Q1 2025 Medifast Inc Earnings Call
Greetings and welcome to the Medifast first quarter 2025 earnings conference call. At this time, all participants are in listen only mode.
Operator: Greetings and welcome to the Medifast first quarter 2025 earnings conference call. At this time all participants are in listen-only mode. If anyone should require operator assistance, please press star zero on your telephone keypad.
Speaker Change: If anyone should require operator assistance. Please press star zero on your telephone keypad.
Operator: Our question and answer session will follow the formal presentation. You may be placed into question queue at any time by pressing star 1 on your telephone keypad. As a reminder, this conference is being recorded.
Question and answer session will follow the formal presentation.
Speaker Change: Maybe places of questions any time by pressing star one on your telephone keypad as a reminder, this conference is being recorded.
Steven Zenker: It's now my pleasure to turn the call over to Steven Zenker, Vice President, Investor Relations. Steven, please go ahead. Good afternoon and welcome to Medifast's first quarter 2025 earnings conference call. On the call with me today are Dan Chard, Chairman and Chief Executive Officer, and Jim Maloney, Chief Financial Officer. By now, everyone should have access to the earnings release for the first quarter ended March 31st, 2025, that went out this afternoon at approximately 4.05 p.m. Eastern Time. If you have not received the release, it is available on the Investor Relations portion of Medifast's website at www.medifastinc.com.
Speaker Change: It's now my pleasure to turn the call over to Steven Zenker, Vice President of Investor Relations. Please go ahead.
Speaker Change: Good afternoon, and welcome to Medifast first quarter 2025 earnings conference call.
Speaker Change: On the call with me today are Dan Chard, Chairman, and Chief Executive Officer, and Jim Maloney, Chief Financial Officer.
Speaker Change: By now everyone should have access to the earnings release for the first quarter ended March 31st 2025. It went out this afternoon at approximately 405 P M Eastern time.
Speaker Change: If you have not received the release it is available on the Investor Relations portion of Medifast website at Www Dot Medifast, Inc. Dot com.
Steven Zenker: This call is being webcast and a replay will also be available on the company's website.
Speaker Change: This call is being webcast and a replay will also be available on the company's website.
Steven Zenker: Before we begin, we would like to remind everyone that today's prepared remarks contain forward-looking statements, and management may make additional forward-looking statements in response to your questions. The words believe, expect, anticipate, and other similar expressions generally identify forward-looking statements. These statements do not guarantee future performance and therefore undue reliance should not be placed on them. Actual results could differ materially from those projected in any forward-looking statement. All of the forward-looking statements contained herein speak only as of the date of this call. Medifast assumes no obligation to update any forward-looking statements that may be made in today's release or call.
Speaker Change: Before we begin we would like to remind everyone that todays prepared remarks contain forward looking statements and management may make additional forward looking statements in response to your questions.
Speaker Change: The words believe expect anticipate and other similar expressions generally identify forward looking statements.
Speaker Change: These statements do not guarantee future performance and therefore undue reliance should not be placed on them.
Speaker Change: Actual results could differ materially from those projected in any forward looking statement.
Speaker Change: All of the forward looking statements contained herein speak only as of the date of this call.
Speaker Change: Medifast assumes no obligation to update any forward looking statements may be made in today's release or call.
Daniel Chard: Now, I would like to turn the call over to Medifast Chairman and Chief Executive Officer, Dan Chard. Thank you, Steve. Good afternoon, everyone, and thank you for joining us today. There's no question that we are operating in a time of tremendous opportunity. The health and wellness space, particularly around weight loss and weight management, is evolving rapidly, and we believe Medifast is well positioned to take advantage. Scientific research has shown that use of GLP-1 medications can result in up to 40% of weight loss coming from muscle mass, equivalent to a decade's worth of muscle loss within just 12 to 18 months.
Speaker Change: Now I would like to turn the call over to Medifast, Chairman and Chief Executive Officer, Dan Chard.
Speaker Change: Thank you Steve Good afternoon, everyone and thank you for joining us today.
Speaker Change: Theres no question that we were operating in a time of tremendous opportunity.
Speaker Change: The health and wellness space, particularly around weight loss and weight management is evolving rapidly and we believe medifast is well positioned to take advantage.
Speaker Change: Scientific research has shown that use of G. L. P. One medications and result in up to 40% of weight loss I mean from a muscle mass equivalent to a decade's worth of muscle loss within just 12 to 18 months.
Daniel Chard: Furthermore, for 88% of patients, GLP-1 medications do not fully support their achieving a healthy weight. We believe these findings reinforce the importance of supporting any health journey with a straightforward health and wellness lifestyle solution to achieve long-term health goals. This is relevant for those using weight loss medications, as well as for those pursuing weight loss and improved health without the use of medications. In either case, Medifast's Optivia program helps preserve lean muscle and delivers healthier outcomes through healthy habits, nutrition, and coaching for those seeking lasting health outcomes. At the same time, independent research that we have commissioned indicated that 83 percent of people looking to lose weight lack confidence in transitioning to a long-term healthy lifestyle.
Speaker Change: Furthermore, for 88% of patients G. L. P. One medications do not fully support their achieving a healthy weight.
Speaker Change: We believe these findings reinforce the importance of supporting any health journey with a straightforward health and wellness lifestyle solution to achieve long term health goals.
Speaker Change: This is relevant for those using weight loss medications as well as for those pursuing weight loss and improved health without the use of medications.
Speaker Change: In either case Medifast after via program helps preserve lean muscle and delivers healthier outcomes through healthy habits nutrition and coaching for those seeking lasting health outcomes.
Speaker Change: At the same time independent research that we have commissioned indicated that 83% of people looking to lose weight lack confidence in transitioning to a long term healthy lifestyle.
Speaker Change: This is precisely the strength of our after via program, which offers a holistic approach to weight loss and healthier living.
Daniel Chard: This is precisely the strength of our Optivia program, which offers a holistic approach to weight loss and healthier living. are offering combined science-backed products, personalized nutrition plans, the support of a dedicated OptiVIA coach, and integration into a like-minded community. Additionally, where appropriate, we provide access to weight loss medications through our collaboration with LifeMD. This integrated solution gives people the tools, accountability, and encouragement they need to learn how to make a healthy lifestyle second nature, lose weight, keep it off, and simplify a complex health journey. Coaches play a vital role in helping people navigate both the active weight loss phase and the weight management phase that follows.
Speaker Change: Our offering combines science backed products personalized nutrition plans.
Speaker Change: The support of a dedicated after via coach and integration into a likeminded community. Additionally.
Speaker Change: Additionally, where appropriate we provide access to weight loss medications through our collaboration with life M D.
Speaker Change: This integrated solution gives people the tools accountability and encouragement they need to learn how to make a healthy lifestyle second nature lose weight keep it off and simplify a complex health journey.
Speaker Change: Coaches play a vital role in helping people navigate both the active weight loss phase and the weight management phase the follows.
Daniel Chard: These coaches, having faced similar challenges themselves, bring invaluable experience to the process. Studies indicate that most people using GLP-1 medications for weight loss struggle with long-term weight maintenance. An average of two-thirds of weight loss by people using medications is regained within a year of stopping them. And with up to 74% of people discontinuing GLP-1 medications within the first 12 months, it is clear that there is a demonstrated need for guidance in achieving health and wellness. This is exactly why our approach is so relevant. It not only helps people lose weight, but also instructs them in healthy habits that can be utilized to help preserve muscle mass, manage weight loss and improve health and wellness.
Speaker Change: These coaches having to face similar challenges themselves bring in valuable experience to the process.
Speaker Change: Studies indicate that most people using G. L. P. One medications for weight loss struggle with long term weight maintenance.
Speaker Change: An average of two thirds of weight loss by people using medications is regained within a year of stopping them.
Speaker Change: And with up to 74% of people discontinuing G. L. P. One medications within the first 12 months. It is clear that there was a true them, Australia need for guidance and achieving health and wellness.
Speaker Change: This is exactly why our approach is so relevant and.
Speaker Change: It not only helps people lose weight, but also instructs them and healthy habits that can be utilized to help preserve muscle mass manage weight loss and improve health and wellness.
Daniel Chard: With more than 40 years of experience supporting people with their health and wellness goals, including many years when we were selling through multiple channels, we continue to believe that our coaches represent a core competitive advantage. They are our most effective customer acquisition engine and the most efficient way to scale our business. In 2025, we are sharpening our focus on reigniting that engine. We're taking action to help simplify the coaching experience, increase productivity, and create scalable and successful businesses through stronger new customer acquisition, better retention, and the re-engagement of former customers.
Speaker Change: With more than 40 years of experience supporting people with their health and wellness goals, including many years. When we were selling through multiple channels. We continue to believe that our coaches represent a core competitive advantage.
Speaker Change: Our our most effective customer acquisition engine and the most efficient way to scale our business.
Speaker Change: In 2025, we are sharpening our focus on reigniting that engine.
Speaker Change: We're taking action to help simplify the coaching experience increased productivity and create scalable and successful businesses with stronger new customer acquisition, better retention and the reengagement of former customers.
Speaker Change: There are three key elements to this initiative.
Daniel Chard: There are three key elements to this initiative. First, we are streamlining the coach development path, making it easier for coaches to succeed in the changed competitive environment. We envision that a more clearly defined path will show them how to achieve early wins and develop their business by placing more emphasis on building coach leadership skills. We anticipate that with more intuitive incentives and clearer guidance on how to grow their businesses, coaches will be better empowered to optimize their efforts and achieve financial success. Through leadership education, podcasts, networking events, and shared best practices, we are working to create an environment where coaches can thrive and where their success becomes repeatable and scalable.
First we are streamlining the coach development path, making it easier for coaches to succeed in a changing competitive environment.
Speaker Change: We envision that a more clearly defined path, we'll show them how to achieve early wins and develop their business by placing more emphasis on building coach leadership skills.
Speaker Change: We anticipate that with more intuitive incentives and clearer guidance on how to grow their businesses coaches will be better empowered the optimize their efforts and achieve financial success.
Speaker Change: Your leadership education podcasts networking events and shared best practices, we are working to create an environment, where coaches can thrive and where their success becomes repeatable and scalable.
Speaker Change: Second.
Daniel Chard: We are enhancing the tools and insights available to the coaches. Upgrading digital business tools are expected to provide a more seamless way for coaches to track customers' progress. and they can use that data to tailor solutions that best meet individual customer needs. Education resources will focus on how to deliver more personalized customer service, equipping coaches with the skills and strategies to build stronger relationships and more sustainable businesses. This is especially important in their ability and confidence in supporting customers who are currently using or have used a GLP-1 medication. Currently, almost half of Optivia coaches have supported GLP-1 medication patients, the highest level we've seen to date, with 25% of coaches having had personal experience using GLP-1 medications themselves as part of their own weight loss and health journey.
Speaker Change: We are enhancing the tools and insights available to the coaches.
Speaker Change: Upgrading digital business tools are expected to provide a more seamless way for coaches to attract customers progress.
Speaker Change: And they can use that data tailor solutions that best meet individual customer needs.
Speaker Change: Education resources will focus on how to deliver more personalized customer service equipping coaches with the skills and strategies to build stronger relationships and more sustainable businesses.
Speaker Change: This is especially important in their ability and confidence and supporting customers who are currently using or have used a G. L. P. One medication.
Speaker Change: Currently almost half of off the vehicle just a supported G. L. P. One medication patients at the highest level we've seen to date.
Speaker Change: With 25% of coaches, having had personal experience using G. L. P. One medications themselves as part of their own weight loss and health journey.
Speaker Change: Third we're continuing to broaden our product offerings to give coaches more tools to serve their customers.
Daniel Chard: Third, we are continuing to broaden our product offerings to give coaches more tools to serve their customers. Over the past 18 months, we've launched Opti-Via Active for those individuals who want to incorporate exercise into their plans, as well as the Opti-Via Ascend line, which is designed specifically for those using GLP-1 medications or transitioning into a weight management phase after achieving their healthy weight. With its high-protein content, the Ascend line helps customers preserve lean muscle mass, a core concern for GLP-1 users and all people trying to lose weight and learning how to keep it off. With a more diverse set of offerings, our coaches have the flexibility to create highly tailored plans that meet customers wherever they are in their health and wellness journey.
Speaker Change: Over the past 18 months, we've launched after via active for those individuals who want to incorporate exercise into their plans as well as the after via satellite which is designed specifically for those using G. L. P. One medications or transitioning into a weight management phase after achieving their healthy weight.
Speaker Change: With its high protein content. The ascend line helps customers preserve lean muscle mass a core concern for G. L. P. One users and all people trying to lose weight and learning how to keep it off.
Speaker Change: With a more diverse set of offerings, our coaches have the flexibility to create highly tailored plans that meet customers wherever they are in their health and wellness journey.
Speaker Change: Science remains at the core of our program and products.
Daniel Chard: Science remains at the core of our program and products. With recent development breakthroughs, our programs and products should be even more effective in delivering key benefits to support customer health wellness journey. These development breakthroughs will first impact our Optivia Essential line and will play an important role in the business transformation as we continue to implement changes over the next 12 to 18 months. Additionally, we are currently developing studies that will evaluate the efficacy of the new Ascend line and the more established Essential line, along with the holistic Optivia model, which pairs customers with a coach and teaches customers how to make a healthy lifestyle second nature, giving coaches even more points to demonstrate why Optivia offers a unique and effective solution.
Speaker Change: With recent development breakthroughs, our programs and products should be even more effective in delivering key benefits to support customer health wellness journey.
These development breakthroughs will first impact our after via a central line and will play an important role in the business transformation as we continue to implement changes over the next 12 to 18 months.
Speaker Change: Additionally, we are currently developing studies that will evaluate the efficacy of the newest N line and the more established a central line along with a holistic after via model, which pairs customers with a coach and teaches customers how to make a healthy lifestyle second nature, given coaches even more points to demonstrate why after V.
Speaker Change: <unk> offers a unique and effective solution.
We expect investment in these areas to be mitigated by reductions in company led marketing costs.
Daniel Chard: We expect investment in these areas to be mitigated by reductions in company-led marketing costs. While those efforts helped re-engage past customers, they proved less efficient at attracting new ones. This year, we're putting the emphasis squarely back on our coach community, which remains central to the strength of our brand and the success of our program. The impact of coach support was measured in our clinical research and showed that customers who received coaching support while using the Optivia plan lost 10 times more weight, 17 times more fat for the self-directed group.
Speaker Change: While those efforts helps reengage past customers, they proved less efficient and attracting new ones.
Speaker Change: This year.
Speaker Change: We're putting the emphasis squarely back on our coach community, which remain central to the strength of our brand and the success of our program.
Speaker Change: The impact of coach support was measured in our clinical research and showed that customers who received coaching support while using the after via plan last 10 times more weight 17 times more fad for the self directed group.
Speaker Change: Turning to our first quarter results.
Daniel Chard: Turning to our first quarter results, revenues and EPS were in guidance range with bright spots continuing to appear in parts of the business. For the fourth consecutive quarter, we saw lower year-over-year coach productivity declines, driven in part by increased productivity of newer coach cohorts. These new cohorts are exhibiting new customer growth ahead of last year and are at levels we experienced back when the business was growing. Q1 marked the first meaningful year-over-year increase in new coaches in the past three years. with a double-digit increase compared to the same period last year. While this hasn't yet made a meaningful impact on revenue, we believe it sets the stage for future improvement in overall coach productivity and new customer acquisition and positions us for coach growth the back half of 2026 if the trend holds.
Speaker Change: Revenues and EPS were in guidance range with bright spots continuing to appear parts of the business.
Speaker Change: For the fourth consecutive quarter, we saw lower year over year coach productivity declines driven in part by increased productivity of Newark coach cohorts.
Speaker Change: These new cohorts are exhibiting new customer growth ahead of last year and are at levels, we experienced back when the business was growing.
Speaker Change: Q1 marked the first meaningful year over year increase in new coaches the past three years.
Speaker Change: With a double digit increase compared to the same period last year.
Speaker Change: While this hasn't yet made a meaningful impact on revenue we believe it sets the stage for future improvement in overall coach productivity and new customer acquisition and positions us for coach growth the back half of 2026, if the trend holds.
Speaker Change: In the meantime, our continued focus on driving cost savings is helping us maintain a strong balance sheet.
Daniel Chard: In the meantime, our continued focus on driving cost savings is helping us maintain a strong balance sheet. While a weaker economy could present consumer demand headwinds, we've historically seen that economic slowdowns can actually help increase coach recruitment as more people seek additional income earning opportunities. Also, we presently do not expect tariffs to have any meaningful impact on our business this year. As 2025 progresses, we expect to get a clearer picture just how resilient these early positive indicators are. The foundation we're putting in place through our coach-led strategy and evolving product mix supports our focus on delivering more definitive signs of a turnaround by the end of the year.
Speaker Change: While the weaker economy could present consumer demand headwinds, we've historically seen that economic slowdowns and actually help increase coach recruitment as more people seek additional income earning opportunity.
Speaker Change: Also we presently do not expect tariffs to have any meaningful impact on our business. This year.
Speaker Change: There's 20 twenty-five progresses, we expect to get a clearer picture just how resilient. These early positive indicators are.
Speaker Change: The foundation, we're putting in place for our coach led strategy and evolving product mix supports our focus on delivering more definitive signs of a turnaround by the end of the year.
Speaker Change: In summary.
Daniel Chard: In summary, our focus in 2025 is on empowering our coaches to be more productive, more successful, and better equipped to meet the needs of a growing and diverse customer base. By providing a holistic solution, inclusive of clinically proven plans, access to weight loss medications through LifeMD, and the power of customized coaching, we're delivering a differentiated solution that addresses the full spectrum of weight loss and long term health. This proven business model has been highly successful in the past. And we are optimistic about its potential to drive growth again in the near future.
Speaker Change: Our focus in 2025 is an empowering our coaches even more productive more successful and better equipped to meet the needs of a growing and diverse customer base.
Speaker Change: By providing a holistic solution inclusive of clinically proven plans access to weight loss medications through life M D and the power of customized coaching we're delivering a differentiated solution that addresses the full spectrum of weight loss and long term health.
Speaker Change: This proven business model has been highly successful in the past.
Speaker Change: And we are optimistic about its potential to drive growth again near future.
James Maloney: With that, I'll turn it over to Jim.
Jim Maloney: With that turn it over to Jim.
Jim Maloney: Thank you Dan good afternoon, everyone.
James Maloney: Thank you, Dan. Good afternoon, everyone. As Dan mentioned, first quarter 2025 results. where both revenue and EPS were within our guidance range. Revenue for the first quarter was $115.7 million, a decrease of 33.8% versus the year earlier. primarily due to a decrease in the number of active earning OptiVEA coaches. We ended the quarter with approximately 25,400 active earning OptiVehicle a decrease of 32.8% from the first quarter of 2024. As Dan mentioned, we continue to see lower year-over-year declines in revenue per active-earning coach. Average revenue per active-earning Optivea coach for the first quarter was $4,556. A year-over-year decrease of 1.4% compared to a year-over-year decrease of 22.0% during Q1 of 2024.
Jim Maloney: As Dan mentioned first quarter 2025 results.
Jim Maloney: Or both revenue and EPS were within our guidance ranges.
Jim Maloney: Revenue for the first quarter was $115.7 million, a decrease of 33.8% versus the year earlier period.
Jim Maloney: Primarily due to a decrease in the number of active earning at the Villa coaches.
Jim Maloney: We ended the quarter with approximately 25400 active earning after via coaches.
Jim Maloney: A decrease of 32.8% from the first quarter of 'twenty 'twenty four.
Jim Maloney: As Dan mentioned, we continue to see lower year over year declines in revenue per active earning coach average revenue per active earning after via coach for the first quarter was $4556 a.
Jim Maloney: Our year over year decrease of 1.4% compared to a year over year decrease of 22 point per cent.
Jim Maloney: In Q1 of 'twenty 'twenty four.
This moderation is being driven in part by increased productivity of Newark coach cohorts.
James Maloney: This moderation is being driven in part by increased productivity of newer coach cohorts. which are exhibiting new customer growth ahead of last Gross profit decreased 33.8% year over year to $84.2 million, driven by lower sales volume. gross profit margin, where the current quarter was 72.8%. which was consistent with the year earlier period. SG&A expense was down 28.4% year over year to $85.5 million, primarily due to a $22.4 million decrease in Octavia Coach compensation on lower volume, $3 million on market research and investment costs related to medically supported weight loss, which were incurred during the first quarter of 2024 that did not occur in the current quarter, a $2.5 million decrease in employee compensation, and a $1.3 million decrease in credit card fees.
Jim Maloney: Which are exhibiting new customer growth ahead of last year.
Jim Maloney: Gross profit decreased 33.8% year over year to $84.2 million driven by lower sales volumes.
Jim Maloney: Gross profit margin for the current quarter was 72.8%.
Jim Maloney: Which was consistent with the year earlier period.
Jim Maloney: SG&A expense was down 28.4% year over year to $85.5 million, primarily due to a $22.4 million decrease in octavia coach compensation on lower volume $3 million on market research.
Jim Maloney: Search and investment costs related to medically supported weight loss, which were incurred during the first quarter of 'twenty 'twenty four that did not occur in the current quarter, a 2.5 million dollar decrease in employee compensation and a 1.3 million dollar decrease in credit card fees.
Jim Maloney: SG&A as a percentage of revenue increased 560 basis points, primarily due to approximately 440 basis points of loss of leverage of fixed cost due to lower sales volumes and 200 basis points of company led marketing efforts.
James Maloney: SG&A as a percentage of revenue increased 560 basis points primarily due to approximately 440 basis points of loss of leverage of fixed cost due to lower sales volumes and 200 basis points of company-led marketing efforts. primarily due to lower sales volume. These increases were partially offset by 170 basis points of market research and investment costs related to medically supported weight loss, which were incurred during the first quarter of 2024 and did not recur in the current quarter. Loss from operations was $1.3 million in first quarter of 2025, down $9.2 million versus the year earlier period.
Primarily due to lower sales volume.
Jim Maloney: These increases were partially offset by 170 basis points of market research and investment costs related to medically supported weight loss, which were incurred during the first quarter of 'twenty 'twenty four and did not recur in the current quarter.
Jim Maloney: Loss from operations was $1.3 million in first quarter of 'twenty twenty-five down $9.2 million versus the year earlier period as the decline in gross profit was largely offset by lower SG&A as a percentage of revenue loss from operations was 1.1.
James Maloney: As the decline in gross profit was largely offset by lower SG&A, as a percentage of revenue, loss from operations was 1.1% in the first quarter, 560 basis points below the year earlier level. Other income decreased 50.9% year over year to $1.8 million due to higher unrealized gains on our investments in LifeMD common stock in the year earlier period. Companies unrealized gain on investments in LifeMD common stock for the first quarter of 2025 was $0.6 million. Income tax expense of $1.3 million for the first quarter of 2025 was lower than the $3.3 million recorded in prior year's first quarter.
Jim Maloney: <unk> percent in the first quarter.
Jim Maloney: 560 basis points below the year earlier level.
Jim Maloney: Other income decreased 59% year over year to $1.8 million due to higher unrealized gains on our investments life M. D. Common stock in the year earlier period companies unrealized gain on investments in life M D common stock for the <unk>.
Jim Maloney: First quarter of 'twenty twenty-five was point $6 million.
Jim Maloney: Income tax expense of $1.3 million for the first quarter of 'twenty twenty-five was lower than the $3.3 million recorded in prior year's first quarter.
James Maloney: The decrease in income tax expense was primarily driven by a decrease in pre-tax income and a tax shortfall for stock compensation, partially offset by a change in unrecognized tax benefits due to finalization of a state tax examination. Net loss in the first quarter of 2025 was $0.8 million or $0.07 per share compared to net income of $8.3 million or $0.76 per diluted share in the year earlier period. Turning to our balance sheet, our financial position remains strong with $164.6 million in cash, cash equivalents.
Jim Maloney: The decrease in income tax expense was primarily driven by a decrease in pretax income and a tax shortfalls from stock compensation, partially offset by a change in unrecognized tax benefits due to finalization of a state tax domination.
Jim Maloney: Net loss in the first quarter of 'twenty twenty-five was $8 million or seven cents per share compared to net income of $8 $3 million or 76 cents per diluted share in the year earlier period.
Jim Maloney: Turning to our balance sheet, our financial position remains strong with $164.6 million in cash cash equivalents.
James Maloney: and no interest bearing debt as of March 31st, 2025.
Jim Maloney: And no interest bearing debt as of March 31st 2025.
Jim Maloney: Now I will turn to guidance.
James Maloney: Now I will turn to guidance. We are expecting second quarter revenue to range from $85 to $105 million in loss per share for the quarter to range from $0.00 to $0.55. Guidance excludes any gains or losses from changes in the market price of our LIFMD common stock holdings, which we are unable to estimate.
Jim Maloney: We are expecting second quarter revenue to range from $85 million to $105 million and loss per share for the quarter to range from zero cents to 55 cents guidance excludes any gains or losses from changes in the market price of our life M D common stock holdings.
Jim Maloney: Which we are unable to estimate.
James Maloney: While it continues to prove challenging to forecast our results for the remainder of the year, we continue to see bright spots in certain pockets of the business and believe they set the stage for improvement in coach productivity in the second half of 2025 with coach growth in the second half of 2026.
Jim Maloney: It continues to prove challenging to forecast our results for the remainder of the year.
Jim Maloney: We continue to see bright spots certain pockets of the business and believe they set the stage for improvement in coach productivity in the second half of 'twenty twenty-five with with coach growth in the second half of 'twenty 'twenty six.
Jim Maloney: With that let me turn the call to the operator for questions.
Operator: With that, let me turn the call to the operator for questions. Thank you, we will now be conducting a question and answer session. If you would like to be placed in the question queue, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. Once again, that's star 1 to be placed in the question queue. One moment please while we poll for questions.
Jim Maloney: Thank you, we'll now be conducting a question and answer session.
Speaker Change: We like to be placed in the question queue. Please press star one on your telephone keypad.
Jim Maloney: Confirmation tone will indicate your line is in the question queue.
Once again Thats star one to be placed in the question queue.
Jim Maloney: One moment please poll for questions.
James Salera: Our first question is from Jim Salera from Steve and Joanna's Allies. Guys, good afternoon. Thanks for taking our I'm going to start off on the second quarter top line guidance. You know, if we look at where the kind of the rate of decline for the top line over the past four quarters, it's been improving every quarter in that, you know, the rate of the year-over-year sales decline has slowed. But then if I just take the midpoint of the guidance, you know, it's right around 95, that would actually imply an acceleration in the year-over-year rate of decline.
Speaker Change: Our first question is coming from Jim Solera from Stephens. Your line is now live.
Jim Solera: Hey, guys. Good afternoon, Thanks for taking my question.
Jim Solera: I wanted to start off on the second quarter top line guidance.
Jim Solera: Look at where the kind of the rate of decline bird the top line over the past four quarters, it's been improving every quarter and that the rate of the year over year sales decline has slowed but then if I just take the midpoint of the guidance.
Jim Solera: Right around 95 that would actually imply an acceleration in the year over year rate of decline. So just any color around.
James Maloney: So just any color around, you know, what's going on there in the second quarter and why that shouldn't continue the trend we've seen over the Thanks, thanks, Jim, I to address that question right on. You know, when you look at the midpoint of the range, and looking at what you're exactly talking about, you know, it could indicate an acceleration. However, you have to take into consideration the timing of uh promotions that that the company has done over uh you know Q1 of this year versus Q1 what we're planning on doing and what we did last year.
Jim Solera: What's going on there in the second quarter and why that shouldn't continue to trend we've seen over the prior four quarters.
Speaker Change: Thanks, Thanks, Jim I to address that question right on.
Speaker Change: You know when you look at the midpoint of the range and looking at what you're exactly talking about.
Speaker Change: You know it could indicate in acceleration. However, you have to take into consideration the timing of.
Speaker Change: Promotions that that the company has done over.
Q1 of this year versus Q1, what were planning on doing and what we did last year. So you know in Q1 of this year.
James Maloney: So, you know, in Q1 of this year, we did run a promotion that did quite well. Dan mentioned it in the prepared remarks. It is the first time we saw uh... new coaches actually see a year-over-year improvement, and we haven't seen that in about three years. And that was, that was due to, you know, that was really the first time we've seen those improvements in the business when we ran a promotion, and it really incentivized the field to focus on acquiring new customers. and also acquiring and sponsoring new coaches. So that worked very well. So when you run a promotion like that in a quarter, it does have impacts to the next quarter.
Speaker Change: We did run a promotion.
Speaker Change: That did quite well Dan mentioned in the prepared remarks. It is the first time we saw.
Speaker Change: New coaches.
Speaker Change: Actually a see a year over year improvement and we haven't seen that in about three years.
Speaker Change: And that was that was due to you know that was really the first time, we've seen those improvements in the business when we ran a promotion.
Speaker Change: And it really incentivize the field to focus on.
Speaker Change: Acquiring new new customers.
Speaker Change: And also acquiring and sponsoring new coaches.
Speaker Change: So that worked very well so when when when you're running a promotion like that in a quarter. It does have impacts to the next quarter. So last year.
James Maloney: So last year, we ran a, we had a promotion in Q2. And in this year, in our guidance, we're not really planning on having a promotion. That's not to say that we could not change our minds, but what our guidance is showing is that we're not going to be doing such things in this year. So hopefully that addresses your question.
Speaker Change: We ran a we had a promotion in Q2.
Speaker Change:
Speaker Change: And in this year in our guidance.
Speaker Change: We're not really planning on having a promotion that's not to say that we could not change our minds, but what are what our guidance is showing is that we're not going to be doing such things in this year, so hopefully that.
Speaker Change: Addresses your question that in and then I guess the last thing I wanted to say on that is that doesn't mean, the following quarters would have that same.
James Maloney: I guess the last thing I wanted to say on that is that doesn't mean the following quarters would have that same accelerated trend like you're you're referring to.
Speaker Change: Celebrated trend like Youre, referring to.
Speaker Change: Hey, gentlemen.
James Maloney: Hey Jim, let me just, um... Go ahead and finish your question, then I just have a couple of comments.
Speaker Change: Oh go ahead and finish your question that I just have a couple of comments.
James Maloney: Normal.dot Microsoft Office Word Microsoft Office Word 97-2003 Title Microsoft Office Word Document MSWordDoc Word.Document.8 No, finish asking your question to Jim, and then I have just a couple of points to make. So essentially, we should see 2Q as the low point in terms of year-over-year rate of decline, like it should be the highest year-over-year rate of decline for the year, if I'm interpreting what you're saying correctly.
Speaker Change: No no no.
Speaker Change: No finish asking your question to Jim and then and then I have just a couple of points to make.
Speaker Change: So essentially we should see <unk>.
Jim: Q as the low point in terms of year over year rate of decline like it should be the highest year over year rate of decline for the year I'm interpreting what you're saying correctly.
James Maloney: Well, I can't really go into that since we're not providing guidance. But that's the impact what you're seeing in Q2. But that I wouldn't lead that into if you're modeling it, that that trend will continue. That's really all I can say on that point.
Jim: But I can't really go into that since we're not providing guidance, but that's the impact what you're seeing in Q2, but that I wouldnt lead that into if you're modeling it.
Jim: Does that trend will continue that that's really all I can say on that point.
Daniel Chard: Okay, that's And, Jim, I wanted to make you aware, as well as anyone else who's joining the call for Q&A, that we have joining us today for the Q&A session, Nick Johnson, as well. Some of you have met Nick before, but Nick is our Chief Field Operations Officer and President of OptiVIA. And Nick is the one who works closely with our now 25,000 coaches across the country. And we wanted specifically for him to be here so he could respond to any specific questions you have about progress and programs that we're making, progress with the programs we're making with, that we're introducing to our coaches, as well as client acquisition productivity.
Jim: Okay, that's fair.
Speaker Change: And Jim I wanted to to make you aware and as well as anyone else's joining the call for Q&A that we have joining us today for the Q&A session. Nick Johnson as well some of you have met yet Nick before but.
Speaker Change: Nick is our chief field operations officer, and President of after via.
And this is the one who works closely with our now 25000 coaches across the country and we want to specifically for them to be here. So we can respond to any specific questions. You have about our progress and programs that were making progress with the progress we're making with the that we're introducing to our coaches as well as.
Speaker Change: Client acquisition productivity, Jim already touched on.
Daniel Chard: Jim already touched on one of the important bright spots that we're talking about that we've seen in the field, which is year-over-year improvement in new coaches. I think the other thing we've talked about over the past several quarters, which continues to be an important trend, is the improvement of productivity, which continues to moderate to this most recent quarter being down 1.4% year-over-year. But that, as we've said before, is a reflection of what we believe is a trend in improving ability for our coaches to acquire new clients. And also a key indicator, which has been in the past, as we've analyzed the business for the last 15 years, has been correlated with what typically has been an improvement in year-over-year active earning coach numbers.
Speaker Change: One of the important bright spots that we're talking about that we've seen in the AR.
Speaker Change: Filled which is year over year improvement in new coaches I think the other thing we've talked about over.
Speaker Change: Over the past several quarters, which continues to be an important trend is the improvement of productivity.
Speaker Change: Which.
Speaker Change: Continues to moderate.
Speaker Change: This most recent quarter of being down.
Speaker Change: One 4% year over year, but that that as we've said before is a reflection of what we believe is.
Speaker Change: Trend in improving ability for our coaches.
Speaker Change: To acquire new clients and also a key indicator, which has been in the past as we've analyzed the business for the last 15 years.
Speaker Change: Has been a.
Speaker Change: Correlated with what typically has been an improvement in year over year active earning coach numbers.
Speaker Change: So.
Nick Johnson: I'll let you ask any specific questions, but I want to make sure that we'll give a few minutes or not just a brief opportunity for for Nick to talk about some of these programs that are helping us see that improvement in your improvement in coach productivity.
Speaker Change: I'll, let you ask any specific questions, but I want to make sure that Oh.
Speaker Change: We'll give a few minutes.
Speaker Change: A brief opportunity for for Nik to talk about some of these programs.
Speaker Change: That are helping us see that improvement in Europe.
Speaker Change: There is improvement in coach productivity, So Nick just take a take a minute to reflect on what's happening in the field.
Nick Johnson: So Nick, just take a just take a minute to to reflect on what's happening in the field. Yeah, thanks, Dan. And thanks, Jim. So if we look at those new cohorts as a bright spot, we've been talking about in the prepared remarks, it really comes down to four factors. Number one, coach leaders have evolved their trainings to the new environment, which is key. Those new coaches that have been brought in in the first quarter really only have experienced the GLP-1 environment. And as Dan said before, they're experiencing productivity rates that are consistent with even high growth periods in the past.
Speaker Change: Yeah, Thanks, Dan and thanks, Jim So if we look at those new cohorts as a bright spot that we've been talking about in the prepared remarks. It really comes down to four factors number one.
Speaker Change: Coach leaders have evolved their trainings to the new environment, which is key.
Speaker Change: Those new coaches that have been brought in in the first quarter really only have experienced the G. L. P. One environment and as Dan said before theyre experiencing productivity rates that are consistent with even high growth periods in the past.
Nick Johnson: Second point here is the training has included support for those on and off GLP-1s. Half of our coaches, in fact, have supported someone on a GLP-1 already. 25% of our coaches have been on a GLP-1 medication. So the third point here is growth in new coaches and growth in that new coach productivity, looking at it year over year. A lot of that has to do with some of the programming that we enacted in the first quarter. So these are incentives that are designed to both drive client acquisition, which improves productivity, and it drives coach sponsoring.
Speaker Change: Second point here is the training has included support for those on and off G. L. P. One.
Speaker Change: Half of our coaches in fact have supported somewhat LNG L. P. One already 25% of our coaches have been on a G. L. P. One medication.
Speaker Change: So the third point here is growth and new coaches and growth in that new coach productivity.
Speaker Change: Looking at it year over year.
Speaker Change: A lot of that has to do with some of the programming that we enacted in the first quarter. So these are incentives that are designed to both drive client acquisition, which improves productivity and it drives coach sponsoring.
Nick Johnson: So as they're getting activated in their first few months, acquiring new clients, then they're on to the next step, which is sponsoring coaches and becoming a mentoring coach or a business coach. So those incentives for coach leaders to help their new clients and coaches win in their early months is key to their progress through the compensation plan. As we talked about before, we did continue to pull the client acquisition side through promotions. And we did that through our spring into health program. which assisted in driving productivity for new coaches who are pulling up those averages as we look year over year.
Speaker Change: So as Theyre getting activated in their first few months acquiring new clients than they are on to the next step, which is sponsoring coaches and becoming a mentor and coach or a business coach to those incentives for coach leaders to help their new clients and coaches win in their early months is key to their progress through the compensation plan.
Speaker Change: As we talked about before will be big continue to pulse the client acquisition side through promotions and we did that through our spring into health program.
Speaker Change: Which assisted in driving productivity for new coaches, who flew all OE up those.
Speaker Change: Averages as we look year over year.
Speaker Change: Oh, Hi, I forget maybe one question for you and then either Jim or Dan So.
Nick Johnson: I appreciate that. Maybe one question for you and then either Jim or Dan. Do you have a sense for of the new coaches? How many of them? personally have utilized GLP-1 and is that new cohort one that are kind of over-indexing to the portion of your coaches that utilize GLP-1? And then maybe a tag-on question to that. I think you guys said on the last call in January, the Ascend product line was just under like 20% of orders. Just any update on that, on how that progressed through the quarter and where we are? I can I can comment on that specific question with respect to how we're looking at those new new coaches coming in.
Do you have a sense for of the the new coaches how many of them.
Speaker Change: Personally have utilized G. L. P. One is that new cohort one that are kind of over indexing.
Speaker Change: Portion of your coaching that utilize the L. P. One and then maybe a tag on question to that.
Speaker Change: Thank you guys said on the last call in January the ascend product line was just under 20% of orders just any update on that and how that progressed through the quarter.
Speaker Change: Today.
Speaker Change: I can I can comment on that specific question with respect to how we're looking at those new new coaches coming in we haven't necessarily done that segmentation, but that is something that we could likely provide through Jim.
James Maloney: We haven't necessarily done that segmentation, but that is something that we could likely provide through Jim following the call. And then I'll let Jim respond to the send question. Yeah, so on the on the ascend question, Jim is, you know, we mentioned last call that that we were, you know, that we were right in line with our expectations with with the ascend line. And it continues that trend continued all the way through q1. And we're at, you know, at the end of q1, we're basically in the mid teens. uh, for the Ascend line, um, uh, for, you know, as, as the, as the number of orders as a percent.
Speaker Change: Following the call.
And then I'll, let Jim respond to the Sunquest.
Speaker Change: Second question.
Speaker Change: Yeah. So on the on your second question, Jim is we mentioned our last.
Speaker Change: Last call that we were you know that.
Speaker Change: Now we were right in line with our expectations with with the ascend line.
Speaker Change: And it continues that trend continued all the way through Q1 and were at you know at the end of Q1, we were basically in the mid teens.
Speaker Change: For the ascend line.
Speaker Change: Hum for Eze as the as the.
Speaker Change: <unk> orders as a percent.
James Maloney: So it's right in line with our expectations.
Speaker Change: So it's right in line with our expectations.
Speaker Change: Okay, and then maybe one last question for me.
James Maloney: Okay, and then maybe one last question for me. If I think about the shift in focus on the company-led marketing and pulling back on the company-led marketing and investing back into the coaches. How should we think about that as impacting SG&A? Does that mean that you're pulling, did you say pulling back like you're not doing any company-led marketing anymore? Or it's just a reduction in the amount of, kind of help us size up what that impact might look like on SG&A as we think about, you know, the progression there. It's a you know, when when you're doing your modeling, Jim, you know, look, we're doing things with with the company led as we mentioned in our prepared remarks.
Speaker Change: We think about the.
Speaker Change: Shifting focus on the company led marketing and pulling back on the pumping led marketing and investing back into the coaches.
Speaker Change: Should we think about that is impacting SG&A.
Speaker Change: That mean that youre pulling and pulling back like Youre not doing any company led marketing anymore or it's just the reduction in the amount you can help us size up what that impact might look like on SG&A as we think about the progression there for the remainder of the year.
Jim: Yeah. So I you know when Youre doing your modeling Jim.
Speaker Change: You know look.
Jim: We're doing things with.
Jim: With the company led as we mentioned in our prepared remarks, but remember that's a.
James Maloney: But remember, that's, you know, as a percent of revenue, you know, that was, you know, not that large of a percent as compared to the compensation we pay our coaches. And, you know, we look at those, and we look at the driver of which one is has the better customer acquisition cost. We looked at that, you know, when we first started piloting it through Q1. And what we've determined is reactivation works quite well I'm with company led, so we will continue to do that. You know, so there will be some pull back, but it's not going to be that dramatic in your modeling.
Jim: As a percent of revenue.
Jim: That was.
Jim: Not that large of a percent.
Jim: As compared to the compensation, we pay our coaches.
Jim: And you know we look at those and we look at the driver of which one is has the better.
Jim: Customer acquisition cost we looked at that.
Jim: You know when we first started piloting it through Q1 and what we've determined is reactivation works quite well.
Jim: With company led so we will continue to do that.
Jim: You know so there will be some.
Jim: Pull back, but it's not going to be that dramatic in your modeling.
James Maloney: Okay.
Jim: Okay.
James Maloney: Sounds good, we'll pass it on. Thank you.
Jim: Okay I will pass it on.
Speaker Change: Thank you next question is coming from Doug Lane from water tower researcher of why this is ally.
Doug Lane: Next question is coming from Doug Lane from Watertower Research, your line is now live. Thanks. Good afternoon, everybody. Nick, glad you could be on the call.
Speaker Change: Thanks, Good afternoon, everybody, Nick glad you could be on the call I think what I'd like to get maybe from you if I could get some perspective on the impact the G. L. P. One has had on your coaching community.
Nick Johnson: I think what I'd like to get maybe from you, if I could, is some perspective on the impact that GLP-1 has had on your coaching community. I mean, I get all the opportunities that you mentioned with the weight loss and gaining it back after you go off the drug, but it's also makes it controversial. So I wanted it the controversy of adding GLP-1 into the equation has had an impact on your coaching Oh, thanks, Doug, for the question. Certainly, certainly the impact of the GLP-1 environment has been reflected in what we've been seeing throughout the last couple of years.
Speaker Change: Get all the opportunity that you mentioned with the weight loss.
Speaker Change: Gaining it back after you go off the drug.
Speaker Change: But it also makes it controversial so I wanted to get the controversy Abadi G. O P. One into the equation has had an impact on your coaching community.
Speaker Change: Oh, Thanks, Doug for the question certainly certainly the impact of the G. L. P. One environment has has been reflected in what we've been saying throughout the last couple of years.
Nick Johnson: It really, for us, is a training opportunity. It's not necessarily a controversial topic in and of itself. It's simply a disruption that causes us to have to retrain around the new environment specifically. And as you know, it takes time for a training around a new way of looking at the market and looking at your offering, as it takes time to take hold and start to duplicate at scale inside of the network. So the disruption really has an effect on the training approach, and adjusting our sales to what the environment is giving us. But also, we continue to see bright spots, as we've said in the prepared remarks, as Dan said in the prepared remarks around what our new coaches are experiencing today.
Speaker Change: It really for US is the training opportunity.
Speaker Change: It's not necessarily a controversial topic in and of itself. It's simply a disruption that causes us to have to retrain around the new environment, specifically and as you know it takes time for a training around our new way of looking at the market and looking at your offering is it takes time to take hold in <unk>.
Speaker Change: Start to duplicate at scale inside of inside of the network. So the disruption really has an effect on the training approach in adjusting our sales to what the environment is giving us but also we continue to see bright spots as we said in the prepared remarks as Dan said in the prepared.
Speaker Change: Remarks around what our new coaches are experiencing today, they only know the G. L. P. One environment. They only know that the G. O P wanted us do exist, though it's not controversial for them, they're still offering what we've historically offered at our core.
Nick Johnson: They only know the GLP-1 environment. They only know that the GLP-1s do exist. So it's not controversial for them. They're still offering what we've historically offered in our core, and then delivering beyond that from a lifestyle, lifestyle transformation perspective.
Speaker Change: And then delivering beyond that from a lifestyle lifestyle transformation perspective.
Daniel Chard: So that's how I would respond to that question, Doug. Dan, anything from your side? Yeah, I think it's important, Doug, and I think you're kind of getting at this. I mean, it's now been a little over two years since we've started to see GLP-1 drugs have a big impact across the country, and specifically, among what had been a pretty stable group of clients who were using Optivia for their solution. But, you know, initially, the GLP-1 drugs were positioned as a solution to a problem that had been challenging for, you know, people who are struggling with overweightness or obesity.
Speaker Change: So that's how I would respond to that question Doug.
Speaker Change: Dan anything from your side.
Speaker Change: Yeah, I think it's important.
Speaker Change: Did any of this I mean, it's now been.
Speaker Change: A little over two years since we started to see G. L. P. One drugs have a big impact across the country and specifically.
Speaker Change: Long.
Speaker Change: What had been a pretty stable group of clients, who are using after via for their solution, but yeah.
Speaker Change: Initially it at that.
Speaker Change: The <unk> one drugs were positioned as a solution to a problem that had been challenging for <unk>.
Speaker Change: People, who are struggling with overweight or obesity.
Daniel Chard: And what it's turned out, and increasingly clear, is that it's a tool to help, but not a solution for it. I mean, consistently, the drugs were prescribed by physicians along with lifestyle, but most either didn't know how to pursue a healthy lifestyle or what that actually meant, or chose to take the easy route and just use them as an appetite suppressant. In both cases, the challenges that were created with the GLP-1 drugs have become more apparent today than they were two years ago or at the time in between, which is when somebody uses a GLP-1 drug without modifying their lifestyle, it has a very dramatic impact on their lean muscle mass.
Speaker Change: And what it's turned out and increasingly clear is that is that it's a tool to help but not a solution for it.
Speaker Change: Consistently the drugs are prescribed by physicians along with lifestyle, but most.
Speaker Change: There didn't know how to pursue a healthy lifestyle or what that actually meant.
Speaker Change: Or chose to take the easy route and just use them as a appetite suppressant in both cases the challenges that were created with the with a G. L. P. One drugs have become more apparent today than they were two years ago at the time in between which is when.
Speaker Change: Somebody uses a GOP one drug without modifying their lifestyle.
Speaker Change: A very dramatic impact on the lean muscle mass. So you can lose up to 40% of your lean muscle mass.
Daniel Chard: So, you can lose up to 40% of your lean muscle mass or the weight lost in lean muscle mass. And the other thing that...the other part of the GLP-1 regimen that was not understood until more recently is that most... are not interested in staying on a drug for the rest of their lives, and as a result, 74% of GLP-1 patients. stop taking the drug after one year, and that those who stop taking it, unless they engage in a lifestyle modification, regain the weight back within the first year. And so what we are seeing with our coaches, now that they have an understanding of that, is an ability to bring in some of those, what we refer to as off-GLP, off-ramp, prospective clients and have them engage in the Opti-VIA program.
The weight loss and lean muscle mass.
Speaker Change: And the other thing that the other part of the <unk> regimen that was not understood until.
Speaker Change: More recently.
Speaker Change: Is that.
Speaker Change: Most.
Speaker Change: They are not interested in staying on drug for the rest of their lives and as a result of 74%.
Speaker Change: Of <unk> patients.
Speaker Change: Stop taking.
Speaker Change: Taking the drug after one year and that those who stopped taking it unless they engage in a <unk>.
Speaker Change: <unk> style modification regain the weight back within the first year and so what we are saying with our coaches now that they have an understanding of that is.
Speaker Change: And the ability to bring in some of those what we referred to as off G. L P off on or off ramp.
Speaker Change: Respective clients and have them engaged in the after the program and that's what's driving some of those statistics that we mentioned in the prepared remarks, which are that roughly 50% of our coaches now.
Daniel Chard: And that's what's driving some of those statistics that we mentioned in the prepared remarks, which are that roughly 50% of our coaches now have had experience in coaching a GLP-1 client, so someone who is on or who has been on a GLP-1 drug. And also 25% of our coaches themselves have either tried or are using a GLP-1 drug. So we're seeing this as a changing environment with an increasing opportunity for our coaches to support three segments, those who don't want a GLP-1 drug to be part of their weight loss or health regimen, those who are transitioning off, so that's 74%, and those who are on and want support with their lifestyle program that works with it.
Speaker Change: Have had experience in coaching a G. L. P. One clients so someone who is on or who has been on a.
Speaker Change: Jill P. One drug.
Speaker Change: And I'm also a 25% of our coaches themselves have either tried or are using a GOP on drugs. So we're seeing this as.
Speaker Change: A changing environment with an increasing opportunity for our coaches to support our three segments, those who don't want or Jill P. One drug to be part of their weight loss or health regimen, those who are transitioning off so that 74% and those who are on and what support.
Speaker Change: With their lifestyle program.
Speaker Change: That works with it so it's a less kind of there are fewer questions now and more answers than we had.
Doug Lane: So there are fewer questions now and more answers than we had previously, and our coaches are starting to perform accordingly. No, it's very helpful. That's good color. I mean, I get it the landscape shifted dramatically with the introduction of GLP ones. And so you've adopted and so now your coaching your coaches are shipping as well in their ability to sell to all three of those clientele.
Speaker Change: Previously in our coaches are starting to to perform accordingly.
Speaker Change: No. That's very helpful. That's good color I mean, I get it the landscape shifts dramatically with the introduction of G. L. P ones and so you adopt it and so now you're coaching you coaches are shifting as well in our ability to sell to all three of those clientele, but this is a lot of products now just out of curiosity, how much is a monthly call.
Daniel Chard: But this is a lot of products now just out of curiosity, how much is a monthly cost of being fully on the GLP one and the supporting nutritional program? Well, actually, the majority of the clients who are on a GLP-1 drug or have transitioned off and want to continue their weight loss, the majority are using our 5-in-1 programs or classic programs. Some of them also add the active line, which is not a significant cost, but think about the monthly cost of being on the 5-in-1 program is roughly $400, if you break that down into how much it is per meal is actually quite reasonable, because that's feeding them 80% of their food in a given day.
Speaker Change: Cost of being fully on the G. L P. One and the supporting nutritional programs.
Speaker Change: Well actually the majority of the clients who are on.
Speaker Change: On the G. L P. One drug or have transitioned off and want to continue their weight loss.
Speaker Change: The majority of our using our five and one programs are classic programs. Some of them are also add the active line, which is not a significant cost but the.
Speaker Change: As you think about the monthly cost of being on the five in one program is roughly $400. If you break that down into how much it is.
Speaker Change: Per meal is actually quite reasonable is that's feeding them 80% of their food.
Daniel Chard: So five out of the six meals is enough to be a program. So the change has not been dramatic, and the impact and the benefits of adding either the active product or transitioning to the Ascend line is actually very much in line with what they have paid in the past.
Speaker Change: Given day, so five out of the six mills is a after the program. So that the change has not been a dramatic and the impact and the benefits of adding <unk>.
Speaker Change: Neither the active product or transitioning to this online is actually very much.
Speaker Change: <unk> in line with what they have.
Speaker Change: Paid in the past.
Speaker Change: Okay and have you talked about with life empty charges for the G. L. P. One monthly.
Daniel Chard: Okay, and have you talked about the life MP charges for the GLP-1 monthly? LifeMD is going, there's a subscription cost to use their telehealth service. which is less than $20 I think. Yeah, a month, yeah. A month, yeah. Yeah. And then the, you know, they have some, a variety of price plans for their products, but the majority of people now, I think this is true of our coaches who use them as well, are covered through their, through their insurance. And most of our coaches, or the clients of our coaches who are using a GLP-1 drug are using a primary care physician and their own insurance.
Speaker Change: Ah well F&B is going there.
Speaker Change: There, there's a a subscription cost to use their telehealth service.
Speaker Change: Which is less than $20 I think.
Speaker Change: Yeah, Yeah, Yeah, Yeah, and and then the.
Speaker Change: They they have some a variety of of price plans for their products, but the majority of people now and I think this is true of our coaches who use them as well are covered through their through their insurance and most of our our coaches are the clients of our coaches.
Speaker Change: <unk>, who are using a G. L P one drug or using a primary care physician and their own insurance.
Daniel Chard: So we have about, you know, we'll just say a majority who are using their own physician services, but we have a complete offer that allows us to use LifeMD where necessary.
Speaker Change: We have about.
Speaker Change: No.
Speaker Change: Uh huh.
Speaker Change: Well, just say majority who are using their own physician services, but we have a complete offer that allows us to use life M D where necessary.
Speaker Change: Okay. That's helpful well, it's good to hear about the new coach cohorts and once we have both.
Daniel Chard: Okay, that's helpful. Well, it's good to hear about the new coach cohorts and hopefully it bodes well for 2026 and beyond. Thank you. Thanks, Doug. Thank you. We've reached the end of our question and answer session.
Speaker Change: Dwell for a 2026 and beyond thank you.
Speaker Change: Thanks, Doug.
Speaker Change: Thank you we've reached end of our question and answer session I'd like to turn the floor back over for any further or closing comments.
Daniel Chard: I'd like to turn the floor back over for any further or closing comments. Thank you. I just wanted to say that we appreciate your questions and for the opportunity to further discuss the progress in our business transformation. And as we adjust our model and train our coaches, and continue to refine our offer, we're focusing on better meeting the needs of customers in this changing environment. But continue to emphasize that today we understand in a far deeper way how our lifestyle program integrates with those who are on GLP-1 drugs transitioning off, or those who choose not to use them.
Speaker Change: Thank you I just wanted to say that we appreciate your questions and for the opportunity to further discuss the progress in our business transformation and as we adjust our model and train our coaches and continue to refine our offer we've.
Speaker Change: We're focusing on better meeting the needs of customers in this changing environment, but.
Continue to emphasize that.
Speaker Change: We understand.
Speaker Change: A far deeper way, how our lifestyle program integrates with those who are on G. O P. One drives transitioning off or those who choose not to use them. So we look forward to continuing our efforts to improve productivity as we move forward and we'll provide you with additional details regarding our progress on our next call or for those of you who are participating in.
Operator: So we look forward to continuing our efforts to improve productivity as we move forward, and we'll provide you with additional details regarding our progress in our next call, or for those of you who are participating in investor conferences that we'll be on, we will see you there as well. Thank you, everyone, and have a great day. Thank you. That does conclude today's teleconference and webcast. You may disconnect your line at this time and have a wonderful day. We thank you for your participation today.
Speaker Change: Investor conferences that will be on well, we will see you there as well. Thank you everyone and have a great day.
Speaker Change: Thank you that does conclude today's teleconference and webcast.
Speaker Change: Connect your line at this time and have a wonderful day, we thank you.
Speaker Change: For you for your participation today.