Hims & Hers Health swung to a surprise third-quarter loss on Monday, 9 November 2026, and cut its profit guidance, capping a bruising day for the telehealth company's shares.

The company reported revenue of $890.4 million for the three months to 30 September, up 49% from $599.0 million a year earlier, but slightly below the roughly $893 million analysts had expected. It swung to a net loss of $33.0 million, or $0.14 per share, from net income of $15.8 million a year earlier. Adjusted earnings were $0.03 per share, missing the $0.07 analysts had expected, according to Zacks.

Shares fell before the results landed

Shares in Hims & Hers had already fallen about 12% during Monday's regular trading session, closing at $22.94, before the results were released after the market closed. They slipped about 3% further in after-hours trading once the numbers were out.

The regular-session fall came just three days after the shares had jumped on Friday, when the company announced a deal for Eli Lilly to sell its weight-loss drugs Zepbound and Foundayo directly through the Hims & Hers platform. That announcement had sent the shares up more than 7% in premarket trading.

Why margins shrank

The main problem in the quarter was profitability, not sales. Gross margin fell to 57%, from 74% a year earlier, as the cost of revenue rose 143% to $381.2 million while revenue grew 49%. Gross profit grew only 15% as a result.

The squeeze reflects a shift in the business towards branded weight-loss drugs. Earlier this year Hims & Hers moved away from selling compounded copies of GLP-1 weight-loss medicines and towards branded products from the big drugmakers, including Novo Nordisk's Wegovy and now Eli Lilly's Zepbound. Branded drugs carry lower margins for the telehealth platform than the compounded versions did, and international expansion has added costs too.

Subscribers grew 13% to nearly 2.8 million, while monthly revenue per average subscriber rose 30% to $105. Revenue from outside the United States rose 321% to $233.3 million, helped by the first full quarter including Eucalyptus, the Australian company behind the Juniper and Pilot brands, which Hims & Hers bought in June. Free cash flow fell to $26.0 million, from $79.4 million a year earlier.

Guidance cut

The outlook disappointed investors as much as the quarter itself. For the fourth quarter, Hims & Hers guided revenue of $875 million to $895 million, well below the $953 million analysts had expected. For the full year, it now expects revenue of $3.13 billion to $3.15 billion and cut its adjusted core profit expectations to $257 million to $277 million.

Chief financial officer Yemi Okupe hinted at several planned expansions to the platform in the fourth quarter, but gave investors little to offset the weaker guidance on the day.

What to watch

The test for Hims & Hers now is whether the branded-drug strategy can deliver growth without margins falling further. The company still targets $6.5 billion of revenue and $1.3 billion of adjusted earnings by 2030, but the third quarter showed how costly the shift away from compounded products has been in the short term.

Investors will watch the fourth-quarter numbers closely, along with any update on how the new Lilly partnership is performing, to judge whether the margin squeeze is stabilising or still has further to go.