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Q1 2026 looked ugly on the headline and entirely different on the substance: this is the trough quarter of a deliberate strategic pivot, and Q1 captured **roughly one week of full branded Ozempic and Wegovy sales** after the late-March launch. The transition’s costs are all in the print. Almost none of the new revenue is.
The numbers. Revenue: $608.1M, +4% YoY, missing $616.85M consensus. GAAP EPS: -$0.40 vs Street +$0.03. Net loss: $92.1M, swinging from +$49.5M last year.
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Gross margin: 65%, down 800 bps and including $33.5M of restructuring charges for the compounded-GLP-1 write-down. Adjusted EBITDA: $44.3M, -51% YoY. ARPU: $80, down from $85. U.S. revenue: -8% YoY as compounded GLP-1s were phased out. Subscribers grew 9% to 2.584M, a sharp deceleration from the 111% top-line growth in this same quarter last year.
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The parts that recalibrate the picture. **Rest-of-world revenue: $78.2M from $7.3M, +969% YoY**, validating the international diversification thesis. **FY2026 revenue raised to $2.8B-$3.0B** (+$100M on both ends) and **Q2 guide: $680-$700M**, well above consensus and implying \~16-19% sequential acceleration. The Q2 raise is the most important number in the report. It reflects branded GLP-1s flowing through plus the new **$39-$149/month weight-loss membership program** (med pricing as low as $149/month) plus the absence of the lawsuit overhang. The Eucalyptus acquisition closes in roughly three weeks, bringing $700-$900M of incremental revenue (post-close GAAP recognition only). Adjusted EBITDA was cut $25M to $275M-$350M, but the margin guide was raised to 10-12% from 6-9%. **H1 trough, H2 recovery, 2027 inflection.**
The forward catalyst stack is where this position earns its keep. **First, the peptide and longevity vertical.** The **July 2026 FDA meeting on lifting restrictions on 12 peptides** plus the RFK Jr. administrative push creates a credible path for HIMS’ longevity specialty (peptides, coenzymes, GLP/GIP combos). HIMS already acquired a peptide manufacturing facility in California in 2025: capacity is built, waiting for the regulatory window. High-margin, sticky, no compounded-pharma overhang.
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**Second, broader GLP-1 expansion** beyond Novo Nordisk: **LLY’s Zepbound and Mounjaro** plus future branded partnerships, with **oral GLP-1 formulations** removing the injection stigma and unlocking mass-market adoption.
**Third, ARPU re-acceleration** as more FDA-approved GLP-1 products and doses flow through. CEO Andrew Dudum has been consistent that the “tremendous growth opportunities” sit precisely here.
**Fourth, the reaffirmed 2030 targets of $6.5B+ revenue and $1.3B+ Adjusted EBITDA**, implying 2.2x revenue growth over four years and a return to \~20% EBITDA margins. None of this is unreasonable. None of it shows up in Q1 either.
Institutional accumulation through Q1 was large and concentrated:
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Meanwhile, short interest remained elevated, but below peak levels:
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We are not adding yet, but we don’t discard improving our cost average with a new buy below $25 levels. **The position is held because the 2030 targets are credible, the international flywheel is real, Eucalyptus closes in three weeks with $700-$900M of incremental revenue, the peptide vertical has a July regulatory catalyst, and Q1 captured almost none of the branded GLP-1 economics.** If Q2 hits the top of $680-$700M with stable 65% gross margins and visible Eucalyptus contribution, we already know how this stock can swing by year-end. If Q2 misses again or gross margin slips below 64%, volatility is guaranteed. **The thesis is on probation, not broken.** Best-in-class telehealth platforms with 2.6M paying subscribers, a $3B revenue run-rate accelerating into Q2, peptide capacity ready for a regulatory tailwind, and a credible path to 5x scale by 2030 do not trade at $24 for very long. “Not very long” still means “could trade at $20 first” too.
Imho, the market hasn't connected the dots yet. Worth revisiting our original thesis and Financial & Valuation models.
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