LifeMD, Inc. Q1 FY2025 earnings call

• Core Telehealth business saw 70% Y/Y revenue growth, driven by weight management and new initiatives like fee-for-service Medicare and men's hormone therapy. Telehealth adjusted EBITDA improved to $5.3M from a loss of $1.3M Y/Y.
• RexMD brand continues to grow, expanding into new verticals beyond sexual health, with new HRT program off to strong start. Over 40% of new HRT patients are existing RexMD patients.
• Strategic collaborations with LillyDirect and NovoCare to improve access to GLP-1 medications for weight management patients. Accepted fee-for-service Medicare, expanding coverage to over 21 million beneficiaries in 26 states.
• Entering women's health via acquisition of Optimal Human Health MD, launching cash-pay women's health program in next 90 days. Imminent entry into behavioral health with tele-psychiatry services.
• Plan to introduce LifeMDPlus and synchronous care offerings to RexMD's 180,000 active patients later this year.

Core Telehealth business had strong performance with revenue growing 70% year-over-year to contribute significantly to total revenues of $65.7 million. Telehealth adjusted EBITDA reached $5.3 million, a dramatic improvement from a loss of $1.3 million in the same period last year. RexMD brand continues to perform exceptionally well, with consistent growth in both revenue and active patient count, contributing to the overall performance. Telehealth revenue contributed a large portion, with core Telehealth revenue growing 70% Y/Y, and RexMD's growth reinforcing its position in men's health verticals.

• Revised 2025 total revenues guidance to $268 million to $275 million.
• Telehealth revenue guidance revised to $208 million to $213 million.
• Consolidated adjusted EBITDA guidance revised to $31 million to $33 million.
• Telehealth adjusted EBITDA guidance set to be at least $21 million.

Q: Can you talk a little bit about your relationships with Lilly and Novo? Specifically, can you talk about, like, the pricing for each of those products? And then maybe just, if you can, talk a bit about the conversion from commercial compounded scripts to personalized as we progress through May and the rest of the year?

A: Our relationship with both Lilly and Novo enables integration of care offerings. Patients pay the same price as elsewhere, no discount for LifeMD patients. LifeMD doesn't receive compensation from drug manufacturers. On personalized compounding, we're helping patients access branded therapies and some may be offered personalized compounded therapies, with more details to come. Integrations with LillyDirect and NovoCare expected to go live next week.

Q: Can you talk about the role of insurance in your view? One of your peers or competitors seems to have a philosophy against taking insurance and it’s entirely cash-pay. In my mind, it’s like if the member has insurance, why not use it, especially if the insurance dollars can go to help cover like the branded therapies that Lilly and Novo and other manufacturers might present through your platform. So just any color around growth in the insurance side of things?

A: At LifeMD, insurance component is important. We've invested in building platform for accepting commercial and government insurance. Medicare business has seen strong initial traction with over 21 million beneficiaries in 26 states, on track to reach 49 states and over 60 million by end of Q2. We'll continue to double down on insurance side.

Q: Can you give us an update on your launch of your compounding pharmacy? How are things trending versus your expectations on a timeline basis?

A: Our compounding pharmacy is on track. Expect to have it licensed this summer and licensed in most states by end of year. Mail-order pharmacy is scaling, averaging close to 1,000 prescriptions a day and expected to continue scaling.

Q: Does your 2025 guidance include contributions from mental health and women’s health? And then as a follow-up, you talk about which RexMD offerings are mainly driving the success in that segment. It sounds like it’s a hormone replacement therapy, but I just want to make sure that we have that right?

A: 2025 guidance includes contributions from female health and mental health, though de minimis. RexMD's success is driven by hormone replacement therapy, with new HRT program off to strong start.

Q: I guess I understand you don’t want to get into too much specific numbers yet on the Wegovy, NovoCare pharmacy announcement from last week. But I guess I’m curious how much of the positive guidance revision today for 2025 is related to that announcement from last week. I’m just trying to get a sense for how much of a game changer… A: None of the guidance revision is related to the Wegovy and NovoCare announcement. It's related to Q1 performance. The announcement provides another avenue for patients, but not factored into guidance yet.

Q: Now that you have both Wegovy and Zepbound on your platform. Can you tell us about a patient seeking weight management, how is he going to choose one of the two and whether the patient’s choice affect potential benefits to your company going forward?

A: Patient's choice of medication doesn't affect LifeMD or revenue. Providers will make recommendation based on clinical presentation. There are price and delivery mechanism differences, but LifeMD's pricing for care alongside therapies will be similar to current weight management program.

Q: Does LifeMD plan to continue to offer compounded GLP-1 in the coming years?

A: LifeMD doesn't compound GLP-1 medications. It's a virtual care provider. If patients can't access branded therapies, LifeMD may send prescription to compounding pharmacy, but focus is on helping patients access branded therapies.