Hims & Hers Health, Inc. (NYSE:HIMS) Q2 2023 Earnings Call Transcript

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Andrew Dudum : Thanks Jack. So on the cardio side this is one we’re really excited about, because I think it does a couple of things. One, it does to your point massively expand I think the value and differentiation of the platform for that older demographic, right? There’s a tremendous overlap with erectile dysfunction and cardiovascular disease. In fact, as we’ve shared in the release last week, erectile dysfunction is often an early indicator of cardiovascular disease. So the ability to expand in that older audience is something we’re really thrilled by. But also in general, we are seeing tens of thousands of men on the platform today, of which we’ve shared 30% of those men are at risk of heart disease. And so they could be a couple of years away from a heart attack or stroke and most of them are completely unaware of it.

And so this launch, I think brings together really what we do best which is partnering with great clinical excellence the American College of Cardiology and LabCorp innovation with this dual capability, which allows our providers to personalize treatment with these statins that are incredibly well tested and safe with base EV medications. And you can imagine that, this heart support could eventually be added on to other categories mental health or hair care or women’s products as well for people at risk. And ultimately, I think meaningfully adhere increase adherence to this preventative treatment and ultimately I think actually hopefully save tens of thousands of heart attacks from happening and eventually tens of thousands of lives. And so from a pricing standpoint to kind of round this out our aim is to make this as accessible as possible.

I think as Yemi shared, we’ve been able to meaningfully lower prices in the last couple of months and aim to continue to do so for some of our higher value product bundles, while still maintaining and expanding to record high 82% gross margins. So the operational efficiency and excellence within the business is really humming in a way that’s allowing us to take a lot of this value and innovation and pipe it right back into the customers well in a way that allows us to capture more and more competitive market share. And so with heart health by hand, this will be priced at a premium from the core base treatments that are personalized, but at a slight premium. There’ll be still a very mass market very accessible. And our aim is to make it such that that price is never the reason why you’re choosing the treatment that is truly right for you versus the one that might be a little bit cheaper.

Jack Wallace: Got you. That’s helpful. Thanks. And then Yemi, you mentioned that the marketing environment was a little difficult in the front half of the quarter and there was an elevation of investments in the back half. When you mentioned the difficult marketing environment and thinking about this in the context of the price changes, was there any pickup in churn rates that you’re also responding to, or was it just simply some of the — so the key areas you play in with marketing dollars just got more expensive or the consumer is pulling back? Just trying to get some — a better understanding for the — let’s call it the environment dynamics. Thanks.

Yemi Okupe: Yes Jack. I think it’s a great question. I think it was — the environment was in line with what we expected for Q2. And in Q1 we definitely saw some surprising favorability that was unanticipated. Before we make pricing changes, we do a lot of research and experimentation. And so, those changes were effectively months in the making, just because we do want to use prices more of a precise tool versus lots of conservative [ph]. We’re very much disconnected effectively like what we do look to when we institute pricing changes as a few consumers basically value those changes. They’re very likely to retain on the platform for a longer period of time. And then lastly, because we have so many different cohorts of users that are selecting different products, we’re really able to dial in what are the highest LTV products.

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