Medifast(MED) - 2025 Q2 - Quarterly Results

Executive Summary & Business Update 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] - 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] 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 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 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] Profitability Analysis 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] Other Income, Taxes, and Net Income 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] 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 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] Business Outlook 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 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 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 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 |