LifeMD, Inc. Q3 FY2025 earnings call

• LifeMD made progress in executing its strategic plan, with RexMD returning to growth and weight management stabilizing. - Advanced women's health and behavioral health offerings, aiming for 9-figure businesses in 3 years. - Secured regulatory approval for nonsterile 503-A compounding pharmacy, enhancing ability to produce personalized medications. - Divested majority interest in WorkSimpli to focus on core virtual care and pharmacy business. - Strategic priorities for 2026 include accelerating weight management growth via collaborations, scaling women's and behavioral health, expanding RexMD, and launching a unified platform. - Collaborations with Novo Nordisk and Eli Lilly are seen as competitive advantages. - Addressed challenges in weight management due to low-cost/compounded competitors but maintained market share. - Plan to invest in growth for women's and behavioral health in 2026 and launch upgraded LifeMD platform with enhanced patient experience.

Telehealth revenue grew 18% year-over-year, with adjusted EBITDA increasing 30%. RexMD added approximately 10,000 net new subscribers. Weight management has stabilized. Telehealth revenue was $47.3 million, contributing a significant portion to consolidated revenue of $60.2 million in the third quarter. RexMD's growth, particularly in men's health offerings like ED and HRT, played a role in its return to growth. The weight management segment, though facing competition, has stabilized and is positioned for growth in 2026.

• Fourth quarter revenue expected in the range of $45 million to $46 million, with adjusted EBITDA in the range of $3 million to $4 million. - Full year 2025 revenue expected to be between $192 million and $193 million, with adjusted EBITDA between $13.5 million and $14.5 million, representing 24% revenue growth and 254% adjusted EBITDA growth vs 2024. - Guidance reflects impact of reduced fulfillment fees from personalized compounds and expected growth from product innovation in 2026.

• Intense competition from low-cost and low-quality compounded GLP-1 makers, creating near-term pressure on weight management segment. - Potential challenges with FDA regulation of compounding, as aggressive marketing of low-priced compounded therapies impacts market. - Dependence on collaborations with Novo Nordisk and Eli Lilly, and need to maintain competitive pricing and coverage to sustain growth.

Q: Talk about telehealth product revenue mix, especially weight loss from branded vs compounded scripts and 2026 outlook.

A: Marc Benathen said weight management is over 50% of revenue mix, slight sequential decline in subscriber base but stabilized, over half new patient sign-ups from branded therapy. Justin Schreiber added 2026 growth driven by better branded therapy pricing, insurance coverage expansion, and potential FDA action on compounding.

Q: Brand uptake tracking relative to expectations and impact of Novo/Lilly partnerships with others.

A: Justin Schreiber said demand exists for branded therapy, but competition from compounded therapies is intense. Novo/Lilly partnerships with others don't impact demand on LifeMD's platform much, but price and coverage are key.

Q: Return to RexMD growth, ED vs HRT contribution, and ED acquisition outlook.

A: Marc Benathen said most of the 10,000 net new subscribers growth came from sexual health (mostly ED), with ED acquisition volume close to historical levels.

Q: Telehealth gross margin decline and future margins.

A: Marc Benathen said margin decline was due to revenue mix shift to branded product and mix in business, future margins expected to have mild erosion due to mix of business but businesses are accretive to bottom line.

Q: Insurance coverage impact and app launch effect.

A: Justin Schreiber said turning on insurance coverage reduced customer acquisition costs by ~33%, and new app launch has potential to greatly impact cross-selling ability and LTV.

Q: 503-A pharmacy timeline, margin impact, and oral obesity products uptake.

A: Justin Schreiber said expected to be 50-state licensed in next couple of months, in-house pharmacy controls patient experience and drives down COGS. Oral obesity products like Wegovy pill are expected to have big impact on uptake but exact fraction is hard to predict.