Hims & Hers Founder & CEO Andrew Dudum joins Yahoo Finance Live to discuss health care costs and birth control access in a post-Roe world.
BRIAN SOZZI: Shares of Hims & Hers are in focus today, after seeing an 87% rise in revenue for the second quarter. The company ended the quarter with 817,000 subscribers. The health company also lifted its guidance for the full year, and predicted adjusted EBITDA profitability within the next four quarters.
Joining us now to discuss is Hims & Hers founder and CEO, Andrew Dudum. Andrew-- Andrew, been a while. Good to see you, again, here this morning. So good conference call, I would say, for you guys last night. But we're seeing a lot of consumer companies, notably online, warn about slowdowns in their business. What are you seeing?
ANDREW DUDUM: Yeah, you know, I think we're in this really fortunate position, Brian-- and thanks for having me on-- that we have an incredible amount of opportunity to grow. And you see that in this last quarter, right? We are growing this business close to 100% year to date, with close to 80% gross margins. These are records for us across the business, across all of the metrics we have.
While also organically given kind of this overperformance, getting to a point where we can really confidently say that we're an accelerated path to adjusted EBITDA profitability. And this is not us pivoting towards profitability, but just frankly, the scale of the business, the underlying efficiency of the model is getting us to a point that at the high end of guidance in Q4, we can actually achieve that profitability metric.
And so, you know, we're really fortunate, I think, to be able to be in a position where we are offering something to the consumers that is very close to their core. It's very emotionally resonant. It's things like mental health services, things like sexual health services for their partner and them, you know, products to help them feel good and confident in their skin. And ultimately, these are driving really sticky relationships which creates, I think, an opportunity for us to scale through these types of times.
BRAD SMITH: Take us into the pricing strategy that would actually allow you to continue to hold on to some of those profitability ambitions in this near term.
ANDREW DUDUM: Yeah, you know, I think it's important to remember that Hims & Hers was founded in a lot of ways to overcome some of the complexities and pain points that people suffer, and in a lot of ways suffer disproportionately during recessionary times. This is the fact that healthcare is expensive. It's low convenience. It's hard to get access to. It's highly stigmatized.
All of these things get worse when the pocketbook is strained, when people are at home, when they're stressed. And so you know, what we're able to deliver is price points at Hims & Hers for $20 or $30 a month for a range of services across all of our brands and across all of our major conditions. But these are cash pay prices that are cheaper than in most situations than the copay on their insurance plan.
And that's an incredible statement, right? We are able to deliver, given the kind of consumer-centric vertical platform we've built, start-to-finish healthcare cheaper than insurance. And so during recessionary times, I think we are actually incredibly well positioned to really disproportionately take share and build that brand equity because we're really delivering on something people need.
And the alternative, which is high deductible insurance plans, are really difficult for people. And the majority of our customers, and the majority of this country is plagued with those types of plans.
JULIE HYMAN: Andrew, we've been talking a lot about the slowing of hiring, the layoffs that's been going on in tech land, particularly in places like startups. It seems like, I mean, just looking at these results and judging by what you're saying, you're not in that mode. You're not in a belt-tightening, pulling back mode. But tell me what's going on there?
ANDREW DUDUM: No, that's absolutely right. We are really leaning in. And I think it's a testament to the underlying efficiency of this model. Right? If you think about it, we have now close to over 800,000 subscriptions that are paying us monthly or quarterly for incredibly deep, emotionally resonant needs.
This is a 90% recurring revenue business. So any customer that we've acquired last quarter or the quarter before is gonna be paying real dividends in our ability to have productivity in the next couple of quarters and next year. And so when we look at our cohorts, when we look at the retention rates of our business, they're strong. They're very sticky. Our acquisition is growing at all-time highs across the business.
And so I think we really find ourselves in a fortunate position of being able to diversely grow across many of our categories all of which live under this brand of Hims & Hers that we think is really important. Something that, again, solves people's deepest concerns. And ultimately, customers are voting with their wallets right now.
BRIAN SOZZI: Andrew, you mentioned something towards the end of your earnings call last night, a pickup in birth control sales in the wake of Roe versus Wade. Take us through that. Do you have ample supply? What are you seeing on the platform?
ANDREW DUDUM: You know, we have ample supply. This is something we've had on the Her's platform for a very long time, close to a dozen or so contraception options. And we price these near break even. And so they're incredibly reasonable for people.
You know, what happened with Roe v. Wade, we are very interested in figuring out how we can continue to empower people to get the best access to healthcare. That's the mission of this business, right? To help you feel great through the power of better health. And so breaking down stigmas, breaking down access, breaking down price point barriers, this is what we work for every single day.
And so we're excited that we have, you know, a platform in Hers that can really deliver on the contraception needs in this country. And then are obviously looking at other ways that the platform can benefit women in need across the spectrum when it comes to these types of issues.
JULIE HYMAN: And forgive me for not knowing this, Andrew, but on that same point, do you offer Plan B or an alternative drug to that on the platform?
ANDREW DUDUM: You know, we currently don't offer Plan B or abortion prescription services. This is something that is really tightly being litigated, and I think from a regulatory standpoint is going to be changing quite dramatically in the coming quarters.
So it's something that we're watching really closely. It's something that I think our customers would be energized by. But again, we're just kind of learning and watching right now, and really leaning into the contraception side, which we know is very much in demand.
BRIAN SOZZI: All right, we'll leave it there for now. Andrew Dudum, Hims & Hers founder and CEO, always good to see you. We'll talk to you soon.