Business Wire | Aug 11, 2021 04:06PM EDT

Hims & Hers Health, Inc. Reports Second Quarter 2021 Financial Results

Aug. 11, 2021

SAN FRANCISCO--(BUSINESS WIRE)--Aug. 11, 2021--Hims & Hers Health, Inc. ("Hims & Hers", NYSE: HIMS), a multi-specialty telehealth platform that connects consumers to licensed healthcare professionals, today reported financial results for the second quarter ending June 30, 2021.

"This was a quarter of very strong execution, as we continued to drive consistent organic revenue growth across our business, from our core categories to the newer mental health services" said Andrew Dudum, CEO and co-founder of Hims & Hers. "We also heavily invested in key infrastructure and differentiated technologies. These are long-term plays to drive financial improvement and create durable advantage."

Mr. Dudum continued, "Our vision for the future is simple. We are building Hims & Hers into the new front door to healthcare. A new front door that will span dozens of medical specialties, welcoming customers of all demographics into a unified consumer platform that looks and feels and talks to them in a way that gives them confidence they're in the right hands. I believe the majority of healthcare delivery will begin on a platform like ours in the future. For that reason, everything we do is in service of an opportunity that we believe will continue to accelerate and grow over years, both in the US and overseas."

As previously announced, Hims & Hers recently completed the acquisitions of Apostrophe, a teledermatology specialist and compounding pharmacy, and Honest Health, a London-based vertical health platform. Hims & Hers believes these acquisitions will accelerate growth in nascent geographies and specialty verticals. Additional information on the transactions can be found in our most recent Quarterly Report on Form 10-Q.

Key Business Metrics(In Thousands, Except AOV)

June March December September June 30, 31, 31, 30, 30, 2021 2021 2020 2020 2020



AOV (three months period) $ 74 $ 74 $ 69 $ 67 $ 58

Net Orders (three months 786 687 579 582 572 period)

Subscriptions (end of 453 391 312 283 258 period)

Revenue(In Thousands, Unaudited)

Three Months Ended

June 30, 2021

March 31, 2021

December 31, 2020

September 30, 2020

June 30, 2020

Online Revenue

$

58,146

$

50,680

$

40,091

$

38,829

$

33,284

Wholesale Revenue

2,546

1,634

1,375

2,495

2,620

Total revenue

$

60,692

$

52,314

$

41,466

$

41,324

$

35,904

Total revenue year-over-year growth

69

%

74

%

67

%

91

%

76

%

* Revenue was $60.7 million for the second quarter 2021 compared to $35.9 million for the second quarter 2020, an increase of 69% year-over-year. * Net loss was $(9.2) million for the second quarter 2021 compared to $(1.0) million for the second quarter 2020. * Gross margin was 78% for the second quarter 2021 compared to 71% for the second quarter 2020. * Adjusted EBITDA was $(4.7) million for the second quarter 2021 compared to $1.2 million for the second quarter 2020.

A reconciliation of Adjusted EBITDA, a non-GAAP measure, to net loss, its most comparable financial measure under generally accepted accounting principles in the United States ("U.S. GAAP"), has been provided in this press release in the accompanying tables. Additional information about Adjusted EBITDA is also included below under the heading "Non-GAAP Financial Measures".

Financial Outlook

Hims & Hers provides guidance based on current market conditions and expectations for revenue and Adjusted EBITDA, which is a non-GAAP financial measure. The guidance below includes the expected impact the acquisitions of Honest Health and Apostrophe will have on our consolidated financial results.

For the third quarter 2021, we expect:

* Revenue to be in the range of $69 million to $71 million. * Adjusted EBITDA to be in the range of $(9) million to $(11) million.

For the full year 2021, we expect:

* Revenue to be in the range of $251 million to $255 million. * Adjusted EBITDA to be in the range of $(35) million to $(40) million.

The guidance provided above constitutes forward-looking statements and actual results may differ materially. Refer to the "Cautionary Note Regarding Forward-Looking Statements" safe harbor section below for information on the factors that could cause our actual results to differ materially from these forward-looking statements.

We have not reconciled forward-looking Adjusted EBITDA to its most directly comparable U.S. GAAP measure, net loss, because we cannot predict with reasonable certainty the ultimate outcome of certain components of such reconciliations, including market-related assumptions that are not within our control, or others that may arise, without unreasonable effort. For these reasons, we are unable to assess the probable significance of the unavailable information, which could materially impact the amount of future net loss. See "Non-GAAP Financial Measures" for additional important information regarding Adjusted EBITDA.

Conference Call

Hims & Hers will host a conference call to review the second quarter 2021 results on August 11, 2021, at 5:00 p.m. ET. The conference call can be accessed by dialing (833) 900-2256 for U.S. participants and (236) 714-2727 for international participants, and referencing conference ID #9972259. A live audio webcast will be available online at https://investors.forhims.com/. A replay of the call will be available via webcast for on-demand listening shortly after the completion of the call at the same link.

About Hims & Hers Health, Inc.

Hims & Hers is a multi-specialty telehealth platform that connects consumers to licensed healthcare professionals, enabling them to access high-quality medical care for numerous conditions related to primary care, mental health, sexual health, dermatology, and more. Launched in November 2017, the company also offers thoughtfully created and curated health and wellness products. With products and services available across all 50 states and Washington, D.C., Hims & Hers is able to provide access to quality, convenient and affordable care for all Americans. Hims & Hers was founded by CEO Andrew Dudum, Hilary Coles, Jack Abraham and Joe Spector at venture studio Atomic in San Francisco, California. For more information about Hims & Hers, please visit forhims.com and forhers.com.

Cautionary Note Regarding Forward-Looking Statements

This press release includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements can be identified by the use of forward-looking terminology, including the words "believes," "estimates," "anticipates," "expects," "intends," "plans," "may," "will," "potential," "projects," "predicts," "continue," or "should," or, in each case, their negative or other variations or comparable terminology. There can be no assurance that actual results will not materially differ from expectations. Such statements include, but are not limited to, any statements relating to our financial outlook and guidance, our expected future financial and business performance, the assumptions underlying such statements, statements about events and trends including events and trends that we believe may affect our financial condition, results of operations, short- and long-term business operations and objectives, and financial needs, our expectations regarding market acceptance, user experience, the success of our business model, the growth of certain of our categories and the impact of our recent acquisitions, our ability to expand the scope of our offerings, and our ability to comply with the extensive, complex and evolving regulatory requirements applicable to the healthcare industry. These statements are based on management's current expectations, but actual results may differ materially due to various factors.

The forward-looking statements contained in this press release are based on our current expectations and beliefs concerning future developments and their potential effects on us. Future developments affecting us may not be those that we have anticipated. These forward-looking statements involve a number of risks, uncertainties (some of which are beyond our control) and other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. These risks and uncertainties include, but are not limited to, those factors described in the "Risk Factors" section of our most recently filed Annual Report on Form 10-K for the year ended December 31, 2020, as amended, our most recent Quarterly Report on Form 10-Q, and our subsequent filings with the Securities and Exchange Commission (the "Commission").

Should one or more of these risks or uncertainties materialize, or should any of our assumptions prove incorrect, actual results may vary in material respects from those projected in these forward-looking statements. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.

By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. We caution you that forward-looking statements are not guarantees of future performance and that our actual results of operations, financial condition and liquidity, and developments in the industry in which we operate may differ materially from those made in or suggested by the forward-looking statements contained in reports we have filed or will file with the Commission, including our annual report on Form 10-K for the year ended December 31, 2020, as amended, our most recent Quarterly Report on Form 10-Q, and our subsequent filings with the Commission. In addition, even if our results of operations, financial condition and liquidity, and developments in the industry in which we operate are consistent with the forward-looking statements contained in such reports, those results or developments may not be indicative of results or developments in subsequent periods.

Key Business Metrics

Average Order Value ("AOV") is defined as Online Revenue divided by Net Orders (each as defined below).

"Net Orders" are defined as the number of online customer orders minus transactions related to refunds, credits, chargebacks and other negative adjustments. Net Orders represent transactions made on our platform during a defined period of time and exclude revenue recognition adjustments recorded pursuant to U.S. GAAP.

"Online Revenue" represents the sales of products and services on our platform, net of refunds, credits, chargebacks and includes revenue recognition adjustments recorded pursuant to U.S. GAAP, primarily relating to deferred revenue and returns reserve.

"Subscriptions" are defined as the number of customer agreements where the customer has agreed to be automatically billed on a recurring basis at a defined cadence. The billing cadence is typically defined as a number of months (for example, billed every month or every three months). Subscriptions are excluded from our reporting when payment has not occurred at the contracted billing cadence. Subscription billing is preferred by many of our customers because most of the products we make available treat chronic conditions and these product offerings are most effective when taken consistently and continuously. Customers can cancel subscriptions in between billing periods to stop receiving additional products and can reactivate subscriptions to continue receiving additional products.

"Wholesale Revenue" represents non-prescription product sales to retailers through wholesale purchasing agreements.

Revenue(In Thousands, Unaudited)

Three Months Ended

June 30, March 31, December September June 30, 2021 2021 31, 30, 2020 2020 2020



Online Revenue $ 58,146 $ 50,680 $ 40,091 $ 38,829 $ 33,284

Wholesale 2,546 1,634 1,375 2,495 2,620 Revenue

Total revenue $ 60,692 $ 52,314 $ 41,466 $ 41,324 $ 35,904

Total revenueyear-over-year 69 % 74 % 67 % 91 % 76 %growth

* Revenue was $60.7 million for the second quarter 2021 compared to $35.9 million for the second quarter 2020, an increase of 69% year-over-year. * Net loss was $(9.2) million for the second quarter 2021 compared to $(1.0) million for the second quarter 2020. * Gross margin was 78% for the second quarter 2021 compared to 71% for the second quarter 2020. * Adjusted EBITDA was $(4.7) million for the second quarter 2021 compared to $1.2 million for the second quarter 2020.

A reconciliation of Adjusted EBITDA, a non-GAAP measure, to net loss, its most comparable financial measure under generally accepted accounting principles in the United States ("U.S. GAAP"), has been provided in this press release in the accompanying tables. Additional information about Adjusted EBITDA is also included below under the heading "Non-GAAP Financial Measures".

Financial Outlook

Hims & Hers provides guidance based on current market conditions and expectations for revenue and Adjusted EBITDA, which is a non-GAAP financial measure. The guidance below includes the expected impact the acquisitions of Honest Health and Apostrophe will have on our consolidated financial results.

For the third quarter 2021, we expect:

* Revenue to be in the range of $69 million to $71 million. * Adjusted EBITDA to be in the range of $(9) million to $(11) million.

For the full year 2021, we expect:

* Revenue to be in the range of $251 million to $255 million. * Adjusted EBITDA to be in the range of $(35) million to $(40) million.

The guidance provided above constitutes forward-looking statements and actual results may differ materially. Refer to the "Cautionary Note Regarding Forward-Looking Statements" safe harbor section below for information on the factors that could cause our actual results to differ materially from these forward-looking statements.

We have not reconciled forward-looking Adjusted EBITDA to its most directly comparable U.S. GAAP measure, net loss, because we cannot predict with reasonable certainty the ultimate outcome of certain components of such reconciliations, including market-related assumptions that are not within our control, or others that may arise, without unreasonable effort. For these reasons, we are unable to assess the probable significance of the unavailable information, which could materially impact the amount of future net loss. See "Non-GAAP Financial Measures" for additional important information regarding Adjusted EBITDA.

Conference Call

Hims & Hers will host a conference call to review the second quarter 2021 results on August 11, 2021, at 5:00 p.m. ET. The conference call can be accessed by dialing (833) 900-2256 for U.S. participants and (236) 714-2727 for international participants, and referencing conference ID #9972259. A live audio webcast will be available online at https://investors.forhims.com/. A replay of the call will be available via webcast for on-demand listening shortly after the completion of the call at the same link.

About Hims & Hers Health, Inc.

Hims & Hers is a multi-specialty telehealth platform that connects consumers to licensed healthcare professionals, enabling them to access high-quality medical care for numerous conditions related to primary care, mental health, sexual health, dermatology, and more. Launched in November 2017, the company also offers thoughtfully created and curated health and wellness products. With products and services available across all 50 states and Washington, D.C., Hims & Hers is able to provide access to quality, convenient and affordable care for all Americans. Hims & Hers was founded by CEO Andrew Dudum, Hilary Coles, Jack Abraham and Joe Spector at venture studio Atomic in San Francisco, California. For more information about Hims & Hers, please visit forhims.com and forhers.com.

Cautionary Note Regarding Forward-Looking Statements

This press release includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements can be identified by the use of forward-looking terminology, including the words "believes," "estimates," "anticipates," "expects," "intends," "plans," "may," "will," "potential," "projects," "predicts," "continue," or "should," or, in each case, their negative or other variations or comparable terminology. There can be no assurance that actual results will not materially differ from expectations. Such statements include, but are not limited to, any statements relating to our financial outlook and guidance, our expected future financial and business performance, the assumptions underlying such statements, statements about events and trends including events and trends that we believe may affect our financial condition, results of operations, short- and long-term business operations and objectives, and financial needs, our expectations regarding market acceptance, user experience, the success of our business model, the growth of certain of our categories and the impact of our recent acquisitions, our ability to expand the scope of our offerings, and our ability to comply with the extensive, complex and evolving regulatory requirements applicable to the healthcare industry. These statements are based on management's current expectations, but actual results may differ materially due to various factors.

The forward-looking statements contained in this press release are based on our current expectations and beliefs concerning future developments and their potential effects on us. Future developments affecting us may not be those that we have anticipated. These forward-looking statements involve a number of risks, uncertainties (some of which are beyond our control) and other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. These risks and uncertainties include, but are not limited to, those factors described in the "Risk Factors" section of our most recently filed Annual Report on Form 10-K for the year ended December 31, 2020, as amended, our most recent Quarterly Report on Form 10-Q, and our subsequent filings with the Securities and Exchange Commission (the "Commission").

Should one or more of these risks or uncertainties materialize, or should any of our assumptions prove incorrect, actual results may vary in material respects from those projected in these forward-looking statements. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.

By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. We caution you that forward-looking statements are not guarantees of future performance and that our actual results of operations, financial condition and liquidity, and developments in the industry in which we operate may differ materially from those made in or suggested by the forward-looking statements contained in reports we have filed or will file with the Commission, including our annual report on Form 10-K for the year ended December 31, 2020, as amended, our most recent Quarterly Report on Form 10-Q, and our subsequent filings with the Commission. In addition, even if our results of operations, financial condition and liquidity, and developments in the industry in which we operate are consistent with the forward-looking statements contained in such reports, those results or developments may not be indicative of results or developments in subsequent periods.

Key Business Metrics

Average Order Value ("AOV") is defined as Online Revenue divided by Net Orders (each as defined below).

"Net Orders" are defined as the number of online customer orders minus transactions related to refunds, credits, chargebacks and other negative adjustments. Net Orders represent transactions made on our platform during a defined period of time and exclude revenue recognition adjustments recorded pursuant to U.S. GAAP.

"Online Revenue" represents the sales of products and services on our platform, net of refunds, credits, chargebacks and includes revenue recognition adjustments recorded pursuant to U.S. GAAP, primarily relating to deferred revenue and returns reserve.

"Subscriptions" are defined as the number of customer agreements where the customer has agreed to be automatically billed on a recurring basis at a defined cadence. The billing cadence is typically defined as a number of months (for example, billed every month or every three months). Subscriptions are excluded from our reporting when payment has not occurred at the contracted billing cadence. Subscription billing is preferred by many of our customers because most of the products we make available treat chronic conditions and these product offerings are most effective when taken consistently and continuously. Customers can cancel subscriptions in between billing periods to stop receiving additional products and can reactivate subscriptions to continue receiving additional products.

"Wholesale Revenue" represents non-prescription product sales to retailers through wholesale purchasing agreements.

CONDENSED CONSOLIDATED BALANCE SHEETS(In Thousands, Except Share and Per Share Data)



June 30, December 2021 31, 2020

(Unaudited)

Assets

Current assets:

Cash and cash equivalents $ 107,145 $ 27,344

Short-term investments 210,178 72,864

Inventory 6,590 3,543

Prepaid expenses and other current assets 12,429 5,404

Deferred transaction costs - 3,929

Total current assets 336,342 113,084

Restricted cash 856 1,006

Other long-term assets 7,762 4,607

Goodwill 2,739 -

Total assets $ 347,699 $ 118,697

Liabilities, mezzanine equity, and stockholders' equity (deficit)

Current liabilities:

Accounts payable $ 15,564 $ 8,066

Accrued liabilities 10,761 4,984

Deferred revenue 1,019 1,272

Warrant liabilities - 906

Total current liabilities 27,344 15,228

Warrant liabilities 25,406 -

Other long-term liabilities 1,895 381

Total liabilities 54,645 15,609

Commitments and contingencies

Mezzanine equity:

Redeemable convertible preferred stock par value$0.0001, 275,000,000 and 95,997,674 shares authorizedand nil and 93,328,118 shares issued and outstandingas of June 30, 2021 and December 31, 2020, - 249,962 respectively; liquidation preference of nil and$268,452 as of June 30, 2021 and December 31, 2020,respectively

Total mezzanine equity - 249,962

Stockholders' equity (deficit):

Common stock - Class A shares, par value $0.0001,2,750,000,000 and 166,696,759 shares authorized and184,866,219 and 46,025,754 shares issued andoutstanding as of June 30, 2021 and December 31,2020, respectively; Class V shares, par value 19 - $0.0001, 10,000,000 shares authorized and 8,377,623shares issued and outstanding as of June 30, 2021;Class F shares, par value $0.0001, 6,941,352 sharesauthorized, issued, and outstanding as of December31, 2020

Additional paid-in capital 524,924 24,429

Accumulated other comprehensive loss (40 ) (11 )

Accumulated deficit (231,849 ) (171,292 )

Total stockholders' equity (deficit) 293,054 (146,874 )

Total liabilities, mezzanine equity, and $ 347,699 $ 118,697 stockholders' equity (deficit)



CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS(In Thousands, Except Share and Per Share Data, Unaudited)

Three Months Ended June 30,

Six Months Ended June 30,

2021

2020

2021

2020

Revenue

$

60,692

$

35,904

$

113,006

$

65,967

Cost of revenue

13,415

10,242

25,482

19,686

Gross profit

47,277

25,662

87,524

46,281

Gross margin %

78

%

71

%

77

%

70

%

Operating expenses:(1)

Marketing

27,944

11,800

54,902

24,573

Selling, general, and administrative

36,740

14,841

98,438

28,905

Total operating expenses

64,684

26,641

153,340

53,478

Loss from operations

(17,407

)

(979

)

(65,816

)

(7,197

)

Other income (expense):

Change in fair value of liabilities

7,963

(21

)

5,282

50

Interest expense

-

-

-

(10

)

Other income, net

325

56

101

215

Total other income

8,288

35

5,383

255

Loss before provision for income taxes

(9,119

)

(944

)

(60,433

)

(6,942

)

Provision for income taxes

(34

)

(37

)

(124

)

(72

)

Net loss

(9,153

)

(981

)

(60,557

)

(7,014

)

Other comprehensive income (loss)

32

24

(29

)

(18

)

Total comprehensive loss

$

(9,121

)

$

(957

)

$

(60,586

)

$

(7,032

)

Net loss per share attributable to common stockholders:

Basic and diluted

$

(0.05

)

$

(0.03

)

$

(0.35

)

$

(0.20

)

Weighted average shares outstanding:

Basic and diluted

191,922,517

35,331,373

172,631,312

34,968,882

(1) Includes stock-based compensation expense as follows (in thousands):

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS(In Thousands, Except Share and Per Share Data, Unaudited)

Three Months Ended Six Months Ended June 30, June 30,

2021 2020 2021 2020

Revenue $ 60,692 $ 35,904 $ 113,006 $ 65,967

Cost of revenue 13,415 10,242 25,482 19,686

Gross profit 47,277 25,662 87,524 46,281

Gross margin % 78 % 71 % 77 % 70 %



Operating expenses: ^(1)

Marketing 27,944 11,800 54,902 24,573

Selling, general, 36,740 14,841 98,438 28,905 and administrative

Total operating 64,684 26,641 153,340 53,478 expenses

Loss from (17,407 ) (979 ) (65,816 ) (7,197 )operations



Other income (expense):

Change in fairvalue of 7,963 (21 ) 5,282 50 liabilities

Interest expense - - - (10 )

Other income, net 325 56 101 215

Total other income 8,288 35 5,383 255

Loss beforeprovision for (9,119 ) (944 ) (60,433 ) (6,942 )income taxes

Provision for (34 ) (37 ) (124 ) (72 )income taxes

Net loss (9,153 ) (981 ) (60,557 ) (7,014 )

Other comprehensive 32 24 (29 ) (18 )income (loss)

Total comprehensive $ (9,121 ) $ (957 ) $ (60,586 ) $ (7,032 )loss



Net loss per shareattributable to commonstockholders:

Basic and diluted $ (0.05 ) $ (0.03 ) $ (0.35 ) $ (0.20 )

Weighted average shares outstanding:

Basic and diluted 191,922,517 35,331,373 172,631,312 34,968,882

(1) Includes stock-based compensation expense as follows (in thousands):

Three Months Ended Six Months Ended June 30, June 30,

2021 2020 2021 2020

Marketing $ 772 $ 367 $ 2,618 $ 658

Selling, general, and 8,388 1,558 40,772 2,671 administrative

Total stock-based compensation $ 9,160 $ 1,925 $ 43,390 $ 3,329 expense

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS(In Thousands, Unaudited)

Six Months Ended June 30,

2021 2020

Operating activities

Net loss $ (60,557 ) $ (7,014 )

Adjustments to reconcile net loss to net cash used in operating activities:

Depreciation and amortization 899 392

Stock-based compensation 43,390 3,329

Change in fair value of liabilities (5,282 ) (50 )

Warrant expense in connection with Merger 154 -

Amortization of debt issuance costs 144 167

Non-cash other 959 (19 )

Changes in operating assets and liabilities:

Inventory (3,047 ) (2,004 )

Prepaid expenses and other current assets (4,635 ) (950 )

Other long-term assets (58 ) 733

Accounts payable 7,353 (1,061 )

Accrued liabilities 5,583 741

Deferred revenue (253 ) 264

Other long-term liabilities 3 126

Net cash used in operating activities (15,347 ) (5,346 )

Investing activities

Purchases of investments (187,521 ) (48,908 )

Maturities of investments 48,421 34,090

Proceeds from sales of investments 1,215 9,800

Investment in website development and internal-use (1,833 ) (1,050 )software

Purchases of property, equipment, and intangible (122 ) (801 )assets

Acquisition of business, net of cash acquired (748 ) -

Net cash used in investing activities (140,588 ) (6,869 )

Financing activities

Proceeds from issuance of redeemable convertible - 37,552 preferred stock

Pre-closing stock repurchase (22,027 ) -

Proceeds from issuance of common stock upon Merger 197,686 -

Proceeds from PIPE 75,000 -

Payments for transaction costs (12,851 ) -

Proceeds from repayment of promissory notes associated 1,193 - with vested and unvested shares

Proceeds from exercise of Class A common stock 808 - warrants

Proceeds from exercise of vested and unvested stock 254 45 options, net of repurchases and cancelations

Repayments of principal on term loan - (1,515 )

Payments for taxes related to net share settlement of (4,458 ) - equity awards

Net cash provided by financing activities 235,605 36,082

Foreign currency effect on cash and cash equivalents (19 ) (12 )

Increase in cash, cash equivalents, and restricted 79,651 23,855 cash

Cash, cash equivalents, and restricted cash at 28,350 22,797 beginning of period*

Cash, cash equivalents, and restricted cash at end of $ 108,001 $ 46,652 period*

Supplemental disclosures of cash flow information

Cash paid for taxes $ 227 $ 197

Cash paid for interest - 10

Non-cash investing and financing activities

Expiration of Class A common stock redemption right $ - $ 4,500

Exercise of convertible preferred stock warrants - 3,840

Recapitalization of redeemable convertible preferred 125 - stock from pre-closing stock repurchase

Conversion of redeemable convertible preferred stock 249,837 - to common stock

Assumption of Merger warrants liability 51,814 -

Exercise of Class A common stock warrants 20,872 -

Reclassification of deferred transaction costs 3,929 -

Conversion of Series D preferred stock warrants to 1,160 - Class A common warrants

Change in transaction costs payable 568 -

Vesting of early exercised stock options 106 20

Common stock issued, contingent consideration, and 4,064 - payables for acquisition of business

Equity awards classified as prepaid expenses 2,500 -

Non-GAAP Financial Measures

In addition to our financial results determined in accordance with U.S. GAAP, we present Adjusted EBITDA (as defined below), a non-GAAP financial measure. We use Adjusted EBITDA to evaluate our ongoing operations and for internal planning and forecasting purposes. We believe that Adjusted EBITDA, when taken together with the corresponding U.S. GAAP financial measure, provides meaningful supplemental information regarding our performance by excluding certain items that may not be indicative of our business, results of operations, or outlook. We consider Adjusted EBITDA to be an important measure because it helps illustrate underlying trends in our business and our historical operating performance on a more consistent basis. We believe that the use of Adjusted EBITDA is helpful to our investors as it is a metric used by management in assessing the health of our business and our operating performance.

However, non-GAAP financial information is presented for supplemental informational purposes only, has limitations as an analytical tool and should not be considered in isolation or as a substitute for financial information presented in accordance with U.S. GAAP. In addition, other companies, including companies in our industry, may calculate similarly-titled non-GAAP financial measures differently or may use other measures to evaluate their performance, all of which could reduce the usefulness of Adjusted EBITDA as a tool for comparison. A reconciliation is provided below for Adjusted EBITDA to net loss, the most directly comparable financial measure stated in accordance with U.S. GAAP. Investors are encouraged to review net loss and the reconciliation of Adjusted EBITDA to net loss, and not to rely on any single financial measure to evaluate our business.

Adjusted EBITDA is a key performance measure that our management uses to assess our operating performance. Because Adjusted EBITDA facilitates internal comparisons of our historical operating performance on a more consistent basis, we use this measure for business planning purposes. "Adjusted EBITDA" is defined as net loss before depreciation and amortization, provision for income taxes, interest income, interest expense, amortization of debt issuance costs, stock-based compensation, change in fair value of warrant liability, one-time bonuses and warrant expense in connection with the combination of Hims, Inc. ("Hims") and Oaktree Acquisition Corp. ("OAC"), with Hims continuing as the surviving entity and as a wholly-owned subsidiary of OAC, which changed its name to Hims & Hers Health, Inc. (the "Merger"), and acquisition-related costs, which include professional services and consideration paid for employee equity with vesting requirements incurred directly as a result of acquisitions.

Net Loss to Adjusted EBITDA Reconciliation(In Thousands, Unaudited)

Three Months Ended Six Months Ended June 30, June 30,

2021 2020 2021 2020



Net loss $ (9,153 ) $ (981 ) $ (60,557 ) $ (7,014 )

Depreciation and amortization 505 212 899 392

Provision for income taxes 34 37 124 72

Interest income (113 ) (108 ) (195 ) (350 )

Interest expense - - - 10

Amortization of debt issuance - 83 144 167 costs

Stock-based compensation 9,160 1,925 43,390 3,329

Change in fair value of warrant (7,963 ) 21 (5,282 ) (50 )liability

Merger bonuses - - 5,219 -

Warrant expense in connection - - 154 - with Merger

Acquisition-related costs 2,872 - 2,872 -

Adjusted EBITDA $ (4,658 ) $ 1,189 $ (13,232 ) $ (3,444 )

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