MEDIFAST INC

to the Medifast second quarter 2024 earnings conference call. At this time, all participants are in a listen-only mode. A brief question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Steve Beckner, Vice President of Investor Relations. Please go ahead.

Good afternoon, and welcome to Medifast's second quarter 2024 earnings conference call. On the call with me today are Dan Chard, Chairman and Chief Executive Officer, and Jim Maloney, Chief Financial Officer. By now, everyone should have access to the earnings release for the quarter ended June 30, 2024 that 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 MetaFast's website at www.metafastinc.com. This call is being webcast and a replay will also be available on the company's website. Before we begin, we would like to remind everyone that today's prepared remarks contain forward-looking statements, and management may make additional forward-looking statements in response to your questions. The words believe, expect, anticipate, and other similar expressions generally identify forward-looking statements. These statements do not guarantee future performance and therefore undue reliance should not be placed on them. Actual results could differ materially from those projected in any forward-looking statements. All of the forward-looking statements contained herein speak only as of the date of this call. MetaFast assumes no obligation to update any forward-looking statements that may be made in today's release or call. And with that, I would like to turn the call over to MetaFast Chairman and Chief Executive Officer, Dan Chard.

Thank you, Steve, and thank you all for joining us today. With me today is Jim Maloney, MetaFast CFO. I'm pleased to report on our business transformation progress and share our vision for MetaFast in this fast-moving and exciting time for our sector. Medical innovations are enabling more people than ever before to access transformative health solutions. As we have discussed in previous enterings calls, the rapid expansion in both the availability and acceptance of GLP-1 medications in the United States and beyond is reshaping the weight loss landscape, which we believe presents both significant challenges and opportunities for our company. Our mission, refined over the course of the last 40 years, remains focused on helping individuals achieve healthier lifestyles through integrated, holistic solutions. But now we, in conjunction with our incredible Optivia independent coaches, and in collaboration with LifeMD telehealth physicians, expect to be able to put healthy lifestyle transformation within the reach of more people than ever before. Industry projections indicate that as many as 20 million people or more in the US could be utilizing GLP-1 medications by 2030, whether it be medications we already see in the marketplace today or from further innovations that will emerge over the coming years. Indeed, research we have commissioned with BCG finds that the support market for this population could reach $50 billion per year or more by the year 2030, vastly exceeding the $8 billion structured weight loss market we previously targeted. Nutrition products make up over half of this GLP-1 support market, and it is interesting to note that a recent national survey commissioned by Capital Coefficient showed that approximately 90% of GLP-1 users showed interest in food specifically created for GLP-1 patients. Put simply, as a result of this shift, we are positioning MetaFast to address a market that is projected to be more than six times larger than that where we previously operated. This strategic pivot not only broadens our addressable market, but also draws upon our expertise in lifestyle modification, which has always been central to our approach. A focus on medically supported weight loss is a natural extension of our core competencies, allowing us to provide what we believe is an even more robust solution and support system for our customers. We will position ourselves effectively against competitors in this evolving market structure by leveraging our capabilities in science-based product development and clinically proven plans. We are enhancing our product offerings, expanding customer acquisition channels, and elevating the customer experience to drive engagement and retention, all to enable us to take advantage of the potential opportunities that lie ahead. We are focusing on initiating two incremental channels for growth. company-led advertising to drive brand awareness and customer acquisition, and we're also testing a new channel approach through our collaboration with LifeMD to support their patients who are seeking lifestyle support beyond medication. We believe our new comprehensive solution provides us with a differentiated position in the marketplace, providing a more inclusive approach that encompasses nutrition support, dedicated coaching, community engagement, and, through our collaboration with LifeMD, access to medications and clinical support where appropriate. Our mission of helping customers achieve healthier lifestyles remains unchanged, and as we are evolving to provide the necessary tools and resources to meet their needs. This approach ensures that our customers receive the best possible care and support, regardless of where they are in their health journey, and makes it easier for customers to make lasting lifestyle changes, whether they are utilizing medication, transitioning off medications, or pursuing traditional weight loss methods. Turning to our second quarter results, revenues came in within our guidance range at $169 million. We continue to face macroeconomic challenges, including increased competition in the health and wellness space, including the expansion and disruptive effect of GLP-1 regimens adoption. and a broad slowdown in consumer spending. While we do not expect these pressures to ease in the short term, we anticipate that our initiatives will begin to positively impact our top line late this year and as we move into 2025. These initiatives include strategic investments in marketing and product development that are essential to driving long-term growth. Although these investments will negatively impact our EPS in the near term, we believe that they are critical to positioning MetaFast for the long-term success. These investments are supported by our strong balance sheet, which provides the financial flexibility needed to execute our strategy effectively. We're not only making use of our strong balance sheet, but also our strong historical understanding of the market and how to compete effectively in the changing landscape. The new products and plans we are developing are targeted for individuals on GLP-1 medications as well as those who are looking to transition off GLP-1 medications, whether because they have reached their weight loss goal, have plateaued in their weight loss, or no longer have GLP-1 insurance coverage. These products and plans are also designed to help customers maintain their weight loss and overall health and wellness as they work with an OPTAVIA coach to learn healthy habits that make a healthy lifestyle second nature. In May, we introduced a new product and service offer, which included a GLP-1 nutrition support kit, a dedicated and independent OPTAVIA coach, and access to clinician support through LifeMD. This package is priced at $282 per month for a six-month commitment plus the cost of medications. This represents our first bundled solution for this demographic. We're also developing additional targeted products designed to help minimize the side effects of weight loss medications, provide appropriate nutrition, and aid in lean muscle mass retention. All this targets those groups that are looking to GLP-1 medications as part of their efforts to improve their overall health and wellness. These new products, which we expect to launch by year end, will feature more protein, fiber, and calcium. They will be available in various forms, including bars and shakes, with an enhanced flavor profile to appeal to customers who are using GLP-1 medications. We also anticipate introducing vitamin and mineral supplements around the end of this year. These new offerings will be integrated into the comprehensive plans supported by personalized coaching and community engagement. Later in 2025 and into 2026, we anticipate releasing additional products which extend beyond our current offer and tap into additional ways to improve one's health and wellness, including targeting categories in which we do not currently have products. The company-led marketing efforts, which I mentioned earlier, are ramping up in the third quarter. with the aim of building brand awareness and highlighting our new GLP-1 support solutions. We conducted a series of advertising pilots over the last two quarters to refine our strategies and optimize our future efforts. Our advertising is planned to span various platforms, including social media, internet search, digital display, connected TV, and radio. As the campaign kicks into full gear, we'll launch earned PR and influencer campaigns along with online video to further support awareness and demand generation. We are targeting three key audiences, those curious about GLP-1 medications, current GLP-1 users seeking support as they use or transition away from the medications, and individuals aiming for a healthy lifestyle without using weight loss medications. In total, we spent $4.6 million on these company-led marketing activities in the second quarter. Year to date, that number is $9.7 million. We expect that our focus on targeted advertising will drive customer acquisition and engagement. Our goal is to create a seamless experience for our customers, from initial interest to long-term relationship. We are committed to building on this progress, delivering a highly personalized solution for customers at various stages in their weight loss journeys. By creating digital ecosystems that utilize dashboards and tracking methods, we enable better monitoring of individual progress. This information will be accessible to customers and coaches, fostering greater engagement and longer customer retention. Enhanced tools for coaches will provide deeper insights into their customer base, allowing them to offer more personalized support. Our efforts to enhance the customer experience are driven by our belief that personalized support is the key to helping customers achieve long term success. By integrating digital tools and personalized coaching, we can provide our customers with the support they need to achieve their health and wellness goals. We believe that this approach will not only improve customer satisfaction, but also will drive higher engagement and retention rates, ultimately contributing to our long-term growth. So, to summarize, we are making significant strides in our business transformation. Based on a survey we conducted, we estimate that approximately 10,000, or one-third of our active coaches are now supporting at least one client using GLP-1 medications, reflecting our continued learning in this market. Our product and plan development shows continued progress, with new offerings set to launch around year-end, and we expect to make significant enhancements to the customer experience as we move through the rest of the year, which we believe will make it easier for customers to sign up for our integrated solutions and will result in them staying longer with our programs. The weight loss market is undergoing significant transformation, presenting substantial opportunities. There is work to be done, and we must be agile to ensure that we shift and adapt to meet the needs of a market that is rapidly changing. However, MetaFast's holistic approach, combining customers, coaches, and clinicians through LifeMD, positions us uniquely to support GLP-1 users in achieving their long-term health goals. With our financial strength strategic flexibility, and expertise, we believe we are well equipped to capitalize on these opportunities. I am confident in our team's ability to execute our strategy and drive growth in this rapidly evolving space. Thank you for joining us this afternoon. Now I'll turn it over to Jim to review the quarterly financial details.

Thank you, Dan. Good afternoon, everyone. As Dan mentioned, second quarter 2024 revenue was at the upper end of of our guidance range as we continue to make progress on our business transformation initiatives. Revenue for the quarter was $168.6 million, a decrease of 43.1% versus the year earlier period, primarily driven by a decline in the number of active earning OPTAVIA coaches and lower productivity per active earning OPTAVIA coach. Customer acquisition continues to be impacted by competition from GLP-1 medications and consumer spending patterns. We ended the quarter with approximately 33,900 active earning Optivea coaches, a decrease of 36.2% from the second quarter of 2023. Average revenue per active earning Optivea coach for the second quarter was $4,972, a year-over-year decline of 10.9%, reflecting the continued headwinds to customer acquisition. Gross profit decreased 41.4% year-over-year to $123.4 million, driven by lower revenue. Gross profit margin improved 210 basis points to 73.2%, positively impacted by cost savings from our Fuel for the Future initiatives and efficiencies in inventory management. On a non-gap adjusted basis, which excludes the one-time expenses in connection with the company's restructuring of external manufacturing agreements, gross profit decreased 40.2% to $126 million. Non-GAAP adjusted gross profit margin was 74.8%, an increase of 370 basis points from the year-ago period. SG&A expense was down 23.7% year-over-year to $131.3 million, primarily reflecting lower compensation expense due to lower volumes and fewer active earning coaches. SG&A as a percentage of revenue increased 1,980 basis points to 77.9%, primarily as a result of the loss of leverage of fixed costs due to lower sales volumes and supply chain optimization costs. We also incurred costs during the quarter to support our business transformation initiatives, which include market research and investment costs related to medically supported weight loss, cost to exit hotel commitments for our annual OPTAVIA convention in future years reflecting a change in strategy, and cost for our company-led acquisition initiatives on a non-GAAP-adjusted basis, which excludes expenses related to the company's supply chain optimization cost, cost to exit hotel commitments for our annual OPTAVIA convention in future years, and cost for the collaboration With LifeMD, SG&A decreased 33.8% to $113.8 million and moved 940 basis points higher as a percent of revenue to 67.5%. Loss from operations was $7.9 million in the second quarter of 2024 versus a gain of $38.7 million in the prior period. driven by lower gross profit partially offset by lower SG&A. As a percentage of revenue loss from operations was 4.7% in the second quarter, a decrease of 1,780 basis points versus the year earlier period. On a non-GAAP adjusted basis, which excludes the adjustments described previously, income from operations decreased 68.4% to $12.2 million as a percentage of revenue. Non-GAAP adjusted income from operations was 7.3%, a decrease of 580 basis points from the year-ago period. The effective tax rate of 23.4% was higher than the 22.6% recorded in the prior year's second quarter due to the net loss position in 2024 and the corresponding rate impact from research and development tax credits partially offset by the rate impact from the limitation for executive compensation. On a non-GAAP adjusted basis, the effective tax rate in the first quarter was 26.2%. Net loss in the second quarter of 2024 was $8.2 million or 75 cents per diluted share compared to net income of $30.3 million or $2.77 per diluted share in the year earlier period. On a non-GAAP adjusted basis, net income in the second quarter of 2024 was $10.1 million or 92 cents per diluted share. Turning to our balance sheet, we ended the quarter with $163.5 million in cash, cash equivalents, and investments in no interest-bearing debt. This is up from $150 million as of December 31st, 2023. Now I'll turn to our guidance. We are expecting third quarter revenue to range from $125 to $145 million, reflecting a continued decrease in the number of active earning OPTAVIA coaches as a result of near-term challenges to customer acquisition due to growing acceptance of GLP-1 medications in the marketplace. We expect our loss per share for the quarter to range from 5 cents to 70 cents. The guidance includes expectations of spending $9 million during the quarter on company-led marketing and another $4 million on our coach convention. However, it excludes the cost related to the initiation of our LifeMD collaboration and any gains and losses from changes in the market price of our LifeMD common stock holding, which we are unable to estimate. I do want to note that while we initially expected to spend around $30 million on marketing this year, we now expect that the number to be approximately $25 million. We have made a conscious decision to better align our spending with the availability of the full complement of our new offer, which includes the new products and enhanced customer experience that we expect will be ready for the start of resolution season at the beginning of 2025. In summary, we believe that our strong balance sheet will allow us to weather the current market conditions while making the strategic investments necessary to execute our business transformation while maintaining a strong financial position. And that transformation of our business is the most effective way to provide lasting value for the company and stockholders. With that, let me turn the call to the operator for questions.

Thank you. We will now be conducting a question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star 2 if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. Our first question comes from Jim Solera with Stevens. Please go ahead.

Hi, guys. Good afternoon. Thanks for taking our question. Dan, I believe in your prepared remarks, you mentioned that about a third of the coaches have someone that they're currently working with that's on GLP-1 drugs. Can you give us some insight into how many of those customers started using GLP-1 through the LifeMD partnership or just they did it on their own and they just happened to also have an Optivea coach?

Yeah, Jim, it's a mix, and there are a number of reasons that we think it's a mix. A part of it has to do with some of them were already consulting with their own physicians, so they stuck with a primary care physician. The other part of it is that we're just starting on integrating the full solution. But we see that as an encouraging sign, as you pointed out. I mean, that's reflective of our training. We have about 90% of our coach leaders now who have gone through the training for medically supported weight loss. So we're starting to see that have an impact on the ability to bring in new clients who are on GLP-1. We also have about 17% of our total active running coaches who have now been trained. So we believe that training Will have a positive impact on that number, the other big thing that we touched on in the prepared remarks. relate to the product focus that we have. I think there's one of the statistics we shared for the first time was related to a third party study. It's an area that continues to come up and reinforce this area of GLP-1 support, which is that 90% of GLP-1 users indicate they're interested in foods specifically formulated for people who are on GLP-1 drugs. And that also kind of reinforces the other part of what we're looking at for the support market, which is that with our own research, 80% of those who are open to medically supported weight loss medications are also interested in this combined offer that we are putting forward. So we think that this launch of the gap filler in that sense of this nutrition support kit, which sells for about $282 and offers coaching, food, and six months of clinician support is an important part of our new product offer. We're starting to see that become a more significant part of our sales, particularly in the months of May, sequential improvement between May and June. And we also just saw our convention, and we announced and actually sampled a new product line, which has a brand of Ascend, which is a line that was specifically formulated for people on GLP-1 drugs. So the other current nutrition support product was a bundle of our current products. This new one is completely reformulated. You know, the last thing I think just, you know, rounding out this question of, you know, why we think this number of active earning coaches who are supporting GLP-1 clients will continue to increase as we're continuing to improve the the integration between our technology, LifeMD's technology, making it easier for our coaches to support their clients with this clinician supported model in collaboration with LifeMD. And we also, as pointed out, are activating not only our own company-led acquisition, spending, but also testing in collaboration with LifeMD how we might support their patients with our combined offer. So we feel like we're still very much at the beginning of the transformation, but as we add more components to support our transformation, we're starting to see the impact although it's going to take some time for the impact to to translate into a real impact on the top line as we restructure and recreate what we were very successful in doing in the past most of the past eight years which is having that flywheel that brings in new clients who a portion of whom convert to coaches and who are able to bring in more new clients so we're feel good about where we are in the transformation, but feel a real, I'll say, urgency to start seeing that new client number improve so that we can see top line improvement, which we anticipate will be largely part of next year's results.

I appreciate all the detail. Maybe one other thing to drill in on. As you start to ramp the company-supported marketing, you talked about new products, ready to drink shakes or I took it as ready to drink shakes. Maybe if not, please feel free to correct me as well as the bars. Is that something that if the customer comes to that driven by the advertisements that are company led, is there going to be a way for them to order it just direct online without any interaction with a coach or is it still going to require them having a relationship with a coach in order to get the product?

Yeah, so the shakes are not rated to drink. The shakes are in a powder form to answer that first question. And, yeah, you know, we sell the products, but these are really part of programs. And the program, and we changed this several years ago, we found that there's far more success for each of these clients or these customers in terms of achieving their goals ultimate goals if they are tied in with a coach and the community and understand the habits of health. It's possible for somebody to continue on their own, but they're always assigned a coach so that they can have that support if they need it. It's a little bit of self-service support, if you will. Yes, they can get it through the website and but they will be assigned a coach at the same time.

Got it. Okay. Appreciate all the detail. I'll hop back in the queue. All right. Thanks, Jim.

Next question, Linda Bolton-Weiser with DA Davidson. Please go ahead. Linda, if you're speaking, we can't hear you.

Hi, can you hear me now?

Yes, we can.

Oh, okay. Sorry about that. So if your coaches, if the main problem they're having in acquiring new clients is that the GLP-1 drug is kind of a threat, why – the question went out of my head. Oh, I know what I was going to ask. Can you comment on whether the new client acquisition improved from May to June? Because you started offering the kit in May. So it seems that if the main threat is the GLP-1 drugs, the solution was offered starting in May. So it seems like it would have an immediate effect on improving the number of new clients. So was there a sequential increase in new clients from May to June?

Yeah, so we don't really give detail regarding clients in our quarter. But what I can tell you, Linda, is that as a percent of our business for new clients and reactivated clients, we did see a significant increase of orders as a percent of new clients and reactivated from May to June. So it was a very small percent in the month of May that we were seeing those orders. It did increase dramatically in June, but I would still say it's still a small part of our business, we're hopeful that we see that continue into Q3. And then then, as Dan mentioned in the prepared remarks, that we're launching new new products within that line later on this year. So we're hopeful that will keep increasing as a percent of our business and become much more meaningful as we move into 2025.

Okay, so I guess I'm confused. Maybe we can talk offline. So the revenue from new clients increased sequentially from May to June, but the number of new clients did not? I'm confused how that would happen.

No, so as a percent of our business, the orders that we were receiving from customers, that actually increased. Those people were ordering more of the kit that was associated with the GLP-1 versus our old five-in-one program or any other program that we had. So it just, that portion of our business grew in June versus May. Doesn't mean the entire business grew in June though. But we're seeing that movement as we move through this transformation.

So a high-level way to look at it, Linda, is we have a higher number of our coaches who are supporting those on GLP-1 drugs. So that's the third of our coaches, roughly, who are supporting at least one client on GLP-1 drug. And an increasing portion of those clients who are coming in are ordering the GLP-1 nutrition support product kit. And we anticipate that as we continue to train that that proportion of our client base will continue to increase. But there's still a lot of noise out there. So even though we see our coaches and our client community kind of making progress in the sense that we're bringing in a more, I'll say, diverse mix that includes more GLP-1 clients, we are still facing those headwinds that are a result no longer of not being able to offer, but also of a very competitive marketplace where a lot of people are offering. I think another interesting statistic that kind of, well, I'll state it more as a qualitative measure, is that we are seeing more of these clients that we're talking about as well who are transitioning off GLP-1 products and who are interested in using our program for maintenance so you can read about some of that obviously in the news but we're starting to see uh those clients who feel like they've achieved their weight but they they didn't learn kind of the lifestyle component who are coming to our coaches to make sure they don't achieve the weight gain so that's i think can be a meaningful target and segment for the long term okay and then um

Sorry again if you said this and I didn't understand, but you said a third of your coaches have at least one patient using a GLP-1 drug. Can you say how many or what percentage of your coaches had a client get the prescription through LifeMD?

I mentioned that earlier. So we have a mix right now. And what we've seen in these early stages is that quite a few of our customers that are working through coaches are going directly through their primary care physician because that's where they started their conversations. So increasingly, as we kind of integrate the offer more completely, we're seeing more of those go to LifeMD. So we saw improvements in those numbers, but I think we're still at the very early stages of creating the integration and also helping them understand how to use LifeMD if they already have a primary care physician. But we feel like we're making progress there, but right now it's very much a mix.

Okay. And then I guess If you talk about, you gave your numbers for advertising spend, and it does point to a smaller amount in fourth quarter than in third quarter. I guess that would make sense based on the seasonality of the business. Is that the main reason that there would be a sequential reduction? Because, I mean, you're trying to really make a dent here and get some attention in a very crowded market. So I'm wondering, like, are you thinking that, you know, During seasonal high points, this $10 million per quarter is what you're going to be spending? And also related to that, can you comment on Weight Watchers said the CAC has become just inordinately high given the election and the Olympics and everything going on in the weight loss space. So is your LTV to CAC coming out different than what you thought when you put together the plan for advertising? Has that projection changed at all?

Yeah, let me see if I can address those questions. So, you know, in the prepared remarks, we mentioned that we're going to reduce our marketing spend from 30 million to 25. That does have some to do with the seasonality. We do want to continue to invest in this year at a higher degree than we did in Q1 and in Q2 because we want to make sure that we're spending enough to get additional brand awareness as we move into 2025. Because as you know, Linda, that, you know, the brand itself, the awareness has been done through coaches and not through advertising in the past. So we believe we need to continue to invest at a good rate. But those, you know, that's why we're considering the second half of 2024 to be an investment period of time. So as we go into 2025, we're hopeful that that investment will pay off in those periods, plus pulling back a little bit on the spend And we would spend that money in 2025 in better periods, like you just said. The, you know, things like the Olympics and the election, you know, those do make it more difficult to spend the dollars when there's a lot of noise out there in social media and other means. You know, we're relatively, we're obviously much newer at advertising. I would say that on the CAC question, you know, we're seeing that the CAC is relatively what we expected, but we need to hit a target that is lower And we're looking to do that as we move through 2024. So we realize that this is going to take us some time. And that's why we're willing to invest and learn in what that right message is to get to the amount of customers or potential customers that lower that CAC.

Okay. Can I also ask, I mean, according to my model, and this is not your guidance, of course, but I've got like $25 million of free cash flow for the year, you know, significantly down. Are you pretty committed to maintaining, you've got cash on your balance sheet, so you've got an ability to invest in the business, meaning negative free cash flow. Are you pretty committed to keeping free cash flow positive, or do you think that you could just take some time here and invest, you know, heavily in the next year or two? Yeah.

So we don't, we, you know, you know, we're, we're, as you articulated, we do have a strong balance sheet. Uh, we do want to, um, continue having that strong balance sheet, uh, once we once we um have more learnings on uh our advertising spend uh we are expecting to accelerate that but we won't do that unless the investment is right for the shareholders so you know we're looking at the cac also and we're looking at ltv and we're making those calls based on the return on investment. So, I know that's a, I'm not really directly answering your question, but we do, again, we want to keep a strong balance sheet.

We will increase the amount of spending once we know there is a good return to shareholders.

Okay, yeah, that's helpful. Let's see, what else was I going to ask? I guess that's all I had for now. I will take the rest offline. Thank you.

Thanks, Linda. Thanks.

Once again, if you would like to ask a question, please press star 1 on your telephone keypad.

Next question comes from David Larson with BCIG.

Please go ahead.

Hi. Can you talk about your relationship with LifeMD and the go-forward model? Like how much will you be charging for a bundled solution? What does that bundled solution look like? And how much of the money goes to you? How much goes to LifeMD? And what sort of uptake do you expect in terms of members going to your platform and LifeMD's platform at a steady stage? Any more color there would be very helpful. Thank you.

I mean, currently, the way we're working together, and we're obviously just at the start of this, if you look at the combined offer, we're charging together $282. $65 is for a six-month commitment that LifeMD subscription, and our GLP-1 kit is $217. So that's how you get to the $282. That does not include the medication, but we're going to work through this. We don't really have any more to communicate on pricing, but we're going to work through this over the coming months and coming quarters to make sure that we're highlighting the value that we bring as an offer, when you think about it, we have a lot of elements that consumers are looking for when you consider someone that's going on medication to become more healthy. So we have pretty much all the elements that you would want as a patient or a customer.

It certainly makes a lot of sense to me. You have a GLP-1, you have a diet coaching piece as well. How are your top performing coaches responding to the relationship with LifeMD? I guess if you take these GLP-1s, maybe you're not as hungry, so you order less food. How convinced are they that they'll make more money with LifeMD? Thanks.

Yeah, I'd say there's a growing confidence in LifeMD. LifeMD has, over the years, built a great service with their primary care physicians. We actually now, for the second year in a row, have had a LifeMD physician come and present and run a panel for our coaches, most recently two weeks ago at our OPTAVIA convention. So the confidence is growing. And part of the growth in that confidence comes from their physicians being trained specifically on what the Optivea program is. Part of the confidence comes from the improvement in the technology integration, which means that our customers and our coaches' customers have a much better experience. So, for example, it's the ability to check eligibility to schedule time with a clinician, and to order products is all now integrated into the Optivia app. And so the more integrated into the overall solution it is, the greater the confidence becomes. So I think where we believe we would be at this stage but we also expect to see improvements in that as we continue to integrate the service between the two companies.

Great. Thanks very much. Appreciate it.

Thank you. I would like to turn the floor over to Dan for closing remarks.

I'd like to thank everybody for joining us today, and we look forward to seeing many of you at the Accounting for Genuity Growth Conference next week and then at the Wells Fargo Consumer Conference in September. Thank you for joining.

This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.