LifeMD, Inc. Price & Performance (LFMD)

Details on the relationship between these non GAAP measures to the most comparable GAAP measures and reconciliations thereof can be found in the press release issued earlier today. Finally, I would like to remind everyone that today's call is being recorded and will be available for replay in the Investor Relations section of the company's website. I'd now like to turn the call over to LifeMD CEO, Justin Schreiber. Please go ahead, sir. Thank you, and good afternoon, everyone. After the market closed, [indiscernible] we issued an eight ks which contained a press release announcing our fourth quarter financial results. [indiscernible] and posted an updated corporate presentation on our Web site at ir.lifmd.com. LifeMD produced tremendous results in the fourth quarter that well exceeded our prior guidance. Capping off a very strong 2024. Our record financial performance was driven by growth, and increasing profitability in both our REXMD and LifeMD platforms. For the quarter, our telehealth revenue grew by 60% while our telehealth adjusted EBITDA grew by nearly fivefold. Worksimply also rebounded significantly generating more than $1,000,000 of adjusted EBITDA each month during the quarter. Consistent with our prior guidance. In addition to these strong results, we also executed several key product launches that I expect will be critical drivers of our business in the years to come including the successful launch of our male hormone replacement therapy business, the launch of our nationwide pharmacy, which is already licensed in 47 states and the continued expansion of our medical and pharmacy benefits infrastructure. [indiscernible] 2025 will be a critical year in our evolution as a leader in virtual primary care.

We expect to expand our existing capabilities as well as extend our reach into new complementary areas designed to further differentiate LifeMD as a leading provider of the highest quality, and most comprehensive virtual first healthcare. We have three strategic priorities for our business in 2025. One, solidify and grow our market leading position in delivering comprehensive weight loss and metabolic care including affordable access to prescription GLP-one medications. Two, build on the early success of our hormone replacement therapy offering we launched in 2024 on our REXSD platform, three, launch our LifeMD plus membership program and several new high value care offerings on our virtual primary care platform, and four, continue to grow our government and private payer programs as well as our electronic benefit verification and prior authorization to drive more affordable access to virtual care and prescription medications. We are very proud of the weight loss and metabolic health program that we've built on our virtual primary care platform. This program had more than 75,000 active patients as of year end and is well positioned for long term growth. Even as market dynamics change. Despite the FDA's recent decisions to remove semaglutide and tirzepat from the drug shortage list, LifeMD remains extremely well positioned to benefit long term in the weight management market.

Our focus has been and remains on providing affordable access to comprehensive obesity care and the ongoing management of clinically appropriate GLP-one and other generic drugs that can support our patients on their journey to better metabolic health. Importantly, over 85% of our weight management revenue is related to the delivery of care. Helping patients use private insurance, to access weight loss medications has been a fundamental part of our service offering since it launched in 2023. While helping patients access branded GLP-one therapies was previously difficult due to supply shortages, and lower levels of payer coverage we are seeing several encouraging trends that cause us to be very optimistic. Firstly, we are seeing a significant increase in patients getting affordable private insurance coverage for branded GLP-one medications. Especially for Zet bound, We believe this is partly due to private payer and employer coverage rates improving and to improvements we have made to our electronic benefits and prior authorization processes and overall infrastructure at LifeMD. For 18 percentage point increase in the approval rate between October and January, with ZepBound prior authorization approval rates approaching 60% over the past several months. We recently announced an integration with LillyDirect's pharmacy partner Gift Health, make it easier for patients who don't have insurance coverage to purchase where appropriate more affordable cash pay Secondly, we have seen the drug manufacturers that control the current GLP-one market begin to compete with each other in the self pay market now the supply levels have stabilized.

In the past several weeks, both Eli Lilly and Novo Nordisk the manufacturers of Zepbound and Wigovii, respectively announced price reductions to their self pay GLP-one product offerings. Bringing the price of some dose levels as low as $3.49 per month. We need to reduce the price of GLP-one medications as a result of novel and possibly more efficacious therapies coming to market. And pressure from government agencies including the FDA that care about broad access to this class of drugs. As we've said repeatedly and will say again today for emphasis, expanded coverage for branded GLP-one therapies is a great thing for LifeMD our patients and our shareholders as a result in our programs being more affordable which enables better compliance, patient outcomes, and retention rates for our programs. We are also very excited about our fee for service Medicare offerings that we'll be launching next month. [indiscernible] We've been working on the compliance and operational infrastructure for this launch for the past two years, and believe that it will be a big growth driver not only for our weight management offering but also for our broader virtual primary care offerings. There are approximately 24,500,000 Medicare beneficiaries enrolled in standalone prescription drug plans.

And a substantial number have conditions like obesity, and type two diabetes that could make them candidates for GLP receptor agonist medications. Although Part D coverage for GLP-one drugs currently requires certain comorbidities, we are optimistic that Medicare will begin covering these medications for obesity and we aim to make LifeMD the easiest and most affordable way for this population [indiscernible] to access comprehensive obesity care and these medications once coverage is available. It's important to note that in addition to GLP-one therapies, LifeMD also offers exceptionally affordable standalone and combination generic medications that can support patients with weight loss. Including the triple therapy we announced last September. As we collect more data, we are optimistic on the efficacy profile of these medications and believe that they will play an important part in our weight management offerings in the future. Especially if access to personalized versions of GLP-one therapies becomes more patients who do not have insurance coverage. Lastly, the GLP-one supported weight loss market has become highly fragmented with hundreds, if not thousands of smaller players providing varying quality offerings [indiscernible] many of which rely exclusively on compounded drugs from less reputable sources and async only care. We believe many, if not most of these market participants will struggle to adapt in this changing environment has the potential to reduce acquisition costs and expand the overall market for companies like LifeMD.

Now let's move on to RexMD. Since launching in December 2019, RexMD has rapidly become one of the leading men's health brands in the country. While this business was almost entirely sexual health driven when it launched, today we have expanded the reach of this brand to include multiple areas of sexual health weight management, hair loss, insomnia, and most recently hormone replacement therapy. HRT. RexMD currently produces over $80,000,000 in annualized revenue and we expect to see 15% to 20% growth in 2025 driven by the continued growth of our leading sexual health offerings, and rapid expansion into our newly launched HRT offering. Today, RexMD has over 175,000 active patients and we expect this number to continue to increase with the growth of our HRT program and other new clinical areas we expand into. [indiscernible] create better experiences and outcomes for our patients, and increase the bottom line for our shareholders, was a major priority in 2024 and will continue to be a focus in 2025. Two of the most important investments we made were the launch of our 50 state commercial pharmacy and the investments we made in contracting with private and government payers. In late twenty twenty four, we announced the launch of our first dedicated LifeMD pharmacy, I am pleased to announce that as of today, this pharmacy is licensed in 47 states [indiscernible] and is shipping approximately 20,000 orders per month.

We remain on track to realize the previously disclosed $5,000,000 of annual economic benefits from the pharmacy by the end of twenty twenty six. While today the LifeMD pharmacy is solely focused on prescription shipments, [indiscernible] we are in the process of building out non sterile compounding capabilities that we expect to be operational in the next four to six months. This will be a huge advancement for LifeMD that will enable us to expand our portfolio of personalized affordable therapies in areas such as men's and women's HRT, sexual health, dermatology, and more. We continue to advance our insurance offerings at a measured pace and today are enrolled with private payers in 20 states. As I mentioned, our Medicare program remains on track to launch in April and we expect this will become a significant competitive advantage for LifeMD across our virtual primary platform. This offering will significantly expand the addressable market for LifeMD's primary care metabolic health, behavioral health, and prescription services. By the end of twenty twenty five, we anticipate having approximately 150,000,000 lives under coverage. As a final topic, LifeMD expects to launch several new service offerings in 2025. We recently announced plans to enter the behavioral health space in the second quarter with the hire of Julian Cohen, a highly experienced senior leader.

This offering is naturally synergistic with our our rapidly growing therapeutic weight management offering our sizable and growing men's health business, and soon to be launched women's health offering. Initially, we plan to offer A SYNC First treatment for anxiety and depression, and believe there are many large markets within the behavioral health space where our Synchronoss virtual primary care platform can support the delivery behavioral health offerings. In the second quarter, we will also be launching an enhanced version of our virtual care membership program we refer to as LifeMD plus Our expectation is that over time, LifeMD plus will be the backbone of everything we offer on LifeMD's virtual care platform. Initially priced at $19 per month, it will offer patients the following benefits in addition to any specialty care programs they are subscribed to. [indiscernible] LifeMD doctors and nurse practitioners, This care can be self pay or covered by insurance. On demand convenient prescriptions and prescription refills, access to beautifully tracked routine and specialty lab work, self pay or covered by insurance, and a marketplace for the highest quality OTC health and wellness products. Our aim is to leverage our brand equity, amazing providers and highly differentiated care platform to create a strong value proposition around LifeMD plus membership.

We believe that this will have a meaningful positive impact on the experience of patients on our platform, their compliance with care programs they purchase from us, and their overall health. We especially think that LifeMD plus will play a big role encouraging preventative healthcare and will make things like annual wellness visits labs and medication compliance much easier and affordable for patients. In addition to behavioral health and LifeMD Plus, we expect to launch a women's health specialty offering in the second half of twenty twenty five. We plan to provide more details on this on future quarterly conference calls. In short, LifeMD is well positioned to continue to expand our role as a leading provider of differentiated virtual care in 2025 and beyond. With that, I will now turn the call over to our CFO, Mark Benethen to discuss fourth quarter and full year 2024 results. Mark? Thank you, Justin, and good afternoon, everyone. LifeMD achieved very strong fourth quarter performance with consolidated revenue growing 43% versus the year ago period to $64,300,000 dollars Core Telehealth revenue grew by 60% versus the prior year with standalone adjusted EBITDA profitability at $5,900,000 an increase of 396% versus prior year.

POWERHOUSE subscriber growth remained strong with the number of active year over year to over 275,000 at quarter end, The number of works simply active subscribers grew by 3% to 164,000 Importantly, Worksimply's performance stabilized in Q4 with average monthly adjusted EBITDA returning to over $1,000,000 as we previously guided. Gross margin for the fourth quarter was 85.3%, a decline of two eighty basis points versus the prior year, due to changes in revenue mix and one time impacts related to the onboarding of a new pharmacy. We fully expect gross margin rates to return to their normalized 88% to 90 Gross profit was $54,800,000 an increase of 39% from the year ago period. Our GAAP net loss attributable to common stockholders for the fourth quarter was $883,000 or a loss of $0.02 per share. This compares with a GAAP net loss attributable to common stockholders for the fourth quarter of twenty twenty three of $4,500,000 or a loss of $0.12 per share. Adjusted EBITDA is a non GAAP measure we define as income or loss attributable to common shareholders before various items as outlined in today's earnings news release. Adjusted EBITDA totaled $9,000,000 for the fourth quarter as compared with $5,000,000 in the year ago period.

Telehealth adjusted EBITDA is a non GAAP measure defined as adjusted EBITDA for only our telehealth business excluding Works in This measure was $5,900,000 for the fourth quarter of twenty twenty four as compared to $1,200,000 in the year ago period. We exited the fourth quarter with $35,000,000 in cash. Now turning to full year 2024 results. For 2024, consolidated revenue was $212,500,000.0 an increase of 39% versus 2023. Telehealth revenue grew 61% on a standalone basis. Gross margin for the year was 88.7%, an increase of 110 basis points versus 2023. Our GAAP net loss attributable to common stockholders for 2024 was $22,000,000 or a loss of $0.53 per share. This compares with the GAAP net loss attributable to common stockholders for 2023 of $23,700,000 or a loss of $0.7 per share. Adjusted EBITDA totaled $14,400,000 for 2024, compared with $11,200,000 for 2023. [indiscernible] Telehealth adjusted EBITDA totaled $7,400,000 for the year as compared with a loss of $5,200,000 for 2023. Turning to financial guidance. Today, we are introducing guidance for 2025 consolidated revenue of $265 to $275,000,000 with telehealth revenue of $2.00 $5,000,000 to $213,000,000 are also introducing consolidated adjusted EBITDA guidance for 2025 of between $30,000,000 and $32,000,000 with telehealth adjusted EBITDA of approximately $20,000,000 This wraps up our financial results.

I'd now like to turn the call back over to Justin. Thanks, Mark. 2024 was an incredible year for LifeMD. Characterized by outsized performance from our telehealth offerings, and the notable addition of key new capabilities, including our pharmacy and insurance offerings. The progress we made last year coupled with continued execution against our existing businesses and planned new launches will continue to drive our performance in 2025. I believe we have one of the most comprehensive and differentiated offerings in telehealth that continues to broaden and strengthen our capabilities as we grow. With that, I'd like to open the call to Q and A. Operator? Thank you. We will go first to David Larsen with BTIG.

Hi, congratulations on the very good quarter and the guide.

Can you talk a little bit about your relationship with Lilly Direct, how that will work? Do you make money? How do they make money? And then just any thoughts on Novo's program as well? Thank you.

Hi, Dave. Thank you. This is Justin Schreiber. So the the the arrangement was not with Lilly directly. It was a It was a relationship that LifeMD has with a third party pharmacy that Lilly Direct uses to ship cash pay vials of their medications directly to patients. So LifeMD will be integrating with that third party pharmacy And really what it will do is enhance the experience of patients that are receiving virtual care through LifeMD that are not covered by their insurance for a branded therapy. And therefore decide to purchase a more affordable cash pay zapped bound product directly from Lilly Direct. Life and B will continue to make money, Dave We don't make any money on the pharmacy. Continue to lower prices. As we just said on the call, we think that's a trend that has to continue. There still is a problem with coverage and affordability of these medications. And so so we applaud Novo and Lilly for lowering the prices somewhat or slightly on on their their vials and or for Lilly and their vials for Novo, it's their I believe their cash pay options are still are still using an auto injector. We're super encouraged by this.

We hope it continues Obviously, a big part of what we focus on at LifeMD is helping pay increasing access for patients to affordable versions of these medications along with incredible healthcare. So very encouraged by it. We don't We don't have any relationship currently with Novo. Although we expect to be able to offer Novo's Novo's Cash Pay products through our platform in the future.

Okay. That's very helpful. Thank you. And then as as these products come off the drug shortage list, can you talk about your ability to personalize compounded medications and sort of what goes into that? How do you will you be doing that? And then how do you sort of measure the personalization aspect? You talk about the data that you collect in the EMR. What sort of personalization sort of steps matter for each individual? Does lab work go into that? Just any color there would be very helpful.

Thanks, David. This is Justin again. I'm not going to get into the legal aspects of personalized compounded medications for weight loss or other conditions. I think what I'd like to remind everybody of is that LifeMD is a provider of incredible virtual healthcare We work although we do have our own pharmacy, we don't use our own pharmacy for GLP-one medications. We work with a number of the leading third party pharmacies out there that we've vetted to ensure that they they're making high quality products We're going to do we're going to do whatever is right, David, when it comes down to respecting the intellectual property of pharmaceutical companies, and also for our patients.

So whether or not I think it's a little bit too early to tell exactly what many of the third party pharmacies that we work with will do I do believe that I do believe that many of them will be offering personalized versions of GLP-one medications And if it's something that again is not a violation of you know the intellectual property of pharmaceutical companies and makes sense for our patients and increases access that's something that we'll be open to.

Great. Congrats on a great quarter. I'll hop back in the queue.

We'll go next to Steve Decker with KeyBanc.

Hey, guys. Thanks for the questions.

As you continue to expand commercial insurance acceptance with additional payers in states, [indiscernible] much do you think this is contributing to new Telehealth subscriber growth? And are you seeing a higher level of patient retention? As a follow-up, what kind of traction are you seeing on your non Gilpin non guilty weight loss treatment option? Thank you. Hi, Steve. This is Justin Schreiber again. On the insurance, on the question related to I assume that was related to private payer programs. Right now we're still very focused on the infrastructure and expanding the number of lives that we have under coverage. It's important for us to reach reach a critical mass there before before this will really enable us to drive like effective conversion rates. And CPAs. So right now that business is still very small, but as we mentioned, on the call, we are very optimistic about where we can get to this year. We think we can we think by the end of the year, we'll have around 150,000,000 lives under contract. Between our private and government programs and we're really excited about how that could drive the growth of the business longer term. Okay. Thanks. And then just wanted to ask on the non GLP weight loss treatment option, what kind of traction you're seeing there?

So it's something that so right, so we do have a non GLP-one weight loss offering when appropriate for patients. We're it's still a small business for us is the best way to answer that. But it's something that we're kind of placing many of our affiliated providers are placing more emphasis on And look, if some of these, I think it's fair to say that if GLP-one medications become more difficult for patients to affordably access I think you'll see this that side of the business grow a lot.

We will go next to Brooks O'Neil with Lake Street Capital Market.

Thank you. Good afternoon, guys. I'm just curious, maybe Mark could talk a little bit about the decline in the gross margin and just help us to be sure we understand what factors are driving that?

Yes, absolutely. So essentially, we onboarded a new pharmacy mostly within the wave management space. There were some upfront costs associated with that related to shipping, some inventory, which we did take expense for since the intention was sell it very rapidly. So all of that drove a one time increase in expenditures and the cost of goods sold that we booked in the fourth quarter. That obviously normalizes going forward and from a run rate, we're actually seeing gross margin return back to the normal 88% to 90 levels on a consolidated basis. So it was really driven by the onboarding of this pharmacy, bringing inventory in house, front loading a bunch of expense. We also took a fairly conservative accounting approach.

Great, Mark. Thank you very much. Somebody could just talk about right now given the success you've had bringing work simply back, what's your outlook for the future of that business?

Yes. Well, look, I mean, Work Simply is done a great job getting back on track. Obviously, a lot of their problems last year were self induced. Their founder and CEO has really sort of taken the reins there.

We've seen that business consistently growing, consistently producing circa $1,000,000 a month in EBITDA, in some cases a little bit higher. We expect that to continue for the business not to to go back to some of the issues that they had had last year, which again were tough and do is poor execution of the marketing that's been behind them. They've replatformed some of what they do also, which has led to improving conversion rates. And I think they're probably in the earlier stages of realizing that. So there's essentially a lot of upside for them to grow over the next couple of years that we don't get that factored in. [indiscernible] Justin, you and I have talked a little bit about reimbursement for telehealth service in Medicare. Maybe you could just give us an update on on where you think that stands and what the future holds for reimbursement for telehealth and Medicare? Hi, Brooks.

Sure. I mean, I'm not quite sure how valuable my opinion is on this topic.

But look, I think you and I both agree that Medicare has to cover these drugs And I think it's also pretty likely that there are negotiations that have been going on for some time between Medicare [indiscernible] and Lilly and Novo regarding what the price has to be. For Medicare to cover these medications. So I'm extremely optimistic that at some point in the near future, Medicare is going to cover these drugs and you're already seeing coverage in some indications like in some cardiovascular where there's in some in some like for some cardiovascular conditions and also and also for instance obstructive sleep apnea So I think I think these things take time. What's important for LifeMD is that we're ready to go. The data there is broad coverage for these medications from Medicare. And our commitment to shareholders and patients is that we're going to be ready and we're going to have the most comprehensive offering out there. For Medicare patients that want to access these drugs. I mean, this is a this is a population that should have access to these drugs and needs these drugs as much or more than anybody else out there. So we're just doing everything we can to make sure that we have the right compliance and operational infrastructure in place to execute the data this coverage is is put in place, which I think is going to be sometimes [indiscernible] And then, is there any update on Medicare reimbursement for the telehealth services Yes.

So the current bill that's working its way through the legislature has included LL an extension of [indiscernible] Which I believe it's an extension through the fall. Of this year. So clearly, there's going to still need to be a more permanent solution, but everybody that we've talked to Brooks is on the hill is highly confident that you're going to see a permanent extension of Medicare coverage for virtual care. And that it has bipartisan support and it's just a matter of working its way through the legislature.

Sure.

Makes sense.

One last question. I appreciate you taking my questions. I'm excited about the opportunity with behavioral health. Frankly, excited about a lot of opportunities you have, but behavioral health seems like a no brainer. Your combination of telehealth service counseling, access to drugs, etcetera. Can you just help us be sure we understand the program you envision how you think it will work for LifeMD and your members, patients, Sure. Yes. Thanks, Brook, for bringing this up because this is something that we're also extremely excited about. Clearly, the behavioral health market is massive. Think in order to have a comprehensive primary care platform, you have to do a great job in behavioral health. You have to offer treatment. For behavioral health. So this is something that we've wanted to launch for a while.

We took a very thoughtful careful approach to how we entered the space. The big catalyst for us entering it now was finding Julie and Cohen And I would encourage everybody that hasn't already done this to go look at his background. He's over the last thirty years, he's run some of the largest behavioral health operations in the country for names like Cigna, Teladoc, HIMS, I mean, it's wildly impressive background in virtual behavioral health.

So we found Julian, he's working on building some of these programs now on the LifesenDe platform. We're going to start with an async first offering for anxiety and depression. And we're going to be we're already talking with some large talk therapy partners as well because one thing that's very important to us is that we're not just offering kind of a sync treatment for behavioral health that we're also providing patients at the same time like an incredible talk therapy solution when that's appropriate. And behind that, I think think the sky is the limit, right? I mean, there's a number of big virtual behavioral health markets that where there's a large unmet clinical need.

That I think is going to be very good patients out there and extremely good for our shareholders. Great. Thanks. I'll follow-up more later on, but I'm excited about that.

Sure.

Sure. Thanks for the question, Brooks. [indiscernible] We'll go next to Steven Valiquette with Mizuho Securities.

Great. Thanks. Good afternoon. Let me offer my congrats on the results as well. Really the questions I have just a couple kind of intertwined really around what's embedded within the 2025 revenue guidance. Especially within the Telehealth segment I think you disclosed previously that over 70% of the weight loss management patients were on compounded semaglutide as you're exiting '24. What does your '25 revenue guidance imply for percentage retention of these patients? I'm guessing most of them just based on how strong the guidance is.

What should it mean, do you have just assumption in there for what the conversion rates will be, whether they switch to brands? Do they switch to or do you think they'll stay on the compounded versions because of the personalized dosing that we talked about? Curious to get more color around all the assumptions within the revenue guidance. Thanks. [indiscernible] As we've I believe we've said before and we've discussed with some investors, when we produced our planning and our guidance for next year, we took a pretty significant write down on the compounded medication in there. We actually basically wrote off something close to half of it. Obviously, we assumed a certain percentage of that would go over to branded therapy. There's no assumptions that the rate of growth in new acquisitions is going to improve. As a matter of fact, the actual guidance assumes that it's going to be a little bit lower.

Than what it was last year. It assumes that it will be some that will try it out. We don't give out the exact percentage because we haven't necessarily put that in publicly. And then we also had some write off related to compound subscribers. Now the goal for us is to get to about 40% to 50% patients on branded therapy. By the end of the year. Obviously, we think that there'll be some personalized, certainly some triple therapy as well, but we're not banking on retaining tons of patients within compounded therapy. As a matter of fact, we wrote off a lot of that and assumed a lot of the growth will come in from new patients going onto branded therapy, as well as the fact that, I mean, let's not forget here that there's an awful lot of competitors out there that all they do compound the therapy and can't do anything else or their business is set up just to make money. Off of selling the compound product, whereas our business is set up as a service business that seeks to provide access for patients. So all of those negative assumptions are already put in through the budget model for next year.

Where we're seeing improved performance relative to what I think some folks may have thought is on the rec side. We're obviously seeing strong growth there within the sexual health business. The HRT was us a little bit of time to figure out initially, but we're very optimistic there in retention. Should be very strong within that business. Behavioral health was something that until recently wasn't fully on the road map. So we expect to get some incremental benefits next year or this year on that. And then obviously the relaunch of primary care and revamped Lytham D plus primary care has a small amount of incremental benefits in there?

Okay. That's all very helpful. Thank you.

We'll go next to Alex Fuhrman with Craig Hallum Capital Group.

Hey, guys. Thanks very much for taking my question. Just I'd love to talk more about the hormone therapy offering that you launched recently for RexMD. Curious if you can share how many patients you currently have taking advantage of that offering? And then the guidance for this year, obviously, obviously very strong on both the top and bottom line is hormone therapy expected to be a pretty big [indiscernible] but curious what you have kind of penciled in for this year for that offering?

Thanks, Alex.

So I guess first of all, we've been very pretty with with our growth estimates for that business for 2025. Although, I will say that we're incredibly optimistic about the prospects for the HRT business, both for men and for women. But on the rec side, I mean, I think we talked about this this concept a lot over some of the past earnings calls, but many of the men that are accessing this program, it's the best [indiscernible] they've ever received in their life. They're 100% of people in order to access any of the therapy or going to Quest and LabCorp. They're having a lab panel done that would cost anywhere between $1,000 and $1,500 because it's so comprehensive. Having a call with one of our wellness coordinators in most cases, then they're doing a typically a thirty minute video call with a state licensed physician that is specialized in men's health I think approximately seventy percent of men that go through all of that are then getting put on a therapy It's not always testosterone. Sometimes it's ends up being a GLP-one or are multiple therapies that can be appropriate for the patient depending on their lab work and their symptoms.

But from a quality of revenue standpoint, Alex, we are just we are so excited about this business, right? It's quality of I mean, all I'm saying is already did emphasize quality of care is incredible. But quality of revenue as well is we think is going to be incredible. CPAs are very encouraging. [indiscernible] [indiscernible] We're not going to share an exact patient number today, but I will tell you that we've gotten this business to a point where we can we see a clear pathway to a couple hundred patients a day. And if we could do that, I mean that means that business could be just as big as our ED business or entire REXMD business today. And then clearly like look that's a very bullish statement But one of the great things about our business is we have it's very predictable. And we know once we see CPAs that we know when we get to kind of a CPA and a conversion rate that is highly scalable in a large market like this, And we are extremely confident this is scalable. On the female side, Alex, we're doing some really exciting things in the women's health world.

This is a no brainer considering the seventy five percent of the patients on our virtual primary care and weight loss programs today are women. It's the perfect crop care program. We know there's big demand for it there. And we're working on standing up that program. In the call, we mentioned the second half of the year, it could even be a little bit sooner than that. But one other thing I'll mention before I stop talking is we've now gotten our technology at LifeMD to the point where we can we can easily launch these programs that are extremely comprehensive and then scale them. And I think that's a really big milestone for us, right? I mean, was only a couple of years ago when we had a couple of thousand patients on this platform and we've just really now built the infrastructure through this weight management offering like and develop the tech to a certain point where we can quickly and efficiently launch these new care offerings that are great cross care offerings as well. And so I think that's something that we really want investors to understand and look forward to.

And Al, one thing I'll add, I mean, as far as our guidance, the male hormone business only assumes a few million dollars in revenue this year, which will be a fraction of the number of new patients per day, which achieved this year that obviously Justin and the team thinks that we can get to. I think we took a pretty conservative approach there. And if we execute depending upon the level that we execute at, which we're very confident then, There could definitely be upside as in relation to that.

Terrific. That sounds all like good news. Appreciate the thorough response from both of you.

We'll move next to Sarah James with Cantor. Thank you and congrats on a fantastic quarter. I wanted to unpack the EBITDA guidance a little bit.

It's up $15,000,000 at the midpoint and we're estimating work simply now that it's to $1,000,000 a month, it could be $5,000,000 of that. And the gross margin improvement another about $1,000,000 but that still is $9,000,000 improvement. How much of that is growth in your core business versus non repeat of costs like the compliance of setting up new insurance or other aspects that could fall below the gross margin line? And then do you have any assumption of earnings contribution from the new segments?

Yes. So it's Mark. So first, the way the guidance breaks down is approximately $20,000,000 from telehealth million Worksimply, the increase in EBITDA is essentially growth in the business. There's not a lot of cost structure with that business outside of ad spend and payroll. So most of that is associated with growth. On the telehealth side, also the majority of it is associated [indiscernible] non repeat there were some initial costs associated with pharmacy setup and some compliance and other things. But that's essentially around $1,000,000 of things that kind of go by the wayside because new costs do get introduced as certain parts of those segments get larger than previously. Exist on an ongoing basis. So a lot of that also comes down to growth. Gross margin, gross profit, we expect to be somewhat similar on a margin rate basis to what it was for the full year of 2024. And the reason for that is, I mean, one, we're expecting to receive approximately $2,000,000 of COGS benefits in relation to the pharmacy that we opened in the fourth quarter. But there are some mix changes in the business also. So HRT, for example, while extremely profitable from a bottom line economic standpoint because of the retention associated with it, which obviously drives a lot of leverage in the ad spend.

The pure gross profit is not the gross margin percentage that is, is not as high as some of the other businesses because the underlying COGS are higher. So it will be in upper 70s, mid to upper 70s, versus an upper 80s. But obviously, it's very accretive to the bottom line of the company. So most of it is going to come from growth in the business, leveraging your sales and marketing spend, which will grow up obviously year on year, but it's going to go up by less of a percentage than what the revenue will go up in and then obviously leveraging your G and A, which again is all driven by growth in the company and then then moderate growth in expenses.

Great. And one more if I could. On the new insured lives, both commercial and Medicare, what percent of revenue are you assuming from that group in 'twenty five? And where could it go in a couple of years?

Yes. I mean, it's relatively small of what we're assuming in 2025. I mean, we're assuming essentially mid single digit percentage of total revenue to come from that in 25%. As we mentioned before, this a big ramp up there. You acquire [indiscernible] you can acquire a lot of lives. Obviously, it's very important that we get to a Nash national presence, which on the private insurance side is where we're going to take until like the back half of the year or latter part of 2025. And you have a lot of people that are essentially paying the small platform fee fee per month, dollars 19 per month. Which is where obviously most of the margin comes from in that business. And then insurance reimbursements, which are also at more moderate levels than obviously the cash paid business. So don't think it's going to be a huge revenue [indiscernible] can go to, I mean, it could easily within the next three to four years be in the range of 30% to 50%. Of the revenue because you start to get the snowball effect as you acquire a bunch of subscribers and it's particularly relevant to the LifeMD plus offering, which again we're just launching the revamped version in Q2 and that's going to start to scale from there, which also will take some time.

But it's not a major driving factor in anything that we have in the guidance. In 2025.

Thank you.

Move next to Anishin Schach with B. Riley Securities.

Hi. Congrats on the great quarter and thank you for taking the question. Questions. So first on the weight management business, what percentage of your new patients are getting insurance approvals for the branded therapies now following your investment insurance infrastructure? So the way the numbers this is Justin speaking, by the way. The way the numbers break down is around ten percent of patients are receiving coverage. For obesity. Off the bat, without us filing a prior authorization, approximately sixty percent of patients that have private insurance are are are required to are getting a response that requires them to file a prior authorization And as we said on the call about sixty percent of about sixty percent of the prior authorizations that we're filing right now for Zepbounds for patients that are obese, meaning they have a thirty BMI or higher.

Are getting really affordable coverage for the drug.

Okay, got it. And are you seeing existing subscribers who previously or currently are using the compounded therapies now being able to obtain approval and switch to the branded GLP once?

We are seeing some of that and it's something that we do as we rerun benefits regularly for patients that are on compounded therapies. I don't have a number to share with you on that, but it is something that we do see on a regular basis and it's a priority for us to continue to run benefits for patients that are on a compounded therapy. Okay, got it. And with the FDA set to crack down on compounding pharmacies and outsourcing facilities in April and May, Do you plan to continue connecting patients with compounded GLP-1s until then? We plan to continue we plan to we plan to continue to follow the guidance of our kind of outside legal or inside and outside legal advisors as well as the FDA. I mean, our position is the same as it's always been. We think there has to be an affordable route to patients access in these medications. There are many Americans still can't afford $500 $600 $700 a month for a weight loss medication. So whether that ends up being a personalized version of compounded drug that doesn't violate the intellectual property of of one of the manufacturers. I mean that may be a viable route, but we're committed to doing whatever we're committed to putting patients first.

Which is which is what we've done since day one. And we continue to believe that the FDA and the federal government are not going to strip access to these medications from Americans that can't afford them just because they don't have blue chip insurance coverage. So it's an evolving landscape. Again, we've always operated kind of very conservatively in this space. And we're going to continue to follow the lead of the FDA and again of our legal advisors. And do what's best for patients. Okay, got it. Great. Well, thank you for taking our questions.

Our pleasure.

We'll go next to Yi Chen with H. C. Wainwright.

Hi, good afternoon. This is Eduardo on for Yi.

Just had one question kind of in a different vein. You had mentioned previously some development in the context of monitoring and possibly collaborating. I was just kind of curious you had any catalyst in 2025 to look for remote monitoring with wearables or anything like that or any developments in that space we can expect over the next year?

Thanks for the question. Of the things that's been on our priority list for a while has been integrating wearables into the LifeMD mobile application. We currently have scales that we ship out to some of our weight management patients. That have a lot of different kind of metabolic measurements they generate and are organized on our platform and shared with patients providers. As far as as far as LifeMD doing more in the remote patient monitoring world, it's not something that we have on the roadmap for 2025. Okay.

Totally understand. And anything in the I know you guys are also working in the space of at home diagnostics. So any developments in that space?

Sure. We're working on a lot in that space. I mean, we're constantly evaluating a lot of the in home collection devices that are out there. There are two or three that are certainly very interesting to us. The amount of blood that you can collect with many of those devices is limited. So like to run kind of more comprehensive lab panel for something like our hormone therapy offering, you would need multiple devices, which is a really negative experience for patients. We are working with some of the in home phlebotomy companies as well as Quest and LabCorp, which both have in home phlebotomy options to make like blood collection more convenient for our HRT patients. But look, it's a space we're really excited about. I think that being able to collect like sufficient blood remotely from patients to run to run panels like for instance a hormone panel it's really important for our business, right? I mean lab work is important for a lot of the care programs and and medication offerings at LifeMD. And so we're really evaluating the space and we think it's a space where there's going to be a lot of innovation in the near future.

Wonderful.

Thanks for the answer to the question.

And with no other further questions at this time, will turn the call back over to Mr. Schreiber for any additional or closing remarks.

Thank you everyone for your questions and for your interest in LifeMD. Look forward to speaking with you once again when we report our first quarter results in May. Have a great evening.

Thank you. Ladies and gentlemen, this will conclude today's program. We thank you for your participation. You may disconnect at any time.