Lifevantage Corp Q3 FY2025 earnings call

• Third quarter results were strong with revenue growth driven by demand for the mindbody GLP1 system. US revenue up 31%, international down 7% but international launch of MB system expected to help reverse declines.
• Supply chain and logistic issues resolved. International expansion of MindBody began in March, with momentum building in new markets.
• Profitability improved: gross margin up 210 basis points, adjusted EBITDA up 27%. Active account metrics showed strong YOY growth.
• LV360 initiatives launched in multiple markets. Annual global convention held, revealing clinical study results showing MindBody GLP1 system increased GLP1 levels by over 200%.
• Drive era calendar Q2 sales incentives rolled out. Focus on enhancing digital capability, brand awareness, profitability, and ramping MB system in international markets.

Third quarter revenues were $58.4 million, up 21% year-over-year. U.S. revenue grew 31% while international markets declined 7% year-over-year. Americas region revenue was $48.2 million, up 29.5% in the quarter, driven by the MindBody GLP-1 system. Asia Pacific and Europe region revenue was $10.2 million, down 7.2% due to decreased active accounts and foreign currency fluctuations. Gross margin was 81% for the third quarter, a 210-basis point improvement compared to the prior year. Adjusted EBITDA increased 27% year-over-year to $6.4 million, with an adjusted EBITDA margin of 11%.

• Fiscal 2025 revenue anticipated to be $228 million to $235 million, a 16% increase at midpoint YOY.
• Reiterating profitability guidance: adjusted EBITDA $21 million to $24 million, adjusted non-GAAP earnings per share $0.72 to $0.88.

• International market declines remain a significant focus area.
• Uncertainty regarding the growth potential of the international launch of the MB system.

Q: As far as new customers, do you have a rough percentage of people coming on via subscription? Noted slight downdraft in total active accounts QoQ, but subscription rate increased.

A: Steve Fife noted historically about 70% of revenue fulfilled on subscription, and during the quarter about 85% of MindBody customers were on subscription.

Q: Change in top-line outlook, active accounts in Americas drop, and learning about MB product educating sales force.

A: Steve Fife said stock out issues caused some noise in Americas active accounts, majority of noise behind us. On MB product, learned consultants had different approaches with sustainable vs weight loss-focused, and first group has more sustainable growth. Carl Aure added stock out primarily attributable to customer base noise in Americas.