MEDIFAST INC Q1 FY2025 earnings call

• The health and wellness space, especially weight loss and management, offers opportunities. OPTAVIA program helps preserve lean muscle and deliver healthier outcomes. 83% of people looking to lose weight lack confidence in transitioning to a long-term healthy lifestyle, and OPTAVIA's holistic approach addresses this. - Coaches are a core competitive advantage. In 2025, focus is on empowering coaches: streamlining coach development path, enhancing tools and insights for coaches, and broadening product offerings. - First quarter results: revenue and EPS were in guidance range. Lower year-over-year coach productivity declines for the fourth consecutive quarter, first meaningful year-over-year increase in new coaches in three years. Continued focus on cost savings maintains a strong balance sheet.

In the first quarter of 2025, revenue was $115.7 million, a decrease of 33.8% compared to the same period last year. The number of active earning OPTAVIA coaches ended the quarter at approximately 25,400, a decrease of 32.8% from Q1 2024. Average revenue per active earning OPTAVIA coach for Q1 was $4,556, a year-over-year decrease of 1.4% (compared to a 22.8% decrease in Q1 2024). Gross profit decreased 33.8% year-over-year to $84.2 million, with a gross profit margin of 72.8%, consistent with the year-earlier period. SG&A expense was down 28.4% year-over-year to $85.5 million. Loss from operations was $1.3 million in Q1 2025, down $9.2 million from the same period last year. Net loss in Q1 2025 was $0.8 million or $0.07 per share, compared to net income of $8.3 million or $0.76 per diluted share in Q1 2024.

• Second quarter revenue is expected to range from $85 million to $105 million, and loss per share for the quarter to range from zero cents to $0.55. - Guidance excludes gains or losses from changes in the market price of LifeMD common stock holdings. - Believes bright spots in parts of the business set the stage for improvement in coach productivity in the second half of 2025 and coach growth in the second half of 2026.

• A weaker economy could present consumer demand headwinds. - Presently, no meaningful impact from tariffs is expected this year, but future could be uncertain.

Q: Regarding second quarter topline guidance and year-over-year rate of decline, what's the situation?

A: In Q1 of 2025, a promotion that did well led to new coaches seeing year-over-year improvement. Last year, a promotion was in Q2, but in 2025 guidance, no such promotion is planned currently. Q2 could be the low point in year-over-year rate of decline but doesn't mean the trend continues in following quarters.

Q: What's the sense of new coaches personally utilizing GLP-1 and progress of ASCEND product line?

A: Haven't done segmentation on new coaches personally utilizing GLP-1 yet, but could provide details later. ASCEND line was right in line with expectations in Q1, ending the quarter in the mid-teens for orders as a percent.

Q: Impact of GLP-1 on coaching community and cost of GLP-1 and supporting programs?

A: GLP-1 disrupted training approach and sales adjustment, but new coaches only know the GLP-1 environment and aren't controversial about it. Monthly cost of 5-in-1 program is roughly $400, with ACTIVE line not a significant cost addition