Medifast(US:MED)2025-04-28 21:32Financial Data and Key Metrics Changes - Revenue for Q1 2025 was $115.7 million, a decrease of 33.8% year-over-year, primarily due to a decrease in the number of active earning OPTAVIA Coaches [20] - The company ended the quarter with approximately 25,400 active earning OPTAVIA Coaches, a decrease of 32.8% from Q1 2024 [20] - Gross profit decreased 33.8% year-over-year to $84.2 million, with a gross profit margin of 72.8%, consistent with the prior year [21] - Net loss for Q1 2025 was $800,000 or $0.07 per share, compared to net income of $8.3 million or $0.76 per diluted share in the prior year [24] Business Line Data and Key Metrics Changes - Average revenue per active earning OPTAVIA Coach for Q1 was $4,556, a year-over-year decrease of 1.4%, showing a moderation compared to a 22% decrease in Q1 2024 [21] - The company reported lower year-over-year declines in coach productivity, driven by increased productivity of newer coach cohorts [16] Market Data and Key Metrics Changes - The company noted that a weaker economy could present consumer demand headwinds, but historically, economic slowdowns have increased coach recruitment as more individuals seek additional income opportunities [17] Company Strategy and Development Direction - The company is focusing on empowering coaches to be more productive and successful, with an emphasis on a holistic solution that includes clinically proven plans and access to weight loss medications through LifeMD [18] - The strategy includes streamlining the coach development path, enhancing tools and insights for coaches, and broadening product offerings to better serve customers [10][12][13] Management Comments on Operating Environment and Future Outlook - Management expressed optimism about the potential for growth, citing early positive indicators and a focus on coach-led strategies [18] - The company expects to see a clearer picture of resilience in the business as 2025 progresses, with a focus on delivering signs of a turnaround by the end of the year [18] Other Important Information - The company is currently developing studies to evaluate the efficacy of new product lines and the holistic OPTAVIA model [14] - The financial position remains strong with $164.6 million in cash and no interest-bearing debt as of March 31, 2025 [25] Q&A Session Summary Question: Clarification on second quarter top line guidance - Management explained that the guidance reflects the timing of promotions and that the absence of a planned promotion in Q2 could impact the year-over-year rate of decline [27][30] Question: Impact of GLP-1 medications on coaching community - Management indicated that GLP-1 medications have created training opportunities rather than controversy, as coaches adapt to the new environment [52][56] Question: Monthly cost of GLP-1 and supporting nutritional programs - The monthly cost for the five and one program is approximately $400, which covers 80% of daily meals [59] Question: Changes in company-led marketing and its impact on SG&A - Management confirmed that while there will be some pullback in company-led marketing, it will not be dramatic, and reactivation efforts will continue [46][47]