How did HIMS manage to reduce selling expenses in early 2024?

Hims & Hers Health Inc. (HIMS) has been successful in managing its selling expenses in early 2024, which can be attributed to several strategic initiatives and financial optimizations. Here are the key factors that have contributed to this outcome:

1. **Efficient Marketing Strategies**: HIMS has excelled in marketing efficiency, taking a leading position in this crucial area. The company's marketing strategies have been tailored to optimize ROI, focusing on targeted campaigns that directly impact market expansion and revenue growth.
2. **Strong Revenue Growth**: The most significant driver of reduced selling expenses as a percentage of total expenses is the strong revenue growth. HIMS's revenue increased by 69% year-over-year, reaching nearly $1.5 billion in 2024. This substantial growth has diluted the impact of selling expenses, allowing the company to maintain profitability while investing in growth opportunities.
3. **Strategic Diversification**: HIMS's strategic diversification has been a key factor in reducing selling expenses. The company has expanded its healthcare offerings and infrastructure, integrating new technologies and services. This diversification not only increases revenue streams but also allows for more efficient use of marketing resources.
4. **Cost Management**: Despite the increase in operating expenses, HIMS has managed to maintain a strong gross margin of 77-79%. This indicates effective cost management and strong pricing power, which are crucial in reducing the impact of selling expenses on overall profitability.
5. **Financial Health**: The company's financial health, as evidenced by a free cash flow of nearly $200 million in 2024, provides a buffer against unexpected expenses. This financial stability allows HIMS to invest in growth opportunities while maintaining a disciplined approach to spending.

In conclusion, HIMS's ability to reduce selling expenses in early 2024 can be attributed to a combination of efficient marketing strategies, strong revenue growth, strategic diversification, effective cost management, and robust financial health. These factors have collectively enabled the company to optimize its selling expenses and maintain a strong market position.