Q2: revenue, EBITDA and guidance all beat; GAAP EPS misses badly on $81 million of one-off legal and M&A costs
The market priced HIMS's Q2 results as a split verdict. Three lines beat: revenue of $753.2 million (up 38% year on year, 8% above consensus), adjusted EBITDA of $60.3 million (34% above) and full-year revenue guidance raised to $3.1 billion to $3.3 billion.
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But GAAP EPS of -$0.37 badly missed the -$0.05 consensus (net loss of $86.3 million), mainly because of $81 million in one-off charges for M&A (consolidating Eucalyptus), restructuring and FTC litigation provisions. The shares fell only 5.6% after hours to $29.99, a far smaller reaction than the 10.5% drop (14% over 2 days) after Q1. The market has shifted its attention from the one-off GAAP loss to the trend in EBITDA, revenue and guidance quality, and heavy short interest provided a squeeze cushion. The core divergence is unresolved: the narrative (revenue, guidance, 503A peptides) against earnings quality (gross margin down 12 percentage points to 64%, FCF negative at -$68 million, and the FTC legal tail hitting the income statement in real money). The debate over trading margin for revenue scale through branded GLP-1 volume goes on.
Key evidence
- Revenue of $753.2 million, up 38% year on year: about 8% above consensus (MarketBeat, $699 million) and about 3% above a higher estimate of $730 million. A clear beat on the top line
- GAAP loss per share of -$0.37 against a -$0.05 consensus, a gap of -$0.32 (about 640% worse). A year earlier it earned +$0.17, so this is a swing from profit to loss
- Net loss of about $86.3 million (net income was positive a year earlier)
- Adjusted EBITDA of $60.3 million against consensus of about $45 million, a beat of about 34%; EBITDA margin of 8%
- Gross margin of 64%, against 76% a year earlier (-12pp). The structural squeeze from the shift from compounded drugs to branded GLP-1s continues
- Subscribers of 2.891 million, up 19% year on year, with net adds of about 300,000. Monthly revenue per subscriber was $92, up quarter on quarter from $80 in Q1
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- Free cash flow of -$68 million (still positive at $53 million in Q1; negative this quarter)
- The report explicitly lists about $81 million of M&A, restructuring and FTC-related legal costs this quarter. They are the main reason a quarter that would have shown a small loss came in at -$0.37
- The one-off charges comprise M&A and restructuring costs from consolidating Eucalyptus, plus legal provisions related to the FTC lawsuit of 29 Jul (a $15 million probable-loss reserve was already booked in May, with more added this quarter)
- Full-year revenue guidance raised to $3.1 billion to $3.3 billion (from $2.8 billion to $3 billion; consensus about $2.93 billion). A substantial raise, ahead of consensus
- Full-year adjusted EBITDA guidance of $275 million to $325 million, a $300 million midpoint, slightly above the $291.7 million consensus
- Down 5.61% after hours to $29.99 (previous close $31.59 on 7 Aug), a much smaller move than the 10.5% fall (14% over 2 days) after Q1 results
- Truist (Jailendra Singh) reiterated Hold with a $27 target after the results. Its July transaction data had already signalled that HIMS would beat the top of its Q2 revenue guidance, and it did
- Consensus is now Moderate Buy, with an average target of about $30.65 that is already close to the share price
Catalysts to watch
- Direction of sell-side target revisions after the results (the $30.65 consensus average is already close to the share price)
- Progress in the FTC lawsuit and the size of legal provisions in coming quarters
- Progress on integrating Eucalyptus and delivering synergies
- Whether gross margin stops falling and recovers in Q3 and Q4 (64% now against 76% a year ago)
- Expansion of the 503A peptide business and branded GLP-1 unit economics
- The trend in net subscriber additions and whether monthly revenue per subscriber (ARPU) holds up
Risks
- Earnings quality keeps diverging from the narrative, and the structural 12pp gross margin squeeze may not reverse
- The FTC legal tail hits the income statement in real money and may keep eroding GAAP profit in coming quarters
- FCF has swung from positive to -$68 million; if cash burn continues at this rate, the capital structure needs watching
- Whether the model of trading branded GLP-1 volume for scale is sustainable (at the expense of margin)
- The market keeps accepting one-off charges as the explanation; if large adjustments recur next quarter, credibility will suffer
- The squeeze cushion from heavy short interest is a one-off, with no equivalent technical support from here
Sources (4)
- HIMS Q2 2026 results release, 10 Aug after the close
- Truist (Jailendra Singh) post-results note reiterating Hold, $27 target
- MarketBeat consensus: EPS -$0.049, revenue $698.9 million
- Higher consensus revenue estimate of $730 million
A brief is a lead for our research, not a verified conclusion or advice.