Medifast, Inc. Q4 FY2025 earnings call

• Leadership update: Dan Chard plans to step down as CEO effective June 1, 2026, will continue as Chairman, and Nick Johnson appointed President to succeed him. - Transformation: Over past 2 years, Medifast repositioned around metabolic health, using metabolic synchronization science. Clinical study showed 14% reduction in harmful visceral fat. - Coach performance: First year-over-year positive coach productivity since mid-2022, up 6% in Q4 2025. Premier+ and EDGE programs central to efforts, with increased coach-led opportunity meetings and training activity. - Product innovation: Developing new product line to support metabolic health, simplifying client support across metabolic health journey.

Fourth quarter 2025 revenue was $75.1 million, a decrease of 36.9% versus the year earlier period, primarily due to a decrease in the number of active earning coaches. Average revenue per active earning coach for the fourth quarter reached $4,664, a year-over-year increase of 6.2%. Gross profit for Q4 2025 decreased 40.9% year-over-year to $52.1 million, with a gross profit margin of 69.4%. SG&A expense for Q4 2025 was down 31.5% year-over-year to $59.9 million. Loss from operations was $7.8 million in the fourth quarter of 2025. Other income increased 151.1% year-over-year to $1.4 million. Net loss in the fourth quarter of 2025 was $18.1 million or $1.65 per diluted share. For the full year 2026, revenue is expected to be $270 million to $300 million and loss per share between $1.55 and $2.75, with improvements to get back to profitability expected to start in Q4 2026 following the launch of the new product line.

• First quarter 2026 revenue range: $65 million to $80 million, loss per share range: $0.15 to $0.70 per share, with continued coach productivity growth. - Full year 2026: Revenue $270 million to $300 million, loss per share $1.55 to $2.75, improvements to get back to profitability expected to start in Q4 2026 following new product line launch, with earnings improvements targeting 2027 and beyond. - Working capital expected to be more than $140 million at December 31, 2026.

Q: About coach productivity and sequencing into 2026, detail on guests/consumers matched with coaches, younger coach composition and its impact on consumers.

A: Dan Chard said new story focused on metabolic health is resonating, new customers coming in tied to this story, coaches retrained to tell metabolic health story, and cost structure restructured with $30 million in savings.

Q: About top line sequencing against full year $270 - $300 million guidance.

A: Nicholas Johnson said now past transformation stage and on execution, confident in movement into metabolic health, providing annual guidance.

Q: About customers using GLP-1 and new lineup/product innovation.

A: Dan Chard said large inflow of clients off GLP-1 drugs, with coaches attracting those who have used or not, Nicholas Johnson added focus on metabolic synchronization science and upcoming new plan/program solving for consumer outages