Hims & Hers CFO: Business momentum is ‘some of the strongest we’ve seen’
Hims & Hers CFO Yemi Okupe joins Yahoo Finance Live to discuss business and subscription growth, reaching more consumers, removing the stigma around sexual health and reproductive conditions, and weathering an economic downturn.
Video Transcript
BRAD SMITH: Shares of Hims & Hers Health in focus following a Q3 earnings beat that saw the online personal care company add a record 174,000 subscribers in the last three months. We're joined now by Hims & Hers CFO, Yemi Okupe. Yemi, great to have you here with us on the program today. When you think back to this quarter and catalysts for some of the success that you saw and the membership growth, what would you point to?
YEMI OKUPE: Yeah, thanks a lot for having me. Really, the business momentum is some of the strongest that we've seen. In terms of what's driving the growth, it really is execution across all of our key pillars. We oftentimes speak to the three things that really power enable the business. And that really is enabling technology to bring a best in class experience to consumers, really with an eye towards removing some of the friction in the ecosystem.
And so what we aim to do is make health and wellness more accessible to consumers. And we're really seeing that resonate across the ecosystem with the consumers that we serve.
BRIAN SOZZI: And Yemi, a big call out by the team on the earnings release about achieving adjusted operating profits in that fourth quarter. And you're also mentioning you're seeing significant leverage in the business. Where is that coming from? Has there been a restructuring in the business at all?
YEMI OKUPE: No, really, it's what we speak to around just the organic momentum of the business, the momentum of some of the strongest we've ever seen in our history. So we're adding a record number of subscriptions to the platform. Now we almost have 1 million users on the platform. And what that's driving is economies of scale, where we're getting leverage across a multitude of different areas, everything from our operations to the way that we spend.
And so, really, it's a reflection of the implementation of a rigorous capital allocation framework that we oftentimes point to where we're just seeing very rapid payback periods on our investments.
BRAD SMITH: You also raised your guidance and your outlook for the full year of 2022. Thinking through the largest trends that you're seeing right now and how they would even continue to hold going into a recessionary environment, you know, where do you kind of position the business in order to withstand any of those pressures?
YEMI OKUPE: Yeah, it's a great question. Really, we're building a generational brand. And what we do see is that we deal with some of the most emotionally resonant conditions that really touched the lives of so many different people. So whether that's your mental health, sexual health, or hair loss, the way that you look and feel every day, we're fundamentally helping enable consumers to look and feel their best.
And I think as a result of that, we're tapping into such a large market opportunity that I think that's able to transcend many of the macroeconomic factors that are going on out there. And so really, we do believe that we have the ability to serve an individual in every household. So whether you're dealing with hair loss-- that's not necessarily top of mind for me-- or skin care in your anti-aging process, there's so many different things and ways that we can touch consumers. And that's really showing up in the results that we're seeing.
BRIAN SOZZI: I saw what you did there, Yemi. We all picked up on it. Well done. Well done, sir. I was on your website this morning. And when did you guys get into to sexual health products? And what else what's the next frontier in that market for you?
YEMI OKUPE: Yeah, really, what we're trying to do is destigmatize conditions that have traditionally been stigmatized. And so the sexual platform has been actually one of our longest tenured offerings. We started with men's sexual health in erectile dysfunction and have since broadened the offering, not just in sexual health, but also across a multitude of categories that impact how consumers look and feel about themselves each day.
BRAD SMITH: Yemi, one of the other areas that we've continued to track over the course of this year that is certainly perhaps in the minds of some Americans as they do head to the ballot is reproductive rights. And Hers is one of the parts of the business that does have a product that directly correlates to their family planning or sexual health.
For women, you know, how do you look across the midterm elections even right now? And what may be going through Americans' minds and really kind of annex your own business and what you're seeing, more broadly, in not just the market environment, how you engage with consumers and where you believe that they may actually place some of their intentions with regard to matters that impact your business as well?
YEMI OKUPE: Sure. We definitely have recently seen an uptick in the interest for contraceptive services across the Hers platform. Really, what we've been able to do, again, is just remove friction from whatever consumers are interested in. And so we believe that the brand that we have and the experience that we have is able to transcend a multitude of different political environments. But we are closely watching and monitoring what consumers are actively seeking from us.
BRIAN SOZZI: In a recession, have you stress tested the business? What happens to subscriptions if we get a mild recession?
YEMI OKUPE: Yeah, I think that what we've seen thus far really is that the overall business model is largely resistant. And what we see is we serve some of the conditions that impact the way that consumers look and feel about themselves each day. And so as a result of that, we are seeing a continued interest. And throughout a multitude of macroeconomic conditions, we've been able to continue to deliver a strong performance. And we're confident that based upon the overall experience that we provide across our platform, we'll be able to do that in any type of macroeconomic environment.
