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LifeMD, Inc. (LFMD)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 2024 delivered record consolidated revenue of $64.3M (+43% YoY) and adjusted EBITDA of $9.0M (+78% YoY), with telehealth revenue up 60% and telehealth adjusted EBITDA of $5.9M (+396% YoY) .
  • Gross margin compressed to ~85% due to one-time pharmacy onboarding costs and revenue mix; management expects normalization to 88–90% in 2025 .
  • Introduced 2025 guidance: revenue $265–$275M and adjusted EBITDA $30–$32M; Q1 2025 revenue $61–$63M and adj. EBITDA $5–$7M .
  • Strategic catalysts: weight management program momentum (75k patients), LillyDirect Zepbound self-pay integration, Medicare launch (April), and ramping HRT and behavioral health offerings .

What Went Well and What Went Wrong

What Went Well

  • Telehealth growth and profitability: “Telehealth achieved 60% year-over-year growth… telehealth adjusted EBITDA increased 396% to $5.9 million.” — CFO Marc Benathen .
  • Weight management platform: “We are especially pleased with the growth of our weight management program… Medicare launch is slated for April 1 and could be a significant growth driver…” — CEO Justin Schreiber .
  • WorkSimpli stabilization: “WorkSimpli… returned to growth… adjusted EBITDA exceeded $1 million per month during the quarter…” — CFO Marc Benathen .

What Went Wrong

  • Gross margin compression: consolidated gross margin ~85% (vs 88% prior-year) driven by pharmacy onboarding and mix; management expects return to 88–90% in 2025 .
  • Continued GAAP loss: GAAP diluted loss per share of ($0.02) in Q4 (improved from ($0.12) YoY) .
  • Regulatory and compounding uncertainty: Ongoing FDA-related questions around compounded GLP‑1s; management emphasized compliance and patient-first access while the landscape evolves .

Financial Results

Consolidated and Telehealth Metrics (Quarterly)

MetricQ2 2024Q3 2024Q4 2024
Total Revenue ($USD Millions)$50.662 $53.393 $64.255
GAAP Diluted EPS ($)($0.19) ($0.14) ($0.02)
Adjusted Diluted EPS ($)$0.06 $0.09 $0.21
Gross Margin (%)90.1% 90.6% 85.3%
Adjusted EBITDA ($USD Millions)$2.503 $3.690 $8.982
Telehealth Adjusted EBITDA ($USD Millions)$0.820 $2.458 $5.870

Segment and Subscriber Breakdown

MetricQ2 2024Q3 2024Q4 2024
Telehealth Revenue ($USD Millions)$37.432 $40.276 $49.889
WorkSimpli Revenue ($USD Millions)$13.230 $13.118 $14.365
Telehealth Active Subscribers253,759 268,739 275,267
WorkSimpli Active Subscribers158,514 160,864 163,743
Total Active Subscribers412,273 429,603 439,010

KPIs and Cash Flow

KPIQ2 2024Q3 2024Q4 2024
Cash Balance ($USD Millions)$35.703 $37.587 $35.005
Operating Cash Flow ($USD Millions)$4.540 $6.203 $1.568

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Total RevenueQ1 2025N/A$61–$63M New
Telehealth RevenueQ1 2025N/A$48–$49M New
Adjusted EBITDAQ1 2025N/A$5–$7M New
Telehealth Adjusted EBITDAQ1 2025N/A$3–$4M New
Total RevenueFY 2025N/A$265–$275M New
Telehealth RevenueFY 2025N/A$205–$213M New
Adjusted EBITDAFY 2025N/A$30–$32M New
Telehealth Adjusted EBITDAFY 2025N/A~$20M New
Adjusted EBITDAFY 2024$13–$15M (prior) Narrowed to $13–$14M (Nov update) Narrowed

Earnings Call Themes & Trends

TopicPrevious Mentions (Q2 2024 and Q3 2024)Current Period (Q4 2024)Trend
AI/Tech InitiativesQ2: >1B tokens used in July for care ops; 200% response-time improvement . Q3: Continued expansion of AI and insurance capabilities .Continued platform enhancements; focus on scaling across new care offerings .Expanding
Insurance & MedicareQ2: Began accepting commercial insurance; enrolled in Medicare . Q3: Target national private payer presence; Medicare launch in H1’25 .Medicare fee-for-service launch slated April; goal of ~150M covered lives by end-2025 .Accelerating
GLP‑1 Access & Market DynamicsQ2: ~50% PA approval rates for Zepbound/Wegovy increasing . Q3: Compounded GLP‑1 uncertainty; branded access benefits LifeMD .Zepbound PA approvals approaching ~60%; LillyDirect self-pay integration; improving private insurance coverage .Improving coverage/self-pay access
PharmacyQ2: Building 50-state pharmacy for 2024 launch . Q3: Affiliated national pharmacy opened; projected ~$5M annual savings .Onboarding costs impacted Q4 margins; normalized margins expected in 2025 .Operationalized; cost normalization ahead
HRT (Hormone Therapy)Q2: RexMD HRT soft launch planned . Q3: HRT launched; retention expected strong .Clear scaling path; conservative 2025 revenue assumed; high patient experience quality .Scaling
Behavioral HealthNot in Q2; Q3: considering strategy .Entering market led by Julian Cohen; integrated teletherapy/psychiatry .New segment launch
WorkSimpliQ2: pressured; plan to return to peak run-rate EBITDA by YE . Q3: stabilized, returning to growth; divestiture considered .>$1M/month adjusted EBITDA in Q4; continued growth outlook .Recovering
Regulatory/Legal (Compounding)Q3: FDA compounding discussion; belief compounding retains role .Will follow FDA/legal guidance; patient-first access; evolving landscape .Regulatory watch

Management Commentary

  • “LifeMD had a great fourth quarter… record quarterly revenue and adjusted EBITDA… Medicare launch is slated for April 1 and could be a significant growth driver… integration with LillyDirect to provide another more affordable route to Zepbound” — Justin Schreiber, CEO .
  • “Telehealth achieved 60% year-over-year growth… telehealth adjusted EBITDA increased 396% to $5.9 million… introducing 2025 guidance for consolidated revenue of $265–$275 million and consolidated adjusted EBITDA of $30–$32 million.” — Marc Benathen, CFO .
  • On Q4 gross margin: “Onboarding of a new pharmacy… front-loading expense… gross margin to return to 88%–90% going forward.” — CFO Marc Benathen .
  • On GLP‑1 approvals: “Zepbound prior authorization approval rates approaching 60%… LillyDirect integration for self-pay vials.” — CEO Justin Schreiber .
  • On HRT scale: “Clear pathway to a couple hundred patients a day… business could be as big as our ED or entire RexMD business.” — CEO Justin Schreiber; CFO noted conservative assumptions for 2025 .

Q&A Highlights

  • GLP‑1 economics and LillyDirect: Integration with LillyDirect’s pharmacy provider (Gifthealth) to streamline Zepbound self-pay access; LifeMD monetizes care services, not pharmacy margin in that flow .
  • Gross margin compression drivers: One-time pharmacy onboarding, inventory expense; normalization expected to 88–90% in 2025 .
  • WorkSimpli outlook: Consistent ~$1M/month EBITDA; improvements from replatforming and marketing execution; divestiture still strategic consideration .
  • Medicare/insured lives contribution: 2025 contribution modeled mid-single-digit % of revenue initially, scaling materially over 3–4 years as covered lives expand .
  • FDA/compounding stance: Will follow FDA and legal guidance; maintain patient access, evaluate personalized compounded routes without IP violations .

Estimates Context

  • S&P Global consensus for Q4 2024 (revenue, EPS, EBITDA) was unavailable at time of writing due to SPGI rate-limit errors; we attempted retrieval for Q4 2024 and the prior two quarters. Values retrieved from S&P Global are unavailable at this time.*
  • Given the absence of consensus data, we cannot quantify beats/misses versus Wall Street for Q4 2024. Company guidance for Q4 in November (revenue $57–$58M; adj. EBITDA $6.5–$7.0M) was exceeded by actuals ($64.3M revenue; $9.0M adj. EBITDA), indicating an internal guidance beat .

Key Takeaways for Investors

  • Q4 demonstrated strong operating momentum: revenue acceleration, telehealth profitability, and WorkSimpli stabilization; margin headwinds were transient and tied to pharmacy onboarding .
  • 2025 setup is favorable: early-year revenue/EBITDA guidance plus Medicare launch and LillyDirect integration should support weight management access and retention .
  • Watch GLP‑1 coverage trends: rising PA approvals (approaching ~60%) and self-pay price cuts enhance affordability—positive for patient conversion and program economics .
  • HRT expansion under RexMD appears scalable with attractive unit economics and retention; management guided conservatively, implying potential upside if execution continues .
  • Behavioral health entry broadens platform TAM and cross-sell potential, leveraging insurance infrastructure and primary care footprint .
  • Near-term trading implication: Expect positive sentiment on guidance beat vs internal targets and strategy catalysts (Medicare/LillyDirect), with medium-term thesis tied to margin normalization and scaling insured-lives programs .
  • Monitor regulatory signals around compounding and payer coverage; LifeMD aims to remain compliant while maximizing branded access and patient outcomes .

Appendix: Additional Q4 Detail

  • Q4 Telehealth revenue: $49.889M; WorkSimpli revenue: $14.365M .
  • Q4 Telehealth subscribers: ~275,267 (+27% YoY); WorkSimpli: ~163,743 (+3% YoY) .
  • Q4 GAAP net loss to Adjusted EBITDA reconciliation total: $8.982M adjusted EBITDA .
  • Cash at 12/31/24: $35.0M .