LifeMD, Inc. Q3 FY2024 earnings call

• LifeMD's core telehealth business continued to perform strongly, with telehealth revenue up 65% q-o-q and adjusted EBITDA for telehealth increasing 200% sequentially to $2.5 million. - Officially opened LifeMD's affiliated National Pharmacy in Pennsylvania, a 22,500 square foot facility with state-of-the-art automation, expected to be accretive in 2025. - Enhanced weight management program with in-home lab capabilities, launch of non-GLP-1 treatment option, and AI-driven technology improvements. - Accelerated growth of RexMD men's telehealth business, including launch of weight management and hormone replacement therapy offerings, and plan to offer personalized compounded ED therapies and a concierge men's health program. - WorkSimpli's performance leveled out in Q3 and returned to growth, on track to achieve peak EBITDA run rate by end of 2024.

LifeMD's core telehealth business showed strong momentum in the third quarter. Telehealth revenue grew 65% versus the prior quarter, with standalone adjusted EBITDA reaching $2.5 million, up 200% sequentially. Telehealth represented more than 75% of Q3 total revenue. Total revenues grew 38% year-over-year to $53.4 million. Consolidated gross margin was a record 90.6%. WorkSimpli's performance stabilized in the third quarter and then returned to growth. Telehealth-only adjusted EBITDA was $2.5 million for Q3, compared to negative $2.3 million in the year-ago period.

• Reiterated 2024 total revenues guidance of at least $205 million. - Raised telehealth revenue guidance to between $151 million and $152 million, up from $150 million previously. - Raised standalone telehealth adjusted EBITDA guidance for 2024 to $6 million to $7 million, up from $3 million to $4 million. - Adjusted EBITDA guidance, including WorkSimpli, narrowed to $13 million to $14 million from previous $13 million to $15 million.

• Uncertainty regarding insurance coverage for branded GLP-1 therapies, which could impact access and revenue. - Potential shortages of semaglutide and tirzepatide, and unknown timeline for resolution. - Market competition in the weight management and telehealth spaces, which could affect growth and margins.

Q: David Larsen asked about FDA's comments on semaglutide and tirzepatide, and potential shortages.

A: Justin Schreiber stated LifeMD is agnostic to treatment modality, compounded GLP-1s likely to have a role, and more coverage of branded therapies is a win.

Q: Sarah James inquired about telehealth margins and payer/product mix.

A: Marc Benathen said strong retention, upselling to longer subscriptions, and service-based revenue from weight management contributed to margins, with expectations of stable and improved margins going forward.

Q: Kyle Bauser asked about weight management subscribers and WorkSimpli divestment.

A: Marc Benathen said 15,000 net new weight management subscribers added, WorkSimpli plan to divest with interest still present.

Q: Steve Dechert asked about LifeMD's weight management differentiators.

A: Justin Schreiber mentioned quality of care with real provider consults, comprehensiveness of the platform including nutrition consults, and ability to help with more than just weight management.

Q: Eduardo Martinez-Montes asked about growth drivers beyond GLP-1 and new offerings.

A: Justin Schreiber said GLP-1 is a driver, but other offerings like men's health, insomnia, behavioral health, etc., are also key, with new offerings driven by LifeMD's technology platform.