[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]

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]