Q4 2020 LifeMD Inc Earnings Call
Ladies and gentlemen, and you are currently standing by for todays.
Right.
Fourth quarter, and full year, 2020 conflict and earnings results Conference call at the time, we are still of many additional participants and plan to be underway. Shortly we do appreciate your patience and teach them, Illinois.
[music].
Good afternoon, and thank you for joining us today to discuss life and the fourth quarter and full year 2020 results ended December 31st 2020, joining us today is the chief Executive officer of life, and eat Justin Schreiber and cheap company's Chief Financial Officer, Mark benefit of following their remarks well.
The open the call to your questions and the.
Before we conclude today's call I'll provide some important cautions regarding the forward looking statements made by management during the call I'd like to remind everyone that today's call is being recorded and will be made available for the telecom replay via instructions in today's press release, which is available and the Investor Relations section of the company's website.
And now I'd like to turn the call over to life N D CEO, Justin and Striper. Please go ahead.
Thank you Christy and good afternoon, everyone. Thanks for joining us today.
2020 was an incredible year for telemedicine and the stellar year for life and beat our top line grew by nearly 200% true a record $47 3 million.
Adding back the 917000 and deferred revenue loss due to a record level of subscription adjusted sales totaled $38 2 million for the year.
And we ended 2020 of exceptionally strong December revenue hitting of monthly record of $5 2 million.
316% over December of the previous year, and fact December 2020 alone of course the.
The entire fourth quarter of 2019.
2020 was also a year of unprecedented change caused by the pandemic. Despite the challenges and heartbreak, perhaps one silver lining of the pandemic is how we capitalize the rapid expansion and evolution of the telehealth industry for the benefit and well being of consumers and.
And we have of ball and expands and along with it from a branded telemedicine products company into a leading provider of end to end contours of telehealth products and services. Our recent name change from convergent labs to life and the.
The flex the evolution that's the person.
Since we embarked upon this journey two years ago, our vision has always been to radically change healthcare and making.
Access to the best physician diagnosis and treatment easily accessible and convenient and affordable.
And I'm discretely treating non sexual health and then of the women and Tara walk to the upcoming rollout of our new tell of dermatology and Cogs of yours Telehealth services lifetime of the Malibu forefront of the Telehealth Revolution, the improving health care for countless Americans now with the first quarter of 2021 nearly clause we continue to.
We expect more than 17 oriented revenue for the quarter, which would be up more than 30% sequentially and up 295% compared to the same year ago quarter.
All of this growth reflects the huge investments, we've made and the second half of last year, and especially in the fourth quarter to scale, our platform and capture new customers and market share.
And this was driven record levels of new subscribers and net orders of current telemedicine business in fact, our subscription rate for new telemedicine orders and has grown from 20% early last year and now more than 91% and.
We believe these new subscribers are worth far more and the investments we made to acquire.
This also means that our traditionally reported annual recurring revenue from subscription is now nearly the same as our top line of annual run rate with our top line run rate currently exceeding $75 million based on margin estimated results as.
The remarkable all of this growth and market expansion has been we believe we've only begun to scratch the surface of what we see at the 600 billion dollar and growing addressable market opportunity and to capture more of this fast growing market. We are planning to launch additional tele health products and services throughout the year the we.
<unk> will further strengthen our high growth outlook.
But before getting more of these new offerings and the outlook for 2020, one and I can turn the call over to our CFO Mark benefit who will take us through the financial details for the quarter and the year I'm going to deviate from the script for a moment to formally welcome Mark for our first earnings call.
We've talked a lot about the amazing marketing and operations team that we have a life of game, which we believe is one of our main competitive advantages. However, having mark on board of our CFO is truly game changing for the company and our shareholders and I'm extremely confident that the expertise and experience mark going from the table wildlife and either achieved or.
Lot more than we otherwise would have and it didn't have much of the team. So welcome aboard Mark and go ahead.
Thank you, Josh and good afternoon, everyone and.
And there's been about a month since I joined the life M D and I could not be more and trusted by the energy and passion of the entire team and that's what's been evident and the phenomenal growth of the company has been driving over the past year like just the and I truly believe we have only begun to scratch the surface of life in the long term potential.
As Justin mentioned in 'twenty, and 'twenty was a record year of Mark quite substantial growth across all of our products and services revenue and the fourth quarter of 2020 of totaled a record of $12 90 million of 227% one of the fourth quarter of 2019. The growth was primarily driven by of 200.
And 93% increase and saw the house and that revenue to $10 3 million or P. D of simply subsidiary contributed net revenue of $2 6 million of.
The 96% from the year ago quarter.
Including 917000 and year and deferred revenue associated with recurring subscription and total adjusted revenue on the non-GAAP basis would've been $13 8 million for the fourth quarter of 2020.
Annual recurring revenue or a R. R from subscriptions of December 31st 2020 reached the record $53 3 million of 443% compared to the end of 2019 as of today, we estimate our air of our from subscriptions of the increase of $75 9 billion of 206.
The 7% year over year.
We calculate AOR from subscriptions by multiplying by 12, the monthly somewhat revenue attributed exclusively to subscription sales. We don't concern of single accounts to customers that purchased products two of the company's regular checkout pages third party online marketplaces, where involving the assistance of a customer.
So disruptive nonetheless.
Beginning with the reporting of the fourth quarter and full year of 2020 results. The calculation includes revenue from the initial purchase of patients who signed up on the recurring subscription plan. We believe this more accurately represents the current annualized value of our subscription customers.
For future reporting periods, we are evaluating and looking at introducing additional charge of about just for tracking down.
<unk>.
Gross profit and the fourth quarter increase of 184% of $8 9 million compared to $3 1 million and the same year ago two of them.
Gross profit as a percentage of revenue and the fourth quarter of 2020 decreased the 69, 1% from 79, 6% from the same year ago quarter.
However, the decrease was primarily due to a change of mix of product sales and inventory write off associated with legacy products. Excluding the impact of this non cash write off of adjusted gross margin on the non-GAAP basis for the fourth quarter of 2020 would have been 76, 1%.
Operating expense and the fourth quarter of 'twenty, and 'twenty was $41 2 million up from $3 7 million and the same year ago quarter.
The increase was primarily due to increases of selling and marketing expenses of $15 2 million as well as general and administrative expenses of 21 7 million. Other operating expenses of 479000 customer service of expenses of 66000 and development costs of 93000.
And.
The increase and general and administrative expenses was primarily due to $20 1 million of noncash stock based compensation and amortization and the majority of the stock based compensation most of all that with the performance targets achieved during the quarter debt had been granted for the founders of the company and prior years and.
Non cash cost basis of the rewards was set up the price of the Companys share is at the time of the issuance, which it hit record levels during the fourth quarter.
The substantial increase in expenses also reflects our strategic acceleration of and document the patient acquisition and expanding market share of consumers sought out the telematics and options and record number of starting Victoria.
The result of this and Boston and has positioned us very well for elevated growth in 2020 one of them beyond judo of nearly 200% increase of new patients in the fourth quarter of alone with about 90% of the new patient and signing up for recurring subscription and clients.
And as Justin mentioned, our subscription rates for new telemedicine and the water sales increased from 20%. The early last year to currently more than 91%.
And based on our analysis of the substantial investments we have made to acquire the committed subscribers have demonstrated a high R O y.
Our GAAP net loss attributable to common stockholders for the fourth quarter totaled $32 3 million or $2 56 per share.
This compares to a net loss attributable to common stockholders of 712000 or nine cents per share and the fourth quarter of 2019 and.
In addition to the stock based compensation and our net loss for the fourth quarter of 2020 included the other substantial and non cash or financing related charges, such as interest expense of 355 o'clock and combined amortization expenses of 48000 noncash expenses associated with the law.
I guess the warrant settlements of 914000.
Noncash inventory write off of legacy products of 903000 accrued interest of 90000 and financing transactions the expense of 175000.
Adjusted EBITDA non-GAAP term, which factors out the turns total day loss of $9 seven Boeing in the fourth quarter of 2020. This comparison of adjusted EBITDA of 492000, and the same year ago quarter.
Now turning to the full year of 2020 revenue for the full year increased the hunger and and 99% tool of record $37 3 million up from the $12 5.002 million 19. The increase in revenue was attributable to the bulk of the increase and Palo Alto net revenues of 208% of $36 million.
And then the increase in PDF simple and that sales of 165% the $6 seven line.
Including 917000 and year and deferred revenue associated with the Prime subscriptions total adjusted revenue on a non-GAAP basis was $38 2 million and for the fall yet.
Gross profit increased the 185% of $28 4 million with gross profit as a percentage of revenue decreasing to 76, 1% from 79, 7% and 2019 the day.
This was primarily due to the inventory adjustments associated with legacy products as well due to the mix.
<unk> of products sold excluding the noncash inventory adjustments of $2 1 million adjusted gross profit on the non-GAAP weighted just for the full year of 2020 was $30 5 million or 81, 8% of as a percentage of revenue.
Our operating expense for the full year, 2020 totaled $86 3 million.
Which was up from 12 8 million and 2019 the.
The increase was primarily due to increases of selling and marketing expenses of $32 8 million as well as general and administrative expenses of 39 8 million. Other expenses of 142000 customer service expenses of 146000 and development cost of 224000.
General and administrative expenses for the full year of also included noncash stock based compensation of $37.
Like with our expense increase for the fourth quarter. The increase of the year of reflects our strategic the acceleration of investment and patient acquisition and securing market share.
As consumers sought out for telematics and options and record number of starting the year.
Our GAAP net loss attributable to common stockholders for the full year of 2020 was 63 4 million of.
The 44 per share as compared to a net loss attributable to common stockholders of $3 1 million of 32 cents per share.
The net loss for the full year of 2020 included certain non cash or financing related charge of such as interest expense and accrued interest of stock and get and 14000 amortization expense of $1 2 million warrants settlements of non engine and 14000 financing transactions of 237.
And the acceleration of separate accounts of 500000 inventory adjustments that are non cash of $2 1 million noncash gain distributions of $4 7 million and stock based compensation expense of $37 million.
Adjusted EBITDA with the stock without these items total of loss of $16 3 million and the full year of 2020 compared to a loss of 685000 and 2019.
Now turning to our balance sheet cash totaled $9 2 million of December 31, 2020 of compared to the 917 of them at September 30 of 2020. The increase was primarily due to a private placement of net proceeds of $14 nine of them completed in November of 2020.
We believe our current cash position on the available funds and provide the company with ample liquidity to meet our current needs and plans for growth and the coming quarter of two of we are planning to enhance our liquidity metrics. All the further through a non dilutive me and and we are actively engaged in this endeavor and we believe greater liquidity and will enable us to further accelerate.
The growth and expand our market share of its pivotal time with the rapid growth and expansion of the telematics and industry of unprecedented levels. This wraps up our financial results I'd now like put you on the call back over to Justin.
Yeah.
Thanks Mark.
And the growth we've been experiencing over this past year has been incredible we nearly tripled our top line in 2020 and now just three months into the new year, we are hitting and annualized revenue run rate of more than $75 million are growing and recurring revenue stream from subscriptions now represent about 91% of our total revenue given the nearly all of our customers are now on the subscription.
And product either monthly or quarterly we have much greater visibility into our revenue and future growth rate.
We are seeing 2021 already on track to be another record setting year, even if the fully discount the contribution from new product and brand launches during the year.
Our increasing momentum throughout 'twenty, and 'twenty and into the new year reflects how our tell all of platform has been able to provide accessible health care to a rapidly growing number of patients across the country to date between just the Orexin V and secure and the brand the treated over 300000 patients and customers nationwide.
Given the many major milestones we achieved in 2020. We know the foundation for continued strong growth with a differentiated telehealth business model that offers patients convenient and affordable access to health care services.
Well of prescription and over the counter medications one of these major milestones in 2020 was the official launch of our life and the digital telehealth platform the <unk>.
Represents the culmination of years of development by experts and technology Medicine and regulatory affairs.
Owning our own robust and flexible and and telehealth platform allows us the offer highly customized and targeted telemedicine offerings, which resolved and better patient care and high levels of satisfaction. Among our patients. It also gives us the ability to quickly test launch and scale the new telemedicine offerings.
Such offerings include our new total dermatology brand and clinic for women Nava M D which of your.
We're planning the launch in the coming week.
And the other M. D will initially offer of virtual treatment for many common dermatological conditions, such as acne rosacea, Hyperpigmentation and signs of aging and addition to prescription products. We find the key exclusive licensing agreement and 2020 of the stores see the leading medical grades getting the care technology platform.
These include Panda medical grade over the counter products for treating these prevalent and skin conditions integrating of the stores. These clinically proven technology into our nava and be offerings and represents a major competitive advantage for us as we enter this high growth market segment.
We have also been finalizing the rollout plan and technology infrastructure across subscription based primary care and concierge Telehealth services, which will be offered under the life and the brands.
We believe licensees contours care offerings will revolutionize the way our patient access to health care provider and hands, the health care experience and dramatically strengthen our ability to positively impact their long term health the.
Platform will combine of low cost of prescription drug offering this kind of the access to all of our cash day telemedicine offerings and on demand access to the same doctor while the offering will initially be launched and the U S. We believe it has a global appeal given the high regard for the U S medical professionals and treatment and international markets.
While the rapid emergence of telemedicine reflect of major shifts and patient preference for virtual care and.
There's also began to disrupt the traditional health care commercialization model.
Pharmaceutical and medical device diagnostic companies will have to adjust their commercial models. Accordingly, we see this the opening up new direct to consumer joint venture and partnership opportunities from <unk> and further enhancing our value proposition.
These are clearly unprecedented times for the health care and telemedicine industry.
The stage of the telemedicine and juice industry today is reminiscent of the beginning of the E. Commerce era. There were many winners and losers, but the biggest winners where those who made the biggest timely investments and customer acquisition customer care and market share like Amazon and ebay.
We're out of similar stage with virtual health care and telemedicine with the industry is still very much and its nascent stage, we have the opportunity to become the 800 pound gorilla and the space like Amazon is the E Commerce and E Bay, the online auctions and this is our vision.
And we recognize that the future of our company and our fulfillment of the division will be determined by how our patients and customers experience of our telehealth brands and services.
And how loyal and there'll be come to our offering as of resolved. So we have and will continue to invest heavily and recruiting training and deploying the best people and professionals across our physician network clinical support team and customer Service Center and you will also continue to deploy the strongest marketing campaigns to cash.
The new subscribers and market share.
The $14 million strategic private placement and because we Didnt February and supports our aggressive growth initiatives for 2020, one, including further scaling of the size and reach of our digital health ecosystem launching our concierge Telehealth service expanding our suite of brands for men's and women's health and accelerating overall.
Customer acquisition.
We are preparing the launch treatments for new indications under our existing popular telehealth brands Rex M D and Shapiro of M D day.
Have been carefully designed to serve the evolving needs of our patients and especially attract new patients to our platform.
We are now at a stage, where we have strong cash flow and generated by and large subscriber base and besides our media spend for new customer acquisition, which has a strong ROI, we run a pretty tight ship so.
So we believe we are now and a strong position to secure additional growth capital as needed through non dilutive or mostly non dilutive means as mark mentioned earlier and the call given our visibility and the future performance provided by a high level of subscription and revenue for the full year 'twenty 'twenty. One we are forecasting revenue and the range of 85%.
And 95 civilians.
And represent an increase of 128% to 155% over 2020.
Looking ahead.
We're confident more than ever.
And our license of the telemedicine platform will continue to drive tremendous growth and opportunity and especially greater shareholder value over the months and years to come now.
And now with that we'd like to open the call to your questions Christy.
Thank you if you'd like to ask the question at this time. Please press star followed by the number one and the telephone keypad, if you're calling from the speaker phone. Please make sure your mute function and it's often so you're sitting up from the chocolate note and.
Again star one to ask a question and first of all go to David Larsen from D. T. I G line of therapy.
Hey, guys. Congratulations on a good quarter can you can you maybe talk a little bit more about the subscription component of.
The business, obviously, the revenue coming from subscription services increased significantly as a percentage of total just how how exactly does that work. Please.
And and what's actually included in the subscription and I guess, just because of 200 Bucks a month of of 200 Bucks a year and of much of your customers actually get with that thanks.
Thanks, David.
Let's take that or.
Yeah.
All of the most of the subscription revenue and all of it on the dollar outside business today.
The driven and so what the customers Guy does the bond or on the prescription side sorry on the graph.
The X or from the OTC of prescription side of the Shapiro and they've got some products that are the.
And the need because they are given the diagnosis they will desktop subscription and every bond shifted out the door, we charge them on the recurring base of Alternatively, we also do offer of three months subscription options, where you'll get a free month's supply and then the they get billed AR every three months, but it's truly recurring.
Revenue in nature of where are we bill the customer on a recurring basis of sovereign bonds.
Auto ship order of charge.
Okay, great. So it's as if it's a subscription to the product over the course of say a year for example, and the member is charged on a consistent and regular basis from ship to them.
Like every quarter every month.
And again, that's like David This is different this is justin and in it.
The essentially the the patient or the customer is either paying of a bus.
Lee of quarterly fee, which is all inclusive of the treatment that we provide the.
The our physicians provide right and the other.
And the product whether it be prescription or OTC. The you know the pace of our customers receiving from us.
Okay, great. Thanks, and then can you maybe talk a little bit more about the the incremental service lines that are going to be developed and deployed and over the coming months like dermatology and mental health cholesterol, which ones do you think can drive the most revenue for you and which ones of you're most excited about.
Yeah. So I mean, David the two that we're really excited about first of all of you know, we launched and the last couple of weeks.
Our compounded the topical.
The drug offering.
Well by the position, which we have sold and combination given the patients in combination with <unk>.
Our patented shampoo and conditioner products for hair loss and the initial data from that.
As you know is very very strong and even stronger than when we initially launched you know our first Rex offers.
So we're very encouraged about that and we think that there's a very big opportunity and you know of hair loss.
And it's very difficult for women to get to a dermatologist for treatment of these indications.
And so we're very optimistic about that offering this year and then you know where we're launching this week actually we got a soft launch our Nava and.
And the dermatology offerings.
Which again, we don't have data on because we haven't launched out of it closely followed some of our peers.
And with very similar products. So I mean, we we believe that that's going to be a meaningful contributor to growth. This year as well and then look for competitive reasons I'd, rather not speak specifically on other indications of.
But we plan to launch and this year, but I'll just say generically that.
We're looking at the.
Several other markets that we think.
Are a perfect fit for direct to consumer telemedicine.
The total addressable market.
Massive even bigger than erectile dysfunction.
And here of what yeah.
We're very very excited to launch another and another in addition to scaling of the hair loss and launching the derm business and adding indications and the additional indications for men's health and direction and be well.
Very excited to prove out another one or two indications this year and massive markets.
And so more and more to come on on some other areas David.
Okay, and then and then just one more from me can you talk a little bit about your the primary care.
And the concierge solution that youre going to be bringing to market.
And any more detail around that would be very helpful.
I think I heard in your prepared comments, you said that members and patients will have sort of immediate access of direct access to the scene physician kind of on a sort of consistent basis.
Will those just any more color around that would be helpful. Like buoyed the employing those doctors will those will always come from and sort of rented network initially or like what the what the monthly fee will be for those.
Patients will be very helpful and then.
And also if those members need of referral into and acute care system do you of any sort of longer term plans for developing and those types of provider networks. Thank you.
Yeah.
So to start to talk and give provide a little more detail on the license of the offering.
You know wildlife and he is going to be a cash pay subscription based concierge of care offering the and.
Just at the range of price from $50 200 of $50 a month for you the more integrated from.
Care or provider that specializes in integrated medicine.
No.
We see lifetime D of being an incredible thing for our patients long term that was the Genesis of the concept of it like what we're bringing in large numbers of patients for these for.
And so these condition specific treatments, whether it be erectile dysfunction and hair loss dermatology weight loss whatever it is right. We have the we have a large number of patients that's coming and the door every single day and initially my thinking was our thinking was you know what can we do the like.
You know impact positively the long term health of these patients and the more put down the way other than treating them from its initial condition.
And when you kind of combine that thinking with you know.
The fact, the most Americans are on high deductible health plans, where it's oftentimes expensive for them to access prescription medications or even to go see a primary care physician. We believe the many of arc of these patients that are already on our platform for condition specific treatment.
Would love to pay 50 of hundred dollars of mine.
Some of them more to have you know in essence, the doctor and the families and you've got to pick up the fall and when something's wrong and they want to talk to the doctor to be able to get a prescription refilled.
And in addition to like providing that ongoing care for.
And for these patients for a small monthly cash see that everybody can afford we also can provide these patients heavily discounted generic drugs. We can provide them heavily discounted labs, we can offer them discounts on a lot of the different you know more lifestyle treatments that are cash pay and things like E D of things.
The wave off of.
So.
The net amount of the patient is actually paying to have this incredible concierge service.
And our long term relationship with the same doctor.
And you looked at it and it's being affordable. The every American is because we presented the right way, it's going to be very popular.
As far as David as you know thinking about the brick and mortar or referral relationships and specialists.
We think that has the scale with the platform and start to put patients onto the platform.
And that they're going to be a lot of opportunities for us to partner with regional and kind of brick and mortar.
Networks right. The you know, obviously, you're going to want and specialists rides are going over to <unk>.
Three of those patients.
So the initially right and we Havent, we havent line that up even spoken with some different groups that have expressed an interest of the business scale we have.
No interest and building that out right I mean, we believe that we know the we can treat the most.
Most of the things of these patients need and see a doctor for and you know in a virtual setting and so the plan is to you know to refer patients to the partners right when they need to go and see a doctor and person.
Cause that helped create and so anything that I missed.
No that's actually very helpful. I I have yet to meet and acute care hospital system that would decline incoming referrals from a virtual primary care practice. So it makes sense to me and thanks very much I'll hop back in the queue.
Yeah, and one thing I mentioned and David that I forgot the emphasize we're building we're building a great technology platform.
You know the.
Similar to the kind of one medical's of the world right.
Immigration and <unk>.
One place all of the patients lab work all of their kind of medical history with the pool and all of their medical records.
And when they're when they're initially onboard onto the platform.
And so we're really excited to watch that worrying to wash out the summer.
And.
Also from me to think about right and it also and really encourage us or enables us to be able to offer other condition specific treatments to pay.
Patients with and our system so the.
For instance, you know what.
Once you come into life and D as in the day patient.
Obviously, the other access treatment from Shapiro of for him and the loss or other anything and the family of life and B Braun and so.
We think it'll really pull everything that we're doing nicely together.
And then you know be of great way for us to develop of our longer term relationship with our patients.
Great. Thanks very much.
And again, if you'd like to ask the question. Please press star followed by the number one and your telephone keypad and like I spoke of.
And are the silver from B Riley of Securities. Your line is open.
Hey, good afternoon, and thanks for taking my questions and just to start and have a couple of quick bookkeeping ones.
And just.
And as it relates to your share count.
Here of reason the 2020 share count after the.
Full years and if it is higher than your fourth quarter 'twenty of share count.
I'm not sure about that Andy I'd have to check and get back to you, but I mean, if it is it sounds like it was an error.
Okay I wasn't sure if there isn't sort of the.
The road of action or a buyback or something that I missed the okay, that's fine and.
And then could you just discussed the AD buys.
We entered 2021, and what kind of benefits, you're seeing post election and.
And I'd also just be curious if you could let us know and how we should think about modeling overhead tied to the call Center.
Sure.
Overall, we've seen the fall.
Fourth quarter, and the third and fourth quarter, especially before the election. The holidays was very expensive tie for the media.
Our Rd of costs were.
At least double a lot of the time from what they were earlier in the year and then they've come down considerably.
And in 2020 one.
And also we've seen a lot.
Even though the realized a lot of operational efficiencies and we've found a lot of other kind of optimization areas, where we've been able to optimize.
Our advertising and our checkout processes and and other systems that have helped us too.
You know put downward pressure on our overall acquisition cost. So you know I don't know the exact number of Andy but are you the acquisition cost even more.
More scale this quarter are significantly lower than they were and the fourth quarter of last year.
Mark I don't know, if you're able to provide any additional any additional color on that.
And John of all we're saying is strong with the arms on the advertising spend where a significant move all of those just mentioned the quarter one of them.
And we're typically seeing is from the cohorts that we've had sort of.
And then in existence for 12 months of more of what we're paying background the out of the Michelle advertising investment and within the first three to four months and what we're more than doubling of her mom.
And within the first 12 months. So the most of the strong returns and as you carry that forward and we continue to get more and more tenure.
The subscribers and I would also reminds me of this was pre of transitioning a lot of growth for the subscription model, we expect to see very substantial long term the tonnes.
Okay. Okay, and then just sort of color on the call Center.
Yeah, I mean, the call center without really saying the exact statistics of all of this evening day of strong return on investment, we're saying the good the uptick for competitive reasons, we don't necessarily share.
Is that the ethics, but what I would say is ever since the first month that we got it up and running and we are seeing the strong return on investment and each month as far as growth I mean, the the costs on the house.
And by the two engine and seek.
The Bath today, and then look we're gonna.
ROE our capabilities there as long as it makes sense, but it's actually going to produce incremental revenue and so.
It would be more than the wash from a financial modeling standpoint.
Okay, and and yesterday and they get important thing I think the important thing to point out and you know.
If we look at where cpas are now the even as we're scaling.
We do see of massive massive opportunity even in the EV market right to continue to really grow our business throughout this year and.
Probably beyond and sometimes it's silly to make projections, two or three years out, but you know I I.
I really want to emphasize to everybody on the on the call debt.
And then.
Cpas or you know theres a lot of opportunity here, even in these initial markets, especially and erectile dysfunction and.
And we're continuing the tightened the business.
Brought in a lot of power and both of the marketing side on the patient service side.
And we're really encouraged by what's happening with that business and even what we're gonna see growth wise over the next couple of quarters I can't emphasize the bad enough.
Okay very good that that makes sense and say I heard of it when he just referenced our acquisition costs being recouped and about three or four months of and doubling over and run.
The year timeframe, so and we look at and sales and marketing expense for example, and the fourth quarter and.
Is that kind of the base that you're taking that off of or is.
Is it a little bit more segmented there and the wise as far as the portion of that sales and marketing that you're attributing the consumer acquisition cost debt that would be recouped and of that kind of the timeframe.
Yeah, no it's taken off of that metric at the end of the day of the sales and marketing expense of her spending is obviously driven by the acquisition and.
And I'd actually expected with that amount of investment that we spoke about the has the potential to increase over time.
And really due to the fact, the where law and because we're obviously converted most of its of subscription revenue, which was something that wasn't present last year and then secondly, as we start the <unk>.
Look at lifetime, the rolling out the coffee Earth model, and we have greater ability to sell our cross brand to upsell and to retain people through a combo of service product offline and you should actually see the high return on investment improving more in the future and of those advertising dollars go even further.
Okay, Great and then just last question from me as it relates to Pdf's simply can you just discuss the cadence there that that segment actually seems to be growing faster.
And we weren't modeling and I'm just curious how.
How much of say the the first quarter $17 million.
Expectation, we should kind of earmarked as T S simply.
It's very consistent with what you're saying and the fourth quarter at the end of the day of it is continuing to grow by very high double digits or low triple digit suffice to say, it's lower than the growth rate of the significant triple digits debt, we're seeing and telehealth, but you can think about it relatively.
Similarly, with the how are you would think about the fourth quarter, maybe a little yeah, it's very similar.
Okay, great. Thank you very much best of luck on the fourth.
Yeah.
Thanks Amy.
And at this time. This concludes the question answer session I'd now like the turn the call back over to Mr. Shreiber. Please go ahead.
Thanks to everyone for joining us and our call today and all of the great questions and I'd like to give special thanks to our new shell shareholders of recently investing enough of the new analysts have begun to follow all of them.
Very much appreciate your support and participation and our amazing journey, many more exciting things to come and that's for sure, which we look forward to reporting and our Q1 call, which is coming up soon and meanwhile, be well and stay healthy.
Christy, Let's go ahead and wrap up at all.
Thank you before we conclude today's call I would like to provide the company's safe Harbor statements that include important cautions regarding forward looking statements made during today's call.
Information about the company has provided some of this conference call of course its forward looking statements within the meaning of section 27 of the Securities Act of 1933 and section 21 of the Securities Exchange Act of the 19th every four as of Monday regarding among other things the company's plans strategies and prospects growth business and finance.
So a lot of the company believes that its plans and countries and expectation that reflected and or suggested by these forward looking statements I reason of all the comp.
And we cannot assure you that at like cheap or realize these plans intentions or expectations forward looking statements are inherently subject to risks uncertainties and assumptions. Many of the forward looking statements made during this conference call may be identified by the use of forward looking words, such as believe expect anticipate should planned.
Well, no income estimated and potential among others and important factors that could cause actual results to differ materially from the forward looking statements made during this conference call, including market conditions, and those set forth and reports and documents that the company files from time to time with and the United States Securities and exchange kind of thing.
All forward looking statements attributable attributable to life M D incorporated.
And acting on its behalf are expressly qualified in their entirety by this cautionary language.
Before we enter the conference call I would like to remind everyone that this call will be available for replay. Starting later. This evening. Please refer to today's earnings release for dial in replay instructions available via the company's website at Www Dot life and the dotcom.
And for joining us today and this concludes the conference call you may now disconnect.
Yeah.
[music].
And.
[music].
Yeah.
And.
[music].
Okay.
Yeah.
[music].
And.
[music].
And.
Yeah.
And.