LifeMD(US:LFMD)2020-11-17 02:57Financial Data and Key Metrics Changes - Conversion Labs reported record revenue of $11 million for Q3 2020, representing a 21% increase from the previous quarter and a 252% increase compared to the same quarter last year [6][12] - Gross profit for Q3 2020 increased by 238% to $8.3 million, although gross profit margin decreased to 75.1% from 78.2% year-over-year due to product mix [13] - The company experienced a GAAP net loss of $24.1 million or negative $1.64 per share in Q3 2020, compared to a net loss of $944,000 or negative $0.09 per share in Q3 2019 [15] - Annual recurring revenue (ARR) from subscriptions increased by 458% to $19.3 million in September and further increased to $22.1 million in October, up 514% year-over-year [8][6] Business Line Data and Key Metrics Changes - The PDFSimpli subsidiary contributed net sales of $1.6 million in Q3 2020, up 136% from the same year-ago quarter [12] - The company noted strong organic growth across its brand portfolio, particularly in men's health and hair loss products [4][5] Market Data and Key Metrics Changes - The ongoing COVID-19 pandemic has accelerated the adoption of telemedicine, significantly benefiting Conversion Labs' growth strategy focused on new patient acquisition [5] - The company achieved an annualized revenue run rate of nearly $50 million, a four-fold increase from $12.5 million for the entire previous year [7] Company Strategy and Development Direction - Conversion Labs is focused on building out its telehealth technology platform and expanding its provider network, with significant investments in customer service and sales teams [9][10] - The company completed a $15 million financing round to support its growth and plans to uplift to the NASDAQ capital market [11][29] - The launch of new telehealth brands, including Nava MD for teledermatology, is part of the company's strategy to capture growth in rapidly expanding market segments [44] Management's Comments on Operating Environment and Future Outlook - Management believes that the telehealth opportunity is substantial and that the company is well-positioned for continued growth [26] - The company anticipates that lockdowns due to COVID-19 will drive e-commerce and telemedicine growth, viewing these conditions as beneficial for its business [60][61] - Management expressed confidence in the company's ability to maintain strong unit economics and cash-on-cash returns despite being in a new business [48] Other Important Information - The company has appointed new board members with significant experience, including Roberto Simon and Dr. Connie Mariano, to strengthen its governance as it prepares for NASDAQ listing [32][34] - Conversion Labs has engaged B. Riley as a financial advisor to enhance its visibility among institutional investors [30] Q&A Session Summary Question: Can you discuss the stickiness of subscriptions and visibility? - Management has not formally released retention numbers but plans to address this in the first quarter of 2021, noting strong unit economics and quick cash returns [48] Question: What is the average age of customers and success demographics? - The average age of customers for the ED offer is 65 years old, which aligns well with the rollout of additional categories [52] Question: How does the company view the potential impact of COVID-19 on growth? - Management believes telemedicine is here to stay and that lockdowns will drive e-commerce growth, benefiting the company [60][61] Question: Can you provide an update on the NASDAQ uplisting? - Management is hopeful for a quick approval from NASDAQ, having satisfied all requests, but no specific timeline was provided [66]