biote Corp. Q1 FY2025 earnings call

• Bret noted strong financial performance with dietary supplements offsetting procedure softness. Gross profit margin improved 300 basis points to 74.3% due to vertical integration. - Bob reported first quarter revenue up 4.7%, procedure revenue down 3.6%, dietary supplements up 25.5% from e-commerce growth. - SG&A expenses increased 16.4% but decreased 19.2% from Q4 2024. - Announced strategic restructuring focused on accelerating new providers, strengthening top-tier clinic relationships, and improving commercial accountability through realigning the commercial team, expanding sales force, streamlining leadership, and updating compensation structure.

Total revenue for the first quarter increased 4.7% to $49 million. Procedure revenue decreased 3.6% to $36 million, primarily due to reduced commercial effectiveness, slowdown in new clinic additions, and competitive pressures. Dietary supplement revenue increased 25.5% to $9.3 million, driven by growth in the e-commerce channel. Gross profit margin was 74.3%, a 300 basis point increase due to vertical integration of the 503B manufacturing facility. Dietary supplements contributed 19% to total revenue ($9.3M / $49M), while procedure revenue contributed 73.5% ($36M / $49M).

• Maintained 2025 guidance for revenue $202 million to $208 million and adjusted EBITDA $59 million to $64 million. - Expect second quarter 2025 revenue and adjusted EBITDA to be similar to or slightly higher than Q2 2024. - Anticipate a one-time charge of approximately $600,000 to $800,000 in Q2 2025 due to restructuring.

• Competition is an ongoing headwind affecting procedure revenue. - Disruption from launch of clinical decision support software impacted procedure volumes and new clinic additions. - Macro-economic factors could potentially affect consumer price sensitivity, though not currently significant.

Q: Can we talk more about the supplements business and if there's one-time elements?

A: Bob said supplements business, especially e-commerce, had solid performance with no one-time items, and a solid runway.

Q: What's different about today's sales force realignment?

A: Bret said it's focused on growth, not cost-cutting, with transition of 20 people from support to sales roles to increase productivity and drive new clinic growth.

Q: Any color on tariffs for supplement API sourcing?

A: Bob said no significant impact currently as core pellet business is largely domestically sourced and inventory coverage has been increased.

Q: Thoughts on procedure revenue guide of 2% to 4% growth?

A: Bob and Bret said they've taken decisive action, have line of sight into needed actions, and are confident in the overall guide though there's risk, expecting benefits in latter half of the year from restructuring.