Hims & Hers’ Q1 earnings highlight benefits of increased marketing spending and an online/in-store presence

The news: Hims & Hers reported positive growth in its Q1 earnings report.

Key stats:

• Q1 revenues swelled 94% YoY, from $52.3 million to $101.3 million. This marked the first time Hims & Hers’ quarterly revenues surpassed $100 million.
• Hims & Hers witnessed its largest ever bump in membership this past quarter. Its subscriptions grew to 710,000 (an 82% YoY increase).
• Its massive subscription growth was attributed in part to its new mobile platform, which drove organic adoption, according to CEO Andrew Dudum.
• Hims & Hers spent $823,000 on marketing in Q1—less than half than what it spent in Q1'21 ($1.85 million).

How we got here: Hims & Hers upped marketing spend and diversified it health offerings following its public debut in 2021.

Its membership spike shows that its hefty marketing investment in 2021 paid off.

• It increased its marketing investment from $20 million in Q1 2021 to $28 million in Q3 and Q4 of 2021.

And it’s been expanding its footprint and product lines.

• It scaled its online and in-person sales to 20,000+ retail locations via partnerships with CVS, Walgreens, Walmart, GNC, Bed Bath & Beyond, Amazon, and fashion retailers Revolve and Urban Outfitters.
• It acquired virtual dermatology startup Apostrophe and UK-based virtual hair loss clinic Honest Health in June 2021.
• And it expanded its digital mental health offerings in July 2021.

What’s next? Rising inflation and the slowdown of pandemic-era economic growth could make it harder for Hims & Hers to meet sales expectations and membership growth milestones.

The company’s omnichannel presence could cushion it from a sales slump, though.

• 80% of consumers prefer to use digital channels (like online messaging and virtual appointments) when communicating with their healthcare providers at least some of the time. 44% prefer it a majority of the time, per Redpoint Global’s December 2021 research.
• Most of Hims & Hers’ revenues in Q1 came from its online sales ($94.1 million) vs. its retail sales ($7.2 million).