Hims & Hers Posts Negative Reported EBITDA for Two Consecutive Quarters Amid Margin Declines
Gross margins at Hims & Hers have declined for eight consecutive quarters, dropping from 79% in September 2024 to 64% by June 2026. Despite a 40% year-over-year revenue increase to $753 million during the latest quarter, reported EBITDA turned negative at -8.8%, contrasting with an adjusted figure of 8%. The company is relying on its AI-native care platform in the Hers weight loss business—launched in July—to improve efficiency and close this gap within 12-18 months. Management has guided for a return to near 12% adjusted EBITDA margins by Q4, but investors are scrutinizing whether these improvements will materialize before cash flow pressures emerge. The reported losses have been partially masked through adjustments that excluded $81 million in costs related to the Eucalyptus acquisition and restructuring efforts. The challenge lies not just in improving adjusted metrics but proving that AI-driven efficiencies can reverse declining gross margins across a business still prioritizing growth over profitability.
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