Investing.com -- Hims & Hers Health (NYSE:HIMS) reported third-quarter earnings that surpassed analyst expectations and raised its full-year guidance, driven by strong subscriber growth and improving profitability.
Shares in the health and wellness platform surged by more than 11% in premarket US trading following the release.
Adjusted earnings per share came in at $0.32, beating the analyst estimate of $0.10. Revenue for the quarter came in at $401.6 million, up 77% versus the prior year period and exceeding the consensus estimate of $382.2 million.
Hims & Hers saw its subscriber base grow to 2.0 million, a 44% increase year-on-year. The company noted that over 1 million subscribers are now utilizing personalized solutions.
"Our execution against a strategy that brings customers convenient, transparent, and affordable access to care designed specifically for them is allowing us to reach millions of individuals across the country," said Andrew Dudum, co-founder and CEO.
For the fourth quarter, Hims & Hers expects revenue between $465 million and $470 million, above the consensus of $421.1 million. The company raised its full-year 2024 revenue guidance to a range of $1.460 billion to $1.465 billion, up from the previous analyst consensus of $1.4 billion.
CFO Yemi Okupe highlighted the company's improving profitability, stating, "[o]ur model is rapidly gaining scale, driving accelerating top line growth, improving profitability and strong cash flow."
Analysts at Baird noted that the firm is benefiting from GLP-1 drugs, a class of weight-loss and diabetes medications that have seen a spike in popularity. However, Hims & Hers executives did not explicitly quantify how much of contribution GLP-1s are making to the business.
Hims & Hers's stock price had been dented recently after federal drug regulators said Eli Lilly (NYSE:LLY)'s blockbuster weight-loss and diabetes medications are no longer considered to be in shortage.
Major drug companies, including Eli Lilly and rival Novo Nordisk (NYSE:NVO), have struggled to keep up with the soaring demand for GLP-1 drugs, which have been shown to help patients lose up to 20% of their weight on average.
Because of the shortage, US regulators have allowed other businesses to make compound versions, or close recreations of brand-name medicines.
Hims & Hers is one such compounder, offering an injection of semaglutide -- the key ingredient in Novo Nordisk's popular Wegovy drug -- for $199 per month to patients on a 12-month plan, according to its website.
However, the Food and Drug Administration has said that tirzepatide -- the medication Eli Lilly markets as Zepbound for weight loss and Mounjaro for diabetes -- is no longer in short supply in the US, ending a shortage classification it first put in place in 2022.
Analysts have noted that Hims & Hers will not be directly impacted by the FDA's decision because it compounds semaglutide, which remains on the FDA's shortage list. But they flagged that the announcement constrains Hims & Hers's future total addressable market and "portend[s] a faster-than-anticipated resolution to shortages."
(Senad Karaahmetovic contributed reporting.)