"A path to profitability"
It's what investors are demanding in this climate.
hims & hers is actually doing it:
hims & hers operates in telehealth.
It gets people video chat doctor's for stuff they may not otherwise want to talk to a doc in person about:
· Erectile Dysfunction
· Hair Loss
· Mental Health
Then it gets them subscriptions.
It's shown 5 main drivers on its path to profits:
Driver 1: Subscriptions are growing nicely
Growing subscribers is the number one engine of its growth story.
They are up 87% year over year.
It continues to grow them via marketing (up 102% yoy).
It's also grown rev / sub 10%.
Driver 2: It's kept a lid on costs
Many of the other 2021 newly public companies have seen ballooning stock-based comp and other operating costs.
hims & hers hasn't.
SBC was actually down yoy.
That's far different from other 2021 market entrants.
Driver 3: The company is showing leverage
Revenue was up 97% but operating costs were only up 72%.
For every operating dollar spent, it's able to generate more revenue than last year.
This fundamental operating leverage is driving the company toward profitability as it scales
Driver 4: The economics for these products is quite nice
Many of the drugs hims & hers sales are generics.
These are proven products, like Viagra, that work.
But it's able to produce them without R&D.
Gross margin of 79% enables the company to re-invest in marketing.
Driver 5: It's building for a specific audience
hims & hers is a smaller niche player in telehealth.
It's building for millenials and city-folk who like its simple, modern branding.
By staying true to its core, it's able to eat away share from the leader, Teladoc.