LifeMD(US:LFMD)2023-03-23 01:56Financial Data and Key Metrics Changes - LifeMD achieved adjusted EBITDA profitability of $631,000 in Q4 2022, marking a significant improvement from an adjusted EBITDA loss of $8.2 million in the same period the previous year [11][45] - For the full year 2022, revenue totaled $119 million, up 28% compared to 2021, with telehealth net revenues growing by 21% to $82.6 million and WorkSimpli net revenues increasing by 47% to $36.4 million [46] - The company expects revenue growth of approximately 20% to 25% in 2023, with adjusted EBITDA projected to grow to between $12 million and $18 million [11][19] Business Line Data and Key Metrics Changes - LifeMD's virtual primary care business is projected to exceed $5 million in revenue for 2023, a significant increase from just over $500,000 in 2022 [4] - WorkSimpli generated approximately $36 million in revenue and $5 million in EBITDA in 2022, with expectations for 2023 revenue to increase to between $50 million and $55 million and EBITDA to rise to between $15 million and $20 million [7][10] Market Data and Key Metrics Changes - LifeMD's active subscriber base increased by 22% year-over-year, reaching over 169,000 active subscribers, while WorkSimpli's subscriber count rose by 64% to 168,000 [22] - The gross margins for the fourth quarter reached 86%, up 600 basis points compared to the same year-ago period [22] Company Strategy and Development Direction - The company plans to continue investing in and diversifying treatment offerings on its virtual primary care platform while expanding patient access through Medicare participation and private payer contracts [4] - LifeMD aims to position itself as a long-term leader in the telehealth space, leveraging its proprietary technology platform and affiliated medical group to enhance patient engagement and outcomes [5][23] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about future prospects, citing new partnerships and a strong pipeline of opportunities with national organizations seeking to collaborate with LifeMD [6][54] - The company is confident in its ability to eliminate cash burn by mid-2023 and believes its financial position is strong enough to support long-term growth plans [10][50] Other Important Information - LifeMD executed several initiatives in 2022 to strengthen its liquidity and capital position, including closing a credit facility with Avenue Capital that provides up to $40 million [10][50] - The company reduced its marketing expense as a percentage of revenue to 62% in Q4 2022, down from 77% in the same period the previous year [52] Q&A Session Summary Question: Can you talk about the $28 million in revenue that was lower than expected? - Management acknowledged the revenue guidance and explained that the revenue was impacted by a noncash deferral of telehealth order shipments [28][51] Question: What is the revenue split between health care and software for 2023? - The health care segment is expected to be around $100 million, while the WorkSimpli business is projected to contribute approximately $45 million to $50 million [30] Question: What sort of EBITDA margin is expected for the software and health care businesses? - Both businesses are expected to be profitable by mid-year, but specific margins were not disclosed at this time [32] Question: How much of the $40 million credit facility is accessible now? - The company has funded $15 million at closing, with an additional $5 million committed without contingencies, and the remaining $20 million will be accessible upon reaching approximately $150 million in TTM revenue [34][35] Question: What is the payer mix expected to trend towards by Q4 of fiscal '24? - Management speculated that the payer mix could shift to 50% insurance and 50% cash pay, based on survey data from potential patients [47][48] Question: Can you provide details on partnerships with larger entities? - Management confirmed late-stage conversations with multiple national organizations regarding partnerships, emphasizing the strong interest and traction in the business development pipeline [53][55]