Lifemd, Inc. ((LFMD)) has held its Q3 earnings call. Read on for the main highlights of the call.
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The recent earnings call for LifeMD, Inc. painted a picture of both optimism and caution. The overall sentiment was positive, with significant strategic advancements and growth potential highlighted, particularly in the telehealth sector and partnerships with major pharmaceutical companies. However, the company also faces challenges, notably in the weight management category and a decline in gross margin, which were notable concerns discussed during the call.
Telehealth Revenue Growth
LifeMD reported a robust 18% year-over-year increase in telehealth revenue, reaching $47.3 million. This growth was complemented by a 30% rise in telehealth adjusted EBITDA, showcasing the company’s successful expansion in this sector.
RexMD Subscriber Growth
The RexMD business segment showed promising signs of recovery, adding approximately 10,000 net new subscribers. This growth indicates a positive trend and a return to subscriber growth for the company.
Regulatory Approval for Pharmacy
A significant milestone was achieved with LifeMD securing regulatory approval for its nonsterile 503-A compounding pharmacy. This approval will enable the company to produce personalized medications at scale, enhancing its service offerings.
Partnerships with Pharmaceutical Companies
LifeMD has established collaborations with pharmaceutical giants Novo Nordisk and Eli Lilly. These partnerships aim to offer branded weight management therapies at reduced prices, potentially broadening the company’s market reach.
Strong Balance Sheet
The company reported its strongest balance sheet and liquidity position to date, with $23.8 million in cash and no debt. This financial strength positions LifeMD well for future investments and growth.
Weight Management Challenges
Despite the positive developments, LifeMD faces intense competition in the weight management category from low-cost compounded GLP-1 makers. This competition has exerted near-term pressure on the company.
Gross Margin Decline
The third quarter saw a decline in gross margin by 290 basis points to 88%, attributed to changes in the revenue mix. This decline is a point of concern for the company moving forward.
Revenue Revision Impact
A revision related to system migrations led to an approximate $4.6 million impact in over-recognition of revenue for the total period, highlighting the need for careful financial oversight.
Forward-Looking Guidance
Looking ahead, LifeMD provided optimistic guidance for strong growth in 2026, driven by strategic initiatives. The company anticipates fourth-quarter revenue of $45-$46 million and adjusted EBITDA of $3-$4 million. For the full year 2025, guidance includes revenue between $192-$193 million and adjusted EBITDA of $13.5-$14.5 million, representing significant increases over 2024. Key growth areas include the expansion of women’s and behavioral health offerings, the launch of the LifeMD+ membership, and the development of a more integrated platform and marketplace.
In conclusion, LifeMD’s earnings call reflected a company poised for growth, with strategic partnerships and telehealth advancements leading the way. However, challenges in the weight management sector and a decline in gross margin present hurdles that the company must address. Overall, the sentiment remains optimistic, with forward-looking guidance suggesting robust growth in the coming years.