Hims & Hers' Strategic Push to Close the $10 ARPU Gap: A Deep Dive into Product Diversification and Partnerships

In the rapidly evolving telehealth and personalized healthcare sector, Hims & Hers Health, Inc. (HIMS) has emerged as a formidable player, leveraging a subscription-based model to drive growth. However, a critical challenge looms: closing a $10 gap in its average revenue per user (ARPU) to align with long-term financial targets and outpace competitors. With Q2 2025 ARPU at $74-a 30% year-over-year increase from $57 Q2 2025 results-the company is strategically expanding its product portfolio and forging high-impact partnerships to bridge this gap.

The ARPU Gap: A Benchmark for Growth

Hims & Hers' current ARPU, while robust, still falls short of its 2030 financial goals. The company aims to achieve at least $6.5 billion in revenue and $1.3 billion in Adjusted EBITDA by 2030, according to its Q1 2025 slides, necessitating a significant lift in ARPU. Analysts note that the $10 gap likely reflects the difference between Hims & Hers' current performance and its aspirational targets, as well as the need to outperform competitors like Teladoc Health, which reported a Q2 2025 ARPU of $6.17 Teladoc's Q2 2025 ARPU. While Teladoc's lower ARPU underscores its focus on volume over price, Hims & Hers is betting on premium personalization to justify higher pricing.

Product Diversification: Expanding the Value Proposition

A cornerstone of Hims & Hers' strategy is diversifying its offerings to deepen customer engagement and spending. In Q1 2025, the company reported a 53% year-over-year increase in monthly online revenue per average subscriber, reaching $84 Q1 2025 results, driven by expanded categories such as weight loss, mental health, and dermatology. For instance, the weight loss segment alone is projected to generate at least $725 million in 2025, per MarketBeat data, reflecting the success of partnerships like its collaboration with Novo Nordisk to offer branded GLP-1 medications (e.g., Wegovy), as discussed in an AlphaMonk analysis.

By introducing emotionally resonant specialties-such as menopause, longevity, and sleep-Hims & Hers is transforming from a niche telehealth provider into a full-stack healthcare platform. This approach not only increases ARPU but also enhances customer retention, with 60% of its 2.4 million subscribers now using personalized formulas, according to Next 100 Baggers.

Strategic Partnerships: Scaling Personalization and Access

Hims & Hers' partnerships are pivotal to its ARPU growth. The Novo Nordisk collaboration, for example, allows the company to offer high-margin, branded medications, directly boosting revenue per user. Similarly, its acquisition of ZAVA, a European telehealth platform, and the launch of MedMatch, an AI-powered tool for personalized treatment insights, demonstrate a commitment to vertical integration and data-driven care, as outlined in a Canvas blog. These moves reduce reliance on third-party providers and enable Hims & Hers to capture more value from each customer interaction.

Moreover, the company's partnership with Novo Nordisk extends beyond product offerings. By integrating GLP-1 medications into its subscription model, Hims & Hers is creating a recurring revenue stream that aligns with long-term health outcomes, further justifying higher ARPU.

Long-Term Vision: From ARPU to EBITDA

While the $10 ARPU gap is a near-term focus, Hims & Hers' 2030 targets reveal a broader ambition. The company's Q1 2025 revenue surged 111% year-over-year to $586 million, per the Business Wire release, and it has raised its 2025 Adjusted EBITDA guidance to $295–$335 million, according to its Q2 earnings guidance. These figures suggest that ARPU growth is part of a larger strategy to scale profitability through operational efficiency and market share expansion. With a 37.2% market share in the healthcare facilities industry, based on market share data, Hims & Hers is well-positioned to capitalize on its first-mover advantage in personalized telehealth.

Risks and Considerations

Despite its momentum, Hims & Hers faces challenges. Regulatory scrutiny of GLP-1 medications and competitive pressures from firms like Teladoc could temper ARPU growth. Additionally, the company's reliance on high-margin partnerships means any disruption in these relationships could impact revenue. Moreover, historical data on earnings releases since 2022 reveals limited statistical power due to only four events, with cumulative returns lagging the benchmark by 8.34% versus 12.54% over 30 days, and no statistically significant abnormal returns on any single day. The win-rate never exceeded 75%, underscoring the absence of a reliable upside pattern around these events (see Backtest results: Impact of HIMS earnings releases (2022–2025)).

Conclusion

Hims & Hers' strategy to close the $10 ARPU gap is a masterclass in leveraging product diversification and strategic partnerships to drive sustainable growth. By expanding into high-demand specialties, integrating premium offerings, and building a vertically integrated platform, the company is not only increasing revenue per user but also redefining the telehealth landscape. As it marches toward its 2030 targets, investors should watch for continued innovation in personalization and the successful execution of its global expansion plans.