Hims(HIMS)2024-02-27 00:55Financial Data and Key Metrics - Revenue increased 65% year-over-year to 1.2 million [43] - Adjusted EBITDA increased 68% quarter-over-quarter in Q4 2023 to almost 100 million in revenue by 2025 [38] Market Data and Key Metrics - The company serves over 100 million individuals in the U.S. alone across its core specialties [20] - The company is targeting a long-term adjusted EBITDA margin of 20% to 30%, with expectations to reach low to mid-teens by 2027 [60] - Marketing as a percentage of revenue is expected to be in the mid-30s to low-40s by 2030 [60] Company Strategy and Industry Competition - The company is focused on expanding its portfolio of personalized solutions and improving the efficiency of affiliated pharmacies [55] - The strategy includes leveraging AI capabilities to inform new solutions and match users with the right treatments [37] - The company aims to bring tens of millions of users onto its platform, targeting mass-market pricing and convenience [42] - The company is confident in its ability to drive marketing leverage over time, with expectations of 1 to 3 points of marketing leverage per year starting in 2024 [64] Management Commentary on Operating Environment and Future Outlook - The company expects revenue in the range of 1.2 billion for 2024, representing a year-over-year increase of 34% to 38% [57] - Adjusted EBITDA for 2024 is expected to be between 120 million, with an adjusted EBITDA margin of 9% at the midpoint [57] - The company is on track to achieve its 2025 targets of 100 million in EBITDA one year early [22] - The company is focused on removing barriers to treatment, such as lack of awareness, accessibility, and affordability, and expects personalization to be key in 2024 [27] Other Important Information - The company released its first-ever shareholder letter, available on its website [13] - The company uses non-GAAP financial measures, with reconciliation tables provided in the press release and shareholder letter [15] - The company ended 2023 with 41 million from the end of 2022 [55] Q&A Session Summary Question: Pricing Actions and Market Dynamics (George Hill, Deutsche Bank) - The company evaluates pricing actions based on experimentation and optimization of lifetime value analysis, rather than comparing to external factors [6][7] - The company is focused on leveraging scale and efficiency to pass value back to consumers over time [10] Question: Gross Margin Trajectory (Korinne Wolfmeyer, Piper Sandler) - Gross margins are expected to expand in 2024, with a long-term target of 75% [9] - The company is actively looking for ways to pass efficiencies back to consumers, but this will be a multiyear journey [10] Question: Emerging Categories and Marketing Spend (Allen Lutz, Bank of America) - The company is seeing strong adoption of personalized offerings in emerging categories like Hers dermatology and weight loss, with high retention rates [65] - Marketing spend is increasingly becoming semi-fixed, with expectations of greater leverage in 2024 and beyond [61] Question: Retention Rates and User Base (Daniel Grosslight, Citigroup) - The company is focused on maintaining a payback period of less than a year for customer acquisition costs [72] - Personalized solutions are driving higher retention and stickiness on the platform [87] Question: Weight Loss Product Offering (Glen Santangelo, Jefferies) - The company is offering personalized weight loss treatments at 47 million in free cash flow in 2023 and ended the year with $221 million in cash and short-term investments [142] - The company is focused on internal investments in affiliated pharmacies and personalized solutions, with potential for opportunistic M&A [136] Question: Gross Margin and Pricing Strategy (Michael Cherny, Leerink Partners) - The company is targeting a long-term gross margin in the mid-70s, with a focus on mass-market pricing and segmented offerings [166] - The company is running experiments to determine the optimal pricing mix to pass value back to consumers [153] Question: Subscriber Growth and Product Adoption (Ivan Feinseth, Tigress Financial Partners) - The company has seen rapid adoption of personalized treatments, with over 30% of subscribers on the platform using personalized offerings [170] - The company is focused on expanding its subscriber base and innovating with multi-condition treatments [159]