Feb. 18, 2025
“This past year was a pivotal year for Medifast, as we continued to transform our business to meet the changing nature of a health and wellness market that has been revolutionized by the rising acceptance of GLP-1 medications,” said Dan Chard, Chairman & CEO.
Fourth quarter 2024 revenue decreased 37.7% to $119.0 million from $191.0 million for the fourth quarter of 2023 primarily driven by a decrease in the number of active earning OPTA VIA coaches and lower coach productivity. The total number of active earning OPTA VIA coaches decreased 34.1% to 27,100 compared to 41,100 for the fourth quarter of 2023. The average revenue per active earning OPTA VIA coach was $4,391, compared to $4,648 for the fourth quarter last year, a decline of 5.5% primarily driven by continued pressure on customer acquisition.
Gross profit decreased 37.6% to $88.2 million from $141.4 million for the fourth quarter of 2023. The decrease in gross profit was due to lower sales volumes.
For the fiscal year ended December 31, 2024, revenue decreased 43.8% to $602.5 million compared to revenue of $1.1 billion in 2023. Net income for 2024 was $2.1 million, or $0.19 per diluted share. The company expects first quarter 2025 revenue to be in the range of $100 million to $120 million.
Fourth Quarter 2024
- Revenue of $119.0 million, with revenue per active earning coach of $4,391
- Independent active earning OPTAVIA coaches of 27,100
- Net income of $0.8 million (non-GAAP adjusted net income of $1.1 million)
- Cash, Cash Equivalents, and Investment Securities of $162.3 million and no debt
Full Year 2024
Revenue of $602.5 million
Net income of $2.1 million (non-GAAP adjusted net income of $20.2 million)
Earnings Call Information
Management claims that the decline in coach sales/productivity is moderating, and that they expect that to turn around some time in 2025 (but not during the first quarter). Marketing spend in 2025 is not likely to be any higher than the $24 million spent in 2024. Management says that 17% of its customers are using GLP-1 drugs, vs. 12% at the start of 2024. Most of that 17% are coming via their own healthcare provider/MD, rather than from LifeMD. (This begs the question of just how valuable the partnership has been so far.). The firm reports higher than expected customer acquisition costs. Medifast will launch a new starter kit. The company is hopeful about its high protein Optavia Ascend product line that supports GLP-1 users.
DietBusinessWatch/Marketdata Commentary
Plainly put, 2024 was a disaster for the company, with revenues down 45% from 2023, and the number and productivity of its health coaches continuing to decline. Like so many other weight loss companies, the competition from the wildly popular GLP-1 drugs has decimated them. The company said it spent $24 million on marketing last year, yet we have yet to see even one TV commercial for the company and its Optavia line of products. Where were those marketing dollars spent, we wonder? Management says that most of these marketing dollars actually are in the form of coach compensation, where they encourage coaches to use word-of-mouth advertising. That’s fine but it’s not enough in this crowded marketplace. If you don’t run national TV ads, and online ads, and invest in social media ads, YOU ARE INVISIBLE! Medifast needs to loosen the purse strings and spend some of that $162 million of cash & equivalents it is hoarding on national advertising.
In addition, the affiliation with LifeMD has apparently produced very little. LifeMD doesn’t even mention the partnership with Medifast in press releases. It’s hard to see where and why dieters will come back to Medifast when they have GLP-1s and a growing number of telemedicine providers at their disposal. Also, when dieters can spend only $300-400/month on compounded GLP-1 drugs from a telemedicine company, and lose weight, why do they need to spend additional money to buy Medifast meal replacement foods? They are eating a lot less to begin with, and what they do eat is regular grocery store foods. Also, no mention any more of expanding into Mexico and the Hispanic market. Did they scrap that idea?