you just talk about the broader GLP-1 strategy? I think it's obvious we've gotten a lot of questions around the durability of this opportunity. How should we think about HIMS' ability to stay in the GLP-1 market in a scenario where these drugs are taken off the shortage list? Thanks.
Andrew Dudum: Yes. Thank you, Allen. That's a good question.
al: Yes, thanks al.
Andrew Dudum: I'd start by saying we're currently still seeing, and wouldn't expect this to change, thousands of patients coming to us every day, struggling to get access to these GLP-1s, including TERS Epitide, which has caused a lot of news in the last couple of days. I think given the breadth of the portfolio that we have, and this is inclusive of The Personalized Oral Compounds.
Speaker Change: I'll start by saying, we're currently still seeing and Wouldnt expect this to change thousands of patients coming to us every day.
Speaker Change: Willing to get access to these <unk>, including turns appetite, which.
Speaker Change: A lot of these last couple of days I think giving given the breadth of the portfolio that we have and this is inclusive.
Speaker Change: The personalized for all compounds, which as we shared in the remarks.
Andrew Dudum: which, as we shared in the remarks, has grown to 100
Andrew Dudum: Remarks has grown as a 100 million run rate business, our fastest specialty alone. But in addition to the oral compounds, the branded medications, the personalized GLP-1 doses, which augment the commercially available dosages for patients that need them, as well as off-patent GLP-1s like Lyric Glutide, you know, I think we believe the combination of that portfolio allows customers and providers a really robust range of offerings that we think is very This will exist and expand beyond the current shortage dynamics.
Speaker Change: <unk> grown a 100 million run rate business, our fastest specialty alone.
Speaker Change: But in addition to the oral compounds that branded medications, the personalized <unk> doses, which augment the commercially available.
Speaker Change: Dosages for patients that need it as well as the off patent <unk> likely our glue tied I think we believe the combination.
Speaker Change: <unk> allows customers and providers are really robust range of offerings that we think as Victor.
Speaker Change: I think this will exist.
Speaker Change: Expanding beyond the shortage dynamics.
Andrew Dudum: You know, I think there's really established precedent with regard to the compounding exemption, which allows for this level of personalization that we've spoken about for patients that need it. And I would expect that, you know, the clinical necessity of that will be really clear with these medications, as people know. There are real side effects. There is really no one size fits all dynamic. We think there is a really robust platform that extends well beyond the shortage across a number of these avenues.
Speaker Change: I think theres really established precedent with regard to the compounding exemption, which allow us for this level of personalization that we've spoken about for patients that need it and I would expect that the clinical necessity that will.
Speaker Change: Be really clear with these medications as people know there are real side effects. There are really no one size fits all dynamic.
Speaker Change: So we think there's a really robust platform that extends well beyond the shortage.
Speaker Change: A number of avenues.
Andrew: Great. Thanks, Andrew.
Alan: Thanks Alan.
Operator: Your next question comes from the line of Jack Wallace from Guggenheim Securities. Your line is open.
Speaker Change: Your next question comes from the line of Jack Wallace from Guggenheim Securities. Your line is open.
Operator: Hey, thanks for taking my questions and congrats on a great quarter. Just wanted to follow up on that last question and, you know, maybe ask the personalization element a different way. You know, is there an existing product in the market, an existing form factor, is that enough to be personalized, or is it through a personalized dosing regimen personalized enough to operate under a personalization exemption after the drugs are off the shortage list?
Jack Wallace: Hey, Thanks for taking my questions and congrats on a great quarter.
Jack Wallace: I just wanted to follow up to that last question and maybe ask the personalization element a different way.
Speaker Change: Is there a.
Speaker Change: The existing product in the market and the existing form factor is that.
Speaker Change: Enough to be personalized or is it.
Speaker Change: Through a personalized dosing regimen personalized enough to operate.
Andrea: Andrea personalization exemption after the drugs are off on the shortage list or do they need to be further personalization enhancements.
Operator: Or do they need further personalization enhancements to make that possible? And, you know, as a follow-up to that, how much is the MedMatch capability and the data you're collecting on the platform going to be empowering those personalization enhancements to the medication? Thank you.
Speaker Change: To make that possible and as a follow up to that how much is the med match.
Speaker Change: And our capability and the data you're collecting on the platform going to be empowering.
Speaker Change: Those personalization enhancements to the medication. Thank you.
Andrew Dudum: Yeah, thanks. Thanks, Jack.
Speaker Change: Yeah. Thanks, Thanks for taking my question.
Speaker Change: The short answer is that the compound of exemption.
Speaker Change: It's relatively clear there's been decades of established precedent with regard to what qualifies as a personalized.
Andrew Dudum: Good question. The short answer is that the compound exemption is relatively clear, and there's been decades of established precedent with regard to what qualifies as personalized. And this often is a form factor, as you outlined, or it could be dosing dynamics if a patient is not getting the outcome that they're hoping for, or they're experiencing side effects that are intolerable. So, these types of customizations are relatively well established, and I think the clinical necessity of compounding and the clinical necessity of personalizing medications is really well established, right?
Speaker Change: And this often is form factor as you outlined or it could be dosed.
A dosing dynamics, if a patient is not getting the.
Speaker Change: Outcome that they're hoping for or they're experiencing side effects that are intolerable. So these these types of.
Speaker Change: Customization are relatively well established and I think the clinical necessity of compounding and the clinical necessity of personalizing medications is really well established right. This is not overwhelmingly the case, but in many ways. These personalized dosages what.
Andrew Dudum: This is not overwhelmingly the case, but in many ways, these personalized dosages augment what is commercially available. And so I think our personalized dosages that exist on the platform today are offering fantastic, high-touch care to patients that otherwise really wouldn't be able to experience the benefits of GLP-1. And I would suspect in the future, in a post-shortage world, this also will continue to exist for patients as an access point. With regard to MedMatch, you know, I think what is happening right now is that there is an expansion and breadth of options that we are bringing to the market in the second half of this year and the next year across all avenues. This is oral compounds, new combination therapies on the oral side. These are branded medications when available. Medications like Lyric Glutide.
Speaker Change: It is commercially available and so I think our personalization dosages that exist on the platform today are offering.
Speaker Change: High touch care to patients that otherwise really would be able to experience the benefits of GOP. One now with respect in the future in a post shortage world.
Speaker Change: This also continues to exist for patients as an access point.
Speaker Change: With regard to med Max I think what is happening right now.
Is that there is an expansion.
Speaker Change: And a breadth of options that we are bringing to the market in the second half of this year and next year across all avenues. The oral compound new combination therapies on the Oracle side. This is branded medications when available.
Speaker Change: Medications.
Andrew Dudum: And so, you know, the breadth is only expanding, the range of dosages is only expanding on the platform, which gives providers and patients that level of nuance that we think is really, really critical. And when you match that with the capability to help identify the right control schedule, the right end dose, the right adjustments as necessary for a patient, we think that combination is incredibly strong. And you know, the data today already suggests patients are having really world-class experiences, but long-term, honestly, we believe the combination of that breadth of portfolio and MedMatch together will be able to hopefully result in clinical outcomes that are far superior than you can get not only in brick and mortar but also via any online-type telemedicine provider.
Speaker Change: Tide.
Speaker Change: No.
Speaker Change: The breadth is only expanding the range of dosages is only expanding on the platform, which gives providers and patients that level of nuance that we think is really really critical and when you match that.
Speaker Change: The capability and match to help identify.
Speaker Change: The rate and dose.
Speaker Change: Adjustments as necessary for a patient we think that combination is incredibly strong.
Speaker Change: And the data today already suggest patients are having really world class experiences, but long term honestly, we believe the combination of that breadth of portfolio in med matched together, we'll be able to hopefully result in clinical outcomes that are far superior than you can get not only in brick and mortar, but also via any online type telemedicine.
Speaker Change: Provider.
Operator: Gotcha. That's helpful. Thank you, Andrew. And then, Yemi, just a quick two-parter on the guide. Just wanted to make sure I heard it correctly. The gross margin erosion in the back half of the year from the launching categories, is that a second-half versus first-half comparison, or is that a full-year comparison?
Speaker Change: Got you that's helpful. Thanks, Thank you Andrew and then yummy.
Speaker Change: Just quick two parter on the guide just wanted to make sure I heard it correctly.
Speaker Change: Gross margin erosion in the back half of the year from the launching categories.
Yemi Okupe: And I'll leave it be.
Speaker Change: Is that a second half versus first half comparison or is that a full year comparison.
Speaker Change: And I'll leave it there.
Yemi Okupe: Yeah, thanks for the question, Jack. Yeah, it's a first half versus second half comparison. And so I think in the near term, while we look to optimize the cost structure for the overall weight category, specifically GLP-1s, we do expect some compression, but I think that we do expect that to revert in the midterm once some of the investments that we mentioned earlier start to come online.
Speaker Change: Yes, thanks for the question Josh.
Speaker Change: First half versus second half comparison.
Speaker Change: So I think in the near term.
Speaker Change: While we look to optimize the cost structure.
Speaker Change: For our overall weight categories, specifically G L P ones.
Speaker Change: We do expect some compression, but I think that we do expect that you referred in the midterm wants them to be.
Speaker Change: Investments that we mentioned earlier it start to come online.
Operator: Your next question comes from the line of Daniel Grosslight from Citi. Your line is open. Hi, thanks for taking the question. I know you probably haven't gotten this question in about a year now, but it seems like it's time.
Your next question comes from the line of Daniel <unk> from Citi. Your line is open.
Operator: Hi, thanks for taking the question. I know you probably haven't gotten this question in about a year now, but it seems like everyone's thinking about this, at least today, a weakening economy and a potential recession. I'm curious if you've seen, you know, any signs out there of a slackening in consumer demand. And if so, if you can kind of describe where that slack might be coming from.
Speaker Change: Hi, Thanks for taking the question I know you probably haven't gotten this question in about a year now, but it seems like everyone's thinking about this at least today, a weakening economy and a potential recession I'm curious if you've seen any signs out there of a slacking.
Speaker Change: In consumer demand.
Speaker Change: And if so if you can kind of describe where where that cycle might be coming in.
Speaker Change: Hello.
Yemi Okupe: Aidan, this is Yemi. Thanks for the question. I think overall, in the second quarter, we've not seen any meaningful degradation from the consumer. I think that, similar to during other periods of economic uncertainty, we do see the consumer continue to remain durable. I think there are a few reasons behind this. One is just the diversity and the breadth of the consumers that we serve across different age ranges, income levels, and geographic locations.
Speaker Change: Yes.
Speaker Change: Thanks for the question I think overall in the second quarter, we have not seen any meaningful degradation from the consumer I think that's similar to your during other periods of economic uncertainty.
Speaker Change: We do see the consumer continues to remain durable I think theres a few reasons behind this one is just the.
Speaker Change: The diversity and the breadth of the consumers that we serve across different age ranges income levels geographic locations is pretty broad.
Yemi Okupe: The second is that we serve consumers across a wide variety of some of the most emotionally responsive conditions that impact how they look, and how they feel each and every day. And so, what we've observed historically during these moments of economic uncertainty is that consumers are very reticent to let that go. We are continuously excited by some of the optimization with our cost structure, being able to place even some of the most personalized products at more and more attractive price points that are transparent and provide consumers with access to a holistic solution from being able to match their providers to being able to leverage the technology across the platform to get matched with an attractive [inaudible]
Speaker Change: Second is that we serve consumers across.
Speaker Change: Good variety of some of the most emotionally resonate conditions that impact how they look how they sell each and every day and so we've observed historically during this moment of economic uncertainty is that consumers are very reticent to to let that go.
Speaker Change: We are continuously excited by some of the.
Speaker Change: Optimization around with our cost structure being able to.
Speaker Change: Even some of the most personalized products at more and more attractive price points start trends.
Speaker Change: Our transparent and provide consumers with access to a holistic solution from being able to matches their providers <unk> been able to leverage the technology across the platform to get matched with an attractive.
Speaker Change: Solution.
Speaker Change: Got it at a price point that is oftentimes less than the collection of deductibles for them to do so and so overall, we've not seen a slowdown and I think based upon what we've seen historically during these periods of economic uncertainty.
Speaker Change: We do have very high conviction in the ability for consumers to continue.
Speaker Change: Continue to come to the platform and ultimately for the platform to continue to grow.
Yemi Okupe: Got it. Okay.
Speaker Change: Got it okay, and Andrew as well you both mentioned more folks coming to the platform taking.
Yemi Okupe: And Yemi and Andrew, you both mentioned more folks coming to the platform taking a product that cuts across categories or a single product that cuts across categories. I'm curious if you can provide an update on how many folks are taking multiple drugs across categories or a single drug across categories. And then, you know, of the folks who've come in for GLPs, have any of them converted to other products? or other categories? Thanks, Daniel. I didn't realize that...
Speaker Change: That.
Speaker Change: Cuts across categories are a single product that cuts across categories. I'm curious if you can provide an update on how many folks are taking multiple drugs across categories or a single drug across categories and then.
Speaker Change: The folks who have come in for G. Lps have any of them converted to other products.
Speaker Change: Other categories.
Yemi Okupe: Thanks, Daniel. I can take it off.
Yemi Okupe: On the personalization side and the cross category side, you know, we don't disclose specifically the specialty mixes and how those cross, but I would point to the pretty rapid acceleration of personalized adoption. You know, we shared that fifty five percent of new subscribers are now signed up for personalized products and forty percent of the entire. This is, you know, astronomical speed and acceleration relative to last year. Thank you, everybody. Thank you.
Dan: Thanks, Dan.
Speaker Change: I can take it off.
Speaker Change: On the personalization side and the cross category side.
Speaker Change: No we don't disclose specifically.
Speaker Change: The specialty.
Speaker Change: Mix is and how those cross, but I would point to the pretty rapid acceleration of personalized adoption, we shared 55% of new subscribers are now.
Speaker Change: At 40% of the entire group.
Speaker Change: This is.
Great.
Speaker Change: <unk> topical speed and acceleration of growth.
Speaker Change: Okay.
Speaker Change: Okay.
Speaker Change: Okay.
Speaker Change: Okay.
Speaker Change: Okay.
Speaker Change: Good luck.
Speaker Change: Got it.
Speaker Change: Okay.
Sure.
Andrew Dudum: So, I think there's going to be... (inaudible)
Speaker Change: So I think theres going to be.
Speaker Change: Alright.
Speaker Change: Yeah.
Speaker Change: No.
Speaker Change: Okay.
Speaker Change: Thank you.
Andrew Dudum: Specialty Advancing Customization and Aggregation across Specialties. I think specifically about the weight category. You know, these pages, I think, have some really complex...
Speaker Change: Specialty.
Speaker Change: Yes.
Speaker Change: Customization and AG.
Speaker Change: Aggregation across specialties.
Speaker Change: I think specifically on the weight category.
Speaker Change: Yes.
Speaker Change: Very complex.
Speaker Change: Related issues.
Andrew Dudum: This is why I think the oral compounded category that we have has scaled so quickly and has had such great success, it's because it's really treating many underlying conditions, right? And this could be depressive eating dynamics, binge eating, metabolic disorders, insulin resistance. And so I think for the obesity category in general, I would expect there to be very significant cross-category and cross-specialty concerns, both in oral combinations through compounding therapies, as well as through bundling options.
Speaker Change: The account.
Speaker Change: The category that we have.
Speaker Change: So quickly in the past.
Speaker Change: Great.
Speaker Change: Because it's really treating many underlying conditions that can be suppressive eating dynamic binge eating metabolic disorder insulin resistance.
Speaker Change: And so I think for the obesity category in general I would expect there to be very.
Speaker Change: Very significant cross category and cross specialty concern whereby both oral.
Speaker Change: Combination.
Speaker Change: Compounding therapy as well as certain bundling option.
Speaker Change: For us to treat a personal more holistically.
Speaker Change: I think the patient frankly, we'll just Mr. David I think these patients more than many.
Mr. David: And then maybe any any patient we've seen on the platform.
Mr. David: As requiring a more holistic approach, which I think will then be reflected in the bundled offerings and compounds that you will see the company bring to market.
Operator: [inaudible] Your next question comes from the line of Jonah Kim from TD Cowan. Your line is open. Thanks for taking my question. Could you just provide the...
Operator: Your next question comes from the line of Jonah Kim from TD Cowan. Your line is open. Thanks for taking my call.
Speaker Change: Your next question comes from the line of Jonna Kim from TD Cowen Your line is open.
Jonna Kim: Thanks for taking my question could you just provide additional color around the unit economics of the <unk> ones and how youre able to offer the <unk> lines at our current price claims that are way below.
Speaker Change: And in the market and you know me I would love to get additional comp.
Speaker Change: Color around how what youre, assuming around monthly revenues and subscriber adds in your guide. Thank you so much.
Yemi Okupe: Yeah, thanks so much for the question, Jenna. I think what we know, how we're able to offer the structure that we are or the pricing that we are around GLP ones is really, you know, just a reflection of the benefits from the scale that we have today, just given how the number of consumers on our platform that enables us when we do partnerships with third parties to have a dilutive effect on gross margins.
Speaker Change: Yes, thanks, so much for the question Jonathan.
Speaker Change: I think what we how are you.
Speaker Change: April to offer the the structure that we are the pricing that we are around <unk> was really just a reflection of the benefits from the scale that we have today, just given how the number of consumers on our platform.
Speaker Change: That enables us when we do partnerships with third parties too.
Speaker Change: Negotiate across the supply chain a cost structure that enables us to place. It at these price points I think what's even more exciting is with our scale with our balance sheet, we're able to make investments in the future that provide line of sight to an increasingly strong set of unit economics, and so I think as the cost.
Speaker Change: Sure stands today.
Speaker Change: On a gross margin basis C. L P ones.
Speaker Change: Do you have a dilutive effect on the gross margins I think we're confident that as we continue to make investments in vertical ization optimizing processes continuing to.
Yemi Okupe: I think we're confident that as we continue to make investments in verticalization, optimizing processes, continuing to look for optimization opportunities across logistics, the economics and what we've observed in other specialties as they start to season a bit will only mature. And so I think that the price points that we put the GLP-1s at are a reflection of us being able to utilize this muscle historically in the past.
Speaker Change: Look for optimization opportunities across the logistics the economics I mean, what we've observed in other specialties as I started to season a bit.
Speaker Change: Only mature and so I think that the price points that we put the <unk> ones that are a reflection of us being able to utilize this muscle historically in the past.
Yemi Okupe: With respect to some of the dynamics in the back half of the year around gross subscriber ads and monthly average revenue per subscriber, we don't necessarily get specific guidance there but can speak to what are some of the broad trends and themes that we do expect. Overall, I think resoundingly that we do expect the vast majority of growth to continue to come from subscribers coming onto the platform at increasingly stronger and stronger levels.
Speaker Change: With respect to.
Speaker Change: Some of the dynamics in the back half of the year around.
Speaker Change: Gross subscriber adds and monthly average revenue per.
Speaker Change: Per subscriber, we don't necessarily give specific guidance there, but can speak to what are some of the broad trends and themes that we do expect.
Speaker Change: Overall, I think resoundingly, we do expect the vast majority of growth to continue to come from.
Speaker Change: Subscribers.
Speaker Change: Hi.
Speaker Change: Coming onto the platform.
Speaker Change: And increasingly stronger and stronger levels.
Yemi Okupe: That said, there are a few different dynamics that we do expect will lead to growth in the monthly average revenue per subscriber. The price point of the overall weight category on a monthly basis, roughly $79 a month for the oral compounds to as low as $199 per month on the GLP-1 offering.
Speaker Change: That said I think there are a few different dynamics, we do expect will lead to.
Speaker Change: Growth in the monthly average revenue per subscriber.
Speaker Change: The price point of the overall weight category on a monthly basis, roughly $79 a month for the oral compounds to as low as $199 per month on the G. L. P. One offering while that is very attractive for the overall market. It is accretive to the price point.
Yemi Okupe: While that is, you know, very attractive for the overall market, it is accreted to the price points that the rest of the core businesses are offered at. And so as the weight offering continues to scale, we would expect upward dynamics on the monthly average revenue per subscriber in the back half of the year. Additionally, we do see more and more users each quarter opt for personalized solutions. That's coming from new users that are increasingly opting for those solutions, as well as existing users making the switch as there's more and more value offered to consumers.
Speaker Change: Is that the rest of the core businesses offer that and so as the way offering continues to scale, we would expect upward dynamics on the.
Speaker Change: Average revenue per subscriber in the back half of the year.
Speaker Change: Additionally, we do see more and more users each quarter up for personalized solutions.
Speaker Change: That's coming from new users that increasingly are opting for those solutions as well as existing users, making the switch as there's more and more value offered to consumers and so as we look to launch more unique form factors as we also look to launch.
Yemi Okupe: And so, as we look to launch more unique form factors, as we also look to launch more personalized offerings that cut across multiple conditions, we would expect that trend to continue to accelerate in the back half of the year, which would, again, lead to some tailwinds on the monthly average revenue per subscriber. So that is an element of the monthly average revenue per subscriber that we do expect to increase in the back half of the year. But we still do expect the vast majority of growth to come from new subscriber additions onto the platform.
Speaker Change: More personalized offerings that cut across multiple conditions.
Speaker Change: We would expect that trend to continue to accelerate in the back half of the year.
Speaker Change: Again lead to some tailwind on the monthly average revenue per subscribers, but that is an element on the monthly average revenue per subscriber that we do expect to elevate and increase in the back half of the year, but we still do you expect the vast majority of growth to come from.
Speaker Change: Subscriber additions onto the platform.
Speaker Change: Yeah.
Speaker Change: Got it thank you so much.
Operator: Your next question comes from the line of Aaron Kessler from Seaport. Your line is open. Thank you, guys.
Speaker Change: Your next question comes from the line of Aaron Kessler from Seaport. Your line is open.
Yemi Okupe: A couple of questions. First, just on the guidance. I heard kind of about the personalized solutions in terms of increased revenue. Would you attribute it to any categories as well? Is it mostly weight loss, or is it really across categories? And then maybe any updates on some of your other key categories, including dermatology, mental health, and sexual health as well? Thank you.
Operator: Thank you guys. It's great.
Aaron Kessler: Hey, guys great a couple of questions. Maybe first just on the guidance I heard kind of on a personalized solutions in terms of the increased revenue would you attribute to any categories as well or is it mostly weight.
Aaron Kessler: Weight loss or is it really across categories and then just any updates on some of your other key categories, including dermatology mental health and sexual health as well. Thank you.
Yemi Okupe: Well, maybe Andrew can speak to the broader dynamics, and I can cut into some of the more detailed nuances there.
Aaron Kessler: Well, maybe I'll, let Andrew speak to like the broader dynamics that can cut into some of the more detailed answer.
Andrew Dudum: Yeah, great. Aaron, thanks for the question. You know, I think across categories, it's been a tough one.
Andrew: Yes, great Eric Thanks for the question I think a cross category.
Andrew Dudum: [inaudible]
The offerings.
Speaker Change: We can talk about domestic helps us.
Andrew Dudum: The research that is now offering and engaging with personalized products is up three times year over year. What's really interesting is it's not just personalized, but it's actually more engaged behavior. So on the men's side of the business, Daily. That's all I have for today. If you think about that. Multispecialty, Multicap, [inaudible] Thank you for joining us. Have a good day.
Speaker Change: Okay.
Speaker Change: Okay.
Speaker Change: Ill offering and engaging with personalized product is up three times year over year.
Speaker Change: In particular, what's really interesting not just personalized, but it's actually more engaged behavior. So on the men's side of the business.
Speaker Change: Okay.
Speaker Change: Daily.
Speaker Change: Okay.
Speaker Change: If you think about that.
Speaker Change: That's very important.
Speaker Change: Quick question.
Speaker Change: Okay.
Speaker Change: Multi specialty multi cap.
Speaker Change: Because of the population.
Speaker Change: And engagement.
Speaker Change: Only linked to it.
Speaker Change: The outcome, but any.
Speaker Change: Sure efficacy here.
Speaker Change: Your next album, which we think is really powerful and this is taking place.
Andrew Dudum: [inaudible],,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,, [inaudible] or in some of the other categories where there are. We're seeing really robust adoption of these across the country. If you have the weight loss business, really unlocking that function on top of what is already a very robust set of categories.
Speaker Change: Across the spectrum.
Speaker Change: 90% of that business.
Speaker Change: The updated for a personalized solution.
Speaker Change: Thank you.
Speaker Change: Or.
Speaker Change: And some of the other categories.
Speaker Change: Yes.
Speaker Change: Where.
Speaker Change: Okay.
Speaker Change: We're seeing really robust.
Speaker Change: Got it.
Speaker Change: Uh huh.
Rob: Thanks, Rob.
Rob: New South Wales.
Rob: Okay.
Speaker Change: You have the weight loss business really unlocking.
Speaker Change: Function on top of what is already a very robust.
Set of categories.
Yemi Okupe: Yeah, I think I just to follow up on that, Aaron, I think, you know, Andrew was, um, was breaking up a bit. You know, I think we do expect the adoption of personalization to cut across most of the specialties. What we have seen is that as we continue to expand the breadth of choices, both in terms of new form factors or offering products within conditions that offer multiple sources of value within a specialty.
Speaker Change: Yes, I think I think just to follow up on that Erinn I think Andrew was let's break it up a bit.
Andrew: I think we do expect the adoption of personalization to to cut across most of the specialties.
Speaker Change: We have seen is that as we continue to elevate the breath of choices both in terms of.
Speaker Change: If one factors or.
Speaker Change: Offering products within conditions.
Speaker Change: That offer multiple sources of value within our specialty.
Speaker Change: See more and more consumers opt to switch switch switch to those.
Yemi Okupe: We see more and more consumers opt to switch to switch to those. What we also do expect is in the back half of the year, innovation will accelerate across multiple of our specialties. Additionally, we expect in the back half of the year the ability to bring solutions that cut across popular specialties concurrently.
Speaker Change: We also do you expect in the back half of the year.
Speaker Change: Innovation will accelerate across multiple of our specialties. Additionally, we do expect in the back half of the year is for.
Speaker Change: The ability to bring solutions that cut across.
Yemi Okupe: And so with that, we do expect more and more consumers to either revert to that, whether that's new users that are opting for more of the solutions with greater frequency, or our existing users, you know, to switch. And so an example of, you know, what we've seen that we, that Andrew mentioned in his Prepared Remarks, in the sexual health business, we've seen a rapid uptick in the adoption of personalized products as we've brought on solutions like the hardments or the multi-condition solutions such as heart health products.
Speaker Change: Popular specialties concurrently and so with that we do expect.
Speaker Change: More and more consumers to either revert to that whether that's new users that are opting for more of a solutions with greater frequency or our existing users switch and so an example of what we've seen that we that Andrew mentioned in his.
Andrew: Prepared remarks is in our sexual health business, we have.
Andrew: Seen a rapid uptick.
Andrew: In the adoption of personalized products as we brought on solutions like the <unk> or the multi condition solution such as the.
Speaker Change: Heart health products as a result of that we've seen more and more folks ought to switch to a daily habit and especially there's historically been more of an on demand type of dynamic and so we're confident in the back half of the year, but as that value continues to broaden more and more users across all of our specialties will do so.
Yemi Okupe: As a result of that, we've seen more and more folks opt to switch to a daily habit, and especially this has historically been more of an on-demand type of dynamic, and so we're confident in the back half of the year that as that value continues to broaden, more and more users across all of our specialties will do so. In the weight management category, I think we're very excited about that, and similar to our mental health category, when you're able to combine our ability to offer a very broad set of personalized solutions with technology that can assist providers in matching consumers to the solution that is likely to yield successful results with potentially fewer side effects, we generally see that that leads to a few things.
Speaker Change: Management category I think we're very excited by that and similar to our mental health category.
Speaker Change: When you are able to combine our ability to offer a very broad set of personalized solutions with technology that can assist providers.
Speaker Change: Matching consumers to the solution that is likely to yield.
Speaker Change: Successful results with potentially less side effects.
Speaker Change: We generally see that that yields to a few things one is it fosters a greater.
Yemi Okupe: One is that it just fosters a greater build of consumer trust. Also, what we do see is that retention as a result of the stronger value proposition, as well as the dynamics of being able to mitigate side effect concerns or meet consumers with their preferences, that generally yields to both stronger retention as well as acquisition. So we're very excited by the portfolio that's to come in the second half of the year.
Speaker Change: Build a consumer trust also we do see is that the retention as a result of the stronger value proposition as well as.
Speaker Change: The dynamics of being able to mitigate the side effect concerns or meet consumers with their preferences.
Speaker Change: Generally yields to both stronger retention as well as acquisition.
Speaker Change: We're excited by the portfolio, but what's to come in the second half of the year.
Operator: Great, that's helpful. Thank you.
Speaker Change: Okay, Great. That's helpful. Thank you.
Operator: Your next question comes from the line of Michael Cherny from Leering Partners. Your line is open.
Speaker Change: Your next question comes from the line of Michael Cherny from Leerink Partners. Your line is open.
Operator: Good afternoon. Thanks for taking the time to answer the question. I want to come back to this dynamic of the, I guess, called multi-year, long-term components of your GLP-1 business within weight management. I know some questions have been asked about patent protection and where you sit. If you can, maybe give us some examples, given this is obviously still an evolving market, of where you've seen some of these dynamics put in place. I mean, obviously, you have the ability to scale well, but I think also companies like Lilly and Novo are clearly going to go out of their way to protect the franchises they have.
Good afternoon, thanks for taking the question.
Michael Cherny: I want to come back to this dynamic of the I guess call multiyear long term components of your <unk>, one business within weight management I know some questions have been asked about the patent protection and where you sit.
Speaker Change: If you can maybe give us some examples given this is obviously still an evolving market on where you've seen some of these dynamics put in place I mean, you obviously have the ability to scale well, but I think also companies like Lilly and Novo are clearly going to go out of their way to protect the franchise as they have and also I know that.
Operator: And also, I know that you have the ability to offer branded components over time. So I guess along all those lines, how should we expect all of this dynamic to develop relative to your product availability, the mix of compounded versus traditional brands over time, and where you sit in the marketplace, knowing some of the dynamics around their focus on their patent?
Speaker Change: You have the ability to offer branded components over time, so I guess along those lines how should we expect all of this dynamic to develop relative to your product availability the mix of compounded versus traditional brand over time, and where you sit in the marketplace knowing.
Some of the dynamics around their focus on their patent tickets.
Andrew Dudum: Thanks. Thanks, Michael.
Michael Cherny: Thanks, Michael.
Speaker Change: I'll take a crack I think at a high level you should expect some degree of fluidity right over the next couple of years.
Speaker Change: Just given I think theres going to be not only a changing market dynamic with the current medications that are.
Speaker Change: On shortage, but I think there is also probably going to be five or 10, new medication that come to market in the next few years just given if you look at the clinical studies and the FDA pipeline. So I think youre looking at.
Five to 10 years.
Speaker Change: Innovation.
Speaker Change: All kind of expanding off of the initial <unk> learning.
Speaker Change: And that first that first medication out there with <unk> now coming off time. So I think what you can expect some fluidity without question, where I think we get a lot of confidence is that there's a really broad set of offerings under the hood that we believe in combination resulted in a really durable business line as.
Andrew Dudum: I'll take a crack at it. I think at a high level, you know, you should expect some degree of fluidity right over the next couple of years, just given that I think there's going to be not only a changing market dynamic with the current medications that are on shortage, but I think there's also probably going to be five or 10 new medications that come to market in the next few years, just given if you look at the clinical studies and the FDA pipeline.
Andrew Dudum: So I think you're looking at five to ten years of innovation all kind of expanding off of the initial GLP-1 learning and that first medication out there, Lyric Glutide, now coming off time. So I think what you can expect is some fluidity. Without question, where I think we get a lot of confidence is that there's a really broad set of offerings under the hood that, combined, results in a really durable business line.
Andrew Dudum: As we talked about, the oral compounds that we have launched, that in and of itself is the fastest growing specialty we've ever launched on the platform, achieving north of a 100 million run rate just in six or seven months. We expect, you know, huge evolutions in that platform and expansion of offerings there that patients really do love and are having great outcomes. And then on the injectable side, I think there's going to be, without question, a long horizon of on and off availability, just given the demand.
Speaker Change: As we talked about the oral compounds that we have launched.
Speaker Change: That in of itself is the fastest growing specialty we've ever launched on the platform.
Speaker Change: <unk> north of $100 million run rate just in six or seven months, we expect huge evolutions in that platform and expansion of offerings. There that patients really do love and are having great outcomes.
Speaker Change: And then on the injectable side, I think theres going to be without question.
Speaker Change: A long horizon of on and off avail.
Speaker Change: Availability just given the demand we see thousands of patients coming every single day, saying that they can't get access to these medications.
Andrew Dudum: We see thousands of patients every single day saying that they can't get access to these medications, and so we suspect that we'll be able to offer commercially available dosages in some form, you know, for extended periods. And on top of that, as you said, as supply grows, we are excited to bring branded medications for patients that are interested onto the platform as well as personalized dosages. You know, the compounding.
Speaker Change: So we suspect that we'll be able to offer commercially available dosages in some form.
Speaker Change: For extended periods.
Speaker Change: On top of that as you said as supply grows we are excited to bring the branded medications for patients that are interested onto the platform as well as the personalized dosages.
Speaker Change: The compound.
Andrew Dudum: Titration and End Dose Customization exists and, you know, operates regardless of shortage. This is an exemption for which we operate the entire business under and have for the last six or seven years, and there's really established precedent where everybody in the market really respects the clinical need for personalization and realizes that often these personalized dosages augment what is commercially available and are not directly cannibalizing large pharma. So when you think about, you know, very few, if any, examples where large pharma comes after legitimate, clinically necessary compounding.
Speaker Change: Titration in Endo.
Speaker Change: Customization exists and <unk>.
Speaker Change: Operates regardless of shortage.
Speaker Change: This is an exemption for which we operate the entire business under and have for the last six or seven years, and Theres really established precedent where.
Everybody in market really respect the clinical need of personalization and realizes that often these personalized dosages augment what is commercially available and are not directly cannibalizing large pharma. So when you think about.
Speaker Change: Very few if any examples where large pharma comes after legitimate clinically necessary compounding and what we're seeing on our platform is that for these medications that that that clinical customization is definitely needed for some patients and we believe in combination with the rest of the portfolio that will be included in.
Andrew Dudum: And what we're seeing on our platform is that for these medications, clinical customization is definitely needed for some patients, and we believe, in combination with the rest of the portfolio, that will be included and available to patients over a long period of time.
Alible to patient over for over a long period of time.
Operator: So maybe if I can ask one more quick question, especially given your future offerings, what is your current day-to-day relationship like with Lilly and Novo? And how much are you preparing for that branded offering as some of their products come off shorter?
Speaker Change: So maybe if I can ask one more quick question, especially given your future offerings. What is your current day to day relationship like with Lilly and Novo and how much are you preparing for that branded offering.
Speaker Change: As some of the crops come off shortage.
Andrew Dudum: Yeah, it's a great question. We, you know, as you guys probably saw, we recently brought on Cora Schultz to the board, who's been there for north of 2025 years as President and COO.
Speaker Change #100: Yes, it's a great question.
Speaker Change #101: As you guys probably saw we recently brought on core results of the board who was there for north of 2025 years as President and COO.
Andrew Dudum: You know, I think we are sitting in the same place as almost everybody in the market, which is trying to get supply for the branded medication. You know, we know that some customers will, without question, want the easy, quick application of the self-inject pen. They know the brand, they trust the brand, and they see all the benefits of that medication, and they want those medications. So we, I think, like many others, if not almost everybody, are trying our best to source supply.
Speaker Change #101: I think we are sitting in the same place as almost everybody in market, which is trying to get supply.
Speaker Change #101: For the branded medications, we that some customers will without question one.
Speaker Change #101: <unk>.
Speaker Change #102: Quick application of the self injector pen.
Speaker Change #102: No the brand they trust the brand and they see all the benefits of that medication and they want those medications.
Speaker Change #102: I think like many others, if not almost everybody are trying our best to source supply.
Andrew Dudum: I think what we can tell you is that, you know, it's not easy. There's not really any available in volume, but we are doing our best to try to aggregate some and have a durable supply of that for our customers.
I think what we can tell you is that it's not easy there is there's not really any available.
Speaker Change #102: In volume, but we are doing our best to try to <unk>.
Speaker Change #102: Aggregate sum and have a durable supply of that for our customers.
Operator: Your next question comes from the line of Jailendra Singh from Truist Securities. Your line is open.
Speaker Change #102: Your next question comes from the line of Joe Undressing from <unk> Securities. Your line is open.
Operator: Thank you, and thanks for taking my questions. One follow-up on gross margin trends. I know I'm making some assumptions here, but I'm getting a low to mid 50% gross margin on the GLP-1 offering in the quarter. Just to confirm if I'm in the ballpark, it seems you expect the margins to improve on this offering as you kind of bring the 503B outsourcing facility on board. So on that point, does owning that facility in any way impact your relationship and economics with PPI Labs, the facility you currently have an agreement with, and how quickly can you shift volume to your own facility? Just trying to understand if there are any contractual agreements with your existing partner which would put any restrictions on how aggressively you can leverage your own facility.
Thank you and thanks for taking my questions I wanted to follow up on gross margin trends.
Joe Undressing: I know I'm, making some assumptions here, but I am getting low to mid 50% gross margin on <unk>, one offering in the quarter just to confirm if I'm in the ballpark. It seems you expect the margins to improve on this offering as you kind of being 500 <unk> outsourcing facility onboard so on that point does owning that person redeemed and EBIT impact.
Speaker Change #104: The relationship on economics at BPI lapsed. The facility you currently have agreement with and how quickly can you shift volume to your own presently just trying to understand if there any contractual agreements with your existing partner, which would put any restrictions on how aggressively you can leverage your own facility.
Yemi Okupe: Yeah, thanks for the question, Jailendra. You know, I think we don't comment on the specific gross margins for any individual product. Like most other products in the near term, we do see some degree of gross margin degradation. I think that as products tend to season in their tenure, there's a multitude of different levers that we have to pull to improve unit economics. This is everything from being able to intelligently adjust information, and Product Dynamics is about the consumer, to reduce customer service costs, to being able to optimize the logistics of the supply chain and automate some of the facilities, you know, through verticalization.
Speaker Change #104: Yes, thanks for the question Andre.
Speaker Change #105: We don't comment on the specific gross margins for any individual product.
Speaker Change #105: Like most other products in the near term.
Speaker Change #106: We do see.
Speaker Change #107: Some degree of gross margin degradation, I think that as products tend to.
Speaker Change #108: Season, and their tenure Theres, a multitude of different.
Speaker Change #108: The levers that we have to pull to improve the unit economics. This is everything from.
Speaker Change #108: Being able to intelligently.
Adjust your information in.
Speaker Change #108: And.
Speaker Change #109: Product dynamics about the consumer to reduce customer service cost have you been able to optimize on the logistics of the supply chain automate some of the facilities. They are verticalizing <unk>.
Yemi Okupe: Those have been historical levers that we've pulled in the past, and I think we're confident in our ability to do each of those over time with GLP-1s. In the near term, you know, we do expect to see some gross margin compression. But as we start to go out, you know, into next year, the ability to start to deploy multiple of those levers does come into play. And so I think, as Andrew has mentioned historically in the past, as we make investments, we tend to think about them over multi-year horizons and look to have multiple different angles to do so.
Speaker Change #109: <unk> been historical levers that we've pulled in the past and I think we're confident in our ability.
Speaker Change #109: To do each of those over time with with G. L. P ones in the near term, we do expect to see some gross margin compression, but as we start to go out.
Speaker Change #109: Into into next year, the ability to start to deploy multiple of those levers does come into play.
Speaker Change #109: So I think as Andrew has mentioned historically in the past as we make investments we tend to think about them on multiyear horizons.
Andrew: And look to have multiple different angles to do so and so.
Yemi Okupe: And so while GLP-1 scales in the near term, you know, there's roughly a couple of points of market degradation in the back half of this year that we're expecting. But we do expect, in the midterm, as we start to optimize some of those efficiency levers, inclusive of the verticalization, that we have the ability to revert that. But there's no, like, individual lever; it's only verticalization or it's only optimization in terms of our processes. We have the ability to pull multiple levers and expand our margins over time.
Speaker Change #110: <unk> in the near term there's roughly the.
Speaker Change #110: No.
Speaker Change #110: Couple of points of margin degradation in the back half of this year that we're expecting we do expect in the midterm as we start to optimize some of those efficiency lever is inclusive of the vertical as Asian do we have the ability to refer at that but there's no like individual lever of its only radicalization or it's only optimization in terms of our processes, we have the ability to pull multiple.
Speaker Change #110: Multiple levers and expand the margins over time.
Yemi Okupe: But just to clarify, there's no restriction from your existing pharmacy partner to shift any volume, right?
Speaker Change #111: Well just to clarify there is no restriction from your existing pharmacy partner to ship any volume right.
Yemi Okupe: We don't speak to the specific dynamics around what happens or what the partnership arrangement looks like for any individual partner. That said, I think that what we do expect is, you know, there's a period of time for us to close the deal. There's also the period of time for us to invest accordingly, to be able to scale up appropriately. I think that, you know, those dynamics we do expect to occur more in the midterm. And so as those occur, we would expect vigorous margins to, you know, expand.
Speaker Change #112: We don't speak to the specifics of the dynamics around what happens or what the partnership arrangement looks like for any individual partner.
Speaker Change #113: That said I think that what we do expect as you know there is a period of time for us to close the deal. There is also the period of time for us to invest accordingly to be able to scale up appropriately.
Speaker Change #113: I think that those dynamics, we do expect to occur more in the mid term and so as those occur we would expect gross margins to expand.
Operator: Your next question comes from a line of Glen Santangelo from Jeffreys. Your line is open.
Speaker Change #113: Your next question comes from the line of Glen Santangelo from Jefferies. Your line is open.
Operator: Oh yeah, thanks for taking my questions. Just a couple for me.
Glen Santangelo: Yeah. Thanks for taking my questions. Just a couple from me Hey, Jimmy I wanted to follow up on on these incremental subscribers to the compounds and <unk> one products.
Yemi Okupe: Hey, Yemi, I want to follow up on these incremental subscribers to Compound, the GLP-1 product. You know, are many of the subscribers taking advantage of multi-month subscriptions? Could you give us a little bit more about the demographic of these types of subscribers and, like, on average, how many months are they buying at a time? Anything you can tell us to help us think about that, and then I have a quick follow-up.
Glen Santangelo: Many of the subscribers taking advantage of multi month subscriptions can you give us a little bit more about the demographic of these types of.
Glen Santangelo: Subscribers.
Glen Santangelo: On average how many months are they are they buying at a time, but anything you can tell us to help us think about that and then I have a quick follow up.
Yemi Okupe: Yeah, thanks for the question, Glen. We do see the vast majority of subscribers on just the overall weight management solution, both inclusive of oral as well as GLP ones, opt for multi-month multi-packs. What you do see is I think that the price points, you know, as you make longer-term commitments, tend to be more attractive. But we also do see that, you know, this is a product across all weights, both oral and GLP ones, it does require multiple months of commitment to really get to the appropriate titration schedule and see the effects emerge. And so as a result of that, we do see the overwhelmingly majority of consumers opt for a multi-month, multi-month solution.
Speaker Change #115: Yes. Thanks for the question Glenn we do see the the vast majority of subscribers on the just the overall weight management solution, both inclusive of oral as well as the L. P ones up for multi year multi months, where you do see as I think that the price points as you make longer term commitments tend to be more attractive.
Speaker Change #115: But we also do see is that this is the product.
Speaker Change #115: Across all of way at both oral NGL P. Once it does require multiple months of commitments to really get to the appropriate titration schedule and CV effects emerge and so as a result of that.
Speaker Change #115: We do see the overwhelmingly majority of consumers opt for a multi month multi month tuition.
Yemi Okupe: Yeah, that's what I thought. And so my follow-up question is, I guess, how many months of this compounded demaglutide can you ship at once? And then when I think about the revenue recognition sort of related to that, if you, you know, if you ship three months at once, do you book all three months of the revenue up front or any sort of clarity on how that works? I mean, I think that would help us a lot from a modeling point of view.
Speaker Change #116: Yes, that's what I thought and so my follow up question is I guess, how many months of this compounded the magnetite can you ship. It once and then when I think about the revenue recognition sort of related to that if you. If you shipped three months at once the book all three months of the revenue upfront or any sort of clarity on how that works I mean, I think they would.
Speaker Change #116: Help us a lot from a modeling perspective, thanks, and I'll stop there.
Yemi Okupe: Thanks, and I'll stop there.
Yemi Okupe: Yes, I think that the, you know, the short answer is I think that the number of months that we ship does vary state to state, but typically, depending on the duration that the individual selects, we do typically ship between three months or no more than six months historically. What we do see as an effect of that across the oral as well as the GLP-1 solution is that as more and more consumers are opting for longer duration subscriptions that exceed 90 days, you do see the deferred revenue component start to increase on the balance sheet as a result of that as well.
Speaker Change #117: Yeah. So I think the short answer is I think that the number of months that we ship does vary.
Speaker Change #118: To say typically we depending on the.
Speaker Change #119: The duration that the individuals flux, we do typically ship between three months or no more than six months.
Stork Liam: Stork Liam.
Speaker Change #121: We do see is the effect of that across.
Speaker Change #121: The oral oral as well as the GOP one solution.
As more and more consumers are opting for longer duration subscriptions that exceed.
Speaker Change #121: 90 days you do see the deferred revenue component start to increase on the balance sheet as a result of that as well. So typically it's going to be within the three to six month timeframe beyond that particularly given the product costs for G. L. P ones, we typically don't extend.
Yemi Okupe: So typically, it's going to be within the three to six-month timeframe. Beyond that, particularly given the product costs specifically for GLP-1s, we typically don't extend beyond that type of cadence. And so the effect of that would be, if consumers continue to take longer and longer cadences, you would expect to see deferred revenue expand from quarter to quarter on the balance sheet.
Speaker Change #121: Beyond that type of cadence and so the effect of that would be is if consumers continue to take longer and longer cadence as you would expect to see deferred revenue expand from quarter to quarter on the on the balance sheets.
Operator: Your next question comes from the line of George Hill from Deutsche Bank. Your line is open.
Your next question comes from the line of George Hill from Deutsche Bank. Your line is open.
Operator: Good afternoon, guys. Thanks for taking the time to answer the question. First, just a point of clarification; I want to make sure I heard you guys right. You said you're tracking towards a million weight loss subscribers by the end of the year. And then if I have that number right now, if I have it wrong, you can just correct me on what it was. But I'm just interested in the mix, I guess, if you could talk about how many of those people are on GLP-1s or buying GLP-1s versus other drugs.
George Hill: Good afternoon, guys. Thanks for taking the questions first just a point of clarification I want to make sure I heard you guys right that you said you're tracking towards a million <unk> subscribers by the end of the year and then if I if I have that number in our favor. All you can just corrected me on what it was but I'm just interested in the mix I guess, if you can talk about.
George Hill: There's people who are on <unk> are probably GOP ones versus other drugs and then within the <unk> category.
Operator: And then within the GLP-1 category, there's the compounded product versus the injection product. You guys draw a differentiation there. And then looking forward, Yemi or Andrew, I'd love to hear you guys talk a little bit about how you expect the business mix to evolve in that category.
Speaker Change #123: Compounded products versus the injection product you guys draw a differentiation there and then looking forward.
Speaker Change #124: Your Android Love to hear you guys talk a little bit about like how you expect the business mix to evolve in that category.
Yemi Okupe: Maybe I can take the front half of that question, just to clarify. So I think it was, you know, George, it was a million personalized subscribers, you know, and then Andrew can go into the weight specifics. Okay, then I misheard. Sorry about that.
Speaker Change #125: Maybe I can take the front half of that question just just to clarify so I think it was GA was 1 million personalized subscribers.
Speaker Change #125: Andrew can go into both the waste products, Okay, I misheard, sorry about that.
Yemi Okupe: Yep. Yeah. Yeah. Thanks.
Yemi Okupe: Okay, and I misheard you. Sorry about that.
George Hill: Yes, Thanks George.
Andrew Dudum: Thanks, George. You know, long-term, I think I'd suspect, like we see across almost every one of our specialties, pretty vast diversity within the offering. You know, you see that, you know, already within the weight loss specialty, as we talked about the oral compounds, you know, even of themselves growing very, very quickly, the fastest we've ever had as a specialty north of 100 million run rate just in six or seven months. And I think as we continue to expand the options on that side, as well as, you know, off-patent medications like Liraglutide and the branded mix, we've always seen historically great variation.
Andrew: I think I think long term I would suspect.
Speaker Change #126: Tax like we see across almost every one of our specialties pretty that diversity within the offering you see that.
Andrew: Already within the weight loss specialty as we talked about the oral compound.
Andrew: Themself growing very very quickly the fastest we've ever had as a specialty north of $100 million run rate just in six to seven months.
Andrew: And I think as we continue to expand the options on that side as well as.
Andrew: Off patent medications likelier glu tied in the branded mix, we've always seen historically great variation when we look back for example on our sexual health side of the business. We had branded viagra, we had generic viagra, we had custom compounds.
Andrew Dudum: When we look back, for example, on our sexual health side of the business, we had branded Viagra, we had generic Viagra, we had custom compounds, and you see just, you know, really no concentration. And I think if we're doing our job well, there is no concentration because we are expanding into further segments that better serve each customer.
Andrew: You see just really no concentration.
Andrew: And I think if we're doing our job well there is no concentration because we are expanding into further segment that better serve each customer and I think thats really how we think about our product roadmap approach, which is if there is a large segment of customers.
Andrew Dudum: And I think that's really how we think about our product roadmap approach, which is, you know, if there's a large segment of customers that are on a current medication, let's really get to know those customers. Let's figure out how we can make their experience better, what other conditions or specialties they're struggling with, what other types of concerns they have, and how can we optimize adherence and clinical outcomes even further. So, I would suspect, like all other specialties, you'll get a pretty wide variety.
Andrew: That is on a current medication, let's really get to know those customers, let's figure out how we can make their experience better what other conditions or specialties are struggling with what other types of concerns do they have and how can we optimize even further.
Speaker Change #127: The adherence and clinical outcomes, so I would suspect like all other specialties youll get to pretty wide variation.
Andrew Dudum: What is abundantly clear is that while GLP-1s are incredible medications, I think what's even more incredible is that they have really changed the cultural conversation around obesity management. You now have tens of thousands of people coming to us every week that are looking to get treated for obesity as a disease, and I think that stigma and that shame associated with taking action and pharmaceutical action to treat weight loss have really been diminished, which is fantastic because I think it just really empowers people to get care.
Speaker Change #128: Is abundantly clear is that while <unk> are incredible medications I think.
Speaker Change #128: Even more incredible is that they have really changed the cultural conversation around obesity management now have.
Speaker Change #128: Tens of thousands of people coming to US every week that are looking to get treated for obesity as a disease and I think that stigma and that shame associated with taking action and pharmaceutical action to treat weight loss has really been diminished which is fantastic.
Speaker Change #128: Because I think it just really empowers people to get care and so.
Andrew Dudum: And so, you know, the awareness of the disease state as something that is treatable in and of itself is driving really tremendous interest and exploration. And then, I think on top of that, what we're seeing is that there are a lot of people that come in who are at very different stages of their process, right? Many people have, you know, come in and tried everything, and they want to be the most aggressive possible, and often that means, you know, going with something like a Zep-Bound, right?
Speaker Change #128: The awareness of the disease state is something that is treatable with it.
Speaker Change #129: <unk> is driving really tremendous interest in exploration.
Speaker Change #129: And then I think on top of that what we're seeing is there's a lot of people that come in.
Speaker Change #129: Who are at very different stages of their of their process right. Many people have.
Speaker Change #129: Come in and have tried everything and they want to be the most aggressive.
Speaker Change #130: Global and often that means.
Speaker Change #130: Going with something like.
Andrew Dudum: Highest chance of weight loss, you know, self-inject, right? These things are actually quite scary for a lot of people, and many of them come in and say, hey, I want to go a little bit slower. I want something that involves an oral medication or something that I can chew or dissolve on the tongue that might not be as extreme but is much more known and has been around for decades.
Speaker Change #130: ZIP bound rate highest chance of weight loss.
Speaker Change #130: Self inject read these things are actually quite scary for a lot of people and many of them come in and say, Hey, I want I want to go a little bit slower I.
I want something that involves an oral medication or something that I can chew or dissolve them on the tongue that that might not be as extreme but is much more known has been around for decades and.
Andrew Dudum: And we see every customer in and on that spectrum. So, there's not only, you know, a product mix that takes place, but there's really a customer mix because, in this category, it is so large that it really represents such a massive part of the country, and everybody's coming in at a very different point in their cycle and is looking to be, you know, different levels of aggressive with different types of caution and [inaudible].
Speaker Change #130: And we see every customer in between that that spectrum.
Speaker Change #130: So theres not only.
Speaker Change #130: A product mix that takes place, but theres really a customer mix.
Speaker Change #130: And this category. It is so large that it really represents such a massive part of the country and everybody coming in at a very different point in their cycle and is looking to be.
Speaker Change #130: Different levels of aggressive with different types of caution and perspective.
Speaker Change #131: Thank you.
Operator: Your next question comes from the line of Korinne Wolfmeyer from Piper Sandler. Your line is open.
Korean Wolf: Your next question comes from the line of Korean Wolf, where from Piper Sandler Your line is open.
Operator: Hey, thanks for taking the question. Could you provide a little bit of color on the cadence of signups with the GLP-1s that you saw right after launching? I know you're still in the early days, but have you seen any change in the monthly sign-ups since that launch, and then how has the retention been for those GLP-1 patients so far?
Korean Wolf: Hey, Thanks for taking the question could you opine a little bit of color on that.
Korean Wolf: <unk> are financed with the TRP ones that you saw right after lunch and I know you are still in early days, but have you seen any tons and packed in monthly fine at that lines and then how is the retention benefits SDLP line patients so far thanks.
Yemi Okupe: Yeah, thanks for the question, Korinne. I think what we've seen, you know, since the launch, and we saw this with oral medications as well, is the vast majority or overwhelming majority of folks are selecting multi-month cadences across the platform. Again, I think a lot of that is just due to the nature of truly seeing the benefits from these medications. Oftentimes, it does take longer than an individual month.
Korean Wolf: Yes, I think thanks for the question Karen I think what we have seen.
Korean Wolf: Since the launch and we saw this with the oral medications as well.
Speaker Change #133: As the vast majority or overwhelming majority of folks are selecting multi month cadences across the platform.
Speaker Change #134: Again, I think a lot of that is just due to the nature of to truly see the benefits from these medications oftentimes it does take longer than an individual month.
Yemi Okupe: Consumers do recognize that in the education process from providers and throughout the flow as they're going through the journey. I think that that dynamic, paired with the more favorable economics of the consumer with longer-term cadences that you commit to, is resulting in an overwhelming majority of consumers opting for longer duration cadences. We're very much in the early days where the product has been on the market for, you know, a little less than three months at this point.
Speaker Change #135: Consumers do you recognize that in the education process from providers and throughout the Florida as they're going through that journey I think that that dynamic paired with me.
Speaker Change #135: More favorable economics of the consumer with longer term cadences that you commit to as a resulting in an overwhelmingly majority of the.
Speaker Change #135: The consumers opting for longer duration cadences.
Yemi Okupe: I think that what we are seeing is, based upon the cadences that users are selecting, as well as the feedback that users are giving to their providers in the check-in, we are confident that retention will be very strong and sound. But that said, I think we have less than three months of data at this point. So, it is truly hard to get a meaningful read there. Great, thank you. And then, could you just let us know?
Speaker Change #135: Very much in the early days, where the product has been in market for.
Speaker Change #135: A little less than three months at this point I think that what we are seeing is.
Speaker Change #135: Based upon the cadence as it uses are selecting as well as.
Speaker Change #135: The feedback that users are giving to their providers in the chalk and we're confident that retention will be very strong and sound, but that said I think we have less than three months of data at this point. So it's really hard to get a meaningful read read there.
Yemi Okupe: And then could you just let us know that regarding the news from Lilly last week and the improvement in capacity there, did you alter your internal expectations, I guess, for both this year and next year following that announcement? Or is that kind of a non-event related to your guidance? Thank you.
Speaker Change #136: Great. Thank you and then.
Speaker Change #137: Let us note.
Speaker Change #138: Regarding the news from where we were last week and the improvement in capacity there.
Did you alter your internal expectation.
Speaker Change #139: I guess for about the CRE next year following that announcement.
Speaker Change #140: Is that kind of.
And John and thank you for thank.
John: Thank you.
Operator: Yemi might be on mute. But I would say, Korinne, I don't think there's any material expectation that that alters guidance. You know, as you can tell from the current business, the Mago Tides are the only GLP-1s currently on the offering and platform today. And so I think all of that was built into the existing forecast. And there are no further questions at this time.
Speaker Change #142: Yes, I mean, it might be on mute.
Speaker Change #143: But I wouldn't say corn, I don't think theres any material expectations at that that alters guidance.
Speaker Change #143: As you can tell from the current business and <unk> are the only <unk> currently on the offering.
Speaker Change #143: Platform today.
Speaker Change #143: And so I think all of that was was built into the existing forecast.
Operator: And there are no further questions at this time. This concludes today's conference call. Thank you for your participation. You may now disconnect.
Speaker Change #144: And there are no further questions at this time. This concludes today's conference call. Thank you for your participation you may now disconnect.
Speaker Change #144: [music].