LifeMD, Inc.

Good afternoon. Thank you for joining us to discuss Life in the Inc. fourth quarter and full year 2024 earnings results. Joining the call today are Justin Schreiber, Chairman and Chief Executive Officer, and Mark Benethen, Chief Financial Officer. Following management's prepared remarks, we will open the call for a question and answer session. 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 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, March 10, 2025. 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 are important in 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. I'd now like to turn the call over to LifeMD's CEO, Justin Schreiber. Please go ahead, sir.

Thank you, and good afternoon, everyone. After the market closed, we issued an 8K, which contained a press release announcing our fourth quarter financial results and posted an updated corporate presentation on our website at ir.lifemd.com. LifeMD produced tremendous results in the fourth quarter that well exceeded our prior guidance. capping off a very strong 2024. Our record financial performance was driven by growth and increasing profitability in both our RexMD and LifeMD platforms. For the quarter, our telehealth revenue grew by 60%, while our telehealth adjusted EBITDA grew by nearly fivefold. WorkSimply also rebounded significantly, generating more than 1 million of adjusted EBITDA each month during the quarter, consistent with our prior guidance. In addition to these strong results, we also executed several key product launches that I expect will be critical drivers of our business in the years to come, including the successful launch of our male hormone replacement therapy business, the launch of our nationwide pharmacy, which is already licensed in 47 states, and the continued expansion of our medical and pharmacy benefits infrastructure. 2025 will be a critical year in our evolution as a leader in virtual primary care. We expect to expand our existing capabilities as well as extend our reach into new complementary areas designed to further differentiate LifeMD as a leading provider of the highest quality and most comprehensive virtual first healthcare. We have three strategic priorities for our business in 2025. One, solidify and grow our market leading position in delivering comprehensive weight loss and metabolic care including affordable access to prescription GLP-1 medications. Two, build on the early success of our hormone replacement therapy offering we launched in 2024 on our RexMD platform. Three, launch our LifeMD Plus membership program and several new high-value care offerings on our virtual primary care platform. And four, continue to grow our government and private payer programs as well as our electronic benefit verification and prior authorization infrastructure to drive more affordable access to virtual care and prescription medications. We are very proud of the weight loss and metabolic health program that we've built on our virtual primary care platform. This program had more than 75,000 active patients as of year end and is well positioned for long-term growth, even as market dynamics change. Despite the FDA's recent decisions to remove semaglutide and terzepatide from the drug shortage list, LifeMD remains extremely well-positioned to benefit long-term in the weight management market. Our focus has been and remains on providing affordable access to comprehensive obesity care and the ongoing management of clinically appropriate GLP-1 and other generic drugs that can support our patients on their journey to better metabolic health. Importantly, over 85% of our weight management revenue is related to the delivery of care. Helping patients use private insurance to access weight loss medications has been a fundamental part of our service offering since it launched in 2023. While helping patients access branded GLP-1 therapies was previously difficult due to supply shortages and lower levels of payer coverage, we are seeing several encouraging trends that cause us to be very optimistic. Firstly, we're seeing a significant increase in patients getting affordable private insurance coverage for branded GLP-1 medications, especially for ZetBound. We believe this is partly due to private payer and employer coverage rates improving and to improvements we have made to our electronic benefits and prior authorization processes and overall infrastructure at LifeMD. For ZetBound, we've seen an 18 percentage point increase in the approval rate between October and January, with ZetBound prior authorization approval rates approaching 60% over the past several months. We recently announced an integration with Lilly Direct's pharmacy partner, Gift Health, to make it easier for patients who don't have insurance coverage to purchase, where appropriate, more affordable cash pay via ZetBound. Secondly, we have seen the drug manufacturers that control the current GLP-1 market begin to compete with each other in the self-pay market now that supply levels have stabilized. In the past several weeks, both Eli Lilly and Novo Nordisk, the manufacturers of Zepbound and Wagovi, respectfully, announced price reductions to their self-pay GLP-1 product offerings, bringing the price of some dose levels as low as $3.49 per month. to reduce the price of GLP-1 medications as a result of novel and possibly more efficacious therapies coming to market and pressure from government agencies, including the FDA, that care about broad access to this class of drugs. As we've said repeatedly and we'll say again today for emphasis, expanded coverage for branded GLP-1 therapies is a great thing for LifeMD, our patients, and our shareholders, as it results in our programs being more affordable, which enables better compliance, patient outcomes, and retention rates for our programs. We are also very excited about our fee-for-service Medicare offerings that we'll be launching next month. We've been working on the compliance and operational infrastructure for this launch for the past two years and believe that it will be a big growth driver not only for our weight management offering, but also for our broader virtual primary care offerings. There are approximately 24.5 million Medicare beneficiaries enrolled in standalone prescription drug plans, and a substantial number have conditions like obesity and type 2 diabetes that could make them candidates for GLP-1 receptor agonist medications. Although Part D coverage for GLP-1 drugs currently requires certain comorbidities, We are optimistic that Medicare will begin covering these medications for obesity, and we aim to make LifeMD the easiest and most affordable way for this population to access comprehensive obesity care and these medications once coverage is available. It's important to note that in addition to GLP-1 therapies, LifeMD also offers exceptionally affordable standalone and combination generic medications that can support patients with weight loss. including the triple therapy we announced last September. As we collect more data, we are optimistic on the efficacy profile of these medications and believe that they will play an important part in our weight management offerings in the future, especially if access to personalized versions of GLP-1 therapies becomes more difficult for patients who do not have insurance coverage. Lastly, the GLP-1 supported weight loss market has become highly fragmented with hundreds, if not thousands, of smaller players providing varying quality offerings, many of which rely exclusively on compounded drugs from less reputable sources and async-only care. We believe many, if not most, of these market participants will struggle to adapt in this changing environment, which has the potential to reduce acquisition costs and expand the overall market for companies like LifeMD. Now let's move on to RexMD. Since launching in December 2019, RexMD has rapidly become one of the leading men's health brands in the country. While this business was almost entirely sexual health driven when it launched, today we have expanded the reach of this brand to include multiple areas of sexual health, weight management, hair loss, insomnia, and most recently, hormone replacement therapy, or HRT. RexMD currently produces over 80 million in annualized revenue, and we expect to see 15 to 20% growth in 2025, driven by the continued growth of our leading sexual health offerings and rapid expansion into our newly launched HRT offering. Today, RexMD has over 175,000 active patient subscribers, And we expect this number to continue to increase with the growth of our HRT program and other new clinical areas we expand into. Building capabilities and infrastructure that can differentiate LifeMD, create better experiences and outcomes for our patients, and increase the bottom line for our shareholders was a major priority in 2024 and will continue to be a focus in 2025. Two of the most important investments we made, which we believe will play a major role in our future success, were the launch of our 50-state commercial pharmacy and the investments we made in contracting with private and government payers. In late 2024, we announced the launch of our first dedicated LifeMD pharmacy. I am pleased to announce that as of today, this pharmacy is licensed in 47 states and is shipping approximately 20,000 orders per month. We remain on track to realize the previously disclosed $5 million of annual economic benefits from the pharmacy by the end of 2026. While today the LifeMD pharmacy is solely focused on prescription shipments for our lifestyle healthcare business, we are in the process of building out non-sterile compounding capabilities that we expect to be operational in the next four to six months. This will be a huge advancement for LifeMD that will enable us to expand our portfolio of personalized and affordable therapies in areas such as men's and women's HRT, sexual health, dermatology, and more. We continue to advance our insurance offerings at a measured pace and today are enrolled with private payers in 20 states. As I mentioned, our Medicare program remains on track for launch in April, and we expect this will become a significant competitive advantage for LifeMD across our virtual primary platform. This offering will significantly expand the addressable market for LifeMD's primary care, metabolic health, behavioral health, and prescription services. By the end of 2025, we anticipate having approximately 150 million lives under coverage. As a final topic, LifeMD expects to launch several new service offerings in 2025. We recently announced plans to enter the behavioral health space in the second quarter with the hire of Julian Cohen, a highly experienced senior leader. This offering is naturally synergistic with our expanded insurance capabilities, our rapidly growing therapeutic weight management offering, our sizable and growing men's health business, and soon to be launched women's health offering. Initially, we plan to offer async-first treatment for anxiety and depression and believe there are many large markets within the behavioral health space where our synchronous virtual primary care platform can support the delivery of much-needed behavioral health offerings. In the second quarter, we will also be launching an enhanced version of our virtual care membership program we refer to as LifeMD+. Our expectation is that over time, LifeMD Plus will be the backbone of everything we offer on LifeMD's virtual care platform. Initially priced at $19 per month, it will offer patients the following benefits in addition to any specialty care programs they are subscribed to. 24-7 care by LifeMD's doctors and nurse practitioners. This care can be self-pay or covered by insurance. on-demand convenient prescriptions and prescription refills, access to beautifully tracked routine and specialty lab work, self-pay or covered by insurance, and a marketplace for the highest quality OTC health and wellness products. Our aim is to leverage our brand equity, amazing providers, and highly differentiated care platform to create a strong value proposition around LifeMD Plus memberships. We believe that this will have a meaningful, positive impact on the experience of patients on our platform, their compliance with care programs they purchase from us, and their overall health. We especially think that LifeMD Plus will play a big role encouraging preventative healthcare and will make things like annual wellness visits, labs, and medication compliance much easier and affordable for patients. In addition to behavioral health and LifeMD Plus, we expect to launch a women's health specialty offering in the second half of 2025. We plan to provide more details on this on future quarterly conference calls. In short, LifeMD is well positioned to continue to expand our role as a leading provider of differentiated virtual care in 2025 and beyond. With that, I will now turn the call over to our CFO, Mark Benethen, to discuss fourth quarter and full year 2024 results. Mark.

Thank you, Justin, and good afternoon, everyone. LifeMD achieved very strong fourth quarter performance with consolidated revenue growing 43% versus the year-ago period to $64.3 million. Core telehealth revenue grew by 60% versus the prior year, with standalone adjusted EBITDA profitability at 5.9 million, an increase of 396% versus prior year. Powerhouse subscriber growth remained strong, with the number of active subscribers increasing 27% year-over-year to over 275,000 at quarter end. The number of WorkSimply active subscribers grew by 3% to 164,000. Importantly, WorkSimply's performance stabilized in Q4 with average monthly adjusted EBITDA returning to over $1 million as we previously guided. Gross margin for the fourth quarter was 85.3%, a decline of 280 basis points versus the prior year due to changes in revenue mix and one-time impacts related to the onboarding of a new pharmacy. We fully expect gross margin rates to return to their normalized 88 to 90% in 2025. Gross profit was $54.8 million, an increase of 39% from the year-ago period. Our gap net loss attributable to common stockholders for the fourth quarter was $883,000, or a loss of $0.02 per share. This compares with a gap net loss attributable to common stockholders for the fourth quarter of 2023 of $4.5 million, or a loss of $0.12 per share. Adjusted EBITDA is a non-GAAP measure we define as income or loss attributable to common shareholders before various items as outlined in today's earnings news release. Adjusted EBITDA totaled $9 million for the fourth quarter as compared with $5 million in the year-ago period. Telehealth Adjusted EBITDA is a non-GAAP measure defined as adjusted EBITDA for only our telehealth business excluding work simply. This measure was $5.9 million for the fourth quarter of 2024, as compared to $1.2 million in the year-ago period. We exited the fourth quarter with $35 million in cash. Now turning to full-year 2024 results. For 2024, consolidated revenue was $212.5 million, an increase of 39% versus 2023. Telehealth revenue grew 61% on a standalone basis. Growth margin for the year was 88.7%, an increase of 110 basis points versus 2023. Our GAAP net loss attributable to common stockholders for 2024 was 22 million or a loss of 53 cents per share. This compares with the GAAP net loss attributable to common stockholders for 2023 of 23.7 million or a loss of 70 cents per share. Adjusted EBITDA total $14.4 million for 2024, compared with $11.2 million for 2023. Telehealth adjusted EBITDA total $7.4 million for the year, as compared with a loss of $5.2 million for 2023. Turning to financial guidance, today we are introducing guidance for 2025 consolidated revenue of $265 to $275 million. with telehealth revenue of 205 to 213 million. We are also introducing consolidated adjusted EBITDA guidance for 2025 of between 30 and 32 million, with telehealth adjusted EBITDA of approximately 20 million. This wraps up our financial results. I'd now like to turn the call back over to Justin.