biote Corp. Q3 FY2025 earnings call

Strategic Priorities - Accelerate growth from new providers: Rebuilding the commercial organization, aligning sales incentives, enhancing sales team quality/training, with ~half the commercial team joining in past year and aiming to reach planned sales rep headcount by end of 2025. - Maximize value from top-tier clinics: Hosted annual Sun, Sea and Biote marketing event in Cancun with over 800 attendees, featuring renowned speakers, reinforcing Biote's leadership in evidence-based hormone optimization. - Improve financial performance: Implemented fundamental changes to internal processes/systems, leading to enhanced data insights and productivity. Gross profit margin improved due to cost savings from vertical integration of 503(B) manufacturing facility.

Third quarter revenue was $48.0 million, a decrease of 6.7%. Procedure revenue declined 10.4% to an unspecified absolute amount, while dietary supplements revenue grew 8.4% to $11.2 million. Procedure revenue was impacted by slower net new clinic additions and lower procedure volume, as well as the ongoing transformation of the commercial team. Dietary supplements revenue was driven by the continued growth of the e-commerce channel. Procedure revenue contributed a larger portion to total revenue compared to dietary supplements, but dietary supplements showed growth.

Reiterates fiscal 2025 revenue guidance of above $190 million and adjusted EBITDA guidance of above $50 million. Anticipates reaching targeted sales rep headcount by end of 2025 to help return to procedure revenue growth.

Challenges in hiring sales personnel with potential delays and higher costs than expected. Competition in the market could impact business. Macro-economic conditions may affect the company's operations and financial performance.

Q: How is the speed of hiring sales folks going?

A: Bret notes they changed incentives, restructure, and are actively hiring a new profile of rep, about 85% of where they want to be by end of year. Robert adds they ramped up to around 80 people on board in Q3 end.

Q: Feedback from practitioners at the marketing event?

A: Bret says providers raved about speakers, event, interaction, it was a great event, but trends post-event too early to tell.

Q: Status of attrition rate?

A: Bret says attrition rate was similar to elevated rate, issues include more competition, need for better rep coverage, service, education, and improving value proposition.

Q: Savings from Donovitz transactions?

A: Robert says Marci deal saved ~$7.5 million, Dr. Donovitz deal saved ~$11.1 million.

Q: Ramp cycle of sales force?

A: Bret says there's a ramp period, but they're getting people off to quicker start with better training, Bob adds about better targeting.

Q: Spend on marketing event?

A: Robert says spend was around $1.3 million.

Q: Asteria's progress?

A: Robert says it supplied over 50% of procedure fulfillments, expect ramp through rest of year.

Q: Near-term expectations for procedure revenue growth?

A: Robert says quarter-over-quarter, Q4 has 3 less business days than Q3, and holiday period uncertainty, but expects procedures in high single digits reduction and mid-teens growth in revenue.