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What changed in Hims & Hers Health, Inc.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of Hims & Hers Health, Inc.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+727 added−518 removedSource: 10-K (2026-02-23) vs 10-K (2025-02-24)

Top changes in Hims & Hers Health, Inc.'s 2025 10-K

727 paragraphs added · 518 removed · 440 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

92 edited+87 added−27 removed64 unchanged
Biggest changeIf we begin accepting reimbursement payments from insurance providers or other third-party payors such as a government program, we will become subject to some of these additional healthcare laws and regulations. Irrespective of our business model, the healthcare industry is subject to changing political, economic and regulatory influences that may affect health and wellness companies like Hims & Hers.
Biggest changeBecause of this approach, we are not subject to many of the laws and regulations that impact other participants in the healthcare industry in these jurisdictions. If we begin accepting reimbursement payments from insurance providers or other third-party payors such as a government program in these jurisdictions, we will become subject to some of these additional healthcare laws and regulations.
Corporate practice of medicine laws in the U.S.; Fee splitting In certain jurisdictions, the corporate practice of medicine doctrine generally prohibits non-physicians from practicing medicine, including by employing physicians to provide clinical services, directing the clinical practice of physicians, or holding an ownership interest in an entity that employs physicians.
Corporate practice of medicine laws; Fee splitting In certain jurisdictions, including in the U.S., the corporate practice of medicine doctrine generally prohibits non-physicians from practicing medicine, including by employing physicians to provide clinical services, directing the clinical practice of physicians, or holding an ownership interest in an entity that employs physicians.
Regulation of medical and wellness products Certain of the products available through our platform, including prescription pharmaceuticals, over-the-counter drugs, over-the-counter devices, cosmetics, and dietary supplements, and the third-party suppliers and manufacturers of these products (“Manufacturing Suppliers,”) which manufacture and/or supply certain of our products or product ingredients, including compounded glucagon-like peptide-1 receptor agonists (“GLP-1s”), to the Pharmacies, are subject to extensive regulation by the FDA and international, federal, state, and local authorities.
Regulation of medical and wellness products Certain of the products available through our platform, including prescription pharmaceuticals, over-the-counter drugs, prescription medical devices, over-the-counter medical devices, wellness products, cosmetics, and dietary supplements, and the third-party suppliers and manufacturers of these products (“Manufacturing Suppliers,”) which manufacture and/or supply certain of our products or product ingredients, including compounded glucagon-like peptide-1 receptor agonists (“GLP-1s”), to the Pharmacies, are subject to extensive regulation by the FDA and international, federal, state, and local authorities.
Further, we have committed to, and formalized, employee development programs that are focused on feedback, coaching and employee development. Programming includes a formalized performance review process that includes a self-evaluation process, peer-evaluation process and a manager self-evaluation process, together with training and resources on how to approach these evaluations.
Further, we have committed to, and formalized, employee development programs that are focused on feedback, coaching, and employee development. Programming includes a formalized performance review process, a self-evaluation process, peer-evaluation process, and a manager self-evaluation process, together with training and resources on how to approach these evaluations.
We evaluate the data obtained through employee feedback to architect learning pathways and experiences that are truly valuable to our employees. We have regular people manager training and labs as well as effective communication training across the organization. We are continually working to improve our processes and policies to align with our growing and evolving workforce.
We evaluate the data obtained through employee feedback to architect learning pathways and experiences that are truly valuable to our employees. We have regular people manager training as well as effective communication training across the organization. We are continually working to improve our processes and policies to align with our growing and evolving workforce.
FDA regulations relating to the advertising and promotion of prescription and over-the-counter drugs, including prescription compounded drugs, also require that promotional materials for prescription drugs not be false or misleading. Failure to comply with FDA requirements can result in a prescription drug being deemed misbranded under the FDCA.
FDA regulations relating to the advertising and promotion of prescription and over-the-counter drugs, including prescription compounded drugs, require that promotional materials for prescription drugs not be false or misleading. Failure to comply with FDA requirements can result in a prescription drug being deemed misbranded under the FDCA.
Our integrated technology platform allows us to serve our customers efficiently from start to finish: initially from customer discovery and purchase of offerings on our websites and mobile application, to connecting customers with medical providers for telehealth consultations, to the fulfillment and delivery of customer orders, and finally through ongoing clinical management by medical providers.
Our integrated technology platform allows us to serve our customers efficiently from start to finish: initially from customer discovery and purchase of offerings on our websites and mobile applications, to connecting customers with medical providers for telehealth consultations, to the fulfillment and delivery of customer orders, and finally through ongoing clinical management by medical providers.
The Affiliated Medical Groups and their providers maintain exclusive authority regarding the provision of healthcare services (including 6 Table of Contents consults that may lead to the writing of prescriptions) and remain responsible for retaining and compensating their providers, credentialing decisions regarding their providers, maintaining professional standards, maintaining clinical documentation within medical records, establishing their own fee schedule, and submitting accurate information to us so that we can bill customers.
The Affiliated Medical Groups and their providers maintain exclusive authority regarding the provision of healthcare services (including consults that may lead to the writing of prescriptions) and remain responsible for retaining and compensating their providers, credentialing decisions regarding their providers, maintaining professional standards, maintaining clinical documentation within medical records, establishing their own fee schedule, and submitting accurate information to us so that we can bill customers.
The convenience of our websites and mobile application allows us to reduce stigma and access-related barriers that frequently prevent consumers from seeking medical care, expanding the Company’s market opportunity. Organic growth is enhanced by sophisticated omnichannel acquisition strategies meant to target future customers with condition-specific on-ramps at profitable returns on investment.
The convenience of our websites and mobile applications allows us to reduce stigma and access-related barriers that frequently prevent consumers from seeking medical care, expanding our market opportunity. Organic growth is enhanced by sophisticated omnichannel acquisition strategies meant to target future customers with condition-specific on-ramps at profitable returns on investment.
The administrative services and support we provide include IT products and support, including the Hims & Hers platform and electronic medical record system, billing and collection services, non-clinical 4 Table of Contents personnel, customer service support, administrative support for provider credentialing and quality assurance, and other non-clinical items and services, including access to a line of credit we make available to the Affiliated Medical Groups as necessary to support their operations.
The administrative services and support we provide include IT products and support, including the Hims & Hers platform and electronic medical record system, billing and collection services, non-clinical personnel, customer service support, administrative support for provider credentialing and quality assurance, and other non-clinical items and services, including access to a line of credit we make available to the Affiliated Medical Groups as necessary to support their operations.
The Federal Food, Drug and Cosmetic Act (“FDCA”), and FDA’s implementing regulations, set forth, among other things, requirements for the testing, development, manufacture, quality control, safety, effectiveness, approval, labeling, storage, record-keeping, reporting, distribution, import, export, advertising, and promotion of many of the products offered on our platform.
The Federal Food, Drug and Cosmetic Act (“FDCA”), and FDA’s implementing regulations, set forth, among other things, requirements for the testing, development, manufacture, quality control, safety, effectiveness, approval, labeling, storage, 8 Table of Contents record-keeping, reporting, distribution, import, export, advertising, and promotion of many of the products offered on our platform.
While we believe the compounded drug products available through our platform meet the requirements for exemption under Section 503A or Section 503B of the FDCA, as applicable, if the FDA were to determine that such products do not meet the requirements for exemption, the FDA could subject us, the Pharmacies, Partner Pharmacies, Affiliated Medical Groups, Providers, Facilities, or Manufacturing Suppliers to regulatory and/or legal enforcement actions, including the issuance of a warning letter, injunction, seizure, civil fine, and criminal penalties.
While we believe the compounded drug products available through our platform meet the applicable requirements for exemption under the FDCA, if the FDA were to determine that such products do not meet the requirements for exemption, the FDA could subject us, the Pharmacies, Partner Pharmacies, Affiliated Medical Groups, Providers, Facilities, or Manufacturing Suppliers to regulatory and/or legal enforcement actions, including the issuance of a warning letter, injunction, seizure, civil fine, and criminal penalties.
For example, the federal anti-kickback law (the “Anti-Kickback Law”) prohibits, among other things, knowingly and willfully offering, paying, soliciting, receiving, or providing remuneration, directly or indirectly, in exchange for or to induce either the referral of an individual, or the furnishing, arranging for, or recommending of an item or service that is reimbursable, in whole or in part, by a federal health care program.
For example, the federal anti-kickback law (the “Anti-Kickback Law”) prohibits, among other things, knowingly and willfully offering, paying, soliciting, receiving, or providing anything of value, directly or indirectly, in exchange for or to induce or reward either the referral of an individual, or the furnishing, arranging for, or recommending of an item or service that is reimbursable, in whole or in part, by a federal health care program.
The information on our websites is not, and will not be deemed to be, a part of this Annual Report on Form 10-K or incorporated into any of our other filings with the SEC, except where we expressly incorporated such information.
The information on our websites and social media accounts is not, and will not be deemed to be, a part of this Annual Report on Form 10-K or incorporated into any of our other filings with the SEC, except where we expressly incorporated such information.
We also reach our customers through our own social media accounts, press coverage and public relations, internally developed educational and lifestyle content, presence in brick-and-mortar retail stores, and physical brand advertising campaigns. This overall strategy drives significant customer traffic to our platform, including direct type-in traffic and organic online search traffic.
We also reach our customers through our own social media accounts, press coverage and public relations, internally 14 Table of Contents developed educational and lifestyle content, presence in brick-and-mortar retail stores, and physical brand advertising campaigns. This overall strategy drives significant customer traffic to our platform, including direct type-in traffic and organic online search traffic.
We offer access to certain prescription generic, brand-name and compounded medications, including certain sterile compounded medications. The majority of prescriptions for these medications are fulfilled through our affiliated pharmacies. We also offer over-the-counter drug and device products and cosmetics and supplement products, which are primarily focused on general wellness, skincare, sexual health and wellness, and hair care.
We offer access to certain prescription generic, brand-name and compounded medications, including certain sterile compounded medications. The majority of prescriptions for these medications are fulfilled through our wholly-owned pharmacies (“Pharmacies”). We also offer over-the-counter drug and device products and cosmetics and supplement products, which are primarily focused on general wellness, skincare, sexual health and wellness, and hair care.
We are not bound by any exclusivity or minimum order requirements with respect to our use of any Partner Pharmacy, and have the ability to utilize other pharmacies, including the Pharmacies, at our discretion. The contractual arrangements with the Partner Pharmacies are typically for one-year terms with automatic renewals, subject to standard termination rights of the parties.
We are generally not bound by any exclusivity or minimum order requirements with respect to our use of any Partner Pharmacy, and have the ability to utilize other pharmacies, including our Pharmacies, at our discretion. The contractual arrangements with the Partner Pharmacies are typically for fixed terms with automatic renewals, subject to standard termination rights of the parties.
During the past several years, the healthcare industry has been subject to an increase in governmental regulation and subject to potential disruption due to legislative initiatives and government regulation, as well as judicial interpretations thereof, and changes in regulatory policy and leadership.
During the past several years, the healthcare industry has been subject to increased governmental regulation and potential disruption due to legislative initiatives and government regulation, as well as judicial interpretations thereof, and changes in regulatory policy and leadership.
Although we periodically monitor the FDA compliance of our third-party manufacturers, we cannot be 7 Table of Contents certain that our present or future third-party manufacturers will consistently comply with cGMP and other applicable FDA regulatory requirements.
Although we periodically monitor the FDA compliance of our third-party manufacturers, we cannot be certain that our present or future third-party manufacturers will consistently comply with cGMP and other applicable FDA regulatory requirements.
As a result, we must continually monitor legislative, regulatory, and judicial developments regarding the practice of medicine, telehealth and pharmaceutical laws in order to support the Affiliated Medical Groups and the Pharmacies.
As a result, we must continually monitor legislative, regulatory, and judicial developments regarding the practice of medicine, telehealth and pharmaceutical laws in order to support the Affiliated Medical Groups, the telehealth operations of our subsidiaries and the Pharmacies.
We advertise on digital media, social media, television, radio, out-of-home media, and various other media channels. We believe advertising in a diversified set of media channels is important to prevent overreliance on any single channel and to maximize the exposure of our brands to our desired customers.
We advertise on digital media, social media, television, radio, out-of-home media, and various other media channels. We believe advertising in a diversified set of media channels, in compliance with applicable laws, is important to prevent overreliance on any single channel and to maximize the exposure of our brands to our desired customers.
We have relationships with leading health systems including, as of December 31, 2024, Ochsner Health, Mount Sinai Health System, Carbon Health, ChristianaCare Health System, and Hartford Healthcare to provide a clinically focused, telehealth-enabled patient care collaboration. These relationships offer our customers access to applicable in-person care within these systems to enhance their overall healthcare experience.
We have relationships with leading health systems in the U.S. including, as of December 31, 2025, Ochsner Health, Mount Sinai Health System, Carbon Health, ChristianaCare Health System, and Hartford Healthcare to provide a clinically focused, telehealth-enabled patient care collaboration. These relationships offer our customers access to applicable in-person care within these systems to enhance their overall healthcare experience.
These authorities enforce regulations related to methods and documentation of the testing, production, compounding, control, safety, quality assurance, labeling, packaging, sterilization, storage, and shipping of products and the components of those products.
These authorities enforce regulations related to methods and documentation of the testing, production, compounding, control, safety, quality assurance, labeling, marketing, packaging, sterilization, storage, and distribution of products and the components of those products.
To fulfill this mission, our business strategy and market differentiation are centered around our trusted brand, innovative products and services, leading technology, and clinical excellence. • We work to build a brand that is trusted by our customers, easy to use, and normalizes the practice of seeking and receiving treatment by empowering our customers with personalized care and an omnichannel experience. • The Hims & Hers platform offers a streamlined, personalized patient and clinician experience facilitated by proprietary algorithms and a customizable and integrated technology stack, allowing us to give customers a seamless experience and to follow up programmatically and with precision. • We can leverage these insights and feedback to offer access to personalized prescription and non-prescription treatments that are designed to meet individual needs. • At the foundation of our broader platform is the consumer trust we establish through our clinical excellence.
To fulfill this mission, our business strategy and market differentiation are centered around our trusted brand, innovative products and services, leading technology, and clinical excellence. • We work to build a brand that is trusted by our customers, easy to use, and normalizes the practice of seeking and receiving treatment by empowering our customers with access to proactive, personalized care and an omnichannel experience. • The Hims & Hers platform offers a streamlined, personalized patient and clinician experience that includes access to consistent follow-up care, facilitated by proprietary algorithms and a customizable and integrated technology stack. • We can leverage insights and feedback from our platform and offerings to offer access to personalized prescription and non-prescription treatments that are designed to meet individual needs. • At the foundation of our broader platform is the consumer trust we establish through our clinical excellence.
Future care opportunities that show high prevalence within our existing customer base and offer traits similar to our existing specialties in terms of business model characteristics include testosterone treatment, menopause, sleep disorders, post-traumatic stress disorder, fertility, diabetes, cholesterol, and hypertension, which we believe represent significant opportunities.
Future care opportunities that show high prevalence within our existing customer base and offer traits similar to our existing specialties in terms of business model characteristics include sleep disorders, post-traumatic stress disorder, 3 Table of Contents fertility, diabetes, cholesterol, and hypertension, which we believe represent significant opportunities.
We will also be subject to CDPH Food & Drug Branch oversight as a CDPH-registered drug manufacturer and will be required to comply with certain rules and regulations from the departments of health, boards of pharmacy, or other regulatory authorities of other states to which we ship or otherwise introduce API.
We will also be subject to CDPH Food & Drug Branch oversight as a CDPH-registered drug manufacturer and will be required to comply with certain rules and regulations from the departments of health, boards of pharmacy, or other regulatory authorities of other states to which we ship or otherwise introduce API. We have limited experience with this operational area.
Sections 503A and 503B also prohibit compounding of drug products that present “demonstrable difficulties for compounding.” However, FDA must publish a list of such drugs, through notice and comment rulemaking, before implementing this rule, and FDA has never finalized the list for any drug products.
Sections 503A and 503B also prohibit compounding of drug products that present “demonstrable difficulties for compounding.” However, FDA must publish a list of such drugs, through notice and comment rulemaking, before implementing this rule.
We are a company with a growth mindset. To that end, we gauge our employees’ level of engagement and satisfaction through ongoing engagement surveys. We leverage these surveys to gather information to ensure we hear directly from our employees on their personal work experiences and how we can continue working to manifest our value set.
To that end, we gauge our employees’ level of engagement and satisfaction through ongoing engagement surveys. We leverage these surveys to gather information to ensure we hear directly from our employees on their personal work experiences and how we can continue working to manifest our value set.
Additionally, in July 2023, the European Commission adopted an adequacy decision concluding that the United States ensures an adequate level of protection for personal data transferred from the EEA to the United States under the EU-U.S. Data Privacy Framework (followed in October 2023 with the adoption of an adequacy decision in the UK for the UK-United States Data Bridge).
Additionally, in July 2023, the European Commission adopted an adequacy decision concluding that the United States ensures an adequate level of protection for personal data transferred from the EEA to the United States under the EU-U.S. Data Privacy Framework. In October 2023, the United Kingdom Government adopted a similar adequacy decision for the UK-United States Data Bridge.
It is also possible that other federal, state, or foreign enforcement authorities might take action if they consider the product promotion to constitute promotion of an unapproved use of an approved product or of an unapproved product, which could result in significant fines or penalties under other statutes, such as laws prohibiting false claims for reimbursement.
It is also possible that other federal, state, or foreign enforcement authorities might take action if they consider the product promotion to constitute promotion of an unapproved use of an approved product or of an unapproved product, which could result in significant fines or penalties under other statutes.
Physicians, mid-level providers (e.g., physician assistants, nurse practitioners), and behavioral health providers who provide professional clinical services via telehealth must, in most instances, hold a valid license to provide the applicable professional services in the state in which the patient is located.
Physicians, mid-level providers (e.g., physician assistants, nurse practitioners), and behavioral health providers who provide professional clinical services via telehealth must, in most instances, hold a valid license to provide the applicable professional services in the state in which the patient is located, with similar requirements applicable in the United Kingdom, the European Union, and Canada.
Under the GDPR, data protection authorities in the EU have the power to impose significant administrative fines for violations, which may also lead to damages claims by data controllers and data subjects. The UK GDPR sits alongside the UK Data Protection Act 2018 which implements 10 Table of Contents certain derogations in the GDPR into UK law.
Under both the EU GDPR and UK GDPR, data protection authorities have the power to impose significant administrative fines for violations, which may also lead to damages claims by data controllers and data subjects. The UK GDPR sits alongside the UK Data Protection Act 2018 which implements certain UK-specific provisions and derogations the GDPR into UK law.
Section 503B also includes requirements regarding adverse event reporting, use of bulk drug substances, and prohibitions on wholesaling and compounding “essentially a copy” of an FDA approved drug, unless the drug is on FDA’s Drug Shortage List at the time of compounding, distribution, and dispensing.
Section 503B also includes requirements regarding adverse event reporting, use of bulk drug substances, and prohibitions on wholesaling and compounding “essentially a copy” of an FDA approved drug, unless the drug is on FDA’s Drug Shortage List at the time of compounding, distribution, and dispensing, or the bulk drug substance appears on FDA’s list of bulk drug substances for which there is a clinical need.
It is unclear whether these changes will have a long-term impact on the adoption of telehealth services by the general public or legislative and regulatory authorities.
It is unclear whether all of these changes will remain in place, and whether these changes will have a long-term impact on the adoption of telehealth services by the general public or legislative and regulatory authorities in the United States.
Specialty expansion into new conditions We are pursuing a roadmap of rapid specialty expansion into new conditions that can be treated safely and effectively via telehealth, require ongoing and recurring customer relationships, and generally for which generic medication has been established as an effective means of treatment.
Expansion into new specialties and access to proactive care We are pursuing a roadmap of rapid specialty expansion into new conditions that can be appropriately addressed via telehealth, require ongoing and recurring customer relationships, and generally for which generic medication has been established as an effective means of treatment.
Additionally, with respect to our expansion into laboratory testing services, we will now be subject to new licensure and certification requirements and federal, state, and local laws and regulations applicable to laboratory testing including the FDCA the Clinical Laboratory Improvement Amendments of 1988 (“CLIA”), and similar state laws.
Laboratory testing and related sample collection kit requirements With respect to our expansion into laboratory testing services, we are subject to new licensure and certification requirements and federal, state, and local laws and regulations applicable to laboratory testing including the FDCA, the Clinical Laboratory Improvement Amendments of 1988 (“CLIA”), and similar state laws.
This will also result in additional oversight by various regulatory agencies, including the Centers for Medicare & Medicaid Services (“CMS”) and the FDA within the United States Department of Health and Human Services (“HHS”) on the federal side, as well as state and local departments of health responsible for regulating clinical laboratory testing within the jurisdictions where we will conduct laboratory testing.
We are also subject to additional oversight by various regulatory agencies, including the Centers for Medicare & Medicaid Services (“CMS”) and the FDA within the United States Department of Health and Human Services (“HHS”) on the federal side, as well as state and local departments of health and other state-based agencies responsible for regulating clinical laboratory testing and billing within the jurisdictions where we will conduct laboratory testing and, in some cases, by the states from which we accept specimens for testing.
For example, some states specifically require synchronous (or “live”) communications and restrict or exclude the use of asynchronous telehealth modalities, which is also known as “store-and-forward” telehealth. However, other states do not distinguish between synchronous and asynchronous telehealth services.
Additionally, there may be limitations placed on the modality through which telehealth services are delivered. For example, some states specifically require synchronous (or “live”) communications and restrict or exclude the use of asynchronous telehealth modalities, which is also known as “store-and-forward” telehealth. However, other states do not distinguish between synchronous and asynchronous telehealth services.
For example, in some states the corporate practice of medicine restrictions may be implicated by non-clinical activities such as scheduling, contracting, setting rates, and the hiring and management of non-clinical personnel.
In some states, even activities not directly related to the delivery of clinical services may be considered an element of the practice of medicine. For example, in some states the corporate practice of medicine restrictions may be implicated by non-clinical activities such as scheduling, contracting, setting rates, and the hiring and management of non-clinical personnel.
This complex, dynamic legal landscape regarding privacy, data protection, information security, and artificial intelligence creates significant compliance issues for us, the Affiliated Medical Groups, the Pharmacies, Facilities, and the Providers, and potentially exposes us to additional expense, adverse publicity, and liability. Various government and consumer agencies have also called for new regulation and changes in industry practices.
This complex, dynamic legal landscape regarding privacy, data protection, information security, and artificial intelligence creates significant compliance issues for us, the Affiliated Medical Groups, the Pharmacies, Facilities, and the Providers, and potentially exposes us to additional expense, adverse publicity, and liability.
Regulatory Environment As a consumer-focused health and wellness company delivering comprehensive telehealth technologies and services and health and wellness products such as prescription drugs, compounded drugs, over-the-counter drugs and devices, cosmetics, and dietary supplements, in addition to the typical legal and regulatory considerations faced by a technology-based company, we are required to comply with complex healthcare laws and regulations, and consumer protection laws and regulations, all at both the state and federal level.
Dispensing and dispatching of medicines prescribed through these services is carried out directly by Asda and Superdrug’s respective pharmacy operations. 5 Table of Contents Regulatory Environment As a consumer-focused health and wellness company delivering comprehensive telehealth services and access to health and wellness products such as prescription drugs (including compounded drugs), over-the-counter drugs and devices, cosmetics, and dietary supplements, in addition to the typical legal and regulatory considerations faced by a technology-based company, we are required to comply with complex healthcare laws and regulations, and consumer protection laws and regulations, all at both the state and federal level.
Because of the restrictions on the corporate practice of medicine doctrine and fee-splitting in various jurisdictions, we do not employ the healthcare providers who provide clinical services on the Hims & Hers platform. Instead, the Affiliated Medical Groups provide services on the platform and we contract with but do not own the Affiliated Medical Groups.
Because of the restrictions on the corporate practice of medicine doctrine and fee-splitting in various jurisdictions in the United States, we do not employ the healthcare providers in the U.S. who provide clinical services on the Hims & Hers platform.
Partner Pharmacies In addition to fulfilling orders through the Pharmacies, we maintain contractual arrangements with three licensed pharmacies (sometimes referred to herein as “Partner Pharmacies”), EHT Pharmacy LLC (d/b/a Curexa Pharmacy), ITC Inc. (d/b/a ITC Compounding Pharmacy), and The London Specialist Pharmacy Limited for fulfillment and distribution of certain prescription and non-prescription products available through the Hims & Hers platform.
Partner Pharmacies In addition to fulfilling orders through the Pharmacies, we maintain contractual arrangements with various licensed pharmacies (sometimes referred to herein as “Partner Pharmacies”) for fulfillment and distribution of certain prescription and non-prescription products available through the Hims & Hers platform.
For subscription plans, in addition to a 30-day cadence or treatment term, we offer customers the ability to select a desired cadence to receive products or treatments, which can range from every 60 to 360 days, depending on the product.
For subscription plans, in addition to a 30-day cadence or treatment term, we offer customers the ability to select from a range of shipment cadences or treatment terms, from every 60 days to 360 days, depending on the offering.
We have established systems to assist the Affiliated Medical Groups in ensuring that their providers are appropriately licensed under applicable state law and that their provision of telehealth to our customers occurs in each instance in compliance with applicable rules governing telehealth. Additionally, there may be limitations placed on the modality through which telehealth services are delivered.
We have established systems to assist the Affiliated Medical Groups in ensuring that their providers are appropriately licensed under applicable state law in the U.S. and foreign law equivalents and that their provision of telehealth to our customers occurs in each instance in compliance with applicable rules governing telehealth.
We have a number of measures to protect our intellectual property and brand, including trademarks, confidentiality procedures, non-disclosure agreements, and employee non-disclosure and invention assignment agreements, to establish and protect our proprietary rights. Despite these efforts, there can be no assurance that we will adequately protect our intellectual property.
We have a number of measures to protect our intellectual property and brand, including trademarks, patents, confidentiality procedures, non-disclosure agreements, and employee non-disclosure and invention assignment agreements, to establish and protect our proprietary rights.
These arrangements are reviewed and updated periodically to address changing regulatory or market conditions. Health System Partnerships The strength of the Hims & Hers brand affords us numerous opportunities to partner with and offer new solutions to help transform existing healthcare stakeholders.
Health System Partnerships The strength of the Hims & Hers brand affords us numerous opportunities to partner with and offer new solutions to help transform existing healthcare stakeholders.
We may also be subject to additional state licensure requirements applicable to entities engaging in the distribution of prescription medical devices and products depending on how we integrate the laboratory services into our current customer offerings.
We may also be subject to additional state licensure requirements applicable to entities engaging in the manufacture and/or distribution of prescription medical devices and products depending on how we integrate the laboratory services into our current customer offerings. In addition, certain of our workflows involve the use of at-home sample collection kits that we make available to customers.
Regulation of compounded drugs Certain of the products available through our platform are compounded drug products under Section 503A or Section 503B of the FDCA, which provide exemptions from the requirements for preapproval to market a new drug and labeling with adequate directions for use. To market our products under these exemptions, we must comply with the applicable requirements.
These regulations govern pharmacy licensing, prescription fulfillment, compounding, and distribution. 10 Table of Contents Regulation of compounded drugs Certain of the products that are or have been available through our platform are compounded drug products under Section 503A or Section 503B of the FDCA, which provide exemptions from the requirements for preapproval to market a new drug and labeling with adequate directions for use.
Compounding under 503A is primarily regulated by state pharmacy laws and regulations governing pharmacy operations. These laws and regulations often include specific requirements for compounding operations, including requirements for licensing of pharmacists, pharmacy technicians and pharmacies, supervision and training, inspections, sterility assurance, and recordkeeping, among other requirements.
These state laws and regulations often include specific requirements for compounding operations, including requirements for licensing of pharmacists, pharmacy technicians and pharmacies, supervision and training, inspections, sterility assurance, and recordkeeping, among other requirements. State regulations are updated periodically, generally under the jurisdiction of individual state boards of pharmacy.
While we are prohibited from owning a professional entity such as any of the Affiliated Medical Groups, the Affiliated Medical Groups were incorporated and established with our assistance for the specific purpose of providing clinical services to patients through the Hims & Hers platform and have no other operations or activities outside of the provision of services through the Hims & Hers platform.
While we are prohibited from owning a professional entity such as any of the Affiliated Medical Groups, the Affiliated Medical Groups were incorporated and established with our assistance for the specific purpose of providing clinical services to patients through the Hims & Hers platform and have no other operations or activities outside of the provision of services through the Hims & Hers platform. 4 Table of Contents The Affiliated Medical Groups contract with or employ physicians, nurse practitioners, physician assistants, and behavioral health providers (each, a “Provider”) to provide telehealth consultations and related services on the Hims & Hers platform in the U.S.
Customers serve as ambassadors for the Hims & Hers brand, further driving organic growth through word of mouth and user-generated content. The large majority of our first time customers to date indicate that they came to Hims & Hers to learn about and find options for their condition and are seeking treatment for their particular conditions for the first time.
The majority of our first-time customers to date indicate that they came to Hims & Hers to learn about and find options for their condition and are seeking treatment for their particular conditions for the first time.
In addition, FDA findings of misleading promotional statements and practices can lead to private litigation under federal and state consumer protection and unfair trade practices laws.
In addition, misleading promotional statements and practices, or allegations thereof, can lead to private litigation under federal and state consumer protection and unfair trade practices laws, including the Lanham Act and similar state laws.
This also ensures that our internal community reflects our vision for an equity-centered, inclusive workforce. 11 Table of Contents We aim to create an environment of mutual trust, confidence, and inclusion to provide opportunity for growth and recognition, with the ultimate goal of helping more customers feel great through providing access to better health and wellness solutions.
We aim to create an environment of mutual trust, confidence, and inclusion to provide opportunity for growth and recognition, with the ultimate goal of helping more customers feel great through providing access to better health and wellness solutions. We are a company with a growth mindset.
The federal False Claims Act imposes liability on any person or entity that, among other things, knowingly presents, or causes to be presented, a false or fraudulent claim for payment to the federal government. The penalties for violating these laws can be severe, including criminal and civil penalties, imprisonment, and possible exclusion from the federal health care programs.
The federal civil False Claims Act imposes liability on any person or entity that, among other things, knowingly presents, or causes to be presented, a false or fraudulent claim for payment of federal government funds.
We have heavily invested in the software, tools, and culture that allow our company to be a leading force in the new remote-work environment. Not only has this allowed us to maintain and enhance our commitment to quality, our management team believes it has also provided a real competitive advantage by attracting diverse talent and garnering new geographic exposure.
Not only has this allowed us to maintain and enhance our commitment to quality, our management team believes it has also provided a competitive advantage by attracting diverse talent and garnering new geographic exposure.
In addition, we also offer access to a range of health and wellness products designed to meet individual needs, which can include curated prescription and non-prescription products. Through the Hims & Hers mobile applications, consumers can access a range of educational programs, wellness content, community support, and other services that promote lifelong health and wellness.
Through the Hims & Hers mobile applications, consumers can access a range of educational programs, wellness content, community support, and other services that promote lifelong health and wellness.
It is impossible to predict whether other changes to legislation, regulation, or guidance will be enacted, or what the impact of such changes, if any, may be.
Further, the FDA revises its regulations and guidance in light of new legislation in ways that may affect our business or products. It is impossible to predict whether other changes to legislation, regulation, or guidance will be enacted, or what the impact of such changes, if any, may be.
We prioritize hiring team members with a diversity of lived experiences, and we believe we get the benefit of more multi-faceted and nuanced insight into the customers we serve.
We prioritize hiring team members with a variety of lived experiences, and we believe we get the benefit of more multi-faceted and nuanced insight into the customers we serve. This also ensures that our internal community reflects our vision for a human-centered workforce.
However, the adequacy decision does not foreclose, and is likely to face, future legal challenges. Marketing We are building a trusted brand focused on empowering consumers to feel great by providing modern personalized health and wellness experiences to consumers to address their health and wellness needs. From our launch, we have used a diverse marketing strategy to reach our customers.
Upon the closing, we will be subject to new regulatory requirements in each new jurisdiction. Marketing We are building a trusted brand focused on empowering consumers to feel great by providing modern personalized health and wellness experiences to consumers to address their health and wellness needs. From our launch, we have used a diverse marketing strategy to reach our customers.
Regulatory and/or legal enforcement actions by the FDA, Department of Health and Human Services, or other federal, state, or foreign enforcement authorities could have material adverse consequences on our business or its operations. Government regulation of healthcare generally We and other healthcare companies are subject to significant regulation in the United States.
Regulatory and/or legal enforcement actions by the Food and Drug Administration (the “FDA”), Department of Health and Human Services, or other international, federal, state, or foreign enforcement authorities could have material adverse consequences on our business or its operations.
Additionally, we are subject to the General Data Protection Regulation (“GDPR”) as implemented in the United Kingdom (the “UK GDPR”). The GDPR became effective in the European Union (“EU”) on May 25, 2018.
Additionally, we are subject to the General Data Protection Regulation (“GDPR”) with respect to our operations in Germany, the Republic of Ireland, and France. In the United Kingdom, the GDPR applies as retained and amended in United Kingdom law. The GDPR became effective in the European Union (“EU”) on May 25, 2018.
Under the UK GDPR, companies not established in the UK but who process personal data in relation to the offering of goods or services to individuals in the UK, or to monitor their behavior, are subject to the UK GDPR - the requirements of which are (at this time) largely aligned with those under the GDPR and may lead to significant compliance and operational costs.
Under the UK GDPR, companies not established in the United Kingdom but who process personal data in relation to the offering of goods or services to individuals in the UK, or to monitor their behavior, are subject to the UK GDPR.
Subscription plans provide an easy and convenient way for customers to get the ongoing treatment they need while simultaneously providing the Company with predictability through a recurring revenue stream.
Many of the offerings on our websites and mobile applications are sold to customers on a subscription basis. Subscription plans provide a seamless way for customers to get the ongoing treatment they need while simultaneously providing us with predictability through a recurring revenue stream.
Government regulation of the practice of medicine and telehealth The practice of medicine is subject to various federal, state, and local certification and licensing laws, regulations, approvals and standards, relating to, among other things, the qualifications of the provider, the practice of medicine (including specific requirements when providing health care utilizing telehealth technologies and the provision of remote care), the continuity and adequacy of medical care, the maintenance of medical records, the supervision of personnel, and the prerequisites for the prescription of medication and ordering of tests.
If regulators assert broader authority over companies like us, or if we accept payment from and/or participate in third-party payor programs in additional jurisdictions in the future, the complexity of our operations and our compliance obligations will materially increase. 6 Table of Contents Government regulation of the practice of medicine and telehealth The practice of medicine is subject to various federal, state, and local certification, registration, and licensing laws, regulations, approvals and standards, relating to, among other things, the qualifications of the provider, the practice of medicine (including specific requirements when providing health care utilizing telehealth technologies and the provision of remote care), the continuity and adequacy of medical care, the maintenance of medical records, the supervision of personnel, the liability coverage of the provider, and the prerequisites for the prescription of medication and ordering of tests.
Depending on the jurisdiction, trademarks, and service marks generally are valid as long as they are used and/or registered. Patents, copyrights, and licenses are of varying durations. In addition, we have registered and maintain numerous Internet domain names, including “www.hims.com” and “www.forhers.com.” Additional Information Our products and services are available through the following websites: www.hims.com, www.forhers.com, www.forhims.co.uk and www.apostrophe.com.
In addition, we have registered and maintain numerous Internet domain names, including “www.hims.com” and “www.forhers.com.” Additional Information Our products and services are available through the following websites: www.hims.com, www.forhers.com, www.forhims.co.uk, www.hims.ca, www.forhers.ca, www.forhers.co.uk, www.zavamed.com, and www.sprechstunde.online.
Section 503A permits compounding of a drug that is not “essentially a copy” of a commercially available (or FDA-approved) drug product by a licensed pharmacist or a licensed physician based on receipt of a valid prescription for an individual patient or limited quantities before receipt of a valid prescription if certain conditions are met. 503A pharmacies are not subject to current cGMP requirements, and these facilities are not inspected by FDA.
Section 503A permits compounding of a drug that is not “essentially a copy” of a commercially available (or FDA-approved) drug product by a licensed pharmacist or a licensed physician based on receipt of a valid prescription for an individual patient or limited quantities before receipt of a valid prescription if certain conditions are met. 503A pharmacies may only compound using bulk drug substances that comply with the standards of an applicable United States Pharmacopoeia (“USP”) or National Formulary monograph, if a monograph exists, and the USP chapter on pharmacy compounding.
Regulations are updated periodically, generally under the jurisdiction of individual state boards of pharmacy. Failure to comply with the state pharmacy regulations of a particular state could result in a pharmacy being prohibited from operating in that state, financial penalties and/or becoming subject to additional oversight from that state’s board of pharmacy.
Failure to comply with the state pharmacy regulations of a particular state could result in a pharmacy being prohibited from operating in that state, financial penalties and/or becoming subject to additional oversight from that state’s board of pharmacy. In addition, many states are considering imposing, or have already begun to impose, more stringent requirements on compounding operations.
We believe that the Company has the technical platform, distributed provider network, and access to clinical capabilities to lead the migration of routine office visits to a personalized, digital, accessible format. The Hims & Hers platform includes access to a highly-qualified and technologically-innovative provider network, a clinically-focused electronic medical record system, digital prescriptions, cloud pharmacy fulfillment, and personalization capabilities.
We believe that the Company has the technical infrastructure, distributed provider network, and access to clinical capabilities to lead the migration of routine office visits to a personalized, digital, accessible format.
Since our founding, we have facilitated over thirty million telehealth consultations, enabling greater access to high-quality, convenient, affordable, personalized care for people in all 50 states and the United Kingdom. The mission of Hims & Hers is to help the world feel great through the power of better health.
Since our founding, we have facilitated over fifty million telehealth consultations, enabling greater access to high-quality, convenient, affordable, personalized care for people in the United States, Canada, the United Kingdom, and the European Union (in Germany, the Republic of Ireland, France, and Spain).
Many states also limit the extent to which nurse practitioners and physician assistants can practice independently and require that they practice under the supervision of or in collaboration with a supervising physician. These laws are intended to prevent unlicensed persons from interfering with or unduly influencing a physician’s professional judgment.
Other practices, such as professionals splitting their professional fees with non-professional persons or entities, are also 7 Table of Contents prohibited in some jurisdictions. Many states also limit the extent to which nurse practitioners and physician assistants can practice independently and require that they practice under the supervision of or in collaboration with a supervising physician.
Hims & Hers owns or is licensed to use valuable intellectual property, including trademarks, service marks, patents, copyrights, trade secrets, and other proprietary information. We consider the trademarks “HIMS,” “HERS,” “H,” and “HIMS & HERS” to be of material importance to our business.
Despite these efforts, there can be no assurance that we will adequately protect our intellectual property. 16 Table of Contents Hims & Hers owns or is licensed to use valuable intellectual property, including trademarks, service marks, patents, copyrights, trade secrets, and other proprietary information.
We believe that celebrating multiple approaches and perspectives allows us to better meet the challenge of providing access to affordable, accessible, personalized health and wellness solutions. We continue to look for intentional ways to expand our programs and initiatives to not only attract, develop, and retain top talent, but also to center the well-being of our people.
We continue to look for intentional ways to expand our programs and initiatives to not only attract, develop, and retain top talent, but also to center the well-being of our people. We strive to hire the best and brightest talent across the industry with a focus on individuals determined to improve access to health and wellness solutions for millions.
Given the prevalence of these conditions, we see a large market opportunity for our current and future offerings. 3 Table of Contents Leverage existing capabilities and continue to expand capabilities to penetrate new sales channels and further improve operations Our pharmacy, affiliated pharmacies, and compounding outsourcing facility enable seamless drug delivery, and drive increased operating leverage across the platform by allowing us to further personalize and consolidate shipping of orders as well as expand capabilities quickly for adjacent and other new conditions.
We believe our Facilities enable seamless drug delivery and supply chain oversight, and drive increased operating leverage across the platform by allowing us to further personalize and consolidate shipping of orders as well as expand capabilities quickly for adjacent and other new conditions.
Other federal, state, or foreign enforcement authorities might also take action against us or the Pharmacies, Partner Pharmacies, Affiliated Medical Groups, Providers, Facilities, or Manufacturing Suppliers if they determine that compounded drug products available through our platform do not meet applicable legal or regulatory requirements.
Other federal, state, or foreign enforcement authorities might also take action against us or the Pharmacies, Partner Pharmacies, Affiliated Medical Groups, Providers, Facilities, or Manufacturing Suppliers if they determine that compounded drug products available through our platform do not meet applicable legal or regulatory requirements, which could include disciplinary sanctions, suspension or revocation of licenses we need to operate, or financial penalties. 11 Table of Contents In the United Kingdom, compounded GLP-1 injectables may be offered only where a patient has a special clinical need that cannot be met by a licensed product or dose.
We also offer generous parental leave benefits for eligible employees as well as a variety of perks including backup childcare, family forming resources, fitness and coworking space reimbursements, providing support for our employees’ needs.
We also offer generous parental leave benefits for eligible employees as well as a variety of perks including backup childcare, family forming resources, fitness, and coworking space reimbursements, providing support for our employees’ needs. 15 Table of Contents Commitment to highest standards of provider quality In addition to our employees, as of December 31, 2025, 1,586 medical providers located throughout all 50 states in the United States provided services on the Hims & Hers platform through the Affiliated Medical Groups.
For example, with respect to the peptide manufacturing business, we will now be subject to provisions governing FDA-registered manufacturers of active pharmaceutical ingredients (“API”), as well as federal regulations regarding cGMP applicable to API manufacturers.
API requirements Our Peptide Facility (and related assets) presents regulatory requirements to which we have not previously been subject. Once we have commenced commercial operations, these operations will be subject to provisions governing FDA-registered manufacturers of active pharmaceutical ingredients (“API”), as well as federal regulations regarding cGMP applicable to API manufacturers.
Based on externally reported data, we believe our market share, both in terms of number of customers and total sales, in each of our sexual health, dermatology, and mental health specialties has increased in recent years.
In particular, our media advertising campaigns have further amplified brand visibility, efficiently reaching potential customers and increasing awareness of the products and services we make available. Based on externally reported data, we believe our market share in the digital health and wellness space, both in terms of number of customers and total sales, has increased in recent years.
Much of our marketing efforts since our founding have thus focused on consumer education around these capabilities and the underlying conditions that providers on our platform can help treat. The relatively low (albeit rapidly increasing) penetration of telehealth implies that there is a significant market opportunity as consumers continue to shift their behavior.
At the same time, many consumers are not aware of the relative affordability, convenience, and accessibility of care through telehealth. Much of our marketing efforts since our founding have thus focused on consumer education around these capabilities and the underlying conditions that providers on our platform can help treat.
In addition, many states are considering imposing, or have already begun to impose, more stringent requirements on compounding operations. 8 Table of Contents We also offer access to drugs compounded by facilities referred to as 503B outsourcing facilities, including MedisourceRx. Under Section 503B, outsourcing facilities may compound drugs without an individual patient prescription.
We may also offer access to drugs compounded by facilities referred to as 503B outsourcing facilities, including MedisourceRx. Under Section 503B, outsourcing facilities may compound drugs without an individual patient prescription. Outsourcing facilities must be registered with FDA and are subject to cGMP requirements and regular FDA inspections.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeIf any of our Facilities are unable to obtain and/or maintain necessary licenses and permits, or if any of the Facilities or our operations fail to comply with applicable laws and regulatory requirements, our business, financial condition, and results of operations may be materially and adversely affected. • If we fail to comply with applicable healthcare and other laws and governmental regulations, we could face substantial penalties, our business, financial condition, and results of operations could be materially and adversely affected, and we may be required to restructure our operations. • Evolving government regulations and enforcement activities may require increased costs or adversely affect our results of operations. • Security breaches, loss of data, and other disruptions could compromise sensitive information related to our business or customers, or prevent us from accessing critical information and expose us to liability, which could adversely affect our business and our reputation. • From time to time we are subject to legal proceedings in the ordinary course of business, which can include intellectual property disputes or claims relating to our marketing or sale of products, any of which may be costly to defend and could materially harm our business and results of operations. • We may require additional capital to support business growth, and this capital might not be available on acceptable terms, if at all. • Our dual class common stock structure has the effect of concentrating voting power with our Chief Executive Officer and Co-Founder, Andrew Dudum, which limits an investor’s ability to influence the outcome of important transactions, including a change in control. • The market price of our Class A common stock may be volatile.
Biggest changeThe breadth and scale of our operations increase the complexity and extent of our compliance and regulatory obligations. • If any of our Facilities are unable to obtain and/or maintain necessary licenses and permits, or if any of the Facilities or our operations fail to comply with applicable laws and regulatory requirements, our business, financial condition, and results of operations may be materially and adversely affected. • Evolving government regulations and enforcement activities may require increased costs or adversely affect our results of operations. • Security breaches, loss of data, and other disruptions could compromise sensitive information related to our business or customers, or prevent us from accessing critical information and expose us to liability, which could adversely affect our business and our reputation. • We may require additional capital to support business growth, and this capital might not be available on acceptable terms, if at all. • Our dual class common stock structure has the effect of concentrating voting power with our Chief Executive Officer and Co-Founder, Andrew Dudum, which limits an investor’s ability to influence the outcome of important transactions, including a change in control. • The market price of our Class A common stock has been and may continue to be volatile. 18 Table of Contents Risks Related to Our Business We have experienced rapid growth in recent fiscal years and expect to continue to invest in our growth for the foreseeable future.
We believe that maintaining and enhancing our reputation and brand recognition is critical to our relationships with existing customers, Providers, strategic partners, Pharmacies, Partner Pharmacies, and other suppliers, and to our ability to attract new customers, Providers, strategic partners, Pharmacies, Partner Pharmacies, and other suppliers.
We believe that maintaining and enhancing our reputation and brand recognition is critical to our relationships with existing customers, Providers, strategic partners, Partner Pharmacies, and other suppliers, and to our ability to attract new customers, Providers, strategic partners, Partner Pharmacies, and other suppliers.
Similarly, if we were to lose our relationship with one of our Facilities, Partner Pharmacies, or Manufacturing Suppliers, are unable to obtain access for customers to low cost pharmaceutical products through our Partner Pharmacies, Facilities, or Manufacturing Suppliers was subject to regulatory or legal enforcement, we cannot guarantee that we will be able to find, perform due diligence on, and engage with one or more replacement partners in a timely manner.
Similarly, if we were to lose our relationship with one of our Partner Pharmacies or Manufacturing Suppliers, are unable to obtain access for customers to low cost pharmaceutical products through our Partner Pharmacies, Facilities, or Manufacturing Suppliers, or one of our Partner Pharmacies, Facilities or Manufacturing Suppliers was subject to regulatory or legal enforcement, we cannot guarantee that we will be able to find, perform due diligence on, and engage with one or more replacement partners in a timely manner.
Governmental inquiries or actions or litigation brought against us, a Partner Pharmacy, Pharmacy, Facility, or Manufacturing Supplier relating to our compounding activities, including with respect to GLP-1 products, whether or not such inquiry, action or litigation ultimately results in penalties, changes to our business practices or other consequences, could have an adverse effect on our brand, reputation and business.
Governmental inquiries or actions or litigation brought against us, a Partner Pharmacy, Pharmacy or other Facility, or Manufacturing Supplier relating to our compounding activities, including with respect to GLP-1 products, whether or not such inquiry, action or litigation ultimately results in penalties, changes to our business practices or other consequences, could have an adverse effect on our brand, reputation and business.
We have encountered and will continue to encounter significant risks and uncertainties frequently experienced by growing companies in rapidly changing and heavily regulated industries, such as attracting new customers and Providers to our platform, retaining our customers and encouraging them to utilize new offerings we make available, increasing the number of conditions that can be treated by Providers through our platform, operating our Facilities and the compounding and distribution of pharmaceutical products, competition from other companies, including online healthcare providers and traditional healthcare providers, hiring, integrating, training, and retaining skilled personnel, verifying the identity of customers and credentials of Providers serving our customers, developing new solutions, determining prices for our solutions, unforeseen expenses, challenges in forecasting accuracy, and new or adverse regulatory developments affecting the use of telehealth, pharmaceutical products or operations, including compounding, data privacy, use of artificial intelligence, peptide development, laboratory services or other aspects of the healthcare industry.
We have encountered and will continue to encounter significant risks and uncertainties frequently experienced by growing companies in rapidly changing and heavily regulated industries, such as attracting new customers and Providers to our platform, retaining our customers and encouraging them to utilize new offerings we make available, increasing the number of conditions that can be treated by Providers through our platform, operating our Facilities and the compounding and distribution of pharmaceutical products, competition from other companies, including online healthcare providers and traditional healthcare providers, hiring, integrating, training, and retaining skilled personnel, verifying the identity of customers and credentials of Providers serving our customers, developing new solutions, determining prices for our solutions, unforeseen expenses, challenges in forecasting accuracy, and new or adverse regulatory developments affecting the use of telehealth, pharmaceutical products or operations, including compounding, data privacy, use of artificial intelligence, peptide development, laboratory testing services or other aspects of the healthcare industry.
Further, any failure, or perceived failure, by us, or any third parties processing such data, to comply with privacy policies or with any federal or state healthcare, privacy or consumer protection-related laws, regulations, industry self-regulatory principles, industry standards or codes of conduct, regulatory guidance, orders to which we may be subject or other legal obligations relating to privacy, consumer consent, or consumer protection could adversely affect our reputation, brand, and business, and may result in claims, proceedings or actions against us by governmental entities, consumers, suppliers, or others, or other liabilities, or may require us to change our operations and/or cease using certain data sets.
Further, any failure, or perceived failure, by us, or any third parties processing such data, to comply with privacy policies or with any foreign, federal or state healthcare, privacy or consumer protection-related laws, regulations, industry self-regulatory principles, industry standards or codes of conduct, regulatory guidance, orders to which we may be subject or other legal obligations relating to privacy, consumer consent, or consumer protection could adversely affect our reputation, brand, and business, and may result in claims, proceedings or actions against us by governmental entities, consumers, suppliers, or others, or other liabilities, or may require us to change our operations and/or cease using certain data sets.
High levels of growth may not be achieved in future periods and may not generate a corresponding improvement in our results of operations. • We may not be able to maintain our profitability. • Our results of operations, as well as the performance of our key metrics, may fluctuate on a quarterly and annual basis, which may result in us failing to meet the expectations of industry and securities analysts or our investors. • If we are unable to expand or maintain the scope of our offerings, including the number and type of products and services that we offer, the number and quality of Providers serving our customers, and the number and types of 13 Table of Contents conditions capable of being treated through our platform, our business, financial condition, and results of operations may be materially and adversely affected. • If we are unable to successfully market to new customers and retain existing customers, or if evolving privacy, healthcare, or other laws or regulations prevent or limit our marketing activities, our business, financial condition, and results of operations could be harmed. • We operate in highly competitive markets and face competition from large, well-established healthcare providers, traditional retailers, pharmaceutical providers and technology companies with significant resources, and, as a result, we may not be able to compete effectively. • Our brand is integral to our success.
High levels of growth may not be achieved in future periods and may not generate a corresponding improvement in our results of operations. • We may not be able to maintain our profitability. • Our results of operations, as well as the performance of our key metrics, may fluctuate on a quarterly and annual basis, which may result in us failing to meet the expectations of industry and securities analysts or our investors. • If we are unable to expand or maintain the scope of our offerings, including the number and type of products and services that we offer, the number and quality of Providers serving our customers, and the number and types of conditions capable of being treated through our platform, our business, financial condition, and results of operations may be materially and adversely affected. • If we are unable to successfully market to new customers and retain existing customers, or if evolving privacy, healthcare, or other laws or regulations prevent or limit our marketing activities, our business, financial condition, and results of operations could be harmed. 17 Table of Contents • We operate in highly competitive markets and face competition from large, well-established healthcare providers, traditional retailers, pharmaceutical providers and technology companies with significant resources, and, as a result, we may not be able to compete effectively. • Our brand is integral to our success.
Our use, disclosure, and other processing of personally identifiable information, including health information, is subject to federal, state, and foreign privacy and security regulations, and our failure to comply with those regulations or to adequately secure the information we hold could result in significant liability or reputational harm and, in turn, a material adverse effect on our customers, the Affiliated Medical Groups and/or their Providers, the Pharmacies, our revenue, our business, and/or our financial condition.
Our use, disclosure, and other processing of personally identifiable information, including health information, is subject to federal, provincial, state, and foreign privacy and security regulations, and our failure to comply with those regulations or to adequately secure the information we hold could result in significant liability or reputational harm and, in turn, a material adverse effect on our customers, the Affiliated Medical Groups and/or their Providers, the Pharmacies, our revenue, our business, and/or our financial condition.
The market for our model is new, rapidly evolving and increasingly competitive. We are expanding our business by offering technology-driven access to consultation and treatment options for new conditions, including the utilization and integration of artificial intelligence in our offerings, but it is uncertain whether our offerings will achieve and sustain high levels of demand and market adoption.
The market for our model is relatively new, rapidly evolving and increasingly competitive. We are expanding our business by offering technology-driven access to consultation and treatment options for new conditions, including the utilization and integration of artificial intelligence in our offerings, but it is uncertain whether our offerings will achieve and sustain high levels of demand and market adoption.
We offer access to compounded pharmaceutical products that are in some cases compounded, fulfilled, and distributed through the Pharmacies, and we, as well as the Pharmacies, Affiliated Medical Groups, and Providers, have faced and in the future may face allegations, litigation, and regulatory investigations under federal or state laws related to the marketing, fulfillment, distribution, and/or sale of these products.
We offer access to compounded pharmaceutical products that are in some cases compounded, fulfilled, and distributed through the Pharmacies, and we, as well as the Pharmacies, Affiliated Medical Groups, and Providers, have faced and in the future may face allegations, litigation, and regulatory investigations under foreign, federal or state laws related to the marketing, fulfillment, distribution, and/or sale of these products.
A material change in our relationships with the Affiliated Medical Groups, whether resulting from a dispute, a change in government regulation or enforcement patterns, a determination of non-compliance, or the loss of these agreements or business relationships, could impair our ability to provide products and services to our customers and could have a material adverse effect our business, financial condition and results of operations.
A material change in our relationships with the Affiliated Medical Groups, whether resulting from a dispute, a change in government regulation or enforcement patterns, a determination of non-compliance, or the loss of these agreements or business relationships, could impair our ability to provide products and services to our customers and could have a material adverse effect on our business, financial condition and results of operations.
Our ability to achieve our strategic objectives will depend, among other things, on our ability to enable fast and efficient telehealth consultations, maintain comprehensive and affordable offerings, ensure the successful operation of the Facilities, and deliver an accessible and reliable platform that is more appealing and user-friendly than available alternatives.
Our ability to achieve our strategic objectives will depend, among other things, on our ability to continue to enable fast and efficient telehealth consultations, maintain comprehensive and affordable offerings, ensure the successful operation of the Facilities, and deliver an accessible and reliable platform that is more appealing and user-friendly than available alternatives.
We anticipate that we will continue to significantly expand our operations and headcount in the near term. This growth has placed, and future growth will place, a significant strain on our management, administrative, operational, and financial infrastructure. Our success will depend in part on our ability to continue to manage this growth effectively and execute our business plan.
We anticipate that we will continue to significantly expand our operations and headcount in the near-to-medium term. This growth has placed, and future growth will place, a significant strain on our management, administrative, operational, and financial infrastructure. Our success will depend in part on our ability to continue to manage this growth effectively and execute our business plan.
Our ability to service customer requirements could be materially impaired or interrupted in the event that our relationship with an Affiliated Medical Group, Facility, Partner Pharmacy or Manufacturing Supplier is terminated, or any Affiliated Medical Group, Facility, Partner Pharmacy, or Manufacturing Supplier experiences a disruption in operations, including as the result of regulatory or legal enforcement.
Our ability to service customer requirements could be materially impaired or interrupted in the event that our relationship with an Affiliated Medical Group, Partner Pharmacy or Manufacturing Supplier is terminated, or any Affiliated Medical Group, Partner Pharmacy, or Manufacturing Supplier experiences a disruption in operations, including as the result of regulatory or legal enforcement.
In addition, during the course of litigation, there could be public announcements of the results of hearings, motions or other interim proceedings or developments. If securities analysts or investors perceive these results to be negative, it could have a substantial adverse effect on the price of our common stock.
In addition, during the course of litigation, there could be public announcements of the results of hearings, motions or other interim proceedings or developments. If securities analysts or investors perceive these results to be negative, it could have a substantial adverse effect on the price of our Class A common stock.
The related areas where we face risks include, but are not limited to: • diversion of management’s time and focus from operating our business to addressing acquisition integration challenges; • loss of key employees of the acquired company and other challenges associated with integrating new employees into our culture, as well as reputational harm if integration is not successful; • difficulties in integrating and managing the combined operations, technologies, technology platforms, and products of the acquired companies, and realizing the anticipated economic, operational, and other benefits in a timely manner, which could result in substantial costs and delays or other operational, technical, or financial problems; • regulatory complexities of integrating or managing the combined operations or expanding into other industries or parts of the healthcare industry; 23 Table of Contents • assumption of contractual obligations that contain terms that are not beneficial to us, require us to license or waive intellectual property rights, or increase our risk for liabilities; • failure to successfully further develop the acquired technology or realize our intended business strategy; • uncertainty of entry into markets in which we have limited or no prior experience or in which competitors have stronger market positions; • unanticipated costs associated with pursuing acquisitions; • failure to find commercial success with the products or services of the acquired company; • difficulty of transitioning the acquired technology onto our existing platforms and maintaining the security standards for such technology consistent with our other offerings; • failure to successfully onboard customers or maintain brand quality of acquired companies; • responsibility for the liabilities of acquired businesses, including those that were not disclosed to us or exceed our estimates, as well as, without limitation, liabilities arising out of an acquired business’ failure to maintain effective data protection and privacy controls and comply with applicable regulations; • failure to generate the expected financial results related to an acquisition on a timely manner or at all; and • potential accounting charges to the extent intangibles recorded in connection with an acquisition, such as goodwill, trademarks, client relationships, or intellectual property, are later determined to be impaired and written down in value.
The related areas where we face risks include, but are not limited to: • diversion of management’s time and focus from operating our business to addressing acquisition negotiation and integration challenges; • loss of key employees of the acquired company and other challenges associated with integrating new employees into our culture, as well as reputational harm if integration is not successful; • difficulties in integrating and managing the combined operations, technologies, technology platforms, and products of the acquired companies, and realizing the anticipated economic, operational, and other benefits in a timely manner, which could result in substantial costs and delays or other operational, technical, or financial problems; • regulatory complexities of integrating or managing the combined operations or expanding into other industries or parts of the healthcare industry; • assumption of contractual obligations that contain terms that are not beneficial to us, require us to license or waive intellectual property rights, or increase our risk for liabilities; • failure to successfully further develop the acquired technology or realize our intended business strategy; • uncertainty of entry into markets in which we have limited or no prior experience or in which competitors have stronger market positions; • unanticipated costs associated with pursuing acquisitions; • failure to find commercial success with the products or services of the acquired company; • difficulty of transitioning the acquired technology onto our existing platforms and maintaining the security standards for such technology consistent with our other offerings; • failure to successfully onboard customers or maintain brand quality of acquired companies; • responsibility for the liabilities of acquired businesses, including those that were not disclosed to us or exceed our estimates, as well as, without limitation, liabilities arising out of an acquired business’ failure to maintain effective data protection and privacy controls and comply with applicable regulations; • failure to generate the expected financial results related to an acquisition in a timely manner or at all; and • potential accounting charges to the extent intangibles recorded in connection with an acquisition, such as goodwill, trademarks, client relationships, or intellectual property, are later determined to be impaired and written down in value.
The products available through our platform, and the third-party suppliers and manufacturers of these products, including our Manufacturing Suppliers, are subject to extensive regulation by the FDA and international, federal, state and local authorities, including prescription drug products, over-the-counter drugs, over-the-counter devices, cosmetics and dietary supplements.
The products available through our platform, and the third-party suppliers and manufacturers of these products, including our Manufacturing Suppliers, are subject to extensive regulation by the FDA and international, federal, state and local authorities, including prescription drug products, over-the-counter drugs, prescription medical devices, over-the-counter medical devices, cosmetics and dietary supplements.
Celebrity influencers with whom we maintain endorsement arrangements could engage in behavior or use their platforms to communicate with our customers in a manner that reflects poorly on our brand and may be attributed to us or otherwise adversely affect our reputation.
Influencers with whom we maintain endorsement arrangements could engage in behavior or use their platforms to communicate with our customers in a manner that reflects poorly on our brand and may be attributed to us or otherwise adversely affect our reputation.
In addition, any failure, or perceived failure, by us or other telehealth companies to comply with any federal, state, or local laws or regulations governing our marketing activities could adversely affect the perception of our industry, our reputation, brand, and business.
In addition, any failure, or perceived failure, by us or other telehealth companies to comply with any foreign, federal, state, or local laws or regulations governing our marketing activities could adversely affect the perception of our industry, our reputation, brand, and business.
The introduction by competitors of solutions or offerings that are or claim to be superior to our platform or offerings may create market confusion, which may make it difficult for potential customers to differentiate between the benefits of our offerings and competitive solutions.
The introduction by competitors of solutions or offerings that are or claim to be superior to our platform or offerings may create market confusion, which may make it difficult for potential customers to differentiate between the benefits of our offerings and the benefits of other competitive solutions.
In addition, intellectual property rights, including use of an individual’s likeness and related trademarks, are a key asset of the celebrity influencers we work with and any use by us of such assets is often heavily negotiated.
In addition, intellectual property rights, including use of an individual’s likeness and related trademarks, are a key asset of the influencers we work with and any use by us of such assets is often heavily negotiated.
In addition, incorrect identity verification data with respect to our current or potential customers received from third-party service providers, including as a result of an individual customer providing untruthful or inaccurate information, has in the past and may in the future result in us inadvertently allowing access to our offerings, including treatments and medications, to individuals who should not be permitted to access them, or otherwise inadvertently denying access to individuals who should be 28 Table of Contents able to access our offerings, in each case based on inaccurate identity determination.
In addition, incorrect identity verification data with respect to our current or potential customers received from third-party service providers, including as a result of an individual customer providing untruthful or inaccurate information, has in the past and may in the future result in us inadvertently allowing access to our offerings, including treatments and medications, to individuals who should not be permitted to access them, or otherwise inadvertently denying access to individuals who should be 33 Table of Contents able to access our offerings, in each case based on inaccurate identity determination.
While we have not experienced material supply chain issues to date, the loss or disruption of such supply arrangements for any reason, including as a result of ongoing conflict arising out of the Russian invasion of Ukraine and the hostilities and conflict in the Middle East, other acts of war or terrorism, 27 Table of Contents trade sanctions, inflation, health epidemics or pandemics, labor disputes, loss or impairment of key manufacturing sites, inability to procure sufficient raw materials, quality control issues, ethical sourcing issues, a supplier’s financial distress, natural disasters, looting or other external factors over which we have no control, could interrupt product supply and, if not effectively managed and remedied, have a material adverse impact on our business, results of operations and financial condition.
While we have not experienced material supply chain issues to date, the loss or disruption of such supply arrangements for any reason, including as a result of ongoing conflict arising out of the Russian invasion of Ukraine and the hostilities and conflict in the Middle East, other acts of war or terrorism, trade sanctions, inflation, health epidemics or pandemics, labor disputes, loss or impairment of key manufacturing sites, inability to procure sufficient raw materials, quality control issues, ethical sourcing issues, a supplier’s financial distress, natural disasters, looting or other external factors over which we have no control, could interrupt product supply and, if not effectively managed and remedied, have a material adverse impact on our business, results of operations and financial condition.
In order to attract new customers and incentivize existing customers to purchase our offerings, we use social media, emails, text messages, celebrity influencers, television commercials, and other marketing strategies to reach potential and existing customers.
In order to attract new customers and incentivize existing customers to purchase our offerings, we use social media, emails, text messages, influencers, television commercials, and other marketing strategies to reach potential and existing customers.
If our ability to offer these products is constrained in the future, supply may be limited, the price of these offerings may increase significantly and the margins on our sale of such products may decrease, which could decrease new customer demand, cause existing customers to cancel their subscriptions, and reduce our revenues and/or gross profit from sales of such products, which could harm our brand, reputation, results of operations and the market price of our Class A common stock.
If our ability to offer these products continues to be constrained in the future, supply may be limited, the price of these offerings may increase significantly and the margins on our sale of such products may decrease, which could decrease new customer demand, cause existing customers to cancel their subscriptions, and reduce our revenues and/or gross profit from sales of such products, which could harm our brand, reputation, results of operations and the market price of our Class A common stock.
Failure to comply with any applicable federal, state and local laws and regulations could have a material adverse effect on our business, financial condition and results of operations.
Failure to comply with any applicable foreign, federal, state and local laws and regulations could have a material adverse effect on our business, financial condition and results of operations.
Compliance may require obtaining appropriate federal, state, or local licenses or certificates, increasing our security measures and expending additional resources to monitor developments in applicable rules and ensure compliance.
Compliance may require obtaining appropriate federal, state, or local or national licenses or certificates, increasing our security measures and expending additional resources to monitor developments in applicable rules and ensure compliance.
In addition, any failure, or perceived failure, by us to comply with any federal, state, or local laws or regulations with respect to any new offering or product or service enhancement could adversely affect our reputation, brand, and business, and may result in claims, proceedings, or actions against us by governmental entities, consumers, suppliers, or others or other liabilities that may require us to change our operations and/or cease offering certain products or services.
In addition, any failure, or perceived failure, by us to comply with any foreign, federal, state, or local laws or regulations with respect to any new offering or product or service enhancement could adversely affect our reputation, brand, and business, and may result in claims, proceedings, or actions against us by governmental entities, consumers, suppliers, competitors, or others or other liabilities that may require us to change our operations and/or cease offering certain products or services.
We compete directly not only with other established telehealth providers but also traditional healthcare providers, pharmacies, pharmaceutical companies, large retailers that sell non-prescription products, including, for example, over-the-counter medical devices, nutritional supplements, vitamins, and hair care treatments, as well as technology companies entering into the health and wellness industry.
We compete directly not only with other established telehealth providers but also traditional healthcare providers, pharmacies, pharmaceutical companies, clinical laboratories, large retailers that sell non-prescription products, including, for example, over-the-counter medical devices, nutritional supplements, vitamins, and hair care treatments, as well as technology companies entering into the health and wellness industry.
The market price of our Class A common stock may fluctuate due to a variety of factors, including: • changes in the industries in which we operate; • variations in our operating performance and the performance of our competitors in general; • actual or anticipated fluctuations in our quarterly or annual results of operations; • publication of research reports by securities analysts about us or our competitors or our industry; • the public’s reaction to our press releases, our other public announcements, statements by our company or our management team, and our filings with the SEC; • negative publicity and short-seller reports that make allegations against us or our Facilities or Affiliated Medical Groups, or our Manufacturing Suppliers, even if unfounded; • the public’s reaction to the press releases or other public announcements or statements of our competitors or regulators that may or may not directly relate to our business or operations; • our failure or the failure of our competitors to meet analysts’ projections or guidance that we or our competitors may give to the market; • additions and departures of key personnel; • changes in laws and regulations, or enforcement thereof, affecting our business; 49 Table of Contents • commencement of, or involvement in, litigation or governmental action involving us; • changes in our capital structure, such as future issuances of securities or the incurrence of debt; • the volume of shares of our Class A common stock available for public sale; and • general economic and political conditions such as recessions, interest rates, fuel prices, inflation, foreign currency fluctuations, tariffs, economic sanctions and trade restrictions, social, political and economic risks, pandemics or epidemics, and acts of war or terrorism or other geopolitical conflicts.
The market price of our Class A common stock has fluctuated and may continue to fluctuate due to a variety of factors, including: • changes in the industries in which we operate; • variations in our operating performance and the performance of our competitors in general; • actual or anticipated fluctuations in our quarterly or annual results of operations; • publication of research reports by securities analysts about us or our competitors or our industry; • commencement of, involvement in, or public statements with respect to, litigation or governmental action involving us; • the public’s reaction to our press releases, our other public announcements, statements by our company or our management team, and our filings with the SEC; 59 Table of Contents • negative publicity and/or short-seller reports that make allegations against us or our Facilities or Affiliated Medical Groups, or our Manufacturing Suppliers, even if unfounded; • the public’s reaction to the press releases or other public announcements or statements of our competitors or regulators that may or may not directly relate to our business or operations; • our failure or the failure of our competitors to meet analysts’ projections or guidance that we or our competitors may give to the market; • additions and departures of key personnel; • changes in laws and regulations, or enforcement thereof, affecting our business; • changes in our capital structure, such as future issuances of securities or the incurrence of debt; • the volume of shares of our Class A common stock available for public sale; and • general economic and political conditions such as recessions, interest rates, fuel prices, inflation, foreign currency fluctuations, tariffs, economic sanctions and trade restrictions, social, political and economic risks, pandemics or epidemics, and acts of war or terrorism or other geopolitical conflicts.
The growth of our business and sales organization and our future continued expansion outside of the United States may increase the potential of violating these laws or our internal policies and procedures.
The growth of our business and sales organization and our continued expansion outside of the United States may increase the potential of violating these laws or our internal policies and procedures.
If our operations or those of the Pharmacies or Affiliated Medical Groups are found to be in violation of any of the federal, state, and foreign laws described above or any other current or future fraud and abuse or other healthcare laws and regulations that apply to us, we may be subject to penalties, including significant criminal, civil and administrative penalties, damages and fines, disgorgement, additional reporting requirements and oversight, imprisonment for individuals, and exclusion from the ability to participate in government healthcare programs, such as Medicare and Medicaid, as well as contractual damages and reputational harm.
If our operations or those of the Pharmacies or Affiliated Medical Groups are found to be in violation of any of the federal, state, and foreign laws described above or any other current or future 38 Table of Contents fraud and abuse or other healthcare laws and regulations that apply to us, we may be subject to penalties, including significant criminal, civil and administrative penalties, damages and fines, disgorgement, additional reporting requirements and oversight, imprisonment for individuals, and exclusion from the ability to participate in government healthcare programs, such as Medicare and Medicaid, as well as contractual damages and reputational harm.
For example, in some cases, the Federal Trade Commission has sought enforcement action where an endorsement has failed to clearly and conspicuously disclose a financial relationship or material connection between an influencer and an advertiser. FDA may also bring enforcement actions for false or misleading advertising and promotion of prescription drugs, including compounded drugs.
For example, in some cases, the Federal Trade Commission has sought enforcement action where an endorsement has failed to clearly and conspicuously disclose a financial relationship or material connection between an influencer and an advertiser. FDA may also bring enforcement actions for false or misleading advertising and promotion of prescription drugs, including compounded drugs, and medical devices.
We have received, and may in the future face, claims alleging violations of federal, state or local laws related to tracking technologies.
We have received, and may in the future face, claims alleging violations of foreign, federal, state or local laws related to tracking technologies.
Any such difficulties or failures with respect to the payment systems we utilize may have an adverse effect on our business. Our pricing decisions may adversely affect our ability to attract new customers, Providers, and other partners, or may otherwise impact our revenue and profitability. We have limited experience determining the optimal prices for our offerings.
Any such difficulties or failures with respect to the payment systems we utilize may have an adverse effect on our business. Our pricing decisions may adversely affect our ability to attract new customers, Providers, and other partners, or may otherwise impact our revenue and profitability. We have limited experience determining the optimal prices for certain of our offerings.
(See “–Use of social media and celebrity influencers may materially and adversely affect our reputation or subject us to fines or other penalties”).
(See “–Use of social media and influencers may materially and adversely affect our reputation or subject us to fines or other penalties”).
Under the UK GDPR, companies not established in the UK but who process personal data in relation to the offering of goods or services to individuals in the UK, or to monitor their behavior, are subject to the UK GDPR - the requirements of which are (at this time) largely aligned with those under the GDPR and may lead to significant compliance and operational costs.
Under the UK GDPR, companies not established in the United Kingdom but who process personal data in relation to the offering of goods or services to individuals in the United Kingdom, or to monitor their behavior, are subject to the UK GDPR, the requirements of which are (at this time) largely aligned with those under the GDPR and may lead to significant compliance and operational costs.
Accordingly, we may face resistance to our offerings from brick-and-mortar Providers. The market for our model and services is new, rapidly evolving, and increasingly competitive, as the healthcare industry in the United States is undergoing significant structural change and consolidation, which makes it difficult to forecast demand for our solutions.
Accordingly, we may face resistance to our offerings from brick-and-mortar Providers. The market for our model and services is relatively new, rapidly evolving, and increasingly competitive, as the healthcare industry in the United States is undergoing significant structural change and consolidation, which makes it difficult to forecast demand for our offerings.
In addition, our business model and the products and services we make available may be perceived by potential customers, Providers, suppliers, and partners to be less trustworthy or effective than traditional medical care or competitive telehealth options, and people may be unwilling to change their current health regimens or adopt our offerings.
In addition, our business model and the offerings we make available may be perceived by potential customers, Providers, suppliers, and partners to be less trustworthy or effective than traditional medical care or competitive telehealth options, and people may be unwilling to change their current health regimens or adopt our offerings.
Further, in 2024, the manufacturers of certain FDA-approved GLP-1 products requested FDA add semaglutide and tirzepatide to its “Demonstrable Difficulties for Compounding List”. FDA has never finalized the Demonstrable Difficulties for Compounding List for any drug products, but if FDA were to add semaglutide to, and finalize, the list, we could no longer compound these products.
Further, in 2024, the manufacturers of certain FDA-approved GLP-1 products requested FDA add semaglutide and tirzepatide to its “Demonstrable Difficulties for Compounding List.” FDA has never finalized the Demonstrable Difficulties for Compounding List for any drug products, but if FDA were to add semaglutide to, and finalize, the list, we could no longer compound these products.
From time to time, we are subject to legal proceedings in the ordinary course of business, which can include intellectual property disputes or claims related to our marketing or sale of products, any of which may be costly to defend and could materially harm our business and results of operations.
From time to time, we are subject to legal and regulatory proceedings and inquiries in the ordinary course of business, which can include intellectual property disputes or claims related to our marketing or sale of products, any of which may be costly to defend and could materially harm our business and results of operations.
Government regulations specific to pharmaceuticals are wide ranging and govern, among other things: the ability to bring a pharmaceutical to market, the conditions under which it can be compounded, the conditions under which it can be sold, the conditions under which it must be manufactured, and permissible claims that may be made for such product.
Government regulations specific to pharmaceuticals and medical devices are wide ranging and govern, among other things: the ability to bring a pharmaceutical to market, the conditions under which it can be compounded, the conditions under which it can be sold, the conditions under which it must be manufactured, and permissible claims that may be made for such product.
We believe that, because of our operating processes, in relation to our customers, we are not a covered entity or a business associate under the Health Insurance Portability and Accountability Act (“HIPAA”), which establishes a set of national privacy and security standards for the protection of protected health information by health plans, healthcare 36 Table of Contents clearinghouses, and certain healthcare providers, referred to as covered entities, and the business associates with whom such covered entities contract for services.
We believe that, because of our operating processes, in relation to our customers, we are not a covered entity or a business associate under the Health Insurance Portability and Accountability Act (“HIPAA”), which establishes a set of national privacy and security standards for the protection of protected health information by health plans, healthcare clearinghouses, and certain healthcare providers, referred to as covered entities, and the business associates with whom such covered entities contract for services.
If Providers, healthcare organizations or regulators work in opposition to us or if we are unable to reduce healthcare costs or drive positive health outcomes for our customers, then the market for our services may not continue to develop, or it might develop more slowly than we expect.
If Providers, healthcare organizations or regulators work in opposition to us or if we are unable to reduce healthcare costs or drive positive health outcomes for our customers, then the market for our offerings may not continue to develop, or it might develop more slowly than we expect.
Our systems are vulnerable to damage or interruption from the occurrence of any catastrophic event, including climate-related disasters or other extreme weather events such as earthquakes, fires, floods, hurricanes, tornadoes or tsunamis, power loss, telecommunications failure, software or hardware malfunction, cyber-attack, war, terrorist attack, or incident of mass violence, which could result in lengthy interruptions in access to our platform.
Our systems are vulnerable to damage or interruption from the occurrence of any catastrophic event, including climate-related disasters or other extreme weather events such as earthquakes, fires, floods, hurricanes, snow or ice storms, tornadoes or tsunamis, power loss, telecommunications failure, software or hardware malfunction, cyber-attack, war, terrorist attack, or incident of mass violence, which could result in lengthy interruptions in access to our platform.
If we raise additional funds through further issuances of equity or convertible debt securities, our existing stockholders could suffer significant dilution, and any new equity securities we issue could have rights, preferences, and privileges superior to those of holders of our common stock.
If we raise additional funds through further issuances of equity or convertible debt securities, our existing stockholders could suffer significant dilution, and any new equity securities we issue could have rights, preferences, and privileges superior to those of holders of our Class A common stock.
Although we contract with and monitor our influencers’ posts on social media, they may fail to comply with our content-related requirements, and if we were held responsible for any false, misleading, or otherwise unlawful content of their posts or their actions, we could be fined or subjected to other monetary liabilities or required to alter our practices, which could have an adverse impact on our business and reputation.
Although we contract with and monitor our 21 Table of Contents influencers’ posts on social media, they may fail to comply with our content-related requirements, and if we were held responsible for any false, misleading, or otherwise unlawful content of their posts or their actions, we could be fined or subjected to other monetary liabilities or required to alter our practices, which could have an adverse impact on our business and reputation.
Providers, or Manufacturing Suppliers to regulatory and/or legal enforcement actions, including the issuance of a warning letter, injunction, seizure, civil fine, and criminal penalties. Our product offerings include proprietary product formulas that we market as cosmetic products.
Providers, or Manufacturing Suppliers to regulatory and/or legal enforcement actions, such as the issuance of a warning letter, injunction, seizure, civil fine, and criminal penalties. Our product offerings include proprietary product formulas that we market as cosmetic products.
If our arrangements are deemed to be inconsistent with any applicable government entity’s interpretation of a law or regulation prohibiting the corporate practice of medicine, a fee-splitting law, or similar regulatory prohibitions, we would need to restructure the arrangements with the Affiliated Medical Groups to create a compliant arrangement or terminate the arrangement, and we could 21 Table of Contents face fines or other penalties in connection with such arrangements.
If our arrangements are deemed to be inconsistent with any applicable government entity’s interpretation of a law or regulation prohibiting the corporate practice of medicine, a fee-splitting law, or similar regulatory prohibitions, we would need to restructure the arrangements with the Affiliated Medical Groups to create a compliant arrangement or terminate the arrangement, and we could face fines or other penalties in connection with such arrangements.
Our ability to develop and maintain satisfactory relationships with Providers and the Affiliated Medical Groups also may be negatively impacted by other factors not associated with us, such as pressures on Providers, consolidation activity among hospitals, physician groups, and other healthcare providers, changes in the patterns of delivery and payment for healthcare services, and any perceived liability risks associated with the use of telehealth.
Our ability to develop and maintain satisfactory relationships with Providers and the Affiliated Medical Groups also may be negatively impacted by other factors not associated with us, such as pressures on Providers, consolidation activity among hospitals, physician groups, and other healthcare providers, changes in the patterns of delivery and payment for healthcare 26 Table of Contents services, and any perceived liability risks associated with the use of telehealth.
If we do not adequately protect our intellectual property, our brand and reputation could be harmed and competitors may be able to use our technologies and erode or negate any competitive advantage we may have, which could materially harm our business, negatively affect our position in the marketplace, limit our ability to commercialize our technology, and delay or render impossible our achievement of profitability.
If we do not adequately protect our intellectual property, our brand and reputation could be harmed and competitors may be able to use our technologies and erode or negate any competitive advantage we may have, which could 49 Table of Contents materially harm our business, negatively affect our position in the marketplace, limit our ability to commercialize our technology, and delay or render impossible our achievement of profitability.
Failure to successfully expand our capabilities, the loss, suspension or other limitation of any license held by a Pharmacy or MedisourceRx, or any failure or perceived failure by us or the Pharmacies or MedisourceRx to comply with any applicable federal, state, or local law or regulation could have a material adverse effect on our business, financial condition, and results of operations and may expose us to civil and criminal penalties.
Failure to successfully expand our capabilities, the loss, suspension or other limitation of any license held by a Pharmacy, or any failure or perceived failure by us or the Pharmacies to comply with any applicable federal, state, or local law or regulation, and equivalent foreign law, could have a material adverse effect on our business, financial condition, and results of operations and may expose us to civil and criminal penalties.
For example, the federal anti-kickback law (the “Anti-Kickback Law”) prohibits, among other things, knowingly and willfully offering, paying, soliciting, receiving, or providing remuneration, directly or indirectly, in exchange for or to induce either the referral of an individual, or the furnishing, arranging for, or recommending of an item or service that is reimbursable, in whole or in part, by a federal healthcare program.
For example, the Anti-Kickback Law prohibits, among other things, knowingly and willfully offering, paying, soliciting, receiving, or providing remuneration, directly or indirectly, in exchange for or to induce or reward either the referral of an individual, or the furnishing, arranging for, or recommending of an item or service that is reimbursable, in whole or in part, by a federal healthcare program.
Consumers who have healthcare insurance coverage may not wish to use our platform to access healthcare services or products for which insurance reimbursement is not available. Moreover, we believe that Providers can be slow to change their treatment practices or approaches because of perceived liability risks or distrust of departures from traditional practice.
Consumers who have healthcare 23 Table of Contents insurance coverage may not wish to use our platform to access healthcare services or products for which insurance reimbursement is not available. Moreover, we believe that Providers can be slow to change their treatment practices or approaches because of perceived liability risks or distrust of departures from traditional practice.
“Remuneration” is broadly defined under the Anti-Kickback Law to include anything of value, such as, for example, cash payments, gifts or gift certificates, discounts, or the furnishing of services, supplies, or equipment. The Anti-Kickback Law is broad, and it prohibits many arrangements and practices that are lawful in businesses outside of the healthcare industry.
“Remuneration” is broadly defined under the Anti-Kickback Law to include anything of value, such as, for example, cash 40 Table of Contents payments, gifts or gift certificates, discounts, or the furnishing of services, supplies, or equipment. The Anti-Kickback Law is broad, and it prohibits many arrangements and practices that are lawful in businesses outside of the healthcare industry.
Additionally, the majority of our revenue is driven by products and services offered through our platform on a subscription basis, and the adoption of subscription business models is still relatively new, especially in the healthcare industry.
Additionally, in the United States, the majority of our revenue is driven by products and services offered through our platform on a subscription basis, and the adoption of subscription business models is still relatively new, especially in the healthcare industry.
Changes in insurance and healthcare laws, as well as the potential for further healthcare reform legislation and regulation, have created uncertainty in the healthcare industry and could materially affect our business, financial condition, and results of operations.
Changes in insurance and healthcare laws in the United States, as well as the potential for further healthcare reform legislation and regulation, have created uncertainty in the healthcare industry and could materially affect our business, financial condition, and results of operations.
If we fail to maintain, protect, and enhance our intellectual property rights, our business, financial condition, and results of operations may be harmed. We may in the future be subject to claims that we violated intellectual property rights of others, which are extremely costly to defend and could require us to pay significant damages and limit our ability to operate.
If we fail to maintain, protect, and enhance our intellectual property rights, our business, financial condition, and results of operations may be harmed. 50 Table of Contents We are, and may in the future be, subject to claims that we violated intellectual property rights of others, which are extremely costly to defend and could require us to pay significant damages and limit our ability to operate.
Any technological breakthroughs in monitoring, treatment, or prevention of medical conditions, including through disruptive technologies such as artificial intelligence, that we are unable to similarly leverage could reduce the potential market for our offerings, which could significantly reduce our revenue and our potential to grow certain aspects of our business.
Any technological breakthroughs in monitoring, treatment, or prevention of medical conditions, including through disruptive technologies such as artificial intelligence, that we are unable to similarly leverage 24 Table of Contents could reduce the potential market for our offerings, which could significantly reduce our revenue and our potential to grow certain aspects of our business.
We also depend on cloud infrastructure providers, payment processors, suppliers of non-prescription products and packaging, and various others that allow our platform to function effectively and serve the needs of our customers. Difficulties with our significant partners and suppliers, regardless of the reason, could have a material adverse effect on our business.
We also depend on cloud infrastructure providers, payment processors, suppliers of prescription and non-prescription products and packaging, shipping and delivery services, and various others that allow our platform to function effectively and serve the needs of our customers. Difficulties with our significant partners and suppliers, regardless of the reason, could have a material adverse effect on our business.
Some of our competitors may be able to sustain the costs of complex patent litigation more effectively than we can because they have substantially greater resources. If we cannot license or develop technology, content, branding or business methods for any allegedly 41 Table of Contents infringing aspect of our business, we may be unable to compete effectively.
Some of our competitors may be able to sustain the costs of complex patent litigation more effectively than we can because they have substantially greater resources. If we cannot license or develop technology, content, branding or business methods for any allegedly infringing aspect of our business, we may be unable to compete effectively.
In addition, pursuant to SEC rules, we are required to make certain 45 Table of Contents cybersecurity disclosures, including related to material cybersecurity incidents and the reasonably likely impact of such an incident.
In addition, pursuant to SEC rules, we are required to make certain 55 Table of Contents cybersecurity disclosures, including related to material cybersecurity incidents and the reasonably likely impact of such an incident.
Dudum holds, directly or indirectly, approximately 90% of the outstanding voting power and will be able to control matters submitted to our stockholders for approval, including the election of directors, amendments of our organizational documents and any merger, consolidation, sale of all or substantially all of our assets or other major corporate transactions. Mr.
Dudum holds, directly or indirectly, approximately 90% of the outstanding voting power and will be able to control matters submitted 57 Table of Contents to our stockholders for approval, including the election of directors, amendments of our organizational documents and any merger, consolidation, sale of all or substantially all of our assets or other major corporate transactions. Mr.
Alternatively, the introduction of new products, services or technologies could expose us to new or increased regulatory risks, including with respect to healthcare, privacy, or consumer protection laws, either through the provision of such products, services, or technologies, or by virtue of the new or expanded personal and health information we acquire from customers to support such offerings.
Alternatively, the introduction of new products, services or technologies could expose us to new or increased regulatory risks, including with respect to healthcare, privacy, or consumer protection laws, either through the provision of such products, services, or technologies, or by virtue of the new or expanded personal and health information we 19 Table of Contents acquire from customers to support such offerings.
Any claims made against us, our Partner Pharmacies, our Facilities, Manufacturing Suppliers, the Affiliated Medical Groups, and/or the Providers that are not fully covered by insurance could be costly to defend against, result in substantial damage awards against us, and divert the attention of our management, our Partner Pharmacies, our Facilities, Manufacturing Suppliers, Affiliated Medical Groups, and/or Providers from their respective operations, which could have a material adverse effect on our business, financial condition, and results of operations.
Any claims made against us, our Partner Pharmacies, our Facilities (and associated personnel, including pharmacists), Manufacturing Suppliers, the Affiliated Medical Groups, and/or the Providers that are not fully covered by insurance could be costly to defend against, result in substantial damage awards against us, and divert the attention of our management, our Partner Pharmacies, our Facilities, Manufacturing Suppliers, Affiliated Medical Groups, and/or Providers from their respective operations, which could have a material adverse effect on our business, financial condition, and results of operations.
If we are unable to renew our agreements with these third-party service providers on commercially reasonable terms, if our agreements with these providers are prematurely terminated, or if in the future we add additional data, call center, or pharmacy providers, we may experience costs or downtime in connection with the transfer to, or the addition of, such new providers.
If we are unable to renew our agreements with these third-party service providers on commercially reasonable terms, if our agreements with these 31 Table of Contents providers are prematurely terminated, or if in the future we add additional data, call center, or pharmacy providers, we may experience costs or downtime in connection with the transfer to, or the addition of, such new providers.
Even where we have intellectual property rights, they may later be found to be unenforceable or have a limited scope of enforceability. In addition, we may not 40 Table of Contents seek to pursue such protection in every jurisdiction. In particular, we believe it is important to maintain, protect, and enhance our brand.
Even where we have intellectual property rights, they may later be found to be unenforceable or have a limited scope of enforceability. In addition, we may not seek to pursue such protection in every jurisdiction. In particular, we believe it is important to maintain, protect, and enhance our brand.
Factors that may contribute to the variability of our results of operations include: • new developments on our platform or in our product offerings; • our ability to attract and retain customers and Providers to our platform; • changes in our pricing policies and those of our competitors; • our ability to execute our plans to add treatment options and Provider expertise for additional medical conditions; • long-term treatment outcomes of customers on our platform; • medical, technological, or other innovations in our industry or in connection with specific products that we make available on our platform; • our ability to maintain relationships with customers, partners, and suppliers; • our ability to retain key members of our executive leadership team; • successful expansion of licensure and capabilities of the Pharmacies and MedisourceRx; • breaches of security or privacy; • the amount and timing of operating costs and capital expenditures related to the expansion of our business; • our ability to complete acquisitions on commercially reasonable terms and integrate acquired businesses; • costs related to litigation, investigations, regulatory enforcement actions, or settlements; 44 Table of Contents • changes in the legislative or regulatory environment, including with respect to practice of medicine, telehealth, pharmaceuticals or compounding, consumer protection, privacy or data protection, or enforcement by government regulators, including fines, orders, or consent decrees; • announcements by competitors or other third parties of significant new products or acquisitions or entrance into certain markets; • our ability to make accurate accounting estimates and appropriately recognize revenue for our platform and offerings for which there are no relevant comparable products; • seasonality trends in our weight loss specialty; • instability in the financial markets; • global economic and trade conditions, including tariffs, economic sanctions, and trade restrictions; and • political, economic, and social instability, including as a result of ongoing conflict arising out of the Russian invasion of Ukraine, the hostilities and conflict in the Middle East, or other war or terrorist activities, and any disruption these events may cause to the global economy.
Factors that may contribute to the variability of our results of operations include: • new developments on our platform or in our product offerings; • our ability to attract and retain customers and Providers to our platform; • changes in our pricing policies and those of our competitors; • our ability to execute our plans to add treatment options, testing services, and Provider expertise for additional medical conditions; • long-term treatment outcomes of customers on our platform; • medical, technological, or other innovations in our industry or in connection with specific products that we make available on our platform; • our ability to maintain relationships with customers, partners, and suppliers; • our ability to retain key members of our executive leadership team; • successful expansion of licensure and capabilities of the Pharmacies, our peptide manufacturing facility and our laboratory testing facility; • successful expansion into international markets; • breaches of security or privacy; • the amount and timing of operating costs and capital expenditures related to the expansion of our business; • our ability to complete acquisitions on commercially reasonable terms and integrate acquired businesses; • costs and the diversion of management attention related to litigation, investigations, regulatory enforcement actions, or settlements; 54 Table of Contents • changes in the legislative or regulatory environment, including with respect to practice of medicine, telehealth, pharmaceuticals or compounding, consumer protection, privacy or data protection, or enforcement by government regulators, including fines, orders, or consent decrees; • announcements by competitors or other third parties of significant new products or acquisitions or entrance into certain markets; • our ability to make accurate accounting estimates and appropriately recognize revenue for our platform and offerings for which there are no relevant comparable products; • seasonality trends in our weight loss specialty; • instability in the financial markets; • global economic and trade conditions, including tariffs, economic sanctions, and trade restrictions; and • political, economic, and social instability, including as a result of ongoing conflict arising out of the Russian invasion of Ukraine, the hostilities and conflict in the Middle East, or other war or terrorist activities, and any disruption these events may cause to the global economy.
Achieving and maintaining market acceptance of our model and our services could be negatively impacted by many factors, including, to the extent they arise from: • perceived risks associated with the use of our platform, telehealth or similar technologies generally, including those related to privacy, customer data (including personal and health information), and the use of artificial intelligence; • perceived risks associated with compounded medications, including the prescribing, compounding, fulfillment, distribution, and marketing of such medications; • our inability to expand into new conditions and/or to attract and retain qualified Providers; • regulatory developments that affect our business, including in healthcare, data privacy and security, consumer protection, and artificial intelligence; • competitors offering telehealth options or technologies for customers and the rate of acceptance of those solutions as compared to our platform; • perceived difficulty or complexity of obtaining a medical consultation or prescription on our platform; • dissatisfaction with our pricing or billing practices; • the ability of the Facilities to meet inventory and product fulfillment expectations; • negative reviews of Providers treating our customers; • perceived ethical questions and potential negative public perception surrounding the use of customer data and artificial intelligence; and • unsatisfactory suggestions made by artificial intelligence tools.
Achieving and maintaining market acceptance of our model and our offerings could be negatively impacted by many factors, including: • perceived risks associated with the use of our platform, telehealth or similar technologies generally, including those related to privacy, customer data (including personal and health information), and the use of artificial intelligence; • perceived risks associated with compounded medications, including the prescribing, compounding, safety, efficacy, fulfillment, distribution, and marketing of such medications; • our inability to expand into new conditions and/or to attract and retain qualified Providers; • regulatory developments that affect our business, including in healthcare, data privacy and security, consumer protection, and artificial intelligence; • competitors offering telehealth options or technologies for customers and the rate of acceptance of those solutions as compared to our platform; • perceived difficulty or complexity of obtaining a medical consultation or prescription on our platform; • dissatisfaction with our pricing or billing practices; • the ability of the Facilities to meet inventory and product fulfillment expectations; • negative reviews of Providers treating our customers; • perceived ethical questions and potential negative public perception surrounding the use of customer data and artificial intelligence; and • unsatisfactory suggestions made by artificial intelligence tools.
Our platform’s continuing and uninterrupted performance is critical to our success. Because our platform is used by our customers to engage with Providers who can diagnose, manage, and treat medical conditions, and pharmacies that can fulfill and ship prescription medication, it is critical that our platform be accessible without 26 Table of Contents interruption or degradation of performance.
Our platform’s continuing and uninterrupted performance is critical to our success. Because our platform is used by our customers to engage with Providers who can diagnose, manage, and treat medical conditions, and pharmacies that can fulfill and ship prescription medication, it is critical that our platform be accessible without interruption or degradation of performance.
Competition for these 29 Table of Contents resources, particularly for engineers with expertise in areas like programming, machine learning and artificial intelligence, is intense. We may need to invest significant amounts of cash and equity to attract new and existing employees and we may never realize returns on these investments.
Competition for these resources, particularly for engineers with expertise in areas like machine learning and artificial intelligence, is intense. 34 Table of Contents We may need to invest significant amounts of cash and equity to attract new and existing employees and we may never realize returns on these investments.
If we are not successful in demonstrating to existing and potential customers the benefits of our services, our revenue may decline or we may fail to increase our revenue in line with our forecasts.
If we are not successful in demonstrating to existing and potential customers the benefits of our offerings, our revenue may decline or we may fail to increase our revenue in line with our forecasts.
Since developing enhancements to our products and services and the launch of new offerings can be complex, the timetable for the release of new offerings and 15 Table of Contents enhancements to our existing products and services is difficult to predict, and we may not launch new offerings and updates as rapidly as our current or prospective customers require or expect.
Since developing enhancements to our products and services and the launch of new offerings can be complex, the timetable for the release of new offerings and enhancements to our existing products and services is difficult to predict, and we may not launch new offerings and updates as rapidly as our current or prospective customers require or expect.
Additionally, changes in regulations or the business practices of third-parties could limit our 16 Table of Contents ability, and the ability of search engines and social media platforms, to collect data from users and engage in targeted advertising, which could negatively impact the effectiveness of our digital marketing.
Additionally, changes in regulations or the business practices of third parties could limit our ability, and the ability of search engines and social media platforms, to collect data from users and engage in targeted advertising, which could negatively impact the effectiveness of our digital marketing.
A “financial relationship” is created by an investment interest or a compensation arrangement. Penalties for violating the Stark Law include the return of funds received for all prohibited referrals, fines, civil monetary penalties, and possible exclusion from the federal healthcare programs.
A “financial relationship” is created by an investment interest or a compensation arrangement. Penalties for violating the Stark Law include the return of funds received for all prohibited referrals, fines, civil monetary penalties, and exclusion from participation in federal healthcare programs.
These efforts may prove more expensive than we currently anticipate, and we may not succeed in increasing our revenue sufficiently to offset these higher expenses. To date, we have financed our operations principally from the sale of our equity, revenue from our platform, and the incurrence of indebtedness.
These efforts may prove more expensive than we currently anticipate, and we may not succeed in increasing our revenue sufficiently to offset these higher expenses. To date, we have financed our operations principally from the sale of equity and convertible debt instruments, revenue from our platform, and the incurrence of indebtedness.
In particular, our products, business, results of operations, and statements and actions of our company and management are subject to significant amounts of commentary by a range of third parties.
In particular, our offerings, business, results of operations, and statements and actions of our company and management are subject to significant amounts of commentary by a range of third parties.
If our customers experience difficulty accessing or using, or if they elect not to use, our mobile websites or mobile applications, our business and results of operations may be adversely affected. Our business depends on continued and unimpeded access to the internet and mobile networks.
If our customers experience difficulty accessing or using, or if they elect not to use, our mobile websites or mobile applications, our business and results of operations may be adversely affected. 30 Table of Contents Our business depends on continued and unimpeded access to the internet and mobile networks.
If this supplier stops fulfilling purchase orders, it could significantly slow our ability to fulfill these orders until new suppliers are onboarded and internal manufacturing capabilities are expanded, which could adversely impact our results of operations and business.
If this supplier stops fulfilling purchase orders, it could significantly slow our ability to fulfill these orders until new suppliers are identified and fully onboarded and/or our internal manufacturing capabilities are expanded, which could adversely impact our results of operations and business.
However, if we begin accepting reimbursement from insurance providers or other third parties or if the government asserts broader regulatory control over companies like ours, the complexity of our operations and our compliance obligations will materially increase.
However, if we begin accepting reimbursement from insurance providers or other third parties in these jurisdictions, or if the government asserts broader regulatory control over companies like ours, the complexity of our operations and our compliance obligations will materially increase.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

11 edited+7 added−0 removed8 unchanged
Biggest changeOur cybersecurity risk management extends to risks associated with our use of third-party service providers. We evaluate vendor security through an integrated process with our legal team to assess security and privacy risks to the business. This integrated process helps ensure appropriate contract provisions and complementary controls are in place to protect our and our customers’ data.
Biggest changeAny observations are ranked by severity and prioritized for response and remediation. Our cybersecurity risk management extends to risks associated with our use of third-party service providers. We evaluate vendor security through an integrated process with our legal team to assess security and privacy risks to the business.
Our Head of Information Security reports to the Audit Committee on a quarterly basis on any relevant cybersecurity issues or risks, related controls, procedures and programming, material cybersecurity and data privacy incidents (if any), as well as any material updates to our cybersecurity risk management and strategy, broader cybersecurity trends, and relevant educational information.
Our Head of Information Security reports to the Audit Committee on a quarterly basis any relevant cybersecurity issues or risks, related controls, procedures and programming, material cybersecurity and data privacy incidents (if any), as well as any material updates to our cybersecurity risk management and strategy, broader cybersecurity trends, and relevant educational information.
Of these, the last 10 years have specifically focused on building, managing, and supporting robust security programs across highly regulated industries. The Head of Information Security holds relevant credentials through leading organizations including CISSP (ISC2), CCSP (ISC2), CRISC (ISACA), CCISO (EC-Council), and QTE (DDN).
Of these, the last 10 plus years have specifically focused on building, managing, and supporting robust security programs across highly regulated industries. The Head of Information Security holds relevant credentials through leading organizations including CISSP (ISC2), CCSP (ISC2), CRISC (ISACA), CCISO (EC-Council), and QTE (DDN).
Governance Our Board of Directors maintains overall oversight of our risk management. The Audit Committee is specifically tasked with reviewing cybersecurity and other information technology risks, controls, and procedures, including our plans to mitigate cybersecurity risks and to respond to data breaches.
Governance Our Board of Directors maintains overall oversight of our risk management. The Audit Committee is specifically tasked with reviewing cybersecurity and other information technology risks, controls, and procedures, including our plans to mitigate 61 Table of Contents cybersecurity risks and to respond to data breaches.
The Audit Committee also reviews with management any specific cybersecurity issues that could affect the adequacy of our internal controls.
This committee also reviews with management any specific cybersecurity issues that could affect the adequacy of our internal controls.
Key vendors are reassessed annually to confirm their control environment remains secure and meets our expectations. 50 Table of Contents Our platform is continuously probed and attacked by malicious actors, and accordingly, the controls and practices utilized by our cybersecurity and technology teams have continued to evolve.
Key vendors are reassessed annually to confirm their control environment remains secure and meets our expectations. Our platform is continuously probed and attacked by malicious actors, and accordingly, the controls and practices utilized by our cybersecurity and technology teams have continued to evolve.
These individuals are informed about and monitor the prevention, mitigation, detection and remediation of cybersecurity incidents through their management of, and participation in, the cybersecurity risk management and strategy processes described above, which include escalation to the CCO and the Audit Committee, as appropriate.
These individuals are informed about and monitor the prevention, mitigation, detection and remediation of cybersecurity incidents through their management of, and participation in, the cybersecurity risk management and strategy processes described above, which include escalation to the CTO and executive leadership, as well as the Audit and Risk Committees when appropriate.
We have implemented a comprehensive set of processes for assessing, identifying, and managing material risks from cybersecurity threats. We conduct continuous vulnerability scanning and periodic penetration tests to evaluate risks in key infrastructure and applications as part of ongoing cybersecurity management and in accordance with required regulatory practices. Any observations are ranked by severity and prioritized for response and remediation.
We have implemented a comprehensive set of processes for assessing, identifying, and managing material risks from cybersecurity threats. We conduct continuous vulnerability scanning and periodic penetration tests to evaluate risks in key 60 Table of Contents infrastructure and applications as part of ongoing cybersecurity management and in accordance with required regulatory practices.
While we have not experienced any material cybersecurity threats or incidents in recent years, there can be no guarantee that we will not be the subject of future threats or incidents.
While we have not experienced any material cybersecurity threats or incidents in recent years, there can be no guarantee that we will not be the subject of future threats or incidents. Like other companies, we are subject to cybersecurity threats and nonmaterial cybersecurity incidents from time to time.
We execute this review process as we onboard a new vendor or renew a contract with an existing vendor, or when there are significant changes in the scope of services provided by the vendor.
This integrated process helps ensure appropriate contract provisions and complementary controls are in place to protect our and our customers’ data. We execute this review process as we onboard a new vendor or renew a contract with an existing vendor, or when there are significant changes in the scope of services provided by the vendor.
We employ a cybersecurity team of seasoned professionals with direct experience in securing both large and small enterprises. The team is led by our Head of Information Security, who reports to the Chief Operating Officer (COO). The Head of Information Security has nearly 20 years of experience in various technology leadership roles.
We maintain a dedicated cybersecurity team of seasoned professionals with proven expertise in securing large-scale enterprises across diverse industries. The team is led by our Head of Information Security, who reports to the Chief Technology Officer (CTO). The Head of Information Security has 20 years of experience in various technology leadership roles.
Added
For example, in early February 2026, we identified a cybersecurity incident (the “Incident”) in which an unauthorized third party gained access to certain of our systems by means of a social engineering attack on two employees.
Added
In response to the Incident, we promptly initiated our cybersecurity response plans and took steps to assess, contain, and remediate the unauthorized activity, including isolating the affected systems, launching an investigation with the assistance of external cybersecurity advisors, and coordinating with law enforcement.
Added
As of the date of this Annual Report on Form 10-K, we have confirmed that our customer service software platform was accessed and certain customer information was obtained. We have further confirmed that the vast majority of customer information accessed was limited to personally identifiable information (PII), specifically, names and email addresses, and less frequently phone numbers and physical addresses.
Added
Additionally, for customers who contacted customer service between mid-February 2025 and early February 2026 through our online customer service platform, the unauthorized third party may have gained access to customer data regarding category of treatment and other information included in their communications with customer service. Our electronic medical record was not accessed.
Added
When our investigation is complete, we will make required regulatory and individual notifications on a rolling basis. Our investigation into the Incident is ongoing, and we are still in the process of gathering details regarding the scope of information involved.
Added
While our investigation and assessment of the Incident is ongoing, as of the date of this Annual Report on Form 10-K, we do not believe the Incident is reasonably likely to materially impact our financial condition or results of operations.
Added
However, if new or additional information were to come to light as the investigation progresses, the impact of the incident could prove to be material to our business, financial condition, results of operations, or cash flows.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeItem 2. Properties Hims & Hers’ address is 2269 Chestnut Street, #523, San Francisco, California 94123. In addition, as of December 31, 2024 we lease and operate fulfillment centers and Pharmacy facilities in New Albany, Ohio, Gilbert, Arizona, and Los Alamitos, California, along with a corporate facility in New York, New York.
Biggest changeItem 2. Properties Hims & Hers’ address is 2269 Chestnut Street, #523, San Francisco, California 94123. In addition, as of December 31, 2025 we lease and operate office spaces, fulfillment centers, and Facilities in locations around the United States as well as in the United Kingdom, the European Union, and Canada.
Hims & Hers’ workforce is currently working on a fully remote basis with the exception of those employees serving our fulfillment operations and certain of our Facilities.
Hims & Hers’ workforce is currently working on a fully remote basis with the exception of those employees serving our fulfillment operations and certain of our Facilities, and certain employees internationally. We believe the Facilities are in good operating condition and are suitable for the conduct of our business.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeItem 3. Legal Proceedings From time to time, we are party to litigation and subject to claims incident to the ordinary course of business. As our growth continues, we may become party to an increasing number of litigation matters and claims.
Biggest changeItem 3. Legal Proceedings In addition to the legal matters described in Note 14 – Commitments and Contingencies included in Part II, Item 8 of this Annual Report on Form 10-K, we are, from time to time, a party to litigation, various claims, and other legal and administrative proceedings arising in the ordinary course of business.
Removed
The outcome of litigation and claims cannot be predicted with certainty, and the resolution of these matters could materially affect our future results of operations, cash flows, or financial position.
Added
Some of these claims, lawsuits, and other proceedings may involve highly complex issues that are subject to substantial uncertainties, and could result in damages, fines, penalties, non-monetary sanctions, or relief. Management is not currently aware of any matters that are reasonably likely to have a material adverse impact on our business, financial position, results of operations, or cash flows.
Removed
We are not presently party to any legal proceedings that, in the opinion of management, if 51 Table of Contents determined adversely to us, would individually or taken together have a material adverse effect on our business, operating results, financial condition, or cash flows.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

6 edited+2 added−2 removed3 unchanged
Biggest changeWe issued the foregoing securities in transactions not involving an underwriter and not requiring registration under Section 5 of the Securities Act, in reliance on the exemption afforded by Section 4(a)(2) thereof. 53 Table of Contents Stock Performance Graph The following graph compares the cumulative total return to stockholders on our Class A common stock relative to the cumulative total returns of the Nasdaq Internet Index, the S&P 500 Health Care Sector Index, and the Russell 2000 Index.
Biggest changeThe 2025 Share Repurchase Program expires on November 11, 2028, and may be suspended or discontinued at any time. 63 Table of Contents Stock Performance Graph The following graph compares the cumulative total return to stockholders on our Class A common stock relative to the cumulative total returns of the Nasdaq Internet Index, the S&P 500 Health Care Sector Index, and the Russell 2000 Index.
(2) On July 24, 2024, we announced that our Board of Directors had authorized the 2024 Share Repurchase Program, pursuant to which we may repurchase up to $100.0 million of our Class A common stock through open market purchases, privately negotiated transactions or other means.
(2) On July 24, 2024, we announced that our Board of Directors had authorized the 2024 Share Repurchase Program, pursuant to which we were authorized to repurchase up to $100.0 million of our Class A common stock through open market purchases, privately negotiated transactions or other means.
An investment of $100 (with reinvestment of all dividends) is assumed to have been made in our Class A common stock and in each index on January 21, 2021, the date our Class A common stock began trading on the NYSE, and its relative performance is tracked through December 31, 2024.
An investment of $100 (with reinvestment of all dividends) is assumed to have been made in our Class A common stock and in each index on January 21, 2021, the date our Class A common stock began trading on the NYSE, and its relative performance is tracked through December 31, 2025.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information Our Class A common stock trades on the New York Stock Exchange (“NYSE”) under the symbol “HIMS”. Holders On February 21, 2025 , there were 93 holders of record of our Class A common stock.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market Information Our Class A common stock trades on the New York Stock Exchange (“NYSE”) under the symbol “HIMS”. Holders On February 20, 2026 , there were 93 holders of record of our Class A common stock.
Securities Authorized for Issuance under Equity Compensation Plans The information concerning our equity compensation plans is incorporated by reference herein to the section of the 2025 Proxy Statement entitled “Equity Compensation Plan Information.” Issuer Purchases of Equity Securities Share repurchase activity during the three months ended December 31, 2024 was as follows (in thousands, except share and per share data): Total Number of Shares of Class A Common Stock Purchased Average Price Paid per Share (1) Total Number of Shares Purchased as Part of the Publicly Announced Program Approximate Dollar Value of Shares That May Yet Be Purchased Under the Publicly Announced Program (2) October 1, 2024 to October 31, 2024 — $ — — November 1, 2024 to November 30, 2024 238,736 $ 20.96 238,736 December 1, 2024 to December 31, 2024 — $ — — Total repurchases 238,736 $ 64,957 ______________ (1) Average price paid per share includes costs associated with the repurchases.
Securities Authorized for Issuance under Equity Compensation Plans The information concerning our equity compensation plans is incorporated by reference herein to the section of the 2026 Proxy Statement entitled “Equity Compensation Plan Information.” Issuer Purchases of Equity Securities Share repurchase activity during the three months ended December 31, 2025 was as follows (in thousands, except share and per share data): Total Number of Shares of Class A Common Stock Purchased Average Price Paid per Share (1) Total Number of Shares Purchased as Part of the Publicly Announced Programs Approximate Dollar Value of Shares That May Yet Be Purchased Under the Publicly Announced Programs (2)(3) October 1, 2025 to October 31, 2025 — $ — — November 1, 2025 to November 30, 2025 2,042,652 $ 39.41 2,042,652 December 1, 2025 to December 31, 2025 — $ — — Total repurchases 2,042,652 $ 224,986 ______________ (1) Average price paid per share includes costs associated with the repurchases.
As of December 31, 2024, $35.0 million of our shares of Class A common stock had been repurchased under the authorization. The 2024 Share Repurchase Program expires on August 31, 2027.
As of December 31, 2025, $25.0 million of our shares of Class A common stock had been repurchased under the authorization.
Removed
Unregistered Sales of Equity Securities and Use of Proceeds In December 2024, 190,373 of the outstanding Class A common stock warrants issued to nonemployees in connection with vendor service arrangements, with a weighted average exercise price of $1.75, were exercised for 190,373 shares of Class A common stock.
Added
The repurchase program had an expiration date of August 31, 2027, and was fully utilized as part of the share repurchases made during the fourth quarter of 2025.
Removed
Upon the exercise of these warrants, the holder received an additional 18,622 shares of Class A common stock based on the terms of the earn-out arrangement. For more detail regarding the transaction, see Note 14 – Stockholders’ Equity to the consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K.
Added
(3) Following the full utilization of the 2024 Share Repurchase Program, on November 17, 2025, we announced that our Board of Directors had authorized the 2025 Share Repurchase Program, pursuant to which we may repurchase up to $250.0 million of our Class A common stock through open market purchases, privately negotiated transactions or other means.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

105 edited+63 added−22 removed50 unchanged
Biggest changeIf and when we conclude that we are more likely than not to utilize some or all of our deferred tax assets, we release some or all of our valuation allowance and our tax provision will decrease in the period in which we make such determination, which will cause a corresponding one-time increase to net income. 62 Table of Contents Results of Operations Comparisons for the years ended December 31, 2024 and 2023 The following table sets forth our consolidated statement of operations for the years ended December 31, 2024, 2023, and 2022 and the dollar and percentage change between the three periods (dollars in thousands): Year Ended December 31, 2024 Change % Change 2023 Change % Change 2022 Revenue $ 1,476,514 $ 604,514 69 % $ 872,000 $ 345,084 65 % $ 526,916 Cost of revenue 303,379 146,328 93 % 157,051 38,857 33 % 118,194 Gross profit 1,173,135 458,186 64 % 714,949 306,227 75 % 408,722 Operating expenses: (1) Marketing 678,844 232,409 52 % 446,435 173,848 64 % 272,587 Operations and support 185,802 65,945 55 % 119,857 42,454 55 % 77,403 Technology and development 78,819 30,592 63 % 48,227 18,990 65 % 29,237 General and administrative 167,767 37,884 29 % 129,883 31,691 32 % 98,192 Total operating expenses 1,111,232 366,830 49 % 744,402 266,983 56 % 477,419 Income (loss) from operations 61,903 91,356 * (29,453) 39,244 (57) % (68,697) Other income (expense): Change in fair value of liabilities — 1,075 (100) % (1,075) (1,145) * 70 Other income, net 9,808 851 10 % 8,957 6,039 207 % 2,918 Total other income, net 9,808 1,926 24 % 7,882 4,894 164 % 2,988 Income (loss) before income taxes 71,711 93,282 * (21,571) 44,138 (67) % (65,709) Benefit (provision) for income taxes 54,327 56,302 * (1,975) (2,006) * 31 Net income (loss) $ 126,038 $ 149,584 * $ (23,546) $ 42,132 (64) % $ (65,678) ______________ (*) Not meaningful (1) Includes stock-based compensation expense as follows (in thousands): Year Ended December 31, 2024 2023 2022 Marketing $ 9,392 $ 5,477 $ 4,648 Operations and support 10,205 6,815 2,684 Technology and development 12,534 7,126 4,327 General and administrative 60,191 46,662 31,158 Total stock-based compensation expense $ 92,322 $ 66,080 $ 42,817 63 Table of Contents The following table sets forth our results of operations as a percentage of our total revenue for the periods presented: Year Ended December 31, 2024 2023 2022 Revenue 100 % 100 % 100 % Cost of revenue 21 % 18 % 22 % Gross profit 79 % 82 % 78 % Operating expenses: Marketing 46 % 51 % 52 % Operations and support 13 % 14 % 15 % Technology and development 5 % 6 % 6 % General and administrative 11 % 15 % 18 % Total operating expenses 75 % 86 % 91 % Income (loss) from operations 4 % (4) % (13) % Other income (expense): Change in fair value of liabilities — % — % — % Other income, net 1 % 1 % 1 % Total other income, net 1 % 1 % 1 % Income (loss) before income taxes 5 % (3) % (12) % Benefit (provision) for income taxes 4 % — % — % Net income (loss) 9 % (3) % (12) % Revenue Revenue was $1,476.5 million for the year ended December 31, 2024 compared to $872.0 million for the year ended December 31, 2023, an increase of $604.5 million, or 69%.
Biggest changeAny future releases of our current valuation allowance would be immaterial to the consolidated statements of operations. 74 Table of Contents Results of Operations Comparisons for the years ended December 31, 2025 and 2024 The following table sets forth our consolidated statement of operations for the years ended December 31, 2025, 2024, and 2023 and the dollar and percentage change between the three periods (dollars in thousands): Year Ended December 31, 2025 Change % Change 2024 Change % Change 2023 Revenue $ 2,347,637 $ 871,123 59 % $ 1,476,514 $ 604,514 69 % $ 872,000 Cost of revenue 614,259 310,880 102 % 303,379 146,328 93 % 157,051 Gross profit 1,733,378 560,243 48 % 1,173,135 458,186 64 % 714,949 Operating expenses: (1) Marketing 919,296 240,452 35 % 678,844 232,409 52 % 446,435 Operations and support 286,444 100,642 54 % 185,802 65,945 55 % 119,857 Technology and development 149,301 70,482 89 % 78,819 30,592 63 % 48,227 General and administrative 272,724 104,957 63 % 167,767 37,884 29 % 129,883 Total operating expenses 1,627,765 516,533 46 % 1,111,232 366,830 49 % 744,402 Income (loss) from operations 105,613 43,710 71 % 61,903 91,356 * (29,453) Other income (expense): Change in fair value of equity securities 4,437 4,437 100% — — — % — Change in fair value of liabilities (9,255) (9,255) (100)% — 1,075 (100) % (1,075) Other income, net 23,129 13,321 136 % 9,808 851 10 % 8,957 Total other income, net 18,311 8,503 87 % 9,808 1,926 24 % 7,882 Income (loss) before income taxes 123,924 52,213 73 % 71,711 93,282 * (21,571) Benefit from (provision for) income taxes 4,441 (49,886) (92) % 54,327 56,302 * (1,975) Net income (loss) $ 128,365 $ 2,327 2 % $ 126,038 $ 149,584 * $ (23,546) ______________ (*) Not meaningful (1) Includes stock-based compensation expense as follows (in thousands): Year Ended December 31, 2025 2024 2023 Marketing $ 12,510 $ 9,392 $ 5,477 Operations and support 18,910 10,205 6,815 Technology and development 19,240 12,534 7,126 General and administrative 84,584 60,191 46,662 Total stock-based compensation expense $ 135,244 $ 92,322 $ 66,080 75 Table of Contents The following table sets forth our results of operations as a percentage of our total revenue for the periods presented: Year Ended December 31, 2025 2024 2023 Revenue 100 % 100 % 100 % Cost of revenue 26 % 21 % 18 % Gross profit 74 % 79 % 82 % Operating expenses: Marketing 39 % 46 % 51 % Operations and support 12 % 13 % 14 % Technology and development 7 % 5 % 6 % General and administrative 12 % 11 % 15 % Total operating expenses 70 % 75 % 86 % Income (loss) from operations 4 % 4 % (4) % Other income (expense): Change in fair value of equity securities — % — % — % Change in fair value of liabilities — % — % — % Other income, net 1 % 1 % 1 % Total other income, net 1 % 1 % 1 % Income (loss) before income taxes 5 % 5 % (3) % Benefit from (provision for) income taxes — % 4 % — % Net income (loss) 5 % 9 % (3) % Revenue Revenue was $2,347.6 million for the year ended December 31, 2025 compared to $1,476.5 million for the year ended December 31, 2024, an increase of $871.1 million, or 59%.
Cash flows from investing activities Cash flows from investing activities primarily relate to our treasury operations of investing in available-for-sale investments and acquisitions, as well as investment in website development and internal-use software and purchases of property, equipment, and intangible assets.
Cash flows from investing activities Cash flows from investing activities primarily relate to our treasury operations of investing in available-for-sale investments and acquisitions, as well as purchases of property, equipment, and intangible assets and investment in website development and internal-use software.
The Revolving Credit Facility includes letter of credit and swing line loan sub-limits of $40.0 million and $20.0 million, respectively, and an accordion option, which, if exercised, would allow us to increase the aggregate revolving commitment amount by up to $125.0 million, plus additional amounts if we are able to satisfy a leverage test and certain other conditions.
The Credit Facility includes letter of credit and swing line loan sub-limits of $40.0 million and $20.0 million, respectively, and an accordion option, which, if exercised, would allow us to increase the aggregate commitment amount by up to $125.0 million, plus additional amounts if we are able to satisfy a leverage test and certain other conditions.
When evaluating our performance, you should consider Free Cash Flow in addition to, and not as a substitute for, other financial performance measures, including our net cash provided by (used in) operating activities and other U.S. GAAP results. Basis of Presentation Currently, we conduct business through one operating segment.
When evaluating our performance, you should consider Free Cash Flow in addition to, and not as a substitute for, other financial performance measures, including our net cash provided by operating activities and other U.S. GAAP results. Basis of Presentation Currently, we conduct business through one operating segment.
We determined that we are the primary beneficiary of the Affiliated Medical Groups and the Affiliated Pharmacies for accounting purposes because we have the ability to direct the activities that most significantly affect these entities’ economic performance and have the obligation to absorb the entities’ losses.
We determined that we are the primary beneficiary of the Affiliated Medical Groups for accounting purposes because we have the ability to direct the activities that most significantly affect these entities’ economic performance and have the obligation to absorb the entities’ losses.
Cost of revenue Cost of revenue consists of costs directly attributable to the products shipped and services rendered, including product costs of purchased and manufactured products, packaging materials, shipping costs, labor costs directly related to revenue generating activities including medical consultation services and manufacturing labor, and overhead costs associated with manufactured products.
Cost of revenue Cost of revenue consists of costs directly attributable to the products shipped and services rendered, including product costs of purchased and manufactured products, packaging materials, shipping costs, labor costs directly related to revenue generating activities including primarily medical consultation services and manufacturing labor, and overhead costs associated with manufactured products.
“Free Cash Flow” is defined as net cash provided by (used in) operating activities, less purchases of property, equipment, and intangible assets and investment in website development and internal-use software in investing activities.
“Free Cash Flow” is defined as net cash provided by operating activities, less purchases of property, equipment, and intangible assets and investment in website development and internal-use software in investing activities.
Cash flows from financing activities Net cash used in financing activities for the year ended December 31, 2024 was $107.8 million, which was primarily due to repurchases of our Class A common stock of $83.0 million, payments for taxes related to net share settlement of equity awards of $52.5 million, and payments for acquisition-related earn-out consideration of $3.2 million.
Net cash used in financing activities for the year ended December 31, 2024 was $107.8 million, which was primarily due to repurchases of our Class A common stock of $83.0 million, payments for taxes related to net share settlement of equity awards of $52.5 million, and payments for acquisition-related earn-out consideration of $3.2 million.
Customer acquisition costs, also called paid marketing expense, are the advertising and media costs associated with our efforts to acquire new customers, promote our brands, and build awareness for our products and services. Customer acquisition costs include advertising in digital media, social media, television, radio, out-of-home media, and various other media outlets and excluding content production costs.
Customer acquisition costs, also called paid marketing expense, are the advertising and media costs associated with our efforts to acquire new customers, promote our brands, and build awareness for our products and services. Customer acquisition costs include advertising in digital media, social media, television, radio, out-of-home media, and various other media outlets and exclude content production costs.
Additionally, in February 2025, we entered into a Revolving Credit and Guaranty Agreement with certain lenders and JPMorgan Chase Bank, N.A., as administrative and collateral agent, which provides for a three-year senior secured revolving line of credit in an amount up to $175.0 million (the “Revolving Credit Facility”).
Additionally, in February 2025, we entered into a Revolving Credit and Guaranty Agreement with certain lenders and JPMorgan Chase Bank, N.A., as administrative and collateral agent, which provides for a three-year senior secured revolving line of credit in an amount up to $175.0 million (the “Credit Facility”).
Discussions of 2022 items and year-to-year comparisons between 2023 and 2022 are not included in this Form 10-K, and can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2023 .
Discussions of 2023 items and year-to-year comparisons between 2024 and 2023 are not included in this Form 10-K, and can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2024 .
You should read the following discussion and analysis of our financial condition and results of operations in conjunction with the consolidated financial statements and accompanying notes included in Part II, Item 8 of this Form 10-K. This section of the Form 10-K generally discusses 2024 and 2023 items and year-to-year comparisons between 2024 and 2023 .
You should read the following discussion and analysis of our financial condition and results of operations in conjunction with the consolidated financial statements and accompanying notes included in Part II, Item 8 of this Form 10-K. This section of the Form 10-K generally discusses 2025 and 2024 items and year-to-year comparisons between 2025 and 2024 .
In addition to a 30-day cadence or treatment term, we offer Subscribers the ability to select from a range of Subscription shipment cadences or treatment terms, from every 60 days to 360 days, depending on the product. Subscriptions automatically renew on the applicable cadence selected by the Subscriber when purchasing or updating the Subscription.
In addition to a 30-day cadence or treatment term, we offer Subscribers the ability to select from a range of Subscription shipment cadences or treatment terms, from every 60 days to 360 days, depending on the offering. Subscriptions automatically renew on the applicable cadence selected by the Subscriber when purchasing or updating the Subscription.
Net cash provided by operating activities included net income of $126.0 million, non-cash expense related to stock-based compensation of $92.3 million, and depreciation and amortization of $17.1 million, partially offset by benefit for deferred taxes of $61.6 million and a net accretion on securities of $4.4 million.
Net cash provided by operating activities included net income of $126.0 million, non-cash expense related to stock-based compensation of $92.3 million, and depreciation and amortization of $17.1 million, partially offset by benefit from deferred taxes of $61.6 million and a net accretion on securities of $4.4 million.
The decrease was partially offset by lower costs associated with medical consultation services as a percent of revenue as a result of improving Provider efficiency, synergies gained through increased fulfillment volume, as well as lower shipping costs as a percent of revenue as a result of optimizing costs.
The decrease was partially offset by lower costs associated with medical consultation services as a percent of revenue as a result of improving Provider efficiency, as well as synergies gained through increased fulfillment volume.
These expenses also include operating expenses primarily relating to operating and support functions for facilities, warehousing and storage, fulfillment, transaction processing, third-party software and hosting to support those functions, and related depreciation and amortization.
These expenses also include operating expenses primarily relating to operations and support functions for our Facilities, warehousing and storage, fulfillment, transaction processing, third-party software and hosting to support those functions, and related depreciation and amortization.
In evaluating Free Cash 59 Table of Contents Flow, you should be aware that in the future we will have cash outflows similar to the adjustments in this presentation. Our presentation of Free Cash Flow should not be construed as an inference that our future results will be unaffected by these cash outflows or any unusual or non-recurring items.
In evaluating Free Cash Flow, you should be aware that in the future we will have cash outflows similar to the adjustments in this presentation. Our presentation of Free Cash Flow should not be construed as an inference that our future results will be unaffected by these cash outflows or any unusual or non-recurring items.
Our gross profit and gross margin have been and will continue to be affected by a number of factors, including the prices we charge for our products and services, the costs we incur from our vendors for certain components of our cost of revenues, the mix of the various products and services we sell in a period including the launch of new offerings, the mix of Online Revenue and Wholesale Revenue in a period, volume of fulfillment through affiliated and internal fulfillment capabilities, and our ability to sell our inventory.
Our gross profit and gross margin have been and will continue to be affected by a number of factors, including the prices we charge for our products and services, the costs we incur from our vendors for certain components of our cost of revenues, the mix of the various products and services we sell in a period including the launch of new offerings, the volume of fulfillment through internal fulfillment capabilities, and our ability to sell our inventory.
For example, we are making investments in the expansion of our current facilities, which are expected to continue for at least the next 12 months. Additionally, we expect to continue to make significant investments in marketing to acquire new customers and we expect to continue to make investments in product offerings and customer experience.
For example, we are making investments in the expansion of our current Facilities, which are expected to continue for at least the next 12 months. Additionally, we expect to continue to make significant investments in marketing to acquire new customers across all of our brands, and we expect to continue to make investments in product offerings and customer experience.
“Adjusted EBITDA” is defined as net income (loss) before stock-based compensation, depreciation and amortization, acquisition and transaction-related costs (which includes (i) consideration paid for employee compensation with vesting requirements incurred directly as a result of acquisitions, inclusive of revaluation of earn-out consideration recorded in general and administrative expenses prior to 2024, and (ii) transaction professional services), legal settlement expenses that are considered non-recurring, impairment of long-lived assets, change in fair value of liabilities, interest income, and income taxes.
“Adjusted EBITDA” is defined as net income (loss) before stock-based compensation, depreciation and amortization, acquisition and transaction-related costs (which includes (i) consideration paid for employee and nonemployee compensation with vesting requirements incurred directly as a result of acquisitions, inclusive of revaluation of earn-out consideration recorded in general and administrative expenses prior to 2024, and (ii) transaction professional services), change in fair value of liabilities, payroll tax expense related to stock-based compensation, impairment of long-lived assets, legal settlement expenses that are considered non-recurring, change in fair value of equity securities, income taxes, and interest income and expense, net.
The change was mainly due to the change in valuation allowance of $68.0 million, primarily due to the full release of the valuation allowance on our domestic deferred tax assets during the year ended December 31, 2024, partially offset by current period tax activity.
The change was mainly due to the change in valuation allowance of $68.0 million in the prior period, primarily due to the full release of the valuation allowance on our domestic deferred tax assets during the year ended December 31, 2024, partially offset by tax activity during that period.
GAAP”); and (ii) other companies, including companies in our industry, may calculate our key business metrics or similarly titled measures differently, which reduces their usefulness as comparative measures. Brief descriptions of our key business metrics are provided below.
GAAP”); and (ii) other companies, including companies in our industry, may calculate our key business metrics or similarly titled measures differently, which reduces their usefulness as comparative measures. 65 Table of Contents Brief descriptions of our key business metrics are provided below.
Operations and support expenses Operations and support expenses include the salaries, benefits, taxes, professional services expenses, and stock-based compensation for personnel, consultants, and contractors for our supply chain, retail, medical group, pharmacy, fulfillment, and customer service functions.
Operations and support expenses Operations and support expenses include the salaries, benefits, taxes, professional services expenses, and stock-based compensation for personnel, consultants, and contractors for our supply chain, retail, medical, pharmacy, fulfillment, customer service, and corporate quality functions.
Online Revenue can fluctuate on a period-to-period basis due to various factors, including launches of new product offerings, the success of our marketing campaigns, and strategic pricing decisions impacting customer uptake of our offerings, as well as product availability and the regulatory landscape impacting our offerings.
United States Revenue can fluctuate on a period-to-period basis due to various factors, including launches of new product offerings, the success of our marketing campaigns, and pricing decisions impacting customer uptake of our offerings, as well as product availability and the regulatory landscape impacting our offerings.
If we are unable to acquire enough new customers in the future, revenue might decline. New customer acquisition could be negatively impacted if our marketing efforts are less effective in the future. Increases in advertising rates could also negatively impact our ability to acquire new customers.
If we are unable to acquire enough new customers in the future, revenue might decline. New customer acquisition could be negatively impacted if our marketing efforts are less effective in the future. Increases in 68 Table of Contents advertising rates could also negatively impact our ability to acquire new customers.
Under the variable interest entity model, we present the results of operations and the financial position of the entities as part of our consolidated financial statements as if the consolidated group were a single economic entity.
Under the VIE model, we present the results of operations and the financial position of the entities as part of our consolidated financial statements as if the consolidated group were a single economic entity.
Growth in Online Revenue for the year ended December 31, 2024 was driven by weight loss offerings launched in the fourth quarter of 2023 or later, including new offerings launched in the second quarter of 2024 for which there was no comparable revenue in 2023, as well as continued sustainable growth in Subscribers pertaining to offerings available in all periods presented, from whom we generated recurring revenue.
Growth in United States Revenue for the year ended December 31, 2024 was primarily driven by offerings launched in the fourth quarter of 2023 or later, including new offerings launched in the second quarter of 2024 for which there was no comparable revenue in 2023, as well as continued sustainable growth in Subscribers pertaining to offerings available in all periods presented, from whom we generated recurring revenue.
Total contractual obligations and commitments as of December 31, 2024 were $36.4 million, of which $9.9 million was payable within 12 months. Critical Accounting Estimates The preparation of our consolidated financial statements in conformity with U.S. GAAP requires management to make estimates, judgments, and assumptions that affect the amounts reported in our financial statements and accompanying notes.
Total contractual obligations and commitments as of December 31, 2025 were $356.2 million, of which $77.9 million was payable within 12 months. Critical Accounting Estimates The preparation of our consolidated financial statements in conformity with U.S. GAAP requires management to make estimates, judgments, and assumptions that affect the amounts reported in our financial statements and accompanying notes.
Wholesale Revenue also includes non-prescription product sales to third-party platforms through consignment arrangements. In addition to being revenue generative and profitable, wholesale partnerships and consignment arrangements have the added benefit of generating brand awareness with new customers in physical environments and on third-party platforms.
“Wholesale Revenue” represents non-prescription product sales to retailers through wholesale purchasing agreements. Wholesale Revenue also includes non-prescription product sales to third-party platforms through consignment arrangements. In addition to being revenue generative and profitable, wholesale partnerships and consignment arrangements have the added benefit of generating brand awareness with new customers in physical environments and on third-party platforms.
While marketing expenses may fluctuate as a percentage of revenue due to the timing and discretionary nature of these expenses, with the additional marketing leverage driven by our newer offerings, along with the maturation of our existing Subscriber base, we expect total marketing expenses as a percentage of revenue to continue to decrease over the long term.
While marketing expenses may fluctuate as a percentage of revenue, with the additional marketing leverage driven by our newer offerings, along with the maturation of our existing Subscriber base, we expect total marketing expenses as a percentage of revenue to continue to decrease over the long term.
Our primary use of cash from operating activities includes costs of revenue, marketing expenses, and personnel-related expenditures to support the growth of our business. Net cash provided by operating activities was $251.1 million for the year ended December 31, 2024.
Our primary use of cash from operating activities includes costs of revenue, marketing expenses, and personnel-related expenditures to support the growth of our business. Net cash provided by operating activities was $300.0 million for the year ended December 31, 2025.
We are working to enhance our offerings and expand the breadth of health and wellness products and services offered on our websites and mobile applications. The number of our Subscribers using personalized solutions has grown in recent periods and represented more than a majority of Subscribers as of the end of fiscal year 2024.
We are working to enhance our offerings and expand the breadth of health and wellness products and services offered on our websites and mobile applications. The number of our Subscribers using personalized solutions has grown in recent periods and represented more than a majority of Subscribers as of December 31, 2025.
The increase in technology and development expenses was primarily driven by an increase in employee compensation (comprising salaries and wages, benefits, taxes, and performance bonuses, and excluding stock-based compensation) of $15.2 million, an increase in depreciation, amortization, and technology costs of $7.0 million, an increase in stock-based compensation of $5.4 million, and an increase in professional services of $1.4 million.
The increase in technology and development expenses was primarily driven by an increase in depreciation, amortization, and technology costs of $24.0 million, an increase in employee compensation (comprising salaries and wages, benefits, taxes, and performance bonuses, and excluding stock-based compensation) of $21.4 million, an increase in professional services of $7.7 million, an increase in stock-based compensation of $6.7 million, and an increase in product development costs of $4.6 million.
If we are unable to raise or access additional capital when desired, our business, financial condition, and results of operations would be harmed. 66 Table of Contents Cash Flows The following table provides a summary of cash flow data (in thousands): Year Ended December 31, 2024 2023 2022 Net cash provided by (used in) operating activities $ 251,084 $ 73,483 $ (26,531) Net cash (used in) provided by investing activities (19,048) (12,106) 34,699 Net cash used in financing activities (107,845) (11,475) (33,127) Cash flows from operating activities Our largest source of operating cash flows is cash collections from our customers.
If we are unable to raise or access additional capital when desired, our business, financial condition, and results of operations would be harmed. 79 Table of Contents Cash Flows The following table provides a summary of cash flow data (in thousands): Year Ended December 31, 2025 2024 2023 Net cash provided by operating activities $ 300,006 $ 251,084 $ 73,483 Net cash used in investing activities (1,024,958) (19,048) (12,106) Net cash provided by (used in) financing activities 729,620 (107,845) (11,475) Cash flows from operating activities Our largest source of operating cash flows is cash collections from our customers.
The increase in operations and support was primarily driven by an increase in employee compensation (comprising salaries and wages, benefits, taxes, and performance bonuses, and excluding stock-based compensation) of $25.0 million, an increase in order fulfillment and transaction processing of $16.3 million, an increase in professional services of $9.4 million, an increase in depreciation, amortization, and technology costs of operations and support functions of $7.6 million, and an increase in stock-based compensation of $3.4 million.
The increase in operations and support was primarily driven by an increase in employee compensation (comprising salaries and wages, benefits, taxes, and performance bonuses, and excluding stock-based compensation) of $40.2 million, an increase in order fulfillment and transaction processing of $26.6 million, an increase in depreciation, amortization, and technology costs of operations and support functions of $9.1 million, an increase in stock-based compensation of $8.7 million and an increase in professional services of $7.2 million.
The following table reconciles net cash provided by (used in) operating activities to Free Cash Flow for the years ended December 31, 2024, 2023, and 2022 (in thousands): Years Ended December 31, 2024 2023 2022 Net cash provided by (used in) operating activities $ 251,084 $ 73,483 $ (26,531) Less: purchases of property, equipment, and intangible assets in investing activities (41,655) (17,220) (2,714) Less: investment in website development and internal-use software in investing activities (11,095) (9,272) (4,533) Free Cash Flow $ 198,334 $ 46,991 $ (33,778) Some of the limitations of Free Cash Flow include (i) Free Cash Flow does not represent our residual cash flow for discretionary expenditures and our non-discretionary commitments, and (ii) Free Cash Flow includes capital expenditures, the benefits of which may be realized in periods subsequent to those in which the expenditures took place.
The following table reconciles net cash provided by operating activities to Free Cash Flow for the years ended December 31, 2025, 2024, and 2023 (in thousands): Years Ended December 31, 2025 2024 2023 Net cash provided by operating activities $ 300,006 $ 251,084 $ 73,483 Less: purchases of property, equipment, and intangible assets in investing activities (226,045) (41,655) (17,220) Less: investment in website development and internal-use software in investing activities (16,546) (11,095) (9,272) Free Cash Flow $ 57,415 $ 198,334 $ 46,991 71 Table of Contents Some of the limitations of Free Cash Flow include (i) Free Cash Flow does not represent our residual cash flow for discretionary expenditures and our non-discretionary commitments, and (ii) Free Cash Flow includes capital expenditures, the benefits of which may be realized in periods subsequent to those in which the expenditures took place.
We expect to continue to pursue opportunities to expand our manufacturing and internal fulfillment capabilities and may acquire or invest in complementary businesses, services, and technologies, including intellectual property rights.
We expect to continue to pursue opportunities to expand our manufacturing and internal fulfillment capabilities as well as acquire or invest in complementary businesses (including our Proposed Acquisition of Eucalyptus), services, and technologies, including intellectual property rights.
The increase in customer acquisition costs was primarily a result of management’s decision to increase investment in display, search, streaming television, affiliate, and radio and 64 Table of Contents podcast marketing, as we continue to identify opportunities to drive new customer growth and which further expanded with the addition of newer offerings.
The increase in customer acquisition costs was primarily a result of management’s decision to increase investment in display, search, streaming and linear television (including our Super Bowl marketing campaign in February 2025), affiliate, and radio and podcast marketing, as we continue to identify opportunities to drive new customer growth and which investment further expanded with the addition of newer offerings.
We continue to believe it is more likely than not that we will realize our domestic deferred tax assets. Business combinations Determining the fair value of assets acquired and liabilities assumed requires management to use significant judgment and estimates, including the selection of valuation methodologies, estimates of future revenue and cash flows, discount rates, and selection of comparable companies.
As of December 31, 2025, with the exception of certain attributes, we believe it is more likely than not that we will realize our domestic and foreign deferred tax assets. 81 Table of Contents Business combinations Determining the fair value of assets acquired and liabilities assumed requires management to use significant judgment and estimates, including the selection of valuation methodologies, estimates of future revenue and cash flows, discount rates, and selection of comparable companies.
Benefit (provision) for income taxes Benefit for income taxes was $54.3 million for the year ended December 31, 2024, compared to a provision for income taxes of $2.0 million for the year ended December 31, 2023.
Benefit from (provision for) income taxes Benefit from income taxes was $4.4 million for the year ended December 31, 2025, compared to a benefit from income taxes of $54.3 million for the year ended December 31, 2024.
In connection with determination of fair values, we may engage a third-party valuation specialist to assist with the valuation of intangible and certain tangible assets acquired and certain assumed obligations. 68 Table of Contents During the year ended December 31, 2024, we acquired MedisourceRx.
In connection with determination of fair values, we may engage a third-party valuation specialist to assist with the valuation of intangible and certain tangible assets acquired and certain assumed obligations. During the year ended December 31, 2025, our largest acquisition was Zava.
As we expect the percentage of Subscribers on our platform using a personalized solution to continue to increase, we plan to continue to invest in personalized product offerings, including in our compounding capabilities.
As we expect the percentage of Subscribers on our platform using a personalized solution to continue to increase, we expect revenue from personalized offerings across the business to increasingly drive total revenue growth in the future, and we plan to continue to invest in personalized product offerings, including in our compounding capabilities.
We may also use our cash and cash equivalents to repurchase up to $65.0 million of our Class A common stock through August 31, 2027 at management’s discretion pursuant to our 2024 Share Repurchase Program.
We may also use our cash and cash equivalents to repurchase up to $225.0 million of our Class A common stock through November 11, 2028 at management’s discretion pursuant to our 2025 Share Repurchase Program.
For detailed discussion of this increase, refer to “Revenue and Key Business Metrics.” Cost of revenue and gross profit Cost of revenue was $303.4 million for the year ended December 31, 2024, compared to $157.1 million for the year ended December 31, 2023, an increase of $146.3 million, or 93%.
For detailed discussion of this increase, refer to the “Revenue and Key Business Metrics” section. Cost of revenue and gross profit Cost of revenue was $614.3 million for the year ended December 31, 2025, compared to $303.4 million for the year ended December 31, 2024, an increase of $310.9 million, or 102%.
The cash payments, net of cash acquired, are included within investing activities on the consolidated statements of cash flows.
The cash proceeds and cash payments are included within financing activities on the consolidated statements of cash flows.
This inflow was partially offset by an increase in inventory of $41.6 million, an increase in prepaid expenses of $9.5 million, and a decrease in earn-out payable of $2.8 million. Net cash provided by operating activities was $73.5 million for the year ended December 31, 2023.
This inflow was partially offset by an increase in inventory of $41.6 million, an increase in prepaid expenses of $9.5 million, and a decrease in earn-out payable of $2.8 million.
Our Subscribers (sometimes also referred to by us as “members”) select a cadence at which they wish to receive product shipments or a treatment term depending on the offering.
We continuously test and optimize the online experience and offerings to improve the customer experience, maximize sales, and improve gross margin. Our Subscribers (sometimes also referred to by us as “members”) select a cadence at which they wish to receive product shipments or a treatment term depending on the offering.
The most significant component of marketing expenses is customer acquisition costs, which increased to $594.5 million for the year ended December 31, 2024, compared to $379.7 million for the year ended December 31, 2023, an increase of $214.8 million, or 57%.
The most significant component of marketing expenses is customer acquisition costs, which increased to $798.5 million for the year ended December 31, 2025, compared to $594.5 million for the 76 Table of Contents year ended December 31, 2024, an increase of $204.0 million, or 34%.
Gross profit was $1,173.1 million for the year ended December 31, 2024 compared to $714.9 million for the year ended December 31, 2023, an increase of $458.2 million or 64%. Correspondingly, gross margin was 79% for the year ended December 31, 2024 compared to 82% for the year ended December 31, 2023.
Gross profit was $1,733.4 million for the year ended December 31, 2025 compared to $1,173.1 million for the year ended December 31, 2024, an increase of $560.2 million or 48%. Correspondingly, gross margin was 74% for the year ended December 31, 2025 compared to 79% for the year ended December 31, 2024.
Operations and support Operations and support expenses were $185.8 million for the year ended December 31, 2024, compared to $119.9 million for the year ended December 31, 2023, an increase of $65.9 million, or 55%.
Operations and support Operations and support expenses were $286.4 million for the year ended December 31, 2025, compared to $185.8 million for the year ended December 31, 2024, an increase of $100.6 million, or 54%.
General and administrative General and administrative expenses were $167.8 million for the year ended December 31, 2024, compared to $129.9 million for the year ended December 31, 2023, an increase of $37.9 million, or 29%.
General and administrative General and administrative expenses were $272.7 million for the year ended December 31, 2025, compared to $167.8 million for the year ended December 31, 2024, an increase of $105.0 million, or 63%.
Our Online Revenue consists of products and services purchased by customers directly through our online platform. The majority of our Online Revenue is subscription-based, where customers agree to be billed on a recurring basis to have products and services automatically delivered to them. “Wholesale Revenue” represents non-prescription product sales to retailers through wholesale purchasing agreements.
Our Online Revenue consists of products and services purchased by customers directly through our online platform. The majority of our Online Revenue is subscription-based, where customers agree to be billed on a recurring basis to have products and services automatically delivered to them. Online Revenue also includes sales from customers who have made one-time purchases.
Other income (expense) Other income (expense) was $9.8 million for the year ended December 31, 2024, compared to $7.9 million for the year ended December 31, 2023, an increase of $1.9 million.
Total other income, net Total other income, net was $18.3 million for the year ended December 31, 2025, compared to $9.8 million for the year ended December 31, 2024, an increase of $8.5 million.
“Adjusted EBITDA margin” is defined as Adjusted EBITDA divided by revenue. 58 Table of Contents The following table reconciles net income (loss) to Adjusted EBITDA for the years ended December 31, 2024, 2023, and 2022 (in thousands): Year Ended December 31, 2024 2023 2022 Revenue $ 1,476,514 $ 872,000 $ 526,916 Net income (loss) 126,038 (23,546) (65,678) Stock-based compensation 92,322 66,080 42,817 Depreciation and amortization 17,088 9,515 7,474 Acquisition and transaction-related costs 3,979 3,016 1,192 Legal settlement 2,008 — — Impairment of long-lived assets 114 429 1,127 Change in fair value of liabilities — 1,075 (70) Interest income (10,349) (9,029) (2,610) (Benefit) provision for income taxes (54,327) 1,975 (31) Adjusted EBITDA $ 176,873 $ 49,515 $ (15,779) Net income (loss) as a % of revenue 9 % (3) % (12) % Adjusted EBITDA margin 12 % 6 % (3) % Some of the limitations of Adjusted EBITDA include (i) Adjusted EBITDA does not properly reflect capital commitments to be paid in the future, and (ii) although depreciation and amortization are non-cash charges, the underlying assets may need to be replaced and Adjusted EBITDA does not reflect these capital expenditures.
As a result of recent trends in our stock price, this amount was not considered significant for prior periods and, accordingly, prior period disclosures were not recast to conform to the current presentation. 70 Table of Contents The following table reconciles net income (loss) to Adjusted EBITDA for the years ended December 31, 2025, 2024, and 2023 (in thousands): Year Ended December 31, 2025 2024 2023 Revenue $ 2,347,637 $ 1,476,514 $ 872,000 Net income (loss) 128,365 126,038 (23,546) Stock-based compensation 135,244 92,322 66,080 Depreciation and amortization 54,502 17,088 9,515 Acquisition and transaction-related costs 15,544 3,979 3,016 Change in fair value of liabilities 9,255 — 1,075 Payroll tax expense related to stock-based compensation 6,947 — — Impairment of long-lived assets 531 114 429 Legal settlement — 2,008 — Change in fair value of equity securities (4,437) — — (Benefit from) provision for income taxes (4,441) (54,327) 1,975 Interest income and expense, net (23,526) (10,349) (9,029) Adjusted EBITDA $ 317,984 $ 176,873 $ 49,515 Net income (loss) as a % of revenue 5 % 9 % (3) % Adjusted EBITDA margin 14 % 12 % 6 % Some of the limitations of Adjusted EBITDA include (i) Adjusted EBITDA does not properly reflect capital commitments to be paid in the future, and (ii) although depreciation and amortization are non-cash charges, the underlying assets may need to be replaced and Adjusted EBITDA does not reflect these capital expenditures.
Wholesale Revenue can fluctuate on a period-to-period basis due to various factors, including delayed inventory purchases from our partners, seasonality trends, launches of new merchants, and timing of specialized campaigns. Subscribers grew 45% to approximately 2,229,000 as of December 31, 2024 as compared to approximately 1,537,000 Subscribers as of December 31, 2023.
Wholesale Revenue can fluctuate on a period-to-period basis due to various factors, including timing of inventory purchases from our partners, seasonality trends, launches of new merchants, and timing of specialized campaigns.
Technology and development Technology and development expenses were $78.8 million for the year ended December 31, 2024, compared to $48.2 million for the year ended December 31, 2023, an increase of $30.6 million, or 63%.
Technology and development Technology and development expenses were $149.3 million for the year ended December 31, 2025, compared to $78.8 million for the year ended December 31, 2024, an increase of $70.5 million, or 89%.
We expect operations and support expenses to increase for the foreseeable future as we continue to invest in our fulfillment and operating capabilities and grow our business, resulting in additional operational efficiencies.
We expect operations and support expenses to increase for the foreseeable future as we continue to invest in our fulfillment and operating capabilities and grow our business, resulting in additional operational efficiencies, although it may fluctuate as a percentage of total revenue from period to period due to the timing and amount of these expenses.
These expenses also include operating expenses primarily relating to general and administrative functions for insurance, third-party software and hosting to support those functions, related depreciation and amortization, and other general corporate costs. We expect G&A to increase for the foreseeable future as we increase headcount with the growth of our business.
These expenses also include operating expenses primarily relating to general and administrative functions for insurance, third-party software and hosting to support those functions, related depreciation and amortization, and other general corporate costs.
Marketing expenses Marketing expenses were $678.8 million for the year ended December 31, 2024, compared to $446.4 million for the year ended December 31, 2023, an increase of $232.4 million, or 52%.
Marketing expenses Marketing expenses were $919.3 million for the year ended December 31, 2025, compared to $678.8 million for the year ended December 31, 2024, an increase of $240.5 million, or 35%.
Net cash provided by operating activities included non-cash expense related to stock-based compensation of $66.1 million, depreciation and amortization of $9.5 million, non-cash acquisition-related costs of $2.7 million, and change in fair value of liabilities of $1.1 million, partially offset by a net loss of $23.5 million and net accretion on securities of $5.7 million.
Net cash provided by operating activities included non-cash expense related to stock-based compensation of $135.2 million, net income of $128.4 million, depreciation and amortization of $54.5 million, change in fair value of liabilities of $9.3 million, non-cash acquisition-related costs of $5.9 million, and amortization of debt discount and issuance costs of $4.5 million, partially offset by benefit from deferred taxes of $13.0 million, change in fair value of equity securities of $4.4 million, and a net accretion on securities of $2.0 million.
Consumer tastes, preferences, and sentiment for our brands may also change and result in decreased demand for our products and services. Changes in the legal or regulatory environment could also negatively impact our ability to acquire new customers, including changes to privacy, healthcare, or other laws, or the interpretation or enforcement of such laws, and could impact customer acquisition costs.
Changes in the legal or regulatory environment have and could continue to impact our ability to acquire new customers, including changes to privacy, healthcare, or other laws, or the interpretation or enforcement of such laws, and could impact customer acquisition costs.
While gross margin has decreased period to period in the most recent quarters, and we may see this trend continuing in the short term, over the long term we expect gross margin to stabilize as we continue to scale our business and increase our ability to negotiate more favorable costs of revenue. 60 Table of Contents Marketing expenses The largest component of our marketing expenses consists of our discretionary customer acquisition costs.
While we expect our gross margin to fluctuate from period to period depending on these and other factors, over the long term we expect gross margin to stabilize as we continue to scale our business and increase our ability to negotiate and optimize more favorable costs of revenue. 72 Table of Contents Marketing expenses The largest component of our marketing expenses consists of our discretionary customer acquisition costs.
Monthly Online Revenue per Average Subscriber grew 19% to $64 for the year ended December 31, 2024 as compared to $54 for the year ended December 31, 2023, primarily due to newer offerings introduced during the second quarter of 2024 along with changes in product mix.
Monthly Revenue per Average Subscriber grew 16% to $65 for the year ended December 31, 2024 as compared to $56 for the year ended December 31, 2023, primarily due to our weight loss offerings along with changes in product mix.
We believe that we have the technical platform, distributed provider network, and access to clinical capabilities to lead the migration of routine office visits to a personalized, digital, accessible format.
Our mission is to help the world feel great through the power of better health. We believe that we have the technical infrastructure, distributed provider network, and access to clinical capabilities to lead the migration of routine office visits to a personalized, 64 Table of Contents digital, accessible format.
We generated $38.6 million in Wholesale Revenue for the year ended December 31, 2024, an increase of $9.0 million, or 30%, as compared to $29.6 million for the year ended December 31, 2023.
We generated $36.2 million in Wholesale Revenue for the year ended December 31, 2025, a decrease of $2.4 million, or 6%, as compared to $38.6 million for the year ended December 31, 2024.
The increase in general and administrative expenses was primarily driven by an increase in stock-based compensation of $13.5 million, an increase in professional services of $8.1 million, an increase in employee compensation (comprising salaries and wages, benefits, taxes, and performance bonuses, and excluding stock-based compensation) of $7.2 million, an increase in acquisition costs of $3.6 million, an increase in depreciation, amortization, and technology costs relating to general and administrative functions of $2.0 million, and $2.0 million of legal settlement expenses during the year ended December 31, 2024 that are considered non-recurring.
The increase in general and administrative expenses was primarily driven by an increase in employee compensation (comprising salaries and wages, benefits, taxes, and performance bonuses, and excluding stock-based compensation) of $26.3 million, an increase in stock-based compensation of $24.4 million, an increase in professional services of $20.0 million, an increase in depreciation, amortization, and technology costs relating to general and administrative functions of $17.1 million, an increase in acquisition costs of $5.9 million, and an increase in insurance premiums of $5.4 million.
Increases or decreases in these key business metrics may not correspond with increases or decreases in our revenue. We also continually and strategically review our key business metrics to ensure that they are helpful in managing or monitoring the performance of our business as it grows, which may result in changes in our key business metrics over time.
We continually and strategically review our key business metrics to ensure that they are helpful in managing or monitoring the performance of our business as it grows, which may result in changes in our key business metrics over time. As an example, Monthly Online Revenue per Average Subscriber (as defined below) has become less relevant for our business.
Our consolidated revenue primarily comprises online sales of health and wellness products through our websites and mobile applications, including prescription and non-prescription products. In contracts that contain prescription products issued as the result of a consultation, revenue also includes medical consultation services and post-consultation service support provided by Affiliated Medical Groups. Additionally, revenue is generated through wholesale arrangements.
Our consolidated revenue primarily comprises online sales of health and wellness products through our websites and mobile applications, including prescription and non-prescription products, as well as services, primarily consisting of medical consultation services, post-consultation service support, and delivery of laboratory testing results, as applicable. Additionally, revenue is generated through wholesale arrangements.
We believe our existing cash resources, together with our availability under our Revolving Credit Facility, are sufficient to support planned operations for the next 12 months. As a result, management believes that our current financial resources are sufficient to continue operating activities for at least one year past the issuance date of the consolidated financial statements.
As a result, management believes that our current and available financial resources are sufficient to continue operating activities for at least one year past the issuance date of the consolidated financial statements.
GAAP financial measures, provide meaningful supplemental information regarding our performance by excluding certain items that may not be indicative of our business, results of operations, or outlook.
We believe that Adjusted EBITDA, Adjusted EBITDA margin, and Free Cash Flow, when taken together with the corresponding U.S. GAAP financial measures, provide meaningful supplemental information regarding our performance by excluding certain items that may not be indicative of our business, results of operations, or outlook.
For the periods presented, the VIEs are: (i) “Affiliated Medical Groups,” which are professional corporations or other professional entities owned by licensed physicians and that engage licensed healthcare professionals (physicians, physician assistants, nurse practitioners, and mental health providers; collectively referred to as “Providers” or individually, a “Provider”) to provide consultation services; and (ii) XeCare, LLC (“XeCare”) and Apostrophe Pharmacy LLC (“Apostrophe Pharmacy”, and together with XeCare, the “Affiliated Pharmacies”), which are licensed mail order pharmacies providing prescription fulfillment solely to our customers.
As of December 31, 2025, the VIEs are the “Affiliated Medical Groups,” which are professional corporations or other professional entities owned by licensed physicians and that engage licensed healthcare professionals (physicians, physician assistants, nurse practitioners, and mental health providers; collectively referred to as “Providers” or individually, a “Provider”) to provide consultation services.
While historically the consistent uptake by Subscribers of our offerings contributed to the stable and predictable nature of our Monthly Online Revenue per Average Subscriber, newer offerings introduced in 2024 have led to increases in this metric, which may continue in the near future.
While historically the consistent uptake by Subscribers of our offerings contributed to the stable and predictable nature of our Monthly Revenue per Average Subscriber, some of our weight loss offerings have led to increases in this metric, though we expect this metric to normalize over the long term.
Our products and services are available for purchase directly by customers on our websites and mobile applications. Additionally, Hims & Hers non-prescription products can be found in tens of thousands of top retail locations in the United States.
Additionally, Hims & Hers non-prescription products can be found in tens of thousands of top retail locations in the United States.
Substantially all our long-lived assets are maintained in, and a significant majority of our results of operations are attributable to, the United States of America. The consolidated financial statements include the accounts of our company, our wholly-owned subsidiaries, and variable interest entities (“VIEs”) for which we are the primary beneficiary.
The consolidated financial statements include the accounts of our company, our wholly-owned subsidiaries, and variable interest entities (“VIEs”) for which we are the primary beneficiary.
Non-GAAP Financial Measures In addition to our financial results determined in accordance with U.S. GAAP, we present Adjusted EBITDA (which is a non-GAAP financial measure), Adjusted EBITDA margin (which is a non-GAAP ratio), and Free Cash Flow (which is a non-GAAP financial measure) each as defined below.
GAAP, we present Adjusted EBITDA (which is a non-GAAP financial measure), Adjusted EBITDA margin (which is a non-GAAP ratio), and Free Cash Flow (which is a non-GAAP financial measure) each as defined below. We use Adjusted EBITDA, Adjusted EBITDA margin, and Free Cash Flow to evaluate our ongoing operations and for internal planning and forecasting purposes.
Revenue and Key Business Metrics Our management monitors two financial results, Online Revenue and Wholesale Revenue (both defined below), to track our total revenue generation. We also monitor the additional key business metrics set forth below to help us evaluate our business, identify trends affecting our business, formulate business plans and make strategic decisions.
We also monitor the additional key business metrics set forth below to help us evaluate our business, identify trends affecting our business, formulate business plans and make strategic decisions. Increases or decreases in these key business metrics may not correspond with increases or decreases in our revenue.
This increase was primarily due to increased product and packaging costs of approximately 147%, increased shipping costs of 47%, and increased costs associated with medical consultation services of 37%. These increases were primarily due to newer offerings as well as overall increased business activity with the addition of new Subscribers.
These increases were primarily due to our weight loss offerings, which have higher product and packaging costs and shipping costs compared to our other offerings, as well as overall increased business activity with the addition of new Subscribers.
We intend to continue to invest in our fulfillment, distribution, and operating capabilities, including in our Facilities, with the goal of fulfilling nearly all of our pharmaceutical and over-the-counter customer orders through affiliated and internal fulfillment capabilities.
We intend to continue to invest in our fulfillment, distribution, and operating capabilities, including in our wholly-owned pharmacies (also referred to herein as our “Pharmacies”), our laboratory testing facilities and our peptide manufacturing facility (collectively with our Pharmacies sometimes herein referred to as our “Facilities”), with the goal of fulfilling a significant majority of our pharmaceutical and over-the-counter customer orders through internal fulfillment capabilities.
If we are unable to generate or maintain sufficient demand in new health and wellness specialties, we may not recover the financial investments we make into new specialties and revenue may not increase in the future. Seasonality We expect our weight loss specialty will drive new seasonality considerations for our business.
If we are unable 69 Table of Contents to generate or maintain sufficient demand in new health and wellness specialties, we may not recover the financial investments we make into new specialties and revenue may not increase in the future. Non-GAAP Financial Measures In addition to our financial results determined in accordance with U.S.
A maximum additional $30.0 million in cash and Class A common stock consideration is payable upon reaching certain earn-out conditions, which is subject to a continued service condition as defined in the agreement.
A maximum additional amount of $32.7 million in cash and Class A common stock consideration is payable to the Seller upon satisfying certain earn-out conditions, which is subject to a continued service condition by the Seller’s CEO, as defined in the asset purchase agreement. The cash payments are included within investing activities on the consolidated statements of cash flows.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeTreasury bills, corporate bonds, government and government agency securities, and asset-backed bonds. Our investments are made for capital preservation purposes. We do not hold or issue financial instruments for trading or speculative purposes. Due to the short-term nature of these investments, we believe there will be no associated material exposure to interest rate risk.
Biggest changeOur available-for-sale investments are made for capital preservation purposes. We do not hold or issue financial instruments for trading or speculative purposes and we do not believe there is associated material exposure to interest rate risk. In May 2025, we issued $1.0 billion aggregate principal amount of 0% convertible senior notes due 2030 (the “2030 Convertible Notes”).
Item 7A. Quantitative and Qualitative Disclosures about Market Risk We are exposed to certain market risks in the ordinary course of our business, including sensitivities as follows: Interest Rate Risk Our exposure to interest rate fluctuations relate primarily to our cash and cash equivalents and short-term investments.
Item 7A. Quantitative and Qualitative Disclosures about Market Risk We are exposed to certain market risks in the ordinary course of our business, including sensitivities as follows: Interest Rate Risk Our exposure to interest rate fluctuations relate primarily to our cash and cash equivalents and available-for-sale investments.
Foreign Currency Risk There was no significant foreign currency risk for the years ended December 31, 2024, 2023, and 2022 since we operate primarily in the United States. Our operations in the United Kingdom are not considered significant. Accordingly, we believe we do not have a material exposure to foreign currency risk.
Foreign Currency Risk There was no significant foreign currency risk for the years ended December 31, 2025, 2024, and 2023 since a substantial majority of our operations are in the United States for the periods presented. Our operations in the United Kingdom, the European Union, and Canada are not considered significant for the periods presented.
We may choose to focus on international expansion in the future, which may increase our exposure to foreign currency exchange risk.
Accordingly, we believe we do not have a material exposure to foreign currency risk. We expect to continue to focus on international expansion in the future, which may increase our exposure to foreign currency exchange risk. 82 Table of Contents
We had cash and cash equivalents and short-term investments totaling $300.3 million and $221.0 million as of December 31, 2024 and 2023, respectively, which were held for working capital purposes. Our cash and cash equivalents are comprised of interest-bearing cash accounts and money market funds, and our short-term investments are comprised of U.S.
We had cash and cash equivalents, short-term available-for-sale investments, and long-term available-for-sale investments totaling $928.8 million and $300.3 million as of December 31, 2025 and 2024, respectively, which were held for working capital purposes.
Added
As of December 31, 2025, our cash and cash equivalents are comprised of interest-bearing cash accounts and money market funds, and our short-term available-for-sale investments are comprised of government and government agency securities, corporate bonds, and U.S. Treasury bills, and our long-term available-for-sale investments are comprised of government and government agency securities and corporate bonds.
Added
The 2030 Convertible Notes do not bear regular interest and their principal amount will not accrete; accordingly, we do not have economic interest rate exposure on the 2030 Convertible Notes. However, we may be required to pay special interest under certain circumstances in accordance with the terms of the 2030 Convertible Notes.
Added
For additional details on the 2030 Convertible Notes see Note 13 – Debt to the consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K.

Other HIMS 10-K year-over-year comparisons