At first glance, Hims & Hers Health, Inc. (NYSE:HIMS) delivered the kind of result that investors typically reward. Revenue grew 38%, full-year guidance was increased, and the company completed an acquisition that management says positions it as the world’s leading consumer health platform.
That made the quarter look like another strong growth report, although the higher revenue outlook came with a lower upper end for adjusted EBITDA guidance. But beneath that growth is a more difficult question for institutional investors. How much of that growth is coming from organic demand and how much is being driven by acquisitions, particularly as margins and cash flow are moving in the opposite direction?
We also recently examined whether Hims’ rapid growth can survive the margin reset created by its shift toward branded GLP-1 drugs. Read here: Hims & Hers (HIMS) Raised Guidance. Can Growth Survive Its GLP-1 Margin Reset?
The U.S. business is growing much more slowly than the consolidated company. Domestic revenue increased just 16% year over year, while Eucalyptus contributed approximately 5% of consolidated quarterly revenue after closing in June. Going forward, management expects margins to remain below comparative periods in the near term. Hims & Hers Health, Inc. reported a GAAP net loss of $86 million alongside negative cash flow of $36 million. Part of its cash needs was supported by a new $400 million convertible offering. Investors continue to look for answers as to how the company will reverse these trends.
Revenue Soars, But Margins Move the Wrong Way
Hims & Hers Health delivered roughly 38% year-over-year revenue growth, generating $753 million in revenue. As a result, management raised its full-year 2026 outlook. The company now expects $3.1 billion to $3.3 billion in revenue and $275 million to $325 million in adjusted EBITDA.
Third quarter revenue is projected to range from $880 million to $900 million. A major driver of the updated outlook is the acquisition of Eucalyptus, which closed in June. According to management, this acquisition has positioned Hims & Hers Health as the leading global consumer health platform. Eucalyptus contributed approximately $40 million in quarterly revenue, helping international sales surge 17 times year over year.
The number of hedge funds holding the stock has increased to 48 in Q2 2026, up from 43 in the prior quarter. There is certainly confidence among institutional investors that the company will improve its margins and cash flow. However, a 28.3% short interest shows the other side of the picture: the market is still betting heavily against near-term execution.
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