Phase Space AI

Financial Model Notes

Hims & Hers Health [HIMS]

HIMS — Financial Model Notes

Every figure below is from XBRL companyfacts (CIK 0001773751, max filed date 2026-05-11 — recency asserted, not stale) or read directly off the filed statements. Units $000 unless stated.

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1. Quarterly P&L, as filed

¹ Derived: FY total less the nine-month YTD figure. The scanner's failure to do this is screen defect 1. Derivations used, for audit: Q4'24 revenue 1,476,514 − 995,375; Q4'24 operating income 61,903 − 43,307; Q4'24 net income 126,038 − 100,013; Q4'25 revenue 2,347,637 − 1,729,819; Q4'25 operating income 105,613 − 96,427; Q4'25 net income 128,365 − 107,764. An earlier draft of this table carried 39,529 and 50,450 for Q4'24 operating and net income; both were wrong and are corrected above. Recorded rather than silently fixed. ² Q4'24 marketing/G&A/opex not separately derivable from the tagged periods available. ³ Non-GAAP, from 8-K Ex-99.1. Definition changed twice in four quarters (§4). Not comparable across the row.

Annual

Best-ever annual GAAP operating margin: 4.5% (FY2025). TTM operating income is −$30,607 (Q2'25 26,723 + Q3'25 11,807 + Q4'25 9,186 + Q1'26 −78,323), i.e. −1.3% margin. The reverse DCF's 10% terminal EBIT margin is therefore 2.2x anything ever demonstrated and the required-CAGR result is generous to the bull case, not conservative.

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2. TTM — and the screen's error, shown

CORRECT TTM (to 2026-03-31)
  Q2'25 544,833 + Q3'25 598,976 + Q4'25 617,818 + Q1'26 608,104 = 2,369,731

SCREEN'S NUMBER (reports/scan_v2/HIMS_analysis.json: revenue_ttm = 2,337,923)
  Q1'25 586,010 + Q2'25 544,833 + Q3'25 598,976 + Q1'26 608,104 = 2,337,923   ← exact match

Q4 2025 omitted entirely, Q1 2025 substituted in its place. Error −1.34% here only because HIMS's quarters are flat; on any name with Q4 growth the error scales with it. Root cause: Q4 is not directly XBRL-tagged and must be derived as FY minus nine-month YTD. This is the same defect the brief records from another name tonight — it is in the scanner, not in one record.

TTM gross profit: 416,196 + 442,058 + 444,435 + 396,787 = 1,699,476 → 71.7% TTM gross margin (vs 65.2% in the latest quarter — the TTM understates the deterioration).

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3. Balance sheet and the net-debt verification

Net cash / net debt — verified from the balance sheet

Cash and cash equivalents                    222,266
Short-term AFS investments                   528,609
Long-term AFS investments                          0
                                           ---------
Cash + investments                           750,875
Convertible senior notes, net               (974,106)   face $1,000,000; 0% coupon; due 2030-05-15
                                           ---------
NET DEBT                                    (223,231)

Tags checked as the brief directs: LongTermDebt absent; LongTermDebtCurrent absent; DebtCurrent present but last tagged 2020-12-31 at 0; ConvertibleDebtNoncurrent 974,106 at 2026-03-31; AvailableForSaleSecuritiesDebtSecuritiesCurrent 528,609; AvailableForSaleSecuritiesDebtSecuritiesNoncurrent 0 (confirmed against the printed balance sheet — the long-term line reads "—", it is not a missing tag); LongTermInvestments last tagged 2025-09-30, superseded by the AFS split.

Not in the figure above but contractually owed: earn-outs of $89,689 (40,096 + 26,944 payable, 10,362 + 12,287 liabilities) → net debt $312,920 on the fuller basis. And up to $1.15bn for Eucalyptus (~$240m cash at close, deferred over 18 months, earn-outs to early 2029).

Revolver: undrawn, $12.6m letters of credit, $162.4m available. Covenants: total leverage ≤ 3.50x, interest coverage ≥ 3.00x. Company states compliance at 2026-03-31 and amended the leverage-ratio numerator definition in May 2026 to expand "cash equivalents" to include board-policy investments. An interest-coverage covenant on a company with TTM EBIT of −$30.6m is worth watching; the headroom comes from the credit agreement's definitions, not from earnings.

The trap, for the record. At 2024-12-31 HIMS carried zero debt and ~$300m of net cash. The $1.0bn convertible was issued in May 2025. Anyone anchored on cash + investments — or on a pre-May-2025 model — reads net cash of +$751m and understates EV by $1.2bn (20% of EV). The screen produced no net-cash figure at all, so it did not make this error; but the error was there to be made.

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4. Share count — the dual-class trap, as predicted

Cause of the absence: the cover-page tag is dimension-qualified by share class (us-gaap:CommonClassAMember / hims:CommonClassVMember), and dimensional XBRL tagging does not survive SEC companyfacts aggregation — exactly the failure mode the brief predicted. CommonStockSharesOutstanding is present but last tagged 2019-06-30 at 0. The screen's notes: ["no share count"] and status: INDETERMINATE are the correct D1 behaviour — a missing input returned INDETERMINATE rather than a confident wrong number — but they mean the Tier-1 record contains no market cap, no EV, no multiple and no net cash. The number is in plain English on the 10-Q cover page.

Used throughout this memo: 231,457,695.

EPS cross-check (scale confirmation)

Scale confirmed. No 4x or 54% share-count error. Q1'26 diluted equals basic (228,357,303) — correct anti-dilution in a loss quarter, not a tagging fault. Dilution overhang, for the model: 76,765,318 Class A shares reserved under the 2020 Plan (27,576,214 available for grant), plus 6,047,919 under the ESPP, plus the $1.0bn convertible — and the plan reserve auto-increases 5% of shares outstanding every 1 January (11,362,276 added on 2026-01-01). SBC was $36,862 in Q1'26, 6.1% of revenue, up 48% YoY on 3.8% revenue growth.

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5. Cash flow — and why reported CFO overstates

Q1 2026 net cash provided by operating activities: $89,400. Composition as disclosed:

Reported Free Cash Flow $53.0m (vs $50.1m in Q1'25) — i.e. FCF was reported as up in a quarter with a $92m net loss and a $78m operating loss. It is up because of a $167.6m accounts-payable build. Strip the payable stretch and operating cash generation is materially negative. Read the AP and receivables lines before the FCF headline on 10 August.

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6. Non-GAAP hygiene — two redefinitions in four quarters, neither recast

Q1 2026 reconciliation — $150,864 of addbacks producing $44,280 of Adjusted EBITDA:

Addbacks went from 5.7% to 24.8% of revenue in a year. Of the Q1'26 total, $36.9m (SBC) and $22.0m (D&A) are recurring by any reasonable reading — SBC is 6.1% of revenue and rising, D&A is rising with a $334m PP&E base and $261m of acquired intangibles. And the $33.5m of "non-recurring" restructuring is guided to recur: "To the extent that we incur additional restructuring charges and other related charges in connection with the 2026 US WL Announcement in future periods, these costs will be presented consistently."

Forward Adjusted EBITDA guidance is unreconciled. The company invokes Item 10(e)(1)(i)(B) of Regulation S-K: it "cannot predict with reasonable certainty the ultimate outcome of certain components of such reconciliations." So the FY2026 $275–350m guide has no GAAP counterpart.

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7. Disclosure changes to track

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8. Model construction notes for whoever builds the live workbook

1. Never take TTM from an aggregator or the scanner. Q4 must be derived as FY minus nine-month YTD (§2).
2. Sum both share classes. The dual-class cover-page tag does not survive companyfacts (§4).
3. Net debt, not net cash. The $1.0bn 0% convertible was issued May 2025 and post-dates any FY2024-anchored model (§3). Carry earn-outs of $89.7m and the Eucalyptus consideration separately.
4. Split revenue US vs Rest of World in every period. Total growth is meaningless here — Q1'26 was +3.8% total and −8.4% US, and the difference is entirely acquired (§Research 4).
5. Do not model MRPS as a subscription metric without the correction. It includes one-time purchases; the company discloses the correction as "approximately $10" (Q1'26) and "less than $5" (Q1'25), so subscription MRPS is ~$70 vs ~$81+, a ~14% decline against the −6% headline.
6. Gross margin should be modelled off the ex-write-down figure (69.9% in Q1'26) with three named structural headwinds, then floored on the branded mix — not mean-reverted to the 73–79% history, which belongs to a business that no longer exists.
7. Flag the manufacturer rebate receivable as a distinct line. It reduces inventory cost and therefore feeds gross margin directly; it went $0 → $131.5m in one quarter; it carries no allowance for doubtful accounts.
8. Adjusted EBITDA is not comparable across FY2024–FY2026. Two definition changes, neither recast. If a multiple must be built on it, build it on the current definition only and say so.