Telehealth Growth Desk: Hims Q2 2024 and the GLP-1 Land Grab

Do not copy Hims & Hers.

I say that up front because every time a public telehealth company posts a big quarter, someone in a clinic Slack channel says "we should do what they do." Then they try, with a fraction of the money, a fraction of the data and none of the infrastructure. What I tell clinics is simpler: read the report, take the lessons that scale down, and leave the rest.

Hims reported its Q2 2024 numbers on August 5. They are a useful look at what a subscription engine does when it works. This is the first Telehealth Growth Desk note. It is educational, not legal or medical advice.

What did Hims & Hers actually report for Q2 2024?

Start with the facts from the release.¹

Online revenue was $306.8 million, up 53%. Subscribers reached about 1.9 million, up 43%, and monthly online revenue per average subscriber rose 8% to $57 from $53. Net income was $13.3 million, compared with a loss of $7.2 million a year earlier, and adjusted EBITDA was $39.3 million. The company raised its full-year revenue guidance to $1.37 billion to $1.40 billion.¹

The line that matters most

The release says the majority of online revenue is subscription-based.¹ That sentence is the business model. Recurring revenue turns acquisition spend into an asset: each patient you keep pays you again next month without a new ad.

Where does the GLP-1 move show up in these numbers?

Honestly, you cannot see it directly, and I would be suspicious of anyone who says they can.

In May 2024, Hims said it would offer a compounded version of semaglutide, the active ingredient in Ozempic and Wegovy, at a price starting at $199 a month.³ The Q2 release does not split out weight loss revenue. What it shows is subscriber growth and rising revenue per subscriber, both consistent with a bigger offer, but consistent with other things too.

The demand side is real

KFF's May 2024 poll found 12% of US adults said they had ever taken a GLP-1 drug and 6% said they were currently taking one. Among people who had taken one, 54% said it was somewhat or very difficult to afford, and list prices ran from $936 to $1,349 before insurance or coupons.²

That is the whole land grab in two facts: millions of people want the product, and many struggle to pay for it through the traditional channel. Telehealth companies are selling access and price, and the claims inside those ads are their own risk (I walked through what a clinic can and cannot say earlier this month). The next question is who keeps the patient.

On CNBC on June 4, 2024, Ro co-founder and CEO Zach Reitano described where he thinks the category goes: "GLP-1s serve as the sun around which all other care will orbit."⁵ He runs a company with a stake in that view, so weigh it accordingly. Still, it explains why a retention-first operator wants the patient relationship and not just the first prescription.

What does a subscription engine teach an independent clinic?

Three things scale down cleanly.

Offer breadth

A patient who comes for one thing and leaves is a one-time sale. A patient who can move from an initial consult to ongoing care, follow-up visits and related services is a relationship. Offer breadth is what makes the second and third month possible. For a clinic, that does not mean a hundred products. It means a clear path for what comes after the first prescription.

Retention is the engine

The rise in revenue per subscriber suggests Hims is deepening its relationships, not only adding new ones.¹ For a clinic, retention is a number you can measure this week: of the patients who started in a given month, how many are still active in month two, three and six? If you do not know, you are flying blind on the most important number in a subscription.

What the release does not tell you

It does not give a retention rate, so you cannot tell how long the average subscriber stays. It reports an 81% gross margin, down a point from a year earlier, which gives the company room to spend heavily on marketing.¹ Those two facts together are the point: heavy acquisition spending only makes sense when the margin and the retention can pay it back. A clinic that copies the spend without the payback is copying the risk and skipping the engine.

Cost to acquire a patient

At Hims's scale, marketing expense was $144.9 million in the quarter, which is about 46% of revenue by my calculation from the release.¹ You are not them, and your numbers will differ. But the habit is worth copying: know your cost to acquire a patient, and know what that patient is worth over time. Without both, you cannot tell whether growth is healthy or just expensive, especially now that Meta's average price per ad is climbing.

What should a small clinic not copy?

The spending

A public company with 1.9 million subscribers can absorb marketing at 46% of revenue because the base pays back over time. A clinic with a few hundred patients cannot run the same ratio if its retention is unknown.

The risk profile

Scale draws scrutiny. In April 2024, the FTC announced a proposed order against telehealth firm Cerebral that would ban it from using or disclosing consumers' personal and health information to third parties for most advertising purposes, and that addressed deceptive cancellation practices, including a process that made it hard to cancel.⁴ Whatever your size, the lesson holds: data sharing with ad platforms and the cancel experience are both enforcement areas.

How should a clinic model its own retention and acquisition cost?

You need four numbers from your own records. No benchmark can replace them.

Multiply the first three and you have what a patient is worth over time. Compare that to the fourth. If the ratio is comfortable, you can spend. If it is thin, fix retention before you buy more traffic, because retention improves every dollar you have already spent. A lead is only a promise until it is paid and kept.

The Hims numbers say a subscription engine can compound. Yours will too, at a smaller size, if you measure it first.

If you run a telehealth practice and want to talk through the funnel, the tracking and the retention math, you can find me at ekaistone.com.

Keep building.Ekai