Medifast, Inc. Q2 FY2025 earnings call

• The company is diligently transforming its business to capitalize on opportunities in weight loss and optimal metabolic health, especially related to guiding individuals in adopting healthy habits to preserve lean mass. - The science supporting the company's clinical study programs has three key design elements: fostering sustainable change through coach and community support, targeting optimizing fat burn and lean muscle maintenance, and supporting gut health. - The company is in the process of a comprehensive evolution to maximize the business opportunity for coaches and offer tailored solutions to clients, catering to those using, transitioning off, or not using GLP - 1 medications. - In July, the new Premier+ pricing and incentive structure for auto ship clients was launched, simplifying the value proposition for clients and coaches. - The EDGE program was introduced in the second quarter, featuring integrated coach incentives, best practices, and recognition tools to reinforce success - driving behaviors. - The company is leveraging science and clinical research to extend the impact of the flagship 5 & 1 program and product line to address metabolic health challenges, as 93% of U.S. adults are metabolically unhealthy.

Second quarter 2025 revenue was $105.6 million, a decrease of 37.4% compared to the year - earlier period. The number of active earning OPTAVIA coaches at the end of the quarter was approximately 22,800, a 32.7% decrease from the second quarter of 2024. The average revenue per active earning OPTAVIA Coach for the second quarter was $4,630, a year - over - year decrease of 6.9%. Gross profit decreased 37.9% year - over - year to $76.6 million, with a gross profit margin of 72.6%, down 60 basis points from the prior year. SG&A expense was down 40.8% year - over - year to $77.7 million. Net income in the second quarter of 2025 was $2.5 million or $0.22 per diluted share, compared to a net loss of $8.2 million or $0.75 per share in the corresponding period of 2024.

• Third quarter revenue is expected to range from $70 million to $90 million. - Earnings per share for the third quarter is expected to range from $0.00 to a loss of $0.60. - The new Premier+ auto ship program is rolled out in the third quarter, and no appreciable difference in margins is expected going forward as the impact from pricing changes is offset by other incremental actions taken under the program.

Q: Thoughts on coach composition as the landscape changes and alignment with GLP - 1.

A: Dan mentioned the focus on metabolic health, with 60% of coaches supporting clients who have used GLP - 1 medications and approximately 23% of the client base reflecting people who have used or are using GLP - 1 medications. Nick added that coach leadership has evolved training to the new environment, including training on those on and off GLP - 1 medications.

Q: Update on ASCEND sales.

A: ASCEND continues to meet expectations. It supports clients who are using GLP - 1 medications and those transitioning off the 5 & 1 program.

Q: Company - supported marketing.

A: Coach - shared personal messages are more effective for new client acquisition. The company will strategically use advertising dollars, mainly for search engine management and optimization, with a pared - back budget for company - led acquisition.