Hims & Hers Health's Q3 2025 Earnings: Balancing Explosive Revenue Growth with Profitability Pressures

In Q3 2025, Hims & Hers Health, Inc. delivered a mixed financial performance, marked by robust revenue growth and subscriber expansion but tempered by declining net income and margin pressures. The company reported total revenue of $599.0 million, a 49% year-over-year increase compared to $401.6 million in Q3 2024, according to its Q3 2025 earnings release. This growth underscores the company's ability to capitalize on its direct-to-consumer healthcare model, particularly in men's and women's wellness, mental health, and dermatology services. However, profitability metrics tell a different story, raising critical questions for investors about sustainability and operational efficiency.

Revenue Growth: A Double-Edged Sword

The 49% revenue surge reflects Hims & Hers' aggressive market penetration and product diversification. With 2.471 million subscribers at quarter-end-a 21% year-over-year increase-the company continues to expand its customer base, driven by digital marketing and subscription-based offerings, as noted in the earnings release. This growth, however, appears to come at a cost. Gross margin contracted to 74% in Q3 2025 from 79% in the same period of 2024, signaling rising input costs or pricing pressures according to the release.

Profitability Challenges: Tax Benefits and EBITDA Optimism

While Adjusted EBITDA rose 53% to $78.4 million, net income plummeted to $15.8 million from $75.6 million in Q3 2024, as the earnings release shows. The stark decline is partly attributed to a one-time $60.8 million tax benefit in 2024, which included the release of a tax valuation allowance. Excluding such anomalies, the company's operating expenses-likely inflated by investments in subscriber acquisition and service expansion-appear to erode profitability.

This dichotomy between EBITDA growth and net income contraction highlights a broader challenge: scaling a high-growth business in a competitive healthcare market. While Adjusted EBITDA provides a clearer picture of operational performance, investors must scrutinize how effectively the company converts revenue into sustainable profits.

Subscriber Growth vs. Cost Structure

The 21% subscriber increase is a strategic win for Hims & Hers, yet it also necessitates higher customer acquisition and retention costs. In a sector where customer lifetime value (LTV) is critical, the company must balance aggressive marketing spend with long-term profitability. The narrowing of full-year 2025 revenue guidance to $2.335 billion–$2.355 billion and Adjusted EBITDA guidance to $307 million–$317 million suggests management is recalibrating expectations amid these pressures, per the release.

Implications for Investors

Hims & Hers' Q3 results exemplify the classic trade-off between growth and profitability. For investors, the key question is whether the company can maintain its revenue trajectory while improving gross margins and controlling operating expenses. The absence of a recurring tax benefit in 2025 complicates comparisons, but the underlying trend of margin compression remains a red flag.

That said, the company's subscriber base and market position in direct-to-consumer healthcare remain strong. If Hims & Hers can optimize its cost structure-perhaps through economies of scale or pricing adjustments-it may yet reconcile its growth ambitions with profitability. For now, however, the path forward demands careful monitoring of both top-line momentum and bottom-line discipline.