Lifevantage Corp Q1 FY2025 earnings call

• Launched the MindBody GLP-1 System, which had an overwhelming response with initial inventory selling out quickly and e-commerce sales exceeding forecast. - September enrollments nearly doubled ahead of the product launch. - Market Connect event in Kansas City had exclusive business training for consultants and showcased the new product. - Evolve Compensation Plan enhancements to go live on November 1, including new commission bonuses and accelerators. - Partnered with Clearwater to offer health insurance options for consultants.

In the first quarter, total revenue was down 8% to $47.2 million. The Americas region revenue decreased 4.2% to $36.9 million, with a 6.1% decrease in total active accounts partially offset by higher average revenue per account. The Asia/Pacific & Europe region revenue decreased 19.7% to $10.3 million, driven by a 20.5% decrease in total active accounts and foreign currency impacts. Adjusted EBITDA increased 11% versus the prior year, with an adjusted EBITDA margin of 9.4%, a 160 basis point improvement. Gross margin was 79.9%, slightly below the prior year's 80.2%. Commission and incentive expense decreased $2.2 million year-over-year, and non-GAAP adjusted SG&A expense was $14.7 million, a decrease from the prior year.

• Full year revenue expected in the range of $200 million to $210 million, with expectation to be closer to the upper end based on MindBody's success. - Adjusted non-GAAP EBITDA expected in the range of $18 million to $21 million. - Adjusted non-GAAP earnings per share expected in the range of $0.70 to $0.80 per share. - Committed to improving adjusted EBITDA margins towards low double digits in the near future.

• Macro headwinds impacting international markets. - Stock out situation for MindBody GLP-1 System could pose challenges in meeting demand. - Regulatory uncertainties for international launch of the product.

Q: Carl, you just went over your guidance which remains unchanged from the last quarter. And obviously, you had a very successful launch here with MindBody having sold out of inventory already. So what was the thought process in not adjusting your guidance despite the very strong reception to MindBody?

A: Carl Aure responded that they gave it thought, alluded to being at the top end of the range, and noted it was only 2 weeks into the MindBody launch with stock out, but remained optimistic about long-term success.

Q: That's fair enough. It is still early days. So I mean this is a good problem to have but you are dealing now with a stock out situation for a product that is obviously -- you've done a good job teasing and promoting and launching. So what do you think the impact will be of moving into a stock out situation so quickly among your consultants?

A: Steve Fife said there was proof of excitement with September enrollments nearly doubling before the product was available, and consultants were building excitement, with thousands now talking about the product, still optimistic about continued excitement despite stock out.