Hims & Hers Health, Inc. (NYSE: HIMS), a leading player in the telehealth and wellness space, has raised $1 billion through the issuance of convertible senior notes, according to its recent 8-K filing with the U.S. Securities and Exchange Commission.
The private placement took place under Rule 144A of the Securities Act of 1933 and was offered exclusively to qualified institutional buyers. Initially proposed at $870 million, the offering was later upsized by an additional $130 million after the over-allotment option was fully exercised the following day. These senior unsecured notes carry a 0.00% coupon and are set to mature on May 15, 2030, unless earlier redeemed, repurchased, or converted.
The company’s financials remain strong, reflected in a 77% gross profit margin and earnings of $0.68 per share, indicating a solid overall financial position.
To mitigate dilution risk tied to the convertible notes, Hims & Hers has executed capped call transactions with select option counterparties. These arrangements are designed to limit potential dilution of Class A common stock and to cover any cash payments that might exceed the principal upon note conversion. The initial cap price has been set at $89.95 per share, which is a 75% premium on the stock’s last reported closing price on the date of the pricing.
The notes are senior unsecured obligations, ranking equally with all other existing and future senior unsecured debt. However, they remain subordinated to any secured liabilities and structurally subordinate to obligations of the company’s subsidiaries. The initial conversion rate is approximately 14.1493 shares per $1,000 principal amount, subject to customary adjustments.
Should corporate changes occur, such as a merger or delisting, then the noteholders retain the right to require repurchase of their holdings at face value plus accrued interest. The notes also feature standard provisions covering events of default that could potentially accelerate repayment obligations.
As the securities have not been registered under the Securities Act or any state laws, they are restricted from public resale unless an exemption applies.
The capital raise is part of a broader financial strategy by Hims & Hers, which recently reported its Q1 2025 earnings. Following the report, Truist Securities raised its price target to $45, maintaining a Hold rating. Truist cited a revenue beat driven by GLP-1 sales, along with reaffirmed revenue guidance and an increased EBITDA forecast. Updated projections include $2,302 million in revenue and $324 million in adjusted EBITDA for 2025, with 2026 expectations revised to $2,979 million in revenue and $440 million in adjusted EBITDA.
Piper Sandler also updated its outlook, increasing its price target to $39 while keeping a Neutral rating, citing strong quarterly results and a new partnership with Wegovy.
In a related development, the company separately announced a $450 million convertible notes offering aimed at supporting global expansion and strategic acquisitions. In line with its long-term innovation goals, Hims & Hers recently appointed Mo Elshenawy as Chief Technology Officer to lead efforts in enhancing AI-driven healthcare services and building a more personalized care platform.
