LifeMD(US:LFMD)2022-08-11 23:39Financial Data and Key Metrics Changes - Revenue for Q2 2022 totaled a record $30.5 million, up 37% compared to the same quarter a year ago [17] - Telehealth net revenues grew by 41% to $22.3 million, while WorkSimpli net revenues grew by 26% to $8.2 million [18] - Gross margins reached record levels at 85%, up 300 basis points year-over-year, with telehealth-only gross margin reaching 80% for the first time [20] - Net loss attributable to common stockholders for Q2 totaled $13.8 million, or a loss of $0.45 per share, compared to a net loss of $16.8 million, or $0.64 per share, in Q2 2021 [21] Business Line Data and Key Metrics Changes - The active subscriber base for telehealth increased by 53% year-over-year, ending the quarter with over 168,000 active subscribers [19] - 93% of total revenues in Q2 were generated by recurring subscriptions [17] - 38% of new patient order volumes came from non-erectile dysfunction treatments, up from 22% during the same period last year [12] Market Data and Key Metrics Changes - The company is experiencing strong traction with its virtual primary care (VPC) platform, with a 1500% growth in patient count versus the prior quarter, currently having over 1,200 active patients [11] - Retention rates for the VPC platform are strong, with early attrition rates in the low single-digit percentages [11] Company Strategy and Development Direction - The company is transitioning to a telehealth-only business model through the impending divestiture of WorkSimpli, focusing on profitability and growth of new telehealth offerings [9][14] - The introduction of new telehealth treatment categories is expected to have significant growth potential [8] - The company aims to achieve consolidated adjusted EBITDA profitability by Q4 2022 [12] Management's Comments on Operating Environment and Future Outlook - Management expects short-term slowing of sequential growth for the next few quarters, followed by a return to more aggressive growth at higher profitability levels [9] - The company believes that the demand for its products and services will remain stable even in a recessionary environment, with potential benefits from reduced advertising costs [60][61] Other Important Information - The company has made solid progress in streamlining its operations and has received significant interest from prospective buyers for WorkSimpli [24] - Cash totaled $11.7 million as of June 30, 2022, with expectations of meaningful improvements in cash burn for the remainder of the year [23] Q&A Session Summary Question: Can you talk about the dynamics going from April to June? - The company refined its advertising strategies, leading to record levels of return on investment, which caused a short-term impact on revenue but positions the company for accelerated growth [30][31] Question: What factors contribute to the sequential growth? - Length of subscription and product mix are key factors, with a focus on longer-term subscriptions driving better unit economics [34][35] Question: How is the sale process for WorkSimpli progressing? - The sale process is progressing well, with strong demand and optimism about closing a transaction before the end of the year [57] Question: How did CAC trend in the quarter? - CAC was down slightly year-on-year on a blended basis and flat quarter-on-quarter [58] Question: How would a recession impact the business? - Management does not expect a recession to impact demand for products and services, and it could potentially drive down advertising costs [60][61]