Hims & Hers Q3 2026: Gross Margin Collapse Turns Growth Into a Loss

Hims & Hers reported revenue of $890.4 million for Q3 2026, up nearly 49% year over year but fractionally short of the $892.8 million analysts had expected. On the bottom line, it posted a GAAP loss of $0.14 per share, missing expectations of a profit of roughly $0.06.

The core problem was gross margin, which compressed to 57% from 74% in the same quarter a year ago. Even with revenue growing at a rapid clip, that level of margin deterioration absorbed most of the gains before they could reach the income statement. The quarter also carried $35.4 million in acquisition and earn-out costs, $3.8 million in restructuring charges tied to a strategic shift in the U.S. weight loss business, and $64.5 million in stock-based compensation.

The growth engine powering the top line is international expansion. Rest of World revenue surged 321% to $233.3 million, while domestic revenue grew 21% to $657.1 million. That international land grab is what is compressing margins: goodwill on the balance sheet rose to $1.11 billion from $278.3 million at the end of 2025, reflecting the acquisition activity funding that expansion.

Management trimmed full-year adjusted EBITDA guidance to $257 million to $277 million, a reduction from prior expectations, while tightening the revenue outlook to $3.13 billion to $3.15 billion. For Q4 2026, the company is guiding for revenue of $875 million to $895 million and adjusted EBITDA of $70 million to $90 million, an 8% to 10% margin. The rationale offered was that marketing spend was intentionally paced ahead of several platform expansions planned for Q4.

CEO Andrew Dudum framed the quarter around a long-term platform thesis, saying that in healthcare, whoever owns the customer relationship wins. The company is also rolling out an AI-native care experience and expanding into new treatments and specialties. With subscribers at 2,788 thousand and monthly revenue per average subscriber up 30% to $105, the engagement metrics are moving in the right direction even as the profit picture has deteriorated sharply over the past two quarters.

Free cash flow fell 72% year over year to $26 million, and total liabilities grew 93% to $3.19 billion, partly reflecting $1.37 billion in convertible debt. Hims delivered four consecutive quarters of profit beats through most of 2025 before swinging to losses beginning in Q1 2026. Whether the Q4 platform expansions can stabilize margins is now the central question heading into 2027.