Hims & Hers Health (NYSE: HIMS) delivered a second quarter that was both impressive and messy. Revenue hit $753.2 million, a 38% year-over-year surge that beat consensus by roughly $54 million. The jump came from a re-acceleration in domestic growth and the first full quarter contribution from the Eucalyptus acquisition. But the headline GAAP net loss of $86.3 million ($0.37 per diluted share) versus a $42.5 million profit a year ago tells a different story. This one is dominated by a $47.5 million legal contingency, acquisition costs, and restructuring charges. The real narrative is in the underlying operating momentum and what management did with the guidance.
The top-line beat was broad-based. Domestic revenue grew 16% year-over-year to $621.8 million, accelerating from the 3% growth reported in the first half of 2026. That re-acceleration is the most important number in the release. It suggests the strategic shift in the U.S. weight loss offering—moving toward branded GLP-1 medications and limiting compounded offerings—has not dented overall demand. International revenue hit $131.4 million, up 1,641% from $7.5 million a year ago, almost entirely from the Eucalyptus acquisition that closed in June. Subscribers grew 19% to nearly 2.9 million, while Monthly Revenue per Average Subscriber rose 21% to $92. The company is successfully upselling existing customers into higher-value regimens.
Gross margin compressed sharply. It fell to 64% from 76% a year ago, a 1,200 basis point decline that is the cost of international expansion. The Eucalyptus business carries structurally lower margins, and the company also took restructuring-related inventory charges. Adjusted gross margin, which strips out those charges, was 64% for the quarter. For the first half of 2026, however, adjusted gross margin was 67% versus 64% on a GAAP basis, suggesting the inventory charges were front-loaded. The margin trajectory from here depends on how quickly the international business scales into higher-margin offerings and whether domestic mix shifts continue toward lower-margin GLP-1 products.
The GAAP loss is noisy but not alarming. Adjusted EBITDA of $60.3 million came in well below the $82.2 million reported a year ago, but the comparison is distorted. It includes $47.5 million in legal contingencies, $28.8 million in acquisition and transaction costs, and $4.6 million in restructuring charges. Back those out alongside stock-based compensation and depreciation, and the underlying cash generation story is more nuanced. Free cash flow was negative $68.2 million, essentially flat with negative $69.4 million a year ago, as the company invested heavily in working capital and capital expenditures to support the growth.
The guidance raise is the strongest signal management could send. Full-year 2026 revenue guidance was lifted to $3.1 billion to $3.3 billion, up from the prior range. Adjusted EBITDA guidance was raised to $275 million to $325 million. For the third quarter, the company expects revenue of $880 million to $900 million and Adjusted EBITDA of $75 million to $95 million. The implied second-half revenue acceleration is significant. The midpoint of the full-year range implies roughly $1.8 billion in second-half revenue, or about $900 million per quarter, versus $753 million in Q2. Management is betting that domestic momentum continues to build and that the international business contributes increasingly.
What to watch next is the margin progression. The company is guiding to an Adjusted EBITDA margin of 9% to 10% for the full year, down from 15% in 2025. That compression is the price of the international expansion and the legal overhang. If domestic re-acceleration continues and international margins improve as the Eucalyptus integration matures, the 2030 targets of at least $6.5 billion in revenue and $1.3 billion in Adjusted EBITDA start to look more plausible. For now, the Q2 print is a clear signal that the core business is accelerating, even if the income statement is cluttered with one-time items.