LifeMD (LFMD) 13 Aug 212021 Q2 Earnings call transcript

Good afternoon. Thank you for joining us today to discuss the results for LifeMD's Second Quarter of 2021 Ended June, 30, 2021.

Joining the call today are Justin Schreiber, Chairman and Chief Executive Officer and Marc Benathen, Company's Chief Financial Officer of LifeMD.

Following managements prepared remarks we will open the call for question and answer session. 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.

numerous would company remind of actual will which subject I this that forward-looking results begin that are the uncertainties from call make to to we differ like the those everyone to during statements may materially Before cost and projected. company's risks a number and the and that LifeMD filings uncertainties the SEC These other time described risks time. company's XX-K make with within in are and from to XX-Q filings they

are based measures company to looking current made earlier to statements release except is this call company by Also, there as the and looking financial The that can For to to Details GAAP as on measures available found today. will update forward the law. company evaluating press call between performance. please most assumes in on be the important issued after any these non during the information reconciliations today. be obligation relationship measures certain believes today's note statements LifeMD required or GAAP that of revise no discussing comparable non-GAAP the management

in would investor the everyone like to replay call section today's being relations and I will available company's for that website. recorded of be Finally, is remind the

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

second and afternoon, our operator XXXX quarter joining discuss everyone. good and results. you, us Thank Thank you today for

the our last momentum and the lifted, year. record top quarter Telehealth quarter, saw telehealth for line Even of largely restrictions on incredible XXX% the were we pandemic up services. to we being strong start Our performance products see over orders this this with same continued from demand year. top continue of fiscal building

across patient to revenue brands a numbers all customer XX% retention remained recurring by grow Our of with subscriptions. record at continued Patient based levels. subscription being generated record also

despite a most LifeMD revenues the our significant $XX.X digital across All up in media a period. year ago Perhaps added million of increase from impressive the rates of up record this core producing was to XXX% channels. XX%

drive to on X% brands allowed customer discretionary further acquisitions us costs. Our increase acquisition This down XX% marketing comparable double an increase investment an our day in per decrease sequential patient new in our in acquisition able and share. market team optimization to drive sequential was to

During the our quarter investment MD newest brand reception from promising marketing Nava, of strong results we MD. have favorable, four tele-dermatology also payback customer so Early has begin acquisition with on months. we're Nava two estimated been an costs extremely patients. far been to

be previously, in corporate and to brands especially brings Alex well to includes Nava we billion. the hires, transaction our in very new long industry in said the and in deepen meaningful pharma leadership we direct will as telehealth we important space several and us and president Alex contributor the allow broaden strategy continue experience XX offerings $X our profitable demonstrate in consumer acquisitions mergers development, business extensive experience believe over disrupt healthcare expertise with top that we and years believe a MD to of term. strategic line as As key the we've Organizationally, made over Mironov. us leading will pharmaceutical His and market. where industry. can areas totaling product to This over our

platform. across and over enable that Laboratory to indications life primary of [ph] three care services, XXXX to platform, unlimited emphasis provider will is expandability all our In combination which a XXX will services. National of continue to services laboratory technology these MD partners of and access multitude commonly healthcare provider process We have health, services. highlight at ordered To laboratory patients a of diagnostic partnerships actual over expandability These home access we wide new our class health provides a a in locations range our of diagnostic a exciting world preferred to home upcoming launch us and strong augment that place transformational digital at provide leading including recently the telehealth care patient enabling tests, platform this partnerships, on announced pricing. robust

Next, have we very we provider and marked care of medical and platform HIPAA medical our the the also that Health, of Nava of transform primary care. personalize data and a performance data these compliant partnership care the utilize announced their launch fall, patients a to rapidly brand, marketing differentiating Particle quarter In MD electronic great our technology launch well medical several this our summary, had the with for access time positioned affiliated second records acquisition way us will All consummation elevation real that partnerships of LifeMD providers leading the the tremendous successful partnerships. we of market. by which disrupt platform, infrastructure the primary our expect to their of

patient to to will ahead, direct that, industry. to ever be Marc? will a summary over in market Marc who CFO, turn than call Looking then, the a this Benathen more I of results. leader ability we're financial in the telehealth our now provide With our confident quarter's

and afternoon, everyone. Justin good you, Thank

the during unit able our business quarter across a more rate was level sizeable our approximate XX% factor efficiencies And capabilities second driving the sequential same record these A retention the media performance our ago, in and our achievement discretionary XX%. which and actually media and by conscious economics up and Justin patient this drive million in capture to high mentioned, total generated top efficiently XX% continue strong largely able increased than quarter, XXXX an same was during we the our increase, year drive at new of our a was recurring on Leveraging our share. strong brands, sequentially previous service. quarter second higher maintaining unit day improve this optimizing this as strong. to XXX% remarkable very offerings, a just of the closer XX% As increase sequential our up marketing in to efficiency key line XX% were $XX.X improving all and new while per strategy a subscriptions was rates our operational at also This of market digital revenue same by new period. media remains the decrease Adjusting X% to an how the Taking channels a existing ago was economics spend at our XXXX, acquisition further a the compared recurring months, in team quarter was look the to for strong to year basis, two in pay performance. customers requiring revenue to with total decision grow their in improvement on back rate quarter. to expanded and there of with CAC. We quarter our which our made quarter results drive XX% than how by four time, we we our revenue subscribers the lines execute while launch performances given

million. ago subscribers of Billings XX% this revenue In our XX% grew over to fact, $XX.X compared same existing our XXX% the revenues from in of revenue Telehealth as net quarter. year quarter have just to came already

orders. simply year XXX% quarter. subsidiaries XXX% year legal from volume ago grew order of Telehealth to million the the contributed ago Our $X.X net XXX,XXX versus up revenue period

continued Following excellent performance. this

of growth to marketing a profit We are payment year based non reiterating loss GAAP compared be costs full direct measure same million selling of and quarter, as million, our performance previously controlling Starting our and platform GAAP ago in our delivering the customers versus consider as we products platform effectively second in $XXX Gross subscribers. annual XX.X% year to year XXXX this percentage XXXX XX.X% financial same operating quarter. XXX% reporting which the reflecting and expenses to financial compared costs, quarter contribution our administrative patients ago the sell is important quarter fees, We variable and to we $XX excluding services second expenses. profit of guidance are the in expenses, was defined commence between the our and $X.X of XXXX. across platform revenue in we GAAP to in million of contribution revenue quarter. increased to million XXXX by providers, We on Gross XXX% the we and how raised retain measure direct contribution XXX% useful brands. general how believe other measure an non monitors processing before $XX.X and operating

$XX.X platform Additionally, profitability second an company. well is $X.X increase indicator million to for year XXX%. of compared Platform contribution million, in as a our in same contribution totaled the quarter quarter of good the leading

expenses to increases expenses General same marketing Now operating XXXX primarily of $XX.X was discretionary turning operating quarter. selling million and costs growth, $XXX,XXX. The of due administrative G&A was and expenses and for with ago $XX $X.X chronic the in second operating a non-cash expenses, expenses a million. service operating of million, expenses from our up of quarter other $XX.X million, increase of year based business increase care. compared associated XXXX growing made also of The investments for rapidly scale range amortization and offering infrastructure to primary the the to treatment $X.X expenses of second comp support expenses $XX,XXX. included stock of the Development $XXX,XXX expense year decreased conditions expenses period ago telehealth customer to in in by million. diversified to for and of quarter was

investments starting in XXXX of in gradually EBIDTA by XXXX EBIDTA scaled end reduce the these We losses breakeven the and expect leverage as to business to quarterly we XXXX.

a loss compared is year expense, transaction attributable or million measure based the non-cash financing of to loss of quarter, million compares million the expenses transaction depreciation loss $X.XX Our or an in second ago $X.XX expenses, to $X.XX per XXXX. adjusted $X.X expenses. quarter non loss figure $X.XX totaled of million in for GAAP the for expenses, stock out same million, of ago the factors which EPS This quarter. totaled second non-cash excludes to based attributable the measure $XX.X second common stockholders and totaled litigation common a of of $XXX,XXX Adjusted the as This gap to GAAP in loss share the a This period. compensation per that and non financial amortization second of financing net interest Adjusted to stock in and costs stockholders compensation, year EBITDA per non-recurring share. net XXXX. in share X.X $X.X compares the quarter, EBIDTA $XX and quarter loss of same

XXXX, our totaled XX of million to million XX December turning XXXX. $X.X as balance $XX.X Now cash June as compared to sheet, of as

As the in To mind. of invest This this sheet. sheet expect rapid our up raised this we to turn wraps with strong balance with minimally our and remain of we like building capital to unit end, focused to in complete back now Justin. expansion dilutive shareholders economics, balance we results. on strengthen scale an additional call further interests continue to non business the over or our financial to year our I'd the

Justin?

laid quarter. marketing Thanks, performance significant it after the market, the an consummated demand platform what care Overall, elevator primary very strong exceptional for to we was headwinds see services. a outstanding the tremendous a the MD, products drove quarter to acquisition second The our appointment launched in three end, and upcoming the be infrastructure expect continuing of Marc. quarter, transformational immediately and in very Nava media foundation partnerships successful into president, despite cost we're with quarter strong the performance LifeMD. has for current carried The our second launch of

patient new single fruition. and building acquisitions. for disrupting is coming our to day passing record vision business we telehealth set In day, of new our closing, each speak themselves the our for by healthcare leading recently, with numbers Just

and will operations growth and vision technology immense our depend strength of to the on continued our efforts. Our support team,

such growth last direct and We care up businesses significantly end to XXXX primary new reach new platform, profitability remaining in the have launch existing barring as our of strengthened in and And on We'll foundations things brands our to offerings, of lot the investments healthcare. we track the disrupt providers position unparalleled of while continued significant by our the our focused quarter, setting in patient or a do our as verticals. traditional have We a accomplish through of on in to care to brands continuing and as remain delivering telehealth. this we healthcare. by continue affiliated build leader still

our possible do thanks call everyone's wouldn't With our support. So it we to to Q&A. without and what patients, would and like open again I team that, our be their to do the for providers shareholders,

Andrew to first go we'll And Securities. Instructions] Riley [Operator of B. D'Silva

questions afternoon. good and me. Alright, my the taking few quick Thanks progress. really, on congrats for ones A all for

you Can the First, it just vaccination holding and assume second true and given saw And around during summer? is fair quarter. into what trends are the retention progress those then from to a the you standpoint? of loosen talk restrictions stickiness

Yeah, comparable that to the to retention high in remain second I was what in thanks, all of very can quarter continued products. it prescription first you Andy, quarter tell the was across

first person becomes the to and the to year XX% continue call the then to we within the economics first four an months patient within strong in the cycle, first XX% return those in months Within and two this after three payback continued then to first see in billing retention Xx year. with four initial

the restrictions our really loosing So on have pandemic no impact had business.

far are seeing quarter. as In actually thus fact, we've third started in we the improvement retention

it's of performing record So retention you restrictions a know, a post lifted. new from actually been standpoint, being acquisition business standpoint lot a and at levels

of going administered can highly business clearly also about diagnostic I and therapy. what that what's That's the going opportunities that focused recent some who's testosterone I'm the And things like curious you curious can driving looks moving on And initiatives forward a kinds you was on are to partnership, brought of Alex, really on. that where replacement how better? lot positions pipeline interesting. introduce thinking should over or strategic be we with be if

is with regards the this Andy, to Justin, dev pipeline. Yeah.

in has I right have our that what know, would think You XX the XX more there in expected considering of up. broke a of on, Alex in. I'm others, missed least potential with question, expectations. Alex And only then I promising are especially think exceeded partnerships but lot exceptional stuff is we some know, he's done was kind that pharmaceutical companies sorry, you job the exciting at Definitely, days. estimate an first days that we very your second It XX I the pipeline, kind I than it. of

across diagnostic you provide does platform? far on that partnerships testosterone the as to diagnostic position go, therapy the be partnership Yeah, able as to goes, replacement

going an be radar space relationship with kind and therapies away that's health from could controlled offering and the you something quest testosterone It and used know, we've look term the testosterone near stayed replacement foremost replacement on certainly first and therapy, testosterone substances, but, not any like for you know, the into of actual is screen, have offering, essential. country, lab very cash I location quest it's were where no pricing, XXX across of for on care patients that. can our assure avoid into the virtual because common primary preferential you walk we cost, very the one pay and We tests test, able to our a pricing the can will diagnostics

ability for So for the and that's that. then don't paying gives blood collect for secondly if work, us. that's really And convenient send exciting an actual health us mind go they and the to more to to them, phlebotomist home us fee additional patient's

lab So many telehealth require specific, conditions of specific these offerings indication will work.

example. know, You one is therapy testosterone

as look offerings. really portfolio important to we this the we of of So at diversify our as a puzzle piece continue

Great you. color, thank

that also sales for ad and should and context marketing little about and we think the thought improve? Lastly And be credits manage of we you expect for the to year give with how seasonality continue how the around process a can currently, or me, spend? to race should environment should useful? CPAs we rest CAC would maybe And that overall

Mark. Yeah,

improved So CACs, made quarters quarter, increased and more we've this another have rates our media versus seen been XX%. to brand than actually, improvements, against market to the quarter, to XX%. the we And now had would sequentially quarter, XX%, sequential we the then obviously improved by quarter. that first not the close By first prior XX% XX% of improvements two X%

going into there year be next may longer more be in some be improvements than So will CACs. that, heading I we're there obviously offset term some forward definitely think able to

in You seen, driven we've and would QX, and the cost we've as pretty, pretty and to know, from term, haven't levels comparable be CAC we know, QX, efficient levels. you shorter them cost where driven effective them actually certainly expect very very today, to

experienced the amount on massive in to companies and the in most investments. marketing quarter of growth back their dial fact, In second had increases

marketing believe we've obviously to and optimize and go lead back that's going other customers, marketing revenue to fairly possibly the profitability bit next more to share, suits, growth, how back over period expense have and But reinvested we and very of what And significant that consumer better of in is that. quick $X out significantly grab acquire order only very see to the about capital expense reality going our ultimately, revenue invest growth today, our ability direct in in two we're would is the to and where market a to quarters. think should the trillion. percent of pay to that the next levels size and to be one our quarters we we after a marketing after which patients hand, couple future, and one time, has new are we're we than the into to On going we forward media. is redeployed to to a and sales sales of a been acquisition, comparable approach been, approaching expect of little and sales efficient market able as is, go going The strong I

So and up know, have and strengths seen to with capabilities. leverage catch you for there's far those acquiring term new patients, back amount know, on we've then long as those as opportunity their certainly you go which pull Whereas, companies tremendous other to customers. of us the spend definitely that direction advertising retaining a you and goals

going for and Good on questions. luck my Thanks, taking congrats Mark. progress. Thanks forward

our [indiscernible] from of question come will BTIG. next And

the all and for David in clarifications guys. afternoon Mikael Thanks Good This is for Larsen. progress.

to Nava maybe you can a launch. know I the But my just month side. been payback can mentioned period. there. couple two we frame Just start how and volumes questions of better with that the you know you Maybe four a looking membership have sort on

know there of of market business. a your sense how about You sort margin and overall you're the thinking for that potential profile

this Marc. so Yep,

now, but some obviously took in a you aggressive we in we business little of So launched in know, the time marketing quarter, quarter general, second certification. the first get bit launched to

But but started traffic month seeking amount could wanted have were that were of per across lowest the acquisition the So and to done that patient list back double the the strong of quarter. we're what patient on the market any of brand, we initial four strong through market cap We we saw the halfway can caps. the we've point, to get coming we enabled around digit particular brand couple single perception we've we've strong initial running to very to in obviously the of months, through is, I started is three went we through a read seen rebuilds, patients timeframe. we've in, day a that to to brands trickle going this which that say portfolio, month second at easily first day going and a that tax certain of pay of in that percentage that calculate exceeded obviously traffic out that so tax in rebuild those relaxed amount every to numbers, that the acquire numbers that we pharmacy we seen in July, our what

already Tam billion As than the potential, as it going forward is has be which larger multi this can market, [ph]. far [indiscernible] $XXX even market tremendous

that it's be it exactly a be to business than have know, be we a that bit ahead possibly really along there's months, the big. what possibly no this lines, that that But can little brand of reason a can little size can't over other XX know we be next x you bigger, business XX say So will to whatever we hard the the think looking smaller.

particle so partnerships differentiation, and well, as to that, primary that how you your growth you just Thank to active your be and health be there. health maybe and if launch get maybe, you're more it. going know, that there helpful really Got just and to with care your on potential fall, solution for of grow would you context this leveraging some really frame can membership business

Android, Yeah, I be you B offering first, technology built mean, and iOS well. conservative platform for mobile we've It's the, we're this gate, based No, and the as life, best primary comment they've anytime apps, the Justin, technology is is incredible. we're on subscription that that. the ever the we're care launch I'll something, going it's to know, out built, our we launching of and

so intentionally we're a patients onboard in going And to conservative manner.

putting that's on on we're the we've be, throughout lot that whether of think our affiliated estimates of the platform, initially and fall XX, know, patients of have providers a So saying life to know, growth, or you providers the what going I it's with conservative month little our our I partnerships, I of first don't But, a we technology a think, our but day, offering, board two. these the you that premature, own. on we've be new for new like, give to patients know XX I'm new a okay is, for lot technology, brought of

is going sufficient really we're we're excited to on very show moving big it, of to hey the and markets business scaling, year going this number to and be conservative we've that LifeMD can to and a the of prove to out the but the really end this this of be really is meaningful forward. year, this hopefully part boarded So to this patients demonstrate excited by we story a with

of sort that the kind well, starting breakeven sort margins EBITDA some as of you the the see improvement front. have might of that that expect seeing in one, front. Got into just kind it. your you over to that on on that last improvement of quarters, And to hit just know, on maybe greater when and you of elaborate CAC maybe on thoughts And, guys last know, you one been flowing couple you

Yeah, this Marc. is

improvements to XXXX. see as I've in So, expect know, the And on end we of starting you hitting by EBIDTA call, leverage the some indicated XXXX. be to breakeven

is and year And unit to term, do on it will that capital next and really the the going quarter, flowing grow able the term we quarter started through quarters, XX and improve growth towards XX, starting fourth to the much while market over we're that of so EBIDTA in see to earned to to EBIDTA able very we into year. in them margin to expense the terrific do of as taking the economics XX, short one some EBIDTA more improvements the next expect in significant grow not able next acquire to we're we're with margin our redeploy improvements short and retain As and to if improvements and aggressively this slight more quarter showed well for two continuing CAC and the CAC over far margin I think call efficiencies, months. line significantly the that increase return improve term, and the also think reinvest the that all to we're pan next customers second of our bottom over reason to share, at out the long which new we flowing we of

Thank and the on the you Appreciate all updates all very guys congrats progress. much.

question CEO for that session, final to would like everyone back Justin that, turn answer with And conclude does today's things to comments. I Schreiber, and

even for to appreciate comments look thank and final everyone everybody update this you next giving No quarter. participating to positive just forward you support more call,

participation. with does to today's conclude we'd call, your that And for everyone again thank that like you

disconnect. now may You