LifeMD, Inc.

Good afternoon, and thank you for joining us today to discuss the results for LifeMD's second quarter of 2021, ended June 30th, 2021. Joining the call today are Justin Treiber, Chairman and Chief Executive Officer, and Mark Benison, Chief Financial Officer of LifeMD. Following management's prepared remarks, we will open the call for question and answer session. I would 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 begin, I would like to remind everyone that during this call, the company will make a number of forward-looking statements which are subject to numerous risks and uncertainties that may cause the company's actual results to differ materially from those projected. These risks and uncertainties are described in the company's 10-K and 10-Q filings and within other filings that LifeMD may make with the SEC from time to time. Forward-looking statements made during this call are based on current information available to the company as of today. The company assumes no obligation to update or revise any forward-looking statements after today's call, except as required by law. Also, please note that management will be discussing certain non-GAAP financial measures that the company believes is important to evaluating LifeMD's performance. Details on the relationship between these non-GAAP measures to the most comparable GAAP measures and reconciliations thereof can be found in the press release issued earlier today. Finally, I would like to remind everyone that today's call is being recorded and will be available for replay in the investor relations section of the company's website. Now, I'd like to turn the call over to Life Indies CEO, Justin Shriver. Please go ahead.

Thank you, operator, and good afternoon, everyone. Thank you for joining us today to discuss our second quarter 2021 results. Our strong top-line performance continued this quarter, building on top of the incredible momentum we saw from the start of this fiscal year. Even with pandemic restrictions being largely lifted, we continue to see record demand for our telehealth products and services. Telehealth orders were up 155% over the same quarter last year, Our subscription-based patient customer numbers also continued to grow, with a record 93% of revenue being generated by recurring subscriptions. Patient retention across all brands remained at record levels. All of this added up to LifeMD producing record revenues of $22.3 million, up 145% from the year-ago period. Perhaps most impressive was that despite a significant 20% increase in media rates across our core digital channels, our acquisition team was able to drive an 8% sequential decrease in customer acquisition costs. This optimization allowed us to double down on our discretionary marketing investment to drive an 11% sequential increase in new patient acquisitions per day in comparable brands and further increase our market share. During the quarter, we also began marketing our newest teledermatology brand, NavaMD. Early results have been promising with strong reception from patients. NavaMD customer acquisition costs have so far been extremely favorable with an estimated payback on investment of two to four months. As we've said previously, we believe that NavaMD will be a very meaningful top line and profitable contributor over the long term. Organizationally, we made several important key strategic hires, especially with our new president, Alex Muranoff. Alex brings to us over 20 years of experience in business development, mergers and acquisitions, and corporate strategy, as well as extensive experience in the pharmaceutical industry. This includes leading transactions in the pharma space, totaling over $5 billion. His expertise will allow us to broaden and deepen our telehealth brands and product offerings, in areas where we believe we can continue to disrupt and demonstrate our industry leadership in the direct-to-consumer healthcare market. We continue to place a strong emphasis on our digital health technology platform, which is enabling a robust patient care process that provides unlimited expandability across a multitude of indications and healthcare services. To highlight this expandability, we recently announced three exciting partnerships that will enable us to augment our upcoming launch of the LifeMD primary care platform. These transformational partnerships include a world-class provider of laboratory services and Axel Health, a leading provider of at-home diagnostic services. In combination, these new partners will provide patients of our telehealth platform access to over 150 commonly ordered laboratory tests, a wide range of in-home diagnostic services, and access to over 2,000 national laboratory locations, all at preferred pricing. Next, we also announced a partnership with Particle Health, a leading provider of HIPAA compliant electronic medical records data that will transform the way that our affiliated medical providers and their patients access and utilize real-time medical data to personalize their care. All of these partnerships have positioned us very well for the launch of our primary care platform, LifeMD, this fall, which we expect to rapidly disrupt the primary care market. In summary, we had a great second quarter marked by the successful launch of the NavaMD brand, tremendous performance of our acquisition marketing platform, elevation of our technology infrastructure, and the consummation of several differentiating partnerships. Looking ahead, we're more confident than ever in our ability to be a market leader in the direct-to-patient telehealth industry. With that, I will now turn the call over to our CFO, Mark Benethen, who will provide a summary of this quarter's financial results. Mark?

Thank you, Justin, and good afternoon, everyone. As Justin mentioned, during the quarter, we continued to execute with strong top-line and operational performance. We grew our offerings, expanded our existing brands, launched new business lines and capabilities, and improved our efficiencies, all while maintaining a high level of service. A key factor driving our strong performance this quarter was how we were able to drive improving unit economics by further optimizing our media strategy to drive an 8% sequential decrease in our CAC. This was a remarkable achievement given how at the same time digital media rates across our channels increased by more than 20%. Adjusting for this sizable rate increase, our team was actually able to drive an approximate 30% improvement in our media efficiency on a sequential basis, while also acquiring new patient customers at a per day rate that was 11% higher than the previous quarter. Leveraging this performance in our strong unit economics, which pay back in two to four months, we made the conscious decision to efficiently increase our total discretionary acquisition marketing spend during the quarter to capture market share. Taking a closer look at our results, revenue in the second quarter of 2021 totaled the record $22.3 million, up 145% as compared to the same quarter a year ago. and up 23% sequentially. And this was largely recurring revenue with 93% of our revenue generated by recurring subscriptions in the second quarter of 2021, which was just 56% in the same year-ago period. And our retention on these new subscribers remains very strong. In fact, 60% of our revenue this quarter came from billings of already existing subscribers as compared to just 22% of our revenue in the same year-ago quarter. Telehealth net revenues grew over 100% to $15.8 million. Our Legal Simply subsidiary contributed net revenue of $6.5 million, up 434% from the year-ago quarter. Telehealth order volume grew 155% versus the year-ago period to 199,674 orders. Following this continued excellent performance, we are reiterating our previously raised full-year 2021 revenue guidance of $90 to $100 million, reflecting annual growth in 2021 of between 141% and 168% versus 2020. Gross profit in the second quarter increased 145% to 18.1 million, compared to 7.4 million in the same year-ago quarter. Gross profit as a percentage of revenue in the second quarter of 2021 was 81.2% compared to 81.4% in the same year-ago quarter. Starting this quarter, we commenced reporting platform contribution, a non-GAAP financial measure defined as GAAP operating loss before general and administrative expenses, excluding payment processing fees, selling and marketing expenses, and other operating expenses. We consider platform contribution to be an important non-GAAP financial measure which monitors our performance based on the direct costs of delivering the products and services we sell across our brands. We believe platform contribution is useful to measure how we are controlling our direct variable costs, and how effectively we retain our providers, patients, and customer subscribers. Additionally, platform contribution is a good leading indicator of profitability for our company. Platform contribution in the second quarter totaled $16.5 million compared to $6.7 million in the same year-ago quarter, an increase of 145%. Now turning to operating expenses. Operating expense in the second quarter of 2021 was $34.2 million, up from $10.6 million in the same year-ago quarter. The increase was primarily due to increases of discretionary growth, selling and marketing expenses of $14 million, general and administrative expenses of $8.6 million, other operating expenses of $715,000, and customer service expenses of $384,000. development costs decreased by $47,000. G&A expenses for the second quarter of 2021 also included non-cash expenses for stock-based comp and amortization expenses of $3.3 million. The increase in operating expenses compared to the year-ago period was associated with investments made to scale our infrastructure to support a rapidly growing diversified telehealth business offering treatment for a range of chronic conditions and primary care. We expect to leverage these investments starting in 2022 and gradually reduce quarterly EBITDA losses in 2022 as we scale the business to EBITDA breakeven by the end of 2022. Our GAAP net loss attributable to common stockholders for the second quarter totaled $16.8 million, or 64 cents per share. This compares to a net loss attributable to common stockholders of 3.4 million or 27 cents per share in the second quarter of 2020. Adjusted EPS is a non-GAAP measure that excludes 2.5 million in non-cash stock-based compensation expense and 946,000 of non-recurring financing transaction expenses. This figure totals a loss of 51 cents per share for the second quarter as compared to a loss of $0.24 in the same year-ago period. Adjusted EBITDA, a non-GAAP financial measure which factors out non-cash stock-based compensation, depreciation and amortization expenses, financing transaction expenses, litigation costs and interest expenses, totaled the loss of $12 million in the second quarter of 2021. This compares to an adjusted EBITDA loss of $2.1 million in the same year-ago quarter. Now turning to our balance sheet. Cash totaled 17.4 million as of June 30th, 2021, as compared to 9.2 million as of December 31st, 2020. As we continue to scale and invest in the rapid expansion of our business with strong unit economics, we remain focused on building our balance sheet with the interests of shareholders in mind. To this end, we expect to complete an additional non or minimally dilutive capital raise this year to further strengthen our balance sheet. This wraps up our financial results. I'd now like to turn the call back over to Justin. Justin?