LifeMD Reports First Quarter 2024 Results; Raises Full Year Revenue Guidance

• First quarter revenue increased 33% year-over-year to $44.1 million with telehealth revenue growing 53% versus the year-ago period.
  
• Raising full-year revenue guidance to at least $205 million, up from prior guidance of at least $200 million.
• Growth in all business segments, with weight management subscribers growing to 42,000 as of March 31, 2024. As of today, weight management subscribers exceed 50,000.
• Including the increase in deferred revenue from prepaid weight management subscriptions, cash-adjusted EBITDA was $4.8 million, a 108% increase versus the comparable measure in the year-ago period. Excluding this increase, adjusted EBITDA for the first quarter was $0.5 million.
• Generated $5.2 million of cash flow from operations and a $2.0 million net increase in cash during the first quarter.
  

Conference call begins at 4:30 p.m. Eastern time today

NEW YORK, May 08, 2024 (GLOBE NEWSWIRE) -- LifeMD, Inc. (Nasdaq: LFMD), a leading provider of virtual primary care services, today reported financial results for the three months ended March 31, 2024.   

Management Commentary

“During the first quarter of 2024, LifeMD continued to demonstrate the scalability of our virtual care platform and the alignment of a solid long-term strategy with a current market need. Our focus is on making high quality healthcare accessible for all and we are proud of the impact we are having in this area. We continue to accelerate growth in new patient sign-ups and active subscribers in our GLP-1 weight management business, which alone added over 20,000 net new patients and ended the quarter with over 42,000 subscribers. As of today, we have over 50,000 weight management subscribers on our platform. Moreover, retention for our weight management program remained strong with over 80% of patients starting GLP-1 treatment remaining a patient after 90 days. We also made significant progress on our pharmacy and medical benefits infrastructure and are now seeing prior authorization approval rates between 40-50% for branded GLP-1 treatments. Perhaps most important, our unit economics remain very strong as we continue to achieve a Day 1 return on ad spend of approximately 1.0x with retention that continues to exceed our expectations. I am also particularly proud of our recent announcement to partner with Withings, making us the first telehealth provider to leverage critical metabolic data to drive improved patient outcomes and improved management of chronic conditions and co-morbidities,” said Justin Schreiber, Chairman and CEO of LifeMD.

“Our lifestyle healthcare businesses, led by RexMD^®, continued to produce consistent double-digit growth with robust contribution margins that exceeded 30%,” he added. “We continued to make progress on several key fronts that will provide new, long-term growth levers for LifeMD including our Medifast collaboration, acceptance of commercial insurance which we will launch on a limited basis in the second quarter and the launches of two new product categories under RexMD in the second quarter. The strength of our existing businesses coupled with these new initiatives position LifeMD for accelerated growth and profitability in the back half of 2024 and beyond.”

“We continued our strong financial performance during the first quarter with outstanding topline growth led by a 53% increase in telehealth revenue and over $5 million of cash flow from operations. For the fourth consecutive quarter we achieved positive cash flow from operations and generated positive net cash flow. Adjusting for the large increase in deferred revenue related to the continued over-performance in our GLP-1 weight management program, we generated strong cash-adjusted EBITDA and cash flow continued to outperform expectations. Given the strength of our combined telehealth businesses, we are raising our full-year 2024 revenue guidance to at least $205 million, up from prior guidance of at least $200 million,” added Marc Benathen, Chief Financial Officer of LifeMD.

First Quarter Financial Highlights

• Revenue increased 33% year-over-year to $44.1 million.
• Telehealth revenue increased 53% versus the year-ago period. WorkSimpli revenue increased 3% versus the year-ago period.
• Telehealth active subscribers increased 31% over the year-ago period to approximately 235,000 at quarter-end.
• WorkSimpli subscribers grew by 8,000 sequentially over the prior quarter as performance in this business rebounded in the back half of the quarter.
• Weight management revenue grew 66% sequentially versus the fourth quarter of 2023.
• Gross margin expanded to a record 90%, up from 87% in the year-ago period.
• GAAP net loss was $7.5 million or $0.19 per share, compared with GAAP net loss of $4.8 million or $0.15 per share in the year-ago period.
• Adjusted EBITDA was $0.5 million compared with $2.0 million in the year-ago period (see definition below of this non-GAAP financial measure and reconciliation to GAAP).
• Including the $4.3 million increase in deferred revenue during the quarter related to weight management growth, cash-adjusted EBITDA was $4.8 million, up 108% versus the comparable measure in the year-ago period (see definition below of this non-GAAP financial measure and reconciliation to GAAP).
• Adjusted diluted EPS was $0.01 compared with $0.06 in the year-ago period (see definition below of this non-GAAP financial measure and reconciliation to GAAP).
• Generated $5.2 million of cash flow from operations and positive net cash flow. LifeMD exited the quarter with $35.1 million of cash, an increase of $2.0 million on a net cash flow basis versus the prior quarter driven by continued strong cash flow from operations.
  

Financial Guidance

For the second quarter of 2024, the Company expects:

• Revenue to be between $48 million and $50 million.
• Adjusted EBITDA to be between $2 million and $3 million.
• Cash-adjusted EBITDA (adjusted EBITDA including the increase in Deferred Revenue from multi-month, prepaid subscriptions primarily from our weight management program) to be between $6 million and $7 million.
  

For the full year 2024, the Company expects:

• Revenue to be at least $205 million, raised from previous guidance of at least $200 million.
• Reaffirming adjusted EBITDA guidance to be between $18 million and $22 million.

Conference Call

LifeMD’s management will host a conference call today at 4:30 p.m. Eastern time to discuss the Company’s financial results and outlook, and answer questions. Details for the call are as follows:

A live and archived webcast will be available in the Investors section of the Company’s website at ir.lifemd.com.

About LifeMD

LifeMD is a leading provider of virtual primary care. LifeMD offers telemedicine, laboratory and pharmacy services, and specialized treatment across more than 200 conditions including primary care, men’s and women's health, weight management and hormone therapy. The Company leverages a vertically-integrated, proprietary digital care platform, a 50-state affiliated medical group and a U.S.-based patient care center to increase access to high-quality and affordable care. For more information, please visit LifeMD.com.

Cautionary Note Regarding Forward Looking Statements

This news release includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended; Section 21E of the Securities Exchange Act of 1934, as amended; and the safe harbor provision of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements contained in this news release may be identified by the use of words such as: “believe,” “expect,” “anticipate,” “project,” “should,” “plan,” “will,” “may,” “intend,” “estimate,” predict,” “continue,” and “potential,” or, in each case, their negative or other variations or comparable terminology referencing future periods. Examples of forward-looking statements include, but are not limited to, statements regarding our financial outlook and guidance, short and long-term business performance and operations, future revenues and earnings, regulatory developments, legal events or outcomes, ability to comply with complex and evolving regulations, market conditions and trends, new or expanded products and offerings, growth strategies, underlying assumptions, and the effects of any of the foregoing on our future results of operations or financial condition.

Forward-looking statements are not historical facts and are not assurances of future performance. Rather, these statements are based on our current expectations, beliefs, and assumptions regarding future plans and strategies, projections, anticipated and unanticipated events and trends, the economy, and other future conditions, including the impact of any of the aforementioned on our future business. As forward-looking statements relate to the future, they are subject to inherent risk, uncertainties, and changes in circumstances and assumptions that are difficult to predict, including some of which are out of our control. Consequently, our actual results, performance, and financial condition may differ materially from those indicated in the forward-looking statements. These risks and uncertainties include, but are not limited to, “Risk Factors” identified in our filings with the Securities and Exchange Commission, including, but not limited to, our most recently filed Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, and any amendments thereto. Even if our actual results, performance, or financial condition are consistent with forward-looking statements contained in such filings, they may not be indicative of our actual results, performance, or financial condition in subsequent periods.

Any forward-looking statement made in the news release is based on information currently available to us as of the date on which this release is made. We undertake no obligation to update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise, except as may be required under applicable law or regulation.

Investor Contact
LifeMD, Inc.
Marc Benathen, CFO
[email protected]

Media Contact
[email protected]

About the Use of Non-GAAP Financial Measures:
To supplement our financial information presented in accordance with GAAP, we use adjusted EBITDA and adjusted EPS as non-GAAP financial measures to clarify and enhance an understanding of past performance. We believe that the presentation of these financial measures enhances an investor’s understanding of our financial performance. We further believe that these financial measures are useful financial metrics to assess our operating performance from period-to-period by excluding certain items that we believe are not representative of our core business. We use certain financial measures for business planning purposes and in measuring our performance relative to that of our competitors.

Adjusted EBITDA is defined as income (loss) attributable to common shareholders before interest, taxes, depreciation, amortization, accretion, financing transaction expense, non-controlling interests, foreign currency translation, inventory valuation, sales return reserves, litigation costs, loss on debt extinguishment, dividends, insurance acceptance and Sarbanes-Oxley readiness, acquisition costs, severance expenses and stock-based compensation expense. We have provided below a reconciliation of adjusted EBITDA to net loss attributable to common shareholders, its most directly comparable GAAP financial measure.

Cash-adjusted EBITDA is defined as adjusted EBITDA before the change in the Company's deferred revenue balance from the most recent fiscal year-end. We have provided below a reconciliation of Cash adjusted EBITDA to adjusted EBITDA.

Adjusted EPS is defined as the diluted net loss attributable to LifeMD, Inc common shareholders before interest, taxes, depreciation, amortization, accretion, financing transaction expense, non-controlling interests, foreign currency translation, inventory valuation, sales return reserves, litigation costs, loss on debt extinguishment, dividends, insurance acceptance and Sarbanes-Oxley readiness, acquisition costs, severance expenses and stock-based compensation expense. We have provided below a reconciliation of adjusted EPS to Diluted loss per share attributable to LifeMD, Inc common shareholders, its most directly comparable GAAP financial measure.

We believe the above financial measures are commonly used by investors to evaluate our performance and that of our competitors. However, our use of the terms adjusted EBITDA and adjusted EPS may vary from that of others in our industry. Adjusted EBITDA and adjusted EPS should not be considered as an alternative to net loss before taxes, net loss per share, operating loss or any other performance measures derived in accordance with GAAP as measures of performance.