biote (BTMD) - 2024 Q4 - Annual Results

Financial Performance Overview Q4 & Full Year 2024 Financial Highlights Biote reported a 9.0% revenue increase in Q4 2024 to $49.8 million and a 6.4% increase for the full year to $197.2 million. The company achieved a net income of $3.5 million in Q4 and $0.05 million for the full year. Gross profit margins improved in both periods, primarily due to efficiencies from the vertical integration of its 503B manufacturing facility. The company ended the year with $39.3 million in cash Fourth Quarter 2024 Financial Highlights (vs. Q4 2023) | Metric | Q4 2024 | Q4 2023 | Change | | :--- | :--- | :--- | :--- | | Revenue | $49.8 million | $45.7 million | +9.0% | | Procedure Revenue | $36.6 million | N/A | N/A | | Gross Profit Margin | 71.8% | 69.4% | +2.4 p.p. | | Net Income | $3.5 million | $12.1 million | -71.1% | | Diluted EPS | $0.10 | $0.18 | -44.4% | | Adjusted EBITDA | $15.1 million | $13.6 million | +11.0% | | Adjusted EBITDA Margin | 30.3% | 29.7% | +0.6 p.p. | Full Year 2024 Financial Highlights (vs. FY 2023) | Metric | FY 2024 | FY 2023 | Change | | :--- | :--- | :--- | :--- | | Revenue | $197.2 million | $185.4 million | +6.4% | | Procedure Revenue | $150.3 million | N/A | N/A | | Gross Profit Margin | 70.5% | 68.8% | +1.7 p.p. | | Net Income (Loss) | $0.05 million | $(2.8) million | N/A | | Diluted EPS | $0.09 | $0.13 | -30.8% | | Adjusted EBITDA | $58.2 million | $55.3 million | +5.2% | | Adjusted EBITDA Margin | 29.5% | 29.8% | -0.3 p.p. | Management Commentary Management highlighted significant progress in 2024, strengthening the company's foundation for future growth. Key achievements include the launch of the BioteRx platform and upgraded software, which enhance their competitive position. They also noted improved manufacturing efficiency through the integration of Asteria Health. Despite a temporary slowdown in procedure volume due to the software transition, the company maintains a strong financial position and cash flow generation - CFO Bob Peterson noted that full-year 2024 revenue increased 6.4% and gross profit margin improved due to the vertical integration of their 503B manufacturing facility[3] - The transition to upgraded clinical decision support software impacted Q4 procedure volume, but the company is providing additional training to practitioners[3] - CEO Bret Christensen stated that the launch of the BioteRx platform and upgraded software have strengthened the company's competitive moat and capabilities in hormone optimization[5] - The integration and growth of Asteria Health have optimized manufacturing efficiency and strengthened the supply chain[5] Detailed Financial Review Fourth Quarter 2024 Financial Review In Q4 2024, revenue increased 9.0% to $49.8 million, driven by 5.0% growth in procedure revenue and 10.2% growth in dietary supplement revenue. Procedure growth was tempered by a software transition and a focus on training existing practitioners. Gross margin improved to 71.8% from 69.4% due to vertical integration. However, operating income fell to $2.8 million from $5.5 million, impacted by higher employee-related and legal expenses. Net income decreased to $3.5 million, largely due to a $0.8 million loss from fair value changes of earnout liabilities, compared to a $5.4 million gain in the prior-year period - Q4 revenue grew 9.0% to $49.8 million. Procedure revenue grew 5.0%, while dietary supplement revenue grew 10.2%, benefiting from a transition to an Amazon e-commerce platform[6] - Procedure revenue growth was negatively impacted by a reduction in volume as clinics transitioned to new software and a focus on training existing practitioners, which slowed the addition of new clinics[6] - Gross profit margin increased to 71.8% from 69.4% in Q4 2023, attributed to the vertical integration of the 503B manufacturing facility and cost management[7] - Operating income decreased to $2.8 million from $5.5 million due to employee-related investments and additional legal expenses[7] - Net income for Q4 2024 was $3.5 million, compared to $12.1 million in Q4 2023. The decrease was significantly influenced by a loss on the change in fair value of earnout liabilities versus a gain in the prior year[8] Full Year 2024 Financial Review For the full year 2024, revenue grew 6.4% to $197.2 million, primarily driven by procedure revenue growth. Gross profit margin expanded to 70.5% from 68.8% in 2023, thanks to manufacturing integration and cost controls. Operating income rose 10.3% to $31.6 million. The company reported a net income of $0.05 million, a significant turnaround from a net loss of $2.8 million in 2023. Adjusted EBITDA increased to $58.2 million, though the margin slightly decreased to 29.5% Full Year 2024 vs. 2023 Performance | Metric | FY 2024 | FY 2023 | Change | | :--- | :--- | :--- | :--- | | Revenue | $197.2 million | $185.4 million | +6.4% | | Gross Profit Margin | 70.5% | 68.8% | +1.7 p.p. | | Operating Income | $31.6 million | $28.7 million | +10.3% | | Net Income (Loss) | $0.05 million | $(2.8) million | N/A | | Adjusted EBITDA | $58.2 million | $55.3 million | +5.2% | - The increase in gross profit margin for 2024 was primarily due to the vertical integration of the 503B manufacturing facility and effective cost management[11] - The improvement in operating income was driven by revenue growth and higher gross profit, which offset higher operating expenses[11] 2025 Financial Outlook Management Strategic Focus for 2025 For 2025, management will focus on three key commercial execution strategies to drive accelerated growth. These include maximizing value from top-tier providers, intensifying efforts to add new practitioners to the network, and strengthening accountability and discipline within the commercial organization. While these changes are expected to be implemented quickly, management anticipates a lag before results manifest in accelerated revenue growth later in the year - The company has identified several areas of emphasis for 2025 to drive accelerated growth[13] - Strengthening efforts to maximize the value of top-tier providers - Intensifying focus on adding new practitioners to broaden the network and reinvigorate procedure revenue growth - Driving revenue growth by improving accountability and discipline throughout the commercial organization[13] 2025 Guidance Biote projects fiscal 2025 revenue to be between $202 million and $208 million, with Adjusted EBITDA in the range of $59 million to $64 million. Procedure revenue is expected to grow 2-4%, while dietary supplements revenue is forecasted to increase 5-10%. For Q1 2025, revenue is expected to be slightly higher than Q1 2024, but Adjusted EBITDA is projected to be about 5% lower due to increased sales and marketing activities Fiscal 2025 Guidance | Metric | 2025 Guidance Range ($ in millions) | | :--- | :--- | | Revenue | $202 - $208 | | Adjusted EBITDA | $59 - $64 | - 2025 procedure revenue is expected to increase approximately 2-4% from 2024[13] - 2025 dietary supplements revenue is expected to increase approximately 5-10% from 2024[14] - Q1 2025 revenue is expected to be slightly higher than Q1 2024, while Q1 2025 Adjusted EBITDA is expected to be approximately 5% lower YoY due to increased sales and marketing activities[15] Financial Statements Consolidated Balance Sheets As of December 31, 2024, Biote's balance sheet shows total assets of $122.4 million, a decrease from $155.3 million at year-end 2023, primarily due to a reduction in cash and cash equivalents from $89.0 million to $39.3 million. Total liabilities increased significantly to $224.6 million from $191.8 million, driven by new share repurchase liabilities. This resulted in an increased total stockholders' deficit of $102.2 million compared to $36.5 million in the prior year Selected Balance Sheet Data (in thousands) | Account | Dec 31, 2024 | Dec 31, 2023 | | :--- | :--- | :--- | | Cash and cash equivalents | $39,342 | $89,002 | | Total current assets | $68,127 | $122,343 | | Total assets | $122,370 | $155,295 | | Total current liabilities | $51,514 | $22,215 | | Total liabilities | $224,570 | $191,841 | | Total stockholders' deficit | $(102,200) | $(36,546) | Consolidated Statements of Operations For the year ended December 31, 2024, Biote generated total revenue of $197.2 million, up from $185.4 million in 2023. Income from operations grew to $31.6 million. Despite higher interest expense and a significant loss from the change in fair value of earnout liabilities, the company posted a net income of $46 thousand, a positive shift from a net loss of $2.8 million in the prior year. Diluted earnings per share attributable to stockholders was $0.09 Consolidated Statement of Operations Highlights (in thousands) | Account | Year Ended Dec 31, 2024 | Year Ended Dec 31, 2023 | | :--- | :--- | :--- | | Total revenue | $197,191 | $185,360 | | Gross Profit | $139,061 | $127,483 | | Income from operations | $31,611 | $28,657 | | Net income (loss) | $46 | $(2,805) | | Net income attributable to biote Corp. stockholders | $3,157 | $3,316 | | Diluted EPS | $0.09 | $0.13 | Consolidated Statements of Cash Flows For the full year 2024, net cash provided by operating activities was $45.2 million, a significant increase from $26.9 million in 2023. Net cash used in investing activities was $18.8 million, mainly for acquisitions. Net cash used in financing activities was substantial at $76.1 million, driven by payments on repurchase liability ($62.2 million) and term loan repayments ($6.3 million). This resulted in a net decrease in cash and cash equivalents of $49.7 million, ending the year with a balance of $39.3 million Summary of Cash Flows (in thousands) | Activity | Year Ended Dec 31, 2024 | Year Ended Dec 31, 2023 | | :--- | :--- | :--- | | Net cash provided by operating activities | $45,243 | $26,883 | | Net cash used in investing activities | $(18,798) | $(2,713) | | Net cash used in financing activities | $(76,083) | $(14,380) | | Net (decrease) increase in cash | $(49,660) | $9,771 | | Cash and cash equivalents at end of period | $39,342 | $89,002 | Non-GAAP Financial Measures & Reconciliations Discussion of Non-GAAP Financial Measures Biote uses Adjusted EBITDA and Adjusted EBITDA margin, which are non-GAAP measures, to evaluate operating performance and generate future plans. The company defines Adjusted EBITDA as net income before interest, taxes, depreciation, and amortization, further adjusted for items like stock-based compensation, litigation expenses, and fair value adjustments. Management believes these measures provide useful, comparable information to investors, but acknowledges their limitations and advises considering them alongside GAAP results - Biote discloses Adjusted EBITDA, a non-GAAP measure, calculated as net income adjusted for interest, taxes, depreciation, amortization, stock-based compensation, litigation expenses, and other specific items[18] - Management uses Adjusted EBITDA as a key measure to evaluate operating performance, generate future operating plans, and determine compensation[19] - The company does not provide a reconciliation for forward-looking Adjusted EBITDA to GAAP net income due to the unreasonable effort required to predict uncertain items like share-based compensation and legal expenses[22] Reconciliation of Adjusted EBITDA to Net Income For the full year 2024, Biote's net income of $46 thousand was reconciled to an Adjusted EBITDA of $58.2 million. Major adjustments included a $19.6 million loss from the change in fair value of earnout liabilities, $11.0 million in net interest expense, and $8.7 million in share-based compensation. For Q4 2024, net income of $3.5 million was reconciled to an Adjusted EBITDA of $15.1 million, with key adjustments including legal settlement losses and litigation expenses Reconciliation of Net Income to Adjusted EBITDA (in thousands) | | Q4 2024 | Q4 2023 | FY 2024 | FY 2023 | | :--- | :--- | :--- | :--- | :--- | | Net Income (loss) | $3,483 | $12,078 | $46 | $(2,805) | | Adjusted EBITDA | $15,123 | $13,574 | $58,225 | $55,256 | | Net income (loss) margin | 7.0% | 26.4% | 0.0% | (1.5)% | | Adjusted EBITDA margin | 30.3% | 29.7% | 29.5% | 29.8% | - Significant adjustments for FY 2024 included a $19.6 million loss from change in fair value of earnout liabilities, $11.0 million in net interest expense, $8.7 million in share-based compensation, and a $5.0 million legal settlement loss[33][34]