• Revenue: $115.7 million, a decrease of 33.8% year-over-year.
• Active Earning OPTAVIA Coaches: Approximately 25,400, a decrease of 32.8% from the previous year.
• Average Revenue per Active Earning Coach: $4,556, a year-over-year decrease of 1.4%.
• Gross Profit: $84.2 million, a decrease of 33.8% year-over-year.
• Gross Profit Margin: 72.8%, consistent with the previous year.
• SG&A Expense: $85.5 million, down 28.4% year-over-year.
• Loss from Operations: $1.3 million, down $9.2 million from the previous year.
• Net Loss: $0.8 million or $0.07 per share, compared to net income of $8.3 million or $0.76 per diluted share in the previous year.
• Cash and Cash Equivalents: $164.6 million with no interest-bearing debt as of March 31, 2025.
• Q2 2025 Revenue Guidance: Expected to range from $85 million to $105 million.
• Q2 2025 Loss per Share Guidance: Expected to range from $0.00 to $0.55.

• Warning! GuruFocus has detected 3 Warning Signs with MED.

Release Date: April 28, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Medifast Inc (NYSE:MED) reported that revenues and EPS were within guidance range for the first quarter of 2025.
• The company saw a meaningful year-over-year increase in new coaches for the first time in three years, with a double-digit increase compared to the same period last year.
• Medifast Inc (NYSE:MED) is focusing on empowering coaches by streamlining the coach development path and enhancing tools and insights available to them.
• The OPTAVIA program is designed to support long-term health goals, offering a holistic approach with science-backed products and personalized nutrition plans.
• The company maintains a strong balance sheet with $164.6 million in cash and no interest-bearing debt as of March 31, 2025.

Negative Points

• Revenue for the first quarter decreased by 33.8% compared to the previous year, primarily due to a decrease in the number of active earning OPTAVIA coaches.
• The number of active earning OPTAVIA coaches decreased by 32.8% from the first quarter of 2024.
• SG&A expenses as a percentage of revenue increased by 560 basis points due to lower sales volumes and company-led marketing efforts.
• Medifast Inc (NYSE:MED) reported a net loss of $0.8 million in the first quarter of 2025, compared to a net income of $8.3 million in the same period last year.
• The company anticipates potential consumer demand headwinds due to a weaker economy, which could impact future performance.

Q & A Highlights

Q: Can you explain the reasoning behind the second quarter top line guidance, which seems to imply an acceleration in the year-over-year rate of decline? A: Jim Maloney, CFO, explained that the guidance reflects the timing of promotions. A successful promotion in Q1 led to a year-over-year improvement in new coaches, which impacted Q2 projections. The company does not plan similar promotions in Q2, affecting the guidance. However, this does not imply a continued trend of acceleration in decline for future quarters.

Q: How has the introduction of GLP-1 medications impacted the coaching community? A: Nicholas Johnson, Chief Field Operations Officer, noted that GLP-1 medications have required retraining for coaches to adapt to the new environment. While initially disruptive, new coaches who have only known the GLP-1 environment are performing well. The focus is on lifestyle transformation, and many coaches have experience with GLP-1, either personally or through clients.

Q: What is the current status of the ASCEND product line, and how has it progressed? A: Jim Maloney, CFO, stated that the ASCEND line continues to perform in line with expectations, with orders in the mid-teens percentage of total orders by the end of Q1. This aligns with the company's projections for the product line.

Q: How will the shift from company-led marketing to investing in coaches impact SG&A expenses? A: Jim Maloney, CFO, explained that while there will be some reduction in company-led marketing, it was not a large percentage of revenue compared to coach compensation. The focus will be on reactivation efforts, which have proven effective, and the impact on SG&A will not be dramatic.

Q: What are the costs associated with being on a GLP-1 medication and the supporting nutritional programs? A: Dan Chard, CEO, mentioned that the majority of clients on GLP-1 drugs use the OPTAVIA 5 & 1 program, costing roughly $400 per month. This covers 80% of their daily meals. LifeMD offers telehealth services for less than $20 per month, with most clients using their own insurance for GLP-1 medications.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.