Brian Birnbaum - Hims & Hers Q1 earnings breakdown and the long-term bull case for Hims

Added: 2026-05-14

[00:00:00]Welcome to Hims House. Today we have a conversation about Q1 earnings. But first, let me tell you about Superpower.

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[00:00:56]And now here is my conversation with Brian Burnbomb. Him's House episode 66.

[00:01:04]My name is Jonathan Stern. I'm here today with Brian Burnbomb, retail investor who has grown his net worth by nearly 50x since 2020, driven mainly by stock market outperformance and the successful turnaround of his family business. His major winners have included names like Palunteer, AMD, Robin Hood, and Amazon. And he has been invested in him and hers as well for many years. I wanted to have Brian on the show both to review the Q1 earnings results, which dropped yesterday, and also to talk about why he invested in HIMS in the first place, and importantly, why he continues to hold the stock. Brian Burnbomb, welcome to Hims House.

[00:01:48]>> Thanks for having me. Excited to be here.

[00:01:51]You call yourself on Twitter and on Substack the psychoanalyst.

[00:01:56]What's behind that name?

[00:01:58]>> Yeah. So, uh, a psychoanalyst, you know, everyone knows like in its common usage, it's, uh, you know, like a trained psychiatrist, psychologist rooted in Freudian practice, you know, um, for mental treatments, clinical treatment, exploring the unconscious, all that deep stuff. And then you have a financial analyst. And so, it's a little play on words. I'm uh sort of like a a market psychologist, I guess I'd like to say.

[00:02:24]That's how I approach the markets. Um I don't have any licenses, you know. I'm not Nothing I say here is any financial advice, needless to say. But uh I've been in the stock market since I was basically forming memories. Um and my dad talked to me about business and the market since I was very very young. Um, and I don't know, something that stuck with me throughout my life is basically that um, the market is basically one huge like group psychology project. Um, and uh, yeah, so I I I think a lot a lot of uh, outperformance can be gained through through the mind basically uh, more more than on a DCF spreadsheet.

[00:03:02]>> Great. Well, that that leads into the first question I have about HIMS, which is that in the essay you posted a couple days ago, and and I'll link to that in the show notes, you frame HIMS less as a spreadsheet debate and more as a behavioral test. What does the market misunderstand psychologically about him and hers?

[00:03:24]>> Yeah. So, the main thing uh I I think a lot of people have probably said this that, you know, HIMS is like a venture stage company in the public markets basically. Um, and unfortunately we don't get too many of those anymore since a lot of companies are going public at later stages in their life cycle. Um, and you know, by the time these big waves like like like HIMS is riding a huge wave, healthcare is a huge wave. By the time they they go public, they're like too close to the shore is the way I like to think about it. And you know, they often end up crashing.

[00:03:52]You know, you see that you saw that in the wake of the 2021 uh tech peak. you know, Airbnb stocks like that that really have just been dead since then.

[00:04:00]Uh because they're really big companies.

[00:04:02]Um but companies like HIMS and Dolingo, they give us an opportunity to ride big waves um from their genesis way way out in the ocean. So um I think what the market fails to understand is that these businesses are solving massive problems and on a quartertoquarter basis they have to make decisions that are not necessarily going to optimize the next quarter. Um you know like a like a mature business. So, um, you know, I I think their focus on the long term is really just something that people don't uh don't appreciate. The market hates they they hate when when businesses invest and, uh, sacrifice for the long term.

[00:04:38]>> All right, so let's get into the quarter. Uh, I'll just run through quick highle numbers and then get your response. We had revenue of 608 million.

[00:04:48]Now, the company is breaking that into United States revenue and international revenue. US revenue was 530 million.

[00:04:56]Rest of the world revenue 78 million.

[00:05:00]The notable thing there is that United States revenue is down 8% year-over-year. Rest of world revenue which was basically non-existent outside of I think the UK. I think the 7 million from 2025 is entirely UK revenue. Now it's 78 million revenue. So that's up nearly a,000% due to the Zava acquisition and the Canada Live Well acquisition. Uh we had monthly revenue per average subscriber, which is the closest metric to ARPO that HIMS reports falling by $5 per subscriber year-over-year down to 80 uh from 85.

[00:05:45]gross margins, which is the number that a lot of investors are are zeroing in on, down to 65% for the first quarter of 2026. It was 73% for the first quarter of 2025.

[00:06:01]Uh I should have pulled up the number for the last I think it was 70 either 70 or 71%. I should have that handy, but I don't for the fourth quarter 2025. And maybe you're listening to all this and you're thinking, gosh, none of this really matters. And I'd like to hear your your take on why. And and maybe maybe you're going to ask me to stop talking in a moment and just feel free to jump in. But the mo let's I want to go over the stock performance too because the moment that uh the numbers dropped the stock sort of shot up to 31 or 32 uh and then pretty pretty quickly fell precipitously down to 28 and 27. Uh I think it was bobbing around the 26s through the after hours session last night. opened 25 and now as we're recording this um oh wow it's popped back up into the mid 25s. Okay. Well, this too is probably a project that you're going to counsel me against following the stock price throughout the day every day. Uh I'll I'll let you jump in now, Brian. Uh what did you think of the quarter?

[00:07:09]>> So, I thought the quarter was actually very positive, which I'm you're probably not surprised to hear me say. And and and I'll admit I I thought it was mostly positive because of the guidance for sure. Um to me what proved what they proved to me was that they have a plan and they're confident going forward and that this transition they said it on the call. You know, there's a lot of noise in the numbers right now. So I was okay with it. You know, I I don't like to see it. You know, I want to see better growth. But I did think that uh they clearly have a path forward and you know, we can fuss over gross margins and all this stuff. you know what is the what is the pill going to be uh branded compared to compounding but um they guided for numbers that I think looked very positive. So um yeah >> I just awesome I I just want to note on the gross margin and Y said this yesterday that there's a one-time $33 million charge that caused the gross margin >> correct >> be 65% which is the lowest since HIMS became a public company. The second thing, oh, what was I gonna say? Gross margins lower. Ah, you what what you mentioned with the compounded branded, many said, oh, him switched to branded and therefore gross margins lower. It sounds like that's not really why gross margin was lower. Gross margins is lower because they retired so many products associated with the compounded GLP1s move to branded. And Y said the unit economics of the compounded versus the branded roughly the same. Yep. And so like if that's true, we would expect the gross margin I think to snap back to snap right back to 70% 71% in the second quarter. And we'll be watching that to see if that happens. But it sounded like that that very well may happen as soon as second quarter.

[00:08:58]>> Yeah, you you I could be wrong about this. What I saw what I took from the call is that he said that the dollar amounts were pretty similar. So, I'm wondering if maybe uh you know if the price points are different, maybe the gross margin is different, but the take dollar amount is the same. I'm not sure if I'm right about that.

[00:09:14]>> Did he say dollar amount? I thought he was talking about >> I think he did. I'll have to check later. But, uh anyway, he said it was pretty similar. So, I think either way that's positive whether the gross margin, you know, whatever they take home, if it's the same, then it's just a volume game anyway. Um, and you know, as I've said many times in uh in the Hims House uh Discord, I I'm just not too focused on the uh the immediate um uh the immediate numbers for compounding. I think I want to see the verticals being released. Um that's what I want to see moving forward. And when they talk about uh you know, they they've hit blood testing, uh they've hit uh hormone replacement, you know, X Y and Z, that's what I want to see moving forward. the the speed with which they can release new verticals is basically how fast they're going to grow in the future.

[00:10:02]Obviously, it's multiplied by the success of each of those verticals, but the more they put out, the higher chance they have to to get another home run.

[00:10:09]And then there are going to be synergies the more that they put out because they all work together in combination. So, uh yeah, I thought it was very positive overall.

[00:10:17]>> On the on the topic of speed, we heard that there are 10,000 testosterone customer. We they've served 10,000 men testosterone. That seems kind of slow to me, Brian.

[00:10:31]>> And I might be wrong about this as well.

[00:10:32]I thought on the call he said tens of thousands, but I was reading the transcript, so maybe I tweeted this and and I appreciate you holding me accountable here.

[00:10:42]>> No, you might be right. I'm not I'm I I just read it this morning, but um >> let me quote up on Twitter. I'm pulling this up right now.

[00:10:49]>> What was the question again? says its testosterone offering is now serving tens of thousands of men. I don't know what that means. It could be 90, right?

[00:10:58]But my guess is that it's probably like 20 30,000.

[00:11:02]>> I don't know that that's I mean I think they were projecting this to be multiple hundreds of millions in terms of additional revenue. Tens of thousands of men is not getting you there, I don't believe. So they they'll need to scale that. They still haven't launched the injectable testosterone. Uh it's still and they still have not launched Kaisrex which is the pill I believe that they partnered with uh Marius Pharmaceuticals and should be launching at some point in the first half of the year. We'll see if that happens. But um >> yeah, I I had the same takeaway. If they said tens of thousands, I felt that that was kind of like a way of saying, okay, maybe it's 20, which can which can get you the plural there. Um but uh I calculated at their price point it's about 25 million, something like that.

[00:11:46]So, yeah, it's definitely falling short of the hundreds of millions, but they've got a ways to go. They just they just launched this thing. Um, and they have a lot of balls in the air. So, >> all right. All right. What about the what about the WGOi number that we heard? We're at 125,000 WGOI shipments. I think that's to date, right? And so, that's in the first six weeks post launch. Y >> I don't know if that gets you like 80 or 90,000 a month. Andrew said they were tracking at like a 100,000 a month, right?

[00:12:15]>> Yeah. But then they also said they're adding a 100,000 weight loss customers a month. So I don't know how the math there squares because if you add a 100,000 weight loss customers every month and no one churns, which is like not a realistic assumption, but assuming no one churns, then you're at 1.2 million by the end of the year, which is a run rate that's far higher than shipping a 100,000 WGOI products per month.

[00:12:42]>> Yeah. I wish that they gave >> Am I thinking about Am I thinking about that correctly, Brian?

[00:12:46]>> Yeah. No, I mean, I heard the same thing that you heard on the call and I I wish that they gave us a little more color on that because, >> you know, if you annualize a 100,000 a month 100,000 a month from here, it I doubt that that's what they're doing now at this point. Um, and I don't know what their churn is like, and I don't think they're ever going to disclose that kind of number because I think it's a competitive uh non-disclosure issue. But um no, I don't I I would say that they probably got a huge lift when they announced it. Um uh and I think that we should expect that to peter off. Um but it was, you know, one of the more bullish things I heard on the call in terms of uh short-term short-term numbers for sure.

[00:13:26]>> How are you thinking about Lily's products being on platform for the Lily Direct uh pricing?

[00:13:35]I think it's $149 for the foundo pill.

[00:13:39]Now we have Zepbound and Mangaro for I think $200.

[00:13:44]Um, plus the $149 membership. Were you excited to see that? It's not an official partnership, right?

[00:13:51]>> But how are how are you thinking about all of that?

[00:13:53]>> I'm definitely excited to see it. I mean, more optionality for the customers is what they're going for. But, uh, again, this is a battle that I think every investor has with Andrew is like, I want to know more about it. What what does this mean? Right? Where where are you in discussions with Lily? I mean, we can be sure that someone is talking to them over there. We know that. But, uh, you know, he plays things very close to the chest. Um, but I also like that. Um, and we can get we can get into this a little bit more later, but when we talk about the Novo thing and everything that happened, I mean, he was like a maestro really, you know?

[00:14:26]>> Yeah. I want to hear your thoughts on that. I want to hear your thoughts on Andrew generally. Before before we do that uh final number that I think is interesting is the subscriber number.

[00:14:37]Like everyone's starting oh there was no re reaceleration this quarter which is true but the the the one number that is that that showed uh some reaceleration is the net new ads of subscribers. In Q4 they added 40,000 net new. In Q12026, they added 70 in excess of 70,000 net new subscribers. So that was somewhat encouraging. Still pales in comparison to the number of net news they had early 25 and of course 20 late 2024 as well.

[00:15:12]Was that good to see in your opinion or is this sort of just a distraction as well?

[00:15:16]>> I think I don't think it's a distraction. I think it might be noise because I think the real story is going to be told next quarter when all of this is this whole transition is, you know, worked out. Um that's that's kind of what I want to see. Um >> and next quarter you're looking to what?

[00:15:34]>> Uh in terms of numbers.

[00:15:36]>> Yeah. You Well, you said the story will be told next quarter. What does that mean? Oh, I want to see uh what what the the net new subscribers look like next quarter and what this 100,000 a month looks like really, you know, and this is just GLPs, you know. Um I mean there that's a big number. I don't think that can sustain, but I would expect things to improve >> uh next quarter.

[00:15:56]>> I here's the one thing I will say. I mean, I was blown away by him projecting $690 million in revenue Q2 at the midpoint.

[00:16:11]>> Yeah.

[00:16:12]>> When I released my prediction, I totally forgot that HIMS onboarded all of these new weight loss customers at a $39 per month first month price.

[00:16:25]>> Yeah. Meaning meaning by late April and then all of May and all of June, these customers that signed up in late March and early April are going to be paying $149 per month. So hundred $110 more than they're paying their first month.

[00:16:44]>> Yep.

[00:16:45]>> And that will start to be reflected in the credit card data which has been putrid honestly. like it's been I if if you're if you're extrapolating late March and early April credit card data across Q2 um which sort of I was I was doing uh it's going to give you a projection like I had which is going to be low maybe they will hit 690 and honestly given management's line of sight into numbers and I mean already they're 42 days into the quarter and so they know as as well as anyone what it's going to look like. Uh they very well may clear 700 million. Uh I I I think I think they're going to want to impress some people after the quarter that they just delivered. So I would not be surprised if they hit 700 million in Q2.

[00:17:37]>> Yeah, I I agree. Um and I wish uh I wish Andrew had a little bit more of a sandbagging mindset. Um you know, like someone like Lisa Sue, >> but he he used he used to. And I don't I mean and Yault >> I don't think it's his fault. I think >> Yummy or Andrew >> uh either I don't think it's either of their fault. I I think uh so many things are changing so fast and they're making the correct decision for the business >> so that they don't you know when you had uh Mr. Maris on the show earlier uh last year you know one of the things he's brilliant I >> I I would I I hope you have him on 10 more times. I could listen to him all day. Well, one of the things I didn't agree with is that, you know, he said that they must hit the numbers >> at this stage. I would rather them make the right decision for the business. And I think the Novo deal, for example, was the right thing to do. Um, it showed that they were standing up to them and that they were going to do things on both of their terms, work with Novo, not as like a wacky. So one one other thing I was going to say is we don't know you you know customers of HIMS don't follow the company like we do like shareholders but they do follow the company to see what's happening with GLPs you know they need to know so a lot of the noise that was in the credit card data I think you know it could have been due to a lot of people preparing to switch or you know X Y and Z so you know I wasn't really that concerned uh to be honest with you um you know I I I think I think they knew what was coming down the pipe Let's talk about what happened in early February, late February, early March with respect to Novo Nordisk. Hims rolled out the compounded semiglutide pill, pulled it the next day or a day or two days later, was sued the following Monday, validating supposedly validating the dozens of of bears that you have spent the last year and a half, two years interacting with. Interacting is honestly a euphemism. interacting with on Twitter, right, who who were saying I mean like some of the stuff that was said was honestly out of line, but that's sort of neither here nor there.

[00:19:53]Just like extremely mean-spirited attacks on Andrew, attacks on the company, like rooting for the demise of the business, saying, "Oh, the Bulls are delusional. The Bulls are wrong. Him's house is a joke. This and that." Fine.

[00:20:06]Okay. The Bears certainly had a day in early February when Novo sued him. I heard you just say, Brian, that Andrew had a master stroke through it all and sort of knew exactly what what he was doing. Can you can you defend that argument?

[00:20:23]>> I can't read his mind. I can't say that he knew what he was doing from the drop, you know, um when they put that, you know, when they made the decision to advertise the pill. I can't say that.

[00:20:34]But I do think that this is a team that weighs the probabilities. Um, they're not dumb enough to to think that they know exactly what the outcome is going to be. And if they do know, then they're going to act on that. But I do think that they weigh the probabilities. They had a lot more information than any of us did. Um, and they made the decision that eventually led to the outcome we all really wanted. Um, and it happened in a time frame that not one of us would have predicted. I mean, we thought we were in for a year yearsl long, you know, legal battle. Um, so I think it's just one of many instances where he just pulls off stuff that just seems impossible um for other teams or, you know, CEOs. Um, so I thought it was it was pretty amazing. Um, it was uh I I feel more comfortable now with the price at $25 having gone through all this than I probably have at any time. You know, buying shares now feels easy.

[00:21:35]>> Yeah. I mean, like if you believe in the business long term, it should be very easy to buy the stock price here. Yeah, >> I'll I'll just note that uh HIMS was trading at $2425 during the April tariff madness lows of 2020 of 2025, right?

[00:21:55]>> I didn't know that low.

[00:21:57]>> Yeah. So, we are now 13 months out from the April uh uh what was what's it called? Uh liberation day, right? from we're now 13 months on from Liberation Day and HIMS is exactly where it was.

[00:22:14]Uh, of course it got up to 73. Of course, we've had uh just unbelievable storylines almost weekly with this with this company and with this stock. And yet the price is exactly what it was last April.

[00:22:30]>> Yeah, I'm not surprised. Uh I don't know if you are. I'm not surprised. I think uh this stock's just so heavily shorted and so many people hate it. So many people hate this company. So many people hate Andrew. I mean, it's just it's uh it's something where you just have to have you have to have patience if you want to own this company. And I think there are a lot of people that bought this company last year who don't necessarily have patience. Um which is okay. You know, it was a volatile stock. It was great great to trade. you know, if you're a trader, I mean, it was a >> a trader's wet dream, really.

[00:23:07]>> Yeah.

[00:23:07]>> So, uh yeah, I mean, I I I think uh we saw it get down to $15. You know, that was absurd. In no way, shape, or form does this company deserve to be at $15, even with any lit litigation overhang, it can't be there. Um but >> I got to ask, were you buying in the teens?

[00:23:25]>> Oh, yeah. Oh, yeah. Yeah. I uh I so I'll I'll admit I uh at the end of December I took a good tax loss harvest and then I rebought at the end of January which was a bold move.

[00:23:37]>> Um and I got I got pretty lucky, you know, with the timing there. Um but uh yeah, no I I bought in the teens and then I uh I pro I probably bought more more even after the the Novo thing was done.

[00:23:53]>> You say so many people hate Andrew, so many people don't believe in Andrew. So many people hate the company, I think, for reasons that I don't really understand. I mean, Andrew has Andrew is a a controversial figure, I suppose. Um, and just like a bold a bold founder and like founders founders draw all sorts of >> uh commentary from people who are not brave enough to do the things that they do. But like that aside, >> what gives you the confidence in Andrew?

[00:24:20]Why are you um why do you believe in Andrew to the degree that you do?

[00:24:25]I mean, first execution. I mean, the execution is just it's been almost flawless, I would say. Um, you know, you can only control what you can control and what is under his control has seemed to always come out on this on the side for uh in favor of him. So, that that's really at the top of the list. And then I would also say uh his mind is always on the long term. He you know, he's he's constantly made decisions that have killed the stock price in the short term. And I love that. I I love feeling that pain, you know. It's great.

[00:25:00]>> Yeah. Yeah. Psychoanalyst. There might be a double entandra there, but >> Yes, exact triple. Yeah.

[00:25:06]>> Yeah. Triple. Um, getting back to the quarter, you said some stuff that was good. Was there anything that was concerning about the quarter? Uh I guess like on the flip side, stock is down 13% today. Like what gives you pause?

[00:25:25]>> Yeah. Uh I mean it definitely wasn't perfect. Um I I mentioned to you I think like a a few weeks ago even before this this print um that I thought that we HIMS was risking a little bit of their focus domestically um by going out internationally. That being said, the call actually made me feel better about those acquisitions than I had before.

[00:25:49]Um, so while I still feel like there's a risk to taking our buy off the ball in the US, which is the biggest market, the best market, it's the most controversial insurance system. They don't do insurance. You know, this really is the core business. you know, um, what they were talking about in terms of like getting a larger data set and diversity and capturing that TAM before other players do. I did think that there was a lot of merit to that that I hadn't given as much thought to uh, before they were talking about it on the call. And, you know, they they they mentioned it before on other calls. I think they really highlighted it on this one. Um so yeah and also it was coincided with the drop in US sales which I do think is a lot due to to the noise of the transition.

[00:26:32]Um but you know it's uh I think row has been nipping at their heels a little bit in the US.

[00:26:38]>> I I was going to say I I was a close reader of that essay that you published earlier this week in which you did flag one concern right you said like if there's anything to be worried about it's uh that row has caught up.

[00:26:54]Yeah. Yeah. I >> can you say more about that?

[00:26:57]>> Yeah. Um, so there's one reason I'm not worried about that and it's that ROW, to my knowledge, they're not a public company, so I can't say this with any certainty. I actually haven't even bought products from Row, so maybe I need to do more research, but uh, to my knowledge, they're not a vertically integrated player like him is. I think Hems is really a one of one there. So their cost structure, I can't imagine how they can compete unless they get favorable deals um with some of the same partners. But uh so I do think that row is structurally um disadvantaged against him. But when people get a brand in their head, you know, they get a brand in their head and that's how brands work. Um you know, they'll pay for they'll pay more for something even if they uh you know, even if it's the same product. So, I do think that it's a little bit of a risk and I think uh I wanted to see a little bit more commentary about that. I'm surprised none of the analysts uh asked that question given that there has been such a closing of the gap.

[00:28:00]>> What would you like the analysts to ask?

[00:28:02]Just like mention literally mention row and say like what's going on there?

[00:28:07]>> Yeah. And if Andrew said something like we don't think about the competition, we just think about our customer. I would be like, "Fine, I'll shrug my shoulders."

[00:28:17]Um, but I do want to hear it acknowledged. I want to see how he reacts to it, you know. Um, yeah, >> I I think this is not Well, so I'll say two things. Number one, um, Hims has had a nearly two 2x lead in terms of domestic credit card sales.

[00:28:40]That's observed sales according to Bloomberg's second measure. close to 2x for the last year. That gap completely closed in the first quarter and as early as as as recently as early April, row had actually overtaken him in the weekly observed sales credit card totals according to Bloomberg sec second measure. And I I talk about this a little in the HIMS data tracker, but like you don't even need to see it week to week, right? Like maybe I don't need to publish the data tracker week to week. There's a lot of noise in there. I like I'm I'm open to that. I think that's roughly right. But but but like this this is not this is not a noisy observation.

[00:29:25]>> Roor closed the entire two times him lead. Two Hims was ahead by 2x was entirely closed >> uh over the span of the first quarter which is extremely notable. I don't know if it owes to the Serena Williams Super Bowl campaign, just the amount of ads they've been pushing on uh Facebook and other places, >> right?

[00:29:48]>> I like we also have no idea how much RO is spending relative to him.

[00:29:52]>> We don't know the profit profitability, you know, it's just difficult because they're not public, right?

[00:29:56]>> We have no idea. And Hims is now at a point where they're I think they just noted record marketing efficiency, which is really really awesome to hear. And we have no idea if Rorow is even close in terms of marketing efficiency.

[00:30:11]>> And Hims is paying 36% for marketing and and that's record efficiency. So if Rorow I mean you got to imagine they're paying more than that if they're this much. You know >> I think they are I think there's a chance they are really trying to juice the topline.

[00:30:29]>> Yeah.

[00:30:30]>> In advance of going public. Although not not very many people are talking about this, but like I I think it's possible.

[00:30:38]>> Yeah. So, >> I I think that's definitely possible. Uh that that's a really good insight actually. Um in that case, I would be less worried. Um I I haven't you know, that's another thing that I really should look into is I haven't looked into whether Row even plans to go public. So, um >> I keep asking about and like I I have this is not in information that I've heard. I have actually asked a ton of people like do we know about other companies that might go public in this space like obviously Row is the big one any yeah >> do they have any interest and I just continue to hear time and time again I have no idea so >> um >> I'm just saying Row is behaving in the first quarter like a company that kind of wants to go public later in the year especially if this IPO window is opening and peptides are legal and um tellahalth health is booming and longevity is booming. It seems like an interesting time for them to consider to go public.

[00:31:31]>> Yeah, that's a great point and it, you know, I have like 20 companies in my portfolio. So, these are the things that fall through the cracks that I I never even thought of. So, uh that I I'm going to keep my eyes on that because I I think you're right. I think you're right. I mean, >> I can't imagine that uh this growth is as profitable as him. Um I I would be shocked if that were the case.

[00:31:52]>> I would be surprised. I would be so I I I really want to get either Zach uh Rose CEO or their CFO on the podcast have reached out. Have not been able to make that happen just yet, but if they're listening, would love to have you guys come on the show. I know I know it's called Him's House, but we'd love to have you.

[00:32:14]>> Yeah.

[00:32:14]>> Okay, let's let's get into peptides.

[00:32:16]Brian, what do you think?

[00:32:18]>> Oh, man. Peptides, you know, I have never taken a peptide in my life. I don't know a peptide for madam. So, you're probably asking the wrong guy.

[00:32:26]But >> where do you live, Brian? Are you able to >> I live in DC.

[00:32:30]>> Okay. So, you are on the coasts. Yeah.

[00:32:32]>> You're not like in Kansas or something in Kansas. I just know that pepides are not as common there.

[00:32:39]>> Yeah. Haven't infiltrated that deeply yet. Yeah. So, I mean, you know, obviously I hear about him all the time.

[00:32:43]I talk to Antonio pretty decent amount.

[00:32:46]You know, he's he's a huge uh fan of peptides. Um, yeah, >> I I've listened enough to to the story, right, and I've heard enough about the the potential to feel like this is a massive opportunity for him. Um, >> you know, I know we discussed before coming on whether you were you asked whether you think this is like a GLP moment for him. Sorry if I'm jumping the gun here, but >> um, I think the answer to that is it could be. I don't think it will necessarily be for the market writ large.

[00:33:23]>> Yeah.

[00:33:24]>> But I think for him it could definitely be a GLP size market. Um especially when you see, you know, you had Jonah on the show a few weeks ago. Hearing about how much he's spending on these molecules is just absurd, you know. Um it it it's and and I think that >> I think there's a lot of wealthy guys out there that want to do that, you I think he was at like $23,000 a year annual annual spend on Pep.

[00:33:51]>> Yeah, I thought I thought he even said it got close to 30, but I I don't know.

[00:33:54]Yeah, >> I think he went back and found the spreadsheet.

[00:33:57]>> Oh, okay.

[00:33:58]>> 23. Yeah, it's it's a high number.

[00:34:00]>> Close enough. Yeah, it it that's an absurd number uh for you know for essentially supplements. Um, so yeah, I you know, I it's another area where I should probably do some more research and some testing on myself to get a get an efficacy check because I do wonder sometimes, you know, how much is this placebo? How much is this real? You know, because this stuff hasn't been studied that much. Um, but, you know, the supplement business itself is huge.

[00:34:26]So, the answer to that question doesn't also matter as much as some people might think. Uh, but I think there is enough research out there to suggest that there's a lot of efficacy to to some of these molecules. So, I think it could be a big deal.

[00:34:39]>> Andrew says he doesn't want to be first.

[00:34:41]He wants to be best. He's now said that multiple times. First on Harry Stebings 20VC podcast. Secondly yesterday >> on the earnings call.

[00:34:51]>> Yep.

[00:34:52]>> Uh, I'm I'm I'm mixed on this and I can say why in a moment, but what do you think, Brian?

[00:35:00]>> Yeah, I've heard some of your thoughts.

[00:35:01]I'd like to hear you repeat them, especially in response to to mine, but uh I actually, you know, and I know it sounds like everything he does, you know, I feel like it might seem like I think Andrew walks on water, but I agree with him here. And I think what he's thinking is that it's not just uh you know, he often refers to being the bluest of the blue chip, you know, like you know, that's how they want to approach everything, do everything right. I think we can see that that's not necessarily the case, right? like they're willing to push the boundaries.

[00:35:32]I think what he wants to do is make sure that the doors stay open, >> that none of the doors close as soon as they as the floodgates open and this huge revenue stream because the only thing that would be worse than not tapping into this re revenue stream is to tap into it for a year and then some regulatory loophole is closed or you know x y and z. I think he wants to make sure he has all of his ducks in a row so that the doors stay open and they can keep growing this business because if they invest in it, that's a lot of that's a sunk cost there if it's, you know, stripped away, which we almost saw with compounding, you know, like uh we in the call we saw that they're going to have to basically they all but said they're going to have to shut down their compounding facility.

[00:36:12]>> It sounds like they're they didn't say it's going to zero, but like if this is no longer offered >> via HIMS in a year, I will not be surprised.

[00:36:22]>> Yeah. Yeah, I you know, I guess I guess they'll sell it off. I don't know what they'll do, but um uh and I'm I'm I mean, they they made their investment back and some, so that's fine. Um but, you know, um yeah, I I think I mean the the topic of speed is just a really important one, particularly in this world in which a twoerson company can spin up a two billion dollar business, as we just saw with Medv.

[00:36:48]>> Yeah. uh like HIMS has never had more competition than it has right now and going forward the particularly in peptides or hot spaces like peptides and GOP1s the competition will only intensify and I think there are a lot of things that could separate him from companies like Medv or companies like Row and N and LifeMD that aren't speed right you could you're you separate from those you you differentiate from those by brand by quality by purity by uh third-party testing by verticalizing your operation so that you can manufacture the API yourself I think they said domestic manufacturing of peptides API which is extremely exciting because of course 90% plus comes from China and that sort of creeps a lot of people out and like the number one reason I've heard that most that that some people do not take peptides right now is that they're worried by the supply chain. And so the fact that HIMS is onshoring all of that is like a gives all of those people makes all of those people sleep easier and b like could curry favor with the administration actually. In any case, um I just want the company to move faster and like just just in I really really want him to prioritize speed. We we hired they hired um Moel Shinawi as CTO.

[00:38:23]>> Yep. over a year ago. It was a $50 million uh I think at it was a million shares with given given the stock price was like $50 million pay package, >> right? And we just had a chatbot shipped last week. So like the first thing we got delivered from the tech team from the new tech team >> uh was the chatbot >> and you know that's public facing right that's the first public facing thing it's not the first thing they've done they've been helping providers they've been automating all sorts of stuff in the back end god knows what the systems look like before Mo showed up it could have been absolute chaos to enter that code base and try to contribute I have no idea right but the fact of the matter is 52 weeks passed and we had one thing shipped and it's something that various other companies on the market already offered which is a chatbot paired with the labs AI labs and that's great and I'm hoping that we can sort of build on that and really start to accelerate uh uh on the dimension of tech and AI over the next months and and uh quarters. But um it's just I speed is something I think a lot about something I think a lot about and that I'd really like to see him prioritize.

[00:39:42]>> Yeah. So I don't disagree with you. I there are a lot of there are a lot of avenues in which I think him I wish they were faster. Um you know not to beat a dead horse I think Andrew wants to do things right. I don't think we're going to see a launch of the of the operating system right. I don't think that's going to happen. I think we're going to see just little iterations and building blocks coming out. Um, and I also think that the operating system is a function of how many verticals they have. And right now they really just don't have many. They're really in their infancy.

[00:40:15]You know, um, you know, HIMS has a long way to go. So, I personally want to see more verticals being released and I don't think they can do enough with an operating system until they have those verticals because your your health is a a big symbiotic system, right? You know, it's a complicated symbiotic system. The less inputs you have, the less value there is to an operating system.

[00:40:39]>> Yeah. Can you say more about what your vision is for him in terms of building this health operating system? I I mean I I think they basically are going to build an AI doctor. It's as simple as that. You know, when Andrew said on the call that you're not going to need a second opinion, there's going to be a thousand opinions right there. Uh that that's what he's talking about. It's everything is going to be um uh preventative and, you know, constantly communicated to you. You're going to have a doctor in your pocket essentially. That's basically what I see.

[00:41:09]wearables will hopefully figure in this operating system story, this AI doctor story.

[00:41:17]>> Yeah, it's crucial.

[00:41:20]>> We don't yet know what path HIMS will take to market. And it sounds like yes, yesterday it sounds like HIMS doesn't know what path they will take to market either. Andrew said >> uh they are exploring partnerships with other company or thinking about partnering with other companies. I imagine Whoop is on the table. Aura is on the table. Maybe eight Sleep is on the table. Maybe Fitbit is on the table, I guess. Are they owned by Google now?

[00:41:44]Fitbit >> or did Google?

[00:41:46]>> Maybe not. Google just launched the Well, yeah, I should really know that.

[00:41:52]I'll look into that after. Um, maybe those companies are on the table, but HIMS is also, of course, thinking about manufacturing its own, >> right, >> wearable, which a lot of people in the Hims house discord are uncomfortable with.

[00:42:07]>> Yeah. Yeah.

[00:42:07]>> How do you feel about that, Brian?

[00:42:10]>> Um, it gives me unease. I wouldn't say uncomfortable. It It makes me uneasy.

[00:42:17]One thing I think is that a lot of these wearables companies, I don't think they can buy their way into this business because I think they're going to be too highly valued. Um, because I don't think their assets are worth nearly as much as their goodwill. So, I think building actually isn't a bad idea because the only other avenue is a partnership. Um, so I I I want to hear more about the plan first. I just don't think we're going to get it because that's their MMO. I I don't They don't give these details. Um, so I I guess we'll have to see. I I do I do think that they need to be in this business though, one way or another, because if you want to have an >> either build either build or partner, you mean?

[00:42:55]>> Yeah, they have to be. You you have to be able to to reach this basic data about all your patients, this has to be a part of the the of the workflow. So, um, you know, building it, I would have to start researching what the what the input costs are and like all this stuff that I'm not really familiar with. So, it makes me uneasy.

[00:43:15]Uh, you know, it's like, you know, KO shareholders in the late 80s getting into the shrimp business, you know, but it's not that bad, you know. It's they're still in healthcare, but it's it's pretty wildly out there. It's a lot lot different than their uh their core business. I mean, my thoughts are like I want to be invested in extremely ambitious companies >> and like this is this is something that's making the most loyal of him's investors scratch their heads. Like it's not that crazy.

[00:43:47]>> I'm not that worried because they need they need the data. So if they lose money on this opportunity, I think in the long run it's still necessary for them to get there. you know, Wall Street, but >> there's no argument with me that they need the data.

[00:44:01]>> Yeah.

[00:44:01]>> Right. They could integrate with the wearables today >> and and I think the team's working on that and my hope is that we have a launch >> that integrates wearables data in the next month or two, >> right?

[00:44:13]>> We see no reason that that should not be coming down the pipe very very very quickly following the launch of Labs AI.

[00:44:20]But the moving from partnering or like using data from Whoop or Aura to manufacturing your own and competing potentially with Whoop or Aura at their game before you've even like nailed the software side of things potentially.

[00:44:39]let's do hardware too is it's it seems like uh it seems a little quicksotic but but but I I if they do decide to go that route like I really would applaud the ambition and will probably reserve judgment. I want to see how they do it, what they're thinking of launching, what the form factor is, how sleek and sexy it looks. And to your point, like maybe it's a loss leader that that allows them to add a million subscribers a quarter or something like >> just give it away.

[00:45:19]>> Yeah. I mean, that's they're eating a lot of money at that point. But if they gave it away, how many more subscribers would they have on all of their other products?

[00:45:28]>> I mean, gosh, maybe >> maybe Y could make the economics work. I don't know.

[00:45:33]>> Yeah, that and that's that's really where my thought process goes. a lost leader is probably the better way to put it because it's not just data. It's also brand awareness XYZ. I'm uh so the business I'm in is deaf access like sign language interpreting and captioning uh stuff like that. Also some language access uh stuff like that and we obviously AI has started to affect our industry as well. But about 25 years ago before AI you know when the internet was just starting to become like a thing that people used um video relay service first came onto the scene. This is how deaf people make phone calls. Um, >> all the big VRS companies that help with this, they basically gave these boxes away. At the time, they cost $1,000 a piece, but they gave them away to all these deaf people because once you had them on their system, you know, they're a customer for life. They don't want to change. Um, and I can see some parallels there. Um, obviously wearables, they're definitely a commodity in a way, but maybe there's also some data that they want to capture that they're not getting from certain wearables right now that they that, you know, they can't partner with. Maybe there, you know, there there aren't enough crossovers in different wearables. You know, there's a lot of different reasons they'd want to to build their own to customize it. So, um, yeah, I and reserving judgment, I think, is the right way to go because that's worked in the past with Andrew.

[00:46:54]So that's how I see it.

[00:46:56]>> Worked in the past.

[00:46:57]>> Yeah.

[00:46:59]>> Let's let's talk briefly about uh one of the main bare arguments that I see which is insider selling, right? These executives vest a lot of shares and then have their have their recurring pre pre-scheduled uh selling plans.

[00:47:18]>> What do you think about all this?

[00:47:20]>> I it's a very short answer. I don't care because uh and I guess the longer answer is that I don't care because I've gone through this. I've I've watched this movie so many times and it's almost never mattered. You know, Palunteer, I heard the same thing.

[00:47:38]>> Um you know, all the Spotify, all these different companies where um you know, insiders are just sh selling their shares like they can't fast enough and it it just it just never mattered, you know. Um, you know, I always I always I want to see them buying. Uh, but you know, you've you've heard the you've you've heard the apherism a hundred times. You know, when you sell, it's for a billion different reasons. When you buy, it's for one reason. So, um, yeah, >> I think that's exactly right. What I'll say is that the market may not even I I think HIMS would jump 15 20% if Andrew bought.

[00:48:15]>> Yeah.

[00:48:16]>> Right. Like if Andrew executed his first ever open market buy of him of him's common stock, the the stock would probably jump 15 20%.

[00:48:27]However, what we've seen recently is that the market doesn't really care if you sort of zoom out a month.

[00:48:33]>> No, it's juiced for a bit and then it just fades. Doesn't matter.

[00:48:36]>> This the CEO of the trade desk, which is this I think it's this adver advertising SAS company, right?

[00:48:43]>> Um >> punished. He bought hund I think over a hundred million dollars worth of shares. Something like it was a massive massive buy. One of the largest open market buys I've ever seen.

[00:48:55]>> The stock is well below well below where where he bought it. It was up like 20% the night that he the night that that was disclosed. It is now well well well below service now exact same thing. So the market may just not care and >> market may ultimately not care. And so to your point, it doesn't really mean that much to me. And there are a million reasons that executives sell. And it's so so common at technology companies.

[00:49:22]And HIMS is sort of not a HIMS is not a technology company. I think hopes to be transitioning to one. It's extremely common at highflying fast growing startups that it's hard to get too worked up about.

[00:49:36]>> Yeah, totally agreed. I I literally never even think about it unless I hear a bare argument, you know. Um, and in in you know, to to my credit, I think um after the Novo thing, I really chilled out a lot. I got I got a lot of gratification out of out of that whole series of events. So, I got it out of my system.

[00:49:57]>> You know, we're sort of at this interesting place where I guess some bulls feel vindicated. Like you you seem sort of happy with the state of things, but I think the Bears are also thrilled as well.

[00:50:09]>> They always are. that I I've never seen a a company where the lines are so bold and immovable, you know? Um they just the the bears are the bears and the bulls are the bulls and they never change sides ever.

[00:50:24]>> Yeah. Yeah. I've seen some bulls go neutral, but that's about it.

[00:50:30]Brian, I I want to close with valuation.

[00:50:34]Uh I I don't well I know how I think about valuation which is like a more traditional more traditional way of valuing the company and probably probably misses all sorts of things about the long run right how do you think about valuation >> to be honest with you at this point I really don't because it's just too early um it's we've seen so much change in the past two years just to you know to what you just said when you think about 5 years from Now, it's impossible to think about where they're going to be. Um, so I'm not saying, you know, don't get me wrong, it's not like I've never run a DCF in my life, although I don't really use it um, >> sure, >> uh, literally, you know, it's it's something I use in my head to value a company. But for a company like this, I don't I don't even think about applying it because you you know, two years ago when this was all ramping up and their earnings were going through the roof, we I don't think either of us would have thought that they would have printed uh40 for the quarter uh on the bottom line.

[00:51:40]Um, and and there are also just so many factors. You know, I I'm a fan of Buffett's look through earn earnings and it's almost impossible to get to that number with, you know, the target moving this much.

[00:51:52]>> Can you explain Can you explain that look through earnings?

[00:51:55]>> So, uh, Buffett's look through earnings is basically what would the company's earnings look like if they were kind of mature? Um, and they, you know, so HIMS didn't need to spend as much on marketing. They didn't need to spend as much on X, Y, and Z. um there's maybe less stockbased compensation, things like that. Um and you know that that's usually what I use to value a business, but even in this case, it's it's it's a venture stage public company still. So, um the stock price is more of just a uh uh it's just a manic depressive device.

[00:52:35]I guess while I'll have you I will ask about the market broadly because someone posted I feel like we're going to have a pullback in June or July and then you said well you were wrong the last time why should I believe you this time or something like that I think that was you that responded which suggests to me that you feel relatively comfortable with the AI trade the valuation of the stock market broadly I don't know how you feel about individual sector sectors like memory and photonix stocks which are just on a tear continue to be on a tear.

[00:53:08]Guess we're pulling everything's pulling back today but like an absolute tear. Um meanwhile software has had a tough time.

[00:53:17]Anything you want to call out there?

[00:53:19]Yeah, I would love to. Um I I wouldn't I would say above all of that, all of my feelings about the market, I just don't think it's a good use of my time to predict where it's going next. um because it wouldn't in it wouldn't inform any of my decisions. I make decisions on a on a business basis, business by business. So if I think the market's going higher or whether I think it's going lower, it doesn't affect what I think the value of that underlying business is. That being said, I, you know, in terms of where I see the market going, I don't think people are really prepared for the just completely new constitution of our economy. Um, and I keep seeing these, you know, Cape Schiller PE comparisons to like e, you know, x time and like how it's getting close to the dot level, right?

[00:54:15]>> Right. But you know then you look at what is the Cape Schiller PE it measure it's the average of the last 10 years earnings not the last the trailing 12 months the average of the last 10 years and so if you look at Nvidia it's a useless metric I mean it's literally their earnings have like 100xed since 10 years ago um so and yeah these companies some of these companies are cyclical but even if they if their earnings dropped off 30% it would be nowhere near where they were uh 10 years ago. So, and there's I could go on and on. Um, I there's no long >> What about What about software?

[00:54:50]>> Uh, software. Oh, I I think I think Jensen Hong's right. Um, he's more right than I think the the people who think AI is going to completely kill all these companies. I do think that some of them are going to die. Um, I I I don't or, you know, bleed a slow death. Um, but I I think he's generally right. Um I I see you see engineers increasing in the job force not decreasing. Um I don't know you just don't see the evidence for it.

[00:55:17]So um I'm still pretty bullish software at least on the fundamentals.

[00:55:20]>> Yeah not yet. You definitely don't see evidence that these companies are done.

[00:55:24]I mean well some companies are actually having a hard time and then other companies look to be accelerating right now. Yes. But also, I would not like let's say that a software company dies in three years.

[00:55:39]I don't know that I'd expect to see signs of it just yet. Um I I could I could see arguments both way both ways. Like I think I think we're not at the singularity yet. Or maybe we are. It's just not evenly distributed.

[00:55:56]There are all sorts of ideas around that. I think a lot of these software companies still have such an entrenched um they they still have so much distribution and they they have so many customers and they still hold the keys to a lot of the governance of some of these companies. So a company like Service Now for example, I just don't think that they're going to go anywhere.

[00:56:17]I think they're going to get integrated into the into into AI more than uh being replaced by it. Um, yeah, but it's it's also it's a it's a nuanced conversation that right now is being treated as black or white, you know.

[00:56:29]>> Sure.

[00:56:30]>> There is >> Yeah, there's a host of software companies that I would love to buy handoverfist, right? And like I I I would be shocked if they went anywhere.

[00:56:40]And indeed, I think AI is extremely useful to their business, useful to them expanding their business. The whole world will change many times over, but I think certain businesses will still be here. Yeah, one one other thing I wanted to say is uh just in terms of moving forward, you know, you see the QQ's that the Q's are basically destroying the the S&P 500 over the past 10 years. Um I would expect that to continue and I think people have it in their head that there's like a law of gravity that corporate returns increase at 10% a year. You know, you read that everywhere. This is what the S&P 500 has done. But the S&P 500 is an arbitrary basket of companies. Um, and I just think people aren't really adjusted to this idea that things could possibly accelerate, that the economy could improve. Um, >> by how much? Do you have a projection there?

[00:57:30]>> No, I don't. I I I I don't. The the I I think the Q's have compounded like 12% since since the dot bubble or something like that. It might be even higher actually. Um, I think that's probably a good number. You know, I think maybe they could do even a little better. I mean, I I think what we're seeing now is not sustainable, but I do think it's not we have not reverted to the mean for 25 years now, and I don't think we ever are going to again. Margins have doubled over the last 25 years. Um, I don't think we're ever going back to to where we were before. Um, a lot of things have changed and there's a reason why multiples are higher. Um, so yeah, I I I think I I am still pretty bullish overall and shortterm I think this the situation in Iran is concerning um you know but uh >> because of because of oil >> because of oil. Yeah. Um but it will it will pass at some point. So um I don't think it's going to cause a a global financial crisis or anything like that.

[00:58:33]Any final notes on hims?

[00:58:37]>> I think one thing I'd like to say is I think that the Novo ordeal was actually really positive for the shareholder base. And this is just speculation. I think it might have washed out a lot of the traders or um you know, people who might have been less a little less patient. Uh, so yeah, I don't I don't know if that's true, but >> it it seems like it gives you some satisfaction that you're no longer holding hymns alongside these paper hands.

[00:59:05]>> I mean, you know, you get the shareholder base you deserve. So, I would rather be alongside more like-minded long-term holders, but, you know, I'll hold the stock regardless.

[00:59:15]>> Yeah, Brian, it's been a treat to chat with you. Thank you so much for being a part of him's house. Yeah, thanks a lot for having me. Really enjoyed it.