Q4 2023 LifeMD Inc Earnings Call
Good afternoon. Thank you for joining us today to discuss life Mt's results for the fourth quarter and year ended December 31st 2023.
Joining the call today are Justin Schreiber, Chairman, and Chief Executive Officer, and Mark Burnett Chief.
Chief Financial Officer.
Following managements 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 life M. D may make.
C C from time to time.
Forward looking statements made during this call are based on current information available to the company as of today March 11th 'twenty 'twenty four.
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.
Life M D as performance.
Details on the relationship between these non-GAAP. 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 life M. D. C E O Justin Shopper. Please go ahead.
Thank you and good afternoon, everyone.
After the market close we issued a press release announcing our fourth quarter and year end results. Later today, we will post an updated corporate presentation on our website at IR Dot life Dot com as well as our shareholder letter.
Sure a lot of my thoughts on our journey and where we're headed so I encourage everyone on this call to give it a read.
With that said 2023 was a tremendous and record setting year for life M. D. Our revenue patient subscriber base and profitability all increased sharply versus 2022.
Catalogs and this growth was the launch of our nationwide G. L. P. One weight management program in April 2023, which has since grown to become one of the largest and fastest growing businesses of its kind in the U S.
In fact, our weight management program finished 2023 with over 22000 active patients subscribers.
Well ahead of the 20000 patients we previously guided to.
As of today's call, we have over 35000 weight management patients and that number is growing rapidly.
In addition, as we announced in December we made our largest four eight to date within the business to business market. When we executed a collaboration agreement with met a fast one of the largest diet coaching and nutrition companies in the U S.
This collaboration included $10 million of collaboration fees, and a $10 million equity investment, while providing medifast 40000 coaches and their customers with access to our industry, leading telehealth platform and affiliated medical groups.
I believe this transaction truly validates the strength of our highly differentiated directed patient telehealth platform and offering.
Our lifestyle health care business led by Rexam D had its fourth consecutive year of double digit annual revenue growth.
And the consistently strong growth, we've seen with Rexam deed. The brand continues to be immensely profitable, finishing 2023 with a contribution margin in excess of 30%.
In addition, our noncore subsidiary works simply continued its consistent growth trajectory with 50% year over year revenue growth and EBITDA margins exceeding 25%.
I am pleased to report the 'twenty 'twenty four is off to a strong start and we remain well positioned for sustained growth and profitability.
We remain laser focused on continuing to deliver outstanding performance and long term value for our shareholders through the execution of four key objectives in 2024.
First we expect to continue our rapid growth in the G. L. P. One supported weight loss market.
As stated earlier, our weight management program has grown from nothing when we started in April 2023 to over 22000 active patients subscribers by year end 2023.
And over 35000 subscribers as of today.
Our tremendous growth, which continues to accelerate in pace is largely attributable to our highly differentiated service based offering leveraging our primary care platform to provide our weight management patience comprehensive end to end care for their weight loss goals.
Early retention results continued to be impressive with over 80% of patients who started therapy remaining on therapy. After 90 days.
Economics for these patient groups remained very strong with day, one net revenue over AD spend exceeding onex, while daily acquisition volumes have continued to trend up as we scale, our medical operations and patient services groups to create additional appointment capacity.
We continue to make significant investments in these areas as well as in our technology platform to meet the needs of this market where demand continues to outstrip supply.
Second we remain focused on continuing to grow our more mature lifestyle health care business led by Rexam dis consistent double digit growth rates, while maintaining its high contribution margins.
Since launching in December 2019, Rexam D has grown to become one of the most trusted and largest men's health brands in telemedicine.
To date this has largely been achieved through growth in our men's sexual health market we.
We expect continued double digit growth in this market, while also introducing complementary new products designed not only to capture share in adjacent markets, but to provide substantial cross sell opportunities for our existing racks patients.
Over 160000, and growing Rex patients tend to be well established in their lives with ample disposable income and they appreciate the quality of care they receive from life M D affiliated providers.
The investments, we are making in product and operational expansion will only serve to elevate our market share and enhance the experience we deliver.
Okay.
Third we have made and will continue to make significant progress in building our infrastructure to accept reimbursement from private and government payers for medical services provided by our affiliated medical group.
Over the past several quarters, we have successfully enrolled our medical group in 10 major health plans spanning seven of the 10 States. We are initially focused on.
As part of this effort, we have built out a best in class compliance program for both private payer reimbursement and Medicare.
And it made significant enhancements to our technology platform to support this program.
While we are slightly delayed from our initial timeline largely due to resources being focused on meeting the outsize demand we've had in our weight management business.
This initiative remains a top priority for US we are now expecting to turn this on by the middle of 'twenty 'twenty four.
We will start with a select group of our largest states and those states largest carriers, where we have enrolled our affiliated medical group and expect to expand this to all 50 states over the next 18 months.
We believe that allowing our patients to use their insurance to offset the costs of our virtual and in home care services will accelerate demand for our service offering and drive better retention.
Our fourth key initiative is maintaining our laser focus on delivering gross levels above our 'twenty 'twenty four guidance, while continuing to drive profitability margins in.
In 2023 we made sizable progress in this area growing our adjusted EBITDA from a loss of $14 million in 2022 to a profit of $12 million in 2020 three.
More importantly, our cash flow from operations grew to almost $9 million in 2023 versus negative cash flow from operations of $23 million in 2020 two.
We also ended the year with our strongest balance sheet, yet with more than $33 million of cash.
As we guided in January we expect both our topline and bottom line results to improve substantially in 2024.
And we remain focused on turning our telehealth business profitable on a standalone basis by the middle of 'twenty 'twenty four.
Lastly work simply continues to deliver strong financial results, finishing 2023 with 50% year over year growth and adjusted EBITDA margins exceeding 25%.
This self managed business continues to be a meaningful contributor to license. These overall profitability and positive cash flow.
Work simply has recently pivoted their offering for mostly P. D F and some HR solutions business.
And do a diversified workplace and document services businesses for consumers and small businesses.
In doing so the business has also refocused its marketing and retention efforts on domestic and global markets that produce the highest revenue per user relative to ad spend.
In doing so work simply as active subscriber count has declined slightly year over year, but the unit economics have continued to improve which has in turn supported sizable growth and improving bottom line margins.
In short there is a lot to be excited about in 'twenty 'twenty four for shareholders and with that I'll turn the call over to our CFO, Mark <unk>, who will provide a summary of our financial results Mark.
Thank you Justin and good afternoon, everyone life them de had record fourth quarter performance on both the top and bottom line with consolidated net revenues growing to $44 9 million and adjusted EBITDA growing to $5 5 million. These figures included the recognition of $5 million of programming fees paid by matter of fast.
Loss of life and deal related expenses.
We ended the quarter with over $33 million in cash and positive free cash flow in.
In 2023 cash flow from operations was nearly 9 million versus negative $23 million in 2022, we remain in the strongest financial position in the company's history and are well positioned to execute upon our aggressive growth and profitability plans.
In addition, based on the strong start to the year led by performance in our G. L. P. One weight management business, we are raising our consolidated revenue guidance to at least 200 million from the previous guidance of 195 to 205 million.
Now turning to the results for the fourth quarter of 2023 as I mentioned consolidated revenues in the fourth quarter totaled $44 9 million, an increase of 60% compared with the same year ago period.
Net revenues grew 90% versus a year ago period, and 28% sequentially.
Net revenues from our weight management business more than doubled sequentially.
Subscriber growth remains very strong with the number of telehealth fact of subscribers, increasing 27% to approximately 215000, while it works simply active subscribers contracted 6% to over 158000, both versus a year ago period, as Justin mentioned work simply cannot.
Turning to refocus our marketing and retention efforts on the highest value customer markets, thus generating materially higher revenue per user and enhanced profitability.
The number of weight management active subscribers grew to over 22000 as of year end 2023, and ahead of our previous guidance of 20000 active patients subscribers by year end.
Consolidated gross margin for the fourth quarter was 88, 1% up 260 basis points versus the prior year period.
Profit for the quarter totaled $39 5 million, an increase of 64% from the year ago period.
Operating expenses for the fourth quarter totaled $41 7 million, an increase of 7.3 million births a year ago period, largely due to a 3 million dollar increase in discretionary selling marketing clinical and patient care expenses to support the rapid growth of our weight management program expenses to <unk>.
Important the launch of the Medifast partnership and a $2 5 million dollar increase in non cash expenses for stock based compensation and depreciation and amortization net of these items operating expenses were up only $1 million or 3% year over year.
Our GAAP net loss attributable to common stockholders for the fourth quarter totaled $4 5 million or a loss of 12 cents per share. This compares to a GAAP net loss attributable to common stockholders of $12 7 million or a loss of 40 cents per share in the fourth quarter of 2022.
Adjusted EPS is a non-GAAP financial measure that excludes interest taxes noncash expenses dividends Sox and insurance acceptance riding that's litigation Noncontrolling interests, our M&A financing transaction costs and foreign currency translation, reflecting those adjustments adjusted.
Diluted EPS for the fourth quarter of 'twenty to 'twenty three was 15 cents per share compared with two cents in the same year ago period.
Adjusted EBITDA, which is a non-GAAP financial measure that excludes the same items I noted for adjusted EPS totaled $5 5 million in the fourth quarter of 2023. This compares with adjusted EBITDA of $1 million in the same year ago quarter.
Now turning to the results for the full year of 2023 consolidated revenues for 2020 three were $152 5 million, an increase of 28% compared to 2020 to telehealth revenue net revenues grew 19% versus the prior year, while work simply revenues grew 50%.
Gross margin for the full year was 87, 6% up 330 basis points for a 2022 gross profit for the year and totaled $133 6 million, an increase of 33% from 'twenty to 'twenty two.
Our GAAP net loss attributable to common stockholders for full year, 2020, three and totaled $23 7 million or a loss of <unk> 70 cents per share. This compares to a GAAP net loss attributable to common stockholders of $48 6 million or a loss of $1 57 per share in 2022.
Reflecting the same adjustments as I mentioned in the fourth quarter results. Adjusted EPS for 2023 was 35 cents per share compared with a loss of 45 cents per share in 2022.
Adjusted EBITDA, a non-GAAP financial measure that excludes the same items I noted for adjusted EPS totaled $12 million in 2023. This compares with an adjusted EBITDA loss of $14 million in 2022.
Cash totaled $33 1 million as of December 31, 2023 as mentioned earlier, we are raising our 'twenty 'twenty four guidance for consolidated net revenues to at least 200 million, while reaffirming our adjusted EBITDA guidance of between 18 and 22 million this wraps up our financial.
I'd now like to turn the call back over to Justin.
Thanks Mark.
As we wrap up I want to reflect on our journey, so far and the path ahead.
Over the past few years I've consistently stressed our commitment to building a best in class Telehealth technology platform.
Everything we achieved in 2023 stands as a testament to our execution of this commitment.
De were stronger than ever before financially operationally clinically and technologically.
This is an exciting time to be a shareholder.
We're still in the early days of our growth and I believe the 'twenty 'twenty four it will be an even greater year than 2023 in terms of growth and the long term value. We are building for our shareholders.
The fact is we're still in the earliest days of telehealth and life M. D is at the forefront of this health care Revolution.
Our focus on building an incredible health care experience for our patients is paying dividends.
Our industry, leading affiliated medical group operational capabilities and proprietary platform are allowing us to seamlessly expand our health care presence with our existing and future offerings.
Our work is helping to build a health care system that makes more sense helps more people and creates better outcomes across the board for patients.
Thanks to our strategic vision and execution over the past few years. The opportunity that lies ahead for us is immense.
As we prepare to finish the first quarter of 'twenty 'twenty four.
I remain confident in our ability to deliver on our expectations and beyond this year.
Two our patients who trust us with their health.
Our employees and providers, who believe in and advance our mission.
And our shareholders, who continue to support us I. Thank you for joining us on this journey towards a healthier future.
With that.
I would like to open the call for Q&A.
Thank you we will now be conducting a question and answer session.
If you would like to ask a question. Please press star one on your telephone keypad.
Confirmation tone will indicate that your line is in the question queue and.
And you May press Star two if you would like to remove your question from the queue.
For participants using speaker equipment may be necessary to pick up your handset before pressing the star keys.
One moment, please pull for questions.
Thank you. Our first question comes from the line of David Larsen with B T. I G. Please proceed with your question.
Hi, congratulations on the fantastic quarter can you, maybe just talk a little bit more about the weight management program in.
In particular like what sort of you know our returns are you seeing with the meta fast relationship in terms of de.
I'm, sending you members and also you sending them members and then if you could talk a little bit about the pace of on boarding.
It's my understanding that you know over the past six months there have been periods of time, where you're adding maybe two or 300 or de.
Maybe this is increased to 500, a de just any thoughts around sort of the investments in the platform.
To make sure that the pace of adds is clean and neat and then just any color on pricing for the drugs themselves would be great. Thanks a lot.
Yeah, Hi, David This is Justin I'll I'll take first stab at your question, maybe Mark has some comments he'd like to add.
First of all with regards to the Medifast, where we're really happy with the progress of that collaboration in Q1 in the shareholder letter that just got pushed lives to the website, we talk about that in some more detail, we're not going to release specific numbers I'm on Medifast as we've publicly said I think.
That's their job not ours, but I can tell you. We're very happy we've you know we've exceeded our expectations and and there is I think for the first quarter of that collaboration and where certainly super excited about the rest of the year.
To your second question, we actually just today I think had first couple of patients that are signed up to be to be part of their coaching and diet program. So it took us a while to just get the compliance and all the infrastructure in place for that but you know, we think theres a meaningful percentage of our patients that were.
You know really be helped by that that program alongside of a therapy.
On the your city your second question relating to the scale of the weight loss program.
Mark and I are comfortable sharing you know that over the last 30 days, we've been averaging over 400, new patient acquisitions per day.
So it's been a very very strong month and as we said in the you know as we said in our remarks this yeah.
Yeah, we're seeing excellent growth and we're extremely bullish on this business overall also super bullish for what it's doing for our platform I mean, just as we continue to add tens and tens of thousands of new patients. The technology enhancements, we're making the improvements we're making in data infrastructure and patient experience.
Yes, I mean, it's really really exciting when you think about you know all the learnings from this and how we can apply this to other you know very large chronic conditions down the road on.
On the pricing question of yours.
We haven't really made any changes to pricing you know we still have a lot of patients that are you know purchasing three to six month memberships you know for the weight management program.
There's a lot of deferred revenue that you'll see in the in the 10-K that's filed today.
And we haven't we haven't had to change pricing at all we you know we look at ourselves we're not the cheapest provider out there, but we think we're the highest quality. We're still the only platform that I know of that operates at the scale that we do that is doing sync visits for every single new patient on the life and the platform.
Across the board, we're focused on delivering high quality care to patients and I really think that's paying off right. I mean, I think that one of the reasons why we continue to see the kind of demand that we do is it's not just because of our amazing patient acquisition and media teams, but it's also because of the brand that we built out there in the market. You know we have a lot of I think we are.
A lot of people that have friends that are on a life of deep treatment plan and they they just know theyre getting good care and they know they're getting great prices on these on these medications, we're doing everything we can to help them access branded therapies and if not you know, we're referring them to a high quality compounding pharmacies.
You know that I I think you know delivering them, a very high quality therapy until they're able to get insurance coverage for our branded therapy.
That's that's that's very helpful. Thank you very much and one follow up to my first three part question like if if if the G. L. P ones are called they call it around a thousand bucks or 1200 Bucks a month right now how.
Have you seen a generic product launch and.
And if not like when do you think it will launch and what do you think the pricing on the generics will be and then when one of the pushback that I've heard from some investors is like Hey look of a solid oil comes to market and as generics enter into the market and.
And as pricing pulls back in.
Will we continue to see the sort of demand that we're seeing now for life M DS.
That form and in my view, so I guess, what what is your sort of response Tonight, assuming pricing does improve significantly over the next two years for the drugs themselves. How do you think that will impact your platform will be a tailwind or a headwind what do you think.
Yeah, well you gave me with a number of questions there again, but.
On the first question the first generic G. L. P. One is coming to market in June of 'twenty 'twenty four that's that's a generic version of Victoza that's.
That's a once daily administered G. L. P. One that doesn't have it.
Don't think that the empty pro efficacy profiles not quite the same you know as semi glu title insurers appetite.
So you know we're we're certainly like we have amazing relationships across the board youre going to see multiple generic players in this space and life and deal was certainly offer.
Generic if you know if I mean, there's going to be demand for it. We just don't know how much demand is going to be in.
We're certainly well positioned for that.
We're also making really really we're making big investments in our prior art infrastructure, we're evaluating a number of companies that have you know, they're just best in class when it comes to getting prior off the purpose of these medications you know there are a lot of companies now that are using artificial intelligence to really optimize.
As the whole prior off process. So we're working with we're not working with yet, but we're talking to a number of those companies and this is a it's a major major priority for life indeed to be as good as anybody out there I'd love to use the word the best but they're gonna be other they're going to be on the other market participants that are great at this.
But we're going to be as good as anybody else out there.
Getting these prior offs approved for patients. So that's the one thing that I think investors need to keep in mind, you know, even though a lot of patients right now the majority of patients are not.
We're not getting approved for a branded therapy and they're having to resort to a kind of a high quality you know compounded therapy because of that life of these going to be position, the second that private and government payers or employers decide that you know there's there's.
There's enough long term outcomes associated with these drugs to justify the price tag of them. So you know I think that's an important thing to note as far as and I think that I think that kind of leads really well into your last question.
Theres an oral drug.
It's going to be it's going to improve the compliance for patients youre going to have greater demand for these therapies a lot of people think the orally administered administered drugs are going to be more efficacious.
We're gonna rely on the same prior author infrastructure, we're gonna be us.
It's not the role of virtual care companies like life M D and others.
It's not going to change if anything there'll be more demand for platforms like ours, you're still going to need a prior art, you're still going to need a comprehensive solution, you're still going to need labs, you're still going to need coaching you're still going to need diet.
It's not like an oral.
Oral therapy comes onto the market and you know all of a sudden all that goes out the window. So I don't think it changes the investment thesis that offer life and D and I think it actually fits perfectly with you know everything we're focused on over the next couple of years.
Okay Fantastic I'll hop back in the queue. Thanks, very much congrats on a good quarter.
Thank you.
Our.
Question comes from the line of William <unk> with B Riley. Please proceed with your question.
Thank you so much and truly appreciate you taking our questions and obviously, a really nice quarter.
And great year overall, so I think the first question I would I'd love to get a little bit of additional color.
On the first quarter weight management number you, noting about 13000, so far maybe a little bit above that and how we should be thinking about that in terms of your first quarter or 40 to 43 million guidance and how that should be fitting in in <unk>.
Is this sort of the makeup there yeah, yeah well. This is mark so obviously that does it all fit into the guidance. However, as I mentioned before.
55% of our new sales are six month subscriptions and we've had a significant ramp in our new patient activity and Onboarding is we've created more capacity in our clinical teams to handle additional appointments and patient volumes are really in the second half of the first quarter. So.
Starting around the second week or so of February.
Where you're going to see a significant amount of deferred revenue related to that.
In fact by the end of the first quarter, we could see a 4 million dollar increase in deferred revenue by the end of the first quarter versus the end of the air could potentially be even higher than that obviously contributes to some of the revenue growth that.
What we're seeing in the business. If you net out the 5 million in a matter of fast fees in Q4, and you add back about a $1 million of Medifast fees were forecasting in the first quarter, you're still saying a couple of million dollars of sequential growth that number would be materially higher it would be four to 5 million higher than that so would've been six or seven.
A million without that deferred revenues. So we're really starting to see very meaningful numbers from those acquisition volumes, obviously that deferred revenue is going to come back to us with a big chunk of it in Q2, and then obviously a portion of it even in Q3 as the six months of subscriptions have to be amortized over six months and then.
Outside of this six month subscriptions and out of a 35 per cent or three months. So you really only have about 10% to 12% of the subs that are one month subscription. So it's phenomenal for us on a cash basis. It always creates a lot of deferred revenue that's and are already starting to come back to us in the second quarter.
Got it that's very helpful. I appreciate that.
Follow up on your on your Rexam D. You noted to the continued strength there doubling our double digit growth year over year I believe.
And just curious you also mentioned.
Possibly entering some new markets, maybe with some new offerings I was wondering if you could add a little bit of color on what those markets <unk> offerings may be and maybe when we can expect them.
The biggest thing we're focused on Williams is launching an HR T offering under X M D and we're planning to launch that in the in the coming months. We have some some opinion leaders that have kind of recently gotten involved not in a position right now to to disclose their names, but there are some of the top people in the.
World in this space and we're developing a.
What I think is going to become the gold standard in hormone replacement therapy clinically.
I think we're going to reach a lot of patience with this offering and you know I think it's gonna be a really interesting stepping stone into more you know more meant more like proprietary men's health offerings as well that you know really cater to this.
Wondered and 65000 patient population that we have that's part of Rex M D.
So me you know that brand has matured a little bit and I don't think.
I think that we certainly need to add some some new product offerings, you know on top of our sexual health offerings, there, but I'm I'm I'm very very exciting.
I'm very very excited and optimistic about the potential for Rex I think it's also worth noting that these offerings that we're launching will have I expect to have extremely high retention rates, which is what we're all focused on.
And you know retention of course equals you know as it was.
At a high patient satisfaction, and an efficacy and a great job by the medical group, but for shareholders.
Tension equals earnings right. So I'm I'm really really excited about this offering and getting a live in the next couple of months.
Got it I understand and then one last if I may in terms of your insurance you, you're you're continuing to expand that I just curious if theres any expectations, maybe or color one on what we might be expecting for for increasing your insurance and.
And payer coverage over the.
Of course of the year maybe.
Yeah. This is Justin again, well, yeah, I mean, we're not we're not I'm not really comfortable releasing US you know a specific number.
I do feel good about saying that you know this certainly over the next couple of quarters. You know we will have very very broad coverage in most if not all of the top 10 states that we targeted we we also are we also we also are planning to roll out into you know into all 50 states and we're working on that plan and investing.
And it already I think that the subsequent states are going to be much easier. Since we've worked out a lot of the Kinks with these you know with these top 10 states.
We've started to enroll.
We started to enroll with but look we're this is an important initiative for US. We also we also got into several Medicare plans in the last couple of weeks one in Florida.
And one in another state so that like that continues to you know continues to positively evolve as well. So you know I think I think this is like the business is the business is doing great. As you can tell by our remarks in the numbers, we put out and.
But you know this is something that like we have a we have a we're putting a lot of resources into internally and you know I think that this year. It's gonna be you know we're gonna start to see you know, we're gonna start to see patients using their insurance to subsidize the cost of their life and D care and you know I think it's I think it's a big milestone for the company.
Got it I appreciate you taking our questions I'll hop back in queue and congratulations again on a great quarter. Thanks.
Thanks.
Our next question comes from the line of Alex Fuhrman with Craig Hallum. Please proceed with your question.
Hey, guys. Thanks, very much for taking my question and congratulations on a really strong year end launch of the weight management program.
Just in one of the things that that really seems to differentiate your weight management program from a lot of the others that are out there as it was launched within a virtual primary care are wondering if you can talk a little bit about how many of your weight management patients are receiving some type of treatment for related conditions or maybe medications other than.
G L P ones.
Yeah.
Yeah. Thanks for thanks for the compliment Alex.
It's a it's a it's a great question. We are we do take a lot of pride in and the fact that we offer these services through our primary care platform.
And then we have a we have a you know basically a full time force you know of of medical providers that work on that platform.
I can't I can't really I don't have a specific number for you Alex and you know I would say that I would say that you know I know that every single patient.
No other.
Other aspects of their health when they are on boarded onto our weight management program.
However, I don't I don't have a specific number that we can share with you that would be like you know a certain percentage of patients that that's treated for another chronic condition a lot of these.
A lot of these the majority of these patients that are coming to US are you know very very focused they're very intent on the G. L. P. One medication and using that to jumpstart their kind of weight loss or weight loss program and and that's you know that's where a lot of the interest is so for the most part that's where our providers had been focus.
<unk> focused on where I think youre going to see more yeah, where I think youre going to see more of this is actually like a lot of people starting to hit their go away and think about what's next you know what what are there aspects of their house could use improvement or even optimization you know, that's where I really think youre going to see the license the platform shine.
And youre going to see you know kind of more of ours. There's other capabilities that we have you know come out.
Okay, that's that's really <unk>.
Helpful Alright.
Yeah.
Yeah. Alex this is the same so I don't mean to not answer the question and it's a great question. We just don't have we just we just don't have the data to answer that question properly.
And you know initially we're very focused on these patients are just focused on either way and that that's understandable right, but I think longer term is where youre going to see us we're going to see a lot of these other conditions being treated and optimized.
Okay. That's that's great. Thanks, very much for for those answers Justin and Edmar.
Okay.
Our next question comes from the line of Elliot Zubkov with Freedom broker. Please proceed with your question.
Good afternoon, and thank you for taking my question and congrats with another record quarter.
Could you. Please comment could you please give us more detail on how has the work seems new Yorker had changed so having a transformation process are getting completed and so do you use.
User growth to recover in the last quarters.
Yes, Mark.
Yes, we do expect user growth to recover I mean, the main way that has evolved and they've already tried to diversify their platform as well as focus on certain regions of the world, where they've gone to the highest return on investment I'm, not going to say, which regions because ive divulge as part of their strategy.
But how it's evolved most notably so obviously.
Now two years ago, they acquired a resume business broke into the HR space has since evolved that business to include cover letters as well as AI technology.
The automation of several of those functions.
Which has actually increased our the adoption of that business. That's one to within this past year in 2023, they launched a legal simply illegal forms business them again.
Launching in the early stages of their proprietary forms library.
They also launched a signed simply a product, which essentially is a smaller version of a doctor sign for consumers and small businesses and then lastly, they've begun to penetrate.
Gig workers consumer consortia.
Consortium's, all small business says essentially they've taken their small business penetration from single digits to about 15% today.
Over the last about 18.
So those are just examples of ways that they've continued to and doing so they've continued to refine their marketing strategy they've tested some.
New strategies. These are all things that would be pretty typical that a business their size would do especially.
If they were private and you know obviously not owned by us, but those are all things that are panning out there increasing the company's profitability.
Like a small step back in subscribers similar to what we did in 2020 two when we refined our base I'm the telehealth business to lop off a lot of those trial offers that were not as profitable there.
They're now learning you know more per user and their economics and their margins have gotten a substantially better while still being able to grow the top line with their business. There are going to return to subscriber growth again in 2020 for it now that there are back to the right base. So they have better economics, and youre going to see their margins.
Span well beyond where they are today.
Yes.
Thank you Mark after she had this and so congrats again it'll be a strong quarter.
Yeah.
Thank you.
Our next question comes from the line of <unk> Chen with H C. Wainwright. Please proceed with your question.
Thank you for taking my question.
My first question is.
Could you comment.
What percentage of market share do correctly half was over 22000 patients with G O P O program.
With that.
You know, it's impossible, but it's like a pinball at this point everybody else is pretty much a penpal wherein the first standing of the weight management market I've been looking at the end of the de Bolsa analyst thing by 2030. This is 100 billion dollar plus.
Mark and more and more people are coming down.
The fact that we ended the year at 22000 patients your 129 months with discount things. They are like 90 to 95, a month and we've already in the first quarter between the end of last year and today's call March 11th.
About 70 days to 71 days already up to 35000. So we added another 13000, they're there's massive runway here nobody has a big share obviously had the pharma side theres two dominant players, but from the provider side Nobody has a big share of massive runway were in a situation where it's at.
Statutory had more demand than there is supply on our side. If he has an infinite number of providers and could service people all day long, we could sign up even more than what we're doing today, that's showing no signs of slowing down.
Oh.
Would you be able to call in.
<unk>.
Age groups.
These patients who recently sent a photo weight management program are they on a majority of them.
Towards the younger age group or older age group and do you think the these patients receiving G. O P. One trucks will stay on it for a very long period of time.
Yes. This is Justin.
The average average age right now is in the mid Forty's for these patients.
We you know we've as we shared in our remarks retention rates. So far have been you know very very strong.
It's very difficult to say we know our goal is to you know our goal is to help patients you know hit their goal weight with one of these therapies in a comprehensive way and.
You know and and hopefully they can change their you know their diet and lifestyle in the process and they're not on one of these medications for the rest of their life.
Think that they're likely going to be some patients that are.
Our on these therapies for the rest of their life and need to be in and it makes and it's you know they're they're all their health outcomes are going to be better because of that but as far as predicting.
As far as predicting that right now it's impossible.
Got it.
Well, thank you and congratulations for a strong strong performance. Thank you. Thank you.
Our next question comes from the line of David Larsen with B T. I G. Please proceed with your question.
Just one quick follow up can we get an update on customer acquisition cost companies like Teladoc.
Another entity that mental health space have talked about increased pricing pressure, there or just any thoughts there would be great.
Yeah, I mean look there's been some increased pricing pressure, but we've been able to counteract Ed I mean like in the rack business we've seen this.
This quarter slightly higher increases in cash, but we're also getting much longer.
Bigger ltvs the past year than we had in the prior years. So we've been able to more than offset that and actually are holding ourselves to a higher return on AD spend than what we used to get a year ago in that business in the weight management business, we're actually as we've scaled to more volume and I'm not saying this is going to always hold this way but.
Where actually have seen cash slightly decline, we're actually seeing some of the best return on AD spend investment within the last 30 days that we've had in the history of the weight management program.
You know that will fluctuate a little you know, we're obviously I think those things do fluctuate a little but.
In general we've consistently even if we've scaled to the highest volumes per day that we've seen have seen really strong.
Economics, so yeah, I mean look cpm's pricing out there ebbs and flows and certainly you have some increases in the first quarter, but we've been able to manage through that contract.
Contract.
So if it's $99 a month and somebody signs up.
Basically.
And it's and it's 300 Bucks for three months and the sign up what's your return like on day, one you say if the tax rate.
Yeah look right.
Real numbers are you know, we're getting on average a little over $300 for an average order value and we're earning more than one times our money day one.
Okay, Great and then last quarter, you mentioned, an agreement with <unk> for sales and marketing effort can you just provide a little more color there, but what exactly was that.
Sure David This is Justin so.
So you know we signed a collaboration there was a marketing joint venture type agreement with a Q V. A.
We've explored a several different medium to large pharma opportunities with UBS.
Since signing that agreement not to date like nothing is nothing has turned into a commercial opportunity for us, but we're optimistic I gave you is a great company and we really like the team there and you know we're optimistic that.
Some of that that will be a fruitful relationship down the road.
Okay.
What that means is they're working with pharma manufacturers are trying to identify products that you could help them bring to market as that.
Is that right, yes, exactly I mean, I think yeah.
Yeah. So I can give you a Q V. A provides you know a lot of different commercial solutions directly to pharma companies.
And you know one of the one of the things that's interesting for them or that they were interested in was finding a partner that they could you know enable them to offered or enable their clients.
In the pharma World direct care.
You know platform to deliver direct care to their patients.
You know I think that look I think I think the whole opportunity in pharma has just been has taken a lot more time to materialize.
Then people thought including me I mean, I think if you listen to prior calls I was much more bullish and excited and you know the whole direct to patient telehealth opportunity as it relates to pharma companies over the past several years.
I think for a number of reasons its Ben.
The adoption rates have been very slow I think a large part of that is farm. It doesn't you know pharma has to be very careful about having anything to do with you know.
Delivering health care, there are a lot of compliance issues and so I just I think they're they're very difficult business models to sync two to sync with each other.
Oh, okay. Thanks, very much congrats on a good quarter.
Thank you we have reached the end of our question and answer session and I'd like to turn the floor back over to Mr. Justin Shreiber for closing remarks.
Thanks, Camilla, we appreciate everyone dialing into our earnings call today, and look forward to next quarter and giving you a very positive update next quarter. Thank you very much have a good evening.
Okay.
This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.
Okay.
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