Q1 2026 earnings analysis
The GLP-1 strategic shift is in its painful phase. Moving from compounded to branded drugs is squeezing gross margin, but free cash flow is stable, shorts keep retreating and Q2 guidance is 3-6% above consensus. Whether Q2 revenue delivers is the key test of whether the narrative turns around.
Key metrics
- EPS_consensus
$0.03
- FY_adj_EBITDA_guidance
$275-350 million
- FY_guidance
$2.8-3.0 billion
- Q2_guidance
$680-700 million
- Adj_EBITDA
$44.3 million
- Adj_EBITDA_prev
$91.1 million
- Adj_EPS
-$0.40
- After-hours change
-10.5%
- After-hours price
$26.08
- Free cash flow
$53 million
- Gross margin
65%
- Previous gross margin
73%
- Net loss
$92.1 million
- Revenue_Q1
$608 million
- Revenue growth (YoY)
+4%
- Revenue miss
-1.4%
- Short interest change
-9.5%
- Short interest (%)
30.66%
- Short interest (shares)
63.16 million
- Subscriber growth (YoY)
+9%
- Subscribers
about 2.6 million
Summary
Q1 2026 results were a broad miss, but guidance beat expectations. Revenue was $608 million (a 1.4% miss, up 4% year on year). The net loss was $92.1 million (against a profit of $49.5 million a year earlier, a swing from profit to loss). Adjusted EPS was -$0.40 (expected: $0.03). Gross margin was 65% (73% a year earlier). Adjusted EBITDA was $44.3 million ($91.1 million a year earlier). Subscribers were about 2.6 million (+9% year on year). Free cash flow was $53 million, the only bright spot. The core reason for the loss: after compounded semaglutide was withdrawn from sale, HIMS switched to branded Wegovy/Zepbound, and sharply higher procurement costs eroded gross margin, on top of restructuring charges. Q2 revenue guidance is $680-700 million (consensus $659 million, 3-6% higher). Full-year revenue guidance was raised to $2.8-3.0 billion (+19% to 28% year on year), full-year adjusted EBITDA guidance is $275-350 million, and the 2030 revenue target of $6.5 billion or more is maintained. FINRA short interest data (30 Apr): 63.16 million shares sold short (previous period 69.77 million, -9.5%), equal to 30.66% of the float (from a peak of 84.96 million to 63.16 million, a cumulative fall of 25.6% and the fourth consecutive decline). After-hours reaction: $26.08 (-10.5%). Our view: Q1 was the most painful quarter of the transition. Stable free cash flow shows the core operations have not deteriorated, and the retreat by shorts is clearly continuing. The real test is whether Q2 revenue delivers $680-700 million.
A brief is a lead for our research, not a verified conclusion or advice.