Lifevantage Corporation

Good day, ladies and gentlemen, and thank you for standing by. Welcome to today's conference call to discuss LifeVantage's second quarter of fiscal 2025 results. At this time, all participants are in a listen-only mode. Following the formal remarks, we will conduct a question and answer session. Instructions will be provided at that time for you to queue up. Hosting today's conference call will be Reed Anderson with ICR. As a reminder, today's conference is being recorded. I would now like to turn the conference over to Mr. Anderson. Please go ahead, sir.

Thank you. Good afternoon and welcome to LifeVantage Corporation's conference call to discuss results for the second quarter of fiscal 2025. On the call today from LifeVantage, with prepared remarks are Steve Fyfe, President and Chief Executive Officer, and Carl Alray, Chief Financial Officer. By now, everyone should have access to the earnings release, which went out this afternoon at approximately 4.05 p.m. Eastern Time. If you have not received the release, it is available on the investor relations portion of LifeVantage's website at www.lifevantage.com. This call is being webcast and a replay will be available on the company's website as well. Before we begin, we would like to remind everyone that our prepared remarks contain forward-looking statements and management may make additional forward-looking statements in response to your questions. These statements do not guarantee future performance and therefore, under-reliance should not be placed upon them. These statements are based on current expectations of the company's management and involve inherent risks and uncertainties, including those identified in the risk factors section of LifeVantage's most recently filed Forms 10-K and 10-Q. Please note that during today's call, we will discuss non-GAAP financial measures, including results on an adjusted basis. Management believes these financial measures can facilitate a more complete analysis and greater transparency into LifeVantage's ongoing results of operations particularly when comparing underlying operating results from period to period. We've included a reconciliation of these non-GAAP measures with today's release. This call also contains time-sensitive information that is accurate only as of the date of this live broadcast, February 5th, 2025. LifeVantage assumes no obligation to update any forward-looking projection that may be made in today's release or call. Now, I would like to turn the call over to Steve Fipe, the President and Chief Executive Officer of LifeVantage.

Thanks, Reid, and good afternoon, everyone. Thank you for joining us today. We are thrilled to share our second quarter results, which demonstrate the transformational impact our new MindBody GLP-1 system is having on our business. Our performance in Q2 significantly exceeded initial expectations, with revenue of 67.8 million, representing sequential growth of nearly 44% from our first quarter, and year over year growth of 31%. Profitability metrics also remain strong with gross margins up 190 basis points versus prior year and adjusted EBITDA more than doubling to 6.5 million or 9.6% of revenue. The success of our patent pending MindBody GLP-1 system since its October launch in the US has been remarkable. While our initial inventory sold out in just 13 days, we continued to take orders throughout the quarter, and I'm pleased to report that by mid-December, we had received additional inventory and cleared our backlog by the end of December. This rapid sellout occurred despite ordering significantly more initial inventory compared to our successful liquid collagen launch. More importantly, We have now secured sufficient manufacturing capacity and strengthened our supply chain to meet the continued strong demand we're seeing, with our current capacity significantly higher than our initial launch volumes. Our active accounts metrics are particularly encouraging, including the highest number of enrollments in a quarter since 2019. During Q2, active accounts increased by 23,000, or 25%, in the Americas region compared to Q1, including a 13% increase in the number of our independent consultants and a 31% increase in the number of customers. And while the MindBody system has been a catalyst for active accounts growth, we are also seeing very positive early indications of strong cross-selling opportunities across our broader portfolio of activation products. Subscription metrics are also trending up. and are currently above 70% reflecting the initial impact of MindBody, which is positioned as a long-term lifestyle product to aid in sustainable weight management among other health benefits. The MindBody GLP-1 system exemplifies our ownership and innovation in cellular activation and longevity. The US mind-body clinical results have shown 140% increase in natural GLP-1 production on average, leading to reduction of visceral fat by up to 27% and total body fat by up to 5.5%. All those who lost weight in the clinical also notably maintained their muscle mass. These compelling results combined with the fact that we are using naturally derived ingredients delivered in a format that fits a typical daily routine are resonating strongly with consumers looking for a sustainable approach to weight management. Consumers are discovering the numerous benefits of this approach, including reduced cravings, feeling fuller longer after meals, and reduced food noise. I'm also excited to share the results of our recent third-party in vitro cell study on the synergistic benefits of combining our mind-body GLP-1 system with protandim NRF2 synergizer in what we call the healthy weight stack. The findings are remarkable. When used together, these products not only amplify each other's individual benefits, but activate 22 new genes. This new genetic activity targets key aspects of cellular health, and an aging impact that many of us don't see, the aging of our internal organs. Speaking to the amplified results, the study showed enhanced antioxidant defense through the activation of four additional antioxidant pathways, while nine additional fat and fatty acid metabolisms pathways were activated to optimize the body's ability to use and distribute fat effectively. This product combination supports our customer's wellness journey by not just addressing weight management, but also promoting cellular resilience, metabolic health, and healthy aging. These findings reinforce our scientific leadership in cellular activation and demonstrate how our products can work together to deliver enhanced benefits for our customers. Looking ahead, we're preparing for the international rollout of the MindBody system beginning in March. Given that the U.S. currently represents more than 80% of our revenue, we see significant growth opportunities as we expand into our other markets. We're following the same strategic measured launch approach that proved so successful in the U.S., including comprehensive consultant training and education about the GLP-1 hormone, its role in the body, and how it is activated. Our modernized, evolved compensation plan has been crucial to our success. The plan's flexibility in supporting traditional business builders, the bedrock of LifeVantage, and product-focused sellers have enabled us to retain our core consultant base while expanding into new channels, helping us reach new audiences. For example we're seeing increasing interest from influencers with substantial followings who are attracted by our demonstrable science backed products and compelling earning opportunity. The latest enhancements to our evolved compensation plan including the new sharing bonus launched on November 1st in our current evolved markets are further simplifying the path to success for our consultants. This new bonus on top of other compensation elements, along with accelerators for new consultants, is helping drive the strong enrollment numbers we're seeing. Our commitment to sustainable, profitable growth remains unchanged. Despite the rapid growth we're experiencing, we maintain strong profitability metrics in the quarter. We're continuing to make strategic investments and growth initiatives while maintaining our disciplined approach to costs. Looking to the second half of fiscal 2025, we're focused on several key initiatives. One, ensuring consistent supply to meet the high demand for our mind-body system. Two, successfully launching the MB system in international markets starting in March. Three, launching our evolved compensation plan to our remaining Asian markets in March. Four, continuing to enhance our digital capabilities and consultant tools. Five, building greater brand awareness as we reach new customer segments. And six, maintaining our strong profitability metrics while funding growth initiatives. We believe we're still in the early stages of realizing the full potential of our mind-body system and its ability to transform our business. The product significantly expands our total addressable market brings new customers to our activation platform, and strengthens our position as a leader in cellular health activation. Additionally, we're excited about our upcoming global convention in April in Salt Lake City, where we'll celebrate the international launch of MindBody, consultant business successes, and our vibrant, energetic community that only direct selling and a brand centered on activation can deliver. This event will bring together our global field for training, announcements, and launches that will further build momentum for our growth initiatives. I'm also pleased to announce that we recently welcomed Todd Thompson as our Chief Information and Innovation Officer. Todd brings decades of experience driving transformative technology solutions and business growth for prominent global organizations including JetBlue Airlines, Starwood Hotels, and doTERRA. His proven track record in scaling operations, improving backend systems, and delivering exceptional customer-facing technologies will be invaluable as we enhance the digital experience for our consultants and customers. Todd's experience will be particularly critical as we scale our infrastructure to support our accelerating growth in international plans. In summary, we are very pleased with our latest results. Our business has incredible momentum reflecting the exceptional growth of MindBody in recent months. The strength of our distinctive platform coupled with the competitive edge of our business model that empowers individuals to establish businesses on their own terms position us well for continued success. We remain focused on executing our strategy to deliver strong financial performance and long-term value for our shareholders. Now, let me turn the call over to Carl to review our second quarter financial results in detail. Carl?