Key Takeaways Medifast is focusing on health, nutrition and coaching through its OPTAVIA program.The company is broadening wellness to cover sleep, hydration, motion and mental well-being.Digital tools and apps enhance engagement, linking customers with OPTAVIA coaches.Medifast, Inc. ((MED) is strategically positioning itself at the intersection of health, nutrition and lifestyle coaching. Amid growing consumer demand for health and wellness solutions, MED has been emphasizing the importance of personalized ...

Core Insights - Medifast, Inc. reported second-quarter 2025 results with both net sales and earnings exceeding Zacks Consensus Estimates, despite year-over-year declines in both metrics [1][11] - The company is focusing on personalized support through its OPTAVIA program to meet growing consumer demand for long-term health and wellness solutions [1] Financial Performance - Quarterly earnings were reported at 22 cents per share, benefiting from an investment in LifeMD, with adjusted earnings at 4 cents per share, surpassing break-even estimates [3][11] - Net revenues fell to $105.6 million, a decline of 37.4% year over year, attributed to a decrease in active earning OPTAVIA coaches, although it exceeded the Zacks Consensus Estimate of $95 million [4][11] - The average revenue per active earning OPTAVIA Coach decreased by 6.9% year over year to $4,630, influenced by challenges in client acquisition and the rise of GLP-1 medications for weight loss [4][11] Coach and Customer Base - The number of active earning OPTAVIA Coaches decreased by 32.7% year over year, dropping to 22,800 from 33,900 [5] - The company is prioritizing the revitalization of its coach and customer base by introducing enhanced tools, data-driven support, and new products [2] Margin and Cost Analysis - Gross profit was reported at $76.6 million, down 37.9% year over year, with a gross margin of 72.6%, reflecting a decrease of 60 basis points [6] - Selling, general and administrative expenses (SG&A) fell by 40.8% year over year to $77.7 million, primarily due to a reduction in OPTAVIA coach compensation [7] Operational Loss and Financial Health - The loss from operations improved by 86.5% to $1.1 million, representing 1% of revenues compared to 4.7% in the previous year [8] - As of June 30, 2025, the company had cash, cash equivalents, and investment securities totaling $162.7 million, with no debt and total shareholders' equity of $216 million [9] Future Outlook - For the third quarter of 2025, Medifast expects revenues between $70 million and $90 million, with potential losses ranging from 60 cents to break-even [12]

Financial Data and Key Metrics Changes - Revenue for Q2 2025 was $105.6 million, a decrease of 37.4% year-over-year, primarily due to a decrease in the number of active earning OPTAVIA Coaches [18] - Net income for Q2 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 prior year [23] - 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 previous year [19][20] - SG&A expenses decreased 40.8% year-over-year to $77.7 million, primarily due to a decrease in OPTAVIA Coach compensation [20] Business Line Data and Key Metrics Changes - The total number of active earning OPTAVIA Coaches was approximately 22,800, a decrease of 32.7% from the previous year [18] - Average revenue per active earning OPTAVIA Coach was $4,630, a year-over-year decrease of 6.9% [19] - Coach productivity improved sequentially for the second consecutive quarter, despite a year-over-year decline [19] Market Data and Key Metrics Changes - The company noted that 93% of U.S. adults are metabolically unhealthy, indicating a significant market opportunity for OPTAVIA's programs [9] - There is a growing trend of clients using GLP-1 medications, with 60% of coaches supporting clients who have used these drugs [28] Company Strategy and Development Direction - The company is focused on transforming its business to capitalize on opportunities related to weight loss and metabolic health [5] - A new pricing and incentive structure named Premier Plus was launched to simplify client offers and improve coach compensation predictability [12][13] - The introduction of the EDGE program aims to support coach growth and align behaviors that drive success [14] Management's Comments on Operating Environment and Future Outlook - Management emphasized the importance of sustainable lifestyle changes alongside medication for long-term health [6] - The company is optimistic about addressing the challenges of poor metabolic health and believes its programs can significantly impact this issue [9] - Future guidance for Q3 revenue is expected to range from $70 million to $90 million, with EPS ranging from breakeven to a loss of $0.60 [24] Other Important Information - The effective tax rate for Q2 2025 was 13.7%, down from 23.4% in the prior year [22] - The company has $162.7 million in cash and cash equivalents and no interest-bearing debt as of June 30, 2025 [23] Q&A Session Summary Question: Changes in Coach Composition - Management noted that 60% of coaches support clients using GLP-1 drugs, and 23% of the client base reflects individuals who have used these medications [28][29] Question: Update on ASCEND Sales - ASCEND continues to meet expectations, supporting both clients using GLP-1 drugs and those transitioning to maintenance phases [33] Question: Company-Supported Marketing Strategy - The company found that coach-led personal messages are more effective for client acquisition than company-supported marketing, leading to a more focused budget on coach-driven initiatives [36]

Part I [Item 1 – Financial Statements](index=2&type=section&id=Item%201%20%E2%80%93%20Financial%20Statements) Unaudited financial statements show Q2 2025 net income of **$2.5 million** despite revenue decline and near-zero H1 operating cash flow [Condensed Consolidated Statements of Operations](index=3&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Q2 and H1 2025 vs 2024 Operating Results (in thousands, except per share data) | Metric | Q2 2025 | Q2 2024 | YoY Change | H1 2025 | H1 2024 | YoY Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | **Revenue** | $105,555 | $168,558 | -37.4% | $221,283 | $343,297 | -35.5% | | **Gross Profit** | $76,644 | $123,438 | -37.9% | $160,888 | $250,730 | -35.8% | | **Income (Loss) from Operations** | $(1,066) | $(7,876) | +86.5% | $(2,329) | $64 | -3739.1% | | **Net Income (Loss)** | $2,480 | $(8,154) | +130.4% | $1,708 | $163 | +947.9% | | **Diluted EPS** | $0.22 | $(0.75) | +129.3% | $0.15 | $0.01 | +1400.0% | [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Balance Sheet Summary (in thousands) | Account | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Cash and cash equivalents** | $101,694 | $90,928 | | **Total Current Assets** | $206,441 | $214,404 | | **Total Assets** | $269,333 | $284,213 | | **Total Current Liabilities** | $46,184 | $64,161 | | **Total Liabilities** | $53,328 | $74,104 | | **Total Stockholders' Equity** | $216,005 | $210,109 | [Condensed Consolidated Statements of Cash Flows](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Cash Flow Summary for Six Months Ended June 30 (in thousands) | Activity | 2025 | 2024 | | :--- | :--- | :--- | | **Net cash provided by operating activities** | $28 | $20,351 | | **Net cash provided by (used in) investing activities** | $11,303 | $(5,307) | | **Net cash used in financing activities** | $(565) | $(1,511) | - Net cash from operating activities decreased sharply to **$28 thousand** for the first six months of 2025, down from **$20.4 million** in the same period of 2024[18](index=18&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) - The company operates as a single reportable segment named OPTAVIA, which derives revenue from the sale of its products directly to clients[60](index=60&type=chunk)[62](index=62&type=chunk) - During Q2 2025, the company sold all of its holdings in LifeMD common stock, realizing a net gain of **$2.6 million** for the quarter, while the business collaboration with LifeMD continues[56](index=56&type=chunk)[57](index=57&type=chunk) - The company terminated its Amended Credit Agreement with Citibank, N.A. on October 30, 2024, and had no outstanding borrowings at the termination date[59](index=59&type=chunk) Inventories, Net (in thousands) | Category | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Finished goods | $22,199 | $33,702 | | **Total** | **$30,201** | **$42,421** | [Item 2 – Management's Discussion and Analysis of Financial Condition and Results of Operations](index=19&type=section&id=Item%202%20%E2%80%93%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management attributes revenue decline to fewer coaches and GLP-1 adoption, improving net income via reduced SG&A and business transformation [Overview](index=21&type=section&id=Overview) - The company is undergoing a comprehensive business transformation to address the market shift caused by the rapid acceptance of GLP-1 weight loss medications[70](index=70&type=chunk) - The business model relies on a network of approximately **22,800 active earning OPTAVIA coaches**[70](index=70&type=chunk) - Medifast has developed distinct program offerings for three client categories: those not using medications, those using GLP-1s, and those transitioning off GLP-1s[74](index=74&type=chunk)[76](index=76&type=chunk) - A collaboration with LifeMD provides clients access to clinicians and GLP-1 medications; Medifast sold its equity stake in LifeMD in Q2 2025, but the collaboration continues[78](index=78&type=chunk) [Results of Operations](index=25&type=section&id=Results%20of%20Operations) - Q2 2025 revenue decreased **37.4%** year-over-year to **$105.6 million**, primarily driven by a **32.7%** decrease in the number of active earning OPTAVIA coaches[96](index=96&type=chunk) - SG&A expenses for Q2 2025 decreased by **$53.6 million** (**40.8%**) compared to Q2 2024, mainly due to a **$24.3 million** decrease in coach compensation and the non-recurrence of prior-year costs, including **$12.5 million** for supply chain optimization and **$3.0 million** for convention cancellation[100](index=100&type=chunk) - Other income increased significantly in Q2 2025, primarily due to a **$2.6 million** gain on the investment in LifeMD common stock, compared to a **$4.2 million** loss in the prior-year period[102](index=102&type=chunk) - The company reported net income of **$2.5 million** (**$0.22 per diluted share**) for Q2 2025, a substantial improvement from a net loss of **$8.2 million** (**$0.75 per diluted share**) in Q2 2024[105](index=105&type=chunk) [Liquidity and Capital Resources](index=29&type=section&id=Liquidity%20and%20Capital%20Resources) - Working capital increased to **$160.3 million** at June 30, 2025, from **$150.2 million** at December 31, 2024[106](index=106&type=chunk) - Net cash provided by operating activities fell sharply to less than **$0.1 million** for the first six months of 2025, compared to **$20.4 million** for the same period in 2024[107](index=107&type=chunk) - The company terminated its credit agreement in October 2024 and had no outstanding borrowings[113](index=113&type=chunk) [Item 3 – Quantitative and Qualitative Disclosures about Market Risk](index=30&type=section&id=Item%203%20%E2%80%93%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) Primary market risk from interest rate changes on investments is immaterial, with equity investment risk eliminated after selling LifeMD holdings - The company's main market risk is from interest rate changes impacting its investment portfolio, but it estimates a **10%** adverse change would have an immaterial effect[115](index=115&type=chunk) - Market risk related to price fluctuations in LifeMD common stock was eliminated as the company sold its entire investment during the quarter ended June 30, 2025[116](index=116&type=chunk) [Item 4 – Controls and Procedures](index=30&type=section&id=Item%204%20%E2%80%93%20Controls%20and%20Procedures) Disclosure controls and procedures were effective as of June 30, 2025, with no material changes to internal control over financial reporting - Management concluded that the Company's disclosure controls and procedures are effective at the reasonable assurance level as of June 30, 2025[117](index=117&type=chunk) - No material changes in internal control over financial reporting occurred during the fiscal quarter ended June 30, 2025[118](index=118&type=chunk) Part II [Item 1 – Legal Proceedings](index=31&type=section&id=Item%201%20%E2%80%93%20Legal%20Proceedings) The company is subject to routine litigation, which is not expected to materially impact its financial results or position - The company does not believe that litigation and claims arising from the ordinary course of business will have a material adverse effect on its results, financial position, or liquidity[120](index=120&type=chunk) [Item 1A – Risk Factors](index=31&type=section&id=Item%201A%20%E2%80%93%20Risk%20Factors) No material changes to risk factors previously disclosed in the company's 2024 Form 10-K have been reported - There have been no material changes to the risk factors set forth in the company's 2024 Form 10-K[121](index=121&type=chunk) [Item 2 – Unregistered Sales of Equity Securities and Use of Proceeds](index=31&type=section&id=Item%202%20%E2%80%93%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company repurchased 24 shares for employee tax obligations, with **1,323,568 shares** remaining available under its stock repurchase plan - In June 2025, **24 shares** were repurchased at an average price of **$12.66 per share** to cover employee tax withholding obligations[122](index=122&type=chunk) - As of June 30, 2025, **1,323,568 shares** remained eligible for repurchase under the company's stock repurchase plan, which has no expiration date[124](index=124&type=chunk) [Item 5 – Other Information](index=31&type=section&id=Item%205%20%E2%80%93%20Other%20Information) No director or officer adopted or terminated a Rule 10b5-1 trading arrangement during the second quarter of 2025 - During the three months ended June 30, 2025, no director or officer of the Company adopted or terminated a Rule 10b5-1 trading arrangement[125](index=125&type=chunk) [Item 6 – Exhibits](index=32&type=section&id=Item%206%20%E2%80%93%20Exhibits) This section lists exhibits filed with the Form 10-Q, including corporate governance documents and required CEO and CFO certifications - The report includes a list of filed exhibits, such as the CEO and CFO certifications required under Sections 302 and 906 of the Sarbanes-Oxley Act[126](index=126&type=chunk)

Financial Performance - Q2 2025 revenue reached $106 million[11] - The company reported an operating loss of $1.1 million[15] - Earnings per share stood at $0.22[19] - Revenue per active earning coach (AEC) was $4,630[13, 14] - As of June 30, 2025, cash and investments totaled $163 million[6, 21, 22] Coach Network and Productivity - The company has 22,800 active earning coaches[20] - Revenue per active earning coach declined 6.9% year-over-year but increased sequentially for the second consecutive quarter[8] - New coach productivity exceeded the same period last year[8] - 60% of coaches have had at least one client on GLP-1 medications[30, 70] Strategic Initiatives - The company is focusing on science-driven innovation and offer evolution[23, 65] - The Premier+ program streamlines pricing and processes to improve retention and aid recruitment[25, 48, 51] - The OPTAVIA EDGE program is designed to drive coach productivity, client acquisition, and leadership development[52, 71] Market and Health Focus - The company is addressing the rising metabolic health challenge, with 9 out of 10 U S adults being metabolically unhealthy[31, 69] - The OPTAVIA 5&1 Plan has been shown to impact key drivers of metabolic health, retaining 98% of lean mass in a clinical trial[38, 40] Q3 2025 Guidance - The company projects Q3 2025 revenue between $70 million and $90 million[75] - Q3 2025 loss/earnings per share is expected to be between ($0.60) and $0.00[75]

[Executive Summary & Business Update](index=1&type=section&id=Executive%20Summary%20%26%20Business%20Update) Medifast reported significant Q2 2025 revenue decline, achieving net income and maintaining a strong balance sheet, focusing on business transformation - CEO Dan Chard stated the company is focused on **transforming the business** by reigniting coach growth and productivity through targeted initiatives to enhance offerings and expand client solutions[2](index=2&type=chunk) - The company highlights a scientific finding that its OPTAVIA 5 & 1 Plan helps preserve **98% of lean mass**, positioning it as a key benefit for metabolic health beyond simple weight loss[2](index=2&type=chunk) Q2 2025 Key Metrics Overview | Metric | Value | Source | | :--- | :--- | :--- | | **Revenue** | $105.6 M | Q2 2025 | | **Active Coaches** | 22,800 | Q2 2025 | | **Net Income** | $2.5 M | Q2 2025 | | **Diluted EPS** | $0.22 | Q2 2025 | | **Cash & Investments** | $162.7 M | As of June 30, 2025 | | **Debt** | None | As of June 30, 2025 | [Second Quarter 2025 Financial Performance](index=1&type=section&id=Second%20Quarter%202025%20Financial%20Performance) Medifast's Q2 2025 financial performance saw a **37.4% revenue decrease**, but improved operating loss and **$2.5 million net income**, driven by expense control and an investment gain [Revenue and Coach Metrics](index=1&type=section&id=Revenue%20and%20Coach%20Metrics) Q2 2025 revenue fell **37.4% to $105.6 million** due to a **32.7% decline in active coaches** and client acquisition challenges, exacerbated by GLP-1 medications Revenue and Coach Metrics Comparison (Q2 2025 vs Q2 2024) | Metric | Q2 2025 | Q2 2024 | % Change | | :--- | :--- | :--- | :--- | | **Revenue** | $105.6 M | $168.6 M | -37.4% | | **Active Earning Coaches** | 22,800 | 33,900 | -32.7% | | **Avg. Revenue per Coach** | $4,630 | $4,972 | -6.9% | - The primary drivers for the decline were continued challenges with client acquisition and broader operating environment pressures, including the rapid adoption of GLP-1 medications for weight loss[3](index=3&type=chunk) [Profitability Analysis](index=2&type=section&id=Profitability%20Analysis) Gross profit decreased **37.9% to $76.6 million** due to lower revenue, but **SG&A expenses significantly reduced by 40.8%**, leading to an improved operating loss of **$1.1 million** Profitability Metrics (Q2 2025 vs Q2 2024) | Metric | Q2 2025 | Q2 2024 | % Change | | :--- | :--- | :--- | :--- | | **Gross Profit** | $76.6 M | $123.4 M | -37.9% | | **Gross Margin** | 72.6% | 73.2% | -60 bps | | **SG&A Expenses** | $77.7 M | $131.3 M | -40.8% | | **Loss from Operations** | ($1.1 M) | ($7.9 M) | +86.5% (Improvement) | - The decrease in SG&A was primarily due to a **$24.3 million** reduction in coach compensation and the non-recurrence of prior-year costs, including **$12.5 million** for supply chain optimization and **$3.0 million** for convention cancellation[7](index=7&type=chunk) [Other Income, Taxes, and Net Income](index=2&type=section&id=Other%20Income%2C%20Taxes%2C%20and%20Net%20Income) Medifast reported **$3.9 million in other income**, primarily from a **$2.6 million gain on LifeMD investment**, resulting in a **net income of $2.5 million** ($0.22 diluted EPS) for Q2 2025 - The company recorded a **$2.6 million gain** on its investment in LifeMD common stock in Q2 2025, compared to a **$4.2 million loss** in Q2 2024[9](index=9&type=chunk) Net Income and EPS (Q2 2025 vs Q2 2024) | Metric | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | **Net Income (Loss)** | $2.5 M | ($8.2 M) | | **Diluted EPS** | $0.22 | ($0.75) | [Capital Allocation and Balance Sheet](index=2&type=section&id=Capital%20Allocation%20and%20Balance%20Sheet) Medifast maintains a strong, liquid, and debt-free balance sheet, holding **$162.7 million in cash, cash equivalents, and investment securities** as of June 30, 2025 - The company's balance sheet remains strong with **$162.7 million** in cash, cash equivalents and investment securities and **no debt** as of June 30, 2025[12](index=12&type=chunk) [Business Outlook](index=2&type=section&id=Business%20Outlook) Medifast provided a cautious Q3 2025 outlook, projecting revenue between **$70 million and $90 million** and diluted EPS ranging from a **loss of $0.60 to breakeven** Q3 2025 Outlook | Metric | Guidance Range | | :--- | :--- | | **Revenue** | $70 M - $90 M | | **Diluted EPS** | ($0.60) - $0.00 | [Financial Statements](index=5&type=section&id=Financial%20Statements) The unaudited financial statements detail a year-over-year decline in revenue and gross profit, a shift to net income for the quarter, and a stable balance sheet with reduced liabilities [Condensed Consolidated Statements of Operations](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) For Q2 2025, Medifast reported **$105.6 million in revenue** and **$2.5 million net income**, a significant improvement from the prior year's **$8.2 million net loss** Statement of Operations Summary (Three Months Ended June 30) | (in thousands) | 2025 | 2024 | | :--- | :--- | :--- | | **Revenue** | $105,555 | $168,558 | | **Gross Profit** | $76,644 | $123,438 | | **Income (loss) from operations** | $(1,066) | $(7,876) | | **Net income (loss)** | $2,480 | $(8,154) | | **Earnings (loss) per share - diluted** | $0.22 | $(0.75) | [Condensed Consolidated Balance Sheets](index=6&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of June 30, 2025, total assets were **$269.3 million**, total liabilities decreased to **$53.3 million**, and stockholders' equity increased to **$216.0 million** Balance Sheet Summary (As of June 30, 2025 vs Dec 31, 2024) | (in thousands) | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | **Cash and cash equivalents** | $101,694 | $90,928 | | **Total Current Assets** | $206,441 | $214,404 | | **TOTAL ASSETS** | $269,333 | $284,213 | | **Total Current Liabilities** | $46,184 | $64,161 | | **TOTAL LIABILITIES** | $53,328 | $74,104 | | **Total stockholders' equity** | $216,005 | $210,109 |

Core Viewpoint - Medifast, Inc. (NYSE: MED) is initiated with a Strong Buy rating and a price target of $56, focusing on its weight management and nutritional products under the OPTAVIA brand [1] Company Overview - Medifast, Inc. manufactures and distributes weight management products and nutritional products, primarily under the OPTAVIA brand [1] Research Methodology - Moretus Research employs a structured, repeatable framework to identify companies with durable business models, mispriced cash flow potential, and intelligent capital allocation [1] - The research combines rigorous fundamental analysis with a high-signal, judgment-driven process, avoiding noise and overly complex forecasting [1] - Valuation is based on sector-relevant multiples tailored to each company's business model and capital structure, emphasizing comparability, simplicity, and relevance [1] Investment Focus - Research coverage favors underappreciated companies undergoing structural change or temporary dislocation, where dispassionate analysis can lead to asymmetric returns [1] - Moretus Research aims to provide professional-grade insights, actionable valuation, and a strong filter for what truly matters in modern equity analysis [1]

Core Viewpoint - Medifast's shares have increased by approximately 10.9% since the last earnings report, outperforming the S&P 500, but there are concerns about whether this positive trend will continue leading up to the next earnings release [1] Group 1: Earnings Report and Market Reaction - The consensus estimate for Medifast has shifted downward by 100% over the past month, indicating a negative trend in earnings expectations [2] - The stock has received a subpar Growth Score of D and a similar score for momentum, while it holds a C grade for value, placing it in the middle 20% for that investment strategy [3] Group 2: Outlook and Future Expectations - The overall VGM Score for Medifast is D, suggesting a lack of strong performance across various investment strategies [3] - Estimates for the stock have been broadly trending downward, and the magnitude of these revisions indicates a negative outlook, with a Zacks Rank of 3 (Hold), suggesting an expectation of in-line returns in the coming months [4]

Medifast® Q1 2025 Earnings Supplement © 2025 Medifast, Inc. All Rights Reserved. This presentation contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements generally can be identified by use of phrases or terminology such as "intend," "anticipate," "expect" or other similar words or the negative of ...

Financial Data and Key Metrics Changes - Revenue for Q1 2025 was $115.7 million, a decrease of 33.8% year over year, primarily due to a decrease in the number of active earning OPTAVIA Coaches [19] - Net loss for Q1 2025 was $800,000 or $0.07 per share, compared to net income of $8.3 million or $0.76 per diluted share in the prior year [22] - Gross profit decreased 33.8% year over year to $84.2 million, with a gross profit margin of 72.8%, consistent with the previous year [20] Business Line Data and Key Metrics Changes - The number of active earning OPTAVIA Coaches decreased by 32.8% year over year to approximately 25,400 [19] - Average revenue per active earning OPTAVIA Coach for Q1 was $4,556, a year-over-year decrease of 1.4%, showing a moderation compared to a 22% decrease in Q1 2024 [20] Market Data and Key Metrics Changes - The company noted that a weaker economy could present consumer demand headwinds, but historically, economic slowdowns have increased coach recruitment as more individuals seek additional income opportunities [16] Company Strategy and Development Direction - The company is focusing on empowering coaches to be more productive and successful, with a strategy that includes streamlining coach development, enhancing tools and insights for coaches, and broadening product offerings [10][12][13] - The introduction of the OPTAVIA Ascend line aims to support individuals using GLP-1 medications, helping preserve lean muscle mass [13][14] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the potential for growth, citing early positive indicators and a focus on coach-led strategies [17] - The company expects to see clearer signs of a turnaround by the end of 2025, with a focus on improving coach productivity and customer acquisition [17] Other Important Information - The company is currently developing studies to evaluate the efficacy of the new Ascend line and the established Essential line, which will support the business transformation over the next 12 to 18 months [14] - The financial position remains strong with $164.6 million in cash and no interest-bearing debt as of March 31, 2025 [22] Q&A Session Summary Question: Clarification on second quarter top line guidance - Management explained that the guidance reflects the timing of promotions and that the absence of a planned promotion in Q2 could lead to an acceleration in the year-over-year rate of decline [26][28] Question: Impact of GLP-1 on coaching community - Management indicated that the introduction of GLP-1 medications has created training opportunities rather than controversy, allowing coaches to better support clients on and off these medications [50][55] Question: Monthly cost of GLP-1 and supporting nutritional programs - The monthly cost for the OPTAVIA program is approximately $400, which covers 80% of daily meals, while LifeMD charges less than $20 for their telehealth service [57][59]