Hims & Hers reported FY2025 revenue of $2,348M (+59% YoY), Q4 revenue of $618M (+28% YoY), and 2,511K subscribers (+13% YoY). The 10-K revealed critical balance sheet details: convertible notes confirmed at $1.0 billion at 0% due 2030 (33% larger than our ~$750M estimate), cash declined to $929M, and free cash flow collapsed from $198M to $57M. The Eucalyptus acquisition ($1.15B) was signed 10 days after the DOJ referral. Our five-lens committee re-evaluated seven signal classifications. Result: 2 signals escalated, 5 confirmed.
The Numbers
Two Stress Scanner Signals Escalated
Both escalations occurred in the Stress Scanner lens, which stress-tests the balance sheet under adverse scenarios. The previous assessment was explicitly “high end of STRETCHED, borderline STRAINED.” Q4 data resolved the ambiguity.
- Convertible notes confirmed at $1.0B (33% larger than the ~$750M estimate at 0% due 2030)
- Cash declined to $929M while absorbing $600M+ in new committed acquisition outflows
- FCF collapsed from $198M to $57M as CapEx exploded 5.4x ($42M to $226M)
- $175M JPMorgan credit facility provides buffer but cannot close structural gap
- $1.15B Eucalyptus acquisition signed February 19 — 10 days after DOJ referral
- $190M cumulative buybacks at ~$40 average, now 38%+ underwater (~$65M destroyed)
- $226M CapEx (5.4x increase) concentrated in compounding facilities under regulatory threat
- SBC of $135M exceeds net income of $128M — structural dilution
Five Signals Confirmed
Eucalyptus: $1.15B During Peak Uncertainty
The largest acquisition in HIMS history was signed February 19, 2026 — 10 days after the DOJ referral. The deal structure: $240M upfront, $710M deferred over 18 months, $200M earnout. A 60% stock settlement option on deferred payments creates dilution risk at depressed prices.
The strategic logic (Australian telehealth platform, international diversification, $200M+ revenue contribution in H2 2026) has merit in isolation. The timing and magnitude relative to the acute regulatory crisis are what drove the DESTRUCTIVE classification. The aggregate pattern of ~$1.5B+ in commitments during peak uncertainty systematically reduces financial flexibility to absorb adverse outcomes.
Prediction Markets Updated
Our 9-model ensemble refreshed predictions for all 5 active HIMS markets. Two markets resolved with strong Brier scores.
Q4 subscriber growth landed at 13% YoY. Ensemble predicted 65% probability of YES. Deceleration continued: 38% → 31% → 20% → 13%.
$6.5B 2030 target reaffirmed verbatim. Ensemble predicted 72% probability of NO. Confirms persistent governance misalignment.
The largest shift: GLP-1 revenue below $175M moved from a coin flip (52%) to a clear lean (68%). FY2025 math implies H2 weight loss revenue of ~$308M, making both Q3 and Q4 likely below $175M. The company deliberately avoided disclosing Q4 weight loss revenue despite changing reporting segments. Near-term legal timeline probabilities all declined: Novo injunction and insider purchase both dropped to 10%.
Thesis Classification Changed
At $14.20 (~1.3x trailing P/S), the stock appears to roughly reflect the probability-weighted regulatory outcomes. Fundamentals deteriorated (2 escalations, worse balance sheet) but the price decline and easing legal timelines create a rough equilibrium.
What to Watch
- DOJ prosecution decision — The single highest-variance catalyst. Charges filed = escalate all signals. Declined = de-escalate REGULATORY_EXPOSURE.
- Q1 2026 earnings (May) — Guided 2-7% growth with $65M headwind. First full quarter showing 503A transition impact.
- Novo preliminary injunction — Fastest path to forced GLP-1 revenue cessation. Hearing expected Q2 2026.
- Eucalyptus closing (mid-2026) — $240M upfront cash draw. Monitors liquidity under committed outflows.
- Any insider purchase — Would narrow the narrative-action gap. Still zero after 5+ months.
Full 5-lens committee analysis with 7 signals, 5 prediction markets, and updated thesis assessment