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FITLIFE BRANDS, INC. (FTLF)·Q1 2025 Earnings Summary

Executive Summary

  • Revenue of $15.9M (-4% YoY; +6% QoQ) modestly beat consensus ($15.8M*) while diluted EPS of $0.20 missed consensus ($0.245*) and Adjusted EBITDA of $3.4M was below consensus ($3.61M*) .
  • Mix skewed further to online (67% of revenue; $10.6M), sustaining profitability but consolidated gross margin declined 90 bps YoY to 43.1% amid targeted promotional support for MusclePharm and product-mix pressure at MRC .
  • Legacy FitLife delivered double-digit online growth and margin expansion; MRC revenue fell 11% on tough comps (Dr. Tobias down 11%), while MusclePharm wholesale declined (one large customer) offset by +33% online; Vitamin Shoppe Pro Series pilot launched in March .
  • Balance sheet strengthened: net debt ~$6.0M; net leverage ~0.4x TTM Adjusted EBITDA; management reiterated expectation for organic revenue growth in 2025 and flagged potential Russell 2000 inclusion as a stock catalyst .

Values marked with * retrieved from S&P Global.

What Went Well and What Went Wrong

What Went Well

  • Legacy FitLife revenue +5% YoY with online +11% and wholesale +2%; gross margin rose to 44.6% and contribution margin improved to 43.4% (“strong growth in online revenue…most profitable part of our business”) .
  • Net leverage ~0.4x TTM Adjusted EBITDA with continued cash generation; “financial flexibility to complete a sizable acquisition” .
  • April trends encouraging: “Total company revenue and adjusted EBITDA were up year-over-year in the month of April,” albeit with caution on wholesale PO timing .

What Went Wrong

  • MRC revenue -11% YoY as Dr. Tobias -11% and skin care -14% (or -9% cc); gross margin fell to 45.4% on product mix .
  • MusclePharm wholesale down 41% due to a large customer’s weak sell-through following Q4 promotional incentives; gross margin fell to 30.1% despite +33% online .
  • EPS and EBITDA missed consensus (EPS $0.20 vs $0.245*; EBITDA $3.31M vs $3.61M*), with elevated Q1 M&A expenses and promotional allowances weighing on profitability .

Values marked with * retrieved from S&P Global.

Financial Results

Consolidated P&L and Margins (quarters ordered oldest → newest)

MetricQ3 2024Q4 2024Q1 2025
Revenue ($USD)$15.977M $15.013M $15.936M
Gross Profit ($USD)$7.001M $6.212M $6.874M
Gross Margin (%)43.8% 41.4% 43.1%
Adjusted EBITDA ($USD)$3.588M $3.100M $3.416M
Net Income ($USD)$2.126M $2.1M $2.018M
Diluted EPS ($)$0.43 (split-adjusted) $0.21 (split-adjusted) $0.20 (split-adjusted)

YoY Comparison

MetricQ1 2024Q1 2025
Revenue ($USD)$16.549M $15.936M
Gross Profit ($USD)$7.287M $6.874M
Gross Margin (%)44.0% 43.1%
Adjusted EBITDA ($USD)$3.653M $3.416M
Net Income ($USD)$2.160M $2.018M
Diluted EPS ($)$0.21 (split-adjusted) $0.20 (split-adjusted)

Performance vs Wall Street Consensus (S&P Global)

MetricConsensus (Q1 2025)Actual (Q1 2025)Beat/Miss
Revenue ($USD)$15.772M*$15.936M Beat
Primary EPS ($)$0.245*$0.20 Miss
EBITDA ($USD)$3.607M*$3.309M*Miss

Values marked with * retrieved from S&P Global.

Segment/Brand Breakdown

Brand GroupMetricQ1 2024Q4 2024Q1 2025
Legacy FitLifeTotal Revenue ($USD)$6.961M $5.322M $7.299M
Legacy FitLifeGross Margin (%)42.1% 39.7% 44.6%
Legacy FitLifeContribution ($USD)$2.848M $2.056M $3.169M
MRC (Dr. Tobias + Skin Care)Total Revenue ($USD)$7.493M $6.872M $6.674M
MRCGross Margin (%)47.0% 48.7% 45.4%
MRCContribution ($USD)$2.458M $2.547M $2.236M
MusclePharmTotal Revenue ($USD)$2.095M $2.819M $1.963M
MusclePharmGross Margin (%)40.0% 26.5% 30.1%
MusclePharmContribution ($USD)$0.753M $0.630M $0.416M

KPIs

KPIQ3 2024Q4 2024Q1 2025
Online Sales ($USD)$10.816M $10.074M $10.630M
Online Mix (% of Revenue)67.7% 67.1% 66.7%
Wholesale Sales ($USD)$5.161M $4.939M $5.306M
Active Subscribers (units)——~104,000
Subscriptions as % of Online Revenue——~30%
Advertising & Marketing ($USD)$1.093M $0.979M $1.053M
Net Debt ($USD)~$9.5M ~$8.6M ~$6.0M
Net Leverage (TTM Adj. EBITDA)~0.7x ~0.6x ~0.4x

Guidance Changes

MetricPeriodPrevious GuidanceCurrent CommentaryChange
Consolidated RevenueFY 2025Expect organic revenue growth “Deliver organic revenue growth…in 2025” (no formal guidance) Maintained
Consolidated EBITDAFY 2025Expect EBITDA growth No formal guidance; reiterated organic growth ambition Maintained
Q1 Adjusted EBITDAQ1 2025~Flat YoY Actual $3.416M vs $3.653M in Q1’24 Underperformed
Formal Guidance PolicyOngoingNo formal numeric guidance Unchanged: no formal guidance Maintained

Earnings Call Themes & Trends

TopicPrevious Mentions (Q3’24 and Q4’24)Current Period (Q1’25)Trend
Tariffs/MacroDetailed tariff exposure; ingredient sourcing shift; potential 0–11% product-level COGS impact; forward buys to mitigate 90-day tariff de-escalation noted; inventory at all-time high from pre-tariff procurement Easing near-term, continue mitigation
GNC relationshipDispute in Dec; direct shipping to franchisees; settlement Jan 23; restocking DCs Relationship “very, very positive”; DCs restocked; continued support Stabilized/recovered
MusclePharm growth strategyPromotions lowering reported margin; Pro Series pilot; RTD launch; rebranding Wholesale softness at one customer; online +33%; Vitamin Shoppe pilot bumpy start but ongoing; streaming ads Mixed execution; ongoing investment
MRC performanceStrong margin expansion, contribution up despite rationalized skin care footprint Tough YoY comps: revenue -11%, margin down on mix; advertising optimized Near-term pressure on comps
Online subscriptionsDr. Tobias subscription surge in Feb–Mar’24 due to deeper first-order discounts ~104k active subscribers; 25–35% of online revenue from subscriptions Structural driver; normalization vs tough comps
M&A pipelineActive deal evaluation; balance sheet capacity Elevated Q1 M&A expense; “review a number of M&A opportunities” Active; potential catalyst
Index inclusion—Likely addition to Russell 2000 per banks’ analysis; prelim list May 23; rebalance Jun 27 Potential near-term stock flow catalyst
Product launchesBars and Pro Series planned; RTD launch coming RTD launched late March; distributor adoption; pilot in gyms and chains Building distribution; impact to ramp in Q2

Management Commentary

  • “Strong for our Legacy FitLife business, but somewhat challenged for MRC and MusclePharm…strong growth in online revenue…helped drive increases in gross margin and contribution” — Dayton Judd .
  • “Net debt basis…approximately only 0.4x adjusted EBITDA…financial flexibility to complete a sizable acquisition” .
  • “We intend to continue investing in promotional support [for MusclePharm]…gross margin and contribution margin…may fluctuate” .
  • “Total company revenue and adjusted EBITDA were up year-over-year in the month of April…results may not be representative” .

Q&A Highlights

  • 2025 growth: Management “happy to reiterate” expectation for organic revenue growth; no formal numeric guidance .
  • Margins outlook: Company-level gross margin historically 42–45%; MusclePharm ~30% while promotional investments continue; Legacy margins benefitting from stronger online mix and direct-to-franchisee pricing .
  • MusclePharm wholesale dynamics: Promotions are GAAP price reductions reducing reported revenue/gross margin; support pulled back where ROI weak; seeing improved orders from the large customer in Q2-to-date .
  • Vitamin Shoppe Pro Series: Pilot delayed to full shelf placement by early April; ongoing marketing via streaming; longer pilot given initial bumpy start .
  • Tariffs: Product-specific impact ranges 0–10–11%; mitigation via alternative sourcing (e.g., India) and pre-tariff buys; recent 90-day de-escalation helpful .

Estimates Context

  • The quarter modestly beat on revenue but missed on EPS and EBITDA versus S&P Global consensus. Adjusted EBITDA fell ~6% YoY (vs prior commentary for ~flat), driven by promotional allowances in MusclePharm and elevated M&A expenses, partially offset by Legacy FitLife online strength .
  • With April revenue and Adjusted EBITDA up YoY, estimate trajectories may stabilize, but continued promotional investment and MRC mix headwinds argue for near-term prudence on margin forecasts .

Values marked with * retrieved from S&P Global.

Key Takeaways for Investors

  • Mix shift to online (67%) and Legacy margin expansion underpin quality of earnings; however, consolidated margins near-term capped by MusclePharm promotions and MRC mix .
  • EPS/EBITDA miss vs consensus reflects deliberate growth investments and M&A costs; watch for efficiency of promotional spend and contribution progression, especially at MusclePharm .
  • April up YoY is a constructive data point; monitor Q2 wholesale PO cadence and Vitamin Shoppe pilot read-through for revenue visibility .
  • Balance sheet optionality (net leverage ~0.4x) positions FTLF to pursue accretive M&A; deal execution is a potential catalyst and risk factor .
  • MRC’s tough comps likely fade post-March; expect easier comparisons and improved mix as skin care rationalization anniversaries .
  • Potential Russell 2000 inclusion could drive incremental demand and liquidity near the reconstitution window .
  • No formal guidance policy persists; frame expectations around qualitative drivers (mix, promotions, tariffs) and observed monthly trends rather than rigid quarterly targets .

Appendix: Split-Adjusted EPS Note

  • Company executed a 2-for-1 forward stock split effective Feb 7, 2025; all per-share amounts herein are split-adjusted as noted in filings and calls .