LifeMD, Inc. Q2 FY2025 earnings call

• Core telehealth business strong with 30% Y/Y revenue growth and 560% adjusted EBITDA growth.
• Weight management: Over 400 new patient sign-ups daily, but impacted by higher refund rates; investing in care platform to improve patient experience.
• RexMD: Adjusting marketing and product strategies, early Q3 data shows return to healthier customer acquisition levels.
• Behavioral and women's health: Recently launched, scaling in Q4 to address underserved markets.
• LifeMD+: Nearly 50 new patient sign-ups daily, central to deepening patient relationships and retention.
• AI integration: Streamlining operations, improving patient experience and provider productivity.

Telehealth: Revenue increased 30% year-over-year to $48.6 million, with stand-alone adjusted EBITDA growing 560% to $3.4 million. Weight management: New subscribers consistently over 400 per day, but impacted by higher-than-anticipated refund rates; however, remains robust. WorkSimpli: Generated nearly $3.7 million in adjusted EBITDA on a stand-alone basis. RexMD: Experienced challenging second quarter due to elevated customer acquisition costs in the ED market, but adjusting strategies. Behavioral health and women's health: Recently launched, scaling in the fourth quarter. LifeMD+: Nearly 50 new patient sign-ups per day.

• Consolidated revenue guidance revised to $250 million to $255 million from $268 million to $275 million.
• Telehealth stand-alone revenue guidance now $195 million to $200 million compared to $208 million to $213 million previously.
• Consolidated adjusted EBITDA guidance revised to $27 million to $29 million from $31 million to $33 million.
• Telehealth stand-alone adjusted EBITDA guidance between $14 million and $16 million compared with $21 million previously.

• Weight management impacted by higher refund rates due to patients lacking insurance coverage or unable to afford branded therapies.
• RexMD faced challenges from temporarily elevated customer acquisition costs in the competitive ED market.
• Dependence on insurance coverage and pricing trends affecting weight management's financial performance.

Q: Jenny Shen from BTIG asked about the insurance opportunity, including states contracted, members under coverage, and margin profile.

A: Justin Schreiber responded that LifeMD is contracted with over 100 insurance plans across 40 states, has under 80 million lives under coverage, and unit economics are strong with insurance-sponsored patients potentially having better LTV than cash pay.

Q: Sarah James from Cantor Fitzgerald inquired about RexMD customer acquisition costs.

A: Marc Benathen said CACs bounced around, with some periods up 15%-25% sequentially, and the company is diversifying the business to address temporary disruptions.

Q: Ryan Meyers from Lake Street Capital Markets followed up on the guide down related to RexMD.

A: Marc Benathen explained the majority of the guide down is related to RexMD's performance in Q2 and downstream impacts, with a small proportion from higher refund rates in weight management.

Q: Anderson Schock from B. Riley Securities asked about insurance coverage for GLP-1s, behavioral health launch, and Medicare fee-for-service.

A: Justin Schreiber said 75% of new patients expected to be on insured or affordable therapies by year-end; behavioral health is live across 50 states with onboarding ongoing; Medicare fee-for-service is on track to expand to 49 states by year-end but not yet scaled.

Q: Steven Dechert from KeyBanc inquired about refund rate policy and ties to Novo/Lilly partnerships.

A: Justin Schreiber stated refund policy is liberal, and collaborations with Lilly/Novo not directly affecting refund rate, but self-pay branded drugs being expensive leads to some refunds.

Q: Unidentified Analyst from H.C. Wainwright asked about subscriber counts and attrition rates.

A: Marc Benathen said weight management subscribers are ~30-35% of total active subscribers; retention rate historically about 1/3 of cohorts at 12 months, higher for those on therapy.

Q: Unidentified Analyst asked about insurance coverage as a differentiator.

A: Justin Schreiber said LifeMD's infrastructure for medical and pharmacy benefits, and ability to operate synchronous care across 50 states are unique differentiators.