Medifast, Inc. Q3 FY2025 earnings call

• The weight loss and wellness industry has changed with GLP - 1 medications, and Medifast's program focuses on addressing metabolic health, which is rooted in most weight challenges. Their program retains lean mass, reduces visceral fat, and improves body composition. - They plan to launch a new product line next year using metabolic synchronization science. Coach leaders have been trained on new clinical data, and the Premier+ pricing and auto ship program has simplified the value proposition. - The EDGE leadership development program helps coaches grow their businesses. They are investing in digital platforms to enhance the coaching and client experience.

In the third quarter of 2025, revenue was $89.4 million, a decrease of 36.2% versus the year - earlier period, mainly due to a decrease in the number of active earning OPTAVIA coaches. Average revenue per active earning OPTAVIA coach for the third quarter was $4,585, a year - over - year decrease of 1.9%. Gross profit decreased 41.2% year - over - year to $62.2 million, with a gross profit margin of 69.5% which decreased 590 basis points compared to the year - earlier period. SG&A expense was down 36% year - over - year to $66.2 million. Net loss in the third quarter of 2025 was $2.3 million or $0.21 loss per diluted share.

• Fourth quarter revenue is expected to range from $65 million to $80 million and loss per share is expected to range from $0.70 to $1.25. - They expect to introduce a new product line next year to improve the effectiveness of the current essential product line in addressing metabolic health. - They anticipate that getting back to growth will start with client acquisition and retention, and revenue growth will follow coach growth within a quarter or two after coach growth is sustained.

• Economic softness could impact consumer spending on OPTAVIA. - Changes in GLP - 1 drug usage by consumers could affect the demand for Medifast's program. - Uncertainty around the successful launch and adoption of new product lines.

Q: How to ensure consistent messaging among coaches regarding the holistic view of weight loss moving forward?

A: They conducted clinical studies to show the program's impact on metabolic health and how it links to weight loss. Coach leaders were trained at the Sundance leadership retreat and will continue to cascade knowledge.

Q: Can you give color on modeling SG&A relative to top - line decline?

A: One charge in Q3 was for reformulating the essential line. They are rightsizing the business and expect margins to improve as they return to growth.

Q: Is the $2 million collaboration with LifeMD a onetime expense?

A: The collaboration is ongoing, and the $2 million in Q3 of 2024 was the last bit of amortization from an initial $10 million investment.