LifeMD, Inc. Q1 FY2025 earnings call

• Core Telehealth business saw 70% YOY revenue growth, driven by weight management and new initiatives like fee-for-service Medicare and men’s hormone therapy. Telehealth adjusted EBITDA improved to $5.3M from a loss of $1.3M YOY.
• RexMD brand is growing, expanding into new verticals beyond sexual health, with HRT program off to a strong start and over 40% of new HRT patients being existing RexMD patients.
• Strategic collaborations with LillyDirect and NovoCare to improve access to GLP-1 medications for weight management patients. Accepted fee-for-service Medicare, expanding coverage to over 21 million beneficiaries in 26 states.
• Entering women’s health via acquisition of Optimal Human Health MD, launching cash-pay women’s health program in 90 days, and imminent entry into behavioral health with tele-psychiatry services.
• Plan to introduce LifeMDPlus and synchronous care offerings to RexMD’s 180,000 active patients later in the year.

Core Telehealth business had revenue growing 70% year-over-year to contribute to total revenues of $65.7 million in Q1 2025. Telehealth adjusted EBITDA reached $5.3 million, a significant improvement from a loss of $1.3 million in Q1 2024. RexMD brand continued to grow in revenue and active patient count, with its HRT program off to a strong start. WorkSimpli had a 5% decline in subscribers but still had quarterly adjusted EBITDA exceeding $3 million. Telehealth contributed a large portion to total revenues, with its revenue growth driving the overall financial performance.

• Revised 2025 total revenues guidance to $268 million to $275 million.
• Revised Telehealth revenue guidance to $208 million to $213 million.
• Revised consolidated adjusted EBITDA guidance to $31 million to $33 million, with Telehealth adjusted EBITDA at least $21 million. The revision is due to outperformance of the Telehealth business in Q1.

Forward-looking statements are subject to numerous risks and uncertainties that may cause actual results to differ materially from those projected. These risks and uncertainties are described in the company’s 10-K and 10-Q filings and other SEC filings. No specific operational failures were prominently discussed in detail in the transcript.

Q: Can you talk a little bit about your relationships with Lilly and Novo? Specifically, pricing and conversion from commercial compounded scripts to personalized?

A: Our relationship with Lilly and Novo enables integration of care offerings. Patients pay the same price as elsewhere, and LifeMD doesn't receive compensation from drug manufacturers. On personalized compounding, we're helping patients access branded therapies and some personalized compounded therapies, with integrations with LillyDirect and NovoCare to go live next week.

Q: Can you talk about the role of insurance in your view?

A: Insurance is important. We've invested in building a platform for accepting commercial and government insurance programs. Medicare business has seen strong initial traction with first reimbursements received.

Q: Can you give us an update on your launch of your compounding pharmacy?

A: Our compounding pharmacy is on track, expected to be licensed this summer and in most states by end of year. Mail-order pharmacy is scaling, averaging close to 1,000 prescriptions a day.

Q: Does your 2025 guidance include contributions from mental health and women’s health?

A: Yes, but it's de minimis. Female health is already generating revenue on a smaller scale, and mental health contributions will be more in the back half of the year.

Q: How much of the positive guidance revision is related to the Wegovy, NovoCare pharmacy announcement?

A: None of the guidance revision is related to that announcement; it's based on Q1 performance. The partnerships provide another avenue for patients but didn't factor into the revised guidance.

Q: My competitor who got Wegovy from Novo announced a pricing point higher than yours. What's the difference?

A: LifeMD hasn't finalized pricing for care alongside the products but will be similar to current weight management program pricing. Don't want to comment on competitors' pricing.

Q: Does LifeMD plan to continue to offer compounded GLP-1 in the coming years?

A: LifeMD doesn't compound GLP-1 medications. We help patients access branded therapies and may send prescriptions to compounding pharmacies if patients aren't appropriate for other therapies.

Q: Looking at your guidance for Telehealth, is it being conservative or are there headwinds?

A: Not due to headwinds. It's about revenue timing and seasonality, with Rex business and sexual health being a bit softer seasonally in Q2. The guidance is based on consistent growth year-on-year.

Q: On WorkSimpli, challenges faced and outlook?

A: No major challenges. WorkSimpli is focused on maximizing cash flow, shifting to higher value customers with longer LTVs, with improvements in profitability even as subscribers declined.