Hims & Hers Health, Inc.HIMS
Hims & Hers Health, Inc. Fair Value Disclosure
Fair Value Measurements
The Company’s fair value hierarchy for its financial assets and liabilities that are measured at fair value on a recurring basis as of December 31, 2025, is as follows (in thousands):
| Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||
| Assets | |||||||||||||||||||||||
| Cash and cash equivalents: | |||||||||||||||||||||||
| Money market funds | $ | 90,594 | $ | — | $ | — | $ | 90,594 | |||||||||||||||
| Short-term available-for-sale investments: | |||||||||||||||||||||||
| U.S. Treasury bills | 9,815 | — | — | 9,815 | |||||||||||||||||||
| Government and government agency | — | 180,537 | — | 180,537 | |||||||||||||||||||
| Corporate bonds | — | 158,524 | — | 158,524 | |||||||||||||||||||
| Prepaid expenses and other current assets: | |||||||||||||||||||||||
Short-term indemnification assets | — | — | 3,730 | 3,730 | |||||||||||||||||||
| Long-term available-for-sale investments: | |||||||||||||||||||||||
| Government and government agency | — | 271,175 | — | 271,175 | |||||||||||||||||||
| Corporate bonds | — | 80,088 | — | 80,088 | |||||||||||||||||||
| Other long-term assets: | |||||||||||||||||||||||
| Equity securities | 24,437 | — | — | 24,437 | |||||||||||||||||||
Long-term indemnification assets | — | — | 3,047 | 3,047 | |||||||||||||||||||
| Total assets | $ | 124,846 | $ | 690,324 | $ | 6,777 | $ | 821,947 | |||||||||||||||
| Liabilities | |||||||||||||||||||||||
| Earn-out liabilities, long-term | — | — | 50,745 | 50,745 | |||||||||||||||||||
| Other long-term liabilities: | |||||||||||||||||||||||
| Other contingent consideration | — | — | 2,003 | 2,003 | |||||||||||||||||||
Long-term indemnification liabilities | — | — | 6,086 | 6,086 | |||||||||||||||||||
| Total liabilities | $ | — | $ | — | $ | 58,834 | $ | 58,834 | |||||||||||||||
The Company’s fair value hierarchy for its financial assets that are measured at fair value on a recurring basis as of December 31, 2024, is as follows (in thousands):
| Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||
| Assets | |||||||||||||||||||||||
| Cash and cash equivalents: | |||||||||||||||||||||||
| Money market funds | $ | 64,717 | $ | — | $ | — | $ | 64,717 | |||||||||||||||
| Short-term available-for-sale investments: | |||||||||||||||||||||||
| U.S. Treasury bills | 60,160 | — | — | 60,160 | |||||||||||||||||||
| Corporate bonds | — | 18,060 | — | 18,060 | |||||||||||||||||||
| Government and government agency | — | 1,447 | — | 1,447 | |||||||||||||||||||
| Restricted cash: | |||||||||||||||||||||||
| Money market funds | 856 | — | — | 856 | |||||||||||||||||||
| Total assets | $ | 125,733 | $ | 19,507 | $ | — | $ | 145,240 | |||||||||||||||
The fair values of cash, accounts receivable, accounts payable, and accrued liabilities approximated their carrying values as of December 31, 2025 and 2024, due to their short-term nature. The fair value of earn-out payable related to the Zava business combination approximated its carrying value as of December 31, 2025, due to the payment amount being fixed. The 2030 Convertible Notes are recorded at their net carrying amount on the consolidated balance sheets rather than their fair value, which is a Level 2 measurement, as the Company has not elected the fair value option (refer to Note 13 – Debt for the 2030
Convertible Notes definition and additional detail, including the fair value as of December 31, 2025). All other financial instruments, with the exception of the earn-out liabilities discussed below, are valued either based on recent trades of securities in active markets or based on quoted market prices of similar instruments and other significant inputs derived from or corroborated by observable market data. During the years ended December 31, 2025, 2024, and 2023, the Company had no transfers between levels of the fair value hierarchy of its assets measured at fair value.
The Company has earn-out liabilities related to the C S Bio Co. asset acquisition as well as the Zava and Medici business combinations. The fair values of the earn-out liabilities related to the C S Bio Co. asset acquisition, all of which are current, and related to the Medici business combination, all of which are noncurrent, approximated their carrying value as of December 31, 2025, due to all of the earn-out consideration being paid in cash and the timing of their payout being subject to estimation and, therefore, are excluded from the table above. The Medici business combination also includes current and noncurrent holdback liabilities, which approximated their carrying value as of December 31, 2025, because the Company does not expect the settlement amounts to differ materially from their acquisition date balances. The current amount is recorded within accrued liabilities and the noncurrent amount is recorded within other long-term liabilities on the consolidated balance sheets.
The earn-out liabilities related to the Zava business combination, all of which are noncurrent as of December 31, 2025, are classified as Level 3 fair value measurements containing significant unobservable inputs including estimates of achieving certain revenue and adjusted EBITDA targets and, therefore, are included in the table above. At inception, the fair value of the earn-out liabilities associated with the Zava business combination was determined based on revenue and adjusted EBITDA projections and the probability of achieving the respective revenue and adjusted EBITDA targets as evaluated using a Monte Carlo simulation. The following assumptions were used to determine the fair value at inception:
| Risk-free rate | 1.9 | % | |||
| Revenue volatility | 21.0 | % | |||
| Revenue risk-adjusted discount rate | 9.0 | % | |||
| Counterparty discount rate | 6.0 | % | |||
The fair value of the earn-out liabilities related to the Zava business combination is remeasured at each reporting period. The change in fair value is recognized within total other income, net on the consolidated statements of operations and comprehensive income (loss). The change in the fair value of the earn-out liabilities related to the Zava business combination is as follows (in thousands):
| Balance at December 31, 2024 | $ | — | |||
| Zava business combination | 87,691 | ||||
| Change in fair value | 9,255 | ||||
| Reclassification to earn-out payable | (46,986) | ||||
| Foreign currency translation adjustments | 785 | ||||
| Balance at December 31, 2025 | $ | 50,745 | |||
The Zava business combination also includes contingent consideration for tax loss reimbursements, which is recorded within other long-term liabilities on the consolidated balance sheets.
About Fair Value Disclosures
Fair value disclosures classify all assets and liabilities measured at fair value into a three-level hierarchy: Level 1 (quoted market prices), Level 2 (observable inputs like yield curves), and Level 3 (unobservable inputs requiring management estimates). The proportion of Level 3 assets directly reflects how much of the balance sheet depends on internal models rather than market evidence.
Key signals: a growing Level 3 balance relative to total fair-value assets increases valuation uncertainty and earnings volatility risk. Watch for transfers between levels — assets moving from Level 2 to Level 3 often signal deteriorating market liquidity. Unrealized gains and losses on Level 3 positions flow through earnings or other comprehensive income, so large swings deserve scrutiny. For financial institutions, examine the sensitivity disclosures that show how Level 3 valuations change under alternative assumptions. Compare the fair value of debt against its carrying amount to gauge hidden leverage.