LifeMD (LFMD) 14 May 212021 Q1 Earnings call transcript

Good afternoon. Thank you for joining us today to discuss LifeMD’s First Quarter Fiscal 2021 Results for the three months ended March 31, 2021.

Joining us today is the Chairman and Chief Executive Officer of LifeMD, Justin Schreiber; and Company's Chief Financial Officer, Marc Benathen. I'd like to remind everyone that today's call is being hosted via webcast and the recording will be made available via the link in today's press release which is available in the Investor Relations section of the company's website.

Before we conclude today's call, I'll provide some important cautions regarding the forward-looking statements made by management during the call. is everyone made call via company’s available today’s release remind and being instructions website. to Investor press be the will for which like that of is today’s recorded in Relations I'd section in the available webcast replay

Please Now Schreiber. turn CEO, to like call over ahead. I'd LifeMD to the Justin go

on their you, and good And us ones first our for of and operator the afternoon, XXXX. joining hopeful and have Thank New that earnings hope I the are safe everyone Year, that today loved COVID everyone. Thanks call started. call in for vaccinations now

get a As this continue who selflessly thanks enter management all point team assist the like to themselves. others new we us pandemic to curve, who the to phase of workers the and give to frontline before would helped have

patients are and well the XXX,XXX both access and rolls. year care financially. We Having future our people as patient quality, strong continue LifeMD by the is and our converting the fiscal while over start into possibilities high greater and to to a to pioneer operationally since more evidenced to now served providing XX inception, we new off states, affordable of in growing and telehealth, convenient healthcare, of customers more

no emerge While and millions down. Americans. happening [ph] will way that to delivered report slowing healthcare to of pleased the Indeed, a which broader frankly and the the experienced and levels. COVID signs the I of LifeMD’s continues demand to country very show am helped radically to shift acceleration by is our build to continues pandemic, from accelerate business, our tectonic growth record sensed industry change We is

rates subscription to and XXXX. trend. our nothing results but I trend we that of as by a XXXX, our telemedicine. in our from growth excited revolution. be strong of up done of healthcare explosive the conversion the XXX% patient healthcare based mission period, quarter. direct LifeMD can to through In quarter committed to revenue hesitation positively the to say We ago part fantastic it. at stands vanguard patient increasing of our access to the prior over sequentially of are And a evidence are the XX% to grew compared And first have same year models and standard we without

laying the the the prior revenue margins quarter direct pathway growth very for specifically is response that more technology and profitability addition the costs XX% versus LifeMD predictable coupled see the results leading from of marketing, In our seeds a This also a recurring fact comes subscriptions, to saw scale first gross exceeding while foundation profitability. marketing to in XX%. domain to In structure, by the with XX% building planting growth, beginning of cost optimize XX% phenomenal mind. to this XXXX, strong approximate quarter leveraging in our the is customer better and for over begun in record we've our long-term, level aggressively, our we improvement paving acquisition with our and while core currently of accelerated business telehealth early primary pandemics to also health, telehealth. investors as an and At and and will use of story, to pioneers XXXX, in predates in That permanence surely patient to in that The efficiently. new in past digital support expertise, base that our to our and on the products we have care LifeMD our scale to telehealth new a also of entrench services mass in who And our the in bigger holistic health propel and platform patients. global said, made want as To mind. positive retreat. our customer ability a adoption we COVID businesses have lives pandemic our remind centric of really difference we to that digital quickly the an opportunity through endure has our mission are been goal long narrative

the of and to seeing tens that significant are direct services, ability if support telemedicine We fueling of our not been offerings overwhelmingly hundreds subscription patient have based built to the offerings, growth. have platform our choosing which sequential products a and has patients value our

time rebuilding of XX% more fact, came of In subscribers. the already in than for first existing from telehealth revenue the history, our patient company

remains customer telehealth potential an acquisition, our As industry massive. in leader growth

now, strong imperatives get that in are of operating a addressable a nascent transformed have are market where placed dollars. with open of total to on whitespace a really LifeMD’s emphasis a trillion industry To We we we a strategic nearly few potential.

our built have indications. digital via brand across Nava launch in direct brand. week platform patient women, health dermatology of MD of further other a quarter, robust we services we expandability which to unlimited added a our the launched our is process to third In the care for forward look and patient years, MD, last developing clinical four to tele with we companies. Nava growing further First, the diversification portfolio

before, and brands powerful addition, primary this believe to patient this We later launching our with continue In and successful summer. current coupled end-to-end very launch, about anticipate conditions specific differentiated will platform platform. spoken we to care a direct I've as provide future with telemedicine telehealth LifeMD our LifeMD namesake

have have and who support our it set would formidable growth. periods marked our financials. like with by leadership significant in to regulatory in turn of will of hires experience strides hires to Officer our high and executive solidifying growth I Benathen, to Chief only significant our the our consumer out the a Digital term Medical expansion, brand healthcare that, make team enable LifeMD a XXXX our includes our This Chief Officer, summary, to topline pivotal In strengthened hires, saw with infrastructure, direct quarter These a businesses. team in to the the was with LifeMD rapid profitability. Officer. with previous Financial over us play with performance, also which revenue will given record not Chief scaling efficiently to to the discuss Second, longer we coupled towards Marc? managing call team CFO, executive growth rounding Marc team scale and management roles order And leadership first in

Thank afternoon, And Justin. good everyone. you,

a to we've mentioned, thus fiscal had Justin fantastic far. XXXX start As

and products level Our indications well high and our the patients who recurring services we service have been their choice made converting given treat. we based received overwhelmingly plans, to have maintenance of subscription by the active provide the of accounts

well with a three approaching XX potential a Xx see Xx year economics We at continue or our recurring month to exceed subscriptions on LTV basis. CAC on and strong the to on unit ratios to basis,

by quarter of of first is up into the the million of quarter totaled compared the record growth $XX.X largely in our to revenue same As year first quarter get based. period, in now XXXX. revenues To XXXX, was the XXX% as the a XXXX results, telehealth comparable XX% driven fourth XXX% revenue of recurring subscription quarters XX% million. to net a The increase ago from a and $XX.X

million associated Our of increase first quarter, contributed net ago strong orders. or quarter revenue subscriptions, versus was new existing the of million, including the to retention period basis revenue would been patients. $XX.X XXX,XXX sequentially revenue subsidiary order XX% total year have from adjusted non-GAAP a in grew in year LegalSimpli $X.X increase deferred patients, on of driven a ago million for volume XXX% recurring up $X.X plus XXXX. with XXX% This to XXX% Telehealth the by

million million to of a XXXX $XX had XXX% full million, our performance As reflecting from revenue previously XXXX we of guidance and between we continued $XX result the to momentum, and our $XX significant annual the given million to in of of year XXXX. QX growth in raising guidance versus XXX% are $XXX

ago expenses appointment to the growth, XXX,XXX. due The and compensation million, the to the was development executive XX% million, $XX.X increase revenue XXXX primarily $XX.X to rate year was the discretionary, attributable we expense product the to of current [indiscernible] in board percentage expenses which prescription The to in the to was current $XX.X customer Gross million of The XXX,XXX of revenue an grow. in the of on XXXX, the quarter other period ago we year in million, compared $X XX% was increase same based the of these growth company continues more million million ago same the growth XXX,XXX, The costs first admin lower from quarter $XX.X and solidify expense. service was up to increased $X.X of based in in annualized term from Gross related stock first the leverage costs, to quarter profit the profit scalable profit of are of compensation in selling due run ago reporting operating expenses principally to as by non-cash with associated majority million business As running and quarter. XXX% general same increases of several team costs XX% year infrastructure, of expect $X.X million increase increased in operating a of quarter. revenues period reporting admin made quarter, and of The calculated and LifeMD’s investments rapid primarily Operating cost management. of increase of $X.X marketing as inventory and to compared in first gross of stringent the long expenses was year stock in and members. quarter. our expenses to general of

Our to $X.X per figure per XXXX. loss measure, stockholders is net a Adjusted This first first the compared quarter which of GAAP expense. non-GAAP same million a year million for to period. ago as of compensation a share. common to stock share EPS quarter, common This the per loss $X.XX compares $X.XX stockholders net share quarter first in the $XX.X loss in attributable for million share or attributable of a of in to $X.XX based excludes non-cash or totaled per totaled $X.XX the loss $X.X the

expense, terms factors XXXX year GAAP amortization million these XXX,XXX. XXX,XXX, Adjusted of the transaction based of to the quarter. stock This in financing related loss for term ago EBITDA, charges, adjusted to addition up of of included an expense interest our loss quarter compares as XXX,XXX quarter XXX,XXX the non loss net non-cash compensation first other a financing of $X.X in such XXXX. a same of and combined totaled expenses of EBITDA which or expense first In

totaled to XXXX, December balance net XX, at with at completed $XX.X a The our February increase XXXX. compared sheet. million was March primarily Cash private to period XX, Now as million XXXX. $XX.X proceeds to the of turning $X.X placement in million in due

we with mentioned company basis reduced have ample As started current burn as press do in cash to for release work to a KPIs earlier on current a and current hone cash our XX% to our plans revenue position go-forward [ph] by meet and have our economics approximately today, on in significant our and liquidity believe and the our growth. We funds available needs at levels. result provide

This in turn to further securing to now We balance also position. like continue back call our over Justin. augment sheet up our progress wraps to financial financing to results, make I'd additional the

Marc. Thanks,

So But teams, XXXX. poise is elevated supportive to really growth. Nava to the our patients and with of care infrastructure business in come. our we're key to of subscriptions, MD, to the recurring acquisition executive optimize multiples start XX% We lay improve continued strong launched for best and infrastructure patient off transitioned to over our a patient yet and appointments,

upwards XXXX. to earlier, reflecting employees, supported economics over in the versus years revenue facilitate built, more of guidance $XX we've will million of even growth raising development and years contract our led and XXX this of All year and than XXXX $XXX current to that platform mentioned XXX% full stronger the time growth technological believe to fiscal five by unit come. We to LifeMD Marc million, aggressive as

way allow to Our that, differentiated amazing the health Brands with like on transform on open that the focus delivery of customer continue affordable is With I In Q&A. delivered accessible will and, patients. we medical for building call and care. condition for telemedicine and care so to doing, specific would to to remains the most and innovative importantly health improve access acquisition, brands are equal focus treatment.

first you. Thank question We’ll today David from take BTIG. Instructions] our go ahead. from Please [Operator Larsen

you your there's Hey, very in own vendor. of into a from space. a can on the hoping what you was terms you're what guys, overall Thanks. activity good seeing market. in telehealth the cash increase congratulations of of and just Obviously, quarter pay I a Amazon demand the the acquired been lot terms in are has telehealth comment space. from on in business? the the for mean, entered seeing guidance. Walmart customers appetite I

had a in will on we've enter, we've telemedicine given - be everything small aggressively of type Long significant we've entering of entering is us And Thanks, big company DTC percentage believe they the delivered. - that believe think Justin. on incredible store. they'll the having can we healthcare size the And that the telemedicine, we're This kind seen the and given visit further space will the offering of demonstrates Walmart's of and us entrance DTC and a MeMD, have else but telemedicine we're to or we see M&A to or in David. overall [ph] part that telemedicine it to as know, term, we a the with compete space. no know, the a people a to most business, know, believe it's we at you how or impact impact. second transformation of Amazon DTC before, differentiated Walmart again, that acquisition all, the have we a amount the is Walmart for supposed plans discussed you know, Look focused just that world. awareness you strong And space that with had Amazon, opportunity - whitespace can raises think for exists entrance does it compete that is of we awareness quarter. business. the this that actually for regards happy of ahead of this companies, the business raising I'm grow activity BXB, Amazon condition-specific, sure - of do that opportunity very further you don't in With you our have very, anybody not know,

acquisition like any great. can very sales then you margin, that gross the significant more you term marketing trends longer pop and for sales in customer the a I like, That's margin, helpful, around know, expectations costs see spend Okay. maybe your Thanks. marketing and on would little that give CAC? gross color color like to expected And and just in and be very and more

is this Mark. Yeah,

corner. lot to Regarding driven higher the to OTC a the tighter. our gross gross produced was term expect business. pretty gross longer margin out very of margins seen this A been managing gross that one, we by business prescription see the margins margin, we versus a inventory Two, OTC slightly lot significantly, business similar grow our we’ve has it which we’ve in

both of able have to up certainly gross which So in those laddered very future. maintain to strong margins, be we expect the to

and saw CAC, Regarding was mentioned marketing Justin, sales by and reduction. as a we

the over don't While We've up in another tighten reduction to since did to to we see this number, a XX% release quarter that have second physical reduce absolute time, costs, forward CAC that we a and able XX% then, about our go XX% on QX. to since in about basis. the by been and continued cost actual quarter, XX%

very think we we longer the through improving XX% to is ratios. and and economies years that CACs we'll of reductions of absolute dollar year, continue new on LTV be see basis, to continue a the but subsequent to naturally patients get bigger seeing to you you're year. expect per day. And remainder basis further where because are there's to CAC But bit on only brands scale similar a remainder as cost through term, an in figures what higher, little XX% which would flow substantially QX going acquiring bigger, the have obviously the more we're our to in another continue and per get So to acquisition today we potentially to see tighter, of and that are our

very little television, Marc. so of talk That's it much. bit into, about is you spend, of advertisements? more Can sales the more and sort a into marketing nature going Thanks actually like the is helpful. or online going what

Yeah.

And…

with and pretty a as it have our media-enabled of more geared radio. mix But few spend, We've future. there's a patient it be marketing there's to either television the other channels, lot acquisition it's XXX% growth, channels towards across SEM, growth or amount tested of channels really traditional significant social, tends well. We those different digital digitally-enabled spread in obviously, of media But broadly of accelerate channels. a to discretionary SEO,

say, CAC, regards with like shifting improvement scale? do to lot then how to Are get channel… you XX% that? to the improving a you advertising And given cost your in are actually more dollars costs of Or a

digitally days, earlier our only kind history. mean, of as your recognition we've Two, Its I so not of one, know, our in our more brands, pages obviously have many and, that, your about built [ph] brands positions you there's much improving. of

we've So on and really to works in channels. marketing lot refine And what of those doesn't. of our various we've able done been testing a and hone tests what

that ways And to, those biggest more in is the years. you getting necessarily we're So we in improvements future, scale we fully why scale, that really do further as are look, which well materialized we'll see which I there. that expect - buying able more hasn't to get the as yet, subsequent know, have mentioned be

That’s launched great. early MD in market? signs How more any know me, but Nava I'll recently you. one the tracking? is from just feedback And and or for any with that, I you hop

that David. Yeah. I'll one, take

working some other We kind did some fine the tuning kind and bringing dermatologists recently of soft We bit did leading just we launch a of more it. opinion on were So a protocols. little launch. on

your than the testing seeing know, with seeing to of and brands. Rex some optimization. expensively So at you done patients question we've or less or different We're we're the is, site, what actually lot answer a arrive other

still expect revenue meaningful some its see from start a say, right a lot great now, to like revenue brand, we're to you more we to So know, this But optimist opportunity quarter. we're seeing of that we not - - very there.

then is Great. more, And right rate your one now. just retention what

on through is So orders, selling all products that your what customers you're were you for overall of telehealth that rate? the you're board bringing them - retention

necessarily figure are. we That's we mentioned, out put not directional put I our LTV out publicly CACs you a for as reasons. that know, But competitive what

So the we're year. seeing a on first in to about two average one return

there's a in month. amount bit move fall you first first retaining year, are as those within little of through, off of patients the We substantial the a

looking in So fall-off at once fall-off or you'll re-bill, then fifth really looking somewhere retain minimal of billing And fourth XX% to the around typically, around subsequent that your get pretty period, you and know, billing to digit XX% patients, single period. at we you're first after you're if that. any

think of the subscription Okay. Is And I is based. correct? XX% revenue that

Yeah, pretty much, most, of [ph] thousands this marketplace of all third-party outside subscription at the essentially business based if not the point.

very now. thanks hop the queue much. I'll you. Thank Okay, on into

Thank you.

to our from Securities. B. Andrew go Riley now go Please will We from next D'Silva ahead. question

afternoon. quarter. Hey, on my Congrats And thanks good the taking for questions.

little I'm to breakout more curious to bit I'm trying you bit just of as little understanding better it the could on So a LTV it side? a how model expenses, CACs a relates of to telehealth to LegalSimpli just get granularity relates provide as to if and business. how the to telehealth

really for million an sales and a run has around standpoint. lot lot telehealth infrastructure sales Yeah, roughly know, line the look you there you other line, the look million was at a marketing, it business. few expense is mean, the marketing as look not was LegalSimpli it's A business. and that lines, of at that to expense know, business, expense too marketing of LegalSimpli associated specific categories. material with breakout. associated of the the without with the the - you the and a remainder what telehealth categories, which as other inexpensive $XX in When our from some largest you business. going would significant, and also about into be there's the fuels marketing the business Roughly most And items, of when growth to the other But and to sales the is line the at area $XX.X I do expense pretty, payroll

But - that And that was subscription the cadence took place understand should that expect very in I'm it's there year-over-year anything highly did filler Or growth? I Okay. is that if and was quarter-over-quarter. that a resulted both one-off year on? we business that one goes curious fairly as well, that model. based strong just

with to you're every business. obviously, gets bigger, do very should and - they're are in had mass, to that to mean, has early, continue And marketing I it A those see lot growth place. all at there of issues this were not you that us see optimizations business doubling behind to single but to some to significant a the quarter point. going take critical starting Yeah. as technical you hit expect know,

and business see predictable the very you and tremendous lot So the continue to expect growth, should to materialize of year. has throughout a that

like business. of were sort we're moving critical to was out health of sense in of initiatives And be that the stuff and of mass. men's those hair if or seeing good. you very both close for patient brands, Okay, to any that side that you're given back brands, the differentiated over and to particularly like I things seem the there either telehealth relevant, the curious developing? And Obviously, bolt-ons platform are any getting there or upcoming tuck-ins monitoring makes

opportunities. patient anything. We're of take we at with the at lot Yeah, familiar haven't And We're one. Andy, monitoring looked looking pretty I'll different that a inorganic space.

accurate make business. as economics even and well, could drive said, synergistic - that going the those unit growth over the work I just traditional say offerings. aggressive opportunities, current us, But, to on across We but we're very And, mean, be on world, basis, revenue know, - you at we're, the near somewhere previously, to a we're a healthcare be I right, space. we our doing basis, the product with look, of world that's the opportunities term. a and very in weekly probably that the the haven't in interesting as that to done in even not stuff wouldn't in And where And seeing be seeing you daily in see something pursue new lot certainly, know, we're proprietary over least sense. counter continue

first compounding just model building. of would me benefits in for question the the to the you're subscription to Last much the prescription things Okay. is like quarter attribute saw you related fruitful, How been that of new products you style OTC having introducing that recently? And proprietary, that launches any to out proprietary are coming brands products have any you've in? the if compounded with other you been related those either

We're much seeing where and some health creative progress loss a have our going hired business reason the has to. [Technical Not would you company managers, with we’re And we've products. people you project been been know, aggressively across as hair our, a the as lot for know, of telemedicine It's, just from, been we men's composite kind has that. and there's liked you simple that our to infrastructure know, you And bandwidth unfortunately, expanding growing, still has especially business. decide, our aggressively we've Difficulty] And, of bandwidth. so focus to a know, people line that to growing, managers. developers, know, you we're brand

the energy we're those. so as traction have going of both like to right on both compounded and very Nava [ph] - we drug see focused earlier, now on telemedicine brand. a believe that to within I And to business business of - the said And topical start I lot we're SpearMD date, really with we and strong

Best of much. you Thank great. very going forward. luck Okay,

Thanks, Andy.

for will you. any remarks. additional like conference or to conclude would Justin turn now session. Schreiber back today's I to Thank closing That question-and-answer over the

our of rather who of just all XX this. support, keep especially and days have updated thank forward to employees your And know, like look tumultuous you continuing the our through. in call, an to future been of all bright you company calls all say in I like the a shareholders. been have evening. really And, this everybody has we've over beginning to Like said future. great I the Appreciate to supportive, extremely

you. Thank

of important today's during I XXXX. conclude within statements Section of forward-looking include Act harbor regarding A like statements has forward-looking and made conference information Securities in includes we company's that of call. safe the XX Act meaning Exchange the statements to XXXX cautions the the The provide call E provided Section this would today's Before company that of XX of Securities the call,

company's both As among plans, and amended strategies things, prospects, other and financial. regarding, the business

expectations. suggested or While believes or intentions its and the are forward-looking that that statements company realize that expectations in by reasonable, assure are you these or cannot these plans, reflected achieve company it plans, the will intentions

on Forward-looking inherently Many differ conference to intend, qualified may be anticipate, time statements its language. to this entirety or made should, Securities subject forward-looking from could by believe, statements company that the to the Commission. in expressly from set uncertainties and as may, that use attributable factors behalf of actual to during forward-looking include are files with cause potential those words will, documents call made conference estimated by Incorporated during forth among person United acting risks, cautionary are expect, assumptions. results call market and statements identified time Important this others. such and LifeMD in statements conditions reports or the States their the planned, Exchange and this the materially forward-looking All of forward-looking

to call will this be would evening. Please at concludes available instructions later available end we the conference that us like everyone Thank www.lifemd.com. earnings call, refer this and for starting conference replay for via today's replay the remind call. today's you this company's to website today the Before for I joining release

disconnect. now may You