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

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As we started to see the benefits from scale and our gross margin started to expand, we made the decision to put some of that back into additional customer value. As Andrew mentioned before, we’re really looking to make the first lot products mass market, because the objective is really to have our users for a period of decades.

Jack Wallace: Yes. Awesome. Thank you, guys.

Yemi Okupe: Thanks Jack.

Operator: Your next question comes from Michael Cherny with Bank of America. Your line is open.

Michael Cherny: Good afternoon. Thanks for taking the question. Maybe if I can go back to weight management. I know you talked about GLP-1 products not being available off the bat. But how are you thinking about the characterization of maybe help of the weight management 2.0, given the high demand for the products as well as the logistics that come with an area such as cold storage, for example, on GLP-1s that you may not be as focused on today?

Andrew Dudum: Thanks Michael. Yes, a great question. I think there’s a tremendous amount of excitement internally relating to GLP-1s. And both the existing products that are in market as well as frankly the dozen or two dozen that are in the pipeline today and finishing up clinical trials that I think will likely bring to market an oral, some might blue ties [ph] and ones that have hopefully improved efficacy. So without question these are here to stay and the platform is being built in such a way that enables it, including the affiliated pharmacy operational side as you mentioned the cold storage necessity. That’s something that we don’t feel will be a concern with our operational side. I think the real reason just being really transparent is just the consistency of being able to deliver a world-class experience to our patients and our customers just doesn’t feel quite there yet with this offering.

And I think you’re seeing that from peers in the market, who are pulling back on this offering or turning it off as a result inconsistent supply chain issues or the fact that I think it’s 1% or 2% of all those individuals eligible to actually get reimbursed or actually achieving reimbursement. The fact that in the last couple of months, there’s tremendous amount of new side effect profiles that are coming out. The reality is that the medicines are only nine to 12 months old and have only been studied for that duration. And so we hold clinical excellence and the trusted brand pillars kind of in the highest regard in the company, that’s our greatest asset here over the long haul and want to make sure that everything we bring to market is going to deliver a seamless, effective and safe offering for patients.

And right now, I just don’t think we have that confidence. So we’re staying close to it. We’re working with our clinical advisers to make sure that we are up to speed on how things are evolving. Without question, they will be a part of the platform in some form in the future as a lot of these issues get worked out and hopefully the next generations as well, but likely won’t be available there on launch by the end of this year.

Michael Cherny: Understood, and I appreciate the perspective there, Andrew. And then maybe as a second question I fully appreciate if it’s one that’s hard to answer. But beginning of the year you gave the 2025 targets, $1.2 billion, $100 million of revenue. And I very much understand the emphasis on at least which I think was underlined bolded in your presentation, so I get that. And that being said, this is the second straight quarter of being raised on a pacing perspective, you’re tracking well ahead of there and that’s before market expansion. So, I guess what should we think about in terms of when you plan to update that one way or the other or discuss further changes based on the fact that you’re now also expanding your near-term TAM?

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