Prepared remarks
Good afternoon. Thank you for joining us today to discuss LifeMD’s Results for the First Quarter ended March 31, 2025. Joining the call today are Justin Schreiber, Chairman and Chief Executive Officer; and Marc Benathen, 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, May 6, 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. Now, I’d like to turn the call over to LifeMD’s CEO, Justin Schreiber. Please go ahead.
Thank you, and good afternoon, everyone. After the market closed, we issued a press release announcing our first quarter financial results and posted an updated corporate presentation on our website at ir.lifemd.com. I’m excited to share the significant progress LifeMD has made in the first quarter of 2025. On our last earnings call, we outlined key strategic priorities designed to accelerate our position as a leader in virtual primary care. I’m pleased to report that we’re executing well across the board, building on last year’s momentum and delivering strong performance throughout our platform. Our core Telehealth business had an exceptional quarter with revenue growing 70% year-over-year, driven largely by continued strength in our weight management program. We also saw promising early contributions from our fee-for-service Medicare initiative and the recent launch of our men’s hormone therapy offering.
Notably, Telehealth adjusted EBITDA reached $5.3 million, a dramatic improvement from a loss of $1.3 million in the same period last year. These results are a powerful validation of the brand, technology and operational excellence we’ve built into our virtual care model. Our RexMD brand continues to perform exceptionally well, with consistent growth in both revenue and active patient count, further reinforcing its position as a category leader in men’s health. As we previously guided, we continue to expand Rex beyond its original focus on sexual health into larger, high-demand verticals, including weight management, behavioral health, insomnia and hormone replacement therapy. Our newly launched HRT program is off to a strong start with early adoption, exceeding expectations and offering valuable insights into this fast-growing category. Notably, more than 40% of new HRT patients are existing RexMD patients already engaged in another care subscription.
Later this year, we plan to introduce LifeMDPlus and other synchronous care offerings to RexMD’s 180,000 active patients, unlocking a significant cross-care opportunity across our ecosystem. As a reminder, LifeMDPlus is our affordable monthly membership that includes 24x7 access to synchronous care, convenient prescription and refill services, and access to our curated marketplace of prescription medications, over-the-counter products and lab services. Now I’ll turn to our virtual primary care platform. As recently announced, we’ve established strategic collaborations with LillyDirect and NovoCare to improve access to GLP-1 medications for weight management patients without insurance coverage. These partnerships reflect the growing recognition of our patient-first model and underscore our ability to streamline access to transformative therapies. LifeMD is now the only virtual care provider offering synchronous consults integrated with both NovoCare and LillyDirect, enabling seamless access to Wegovy and Zepbound.
Combined with our direct-to-patient pharmacy, specialized nationwide provider network and pharmacy benefits infrastructure, we believe we’ve created a category-defining competitive moat in virtual obesity care. It’s worth noting that we expect to do exactly the same thing in many other verticals in the years to come. Another major milestone is our acceptance of fee-for-service Medicare, opening a significant and largely untapped market. We’ve already expanded coverage to over 21 million Medicare Part B beneficiaries across 26 states, and we’re on track to reach 49 states and over 60 million beneficiaries by the end of Q2. Approximately 75% of the Medicare population suffers from obesity or chronic cardiometabolic conditions such as diabetes, hypertension or high cholesterol, all areas where LifeMD delivers or intends to deliver high-quality and effective care. Given the lack of convenient, timely access to primary care for many Medicare beneficiaries, we believe our virtual care model is uniquely positioned to serve this population while diversifying revenue and improving outcomes.
We’re also excited to be entering two high-growth verticals, women’s health and behavioral health. Through our recent acquisition of Optimal Human Health MD, we’ve built a foundation for a differentiated women’s health offering focused on areas long overlooked by traditional healthcare. Within the next 90 days, we will launch a cash-pay, subscription-based women’s health program that includes comprehensive lab testing, synchronous virtual visits with specialized providers, and advanced nutrition counseling and coaching. A subsidized version, supported by commercial and government payers, will follow, broadening access to this innovative care model. We will also offer one-time consults available via self-pay or covered insurance plans. Meanwhile, our imminent entry into behavioral health, led by industry veteran Julian Cohen, will round out our care platform with a full suite of tele-psychiatry services.
This offering will eventually include both insurance-covered and cash-pay models designed to meet the growing need for accessible, high-quality mental health care. With behavioral health integrated into our existing chronic, primary and specialty care capabilities, LifeMD is well-positioned to deliver a more holistic and impactful patient experience. By leveraging our fully-integrated platform, including a national provider network, advanced diagnostics through partnerships with Quest & LabCorp, and our newly-launched National Pharmacy, we’re delivering a level of continuity in care that sets LifeMD apart. These strategic expansions are fueling meaningful revenue diversification, improved patient retention and long-term profitability. Our mission remains unchanged, to deliver the most comprehensive, convenient and outcomes-driven care experience in healthcare today. With that, I’ll turn the call over to our CFO, Marc Benathen, to walk through our first quarter financial results. Marc?
Thank you, Justin, and good afternoon, everyone. LifeMD achieved very strong first quarter financial results, with total revenues increasing 49% versus the year-ago period to $65.7 million. Core Telehealth revenue grew by 70% versus the prior year, with standalone adjusted EBITDA of $5.3 million. This compares with a standalone Telehealth adjusted EBITDA loss of $1.3 million in the first quarter of 2024, representing a $6.6 million increase year-over-year. Telehealth subscriber growth remains strong, with the number of active subscribers increasing 22% year-over-year to over 290,000 at quarter ends. The number of WorkSimpli active subscribers declined by 5% to 158,000. WorkSimpli continued to perform well financially, with quarterly adjusted EBITDA again exceeding $3 million. Gross margin for the first quarter was 86.8%. This is a decline of 270 basis points versus the prior year, due to changes in revenue mix and temporary changes in pharmacy mix, yet on a sequential basis, gross margin increased by 150 basis points versus Q4 of 2024.
Gross profit was $57.1 million, an increase of 44% from the year-ago period. GAAP net income attributable to common stockholders for the first quarter was $608,000 or $0.01 per diluted share. This compares with a GAAP net loss attributable to common stockholders for the first quarter of 2024 of $7.5 million or a loss of $0.19 per share. As Justin mentioned, Q1 was our first quarter with positive GAAP net income. Adjusted EBITDA is a non-GAAP measure we define as income or loss attributable to common stockholders before various items as outlined in today’s earnings news release. Adjusted EBITDA totaled $8.7 million for the first quarter, as compared with $0.1 million in the year-ago period. Telehealth adjusted EBITDA is a non-GAAP measure defined as adjusted EBITDA for only our Telehealth business, excluding WorkSimpli. This measure was $5.3 million for the first quarter of 2025, as compared to a loss of $1.3 million in the year-ago period.
We exited the first quarter with $34.4 million in cash. Turning to guidance, today we are raising our financial guidance for 2025 due to the outperformance of our Telehealth business to date. Our revised guidance for total revenues is in the range of $268 million to $275 million, with Telehealth revenue in the range of $208 million to $213 million. Our revised guidance for consolidated adjusted EBITDA is in the range of $31 million to $33 million, with Telehealth adjusted EBITDA to be at least $21 million. This wraps our financial results. I’d now like to turn the call back over to Justin.
Thanks, Marc. As we conclude our prepared remarks, I want to underscore how energized we are by LifeMD’s strong start to 2025. Our first quarter performance reflects disciplined execution against our strategic priorities and the early traction we’re seeing across key initiatives gives us strong confidence in our trajectory for the remainder of the year. The programs we’ve launched, including the expansion of our benefits infrastructure, strategic collaborations with GLP-1 manufacturers, new RexMD offerings, and our entry into the women’s and behavioral health space are all aligned with our near-term vision to build a trusted, vertically integrated marketplace for healthcare services, prescription medications and over-the-counter healthcare products. We’re continuing to scale what has made LifeMD successful, real providers delivering synchronous, high-quality virtual care, a compelling value proposition across services and products, and a consistently exceptional patient experience enabled by world-class technology and a passionate, mission-driven team.
Looking ahead, we have several high-impact initiatives on the horizon, including the upcoming launch of LifeMDPlus, continued investment in our platform, and expansion into new, high-value clinical categories. These efforts are designed to support our fast-growing direct-to-patient business, while also meeting the growing demand from employers seeking to enhance their benefit offerings with solutions that drive stronger engagement and healthier employee populations. With the infrastructure, team and momentum now in place, LifeMD is uniquely positioned to lead the next chapter of virtual care innovation, delivering lasting value to both patients and shareholders. We’re proud of what we’ve accomplished and even more excited about what’s ahead. With that, I’ll now turn the call over to the Operator for Q&A.
Questions and answers
We’ll take our first question from David Larsen with BTIG.
Hey. Congratulations on another very good quarter. Can you talk a little bit about your relationships with Lilly and Novo? Specifically, can you talk about, like, the pricing for each of those products? Is it like a revenue share on a per month basis? And then maybe just, if you can, talk a bit about the conversion from commercial compounded scripts to personalized as we progress through May and the rest of the year? Thank you.
Hi, Dave. Thanks for your question. Our relationship with both Lilly and Novo, particularly with their partner pharmacies, allows us to integrate our care offerings and enhance access to those medications for patients. The price that patients pay, even when facilitated by LifeMD, is the same as elsewhere. There’s no discount for patients coming from LifeMD, and we do not receive any compensation or rebate from the drug manufacturers. Regarding our upcoming launch, we will offer various pricing options for patients based on the care they receive alongside those therapies, with some pricing influenced by the duration of their care membership and other considerations. Similar to our other weight loss programs, we plan to offer discounts and promotions. Concerning personalized compounding, we will provide more details in future quarters, but I can confirm we are effectively assisting patients who were on compounded therapy to access branded therapies and other non-GLP-1 generic medications, with some patients who meet the clinical criteria being offered personalized compounded therapies.
We will share more figures in the upcoming quarters. We anticipate that integrations with both LillyDirect and NovoCare will go live next week, and we are very excited about this development. We believe it will significantly boost growth in the weight management sector and be beneficial for patients seeking these branded therapies.
Great. And then just one more quick follow-up. Can you talk about the role of insurance in your view? One of your peers or competitors seems to have a philosophy against taking insurance, and it’s entirely cash-pay. In my mind, it’s like if the member has insurance, why not use it, especially if the insurance dollars can go to help cover the branded therapies that Lilly and Novo and other manufacturers might present through your platform. So just any color around growth in the insurance side of things? Thanks very much.
Thanks, David. That’s a great question. At LifeMD, we feel the insurance component of these offerings is very important. And as you know, we’ve invested an enormous amount of time and resources into building a platform for accepting commercial and government insurance programs and for making sure that we’re doing that compliantly, training our providers and doing everything else that’s required to scale that side of the business. I think it’s pretty simple, right? We believe that by subsidizing the cost of the care that we provide and, of course, medications that patients access through our platform, we simply make them more accessible. We think it’s a driver of retention. Overall, we believe it’s a really important part of the business’s long-term success. That being said, we’ll still have a lot of cash-pay offerings, and it does increase the complexity of our programs. If you think about it, when we build stuff, there’s a product and technology component to thinking through how cash-pay offerings and insurance-sponsored offerings coexist in the same ecosystem.
I’m not going to say that it’s not always easy to do, but we think it’s really important. We know from our market research that when you give patients the ability to use their insurance, you’re going to lower customer acquisition costs and hopefully drive retention. We haven’t proven that out yet, but I think it also dramatically expands the total addressable market. If you think about people that are willing to pay cash for things versus most Americans who have an insurance card in their wallet, that’s how they are supposed to pay. We’re going to continue to double down in this area. The Medicare business, as we mentioned on the call, we’ve seen really strong initial traction. We’ve gotten some of our first reimbursements for Medicare, and we’re really excited about the growth of that side of the business.
Okay. Congrats on a good quarter. I’ll hop back on the queue.
We’ll go next to Sarah James with Cantor Fitzgerald.
Thank you. I was hoping you could walk us through a little bit what the main drivers of earnings outside was compared to your expectations and help us understand which ones of those might be one to specific or things that would continue on for the rest of the year?
Yeah. This is Marc. Look, the main driver is similar to what we’ve had in the past. It’s been retention revenue. So the rebuilding of existing patients has been stronger than what we had planned. We have a small amount, I’d say, in the form of $200,000 to $300,000 associated with upside relative to higher acquisitions in the weight management space. I would say, obviously, that was more Q1 specific, although acquisitions are still very strong even as we transitioned. There was just a little bit of pent-up demand. Remember, a lot of that gets deferred as far as how we recognize the revenue. But the majority of the rest of it was higher than expected retention revenue, which would be the rebuild of existing patients and most of that will continue. Obviously, typically, Q1 also has a higher rate of new acquisitions in several of our business lines. It’s just historically been the case versus Q2. April will tend to be a little bit lower than historically what Q1 has been. But, all in all, the only anomaly was a small one, which was some pent-up demand in the weight management space.
Great. And then could you give us an update on your launch of your compounding pharmacy? How are things trending versus your expectations on a timeline basis?
Yeah. Hi, Sarah. This is Justin Schreiber. Our compounding pharmacy is on track. We expect to have it licensed sometime this summer and licensed in most states across the country by the end of the year. As far as our mail-order pharmacy continues, we continue to scale that. I think now we’re averaging close to 1,000 prescriptions a day from that pharmacy ballpark. We expect to continue to scale that as well over the next year or two. It’s been extremely positive already for not only reducing lead times to medication for patients, but also has had a positive impact on our bottom line.
Great. Thank you.
We’ll go next to Steve Dechert with KeyBanc.
Hey. Thanks for the question, guys. Does your 2025 guidance include contributions from mental health and women’s health? And then as a follow-up, you talk about which RexMD offerings are mainly driving the success in that segment. It sounds like it’s a hormone replacement therapy, but I just want to make sure that we have that right? Thanks.
Yeah. So the female health and mental health, yes, it does. Nothing that large, though. It’s pretty minimal. Combined, it’s about $5 million in the guidance. Across those, female health, we’re already actively selling and realizing revenue from day one, albeit on a smaller scale as we fully integrate those assets onto our platform, which is a 60 to 90 day endeavor. The rate of growth there will obviously increase quite a bit. Right now, it’s more of a VIP concierge-based offering that’s about $10,000 a year. But it’s driving some decent initial revenue. On the mental health side, that’s really a back-half-of-the-year thing where we’ll see revenue contributions or small amounts baked into the guidance. As far as, like, the RexMD offerings that are mainly driving the success in that segment, hormone replacement therapy is separate from female health. There’s a hormonal component to female health, which is menopause and other hormonal treatments. But on the male side, HRT is testosterone and then non-testosterone treatments. That’s what sits under Rex. That’s what we launched really in Q4 of last year, and that’s what’s beginning to pick up traction.
Great. Thank you.
We’ll go next to Steven Valiquette with Mizuho Securities.
Thanks. Good afternoon, guys. Congrats on the results. Yeah. I guess I understand you don’t want to get into too much specific numbers yet on the Wegovy, NovoCare pharmacy announcement from last week. But I guess I’m curious how much of the positive guidance revision today for 2025 is related to that announcement from last week. I’m just trying to get a sense for how much of a game changer that really is for the company, just any additional color would help. Thanks.
Yeah. None of it’s related to that. It’s all related to our performance in Q1, which obviously predated those partnerships. Look, there could be some upside in relation to that. But it basically provides patients another avenue for treatment. Quite frankly, it says that we’re obviously aligned with the companies that we’re collaborating with. No changes to the guidance, but all around, it’s obviously a positive for patients and the company.
Steve, I’ll just add to that, this is Justin Schreiber. I mean, I think we definitely think it likely will be a long-term game changer for our weight loss offering. One important point is that we view these as long-term collaborations with both of these companies. We know both of these companies are going to be launching new drugs. Some of these companies may launch drugs specifically for these types of self-pay programs. I think the best way to summarize it is that we believe there are many ways that this collaboration can flourish with both of these companies over the long-term. But it’s just too early for us to incorporate that into our guidance or raise guidance because of that belief.
We’ll go next to Yi Chen with H.C. Wainwright.
Thank you for taking my questions. My first question is now that you have both Wegovy and Zepbound on your platform. Can you tell us about a patient seeking weight management, how is he going to choose one of the two and whether the patient’s choice affect potential benefits to your company going forward? Thank you.
Sure. This is Justin Schreiber. Thanks for your question. I mean, the patient’s choice of either medication would not affect LifeMD or our platform or revenue in any way. I think as far as which therapy they end up on, a lot of patients come in requesting a particular therapy. Some patients may choose a branded therapy based on price. There are some price differences between the two therapies. There are different delivery mechanisms for the therapies. For instance, Lilly’s cash-pay products are a vial with a syringe, and NovoCare’s products have an auto injector. The most important component will be the patient’s visit with one of our providers, and the provider will make recommendations based on their clinical presentation.
Yeah. And I would note that we’ve always offered patients both either the semaglutide products or tirzepatide products, obviously, or the branded therapies of those. That’s not a new thing. It’s just the cash-pay discounted collaborations. Obviously, the NovoCare one was signed subsequent to the Lilly one.
Got it. I think one of your competitors who also got Wegovy from Novo announced the pricing point moderately higher than your pricing point. I mean, what is the difference there? Do they offer any additional services that you do not offer?
I don’t really want to get into how our competitors have chosen to price these products. LifeMD hasn’t finalized the pricing structure for the care that will be provided alongside these products, but we have said that it will be very similar to what we’re currently charging for our weight management program.
Okay. Last question, does LifeMD plan to continue to offer compounded GLP-1 in the coming years?
Sure. This is Justin. I’ll answer that. So, to be clear, what LifeMD doesn’t compound any GLP-1 medications. LifeMD is a virtual care provider. In the event that patients don’t have insurance coverage for a brand of therapy and can’t afford one of the self-pay programs from one of our collaborations, and aren’t appropriate clinically speaking for a non-GLP-1 therapy, LifeMD is willing, again, assuming the patient has the appropriate clinical presentation, to send a prescription to a compounding pharmacy. However, our focus is helping patients access branded therapies in every possible way.
We’ll go next to Anderson Schock with B. Riley Securities.
Hi. Congrats on the great quarter and thank you for taking the questions. So first just looking at your guidance for Telehealth, like raising the lower end for revenues following a strong quarter. This looks like you’re expecting Telehealth to be roughly flat sequentially. Is this just being conservative or are there some headwinds that you’re anticipating that will limit your ability to grow sequentially?
Yeah. No. It’s not that there’s headwinds. I mean, there’s some timing in the revenue that we have. We tend to take a relatively conservative view of revenue. We do normally expect and see aspects of the Rex business and sexual health tend to be a little bit softer seasonally in Q2 than they are in Q1, which is what historically we’ve seen, particularly from new acquisition standpoints. We’ve baked that into our model also. But all that’s pretty consistent with what we’ve seen in the past. Obviously, there’s tremendous growth year-on-year, and that’s essentially how we’re managing the business versus just managing for sequential growth every single quarter.
Okay. Got it. And then on WorkSimpli, you had a 5% decline in subscribers this quarter following your return to growth in the fourth quarter. Could you just talk about the challenges this business faced this quarter and how we should think about that business for the rest of the year?
No challenges. The goal with the non-core asset is to eventually divest, but in the meantime, we aim to generate cash flow. That business has the potential for much faster growth, although it may be slightly less profitable due to increased marketing expenses. We’ve aimed for a level where they can achieve modest quarter-on-quarter EBITDA growth, with more significant growth expected in the latter half of the year as they increase their subscriber base. The focus has been on maximizing cash flow rather than just top-line revenue. They have been shifting towards acquiring higher-value customers with longer lifetime values, which explains the revenue increase despite a 5% year-on-year decline in subscribers. We are also beginning to see further improvements in profitability.
Okay. Got it. Thank you for taking our questions and congrats again on the great quarter.
Thank you.
It appears we have no further questions at this time. I will now turn the program back over to Justin Schreiber for any additional or closing remarks.
Thank you for your questions and for your interest in LifeMD. We look forward to speaking with you once again when we report our second quarter results in August. Have a great evening.
This does conclude today’s program. Thank you for your participation. You may disconnect at any time.