The stock of digital health company Hims & Hers Health Inc. tumbled on Tuesday following the release of a disappointing first-quarter earnings report and a subdued full-year forecast.

The telehealth firm reported a net loss of $92 million for the first quarter, a significant increase from the $50 million loss recorded in the same period last year. Its adjusted EBITDA fell to $44 million from $91 million a year earlier. Revenue grew by only 4% year-over-year to $608 million. The company also noted a decline in average monthly revenue per user to $80, down from $85.

For the upcoming second quarter, the company provided revenue guidance in the range of $680 million to $700 million, with adjusted EBITDA expected to reach up to $55 million. For the full year, revenue is projected to be as high as $3 billion, with adjusted EBITDA anticipated to be up to $350 million.

Following the report, the stock was down 15.2%.

Analysts at Citi described the company's outlook as mixed, noting that the Q2 guidance fell short of their estimates. They also pointed out that the first quarter represented a transitional period for the business as the company reduces its reliance on compounded GLP-1 weight-loss drugs.

The company's weight-loss drug business is a high-margin segment, and developments affecting its sales can cause significant stock volatility. In March, Hims & Hers entered into a partnership with pharmaceutical company Novo Nordisk to sell the branded GLP-1 weight-loss drug Wegovy on its platform. As part of the agreement, Hims & Hers committed to cease marketing and promoting lower-priced compounded versions of the drug.

This partnership followed a period of conflict. In February, Novo Nordisk had stated its intention to sue Hims & Hers for selling a compounded version of Wegovy for $49, which was $100 less than the brand's official price. Novo Nordisk argued that Hims's actions constituted large-scale illegal compounding, posing significant patient safety risks. Under pressure, Hims subsequently removed the compounded products.

The company had previously sold compounded versions by exploiting a regulatory loophole that allows non-patent holders to compound and sell drugs during shortages. It continued this practice even after the shortage eased and the relevant patents remain valid until 2032, which sparked controversy.

The two companies had briefly collaborated on a promotional program last year, but the partnership quickly dissolved. Novo Nordisk accused Hims of misleading marketing and raised safety concerns.

Commenting on the new agreement in a March interview with CNBC, Novo Nordisk CEO Mike Doustdar stated, "This partnership is completely different from the last one. Hims & Hers has committed that once our authentic product is listed, they will no longer market or promote compounded weight-loss drugs to the public."