Executive Summary

Q2 FY25 was an inflection quarter: revenue rose 31.3% YoY to a record $67.8M (+43.5% QoQ), driven by U.S. demand for the MindBody GLP-1 System; gross margin expanded 190 bps to 80.5% and adjusted EBITDA more than doubled to $6.5M (9.6% margin). Management raised FY25 revenue, EBITDA, and EPS guidance and declared a $0.04 dividend .
Americas revenue grew 46.3% YoY to $57.2M while APAC/Europe fell 15.5% (FX headwind), reflecting product-led momentum in the U.S. and ongoing international softness; Active Accounts surged 25% sequentially in the Americas as enrollments hit a five-year high .
Near-term headwind: elevated commissions/incentives (48% of revenue in Q2) tied to promotional program qualifications that run through March; management expects normalization to ~44% in Q4, with EBITDA flow-through similar or slightly better in the back half .
Stock-reaction catalysts: guidance raise (revenue to $235–$245M; adj. EBITDA to $21–$24M; adj. EPS to $0.72–$0.88), rapid adoption/subscription attach for MindBody, and international rollout beginning March (Japan) and April (other markets) .
Consensus context: S&P Global consensus for Q2 FY25 (revenue/EPS) was unavailable at time of analysis; beats/misses vs. estimates cannot be determined (SPGI API quota exceeded).

What Went Well and What Went Wrong

What Went Well
- Record Q2 revenue ($67.8M), strong profitability (adj. EBITDA $6.5M, 9.6% margin) on MindBody GLP-1 strength; management highlighted “transformational impact” and “outstanding” results .
- Americas growth and engagement: Americas revenue +46.3% YoY; Active Accounts +25% sequentially in Americas with highest enrollments since 2019; subscriptions >70% overall and even higher for MindBody .
- Gross margin expanded 190 bps YoY to 80.5% on favorable mix (MindBody), lower inventory obsolescence/variance; supply chain capacity increased and backlog cleared by late December .
What Went Wrong
- APAC/Europe revenue fell 15.5% YoY (−13.7% constant currency), reflecting persistent international softness and FX headwinds (primarily Japan) .
- Commissions/incentives rose to 48% of revenue (from 42.1%) due to higher qualifications and mix shift; management expects elevated incentives to persist into Q3 before normalizing in Q4 ~44% .
- Launch-related stock-outs (Nov–mid-Dec) created lumpiness; January softer given December shipment catch-up (multiple systems received late December) .

Financial Results

Metric	Q2 2024	Q1 2025	Q2 2025
Revenue ($M)	$51.624	$47.214	$67.762
GAAP Diluted EPS ($)	-$0.05	$0.14	$0.19
Adjusted Diluted EPS ($)	$0.10	$0.15	$0.22
Gross Margin (%)	78.6%	79.9%	80.5%
Commissions & Incentives (% of rev)	42.1%	43.0%	48.0%
SG&A (% of rev)	38.9% (Adj: 33.8%)	31.4% (Adj: 31.1%)	27.5% (Adj: 26.7%)
Operating Income ($M)	-$1.261	$2.570	$3.428
Adjusted EBITDA ($M)	$3.089	$4.428	$6.474
Adjusted EBITDA Margin (%)	~6.0%	9.4%	9.6%
Cash & Equivalents ($M)	—	$14.596 (9/30/24)	$21.595 (12/31/24)
Debt	—	None	None

Growth vs Prior Year / Prior Quarter	YoY vs Q2 2024	QoQ vs Q1 2025
Revenue Growth	+31.3%	+43.5%
Gross Margin Change (bps)	+190 bps	+60 bps
Adjusted EBITDA Growth	+109.6%	+46.2%
GAAP Diluted EPS Change ($)	+$0.24	+$0.05
Adjusted EPS Change ($)	+$0.12	+$0.07

Segment/Regional Revenue

Region ($M, %)	Q2 2024	Q1 2025	Q2 2025
Americas	$39.065 (76%)	$36.892 (78%)	$57.154 (84%)
Asia/Pacific & Europe	$12.559 (24%)	$10.322 (22%)	$10.608 (16%)
Total	$51.624 (100%)	$47.214 (100%)	$67.762 (100%)

Key KPIs (Active Accounts at Quarter-End)

KPI	Q4 2024 (6/30/24)	Q1 2025 (9/30/24)	Q2 2025 (12/31/24)
Active Independent Consultants (Total)	49,000	47,000	52,000
• Americas	31,000	31,000	35,000
• APAC/Europe	18,000	16,000	17,000
Active Customers (Total)	79,000	76,000	94,000
• Americas	63,000	61,000	80,000
• APAC/Europe	16,000	15,000	14,000
Total Active Accounts	128,000	123,000	146,000

Notes: Subscriptions >70% overall; MindBody carries an even higher subscription rate; >50% of new MindBody buyers joined on subscription in Q2 despite stock-outs .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue	FY25	$200–$210M	$235–$245M	Raised
Adjusted EBITDA	FY25	$18–$21M	$21–$24M	Raised
Adjusted EPS (diluted)	FY25	$0.70–$0.80	$0.72–$0.88	Raised
Tax Rate	FY25	~25%–27%	~22%–24%	Lowered
Dividend per share	Quarterly	$0.04 (paid 12/16/24)	$0.04 (pay 3/17/25; record 3/3/25)	Maintained

Management reiterated the guidance raised on Jan 8 when it preannounced Q2 revenue; at Q2 results it further raised EBITDA and EPS ranges and reiterated revenue .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q4 2024, Q1 2025)	Current Period (Q2 2025)	Trend
Product performance (MindBody GLP-1)	Q4: Teased upcoming launch; focus on innovation and profitability . Q1: Record bookings in October; sold out in 2 weeks; on backorder; price points and strong demand .	Record Q2 revenue; rapid sell-through; backlog cleared mid/late Dec; capacity expanded; strong cross-sell into core lines .	Strongly improving
Supply chain/inventory	Q1: Stock-outs; 7-week restock timeline .	Cleared backlog by end-Dec; “secured sufficient manufacturing capacity” to meet demand .	Improving
Regional trends/FX	Q1: APAC/Europe down 19.7% YoY, FX headwinds (Japan) .	APAC/Europe down 15.5% YoY; −13.7% constant currency; FX still a headwind .	Stabilizing/soft
Compensation/social sellers	Q1: Evolve plan enhancements; new sharing bonus; accelerators; consultants healthcare offer .	Elevated incentives through March; social sellers/influencers increasingly engaged .	Near-term cost up; channel broadening
R&D/Science validation	Q1: Human clinical: +140% GLP-1, visceral fat reduction, muscle preservation .	In vitro synergy: +22 new genes activated with Healthy Weight Stack; international in vitro confirms GLP-1 activation; international launches Mar/Apr .	Expanding validation
Technology/digital	—	Hired Chief Information & Innovation Officer (Todd Thompson) to scale digital/infra; focus on tools and brand awareness .	Building capabilities
Capital allocation	Q4/Q1: Dividends and buybacks continued .	$0.04 dividend; buybacks YTD $1.1M; special dividend “option” under consideration vs brand/inventory investment .	Balanced; optionality maintained

Management Commentary

“Second quarter results were outstanding with year-over-year revenue growth exceeding 31% to a record $67.8 million, driven by tremendous demand for the MindBody GLP-1 System… We are just at the beginning of this exciting journey and with a strong balance sheet and leverageable platform, are well positioned for long-term success.” – Steve Fife, President & CEO .
“Our performance in Q2 significantly exceeded initial expectations… adjusted EBITDA more than doubling to $6.5 million or 9.6% of revenue… We have now secured sufficient manufacturing capacity and strengthened our supply chain… Our active accounts metrics are particularly encouraging, including the highest number of enrollments in a quarter since 2019.” – Steve Fife .
“Subscription metrics are also trending up and are currently above 70%… MindBody… is positioned as a long-term lifestyle product… All those who lost weight in the clinical notably maintain their muscle mass.” – Steve Fife .
“Gross margin was 80.5%… increase… due to product mix (strong sales of MindBody) and lower inventory obsolescence/variance… Adjusted EBITDA… 9.6% of revenues… we now expect FY25 adjusted EBITDA $21–$24M and adjusted EPS $0.72–$0.88.” – Carl Aure, CFO .

Q&A Highlights

Incentives expected to remain elevated in Q3 due to existing program qualifications through March; normalizing to ~44% by Q4 .
EBITDA flow-through expected to be consistent or slightly better in H2; further operating leverage anticipated into FY26 .
Monthly cadence: October a record month; stock-outs hampered November to mid-December; backlog cleared by end-December; January softer given December shipment catch-up .
Subscription attach: company-wide >70%; MindBody “low double digits” higher than company average; >50% of new MindBody customers joined on subscription in Q2 .
Stacks/mix: 80–85% of MindBody revenue was stand-alone in Q2; mix expected to shift toward stacks (e.g., with Protandim/collagen) as science and selling motion evolve .
International rollout: Japan toward late March; broader markets in April; international in vitro results consistent with U.S. formula .
Capital allocation: special dividend remains an option but balanced against brand investments and inventory build for global launches .

Estimates Context

Wall Street consensus estimates (S&P Global) for Q2 FY25 revenue and EPS were unavailable at time of analysis due to SPGI API quota limitations. As a result, we cannot quantify beats/misses vs. consensus for this quarter.

Key Takeaways for Investors

Product-led acceleration: MindBody GLP-1 is driving record revenue, higher gross margins, and strong subscription attach; momentum likely supported by international launches beginning March/April .
Profitability trajectory intact despite near-term incentive pressure; incentives should normalize by Q4 (~44%), supporting margin expansion into FY26 per management .
Mix and cross-sell benefits: early signs of stack adoption and broader portfolio halo (Protandim/collagen) should sustain revenue per consultant and gross margin tailwinds .
International is the next growth leg (U.S. >80% of revenue today); regulatory-ready formula and in vitro validation de-risk launch .
Guidance raise is material: FY25 revenue up ~17% at midpoint vs. prior, with higher EBITDA and EPS ranges; tax rate lowered; dividend maintained .
Watch APAC/Japan FX and regional recovery; Americas currently carrying growth; better balance post-international launch could reduce geographic concentration risk .
Capital allocation optionality remains (buybacks, regular dividend, potential special dividend), but inventory/brand investments may take priority near term to support scale .

Additional Source Documents Reviewed

Q2 FY25 8-K/Press Release with full financials, guidance, and reconciliations .
Q2 FY25 Earnings Call Transcript (prepared remarks and Q&A) .
Q2-related press releases: Jan 8 prelim/raise (revenue), Jan 13 synergy study, Feb 4 international in vitro, Feb 5 dividend .
Prior two quarters: Q1 FY25 results/call; Q4 FY24 results for trend/baseline .

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