biote Corp. Q1 FY2026 earnings call

• Strengthened commercial organization, expanded sales team, and enhanced capabilities to support practitioners and patients. - Sharpened focus on maximizing value from existing top-tier clinics. - Voluntarily withdrew certain bioidentical hormone pellet inventory in January, with $1.7 million revenue impact and $1.5 million incremental costs. - Substantially completed expanding sales personnel from over 90 to approximately 120, with over 25 new hires in Q1. - Trained more than 200 new practitioners in Q1, a 16.5% increase from Q1 2025. - Introduced measures to improve retention and support lifetime revenue outcomes for top clinics. - Enhanced commercial framework to reinforce value proposition for leading practitioners. - New practitioner training sessions near full capacity, indicating continued interest in offerings.

Revenue decreased 8.3% to $44.9 million. Procedure revenue declined 13.2% to $31.3 million, including a $1.7 million revenue impact from the voluntary recall of hormone pellets. Dietary supplement revenue grew 19.1% to $11.0 million, driven by e-commerce growth. Gross profit margin was 68.9% compared to 74.3% previously, due to $1.1 million incremental cost from the recall. Selling, general, and administrative expenses increased 4.1% to $27.8 million. Net income was $2.7 million with diluted earnings per share of $0.06. Adjusted EBITDA decreased to $8.7 million with an adjusted margin of 19.4%. Cash flow from operations was $3.9 million as of March 31st, 2026.

• Maintain guidance for 2026 revenue above $190 million and adjusted EBITDA greater than $38 million. - Procedure revenue expected to return to growth in second half of 2026, but first half procedure revenue growth moderately lower than previously forecast due to recall and supply constraints. - Dietary supplement revenue expected to grow at mid to high single-digit rate from 2025.

• Risks and uncertainties related to forward-looking statements, including factors beyond the company's control that could materially affect actual results. - The voluntary product recall and related supply constraints impacting first quarter and potentially second quarter performance. - Impact of macroeconomic concerns on business results. - Uncertainties in restoring supply continuity and potential ongoing effects on operations and financial performance.

Q: How did the clinic attrition trend in the first quarter as the recent hires ramp up? And are you seeing some stabilization here if you normalize for the voluntary recall?

A: Attrition has stabilized for several quarters but is still higher than desired. Disruption in Q1 due to recall supply constraints makes it hard to draw improvement conclusions yet. Some positive signs in daily volumes prior to recall, but supply constraints dampened that. Salesforce expansion new in Q1, distracted in Q1 with supply issues, but expected to contribute in Q2 once inventory issues normalized.

Q: I just wanted to understand a little bit more about the supply constraints. I guess I'm confused by the recall still having an impact in Q2 and why we would still have supply constraints at this point.

A: Recalled product was compounded and manufactured prior to October 2025, putting strain on Asteria. Had to allocate inventory, reschedule patients, and manage uncertainty. Slowed pellets from Asteria to build inventory, established second production shift. Better today than early days of recall but still weeks away from normalized situation.

Q: How did you feel confident that the second half will be even better than what was previously implied in guidance?

A: Believes recall is temporary headwind to demand. Saw positive signs in daily volumes prior to recall, pent-up demand from supply shortages to be recaptured. New 120 territory reps didn't have chance to contribute before recall, optimistic they'll drive growth once inventory issues resolved. 200 plus practitioners trained in Q1 expected to start adding meaningfully to growth in next six months.

Q: Just back to the recall. I was curious if you saw much clinic attrition as a result.

A: Not really, at this point it's anecdotal, but no significant clinic attrition seen.

Q: With your current status and your sort of inventory build that, you know, your catch-up that you're doing right now, Where are you in that process? You mentioned that you feel like you're in a good spot now as there's still a lot of sort of catch up that needs to happen. And part two of the question is, what have you seen in April? Can you comment on, the press release commented that there's continued pressure. So any kind of detail you can give about procedure volume in April would be helpful.

A: Situation is much better today than before, weeks away from fully normal situation. Intentionally taking it easy on Asteria to build safety stock. Using third-party partners to help. Anecdotally, things better today than yesterday. Still allocating inventory, but customers starting to feel improvement. Second shift at Asteria recently started, expected to eliminate constraints in next couple of weeks, and be ahead of safety stock levels in a month or so.