Hims & Hers Health, Inc.

Previous wording

Our management monitors two financial results, Online Revenue and Wholesale Revenue (both defined below), to track our total revenue generation. We also monitor the additional key business metrics set forth below to help us evaluate our business, identify trends affecting our business, formulate business plans and make strategic decisions. Increases or decreases in these key business metrics may not correspond with increases or decreases in our revenue. We also continually and strategically review our key business metrics to ensure that they are helpful in managing or monitoring the performance of our business as it grows, which may result in changes in our key business metrics over time. As an example, our management primarily uses the Subscribers and Monthly Online Revenue per Average Subscriber metrics, as defined below, to manage and monitor the performance of our business. The Net Orders and AOV metrics have become less relevant for our business, and beginning with the three months ending March 31, 2025 we are no longer reporting them as key business metrics.

Current wording

Our management monitors two financial results, Online Revenue and Wholesale Revenue (both defined below), to track our total revenue generation. We also monitor the additional key business metrics set forth below to help us evaluate our business, identify trends affecting our business, formulate business plans and make strategic decisions. Increases or decreases in these key business metrics may not correspond with increases or decreases in our revenue. We also continually and strategically review our key business metrics to ensure that they are helpful in managing or monitoring the performance of our business as it grows, which may result in changes in our key business metrics over time. As an example, our management primarily uses the Subscribers and Monthly Online Revenue per Average Subscriber metrics, as defined below, to manage and monitor the performance of our business.

Previous wording

The table below provides a breakdown of total revenue between Online Revenue and Wholesale Revenue, for the three months ended March 31, 2025 and 2024, as well as key metrics that drive Online Revenue (i.e., Subscribers and Monthly Online Revenue per Average Subscriber) and the dollar and percentage change between such periods (in thousands, except for Monthly Online Revenue per Average Subscriber):

Current wording

The table below provides a breakdown of total revenue between Online Revenue and Wholesale Revenue, for the three and six months ended June 30, 2025 and 2024, as well as key metrics that drive Online Revenue (i.e., Subscribers and Monthly Online Revenue per Average Subscriber) and the dollar and percentage change between such periods (in thousands, except for Monthly Online Revenue per Average Subscriber):

Previous wording

We generated $576.4 million in Online Revenue for the three months ended March 31, 2025, an increase of $308.6 million, or 115%, as compared to $267.8 million for the three months ended March 31, 2024. Growth in Online Revenue for the three months ended March 31, 2025 was driven by: (i) new Subscriber growth pertaining to weight loss solutions launched in the fourth quarter of 2023 or later, including new Subscribers for compounded semaglutide glucagon-like peptide-1 receptor agonists (“GLP-1s”) offerings launched in the second quarter of 2024 for which there was no comparable revenue for the three months ended March 31, 2024; and (ii) continued sustainable growth in Subscribers pertaining to offerings available in both periods, from whom we generated recurring revenue that was driven in part by ordinary-course marketing campaigns that continued to strengthen our mature offerings. During the three months ended March 31, 2025, our GLP-1 offerings generated approximately $230 million in Online Revenue, a significant majority of which came from personalized doses. New Subscriber growth in our GLP-1 offering was driven by both ordinary-course marketing campaigns as well as a specialized marketing campaign as discussed further below. Certain aspects of our GLP-1 compounded offerings were permitted by the Food and Drug Administration (“FDA”) based on shortages of branded GLP-1s, which were affected by regulatory decisions during the first quarter of 2025 as further described below. Excluding our GLP-1 offerings, the remaining Online Revenue of approximately $346 million during the period increased nearly 30% year-over-year as a result of new Subscriber growth. During the three months ended March 31, 2025, we aired a Super Bowl marketing campaign highlighting specialized offerings on our platform and building brand awareness with consumers in order to normalize health and wellness challenges, which resulted in increased traffic to our platform.

Current wording

We generated $536.9 million in Online Revenue for the three months ended June 30, 2025, an increase of $230.0 million, or 75%, as compared to $306.8 million for the three months ended June 30, 2024. We generated $1,113.2 million in Online Revenue for the six months ended June 30, 2025, an increase of $538.6 million, or 94%, as compared to $574.6 million for the six months ended June 30, 2024. Growth in Online Revenue for the three and six months ended June 30, 2025 was driven by: (i) new Subscriber growth pertaining to weight loss solutions launched in the fourth quarter of 2023 or later, including new Subscribers for glucagon-like peptide-1 receptor agonists (“GLP-1s”) offerings launched in the second quarter of 2024 for which there was limited comparable revenue for the three and six months ended June 30, 2024; and (ii) continued sustainable growth in Subscribers pertaining to offerings available in both periods, from whom we generated recurring revenue that was driven in part by ordinary-course marketing campaigns that continued to strengthen our mature offerings. Our GLP-1 offerings primarily consist of personalized semaglutide and generic liraglutide, as well as commercial dosages of semaglutide and branded Wegovy for partial periods during the first half of 2025. During the three and six months ended June 30, 2025, our GLP-1 offerings generated approximately $190 million and $420 million, respectively, in Online Revenue, a significant majority of which came from personalized doses in both periods. We expect revenue from personalized offerings across the business to increasingly drive Online Revenue growth in the future. New Subscriber growth in our GLP-1 offering was driven by both ordinary-course marketing campaigns, as well as a specialized marketing campaign in the first quarter of 2025 as discussed further below. Certain aspects of our GLP-1 compounded offerings were permitted by the Food and Drug Administration (“FDA”) based on shortages of branded GLP-1s, which were affected by regulatory decisions during the first quarter of 2025 as further described below. During the three and six months ended June 30, 2025, the remaining Online Revenue of approximately $347 million and $693 million, respectively, which excludes our GLP-1 offerings, increased nearly 20% and 25%, respectively, year-over-year as a result of new Subscriber growth. During the first quarter of 2025, we aired a Super Bowl marketing campaign highlighting specialized offerings on our platform and building brand awareness with consumers in order to normalize health and wellness challenges, which resulted in increased traffic to our platform.

Previous wording

Online Revenue can fluctuate on a period-to-period basis due to various factors, including launches of new product offerings, the success of our marketing campaigns, and pricing decisions impacting customer uptake of our offerings, as well as product availability and the regulatory landscape impacting our offerings. As described under Part II, Item 1A: “Risk Factors”, on February 21, 2025, the FDA resolved the semaglutide shortage, which has constrained and is expected to continue to constrain our ability to continue providing access to compounded semaglutide on our platform. The FDA does not limit compounding to drug shortages, and we believe there are paths to continue offering access to certain compounded GLP-1s after the period of FDA enforcement discretion has ended following resolution of the shortage, consistent with the statutory exemptions from the new drug approval requirements. As such, we intend to continue expanding our weight loss offerings and serving our Subscribers with a wide range of weight loss solutions.

Current wording

Online Revenue can fluctuate on a period-to-period basis due to various factors, including launches of new product offerings, the success of our marketing campaigns, and pricing decisions impacting customer uptake of our offerings, as well as product availability and the regulatory landscape impacting our offerings. As described under Part II, Item 1A: “Risk Factors”, on February 21, 2025, the FDA resolved the semaglutide shortage, and on May 22, 2025, the FDA’s period of enforcement discretion following the resolution of the shortage concluded with respect to 503B outsourcing facilities. Resolution of the shortage has constrained and is expected to continue to constrain our ability to continue providing access to compounded semaglutide on our platform. The FDA does not limit compounding to drug shortages, and we continue to offer access to certain compounded GLP-1s consistent with the statutory exemptions from the new drug approval requirements.

Previous wording

We generated $9.6 million in Wholesale Revenue for the three months ended March 31, 2025, a decrease of $0.8 million, or 7% as compared to $10.4 million for the three months ended March 31, 2024. Wholesale Revenue can fluctuate on a period-to-period basis due to various factors, including timing of inventory purchases from our partners, seasonality trends, launches of new merchants, and timing of specialized campaigns. During the three months ended March 31, 2025, there were no launches of material new merchants, notable factors impacting timing of inventory purchases, or material specialized campaigns impacting Wholesale Revenue trends. Top partners, comprising over 90% of Wholesale Revenue, remained consistent for both periods presented. As our presence in physical environments and on third-party platforms has matured and we have successfully built brand awareness with new customers in those environments, we do not anticipate launching new material partnerships in the foreseeable future or investing significantly in specialized wholesale marketing campaigns.

Current wording

We generated $8.0 million in Wholesale Revenue for the three months ended June 30, 2025, a decrease of $0.9 million, or 10%, as compared to $8.8 million for the three months ended June 30, 2024. We generated $17.6 million in Wholesale Revenue for the six months ended June 30, 2025, a decrease of $1.6 million, or 8% as compared to $19.2 million for the six months ended June 30, 2024. Wholesale Revenue can fluctuate on a period-to-period basis due to various factors, including timing of inventory purchases from our partners, seasonality trends, launches of new merchants, and timing of specialized campaigns. During the three and six months ended June 30, 2025, there were no launches of material new merchants, notable factors impacting timing of inventory purchases, or material specialized campaigns impacting Wholesale Revenue trends. Top partners, comprising over 90% of Wholesale Revenue, remained consistent for all periods presented. As our presence in physical environments and on third-party platforms has matured and we have successfully built brand awareness with new customers in those environments, we do not anticipate launching new material partnerships in the foreseeable future or investing significantly in specialized wholesale marketing campaigns.

Previous wording

Subscribers grew 38% to approximately 2.4 million as of March 31, 2025 as compared to approximately 1.7 million Subscribers as of March 31, 2024. Growth in Subscribers was primarily driven by increased traffic to our platform (through our websites and mobile applications) as a result of our marketing activities and improved onsite and customer onboarding experiences. Monthly Online Revenue per Average Subscriber increased $29 to $84 for the three months ended March 31, 2025 as compared to $55 for the three months ended March 31, 2024. This increase was primarily due to Subscriber uptake of our GLP-1 weight loss offering along with changes in product mix.

Current wording

Subscribers grew 31% to over 2.4 million as of June 30, 2025 as compared to approximately 1.9 million Subscribers as of June 30, 2024. Growth in Subscribers was primarily driven by increased traffic to our platform (through our websites and mobile applications) as a result of our marketing activities and improved onsite and customer onboarding experiences, as well as consumer adoption of our personalized offerings across our business, including our GLP-1 weight loss offerings. Monthly Online Revenue per Average Subscriber increased $17 to $74 for the three months ended June 30, 2025 as compared to $57 for the three months ended June 30, 2024 and increased $23 to $79 for the six months ended June 30, 2025 as compared to $56 for the six months ended June 30, 2024. These increases were primarily due to Subscriber uptake of personalized offerings across our business, including our GLP-1 weight loss offering, along with changes in product mix.

Previous wording

We continuously test and optimize the online experience and offerings to improve the customer experience, maximize sales, and improve gross margin. Our Subscribers (sometimes also referred to by us as “members”) select a cadence at which they wish to receive product shipments or a treatment term depending on the offering. In addition to a 30-day cadence or treatment term, we offer Subscribers the ability to select from a range of Subscription shipment cadences or treatment terms, from every 60 days to 360 days, depending on the offering. Subscriptions automatically renew on the applicable cadence selected by the Subscriber when purchasing or updating the Subscription. To ensure timely delivery of prescription medications and in accordance with our terms and conditions, Subscribers may sometimes be charged, and products may sometimes be shipped, earlier than their regularly scheduled cadence to accommodate holidays or for other operational reasons to support continuity of treatment. With the exception of prepaid offerings, the Subscriber is typically billed upon each shipment. Subscribers can cancel or snooze Subscriptions in between billing periods to stop receiving additional products and can reactivate Subscriptions at any time. For longer term Subscriptions, we incur shipping and fulfillment expenses fewer times per year than for 30-day

Current wording

We continuously test and optimize the online experience and offerings to improve the customer experience, maximize sales, and improve gross margin. Our Subscribers (sometimes also referred to by us as “members”) select a cadence at which they wish to receive product shipments or a treatment term depending on the offering. In addition to a 30-day cadence or treatment term, we offer Subscribers the ability to select from a range of Subscription shipment cadences or treatment terms, from every 60 days to 360 days, depending on the offering. Subscriptions automatically renew on the applicable cadence selected by the Subscriber when purchasing or updating the Subscription. To ensure timely delivery of prescription medications and in accordance with our terms and conditions, Subscribers may sometimes be charged, and products may sometimes be shipped, earlier than their regularly scheduled cadence to accommodate holidays or for other operational reasons to support continuity of treatment. With the exception of prepaid offerings, the Subscriber is typically billed upon each shipment. Subscribers can cancel or snooze Subscriptions in between billing periods to stop receiving additional products and can reactivate Subscriptions at any time. For longer term Subscriptions, we incur shipping and fulfillment expenses fewer times per year than for 30-day Subscriptions. The Subscriber uptake of longer term Subscriptions typically results in lower recurring costs and higher gross margins as compared to 30-day Subscriptions.

Previous wording

Our ability to attract new customers is a key factor for our future growth. To date, we have successfully acquired new customers through marketing and the development of our brands as well as through acquisitions. As a result, revenue has increased each year since our launch. If we are unable to acquire enough new customers in the future, revenue might decline. New customer acquisition could be negatively impacted if our marketing efforts are less effective in the future. Increases in advertising rates could also negatively impact our ability to acquire new customers. Consumer tastes, preferences, and sentiment for our brands may also change and result in decreased demand for our products and services. Changes in the legal or regulatory environment have and could continue to impact our ability to acquire new customers, including changes to privacy, healthcare, or other laws, or the interpretation or enforcement of such laws, such as the FDA resolving the semaglutide shortage, and could impact customer acquisition costs.

Current wording

Our ability to attract new customers is a key factor for our future growth. To date, we have successfully acquired new customers through marketing and the development of our brands as well as through acquisitions. As a result, revenue has increased each year since our launch. If we are unable to acquire enough new customers in the future, revenue might decline. New customer acquisition could be negatively impacted if our marketing efforts are less effective in the future. Increases in advertising rates could also negatively impact our ability to acquire new customers. Consumer tastes, preferences, and sentiment for our brands may also change and result in decreased demand for our products and services. Changes in the legal or regulatory environment have and could continue to impact our ability to acquire new customers, including changes to privacy, healthcare, or other laws, or the interpretation or enforcement of such laws, such as the FDA’s resolution of the semaglutide shortage, and could impact customer acquisition costs. In addition, acquiring new customers may be impacted by supply chain constraints related to our offerings, including compounded semaglutide, that may be outside of our control and may impact our future results.

Previous wording

Our ability to retain customers is a key factor in our ability to generate revenue. Most of our customers purchase products and services through subscription-based plans, where Subscribers are billed and sent products and/or receive services on a recurring basis. The recurring nature of this revenue provides us with a certain amount of predictability for future revenue if past Subscriber behavior stays relatively consistent in the future. While historically the consistent uptake by Subscribers of our offerings contributed to the stable and predictable nature of our Monthly Online Revenue per Average Subscriber, newer offerings introduced in 2024 have led to increases in this metric. As a result of the FDA resolving the semaglutide shortage, which has constrained and is expected to continue to constrain our ability to continue providing access to compounded semaglutide on our platform, we expect this metric to decrease in the near term relative to the first quarter of 2025 and normalize over the long term. We expect to retain a significant majority of revenue from Subscribers who maintain a Subscription for more than two years (sometimes referred to by us as “long-term revenue retention”). However, if customer behavior changes, or our assumptions regarding long-term revenue retention are incorrect and Subscriber retention decreases in the future, then future revenue will be negatively impacted. Macroeconomic factors including inflation or recessionary pressures or the impact of trade actions may affect the ability of our Subscribers to continue to pay for our products and services, which may also impact the future results of our operations.

Current wording

Our ability to retain customers is a key factor in our ability to generate revenue. Most of our customers purchase products and services through subscription-based plans, where Subscribers are billed and sent products and/or receive services on a recurring basis. The recurring nature of this revenue provides us with a certain amount of predictability for future revenue if past Subscriber behavior stays relatively consistent in the future. While historically the consistent uptake by Subscribers of our offerings contributed to the stable and predictable nature of our Monthly Online Revenue per Average Subscriber, newer offerings introduced in 2024 have led to increases in this metric. As a result of the FDA resolving the semaglutide shortage, which has constrained and is expected to continue to constrain our ability to continue providing access to compounded semaglutide on our platform, we expect this metric to decrease in the near term relative to the first half of 2025 and normalize over the long term. We expect to retain a significant majority of revenue from Subscribers who maintain a Subscription for more than two years (sometimes referred to by us as “long-term revenue retention”). However, if customer behavior changes, or our assumptions regarding long-term revenue retention are incorrect and Subscriber retention decreases in the future, then future revenue will be negatively impacted. Macroeconomic factors including inflation or recessionary pressures or the impact of trade actions may affect the ability of our Subscribers to continue to pay for our products and services, which may also impact the future results of our operations.

Previous wording

We expect to continue to focus on long-term growth. We intend to continue to invest in our fulfillment, distribution, and operating capabilities, including in our Affiliated Pharmacies (also referred to herein as our “Pharmacies”), MedisourceRx, our recently acquired lab testing facility, and our recently acquired peptide manufacturing facility (collectively sometimes herein referred to as our “Facilities”), with the goal of fulfilling a significant majority of our pharmaceutical and over-the-counter customer orders through affiliated and internal fulfillment capabilities. For example, we are making investments in the expansion of our current Facilities, which are expected to continue for at least the next 12 months. Additionally, we expect to continue to make significant investments in marketing to acquire new customers and we expect to continue to make investments in product offerings and customer experience. We are working to enhance our offerings and expand the breadth of health and wellness products and services offered on our websites and mobile applications. The number of our Subscribers using personalized solutions has grown in recent periods and represented more than a majority of Subscribers as of March 31, 2025. As we expect the percentage of Subscribers on our platform using a personalized solution to continue to increase, we plan to continue to invest in personalized product offerings, including in our compounding capabilities. This also includes further investments in and development of mobile phone technology, including our mobile applications, in order to improve the customer experience on our platform. We may continue to pursue opportunities to acquire or invest in complementary businesses, services, and technologies, including intellectual property rights. In the short term, we expect these investments to increase our operating expenses; however, in the long term, we anticipate that these investments will positively impact our results of operations. If we are unsuccessful at improving our offerings or are unable to generate additional demand for our offerings, we may not recover the financial investments we make into the business and revenue may not increase in the future.

Current wording

We expect to continue to focus on long-term growth. We intend to continue to invest in our fulfillment, distribution, and operating capabilities, including in our Affiliated Pharmacy and wholly-owned pharmacies (also collectively referred to herein as our “Pharmacies”), our recently acquired lab testing facility, and our recently acquired peptide manufacturing facility (collectively sometimes herein referred to as our “Facilities”), with the goal of fulfilling a significant majority of our pharmaceutical and over-the-counter customer orders through affiliated and internal fulfillment capabilities. For example, we are making investments in the expansion of our current Facilities, which are expected to continue for at least the next 12 months. Additionally, we expect to continue to make significant investments in marketing to acquire new customers and we expect to continue to make investments in product offerings and customer experience. We are working to enhance our offerings and expand the breadth of health and wellness products and services offered on our websites and mobile applications. The number of our Subscribers using personalized solutions has grown in recent periods and represented more than a majority of Subscribers as of June 30, 2025. As we expect the percentage of Subscribers on our platform using a personalized solution to continue to increase, we expect revenue from personalized offerings across the business to increasingly drive Online Revenue growth in the future, and we plan to continue to invest in personalized product offerings, including in our compounding capabilities. In addition, we expect to continue to pursue opportunities to acquire or invest in complementary businesses, services, and technologies, including intellectual property rights. Specifically, in July 2025, we acquired all of the outstanding equity of Zava Global GmbH, a digital health platform registered in Germany with operations in the United Kingdom, Germany, France, and Ireland (for additional details regarding the acquisition and the share purchase agreement refer to the “Liquidity and Capital Resources” section). In the short term, we expect these investments to increase our operating expenses; however, in the long term, we anticipate that these investments will positively impact our results of operations. If we are unsuccessful at improving our offerings or are unable to generate additional demand for our offerings, we may not recover the financial investments we make into the business and revenue may not increase in the future.

Previous wording

Our weight loss specialty might drive new seasonality considerations for our business. Specifically, we expect individuals’ health and wellness-based New Year's resolutions to result in additional traffic to our platform and thus increase the number of Subscribers utilizing one of our weight loss offerings. This may result in higher Subscriber and Monthly Online Revenue per Average Subscriber growth in the first quarter compared to the remainder of the year.

Current wording

Our weight loss specialty might drive new seasonality considerations for our business. Specifically, we expect individuals’ health and wellness-based New Year's resolutions to result in additional traffic to our platform and thus increase the number of

Previous wording

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 income before stock-based compensation, income taxes, depreciation and amortization, acquisition and transaction-related costs (which includes (i) consideration paid for employee and nonemployee compensation with vesting requirements incurred directly as a result of acquisitions, and (ii) transaction professional services), impairment of long-lived assets, and interest income and expense, net. “Adjusted EBITDA margin” is defined as Adjusted EBITDA divided by revenue.

Current wording

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 income before stock-based compensation, depreciation and amortization, acquisition and transaction-related costs (which includes (i) consideration paid for employee and nonemployee compensation with vesting requirements incurred directly as a result of acquisitions, and (ii) transaction professional services), payroll tax expense related to stock-based compensation, impairment of long-lived assets, interest income and expense, net, and income taxes. “Adjusted EBITDA margin” is defined as Adjusted EBITDA divided by revenue.

Previous wording

The following table reconciles net income to Adjusted EBITDA for the three months ended March 31, 2025 and 2024 (in thousands):

Current wording

The following table reconciles net income to Adjusted EBITDA for the three and six months ended June 30, 2025 and 2024 (in thousands):

Previous wording

Free Cash Flow is a key performance measure that our management uses to assess our liquidity. Because Free Cash Flow facilitates internal comparisons of our historical liquidity on a more consistent basis, we use this measure for business planning purposes. “Free Cash Flow” is defined as net cash provided by operating activities, less purchases of property, equipment, and intangible assets and investment in website development and internal-use software in investing activities.

Current wording

Free Cash Flow is a key performance measure that our management uses to assess our liquidity. Because Free Cash Flow facilitates internal comparisons of our historical liquidity on a more consistent basis, we use this measure for business planning purposes. “Free Cash Flow” is defined as net cash (used in) provided by operating activities, less purchases of property, equipment, and intangible assets and investment in website development and internal-use software in investing activities.

Previous wording

The following table reconciles net cash provided by operating activities to Free Cash Flow for the three months ended March 31, 2025 and 2024 (in thousands):

Current wording

The following table reconciles net cash (used in) provided by operating activities to Free Cash Flow for the three and six months ended June 30, 2025 and 2024 (in thousands):

Previous wording

Some of the limitations of Free Cash Flow include (i) Free Cash Flow does not represent our residual cash flow for discretionary expenditures and our non-discretionary commitments, and (ii) Free Cash Flow includes capital expenditures, the benefits of which may be realized in periods subsequent to those in which the expenditures took place. In evaluating Free Cash Flow, you should be aware that in the future we will have cash outflows similar to the adjustments in this presentation. Our presentation of Free Cash Flow should not be construed as an inference that our future results will be unaffected by these cash outflows or any unusual or non-recurring items. When evaluating our performance, you should consider Free Cash Flow in addition to, and not as a substitute for, other financial performance measures, including our net cash provided by operating activities and other U.S. GAAP results.

Current wording

Some of the limitations of Free Cash Flow include (i) Free Cash Flow does not represent our residual cash flow for discretionary expenditures and our non-discretionary commitments, and (ii) Free Cash Flow includes capital expenditures, the benefits of which may be realized in periods subsequent to those in which the expenditures took place. In evaluating Free Cash Flow, you should be aware that in the future we will have cash outflows similar to the adjustments in this presentation. Our presentation of Free Cash Flow should not be construed as an inference that our future results will be unaffected by these cash outflows or any unusual or non-recurring items. When evaluating our performance, you should consider Free Cash Flow in addition to, and not as a substitute for, other financial performance measures, including our net cash (used in) provided by operating activities and other U.S. GAAP results.

Previous wording

Currently, we conduct business through one operating segment. Substantially all our long-lived assets are maintained in, and a significant majority of our results of operations are attributable to, the United States of America. The unaudited condensed consolidated financial statements include the accounts of our company, our wholly-owned subsidiaries, and variable interest entities (“VIEs”) for which we are the primary beneficiary. For the periods presented, the VIEs are: (i) “Affiliated Medical Groups,” which are professional corporations or other professional entities owned by licensed physicians and that engage licensed healthcare professionals (physicians, physician assistants, nurse practitioners, and mental health providers; collectively referred to as “Providers” or individually, a “Provider”) to provide consultation services; and (ii) XeCare, LLC (“XeCare”) and Apostrophe Pharmacy LLC (“Apostrophe Pharmacy”, and together with XeCare, the “Affiliated Pharmacies”), which are licensed mail order pharmacies providing prescription fulfillment solely to our customers. We determined that we are the primary beneficiary of the Affiliated Medical Groups and the Affiliated Pharmacies for accounting purposes because we have the ability to direct the activities that most significantly affect these entities’ economic performance and have the obligation to absorb the entities’ losses. Under the variable interest entity model, we present the results of operations and the financial position of the entities as part of our unaudited condensed consolidated financial statements as if the consolidated group were a single economic entity.

Current wording

Currently, we conduct business through one operating segment. Substantially all our long-lived assets are maintained in, and a significant majority of our results of operations are attributable to, the United States of America. The unaudited condensed consolidated financial statements include the accounts of our company, our wholly-owned subsidiaries, and variable interest entities (“VIEs”) for which we are the primary beneficiary. As of June 30, 2025, the VIEs are: (i) “Affiliated Medical Groups,” which are professional corporations or other professional entities owned by licensed physicians and that engage licensed healthcare professionals (physicians, physician assistants, nurse practitioners, and mental health providers; collectively referred to as “Providers” or individually, a “Provider”) to provide consultation services; and (ii) XeCare, LLC (“XeCare” or an “Affiliated Pharmacy”), which is a licensed mail order pharmacy providing prescription fulfillment solely to our customers. We determined that we are the primary beneficiary of the Affiliated Medical Groups and the Affiliated Pharmacy for accounting purposes because we have the ability to direct the activities that most significantly affect these entities’ economic performance and have the obligation to absorb the entities’ losses. Under the VIE model, we present the results of operations and the financial position of the entities as part of our unaudited condensed consolidated financial statements as if the consolidated group were a single economic entity. Additionally, Apostrophe Pharmacy LLC (“Apostrophe Pharmacy”), which is a licensed mail order pharmacy providing prescription fulfillment solely to our customers, was an Affiliated Pharmacy and a VIE through April 2025 when, as a result of a change of ownership, it became a wholly-owned subsidiary of our company and was no longer considered an Affiliated Pharmacy or a VIE.

Previous wording

Our gross profit represents total revenue less our total cost of revenue, and our gross margin is our gross profit expressed as a percentage of our total revenue. Our gross profit and gross margin have been and will continue to be affected by a number of factors, including the prices we charge for our products and services, the costs we incur from our vendors for certain components of our cost of revenues, the mix of the various products and services we sell in a period including the launch of new offerings, the mix of Online Revenue and Wholesale Revenue in a period, volume of fulfillment through affiliated and internal fulfillment capabilities, and our ability to sell our inventory. We expect our gross margin to fluctuate from period to period depending on these and other factors. While gross margin has decreased period to period in the most recent quarters, and we may see this trend continuing in the short term, over the long term we expect gross margin to stabilize as we continue to scale our business and increase our ability to negotiate and optimize more favorable costs of revenue.

Current wording

Our gross profit represents total revenue less our total cost of revenue, and our gross margin is our gross profit expressed as a percentage of our total revenue. Our gross profit and gross margin have been and will continue to be affected by a number of factors, including the prices we charge for our products and services, the costs we incur from our vendors for certain components of our cost of revenues, the mix of the various products and services we sell in a period including the launch of new offerings, the mix of Online Revenue and Wholesale Revenue in a period, volume of fulfillment through affiliated and internal fulfillment capabilities, and our ability to sell our inventory. While we expect our gross margin to fluctuate from period to period depending on these and other factors, over the long term we expect gross margin to stabilize as we continue to scale our business and increase our ability to negotiate and optimize more favorable costs of revenue.

Previous wording

The largest component of our marketing expenses consists of our discretionary customer acquisition costs. Customer acquisition costs, also called paid marketing expense, are the advertising and media costs associated with our efforts to acquire new customers, promote our brands, and build awareness for our products and services. Customer acquisition costs include advertising in digital media, social media, television, radio, out-of-home media, and various other media outlets and excluding content production costs. Marketing expenses also include overhead expenses, including salaries, benefits, taxes, and stock-based compensation for personnel; agency, contractor, and consulting expenses; content production, software, and other marketing operating costs. Marketing is an important driver of growth and we intend to continue to make significant investments in customer acquisition and our marketing organization. Historically, our marketing expenses have increased quarter-over-quarter and we expect this trend to continue. While marketing expenses may fluctuate as a percentage of revenue due to the timing and discretionary nature of these expenses, with the additional marketing leverage driven by our newer offerings, along with the maturation of our existing Subscriber base, we expect total marketing expenses as a percentage of revenue to continue to decrease over the long term.

Current wording

The largest component of our marketing expenses consists of our discretionary customer acquisition costs. Customer acquisition costs, also called paid marketing expense, are the advertising and media costs associated with our efforts to acquire new customers, promote our brands, and build awareness for our products and services. Customer acquisition costs include advertising in digital media, social media, television, radio, out-of-home media, and various other media outlets and excluding content production costs. Marketing expenses also include overhead expenses, including salaries, benefits, taxes, and stock-based compensation for personnel; agency, contractor, and consulting expenses; content production, software, and other marketing operating costs. Marketing is an important driver of growth and we intend to continue to make significant investments in customer acquisition and our marketing organization. Historically, our marketing expenses have increased quarter-over-quarter, though marketing expenses may fluctuate from period to period, due to the timing and discretionary nature of these expenses. While marketing expenses may fluctuate as a percentage of revenue, with the additional marketing leverage driven by our newer offerings, along with the maturation of our existing Subscriber base, we expect total marketing expenses as a percentage of revenue to continue to decrease over the long term.

Previous wording

Operations and support expenses include the salaries, benefits, taxes, professional services expenses, and stock-based compensation for personnel, consultants, and contractors for our supply chain, retail, medical, pharmacy, fulfillment, customer service, and quality functions. These expenses also include operating expenses primarily relating to operating and support functions for our Facilities, warehousing and storage, fulfillment, transaction processing, third-party software and hosting to support those functions, and related depreciation and amortization. We expect operations and support expenses to increase for the foreseeable future as we continue to invest in our fulfillment and operating capabilities and grow our business, resulting in additional operational efficiencies. As a result, we expect revenue growth to continue to outpace those investments made, leading to a decrease in operations and support expenses as a percentage of revenue over the long term, although it may fluctuate as a percentage of total revenue from period to period due to the timing and amount of these expenses.

Current wording

Operations and support expenses include the salaries, benefits, taxes, professional services expenses, and stock-based compensation for personnel, consultants, and contractors for our supply chain, retail, medical, pharmacy, fulfillment, customer service, and quality functions. These expenses also include operating expenses primarily relating to operations and support functions for our Facilities, warehousing and storage, fulfillment, transaction processing, third-party software and hosting to support those functions, and related depreciation and amortization. We expect operations and support expenses to increase for the foreseeable future as we continue to invest in our fulfillment and operating capabilities and grow our business, resulting in additional operational efficiencies. As a result, we expect revenue growth to continue to outpace those investments made, leading to a decrease in operations and support expenses as a percentage of revenue over the long term, although it may fluctuate as a percentage of total revenue from period to period due to the timing and amount of these expenses.

Previous wording

Other income and expense, net primarily consists of interest income from our cash and cash equivalents and investment accounts. Additionally, other income and expense, net includes expenses associated with our credit facility, as well as non-operating and one-time charges classified outside of operating expenses.

Current wording

Other income and expense, net primarily consists of interest income from our cash and cash equivalents and investment accounts. Additionally, other income and expense, net includes expenses associated with our debt, as well as non-operating and one-time charges classified outside of operating expenses. We expect interest income to increase in the near term as a result of the significant balances in cash and cash equivalents and short-term investments at the end of the second quarter of 2025, although it may fluctuate from period to period based on applicable interest rates. This increase in interest income will be partially offset by interest expense related to the amortization of debt discount and issuance costs on our debt.

Previous wording

Provision for income taxes primarily consists of federal and state taxes, as well as any changes in valuation allowance. Deferred tax assets are reduced by a valuation allowance to the extent management believes it is not more likely than not to be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income. Management makes estimates and judgments about future taxable income based on assumptions that are consistent with our plans and estimates. If and when we conclude that we are more likely than not to utilize some or all of our deferred tax assets, we release some or all of our valuation allowance and our tax provision will decrease in the period in which we make such determination, which will cause a corresponding one-time increase to net income. Any future releases of our current valuation allowance would be immaterial to the unaudited condensed consolidated statements of operations.

Current wording

Benefit (provision) for income taxes primarily consists of federal and state taxes, as well as any changes in valuation allowance. Deferred tax assets are reduced by a valuation allowance to the extent management believes it is not more likely than not to be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income. Management makes estimates and judgments about future taxable income based on assumptions that are consistent with our plans and estimates. If and when we conclude that we are more likely than not to utilize some or all of our deferred tax assets, we release some or all of our valuation allowance and our tax provision will decrease in the period in which we make such determination, which will cause a corresponding one-time increase to net income. Any future releases of our current valuation allowance would be immaterial to the unaudited condensed consolidated statements of operations. In addition, we are still evaluating the impact of the One Big Beautiful Bill Act on our consolidated financial statements in future periods.

Previous wording

Comparisons for the three months ended March 31, 2025 and 2024

Current wording

Comparisons for the three and six months ended June 30, 2025 and 2024

Previous wording

The following table sets forth our unaudited condensed consolidated statements of operations for the three months ended March 31, 2025 and 2024, and the dollar and percentage change between the two periods (dollars in thousands):

Current wording

The following table sets forth our unaudited condensed consolidated statements of operations for the three and six months ended June 30, 2025 and 2024, and the dollar and percentage change between the two periods (dollars in thousands):

Previous wording

Revenue was $586.0 million for the three months ended March 31, 2025, compared to $278.2 million for the three months ended March 31, 2024, an increase of $307.8 million, or 111%. For a detailed discussion of this increase, refer to “—Revenue and Key Business Metrics.”

Current wording

Revenue was $544.8 million for the three months ended June 30, 2025, compared to $315.6 million for the three months ended June 30, 2024, an increase of $229.2 million, or 73%. Revenue was $1,130.8 million for the six months ended June 30, 2025, compared to $593.8 million for the six months ended June 30, 2024, an increase of $537.0 million, or 90%. For a detailed discussion of these increases, refer to the “Revenue and Key Business Metrics” section.

Previous wording

Cost of revenue was $155.3 million for the three months ended March 31, 2025, compared to $49.1 million for the three months ended March 31, 2024, an increase of $106.2 million, or 216%. This increase was primarily due to increased product and packaging costs of approximately 336%, increased shipping costs of 109%, and increased costs associated with medical consultation services of 66%, compared to the three months ended March 31, 2024. This increase in cost of revenue for the three months ended March 31, 2025 was primarily due to newer offerings as well as overall increased business activity with the addition of new Subscribers.

Current wording

Cost of revenue was $128.6 million for the three months ended June 30, 2025, compared to $59.0 million for the three months ended June 30, 2024, an increase of $69.6 million, or 118%. This increase was due to increased product and packaging costs of 162%, increased shipping costs of 65%, and increased costs associated with medical consultation services of 49%, compared to the three months ended June 30, 2024. Cost of revenue was $284.0 million for the six months ended June 30, 2025, compared to $108.1 million for the six months ended June 30, 2024, an increase of $175.8 million, or 163%. This increase was primarily due to increased product and packaging costs of approximately 236%, increased shipping costs of 86%, and increased costs associated with medical consultation services of 57%, compared to the six months ended June 30, 2024. These increases in cost of revenue for the three and six months ended June 30, 2025 were primarily due to newer offerings, including our GLP-1 offerings which have higher product and packaging costs and shipping costs compared to our other offerings, as well as overall increased business activity with the addition of new Subscribers.

Previous wording

Gross profit was $430.7 million for the three months ended March 31, 2025, compared to $229.1 million for the three months ended March 31, 2024, an increase of $201.6 million, or 88%. Correspondingly, gross margin was 73% for the three months ended March 31, 2025, compared to 82% for the three months ended March 31, 2024. This decrease in gross margin was primarily due to the addition of newer offerings, including those launched in the second quarter of 2024, which were strategically priced to attract new customers. This decrease was partially offset by lower costs associated with medical consultation services as a percent of revenue as a result of improving Provider efficiency, as well as synergies gained through increased fulfillment volume.

Current wording

Gross profit was $416.2 million for the three months ended June 30, 2025, compared to $256.6 million for the three months ended June 30, 2024, an increase of $159.6 million, or 62%. Correspondingly, gross margin was 76% for the three months ended June 30, 2025, compared to 81% for the three months ended June 30, 2024. Gross profit was $846.9 million for the six months ended June 30, 2025, compared to $485.7 million for the six months ended June 30, 2024, an increase of $361.2 million, or 74%. Correspondingly, gross margin was 75% for the six months ended June 30, 2025, compared to 82% for the six months ended June 30, 2024. These decreases in gross margin were primarily due to the addition of newer offerings, including our GLP-1 offerings, which were strategically priced to attract new customers. These decreases were partially offset by lower costs associated with medical consultation services as a percent of revenue as a result of improving Provider efficiency, as well as synergies gained through increased fulfillment volume.

Previous wording

Marketing expenses were $231.2 million for the three months ended March 31, 2025, compared to $130.6 million for the three months ended March 31, 2024, an increase of $100.7 million, or 77%. Customer acquisition costs increased to $201.6 million in the three months ended March 31, 2025, compared to $113.2 million for the three months ended March 31, 2024, an increase of $88.4 million. The increase in customer acquisition costs was primarily a result of management’s decision to increase investment in display, search, streaming and linear television (including our Super Bowl marketing campaign), affiliate, and radio and podcast marketing, as we continue to identify opportunities to drive new customer growth and which investment further expanded with the addition of newer offerings introduced during 2024.

Current wording

Marketing expenses were $217.9 million for the three months ended June 30, 2025, compared to $144.9 million for the three months ended June 30, 2024, an increase of $72.9 million, or 50%. The most significant component of marketing expenses is customer acquisition costs, which increased to $188.4 million in the three months ended June 30, 2025, compared to $123.8 million for the three months ended June 30, 2024, an increase of $64.6 million. Marketing expenses were $449.1 million for the six months ended June 30, 2025, compared to $275.5 million for the six months ended June 30, 2024, an increase of $173.6 million, or 63%. Customer acquisition costs increased to $390.0 million in the six months ended June 30, 2025, compared to $237.0 million for the six months ended June 30, 2024, an increase of $153.0 million. The increases in customer acquisition costs were primarily a result of management’s decision to increase investment in display, search, streaming and linear television (including our Super Bowl marketing campaign for the six month period), affiliate, and radio and podcast marketing, as we continue to identify opportunities to drive new customer growth and which investment further expanded with the addition of newer offerings introduced during 2024.

Previous wording

Operations and support expenses were $63.0 million for the three months ended March 31, 2025, compared to $38.7 million for the three months ended March 31, 2024, an increase of $24.3 million or 63%. The increase in operations and support was primarily driven by an increase in order fulfillment and transaction processing of $8.9 million, an increase in employee compensation (comprising salaries and wages, benefits, taxes, and performance bonuses, and excluding stock-based compensation) of $7.2 million, an increase in professional services of $4.0 million, and an increase in depreciation, amortization, and technology costs relating to operations and support functions of $2.6 million.

Current wording

Operations and support expenses were $66.5 million for the three months ended June 30, 2025, compared to $41.5 million for the three months ended June 30, 2024, an increase of $25.0 million or 60%. The increase in operations and support was primarily driven by an increase in employee compensation (comprising salaries and wages, benefits, taxes, and performance bonuses and excluding stock-based compensation) of $9.5 million, an increase in order fulfillment and transaction processing of $6.8 million, an increase in professional services of $2.7 million, an increase in depreciation, amortization, and technology costs relating to operations and support functions of $2.5 million, and an increase in stock-based compensation of $1.9 million. Operations and support expenses were $129.5 million for the six months ended June 30, 2025, compared to $80.2 million for the six months ended June 30, 2024, an increase of $49.3 million or 62%. The increase in operations and support was primarily driven by an increase in employee compensation (comprising salaries and wages, benefits, taxes, and performance bonuses, and excluding stock-based compensation) of $16.7 million, an increase in order fulfillment and transaction processing of $15.7 million, an increase in professional services of $6.6 million, an increase in depreciation, amortization, and technology costs relating to operations and support functions of $5.1 million, and an increase in stock-based compensation of $2.7 million.

Previous wording

Technology and development expenses were $29.9 million for the three months ended March 31, 2025, compared to $15.3 million for the three months ended March 31, 2024, an increase of $14.6 million or 95%. The increase in technology and development expenses was primarily driven by an increase in employee compensation (comprising salaries and wages, benefits, taxes, and performance bonuses, and excluding stock-based compensation) of $5.4 million, an increase in depreciation, amortization, and technology costs of $4.2 million, an increase in professional services of $2.3 million, and an increase in stock-based compensation of $1.8 million.

Current wording

Technology and development expenses were $37.8 million for the three months ended June 30, 2025, compared to $18.7 million for the three months ended June 30, 2024, an increase of $19.2 million or 103%. The increase in technology and development expenses was primarily driven by an increase in employee compensation (comprising salaries and wages, benefits, taxes, and performance bonuses, and excluding stock-based compensation) of $6.7 million, an increase in depreciation, amortization, and technology costs of $5.4 million, an increase in professional services of $3.3 million, and an increase in stock-based compensation of $2.1 million. Technology and development expenses were $67.8 million for the six months ended June 30, 2025, compared to $34.0 million for the six months ended June 30, 2024, an increase of $33.8 million or 99%. The increase in technology and development expenses was primarily driven by an increase in employee compensation (comprising salaries and wages, benefits, taxes, and performance bonuses, and excluding stock-based compensation) of $12.2 million, an increase in depreciation, amortization, and technology costs of $9.6 million, an increase in professional services of $5.6 million, and an increase in stock-based compensation of $3.9 million.

Previous wording

General and administrative expenses were $48.6 million for the three months ended March 31, 2025, compared to $34.6 million for the three months ended March 31, 2024, an increase of $14.0 million, or 41%. The increase in general and administrative expenses was primarily driven by an increase in professional services of $4.9 million, an increase in employee compensation (comprising salaries and wages, benefits, taxes, and performance bonuses, and excluding stock-based compensation) of $3.8 million, an increase in stock-based compensation of $2.3 million, an increase in depreciation, amortization, and technology costs relating to general and administrative functions of $1.5 million, and an increase in insurance costs of $1.0 million.

Current wording

General and administrative expenses were $67.3 million for the three months ended June 30, 2025, compared to $40.6 million for the three months ended June 30, 2024, an increase of $26.7 million or 66%. The increase in general and administrative expenses was primarily driven by an increase in employee compensation (comprising salaries and wages, benefits, taxes, and performance bonuses, and excluding stock-based compensation) of $7.8 million, an increase in stock-based compensation of $6.7 million, an increase in professional services of $5.1 million, an increase in acquisition fees of $3.7 million, and an increase in depreciation, amortization, and technology costs relating to general and administrative functions of $1.7 million. General and administrative expenses were $115.9 million for the six months ended June 30, 2025, compared to $75.1 million for the six months ended June 30, 2024, an increase of $40.8 million, or 54%. The increase in general and administrative expenses was primarily driven by an increase in employee compensation (comprising salaries and wages, benefits, taxes, and performance bonuses, and excluding stock-based compensation) of $11.6 million, an increase in professional services of $10.0 million, an increase in stock-based compensation of $9.0 million, an increase in depreciation, amortization, and technology costs relating to general and administrative functions of $3.2 million, an increase in acquisition fees of $2.3 million, and an increase in insurance costs of $2.2 million.

Previous wording

Provision for income taxes was $11.0 million for the three months ended March 31, 2025, compared to $1.3 million for the three months ended March 31, 2024. This change was primarily due to taxes on current year income based on forecasted pretax income and associated taxes. Pretax income was higher during the three months ended March 31, 2025 compared to the three months ended March 31, 2024.

Current wording

Benefit for income taxes was $9.7 million for the three months ended June 30, 2025, compared to a provision for income taxes of $0.1 million for the three months ended June 30, 2024. Provision for income taxes was $1.4 million for each of the six months ended June 30, 2025 and 2024. The benefit for the three months ended June 30, 2025 was primarily due to the impacts of windfall tax benefits and research and development tax credits, partially offset by taxes on current year income based on forecasted pretax income and associated taxes. Pretax income was higher during the three and six months ended June 30, 2025 compared to the three and six months ended June 30, 2024.

Previous wording

As of March 31, 2025, our principal sources of liquidity are cash and cash equivalents in the amount of $273.7 million, which are primarily invested in interest-bearing cash accounts and money market funds, and short-term investments in the amount of $48.9 million, which are invested in U.S. Treasury bills and corporate bonds.

Current wording

As of June 30, 2025, our principal sources of liquidity are cash and cash equivalents in the amount of $1.1 billion, which are primarily invested in interest-bearing cash accounts and money market funds, and short-term investments in the amount of $20.0 million, which are invested in U.S. Treasury bills and corporate bonds.

Previous wording

Additionally, in February 2025, we entered into a Revolving Credit and Guaranty Agreement with certain lenders and JPMorgan Chase Bank, N.A., as administrative and collateral agent, which provides for a three-year senior secured revolving line of credit in an amount up to $175.0 million (the “Revolving Credit Facility”). The Revolving Credit Facility includes letter of credit and swing line loan sub-limits of $40.0 million and $20.0 million, respectively, and an accordion option, which, if exercised, would allow us to increase the aggregate commitment amount by up to $125.0 million, plus additional amounts if we are able to satisfy a leverage test and certain other conditions. As of March 31, 2025, we had no loans or letters of credit outstanding under the Revolving Credit Facility. As such, $175.0 million remained available under the Revolving Credit Facility as of March 31, 2025. Additionally, as of March 31, 2025, we were not yet required to be in compliance with all covenants and conditions thereunder. Compliance will be required beginning in the second quarter of 2025. For additional details regarding the Revolving Credit Facility, see Note 13 – Revolving Credit Facility to the unaudited condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

Current wording

Additionally, in February 2025, we entered into a Revolving Credit and Guaranty Agreement with certain lenders and JPMorgan Chase Bank, N.A., as administrative and collateral agent, which provides for a three-year senior secured revolving line of credit in an amount up to $175.0 million (the “Revolving Credit Facility”). The Revolving Credit Facility includes letter of credit and swing line loan sub-limits of $40.0 million and $20.0 million, respectively, and an accordion option, which, if exercised, would allow us to increase the aggregate commitment amount by up to $125.0 million, plus additional amounts if we are able to satisfy a leverage test and certain other conditions. As of June 30, 2025, we had $1.0 million in letters of credit outstanding under the Credit Facility sub-limit. As such, $174.0 million remained available under the Revolving Credit Facility as of June 30, 2025. No loans were outstanding under the Credit Facility and we were in compliance with all conditions and covenants thereunder as of June 30, 2025. For additional details regarding the Revolving Credit Facility, see Note 13 – Debt to the unaudited condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

Previous wording

We believe our existing cash resources, together with our availability under our Revolving Credit Facility, are sufficient to support planned operations for the next 12 months. As a result, management believes that our current and available financial resources are sufficient to continue operating activities for at least one year past the issuance date of the unaudited condensed consolidated financial statements.

Current wording

We believe our existing cash resources, as well as availability under our Revolving Credit Facility, are sufficient to support planned operations for the next 12 months. As a result, management believes that our current and available financial resources are sufficient to continue operating activities for at least one year past the issuance date of the unaudited condensed consolidated financial statements.

Previous wording

Our future capital requirements will depend on many factors, including the number of orders we receive, the size of our customer base, the continuing market acceptance of telehealth, and the timing and extent of spend to support the expansion of sales, marketing, development activities, and our Facilities, which may be impacted by inflationary, recessionary, supply chain, or other macroeconomic factors, including the impact of trade actions. We expect to continue to pursue opportunities to expand our manufacturing and internal fulfillment capabilities and may acquire or invest in complementary businesses, services, and technologies, including intellectual property rights. From time to time, we order inventory with sufficient lead time in order to ensure our ability to fulfill customer demand for supply chain, seasonality, or other reasons, which may have an impact on our cash and cash equivalents in a given quarter. We may also use our cash and cash equivalents to repurchase up to $65.0 million of our Class A common stock through August 31, 2027 at management’s discretion pursuant to our 2024 Share Repurchase Program. We have based our estimate of our future capital requirements on assumptions that may prove to be wrong, and we could use our available capital resources sooner than we currently expect. We may be required to seek additional equity or debt financing. In the event that additional financing is required from outside sources, we may not be able to raise it on terms acceptable to us or at all. If we are unable to raise or access additional capital when desired, our business, financial condition, and results of operations would be harmed.

Current wording

Our future capital requirements will depend on many factors, including the number of orders we receive, the size of our customer base, the continuing market acceptance of telehealth, and the timing and extent of spend to support the expansion of sales, marketing, development activities, and our Facilities, which may be impacted by inflationary, recessionary, supply chain, or other macroeconomic factors, including the impact of trade actions. We expect to continue to pursue opportunities to expand our manufacturing and internal fulfillment capabilities as well as acquire or invest in complementary businesses, services, and technologies, including intellectual property rights. From time to time, we order inventory with sufficient lead time in order to ensure our ability to fulfill customer demand for supply chain, seasonality, or other reasons, which may have an impact on our cash and cash equivalents in a given quarter. For example, during the six months ended June 30, 2025, inventory on our unaudited condensed consolidated balance sheets increased $77.4 million, partially due to investment to help ensure we can continue meeting customer demand for our offerings, including our GLP-1 offerings, as well as investment related to our overall business growth. We may also use our cash and cash equivalents to repurchase up to $65.0 million of our Class A common stock through August 31, 2027 at management’s discretion pursuant to our 2024 Share Repurchase Program. We have based our estimate of our future capital requirements on assumptions that may prove to be wrong, and we could use our available capital resources sooner than we currently expect. We may be required to seek additional equity or debt financing. In the event that additional financing is required from outside sources, we may not be able to raise it on terms acceptable to us or at all. If we are unable to raise or access additional capital when desired, our business, financial condition, and results of operations would be harmed.

Previous wording

Net cash provided by operating activities was $109.1 million for the three months ended March 31, 2025. Net cash provided by operating activities included net income of $49.5 million, non-cash expense related to stock-based compensation of $24.9 million, and depreciation and amortization of $8.3 million. In addition, a net cash inflow totaling $24.3 million was attributable to changes in operating assets and liabilities, primarily as a result of an increase in deferred revenue of $35.5 million and an increase in accounts payable and accrued liabilities of $18.8 million. This inflow was partially offset by an increase in prepaid expenses and other current assets of $17.2 million and an increase in inventory of $11.7 million.

Current wording

Net cash provided by operating activities was $90.0 million for the six months ended June 30, 2025. Net cash provided by operating activities included net income of $92.0 million, non-cash expense related to stock-based compensation of $60.6 million, and depreciation and amortization of $18.7 million. In addition, a net cash outflow totaling $77.2 million was attributable to changes in operating assets and liabilities, primarily as a result of an increase in inventory of $77.4 million and an increase in prepaid expenses and other current assets of $38.1 million. The increase in inventory was due to investment to help ensure we can continue meeting customer demand for our offerings, including our GLP-1 offerings, as well as investment related to our overall business growth. The increase in prepaid expenses and other current assets was driven primarily by prepayments for income taxes. This outflow was partially offset by an increase in deferred revenue of $23.1 million and an increase in accounts payable and accrued liabilities of $16.9 million.

Previous wording

Net cash provided by operating activities was $25.8 million for the three months ended March 31, 2024. Net cash provided by operating activities included non-cash expense related to stock-based compensation of $19.0 million, net income of $11.1 million, and depreciation and amortization of $3.0 million, partially offset by net accretion on securities of $1.1 million. In addition, a net cash outflow totaling $7.3 million was attributable to changes in operating assets and liabilities, primarily as a result of an increase in inventory of $7.4 million, an increase in prepaid expenses and other current assets of $6.7 million, and a decrease in accrued liabilities of $2.3 million. This outflow was partially offset by an increase in deferred revenue of $6.0 million and an increase in accounts payable of $3.6 million.

Current wording

Net cash provided by operating activities was $79.4 million for the six months ended June 30, 2024. Net cash provided by operating activities included non-cash expense related to stock-based compensation of $43.1 million, net income of $24.4 million, and depreciation and amortization of $6.6 million, partially offset by net accretion on securities of $2.3 million. In addition, a net cash inflow totaling $5.8 million was attributable to changes in operating assets and liabilities, primarily as a result of an increase in accounts payable of $16.2 million and an increase in deferred revenue of $13.3 million. This inflow was partially offset by an increase in inventory of $18.1 million and a decrease in earn-out payable of $2.8 million.

Previous wording

Cash flows from investing activities primarily relate to our treasury operations of investing in available-for-sale investments and acquisitions, as well as investment in website development and internal-use software and purchases of property, equipment, and intangible assets.

Current wording

Cash flows from investing activities primarily relate to our treasury operations of investing in available-for-sale investments and acquisitions, as well as investment in website development and internal-use software and purchases of property, equipment, and intangible assets. Our purchases of property, equipment, and intangible assets have increased in recent quarters as we scale our internal fulfillment capabilities to supply the increasing demand for our personalized offerings, including our weight loss offerings.

Previous wording

Net cash used in investing activities for the three months ended March 31, 2025 was $32.8 million, which was primarily due to $55.3 million in purchases of property, equipment, and intangible assets, including the cash payments made in connection with the C S Bio Co. asset acquisition, $5.1 million for the acquisition ofa business, net of cash acquired, and investments of $3.7 million in website development and internal-use software. This cash outflow was partially offset by $31.3 million in maturities of investments.

Current wording

Net cash used in investing activities for the six months ended June 30, 2025 was $53.9 million, which was primarily due to $101.4 million in purchases of property, equipment, and intangible assets, including the cash payments made in connection with the C S Bio Co. asset acquisition, investments of $8.0 million in website development and internal-use software, and $5.1 million for the acquisition ofa business, net of cash acquired. This cash outflow was partially offset by $60.6 million in maturities of investments.