Mental health services may be new to the direct-to-consumer telehealth company Hims & Hers (NYSE: HIMS), but those offerings are already shaping up to be an important part of its future, according to co-founder and CEO Andrew Dudum.
“We believe this [mental health] specialty to be a foundational pillar of the company in the future, differentiated by a comprehensive set of services and offerings from psychiatry and live group sessions to individualize psychotherapy,” Dudum said recently during the company’s Q2 2021 earnings call. “We believe the Hims & Hers mental health platform offers something truly unique to patients in need.”
Hims & Hers was founded in 2017 as a virtual men’s wellness brand focused on treating stigmatized gender-specific conditions such as hair loss and erectile dysfunction. Since then, it has also added a women’s health arm and expanded the list of conditions it can treat, with mental health being one of its more recent additions.
Additionally, the company went public earlier this year after merging with the special purpose acquisition company (SPAC) Oaktree Acquisition Corp.
In the second quarter of 2020, virtual mental health services were integral to the company’s performance, with first-time users helping drive subscriber and revenue growth.
“Specifically on mental health, what … is very unique about that category for us … is close to 100% of those patients coming to us are first-time buyers,” Dudum said during the Q2 2021 call.
Dudum also said that users were attracted to the platform through endorsements from celebrities, such as Jennifer Lopez and Miley Cyrus.
“These are people who are being activated by the brand, who are being activated by our destigmatization campaigns, by the fact that we’re partnering with celebrities to talk authentically about different issues they’re struggling with,” Dudum added.
Hims and Hers’ mental health platform allows users to access licensed psychiatrists, free group support sessions and a phone-based crisis line available to users 24/7. During Q2 2021, Hims & Hers also debuted a behavioral health mobile tool, which customers can use to schedule therapy appointments, track their progress and manage medications.
The company said that almost 80% of customers that have used the platform for psychiatric services have reported improvements to their mental health.
For Q2 2021, Hims & Hers’ revenue grew 69% year-over-year to $60.7 million, with adjusted EBITDA coming in at a loss of $4.7 million. The company also generated strong year-over-year revenues for the quarter from online activity, which grew 75% to $58.1 million.
The company’s gross margins for the quarter came in at an all-time high of 78%. Additionally, almost 200,000 subscribers were added from Q2 2020, representing an increase of over 40%.
“The results this quarter are a continued validation of our innovative consumer-oriented business model and we believe we are leading a secular trend that will transform healthcare as we know it,” Dudum said on the call. “As a newly public company, Hims & Hers is in the earliest chapters of our story.”
Hims & Hers is part of a growing list of companies with behavioral health care offerings that have gone public within the last year by merging with a SPAC. The SPAC process has become a particularly attractive way for smaller, younger companies to become publicly traded by forgoing the traditional process of an initial public offering (IPO).
“Working with an institutional investor as a vehicle to enter the public market will allow us to continue to expand the categories of care for which we offer access to treatment, with the goal of becoming the first stop for people’s health and wellness needs across hundreds of conditions,” Dudum told Behavioral Health Business last November.
Hims & Hers’ stock closed at $6.91 per share at the end of the trading Tuesday, down 7.5%.
Companies featured in this article:
