MEDIFAST INC Q4 FY2024 earnings call

• Adaptation to the GLP-1 market: Offering solutions for customers on GLP-1 medications, transitioning off, or using habit-based weight loss. - OPTAVIA ASCEND launch: Launched in December 2024, featuring high-protein mini meals and nutrition plans for GLP-1 users and those maintaining weight. - Coach productivity: Revenue per active earning coach showed moderating year-over-year declines, with 44% of coaches supporting GLP-1 users. - Fuel for the Future: Delivered $21 million in cost savings in 2024, with $15M-$20M expected in 2025. - Marketing initiatives: Adjusted strategy in Q4 2024 to optimize messaging, media mix, and targeting, with Resolution Season launch in January 2025.

Fourth quarter 2024 revenue was $119 million, a decrease of 37.7% year-over-year. Gross profit decreased 37.6% year-over-year to $88.2 million. SG&A expense was down 34.1% year-over-year to $87.5 million. Income from operations was $700,000, down 91.8% year-over-year. Revenue per active earning coach showed a third consecutive quarter of moderating year-over-year declines, with a negative 5.5% in Q4 2024 compared to negative 22.2% in Q1 2024. The percentage of customers who used GLP-1 medications in the prior 12 months rose to 17% at year-end, and 44% of coaches were supporting at least one customer on a GLP-1 medication.

• First quarter 2025 revenue expected to range from $100 million to $120 million. - EPS loss per share expected to range from $0.00 to $0.50 per share. - Coach productivity seen as an early indicator of growth, with expectation of turning positive in 2025.

• Continued pressure on coach productivity and customer acquisition due to GLP-1 market dynamics. - Marketing efficiency challenges with initial higher customer acquisition costs. - Uncertainty around the timing and extent of coach productivity improvement.

Q: Thoughts on 1Q guide and coach productivity?

A: Jim Maloney mentioned coach productivity is an early indicator of growth, expecting the metric to turn positive in 2025.

Q: Cadence of company-led marketing?

A: Jim Maloney said spend doesn't need heavy investment like in 2024, focusing on efficient use of cash.

Q: Operating cash flow and CapEx 2024?

A: Operating cash flow for 2024 was $24,476,000 and CapEx was $7,454,000.

Q: Seasonal uptick in coaches?

A: Jim Maloney said coach number will continue to be pressured until the productivity metric improves