Ladies and gentlemen, thank you for standing by. At this time, I would like to welcome everyone to the Hims & Hers Second Quarter 2024 Earnings Conference Call. Please note that this call is being recorded. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question-and-answer session. [Operator Instructions] I would now like to turn today’s call over to Bill Newby, Head of Investor Relations. Please go ahead.

Good afternoon, everyone, and welcome to the Hims & Hers Health second quarter 2024 earnings call. Today after the market closed, we released this quarter's shareholder letter, a copy of which you can find on our website at investors.hims.com. On the call with me today is Andrew Dudum, our Co-Founder and Chief Executive Officer; as well as Yemi Okupe, our Chief Financial Officer. Before I hand it over to Andrew, I need to remind you of legal safe harbor and cautionary declarations. Certain statements and projections of future results made in this presentation constitute forward-looking statements that are based on, among other things, our current market, competitors and regulatory expectations and are subject to risks and uncertainties that could cause actual results to vary materially. We take no obligation to update publicly any forward-looking statement after this call, whether as a result of new information, future events, changes in assumptions or otherwise. Please see our most recently filed 10-K and 10-Q reports for a discussion of risk factors as they relate to forward-looking statements. In today's presentation, we also have certain non-GAAP financial measures. We refer you to the reconciliation tables to the most directly comparable GAAP financial measures contained in today's press release and shareholder letter. You can find this information as well as a link to today's webcast at investors.hims.com. After the call, this webcast will be archived on the website for 12 months. And with that, I will now turn the call over to Andrew.

Thanks, Bill. The second quarter marked one of the most exciting points in our company's history, as momentum continued to rapidly accelerate in the fulfillment of our mission to help the world feel great to the power of better health. The long-term trend toward the consumerization of health care continues and the belief is that this trend will only accelerate. Consumers are increasingly expecting the same quality and level of service that technology has unlocked across other areas of their lives. This includes speed, convenience, transparency, affordable pricing and a personalized experience. I'm excited by the progress we have made on our platform in unlocking these capabilities for consumers across a broader set of conditions and specialties. We believe that our platform is capable in the long term of delivering a new type of health care, where consumer preference and needs, insights and data to the foundation of a hyper personalized set of offerings, treatments and care. We're more energized than ever to deliver this innovation on behalf of the hundreds of millions of people trying to live their happiest and healthiest lives. Several elements continue to come together in the second quarter to bring us one step closer in making that vision a reality. First, we brought in the number of personalized offerings across our specialties, with four out of five specialties now carrying at least 10 personalized solutions. Second, we expanded our weight management offering with the launch of GLP-1s. Weight is a particularly strategic category for us and that enables us to scale the value that comes from personalized solutions to over 100 million potential consumers. Lastly, we brought on world-class talent across multiple levels of the organization from the Board to ML leaders that will enable us to further refine our capabilities and scale them to…

Thanks, Andrew. I will start by providing an overview of our second quarter financial performance and then discuss our updated outlook for 2024. In the second quarter, we continue to strengthen our leadership position across our specialties: mental health, sexual health, men's and women's dermatology and weight loss. Our strategy of democratizing access to high quality personalized solutions on our platform at an affordable price, continues to resonate with consumers, a rapidly evolving weight loss specialty that is inclusive of personalized oral solutions tailored to the underlying drivers in individuals weight challenges and the recently launched compounded GLP-1 offering is serving as an accelerant to what was already a phenomenal trajectory. In the second quarter, we were able to drive north of $300 million of revenue from our suite of offerings outside of GLP-1s. Fully consolidated revenue in the second quarter grew 52% year-over-year to $315.6 million, representing a 6 point acceleration in year-over-year growth relative to the prior quarter. Expansion of our online subscriber base continues to be the primary catalyst behind our incredible growth. Our subscriber base grew 43% year-over-year to $1.9 million. Growth in our subscriber base is being powered by two primary drivers: The first is an evolution of personalized solutions that continues to attract a broader base of consumers to the platform, as well as offer unique value propositions to our existing consumer base. As our offerings expand to encompass more multi-condition solutions, a broader set of form factors and customized dosages, we are seeing an increasing number of our existing subscribers switch to a personalized solution. Additionally, we are seeing new customers overwhelmingly utilize these options with more than 55% of new users in the second quarter, subscribing to a personalized solution. This has not only driven stronger retention across several specialties but has…

Thank you. We will now begin the question-and-answer session. [Operator Instructions] Your first question comes from the line of Maria Ripps from Canaccord. Your line is open.

Great. Thanks so much for taking my questions and congrats on the strong performance here. So I appreciate all the color around your guidance. It sounds like your core business continues to do really well. Is there any color you can able to share with us in terms of projected GLP revenue contribution for the second half of the year that's embedded in your full year outlook? And then secondly, how would this acquisition of the outsourcing facility impact your gross margins and sort of unit economics longer term?

Thanks for the question, Maria. This is Yemi. I’d say, overall, I think we're very excited by how the core business is performing. In the second quarter, as mentioned, the core business, excluding GLP-1s delivered north of $300 million of revenue. What we're expecting in the second half of the year as we'll continue to innovate on the suite of personalized offerings across the core business. And so we do expect the momentum to remain strong from there. With respect to GLP-1 specific contributions, I think we're very much in the early days of the GLP-1 launch being less than three months out from the launch. In the second quarter, we did see very strong momentum. I think it’s too early at this point to provide definitive guidance around a specific specialty or product, but we’re very pleased off of the initial launch and the confidence in the momentum for that specific vertical is very strong as we roll out the product nationally. With respect to your second question around gross margins, I think that typically, as we do see specialties and products within specialty scale. We historically look for opportunities to optimize the margin for those products that can be in the form of processes that we change or increasingly, as you see across other specialties, the verticalization, and so I think that the acquisition that we mentioned around the 503(b) facility that will do a few things. I think it will unlock the ability to enter additional specialties within the future. But also, I think it does provide opportunity for us to optimize the cost structure on the compounded GLP-1 offering.

Got it. Thank you so much, Yemi.

Your next question comes from the line of Allen Lutz from Bank of America. Your line is open.

Hi. Good afternoon and thanks for taking the questions. One for Yemi. You talked about more strategic marketing investment in the back half of the year. Can you talk about just generally as we think about the total investment in the second half of the year, potential impacts from the election, how should we think about where those marketing dollars are going in GLP-1s versus the core. And then you also mentioned 30 states are live today for GLP-1, you expect that to get to 50 by the end of the year. How much of the incremental marketing spend is going to new states? Just really trying to understand the breakdown as we think about the next six months, how much of your marketing dollars are going towards the GLP-1 business? Thanks.

Yeah. Thanks for the question, Allen. I think it's a really good question. I think so the way that we think are marketing is, I think there are a few dimensions. There is a component that can be GLP-1 specific that's in the form of traditional pay channels. But just stepping back, I think one of the beauties of the Hims & Hers platform is the fact that we have a multi-specialty offering, we have the ability to connect with users across a multitude of specialties. And so I think a lot of the investment will come as we start to broaden the aperture of a number of personalized solutions that we have even across the core set of specialties as well as in our weight loss offering. Increasingly, you'll see a meaningful portion of the spend go towards speaking to the multi-condition capabilities that you see across Hims & Hers. We've also left ourselves some room just given the fact that regarding election year and this is new, some flexibility in that dimension. We do anticipate a meaningful portion of the spend to come more in the form of speaking to consumers around the broader capabilities of the platform, weight in GLP1 inclusive of that. I think that kind of just to provide a firm of reference for how we think around it. I think we will still be very disciplined with the overall spend structure. It will maintain the one year payback period. We'll also look to position ourselves from economies of scale. And so I think it's a similar dynamic to what we saw in the back half of 2022, and the front half of 2023 where as we started to see new capabilities in the platform scale, we leaned in to a variety of different channels. I think we're expecting that in the second half and then expect to see leverage of the 1 points to 3 points that we mentioned on a per annum basis on marketing for the next couple of years.

Great. And then one for Andrew. Can you just talk about the broader GLP-1 strategy? I think it's obvious we've gotten a lot of questions around the durability of this opportunity. How should we think about Hims ability to stay in the GLP-1 market in a scenario where these drugs are taken off the shortage list? Thanks.

Yeah. Thanks, Allen. [Technical Difficulty] I'd start by saying we're currently still seeing and wouldn't expect this change thousands of patients coming to us every day, struggling to get access to these GLP-1s, including tirzepatide, which has caused a lot of these in the last couple of days. I think given the breadth of the portfolio that we have and this is inclusive of the personalized oral compounds, which as we shared in the remarks has grown in $100 million run rate business, our fastest specialty alone. But in addition to the oral compound, the branded medications, the personalized GLP-1 doses, which augment the commercially available dosages for patients that need it as well as off-patent GLP-1s like liraglutide, I think we believe the combination of that portfolio allows customers and providers are really robust range of offerings that we think is very durable. I think this will exist and expand beyond the shortage dynamics. I think there's really established precedent with regard to the compounding exception, which allows for this level of personalization that we've spoken about for patients that need it. And I would expect that the clinical necessity of that will be really clear with these medications as people know, there are real side effects. There are really no one size fits all dynamic. But we think there’s a really robust platform that extends well beyond the shortage across a number of these avenues.

Great. Thanks, Andrew.

Thanks, Allen.

Your next question comes from the line of Jack Wallace from Guggenheim Securities. Your line is open.

Hey. Thanks for taking my questions and congrats on a great quarter. Just wanted to follow up to that last question and maybe ask the personalization element in a different way. Is there a -- the existing product in the market or existing form factor, is that enough to be personalized or is it through a personalized dosing regimen, personalized enough to operate under a personalization exemption after the drugs are off the shortage list or do they need to be further personalization enhancements to make that possible? And as a follow-up to that, how much is the MedMatch capability and the data you're collecting on the platform going to be empowering those personalization enhancements to the medication? Thank you.

Yeah. Thanks, Jack for the question. The short answer is that the compounded exemption, it's relatively clear, and there's been decades of established precedent with regard to what qualifies as personalized. And this often is a form factor, as you outlined or it could be dosing dynamics of a patient is not getting the outcome that they're hoping for, are they experiencing side effects that are intolerable. So these types of customizations are relatively well established and I think the clinical necessity of compounding and the clinical necessity of personalizing medication is really well established, right? This is not overwhelmingly the case. But in many ways, you personalized dosages augment (ph) what is commercially available. And so I think our personalization dosages that exist on the platform today are offering fantastic high touch care to patients that otherwise really wouldn't be able to experience the benefits of GLP-1. And I would expect in the future in a post shortage world, this also continues to exist for patients as an access point. With regard to MedMatch, I think what is happening right now is that there's an expansion of, and a breadth of options that we are bringing to the market in the second half of this year and the next year across all avenues. This is oral compounds new combination therapies on the oral side. This is branded medications when available medications [Technical Difficulty] like liraglutide. And so, the breadth is only expanding the range of dosages is only expanding on the platform, which gives providers and patients that level of nuance that we think is really, really critical. And when you match that [Technical Difficulty] the capabilities of MedMatch to help identify the right [indiscernible], the right end dose, the right adjustments as necessary for a patient. We think that combination is incredibly strong. And the data today already suggests patients are having really world-class experiences. But long term, honestly, we believe the combination of that breadth of portfolio and MedMatch together will be able to hopefully result in clinical outcomes that are far superior than you can get not only in brick-and-mortar, but also via any online type telemedicine provider.

All right. Got you. That's helpful. Thank you. And then Yemi, just a quick two-parter on the guide. Just wanted to make sure I heard it correctly. For the gross margin erosion in the back half of the year from the launch in categories. Is that a second half versus first half comparison or is that a full year comparison? And I'll leave it there.

Yeah. Thanks for the question, Jack. Yeah, it’s a first half versus second half comparison. And so I think in the near term, while we look to optimize the cost structure for overall weight category, specifically GLP-1s, we do expect some compression, but I think that we do expect that to revert in the midterm once some of the investments that we mentioned earlier start to come online.

Your next question comes from the line of Daniel Grosslight from Citi. Your line is open.

Hi. Thanks for taking the question. I know you probably haven't gotten this question in about a year now, but it seems like everyone is thinking about this at least today, a weakening economy and a potential recession, I'm curious, if you've seen any signs out there of a slacking in consumer demand? And if so, if you can kind of describe where that stock might be coming in? Hello?

Hey, Dan. This is Yemi. Thanks for the question. I think overall, in the second quarter, we've not seen any meaningful degradation from the consumer. I think that similar to during other periods of economic uncertainty, we do see the consumer continue to remain durable. I think there's a few reasons behind this. One is just the diversity and the breadth of the consumers that we serve across different end ranges, income levels, geographic locations is pretty broad. The second is that we serve consumers across a wide variety of some of the most emotionally resonant conditions that impact how they look, how they fill each and every day. And so we've observed historically during these moments of economic uncertainty is that consumers are very reticent to let that go. We are continuously excited by some of the optimization around with our cost structure, being able to place even some of the most personalized products at more and more attractive price points that are transparent and provide consumers with access to a holistic solution from being able to match their providers, to been able to leverage the technology across the platform to get matched with an attractive solution at a price point that is oftentimes less than the collection of deductibles for them to do so. And so overall, we've not seen a slowdown. And I think based upon what we've seen historically during these periods of economic uncertainty, we do have very high conviction in the ability for consumers to continue to come to the platform and ultimately for the platform to continue to grow.

Got it. Okay. And Andrew as well, you both mentioned more folks coming to the platform, taking a product that cuts across categories or a single product that cuts across categories. I'm curious if you can provide an update on how many folks are taking multiple drugs across categories or single drug across categories? And then of the folks who have come in for GLPs, have any of them converted to other products in other categories?

Thanks, Daniel. I can kick it off. On the personalization side and the cross category side, we don't disclose specifically the specialty mixes and how those cross, but I would point to the pretty rapid acceleration of personalized adoption, we shared 55% of new subscribers are now planned personalized products and 40% of the entire [Technical Difficulty]. This is pretty astronomical speed and acceleration relative to the last year. So I think [Technical Difficulty] many of which specialty case customization and aggregation across specialties. I think specifically on the weight category, these patents that have really complex mix of these issues. I think [Technical Difficulty] the oral compounded category that we have had scaled so quickly and have had such great success. It's because it's really treating many underlying conditions, right? And it could be depressive eating dynamics, binge eating, metabolic disorders, insulin resistance, and so I think for the obesity category in general, I would expect there to be very significant cross category and cross specialty concerns whereby both the oral combination through compounding therapies as well as the bundling options, there is ability for us to treat a person more holistically because I think the patient, frankly, will just necessitate it. I think these patients more than many – more than maybe any patient we’ve seen on the platform is requiring a more holistic approach, which I think will then be reflected in the bundles and offerings and compounds that you will see the company bring to market.

Your next question comes from the line of Jonna Kim from TD Cowen. Your line is open.

Thanks for taking my question. Could you just provide additional color around the unit economics of the GLP-1s and how you're able to offer the GLP-1s at a current pipeline that are way below others in the market? And Yemi would love to get additional color around how -- what you're assuming around monthly revenues and subscriber adds in your guide? Thank you so much.

Yeah. Thanks so much for the question, Jonna. I think what we -- how we're able to offer the structure that we are or the pricing that we are around GLP-1 is really just a reflection of the benefits from the scale that we have today, just given how the number of consumers on our platform, that enables us when we do partnerships with third parties to negotiate across the supply chain, a cost structure that enables us to place it at these price points. I think what's even more exciting is, with our scale, with our balance sheet, we're able to make investments in the future that provide line of sight to an increasingly strong set of unit economics. And so I think as the cost structure stands today, on a gross margin basis, GLP-1s, do you have a dilutive effect on the gross margins, I think we're confident that as we continue to make investments in verticalization, optimizing processes, continuing to look for optimization opportunities across the logistics, the economics and what we've observed in other specialties as they started to season the bid will only mature. And so I think that the price points that we put the GLP-1s at are a reflection of us being able to utilize this muscle historically in the past. With respect to some of the dynamics in the back half of the year around gross subscriber adds and monthly average revenue per subscriber. We don't necessarily give specific guidance there, but I can speak to what are some of the broad trends and themes that we do expect. Overall, I think resonantly we do expect the vast majority of growth to continue to come from subscribers coming on to the platform and increasingly stronger and stronger levels, that set in, there…

Got it. Thank you so much.

Your next question comes from the line of Aaron Kessler from Seaport. Your line is open.

Hey, guys. Great. A couple of questions. Maybe first just on the guidance. I heard kind of a personalized solutions in terms of the increased revenue. Would you attribute to any categories as well? Is it mostly weight loss or is it really across categories? And then just maybe any updates on some of your other key categories, including dermatology, mental health and sexual health as well? Thank you.

Well, maybe let Andrew speak to like the broader dynamics and then I can cut into some of the more detailed nuances there.

Yeah. Great. Aaron, thanks for the question. I think across categories, it's been [Technical Difficulty] offerings. We talked about on the domestic health side [Technical Difficulty] now offering and engaging with personalized product is up 3 times year-over-year. In particular, what's really interesting is, it's not just personalized, but it's actually more engaged behavior. So on the demand side of the business, [Technical Difficulty] one-off daily or one-off [Technical Difficulty] if you think about [Technical Difficulty] transform that business much value in personal [Technical Difficulty] were multi-specialty multi-cap [Technical Difficulty] in high engagement leading to personalized outcome, but in any [Technical Difficulty] outcome, which we think is really powerful. And this is taking place across the spectrum 80%, 90% of that business now is open for a personalized solution. [Technical Difficulty] already a very robust, set of categories.

Yeah. I think just a follow-up on that Aaron, because I think Andrew was breaking up a bit. I think we do expect the adoption of personalization to cut across most of the specialties. What we have seen is that as we continue to elevate the breadth of choices both in terms of new form factors or offering products within conditions that offer multiple sources of value within a specialty. We see more and more consumers opt to switch to those, what we also do expect is in the back half of the year, the innovation will accelerate across multiple of our specialties. Additionally, we do expect in the back half of the year is for the ability to bring solutions that cut across popular specialties concurrently. And so with that, we do expect more and more consumers to either revert to that, whether that's new users that are opting for more of the solutions with greater frequency or our existing users switch. And so an example of what we've seen that Andrew mentioned in his prepared remarks is in the sexual health business, we've seen a rapid uptick in the adoption of personalized products as we brought on solutions like the Hardman's or the multi-condition solutions such as the heart health products. As a result of that, we've seen more and more folks opt to switch to a daily habit and especially that's historically been more of an on-demand type of dynamic. And so we're confident in the back half of the year. But as that value continues to broaden more and more users across all of our specialties will do so. In the weight management category, I think we're very excited by that. And similar to our mental health category, when you're able to combine our ability to offer a very broad set of personalized solutions with technology that can assist providers in matching consumers to the solution that is likely to yield successful results with potentially less side effects. We generally see that, that yields to a few things. One is it just fosters a greater build of consumer trust. Also we do see is that the retention as a result of the stronger value proposition as well as the dynamics of being able to mitigate side effect concerns or meet consumers what their preference is, that generally yields to both stronger retention as well as acquisition. And so we’re very excited by the portfolio that’s to come in the second half of the year.

Great. That’s helpful. Thank you.

Your next question comes from the line of Michael Cherny from Leerink Partners. Your line is open.

Good afternoon. Thanks for taking the question. I want to come back to this dynamic of the, I guess, call it, multiyear long-term components of your GLP-1 business within weight management. I know some questions have been asked about the patent protection and where you sit. If you can maybe give us some examples, given this is obviously still an evolving market on where you've seen some of these dynamics put in place? I mean, you obviously have the ability to scale well. But I think also companies like Lilly and Novo are clearly going to go out of the way to protect the franchises they have. And also, I know that you have the ability to offer branded components over time. So I guess along all those lines, how should we expect all of this dynamic to develop relative to your product availability, the mix of compounded versus traditional brand over time and where you sit in the marketplace, knowing some of the dynamics around their focus on their patent tickets?

Thanks, Michael. I'll take a crack. I think at a high level, you should expect some degree of fluidity right over the next couple of years, just given I think there's going to be not only a changing market dynamic with the current medication that are on shortage. But I think there's also probably going to be five or 10 new medications that come to market in the next few years, just given if you look at the clinical studies and the FDA pipeline. So I think you're looking at five to 10 years of innovation, all kind of expanding off of the initial GLP-1 learning and that first medication out there with liraglutide now coming off time. So I think what you can expect is some fluidity without question, where I think we get a lot of confidence is that there's a really broad set of offerings under the hood that we believe in combination results in a really durable business line. As we talked about, the oral compounds that we have launched, that is -- that in and about itself is the fastest growing specialty we've ever launched on the platform, achieving north of $100 million run rate just in six or seven months. We expect huge evolutions in that platform and expansion of offerings there that patients really do love and are having great outcomes. And then on the injectable side, I think there's going to be, without question, a long horizon of on and off availability, just given the demand. We see thousands of patients coming every single day saying that they can't get access to these medications. And so we suspect that we'll be able to offer commercially available doses to in some form for extended periods. I think on top of that, as you said, as supply grows, we are excited to bring the branded medications for patients that are interested on to the platform as well as the personalized dosages. The compounding [Technical Difficulty] titration and dose customization exists and operates regardless of shortage. This is an exemption for which we operate the entire business under and have for the last six or seven years. And there's really an established precedent where everybody in market really respect the clinical need of personalization and realizes that often these personalized dosages augment what is commercially available and are not directly cannibalizing large pharma. So when you think about very few, if any examples, where large pharma comes after legitimate clinically necessary compounding and what we're seeing on our platform is that for these medications, that clinical customization is definitely needed for some patients. And we believe in combination with the rest of the portfolio, that will be included and available to patients over a long period of time.

So maybe if I can ask one more quick question, especially given your future offerings. What is your current day-day relationship like with Lilly and Novo. And how much are you preparing for that brand offering as some of the products come off shortage?

Yes, it's a great question. As you guys probably saw, we recently brought on Kare Schultz to the Board who is there for north of 20, 25 years as President and COO. I think we are sitting in the same place as almost everybody in market, which is trying to get supply for the branded medication. We -- that some customers will, without question wants easy, quick application of the self-inject pen. They know the brand, they trust the brand and they see all the benefits of that medication and they want those medications. So we, I think, like many others, if not almost everybody, are trying our best to source supply. I think what we can tell you is that it's not easy. There’s not really any available in volume, but we are doing our best to try to aggregate some and have a durable supply of that for our customers.

Your next question comes from the line of Jailendra Singh from Truist Securities. Your line is open.

Thank you and thanks for taking my questions. One follow-up on gross margin trends. I know I'm making some assumptions here, but I'm getting low to mid-50% gross margin on GLP-1 offering in the quarter. Just to confirm if I'm in the ballpark, it seems to expect the margins to improve on this offering as you kind of bring a 503(b) outsourcing facility on board. So on that point, does owning that facility in any way impact your relationship and economics with BPI labs, the facility you currently have agreement with and how quickly can you shift volume to your own facility? Just trying to understand if there are any contractual agreements with your existing partner, which would put any restrictions on how aggressively you can leverage your own facility?

Yeah. Thanks for the question, Jailendra. I think we don't comment on the specific gross margins for any individual product. Like most other products in the near term, we do see some degree of gross margin degradation. I think that as products tend to season in their tenure there's a multitude of different levers that we have to pull to improve the unit economics. This is everything from being able to intelligently adjust information and product dynamics so that the consumer to reduce customer service cost, you've been able to optimize on the logistics of the supply chain, automating some of the facilities through verticalization. Those have been historical levers that we've pulled in the past. I think we're confident in our ability to do each of those over time with GLP-1s. In the near term, we do expect to see some gross margin compression, but as we start to go out into next year, the ability to start to deploy multiple of those levers does come into play. And so I think as Andrew has mentioned, historically in the past, as we make investments, we tend to think about them on multiyear horizons and look to have multiple different angles to do so. And so while GLP-1 scale in the near term, there's roughly the -- couple of points of degradation in the back half of this year that we're expecting. We do expect in the midterm as we start to optimize some of those efficiency levers inclusive of the verticalization that we have the ability to revert that. But there's no like individual lever, it's only verticalization or it's only optimization in terms of our processes. We have the ability to pull multiple levers and expand the margins over time.

Just to clarify, there's no restriction from your existing pharmacy partner to shift any volume, right?

We don't speak to the specific dynamics around what happens or what the partnership arrangement looks like for any individual partner. That said, I think that what we do expect is there's a period of time for us to close the deal. There's also the period of time for us to invest accordingly to be able to scale up appropriately. I think that those dynamics we do expect to occur more in the midterm. And so as those occur, we would expect the gross margins to expand.

Your next question comes from the line of Glen Santangelo from Jefferies. Your line is open.

Yeah. Thanks for taking my question. Just a couple for me. Hey, Yemi. I want to follow up on subscribers to the compounded GLP-1 product. Are many of the taking advantage of multi-month subscriptions. Could you give us a little bit more about the demographic of these types of subscribers? And like, on average, how many months are they buying at a time? Anything you can tell us to help us think about that? And then I have a quick follow-up.

Yeah. Thanks for the question, Glen. We do see the vast majority of subscribers on the -- just the overall weight management solution, both inclusive of oral as well as GLP-1s up for multi months. What you do see is I think at the price points as you make longer-term commitments tend to be more attractive. What we also do see is that this is a product across all of the way through oral and GLP-1s, it does require multiple months of commitment to really get to the appropriate titration schedule and see the effects emerge. And so as a result of that, we do see the overwhelmingly majority of consumers opt for a multi-month, a multi-month solution.

Yeah, that's what I thought. So my follow-up question is, I guess, how the months of this compounded semaglutide can you ship it once. And then when I think about the revenue recognition, sort of related to that, if you ship three months at once, you book all three months of the revenue upfront or any sort of clarity on how that works? I mean, I think that would help us a lot from a modeling perspective. Thanks. I’ll stop there.

Yeah. So I think that the short answer is, I think that the number of months that we ship does vary state to state. Typically, we -- depending on the duration that the individual selects we do typically ship between three months or no more than six months historically. What we do see as an effect of that across the oral as well as the GLP-1 solution. Is it as more and more consumers are opting for longer duration subscriptions that exceed 90 days, you do see the deferred revenue component start to increase on the balance sheet as a result of that as well. So typically, it's going to be within the three to six months timeframe beyond that, particularly given the product costs specifically for GLP-1s, we typically don't extend beyond that type of cadence. And so the effect of that would be is, if consumers continue to take on longer cadences, you would expect to see deferred revenue expand from quarter-to-quarter on the balance sheet.

Your next question comes from the line of George Hill from Deutsche Bank. Your line is open.

Good afternoon, guys. Thanks for taking the question. First, just a point of clarification. I want to make sure I heard you guys right that you said you're tracking towards 1 million weight loss subscribers by the end of the year. And then, if I have that number or if I have wrong, you can just correct me on what it was. But I'm just interested in the mix. I guess, if you can talk about how many of those people are on GLP-1 or probably GLP-1s versus other drugs? And then within the GLP-1 category, there's the compounded product versus the injection product, you guys draw a differentiation there? And then looking forward, Yemi or Andrew, I'd love to hear you guys talk a little bit about like how you expect the business mix to evolve in that category.

Maybe I can take the front half of that question. Just to clarify, I think it was -- George, it was 1 million personalized subscribers. And Andrew can go into the way specifics.

Okay. So I missed. Sorry about that.

Yeah. Thank you, George. I think long term, I would suspect like we see across almost every one of our specialties, pretty vast diversity within the offering. You see that already within the weight loss specialty as we talked about the oral compounds in of themselves growing very, very quickly, the fastest we've ever had as a specialty north of $100 million run rate just in six to seven months. And I think as we continue to expand the options on that side as well as off-patent medications like liraglutide and the branded mix, we've always seen historically great variation. When we look back, for example, on our sexual health side of the business, we have branded Viagra, we had generic Viagra, we had custom compounds. And you see just really no concentration. And I think if we're doing our job well, there is no concentration because we are expanding into further segments that better serve each customer. And I think that's really how we think about our product roadmap approach, which is, if there's a large segment of customers that is on a current medication, let's really get to know those customers. Let's figure out how we can make their experience better, what other conditions or specialties are struggling with, what other types of concerns do they have? And how can we optimize even further the adherence and the clinical outcomes. So I would suspect, like all other specialties, you'll get to pretty wide variation. What is abundantly clear is that while GLP-1s are incredible medications, I think what's even more incredible is that they have really changed the cultural conversation around obesity management. You now have tens of thousands of people coming to us every week that are looking to get treated for obesity as a disease, and…

Thank you.

Your next question comes from the line of Korinne Wolfmeyer from Piper Sandler. Your line is open.

Hey, thanks for taking the question. Could you provide a little bit of color on the cadence of sign-ups with the GLP-1s that you saw right after launching, I know you're still in early days, but have you seen any change in kind of the monthly sign-ups since that launch? And then how has the retention been for those GLP-1 patients so far? Thanks.

Yeah. Thanks for the question, Korinne. I think what we have seen since the launch, and we saw this with the oral medications as well is the vast majority or over majority of folks are selecting multi-month cadences across the platform. Again, I think a lot of that is due to the nature of to truly see the benefits from these medications. Oftentimes, it does take longer than an individual month. Consumers do recognize that in the education process from providers and throughout the flow as they're going through the journey. I think that dynamic paired with the more favorable economics of the consumer with longer-term cadences that you commit to as resulting in an overwhelmingly majority of the consumers opting for longer duration cadences. We're very much in the early days where the product has been in market for a little less than three month at this point. I think that what we are seeing is based upon the cadence that users are selecting as well as the feedback that users are giving to their providers and the check in. We are confident that retention will be very strong and sound. But that said, I think we have less than three months of data at this point. So it's truly hard to get a meaningful read there.

Great. Thank you. And then could you just let us know that regarding the news from Lilly last week and the improvement in capacity there, did you alter your internal expectations, I guess, for both this year and next year following that announcement or is that kind of a non-event for -- related to your guidance? Thank you.

Yemi might be on mute. But I would say, Korinne, I don’t think there’s a material expectations that, that alters guidance. As you can tell from the current business, [indiscernible] are the only GLP-1s currently on the offering and platform today. And so I think all of that was built into the existing forecast.

And there are no further questions at this time. This concludes today's conference call. Thank you for your participation. You may now disconnect.