LifeMD (LFMD) 9 Aug 232023 Q2 Earnings call transcript

Good afternoon. Thank you for joining us today to discuss the results for LifeMD's Second Quarter ended June 30, 2023, Joining the call today are Justin Schreiber, Chairman and Chief Executive Officer; and Marc Benathen, Chief Financial Officer of LifeMD.

Following management's prepared remarks, we will open the call for a question-and-answer session. [Operator Instructions].

Before we begin, I would like to remind everyone to during this call the company will make a number of forward-looking statements, which are subject to numerous risks and uncertainties that may cause actual results to differ materially from those projected.

time are we've the LikeMD seen with SEC uncertainties XX-Q XX-K may and the and filings, other from risks described company's in and make Those time. to filings that

to assumes as during statements made after any August based information of call Forward-looking required to the the update statements as company this company XXXX, forward-looking except by obligation on law. today's are current call, available no X, revise today, or

certain Details non-GAAP the believes non-GAAP that please release relationship comparable discussing and thereof earlier most the evaluating will Also, GAAP between the measures management company press reconciliations financial issued today. be can are light note that in on those in found important be to the measures this measures performance. the in

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

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

After you, corporate presentation press results ir.lifemd.com. updated good an Thank and second posted our and the afternoon, website announcing market our release at on issued quarter a we closed, everyone.

Our established in the second continuing momentum performance quarter. first quarter the was strong,

demonstrated achieved telehealth ahead double-digit growth core and revenue we business Our schedule. again positive once flow cash free sequential of

about management Additionally, have results far GLP-X weight successfully in Wegovy, we rolled patients moment. Mounjaro. out I'll a The early surpassed more program, access Ozempic, speak helps which this our medications, expectations. and such as our

to from $XXX revenue $XXX guidance of weight our XXXX are existing $XXX we and to Given million telehealth raising opportunity the the continued us tremendous our million $XXX strong the performance of management million. ahead up in full-year previous million, to business,

team, time, our the are guidance are business. which we account clinical vital marketing in adjusted same for EBITDA and rapidly to this reducing our the scaling At near-term investments to modestly

in and our off XXXX. investments and bottom these expect pay to beginning both management lines to top substantially being weight accretive foresee quickly our We program

meaningful our For the that focused for value believe on remainder year, to will key LifeMD remains four shareholders. of the initiatives drive we continue

direct-to-consumer we program which the is rolled launch this of our April. First out weight past management officially

and of strongest still our is incredible annual of of short business management to telehealth an economics very translating the unit over start subscribers million recurring In in offerings As early, an we've the while rate any to with off period, active a X,XXX I mentioned weight amassed over $X run patient revenue. to date.

XXX QX We scale differentiated XXX goal offering of to to We're this increasing our competition. per approximately day the patients of patients aiming to with offering day the average is per by new patients from rapidly truly year-end. our XXX believe

offering it's services, a apart and it's access management to weight care patients. as comprehensive integrated GLP-X for with blend a selling lab fully for lifestyle diagnostics, of not GLP-X our holistic program Our physician visits, primary Therapeutics. package a vehicle eligible stands is that work, Instead, just support

LifeMD subscribed services, month. at per $XXX approximately these For quarterly patients

comprehensive gain on requiring conditions. our can synchronous visits and care provide we patients to with data by Additionally, valuable physicians, coexisting our virtual

significantly could and XXXX program enhance forecast EBITDA. this preliminary Our our that suggests revenues

in we management, make and in offers with launched in national Second, quarter, two driven partnerships capabilities wellness, progress to health, companies during we segments. management securing telemedicine LifeMD weight building continued the unique the weight partnerships, off exciting significant the high-value

unique combine be to coaching excited our with telehealth very and patient outcomes. are core competencies these to aligned nutritional with to their We capabilities premier maximize tremendous partners

future in jumping can these believe BXB as point We pilot for area. initial off serve this extremely partnerships an partnerships valuable

group. LifeMD's ahead, our ample unique Looking expand affiliated these the upon to partnerships of and telehealth medical see and opportunity we new leveraging other platform capabilities

our top insurance substantial key Initially, accept represent year. preliminary valuable we from begun We team work these virtual of on Medicare our end providers efforts by primary expansion within and states the care primary acceptance. opportunities accepting progress also believe third of regulatory we've towards experts, aim and platform. XX we're significant a within compliance care the our the insurance to For Alongside initiative, platform. making private private insurance for

lifestyle Health businesses existing anchored health-care by our to subsidiary brand, Finally, continued WorkSimpli and RexMD, Men's our outperform. our

to we considerable profitable high-growth last to only ad guided on year, highly but investment As in XXXX the in on patient and spent spend unit areas, we refining time also economics not RexMD cohorts. focus

of to back in the While deliver in required revenue such a take XXXX returned and to quarter momentum. that this terms continue against sequential we growth, XXXX us step growth first small in to of

quarter up growth. sequential and second consecutive XX% for quarter Second sequentially RexMD double-digit the represents revenue was of

We the balance deliver with for lifestyle for sequential XX% single-digit growth revenue businesses. high expect on of basis growth year-over-year existing go-forward to exceeding our XXXX a

XX% costs. Our corporate remain to versus in deliver with profitable continued WorkSimpli growing XX% prior strong These businesses incredibly and results. during subsidiary quarter, second both year. the of growing XX% revenue including the achieving net margins subscribers excess contribution with

turn CFO, of With over to Marc summary financial Marc? will a who that, provide I'll Benathen, our the results. call our

afternoon, second our flow the only first this of grew time net revenues consolidated free Justin, strong ahead We with company's financial to a quarter. we also in achieved the for you, positive our in exceeding and momentum net performance $XX.X but history not Thank LifeMD continued good guidance record everyone. expectations. and cash million, in the

the management launched gate. we time, with weight the program of significant success right our At same out

lines accretive Our early in be top substantially estimates bottom our will just beginning XXXX. and to to offering this

the XXXX. second turning to for results quarter Now of

As second quarter. first year same revenue the the up and increase mentioned, in totaled versus X% with the a $XX.X quarter compared million, ago an I of quarter XX%

the primary X% first total wave X% quarter management, products quarter, revenues XX% branded XXX% revenues second first increased sequentially revenues accounted from sequentially. Net in and LifeMD Total for quarter. versus care services telehealth telehealth the nearly up and in of grew including from the revenues net of

year and WorkSimpli more active the ago XXX,XXX of the Subscriber subscribers very than increasing growth XXX,XXX over remained number to strong subscribers XX% increasing period. active XX% with both versus telehealth to

revenue revenue recurring from mentioned, second the total $XX.X of subscriptions As percentage revenues. a ago increased increase quarter, was to from came of WorkSimpli XX% year in the that net million of record Justin XX% period. The an total

by stock-based million Gross expenses head rationalization XX%, an a the second of versus marketing of and year-ago in quarter quarter count slight expenses, second margin $XX.X year Gross the reductions million, period. prior for of in million both executed the quarter points totaled period. and a $XX.X in $X.X million, compensation. in for decrease period reflecting was the basis and driven decrease from G&A XXXX the the selling $X.X versus the up XX% profit increase expenses for XXX Operating year-ago totaled

the noncash included interest, with associated compensation, of quarter million in expenses. second depreciation stock-based amortization $X.X expenses Operating and expenses noncash write-off,

$X.X quarter loss $XX.X second per Our GAAP per in million attributable to net of $X.XX a stockholders XXXX. to million GAAP share for common loss a This second or or stockholders attributable common loss loss compares to of share. of the totaled net the of a $X.XX quarter

same non-GAAP of second non-GAAP excludes period. Adjusted for EPS readiness, expenses, that ago acceptance diluted interest, financial a compared XXXX a loss insurance $X.XX litigation those M&A translation, and per noncontrolling expenses, the share dividends, EPS is the was quarter year $X.XX financing, reflecting of adjustments, expense, noncash share foreign costs in measure per with currency transaction

and EPS, measure second This an million gain loss quarter in for our management EBITDA, in non-GAAP totaled with quarter. quarterly growth same of program support to million businesses. Adjusted of was a of new a adjusted our compares the acquisition to items financial excludes ago weight the due lifestyle I EBITDA than of core XXXX. the investments our year and $X.X lower the patient Adjusted that $X.X for in our business adjusted the primarily same guidance we EBITDA this made just noted performance

XX, and of million $X.X reflected positive equivalents as during of Cash totaled free second million flow XXXX, quarter. and June cash $XX.X the cash

businesses, the continued previous program million. of strong As early $XXX raising of strength our our to million guidance our million from revenue million year management and are guidance results to from a result existing in very $XXX to full weight the up $XXX we $XXX launch

million We $XX clinical $XX EBITDA slightly scale management required program. to also million lowering adjusted investments weight reflecting to for million previously, $XX versus the to and acquisition patient $XX our guidance near-term to team our are million

and are growth our current revenue $X.X For strength and million, We the $X.X third more profitability believe fund guiding million. financial $XX.X business. will quarter, up with of between the results. million the allow This $XX.X EBITDA adequately to and adjusted to million between operations be sheet of we than wraps our in balance our us our

call the over back Justin. to I'd to now turn like

bottom line primary growth our previous summarize, LifeMD has launch strides XXXX. substantial program strong Marc. of our management weight tremendous towards vehicle strategic care goals. drive To to delivered made expectations and provides significant another beyond quarter top-line and our Thanks, The within accelerate in another

to core make our partners WorkSimpli lifestyle best-in-class to harness subsidiary, along witnessing bolster healthcare looking telehealth businesses, potential our continue contributions from profits. we're our Moreover, surge platform a to Our to growth. with their in interest robust

In financial I sustained outstanding LifeMD performance drive momentum. thank and continuing work entire would to closing, for their to our team the like and for business hard

the to With that, open call for I would like Q&A.

[Operator Instructions].

question Larsen Our from BTIG. David comes ahead. first with go Please

And every any then every be are -- off about maybe to color Just process care Like congratulations color but you members being bit of physicians they and total And you talk Marc, the more the more pay? revenue mentioned Can the nature think I that? quarter, getting cash to quarter. management don't quarter more program and Are on drugs any drugs contribution that they very need the you. quarter? these repeat these little actually are the are themselves can around prescriptions every a please the Justin you GLP-X? not? helpful. or which prescribed month? in good a the very and prior can patients would give talk or and primary the Thank that? around have you a are the around weight just then Do

start, some the paying is program paying Justin. quarter for upfront. come comment is typically to Marc can that this David, the on of way The they're and well segment. in then revenue I'll the or first attributed -- business they're works patients numbers for as Yes, always

are oftentimes And that when receive three first patients most commonly are Mounjaro. the are on and onboarded. patient will The a Sometimes they prescribed Ozempic Wegovy, drugs discount the appropriate it's for quarter. being

to we've things by all three well, tech accommodate the demand the platform, is which they're prior and verification benefit they're surge assistant on group scaled once onboarded, to for for the onboarded in covered are do our a one days. medical patients the see patient Once of our onboarded drugs that to of that we are drugs the will dramatically within for. -- team electronic these seeing seen run medical they're therapies. We've physician We're it, seeing

insurance that. patient think priority one between XX% we're covering help of a fashion. necessary, XX% If seeing a for that some We're is drugs people seeing we're looking of And can right now to us of we’re constantly improve new done, number of these we technologies. and talking -- partners in

Another network having our in LifeMD I our the is that for a to thing with network eventually to these states long-term going therapies, be across XX think for across competitive is covered getting patients advantage going all but initially XX big be providers largest physician and states.

to set call, going Medicare kind patients driver That's going we're be excited down mentioned road. building we're really also the growth competition. now which the out something our about. in the for therapies we putting us to in into And that infrastructure apart these right LifeMD is lot something helping a with from then for XXXX, of big And a effort -- we this that's compliance think as of a really is access

Marc. This is

Just on piece. revenue the

that for Care cash primary late of weight Primary it's typically about and virtual subscription So subsequent periods. other quarter. pure three-month or Virtual started any revenue $XXX,XXX care quarter a was rebuilds We it that after in products only excluding quarterly any in management, marketing the April in initial

that, with business the a substantially this GAAP defer a was recognition. building we up actually which So, why from the revenue. to cash of pretty balance, than better ended having flow up is that healthy We're lot revenue deferred

a over $XXX,XXX of paying quarter with the deferred over [indiscernible] loss million. So, out that's in of pretty another recognized $XXX patients active X,XXX the quarter, a weight under we're came the We X,XXX about growing by. person average and we on rapidly. revenue only today, bit just little with month. Sitting $XXX here

this to from expect pretty snowball business. see we So, financially a effect significant

Okay.

XQ, I up that the was X% in say XQ. care in of business primary think you X% I that correct? revenue heard like from Is

is correct. all That care the business. That includes primary

So loss that's care Virtual weight essentially. Primary plus

Okay.

state $X I good, So, right million is a right, what we're which maybe $X a very year talking is about million the quarter, is now? like actually, think,

billings For in weight for only million that virtual was $X loss. mentioned, the deferred were that's higher. primary will care, get loss more significantly including increasing which substantially as are correct. QX acquire Of $XXX,XXX I weight weight quarter, But was recognized that day, loss, about to the about pretty we deferred there of the so down this revenue, $XXX,XXX We subscribers. and billings recognized for as

And expect guess Any XQ, annual weight let's Okay. of to the sense what then for that? for GLP-X do for that December loss by or 'XX. rate run you or call it, be

I a that it's $XX million. to monthly which you if range $XX I million figure. mean the $X million $XX pull around that on you're Yes. $X.X probably in just of probably mean month, million basis multiply looking million, up at to out, per

Wow.

Okay.

that's substantial. So very

from annually talking alone. about XX% increase weight management You're a in product revenue potentially

sort different not your And products? vary mean if publicly, I -- that they disclosing then Okay. do then these I are and you... disclosed on based have for like or you're totally understand, And of pricing you negotiations?

We're on a for not our service. we're the but closing not product, publicly charging Basically, the so month, is $XXX patients a the product.

for weight physician the for you're paying you're essentially services. life paying on management So, program this

part get which of attempt will GLP-X, of you for As they good success have approval our physicians a to that, rate.

revenue to a approval of for one management. that no there's draw as our within from well. a actually But insurance to big GLP-Xs access obviously we're those cash If for on patients. pay GLP-Xs we obviously wave as earning of you that, lot patients. providing what There's are service the services providing is can those

the Okay. and/or I And percentage a products analysts too the members? don't time. of be and medications want these want there GLP-X to would on call, mix I take access to you are much of respectful between other medications the compounded and the is for what be up difference to medications. But providing compounded branded compounded

the that some -- from on on patient. a put the ingredients single and and work comment I coverage. very lot all that patients a event What's and every covered make difference that don't important I'll the about therapies. In therapy introducing we to parade these we not for Justin. that. a try want compounding compounded is that they're as pharmacy talking patients don't the happen always this -- rejected to insurance a between the a GLP-X trying afford are David, into compliance-minded want are have into when to organization to put the job I can't pharmacy We branded compounding partner get therapy, that of product. is we buys of does by wholesalers, for patients their their great for FDA-approved therapies company

access you, majority choosing therapy outcomes not I that the clearly is for amazing think important. patients are is route, the look, compounded most we think that that creating I are for covered patients a And a on these [indiscernible] to therapies and them which get helping of that

hoping the branded and good then put can feel moving really a more we're we so, patients coverage therapy these this, therapies and And expands forward. on really doing we about for

you very are tell with and there. very that using the that with it's and pleased we're it, happy therapy well, can our partner really I our are But going patents compounded

Okay. queue. Congratulations a back quarter. I'll hop the great in on

Our comes Cantor Sarah go Fitzgerald. next ahead. question of from Please James

management XXXX what the Thank do weight talked could could How are are And subscription like? hoping the you you? understand you sort your great staying I us your members with about what congrats guidance. for many longevity assumptions quarter. rate you you. clinic months as help on look assume a was of of And run

Yes.

and at I early say not the will speak actual from in model XX% underwrote believe we and we information retain or retaining the a yet not we even expect of assume month that, our is assumption that month it falloff to to will very substantial prefer we model XX, What because that is we're So, of -- data. to less very to we year, on, end one the with that the because publicly disclosing again, more month conservatively. way actually which talking type because And that. like very the of happen in than first we're this like

that's on millions And what of reasonably in margin healthy with to add we model. year that, this expect the and digits. dollars our ran of But top probably is line EBITDA even business low we next tens double

partnerships Justin. or We're that Sarah, starting reason mention, working it's food developing transitioning of -- is custom off working is too, I'll therapy. therapy some focuses a this that on biggest that We're are mentioned. our internally of just the on and of the for for patients lot plans one we also

and We to of care. got we involve a primary for going on So, think coaching, one therapies, to here got sit going on that offering. options. comprehensive we don't these Like be right? we're years, think working this to and therapies, be coaching they're you're to has somebody It's assume start on various food, and

we're think sure want And on and that. lost their at have And focused and they're really way wherever And patients we will can on therapy. come therapy make that off that help back with solution come a in to journey. we we them the doing

the Sure. opportunity that this care is And be because traditional integrated on clinic, a having a would into to fully try cross-sell primary need cross-sell is no a to at primary look you there care as or book

is LifeMD my biggest I one could almost mean is virtual one a Even single competitors every our a consult have video knowledge, that to patient of providers. doing. consult, of with XX-minute our best the to sell. nobody forcing that is cross-sell think -- one important amazing is be things of the Yes, look, doing the the I down cross-sell think a I of the of thing most things

increases so, the these significantly cost. And

It's the group because medical scale goes of to that. up having -- cost dramatically because of Our that. we're

great there think that that think be weight are I'm we're of with that a offerings are fact And these relationship of other lot can for offer And pay in patients to to I lot And other that's hopeful -- -- treating have think things -- think and some want I of doctors I LifeMD going part continue even other food building we and there we I right? that a these we are a loss they'll beyond to off, But cross-sell in them. know I that practitioners. nurse a could way. --

here. question last And

GLP-X just in coverage on a guess in by not had You or a Can the as you meant And of it thought binary? talked bit what of always binary coverage of yes color about the the of context some I I give insurance you if coverage. fashion. it's that no on little

bit you color Can I'm a what more on follow asking? sure you're question. I give little specifically me the not

Yes.

that what it, wondering just that reimburse talked covering like decision So, coverage you're meant some Mounjaro, the it getting coverage it. the success because insurance on I he of not they're fashion. either some loss Wegovy, typically I whether weight of and the of about to going covering was you or about I doing And it medications think talked rate as no with payers in guess

bit. no these So, trying to And landscape cover cover there are coverage, plans this there's talked little -- are for all every there not managers the patients that I'm constantly really we of therapies tomorrow. out clear support are get speculating covered today, a don't And outlook like changing. on to clear kind day day. big to And is a -- help hubs patient we've talked all that

patients going network I Sarah, plans. are help help. going in expand I going know. process, that patients is to It's with do I And going help providers thing though, to one much? that therapies. think get going really will that's prior coverage. our that's to affiliated it's that But How through think authorization The these covering I the if I -- think help with don't think only to

going little now. providers. of going speculation, coverage preference -- a that's to I some how just these providers think knows I for a is But expand think of there's lot these that of versus there's like that bit have big really I right? nobody and mean when providers are for some right -- out-of-network in-network these therapies to

right, got it All thank you. I

comes ahead. Chatterji Securities. Neil Our B. with next go Please from question Riley

Congratulations quarter. on on a for great Wood is William This Neil.

a see Curious about from Just weight program. management for do you progression impacting the shortages GLP-Xs your couple potential of these continued the on how of launch us. questions

We're supply got everything said, are -- find We And we're find expect service help compounded the do that of and army we've continue customer -- can't the to find branded are patients to reps XXXX. these of to event it's until available. the being got that shortages helping in a medical to therapies. going there of help them. is we lot be patients throughout therapies branded if will a an patients a there. drugs There assistance That supply out possible therapies access solution these

reduction kind That readout on follow-up. adverse cardiovascular CVOT makes Novo just VERGOVI of Obviously, sense. had major Select recently, for And their trial in a then a indicating events.

you So, do label if the obviously, you potential adoption this III, expansion do potentially, VERGOVI, program? that impacting cardiovascular and GLP-X see there that see overall incremental how program Phase for and how a driving the into is payer following then for coverage

have Payers but drugs. to no cover these will choice

putting as payers drugs, and the I and both to about the Medicaid some much will part this insurance be what for and is I that's now profile think think have I the safety robust private given there right why reason eventually and choice out effort efficacy broad today. into And these so we why reason to be happen but drug that's of think going LifeMD Medicare part But of cover building have discounting that's there well. profile know will the infrastructure will for to no big Medicare. extremely a coverage

if then And I that. one, Got it. I appreciate may.

anticipate as be partner? sorry, a nationwide competing? network competitive you into Amazon platform could the what the expansion? do platform, Would then Clinic And -- plug impact be potential LifeMD thinking from Just that

what be in charging could money I LifeMD their that Amazon based to Amazon offerings. know participating for going I I one-off given don't always is visits, believe -- about make program, is it's on what there. -- give the don't

of So, would in interest our participate be shareholders think I don't the in Amazon's it program. to

think too long-winded a response. I getting without into Look, much of that

I that because a at business. think at price shop great their Amazon so many so things, quickly products Amazon these conveniently incredible is can any doorstep. almost to get delivered they People and of an

compete comes and better head-on as immediately not but it essentially and care, Amazon health with can deliver for as care at When to price just remember, Amazon, same LifeMD conveniently, maybe the don't that we Amazon to Amazon of price deliver the we're the care we deliver quality, want at care comprehensive at as LifeMD, kind offering same prices. at to can't offer it

is massive call business. I helps. So, being you to think that's our uploaded certainly, we've going as no percentage everybody I to as to seen take think it that of in do in everything here. to probably is the Amazon But online, Amazon presentation see I space as hurt don't the they today, the absolutely And us. see market listening brought only [ph] And some these the impact going this else. TAM like and knows, Amazon investor can in something programs we has

really it. again I I'll Got really helpful. it. good a quarter. jump in queue the appreciate congratulations on and back That's Thanks.

from next go [indiscernible]. Our ahead. question comes please

Hi, subscriber individual Rex growth [indiscernible]. missed this I make but Can want just Chetan I'm Congrats prepared This revenue businesses? remarks, behalf could breakdown sure. your but for any you of on on to MD, progress. your heard sorry if I lifestyle on telehealth is during your provide I

Mark. is This Yes.

health XXX,XXX was up telehealth -- That about lifestyle total the we businesses, is there. subscribers care to mean we're up what roughly I provided our XX% essentially, So year-on-year.

pretty quarter-over-quarter subscribers aggressively. have to continue We

businesses includes So, obviously of the is has that's pretty and a primary -- lifestyle grown and significantly. weight yes, management that then the business, driven virtual which by lot care

about the XXX,XXX through to came in increase XXX% XX,XXX actually first up of business point. this at a that the that, total the before second subscribers second in versus quarter those increase from but That's quarter sequentially. its quarter, end of about the revenue XXX%

even weight partnerships? color businesses partnerships telehealth program. mentioned management I your know you about your Great. potential with remarks prepared or you. Thank either that And any your in on in future

any So, that kind of what something with the Is on of partnerships saw at? comment you're the to nature looking similar we healthwarehouse.com? it

the potential of their They're food They're diet both very, -- both we're and we're big partnerships both programs to brands. these Look, these and pilot live we've seen that both coming are going partners. weeks over going with about the they're we're about more months. now. these And successful the U.S., the companies results more to be partnerships large -- excited And be so talking right in of really very about far. talking

So, we'll on keep posted that. you

of year, And possible insurance If have a should by place coverage you said commentary not lastly, primary Great. in care something the I'm the business. on you mistaken, for end this right?

Yes.

plan the So, is this October. to have infrastructure by live

private insurance. For

exactly QX when probably start a some get That just sometime testing in QX, well. the little bit But just good of say it's we'll I offerings. it's estimate and So, let's as of Medicare to is live. going a assume in then think difficult pushed going QX go to when Medicare is could -- to be

overall going continues lift us make If the will, Medicare, we we think it taking lift we scale could to it like the Medicare weight push management to we operational compliance to right. we're and just start a to think coverage. like It's significant it for do business to is, sure decide

thank Great congratulation. you

There are I no comments. questions to time. go for back ahead, Justin would further the closing at this over to sir. like turn Please Schreiber floor

in forward evening. when third results November. again your a good with your Thank quarter interest you in once our report to look financial questions Have for We we and LifeMD. you speaking for

for presentation. now The attending you today's Thank conference concluded. has

disconnect. You may now