What drove the dramatic rise in HIMS's operating income in 2024?

Hims & Hers Health Inc (HIMS) experienced a significant increase in operating income in 2024, driven primarily by the following factors:

1. Revenue Growth: The company's total revenue grew by 69% year-over-year, reaching nearly $1.5 billion. This substantial increase in revenue was driven by strategic initiatives and new product offerings, particularly in the weight loss segment. The launch of new prescription products in weight loss, sexual health, dermatology, and mental health, along with new hair care and supplement retail products, contributed to this growth.
2. Subscriber Growth: HIMS saw a 44% year-over-year increase in subscribers, reaching over 2 million by the end of the third quarter. This significant growth in the subscriber base led to an increase in online revenue per average subscriber, which grew by 24%. The expansion in the subscriber base and the rise in average order value (AOV) to $147, contributed to the revenue surge.
3. Operational Efficiencies: The company reported improved operational efficiencies, which reflected in the form of increased gross profit and income from operations. The gross profit increased by 64% compared to the previous year, reaching $1,173.1 million, with a gross margin of 79%. The income from operations was $61.9 million, a significant improvement from a loss of $29.5 million in the previous year.
4. Strategic Acquisitions and International Expansion: HIMS has reported strategic acquisitions and international expansion, which have contributed to its growth. These initiatives have enabled the company to expand its service offerings and reach new markets.

In summary, the dramatic rise in HIMS's operating income in 2024 was primarily driven by revenue growth, subscriber growth, operational efficiencies, and strategic initiatives. These factors combined to enable the company to achieve robust financial performance and improved profitability.