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 [20] - The company ended the quarter with approximately 25,400 active earning OPTAVIA Coaches, a decrease of 32.8% from Q1 2024 [20] - Gross profit decreased 33.8% year-over-year to $84.2 million, with a gross profit margin of 72.8%, consistent with the prior year [21] - 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 [24] Business Line Data and Key Metrics Changes - 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 [21] - The company reported lower year-over-year declines in coach productivity, driven by increased productivity of newer coach cohorts [16] 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 [17] Company Strategy and Development Direction - The company is focusing on empowering coaches to be more productive and successful, with an emphasis on a holistic solution that includes clinically proven plans and access to weight loss medications through LifeMD [18] - The strategy includes streamlining the coach development path, enhancing tools and insights for coaches, and broadening product offerings to better serve customers [10][12][13] Management 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 [18] - The company expects to see a clearer picture of resilience in the business as 2025 progresses, with a focus on delivering signs of a turnaround by the end of the year [18] Other Important Information - The company is currently developing studies to evaluate the efficacy of new product lines and the holistic OPTAVIA model [14] - The financial position remains strong with $164.6 million in cash and no interest-bearing debt as of March 31, 2025 [25] 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 impact the year-over-year rate of decline [27][30] Question: Impact of GLP-1 medications on coaching community - Management indicated that GLP-1 medications have created training opportunities rather than controversy, as coaches adapt to the new environment [52][56] Question: Monthly cost of GLP-1 and supporting nutritional programs - The monthly cost for the five and one program is approximately $400, which covers 80% of daily meals [59] Question: Changes in company-led marketing and its impact on SG&A - Management confirmed that while there will be some pullback in company-led marketing, it will not be dramatic, and reactivation efforts will continue [46][47]

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 [18] - The company ended the quarter with approximately 25,400 active earning OPTAVIA Coaches, a decrease of 32.8% from Q1 2024 [18] - 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 [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] Business Line Data and Key Metrics Changes - 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 [19] - The company saw lower year-over-year declines in revenue per active earning Coach, driven by increased productivity of newer coach cohorts [15] Market Data and Key Metrics Changes - The company is experiencing a shift in the coaching community due to the introduction of GLP-1 medications, which has created both opportunities and challenges [48][50] - Approximately 50% of OPTAVIA Coaches have supported clients using GLP-1 medications, with 25% having personal experience with these medications [11][54] 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, and broadening product offerings [9][10][12] - The introduction of the OPTAVIA Ascend line is aimed at those using GLP-1 medications, helping to preserve lean muscle mass [12] - The company plans to reduce company-led marketing costs while emphasizing the importance of the coach community for customer acquisition [14] Management's Comments on Operating Environment and Future Outlook - Management believes the health and wellness space is evolving rapidly, presenting significant opportunities for the company [5] - The company expects to see a clearer picture of resilience in early positive indicators as 2025 progresses, with a focus on delivering signs of a turnaround by the end of the year [17] - Management acknowledges that economic slowdowns could increase coach recruitment as more individuals seek additional income opportunities [16] Other Important Information - The company has a strong financial position with $164.6 million in cash and no interest-bearing debt as of March 31, 2025 [22] - Guidance for Q2 2025 revenue is expected to range from $85 million to $105 million, with a loss per share ranging from $0.00 to $0.55 [23] Q&A Session Summary Question: Clarification on Q2 top line guidance and sales decline - Management explained that the guidance reflects the timing of promotions and does not necessarily indicate a continued trend of decline [25][27] Question: Impact of GLP-1 medications on coaching community - Management noted that the introduction of GLP-1 medications has created training opportunities rather than controversy, as coaches adapt to the new environment [50][54] Question: Monthly costs associated with GLP-1 and supporting nutritional programs - The monthly cost for the OPTAVIA program is approximately $400, which includes most of the meals for clients [57] Question: Changes in company-led marketing and its impact on SG&A - Management indicated that while there will be some pullback in company-led marketing, it will not be dramatic, and reactivation efforts will continue [44][45]

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2025 OR o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from________ to ________. Commission File Number: 001-31573 Medifast, Inc. (Exact name of registrant as specified in its charter) | Delaware | 13-3714405 | ...

Medifast Announces First Quarter 2025 Financial Results BALTIMORE – (BUSINESS WIRE)--Medifast (NYSE: MED), the health and wellness company known for its habit-based and coach-guided lifestyle solution, OPTAVIA®, today reported results for the first quarter ended March 31, 2025. First Quarter 2025 "In today's health and wellness landscape, more people than ever are seeking guidance not just for weight loss but for learning how to lead a healthier lifestyle," said Dan Chard, CEO of Medifast. "However, researc ...

Core Viewpoint - Medifast, Inc. is expected to report a decline in both revenue and earnings for the first quarter of 2025, with revenues projected at $119.9 million, reflecting a 31.4% decrease year-over-year [1] Revenue Outlook - The Zacks Consensus Estimate for Medifast's first-quarter revenues is $119.9 million, indicating a significant decline from the previous year's figure [1] - Management previously projected revenues between $100 million and $120 million for the first quarter, highlighting ongoing challenges in customer acquisition and engagement [4] Earnings Outlook - The consensus estimate for Medifast's bottom line has narrowed to a loss of 7 cents, down from a profit of 66 cents in the same quarter last year [2] - The company anticipates a bottom line between break-even and a loss of 50 cents, reflecting financial strain from declining sales and high customer acquisition costs [5] Market Challenges - Medifast faces a challenging macroeconomic environment, including increased competition in the health and wellness sector, the impact of GLP-1 weight loss medications, and a general decline in consumer discretionary spending [3] - The evolving dynamics of the weight loss market, particularly the rapid adoption of GLP-1 therapies, are altering consumer preferences and behavior, further complicating Medifast's performance [4] Strategic Initiatives - Despite the challenges, Medifast is pursuing strategic initiatives aimed at growth, including expanding its product portfolio and enhancing customer experience [6] - The "Fuel for the Future" program is an enterprise-wide cost optimization initiative that aims to improve operational efficiency and may provide some buffer against broader market pressures [6] Earnings Prediction Model - The Zacks model does not predict an earnings beat for Medifast this quarter, as it currently holds a Zacks Rank of 3 and an Earnings ESP of 0.00% [7]

Core Viewpoint - Medifast, Inc. has experienced a significant decline in stock price, dropping 28.2% over the past six months, underperforming both the industry and broader market indices [1][3][15] Financial Performance - In Q4 2024, Medifast reported revenues of $119 million, a 37.7% year-over-year decline, despite being at the upper end of guidance [4] - The company ended Q4 with a coach base down more than 34% from the previous year, and average revenue per coach declined by over 5% [5] - Projected revenues for Q1 2025 are expected to be between $100 million and $120 million, indicating ongoing challenges [7] Cost and Profitability Challenges - Rising SG&A expenses have significantly pressured profitability, with increased marketing efforts and reduced efficiency leading to higher expenses as a percentage of revenues [6] - The company's operating income has deteriorated sharply, reflecting the escalating costs amid declining revenues [6] Market Dynamics and Strategic Initiatives - The adoption of GLP-1 medications is reshaping consumer preferences in the weight loss market, impacting customer acquisition for Medifast [5] - Medifast is launching OPTAVIA ASCEND in early 2025 to cater to the nutritional needs of GLP-1 users, aiming to enhance customer acquisition and experience [11][12] - The company is pursuing a long-term growth strategy focused on innovation, market expansion, and operational excellence, with initiatives to improve the coach and client experience [13] Cost Optimization Efforts - The "Fuel for the Future" program has delivered $21 million in cost savings in 2024, with expectations of an additional $15 million to $20 million in 2025 [14] Consensus Estimates - The Zacks Consensus Estimate for fiscal 2025 has seen a downward revision, with a projected loss of 1 cent for the current fiscal year and earnings of 2 cents for the next fiscal year [10]

Company Overview - Medifast, Inc. operates the Optavia wellness brand, providing weight loss and management plans through supplements, meals, and coaching services [1] - As of the end of 2024, Medifast has 27.1 thousand active earning coaches [1] Investment Philosophy - The investment philosophy focuses on identifying mispriced securities by understanding the drivers behind a company's financials, often revealed through a DCF model valuation [1] - This approach allows for flexibility beyond traditional value, dividend, or growth investing, considering all prospects of a stock to assess risk-to-reward [1]

Core Insights - Medifast, Inc. reported a decline in both earnings and net revenues for the fourth quarter of 2024, but both metrics exceeded the Zacks Consensus Estimate [1][4][5] Financial Performance - Adjusted earnings per share (EPS) were 10 cents, down from $1.09 in the same quarter last year, surpassing the Zacks Consensus Estimate of an adjusted loss of 27 cents [4] - Net revenues totaled $119 million, a decrease of 37.7% year over year, attributed to fewer active earning OPTAVIA Coaches and reduced productivity per Coach, but exceeded the Zacks Consensus estimate of $111 million [5] - The average revenue per active earning OPTAVIA Coach was $4,391, down 5.5% from $4,648, with the total number of active earning Coaches falling 34.1% to 27,100 from 41,000 [5] Margin and Cost Analysis - Gross profit was $88.2 million, down 37.6% year over year, with a gross margin of 74.1%, which is an increase of 10 basis points year over year [7] - Adjusted selling, general and administrative expenses (SG&A) decreased by 30.1% year over year to $87.5 million, primarily due to reductions in coach compensation and nonrecurring costs [8] - Adjusted SG&A expenses as a percentage of revenues increased by 800 basis points to 73.5%, driven by higher marketing expenditures and reduced leverage on fixed expenses [9] Operational Insights - Adjusted income from operations declined 95.6% to $0.7 million, with the adjusted operating margin decreasing by 790 basis points year over year to 0.6% [10] - The company ended the quarter with cash, cash equivalents, and investments of $162.3 million, with no interest-bearing debt and total shareholders' equity of $210.1 million [11] Future Outlook - For the first quarter of 2025, Medifast expects revenues between $100 million and $120 million, with EPS ranging from a loss of 50 cents to break-even [12]

Financial Data and Key Metrics Changes - Revenue for Q4 2024 was $119 million, a decrease of 37.7% year-over-year, primarily due to a decrease in the number of active earning OPTAVIA coaches and lower coach productivity [30] - Earnings per share (EPS) for Q4 2024 was $0.07, down from $0.55 in the prior year [34] - Gross profit decreased 37.6% year-over-year to $88.2 million, while gross profit margin improved by 10 basis points to 74.1% [31] - SG&A expenses decreased 34.1% year-over-year to $87.5 million, reflecting a significant reduction in OPTAVIA coach compensation and other costs [32] Business Line Data and Key Metrics Changes - The number of active earning OPTAVIA coaches decreased by 34.1% year-over-year to approximately 27,100 [30] - Average revenue per active earning OPTAVIA coach was $4,391, a year-over-year decline of 5.5%, but an improvement from a decline of 22.2% in Q1 2024 [31][10] - The percentage of customers using GLP-1 medications rose to 17% at year-end, up from just over 3% at the beginning of 2024 [11] Market Data and Key Metrics Changes - Approximately 44% of coaches were supporting at least one customer on a GLP-1 medication at year-end, up from 12% at the start of 2024 [11] - The ASCEND product line, launched in December, has been well received, with 17% of customer orders in January including ASCEND products [16] Company Strategy and Development Direction - The company is focusing on adapting to the health and wellness market influenced by the rising acceptance of GLP-1 weight loss medications [7] - Priorities for 2025 include accelerating customer acquisition, improving coach productivity, advancing clinical research, expanding product offerings, and evaluating entry into new categories [24][26] - The company aims to provide integrated solutions that combine lifestyle modifications, clinical guidance, and community support to meet diverse customer needs [27] Management's Comments on Operating Environment and Future Outlook - Management noted continued pressure on new customer acquisition but indicated early signs of stabilization in certain areas [17] - The company expects challenges in customer acquisition to persist through at least the first half of 2025, with hopes for positive comparisons in the second half [36] - Management emphasized the importance of transitioning to support customers on GLP-1 medications and those managing weight loss without medications [55] Other Important Information - The company ended the year with $162.3 million in cash and no debt, providing flexibility for growth initiatives [35] - The "Fuel for the Future" cost reduction initiatives delivered $21 million in savings in 2024, with expectations for an additional $15 million to $20 million in 2025 [23] Q&A Session Summary Question: Thoughts on Q1 guidance and ASCEND launch impact - Management indicated that coach productivity will be an early indicator of return to growth, with expectations for improvement in 2025 [41][42] Question: Marketing efforts and ASCEND product visibility - Management plans to optimize marketing spend and focus on coach compensation to drive customer acquisition [46][47] Question: Retention rates for customers transitioning off GLP-1 - Management noted mixed retention rates, with a portion of customers using coaching to maintain weight loss after transitioning off GLP-1 [60][62] Question: Operating cash flow and capital spending for 2024 - Operating cash flow for 2024 was approximately $24.5 million, with capital expenditures at $7.5 million [67] Question: Marketing spend for 2025 - Management indicated that marketing spend in 2025 will likely be lower than in 2024 due to less non-working marketing [71] Question: Sequential uptick in coaches expected in Q1 2025 - Management expects continued pressure on the number of coaches until coach productivity improves [91][94]

Medifast, Inc. (MED) has introduced a high-protein product line, OPTAVIA ASCEND, designed to support individuals using GLP-1 medications and those seeking help to maintain weight loss. The new line features fiber-rich mini meals and daily nutrient packs, which aim to boost muscle health, digestive function and bone strength.OPTAVIA ASCEND is integrated into two new science-backed nutrition plans, complementing OPTAVIA's comprehensive approach to fill a critical gap in the weight management sector. This laun ...