Sign in

    Biote Corp (BTMD)

    Q4 2023 Summary

    Published Feb 5, 2025, 2:18 AM UTC
    Initial Price$5.08October 1, 2023
    Final Price$4.94December 31, 2023
    Price Change$-0.14
    % Change-2.76%

    What went well

    • Vertical integration through the acquisition of Asteria Health is expected to lead to margin improvement and increased EBITDA in the second half of 2024. Biote plans to be fully integrated by the end of 2024, shifting production to Asteria and realizing the benefits of manufacturing their own pellets. , ,
    • Expansion into the large and underserved men's health market, with over 45 million men over age 40 and only 10%-12% receiving treatment, provides significant growth opportunities. Biote's focus on male procedures is expected to be accretive and expand their consumer base over time.
    • Rollout of BioteRx, offering new hormone and therapeutic wellness products, strengthens Biote's competitive position by making them a single-source provider for practitioners. Initially rolled out to 100 clinics in February, the program is expected to contribute to accelerating growth, with modest impact in 2024 and a more meaningful impact in 2025. , , ,

    What went wrong

    • Biote's nutraceutical revenue declined due to a major distributor exiting the business and challenges with their third-party managing the Amazon relationship in Q4, which may continue to impact revenues in the near term as the company transitions to in-house distribution. ,
    • The rollout of BioteRx wellness therapeutics is in its very early stages, with only 100 clinics onboarded in February and expected to have a modest financial impact in 2024, raising concerns about the near-term revenue growth from this initiative. , , , ,
    • The company's margin improvement from the Asteria acquisition is expected to be realized in the second half of 2024 or later, suggesting any financial impact will be delayed, which may lead to slower-than-expected profit growth in the near term. ,

    Q&A Summary

    1. Confidence in Guidance
      Q: How comfortable are you with your guidance?
      A: Management is confident in their guidance, highlighting a solid position for both core procedure business and nutras to drive revenue growth in the second half of 2024. They expect procedure revenue growth in 2024 to mimic the first half and feel comfortable with their plans baked into the guidance.

    2. Asteria Acquisition and Margin Improvement
      Q: How will the Asteria acquisition affect margins?
      A: The Asteria acquisition is strategic and accretive, expected to provide margin improvement over time as volume shifts to Asteria in the second half of 2024. Management believes the vast majority of the margin benefit and some EBITDA benefit will be realized in the second half of 2024, with full integration by the end of 2024.

    3. Amazon Distribution Shift
      Q: Explain the shifts in Amazon distribution.
      A: Management plans to bring the Amazon distribution channel in-house by the end of the first half of 2024 to improve control and management, shifting from wholesale to retail sales, which should help the business and return to growth in the second half.

    4. Expansion into Men's Health Market
      Q: How significant are the new initiatives in men's health?
      A: The men's health market is large, with over 45 million men over 40 experiencing issues and only 10% to 12% seeking treatment. The expansion is expected to be very accretive, adding value by growing the consumer base and focusing on urologists and different practitioners.

    5. Impact of BioteRx Rollout
      Q: Will new products like BioteRx materially impact growth?
      A: BioteRx is expected to enhance the core hormone business, with a modest impact in 2024 and a more significant impact in 2025 as larger numbers of clinics are rolled out. It strengthens the competitive position but is not expected to materially change economics this year.

    6. Sales Force Optimization
      Q: How is sales force optimization progressing?
      A: Progress is strong with sales force optimization into new "green space" areas. Doctors are being brought into training at a faster rate, and clinics are ramping up faster. Key talent has been hired, and data systems modernized to provide actionable insights.

    7. Online Training Acceleration
      Q: Could online training accelerate practitioner onboarding?
      A: Management has had success with a hybrid method of online training and in-person proctoring. They plan to expand this method, which they find efficient, and it could allow acceleration in the second half of the year in terms of how many practitioners can be trained.

    8. Introduction of New Products
      Q: What can you tell us about the new product offerings?
      A: Ten new products have been rolled out to 100 clinics starting in February. Providers are accepting all products, but it's early to discuss specifics or quantify impact. Categories include hormones, sexual wellness, weight loss (GLP-1s), and body composition. Impact is expected to be modest in 2024 with more meaningful contributions in 2025.

    Related Publications