Release Date: May 08, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- LifeMD Inc (LFMD, Financial) reported strong first quarter performance with significant growth in both weight management and Rex businesses.
- The company added 20,000 new patient subscribers during the quarter, reaching over 235,000 total subscribers.
- Revenue from the core telehealth business grew by 53% compared to the previous year, driven primarily by the GLP-1 weight management program.
- LifeMD Inc (LFMD) has raised its 2024 revenue guidance due to continued outperformance in its GLP-1 business.
- The company has made significant progress in implementing AI across the organization, enhancing response throughput for patient inquiries by 60%.
Negative Points
- The non-core subsidiary, Work Simply, started the year with softer than expected results in January and February.
- The company reported a GAAP net loss attributable to common stockholders of $7.5 million for the first quarter.
- Adjusted EBITDA for the first quarter was $0.5 million, which is lower compared to $2 million in the year-ago quarter.
- The initial drop in patient retention due to access issues and approval rates for GLP-1 treatment was a challenge, although it has since improved.
- LifeMD Inc (LFMD) faces the challenge of scaling appointment capacity and provider ratios to meet the growing demand for its services.
Q & A Highlights
Q: Hi, and congratulations on the quarter. Can you talk about your expectations for the profitability of the healthcare business? Are you EBITDA breakeven right now or not? What would you expect healthcare EBITDA to be in, say, 4Q of 24, for example? And then how should we be thinking about an EBITDA margin for healthcare as we head into 2025?
A: (Marc Benathen - LifeMD Inc - Chief Financial Officer) The healthcare EBITDA is slightly negative today but is cash flow positive. The only reason it's negative is due to deferred revenue from weight management. The telehealth business is moving in the right direction towards profitability, expected by the third quarter of this year. For the fourth quarter, we anticipate EBITDA from the telehealth business alone to be between $3 million to $5 million. Next year, we expect EBITDA to exceed $20 million on a full-year basis.
Q: Thanks for the impressive growth. With 70 physicians, are you guys still looking at adding about four to five a month? And does that mean you have the capacity to go up to about 70,000 weight loss patients with your current staffing levels?
A: (Justin Schreiber - LifeMD Inc - Chairman of the Board, Chief Executive Officer) We are continually adding providers, around four to five a month, sometimes more. We believe the number of patients per provider could be close to double the 1,000 initially estimated, especially as our technology improves. Our growth guidance for this year is based on adding 300,000 new patients per day, and we expect to exceed this, which is why we've increased our guidance.
Q: Can you talk about the upcoming launch of a weight management offering under the Rex MD brand? How are you planning to target the male consumer, and how does this compare to your existing weight management business?
A: (Justin Schreiber - LifeMD Inc - Chairman of the Board, Chief Executive Officer) The initial focus of the Rex MD weight management offering will be on our existing database of 150 to 200,000 active subscribers and 0.5 million formerly active subscribers. We plan to use the same technology platform as our ED business and launch a bundled offering priced around $300 a month. This demographic has a significant need for weight management services, and we are excited about this launch.
Q: How many weight management members did you have at March 31st, and how many do you have right now?
A: (Marc Benathen - LifeMD Inc - Chief Financial Officer) We had approximately 42,000 weight management subscribers at the end of March, and we now have slightly over 50,000.
Q: It's great timing with you guys getting set up in late '24, early '25 to launch the government insurance, coinciding with the FDA approval of Wegovy for cardiac. How do you plan to tap into that market?
A: (Justin Schreiber - LifeMD Inc - Chairman of the Board, Chief Executive Officer) We see a big opportunity in the fee-for-service world with Medicare beneficiaries. Our plan is to tackle this in a very similar way to our current offerings but allow people to use their Medicare or private insurance and then pay a concierge fee alongside that for non-covered services.
Q: Can you provide some details on the Medifast partnership and how much of your expected growth in the back half of the year is expected to come from this and the Rex MD weight management offering?
A: (Justin Schreiber - LifeMD Inc - Chairman of the Board, Chief Executive Officer) The majority of the growth in our guide for the year doesn't include Medifast and Rex MD. We believe both initiatives have a lot of upside potential and are excited about their launch.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
