LifeMD(LFMD) - 2024 Q4 - Earnings Call Transcript

Financial Data and Key Metrics Changes - LifeMD achieved consolidated revenue growth of 43% year-over-year to $64.3 million in Q4 2024, with full-year revenue of$ 212.5 million, a 39% increase from 2023 [30][35] - Telehealth revenue grew by 60% year-over-year, with standalone adjusted EBITDA profitability at $5.9 million, an increase of 396% compared to the previous year [30][34] - Gross margin for Q4 was 85.3%, a decline of 280 basis points year-over-year, but expected to normalize to 88% to 90% in 2025 [32][35] Business Line Data and Key Metrics Changes - Telehealth subscriber growth remained strong, with active subscribers increasing by 27% year-over-year to over 275,000 [31] - WorkSimpli's active subscribers grew by 3% to 164,000, with average monthly adjusted EBITDA returning to over$ 1 million [31] - Rex MD generated over $80 million in annualized revenue, expecting 15% to 20% growth in 2025 driven by sexual health offerings and hormone replacement therapy [20] Market Data and Key Metrics Changes - The weight loss and metabolic health program had over 75,000 active patients as of year-end, positioned for long-term growth [9] - The approval rate for Zepbound prior authorizations increased by 18 percentage points between October and January, approaching 60% [12] - LifeMD expects to have approximately 150 million lives under coverage by the end of 2025 through government and private payer programs [24] Company Strategy and Development Direction - LifeMD's strategic priorities for 2025 include solidifying its market position in weight loss care, expanding hormone replacement therapy, launching the LifeMD plus membership program, and growing payer programs [8][9] - The company plans to enter the behavioral health space in Q2 2025, leveraging its existing telehealth capabilities [25] - LifeMD aims to enhance its pharmacy capabilities and expand its portfolio of personalized therapies [21][23] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the long-term benefits of expanded coverage for branded GLP-1 therapies and the potential for Medicare to cover these medications [15][70] - The company is prepared to capitalize on the evolving landscape of telehealth and weight management, with a focus on patient access and affordability [10][70] - Management highlighted the importance of building a robust operational infrastructure to support future growth in telehealth and pharmacy services [39][70] Other Important Information - LifeMD's GAAP net loss for Q4 was$ 883,000, a significant improvement from a loss of $4.5 million in Q4 2023 [33] - The company introduced guidance for 2025 consolidated revenue of$ 265 million to $275 million, with telehealth revenue of$ 205 million to $213 million [37] - Adjusted EBITDA guidance for 2025 is between$ 30 million and $32 million, with telehealth adjusted EBITDA of approximately$ 20 million [37] Q&A Session Summary Question: Can you talk about your relationship with LillyDirect and how it works? - The relationship is with a third-party pharmacy that LillyDirect uses to ship medications directly to patients, enhancing patient experience for those without insurance coverage [44] Question: What is the outlook for WorkSimpli? - WorkSimpli has stabilized and is expected to continue producing around $1 million in monthly EBITDA, with significant growth potential [66] Question: What percentage of new patients are getting insurance approvals for therapies? - Approximately 10% of patients receive coverage without prior authorization, while about 60% require prior authorization, with a good approval rate for Zepbound [117] Question: What is the expected contribution from the new segments in 2025? - The new segments are expected to contribute modestly in 2025, with significant growth potential in the following years as the company scales its offerings [110][114] Question: Can you provide an update on Medicare reimbursement for telehealth services? - There is optimism for a permanent extension of Medicare coverage for telehealth, with bipartisan support in the legislature [73]