Good afternoon. Thank you for joining us today to discuss LifeMD's Results for the Fourth Quarter and Year Ended December 31, 2023. Joining on the call today are Justin Schreiber, Chairman and Chief Executive Officer; and Marc Benathen, Chief Financial Officer. Following management's prepared remarks, we will open the call for a question-and-answer session. Before we begin, I would like to remind everyone that during this call, the company will make a number of forward-looking statements, which are subject to numerous risks and uncertainties that may cause actual results to differ materially from those projected. These risks and uncertainties are described in the company's 10-K and 10-Q filings and within other filings that LifeMD may make with the SEC from time to time. Forward-looking statements made during this call are based on current information available to the company as of today, March 11, 2024. The company assumes no obligation to update or revise any forward-looking statements after today's call except as required by law. Also, please note that management will be discussing certain non-GAAP financial measures that the company believes are important in evaluating LifeMD's performance. 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. Now I'd like to turn the call over to LifeMD's CEO, Justin Schreiber. Please go ahead.

Thank you, and good afternoon, everyone. After the market close, we issued a press release announcing our fourth quarter and year-end results. Later today, we will post an updated corporate presentation on our website at ir.lifemd.com as well as our shareholder letter. I share a lot of my thoughts on our journey and where we're headed. So I encourage everyone on this call to give it a read. With that said, 2023 was a tremendous and record-setting year for LifeMD. Our revenue, patient subscriber base and profitability all increased sharply versus 2022. Catalyzing this growth was the launch of our nationwide GLP-1 weight management program in April 2023, which has since grown to become one of the largest and fastest-growing businesses of its kind in the U.S. In fact, our weight management program finished 2023 with over 22,000 active patient subscribers, well ahead of the 20,000 patients we previously guided to. As of today's call, we have over 35,000 weight management patients, and that number is growing rapidly. In addition, as we announced in December, we made our largest foray to date within the business-to-business market when we executed a collaboration agreement with Medifast, one of the largest diet, coaching and nutrition companies in the U.S. This collaboration included $10 million of collaboration fees and a $10 million equity investment while providing Medifast's 40,000 coaches and their customers with access to our industry-leading telehealth platform and affiliated medical group. I believe this transaction truly validates the strength of our highly differentiated direct-to-patient telehealth platform and offering. Our Lifestyle Healthcare business, led by RexMD, had its fourth consecutive year of double-digit annual revenue growth. Beyond the consistently strong growth we've seen with RexMD, the brand continues to be immensely profitable, finishing 2023 with a contribution margin in excess of 30%. In…

Thank you, Justin, and good afternoon, everyone. LifeMD had record fourth quarter performance on both the top and bottom line with consolidated net revenues growing to $44.9 million and adjusted EBITDA growing to $5.5 million. These figures included the recognition of $5 million of program fees paid by Medifast less LifeMD related expenses. Additionally, we ended the quarter with over $33 million in cash and positive free cash flow. In 2023, cash flow from operations was nearly $9 million versus negative $23 million in 2022. We remain in the strongest financial position in the company's history and are well positioned to execute upon our aggressive growth and profitability plans. . In addition, based on the strong start to the year, led by performance in our GLP-1 weight management business, we are raising our consolidated revenue guidance to at least $200 million from the previous guidance of $195 million to $205 million. Now turning to the results for the fourth quarter of 2023. As I mentioned, consolidated revenues in the fourth quarter totaled $44.9 million, an increase of 60% compared with the same year ago period. Telehealth net revenues grew 90% versus the year ago period and 28% sequentially. Net revenues from our weight management business more than doubled sequentially. Subscriber growth remained very strong with the number of telehealth active subscribers increasing 27% to approximately 215,000 while WorkSimpli active subscribers contracted 6% to over 158,000 both versus the year ago period. As Justin mentioned, WorkSimpli continued to refocus on marketing and retention efforts on the highest value customer markets, thus generating materially higher revenue per user and enhanced profitability. The number of Weight Management active subscribers grew to over 22,000 as of year-end 2023 and ahead of our previous guidance of 20,000 active patient subscribers by year-end. Consolidated gross margin…

Thanks, Marc. As we wrap up, I want to reflect on our journey so far and the path ahead. Over the past few years, I've consistently stressed our commitment to building a best-in-class telehealth technology platform. Everything we achieved in 2023 stands as a testament to our execution of this commitment. Today, we are stronger than ever before. Financially, operationally, clinically and technologically. This is an exciting time to be a shareholder. We're still in the early days of our growth, and I believe that 2024 will be an even greater year than 2023 in terms of growth and the long-term value we are building for our shareholders. The fact is we're still in the earliest days of telehealth, and LifeMD is at the forefront of this healthcare revolution. Our focus on building an incredible healthcare experience for our patients is paying dividends. Our industry-leading affiliated medical group, operational capabilities and proprietary platform are allowing us to seamlessly expand our healthcare presence with our existing and future offerings. Our work is helping to build a healthcare system that makes more sense, helps more people and creates better outcomes across the board for patients. Thanks to our strategic vision and execution over the past few years, the opportunity that lies ahead for us is immense. As we prepare to finish the first quarter of 2024, I remain confident in our ability to deliver on our expectations and beyond this year to our patients who trust us with their health, our employees and providers who believe in and advance our mission and our shareholders who continue to support us. I thank you for joining us on this journey towards a healthier future. With that, I would like to open the call for Q&A.

[Operator Instructions] Thank you. Our first question comes from the line of David Larsen with BTIG. Please proceed with your question.

Hi. Congratulations on the fantastic quarter. Can you maybe just talk a little bit more about, the weight management program? In particular like, what sort of, returns are you seeing with the Medifast relationship, in terms of them sending you members and also you sending them members? And then if you could talk a little bit about the pace of onboarding. It was my understanding that, over the past six months, there have been periods of time where you're adding maybe 200 or 300 a day. Maybe this has increased to 500 a day. Just any thoughts around sort of the investments in the platform, to make sure that the pace of ads, is clean and neat. And then just any color on pricing for the drugs themselves would be great? Thanks a lot.

Yes. Hi, David. This is Justin. I'll take the first stab at your question. Maybe Marc has some comments he'd like to add. First of all, with regards to Medifast, we're really happy with the progress of that collaboration in Q1. In the shareholder letter that just got pushed live to the website, we talk about that in some more detail. We're not going to release specific numbers on Medifast, as we've kind of publicly said. I think that's their job, not ours. But I can tell you we're very happy. We've exceeded our expectations and theirs, I think, for the first quarter of the collaboration. And we're certainly super excited, about the rest of the year. To your second question, we actually just today, I think, had, first couple patients that signed up to be part of their coaching and diet program. So it took us a while, to just get the compliance and all the infrastructure in place for that. But we think there's a meaningful percentage of our patients that, will really be helped by that program alongside of a therapy. On your second question relating, to the scale of the weight loss program, Marc and I, are comfortable sharing that over the last 30 days, we've been averaging over 400 new patient acquisitions per day. So it's been a very, very strong month. And as we said - in our remarks, we're seeing excellent growth and we're extremely bullish on this business overall. Also super bullish, for what it's doing for our platform. I mean, just as we continue, to add tens and tens of thousands of new patients, the technology enhancements we're making, the improvements we're making, and the data infrastructure and patient experience. I mean, it's really, really exciting when you think about all…

That's very helpful. Thank you very much. And one follow-up to my first three-part question. If the GLP-1s are - they cost around $1,000 or $1,200 a month right now, have you seen a generic product launch? And if not like, when do you think it will launch? And what do you think the pricing on the generics will be? And then one of the pushbacks I've heard from some investors is like, hi, look, if a solid oil comes to market and its generics enter into the market and as pricing pulls back in, will we continue to see the, sort of demand that we're seeing now for LifeMD's platform? And in my view, so I guess what, is your sort of response to that? Assuming pricing does improve significantly, over the next two years for the drugs themselves, how do you think that will impact your platform? Will it be a tailwind or a headwind? What do you think?

Yes, well, you hit me with a number of questions there again, but on the first question, the first generic GLP-1 is coming to market in June of 2024. That's a generic version of Victoza. That's a once-daily administered GLP-1 that doesn't have, I don't think the efficacy profile, is not quite the same as semaglutide and trizepatide. So, we're certainly like, we have amazing relationships across the board. You're going to see multiple generic players in the space, and LifeMD will certainly offer that generic if, I mean, there's going to be demand for it. We just don't know how much demand there's going to be. And we're certainly well-positioned for that. We're also making really, really, we're making big investments in our prior auth infrastructure. We're evaluating a number of companies that have, they're just best-in-class when it comes to getting prior auth approved for these medications. There are a lot of companies now that are using artificial intelligence, to really optimize the whole prior auth process. So, we're working with, we're not working with yet, but we're talking to a number of those companies. And this is a, it's a major, major priority for LifeMD, to be as good as anybody out there. I'd love to use the word the best, but there are going to be other, there are going to be other, other market participants that are great at this. But we're going to be as good as anybody else out there, at getting these prior auth approved, for patients. So, that's the one thing that I think investors need, to keep in mind. Even though a lot of patients right now, the majority of patients, are not getting approved for a brand of therapy, and they're having to resort to a high quality compounded…

Okay, fantastic. I'll hop back in the queue. Thanks very much. Congrats on a good quarter.

Thank you.

Our next question comes from a line of William Wood with B. Riley. Please proceed with your question.

Thank you so much, and I really appreciate you taking our questions and obviously a really nice quarter - and great year overall. So, I think, the first question, I'd love to get a little bit of additional color, on the first quarter weight management number, you're noting about 13,000 so far, maybe a little bit above that. And how we should be thinking about that in terms of your first quarter, $42 million, $43 million guidance. How that should be fitting in, and this sort of the makeup there?

Yes, William, this is Marc. So obviously that does all fit into the guidance. However, as I mentioned before, about 55% of our new sales are six-month subscriptions. And we've had a significant ramp in our new patient activity and onboarding as we've created more capacity in our clinical teams, to handle additional appointments, and patient volumes really in the second half of the first quarter. So starting around the second week or so of February. We're going to see a significant amount of deferred revenue related to that. In fact, by the end of the first quarter, we could see a $4 million increase in deferred revenue, by the end of the first quarter, versus the end of the year. It could potentially be even higher than that. Obviously, it contributes to some of the revenue growth that we're seeing in the business. If you net out the 5 million of Medifast fees in Q4, and you add back about the 1 million of Medifast fees, we're forecasting in the first quarter, you're still seeing a couple million dollars of sequential growth. That number would be materially higher. It would be $4 million to $5 million higher than that, so it would have been $6 million or $7 million without that deferred revenue. So, we're really starting to see very meaningful numbers, from those acquisition volumes. Obviously, that deferred revenue is going to come back to us, with a big chunk of it in Q2. And then obviously a portion even in Q3 as the six-month subscriptions, have to be amortized over six months. And then outside of the six-month subscriptions, another 35% are three months, so you really only have about 10% to 12% of the subs that are one-month subscriptions. So it's phenomenal for us on a cash basis. It obviously creates a lot of deferred revenue that's going to really start to come back to us in the second quarter.

Got it. That was very helpful. Appreciate that. Follow-up on your RexMD, you noticed that the continued strength there, doubling, double-digit growth year-over-year, I believe. And just curious, you also mentioned possibly entering some new markets, maybe with some new offerings. I was wondering if you could add a little bit of a color, on what those markets and/or, offerings may be, and maybe when we can expect them?

The biggest thing we're focused on, William, is launching an HRT offering under RexMD. We're planning to launch that in the coming months. We have some opinion leaders that have, kind of, recently gotten involved, not in a position right now to disclose their names, but they're some of the top people in the world in this space. And we're developing - what I think is going to become, the gold standard in hormone replacement therapy clinically. I think, we're going to reach a lot of patients with this offering. And I think it's going to be a really interesting stepping stone into - more like proprietary men's health offerings as well that, really cater to this 165,000 patient population that we have that's part of RexMD. So that brand has matured a little bit. And I think that, we certainly need to add some new product offerings on top of our sexual health offerings there. But I'm very, very exciting. I'm very, very excited and optimistic about the potential for Rex. I think it's also worth noting that these offerings that we're launching will have, I expect to have, extremely high retention rates, which is what we're all focused on. And retention, of course, equals as a result of high patient satisfaction and efficacy, and a great job by the medical group. But for shareholders, retention equals earnings, right. So, I'm really, really excited about this offering and getting it live in the next couple months.

Got it. I understand. And then one last, if I may, in terms of your insurance, you're continuing to expand that. I'm just curious, if there's any expectations maybe, or color on what we might be expecting for increasing your insurance, and payer coverage over the course of the year maybe?

Yes, this is Justin again, William. I mean we're not - I'm not really comfortable releasing a specific number. I do feel good about saying that, certainly over the next couple of quarters, we will have very, very broad coverage in most, if not all of the top 10 states that we targeted. We also are planning to roll out into all 50 states, and we're working on that plan and investing in it already. I think that the subsequent states, are going to be much easier, since we've worked out a lot of the kinks with these top 10 states that, we've started to enroll with. But look, this is an important initiative for us. We also got into several Medicare plans in the last couple weeks, one in Florida and one in another state. So that - like that continues to positively evolve as well. So, I think this is - look, the business is doing great, as you can tell by our remarks, and the numbers we put out and, but this is something that like we have, we're putting a lot of resources into internally. And I think that this year, it's going to be - we're going to start to see patients using their insurance to subsidize the cost of their LifeMD care. And I think it's a big milestone for the company.

Got it. I appreciate you taking our questions. I'll hop back in queue and congratulations again on a great quarter. Thanks.

Thanks.

Our next question comes from the line of Alex Fuhrman with Craig-Hallum. Please proceed with your question.

Hi guys, thanks very much for taking my question, and congratulations on a really strong year and launch of the weight management program. Justin, one of the things that, really seems to differentiate your weight management program from a lot of the others that are out there, is it was launched within virtual primary care. Wondering if you can talk a little bit about how many of your weight management patients, are receiving some type of treatment for related conditions, or maybe medications other than just GLP-1?

Yes. Thanks for the compliment, Alex. It's a great question. We do take a lot of pride in the fact that, we offer these services through our primary care platform and that we have basically a full-time force of medical providers that work on that platform. I can't really - I don't have a specific number for you, Alex. And I would say that, I know that every single patient, is speaking with a provider about other aspects of their health, when they are onboarded onto our way management program. However, I don't have a specific number that we can share with you that, would be like a percentage of patients that's, treated for another chronic condition. A lot of these, a lot of these - the majority of these patients that are coming to us are very, very focused, they're very intent on the GLP-1 medication. And using that to jump start their kind of weight loss their weight loss program. And that's where a lot of the interest is. So for the most part, that's where our providers have been focused on, where I think you're going to see more. Where I think you're going to see more of this is actually, like as a lot of people start to hit their goal weight, and think about what's next, what other aspects of their health could use improvement or even optimization. That's where I really think you're going to see the LifeMD platform shine. And you're going to see kind of, more of our - those other capabilities that we have come out.

Okay. That's really helpful. And then….

Yes Alex, I don't mean to not answer the question, and it's a great question. We just don't have - we just don't have the data to answer that question properly. And initially, we're very focused on - these patients are just focused on their way, and that's understandable, right? But I think longer term is we're going to see us. We're going to see a lot of these other conditions, being treated and optimized.

Okay. That's great. Thanks very much for those answers, Justin and Mark.

Our next question comes from the line of Ilya Zubkov with Freedom Broker. Please proceed with your question.

Yes. Good afternoon. And thank you for taking my question. And congrats with another record quarter. Could you please comment? Could you please give us more details on how has the WorkSimpli offering changed? So has the transformation process already been completed? And do you expect user growth to recover in the nearest quarters? Thanks.

Yes, it's Marc. Yes, we do expect user growth to recover. I mean the main way that it's evolved and they've really tried to diversify their platform as well as focus on certain regions of the world where they've gotten the highest return on investment. I'm not going to say which regions, because that divulge is part of their strategy. But how it's evolved most notably. So obviously, about - two years ago, they acquired a resume business broke into the HR space, they've since evolved that business to include cover letters as well as AI technology to enable the automation of several of those functions, which has actually increased the adoption in that business. That's one. Two, within this past year in 2023, they launched the Legal Simply legal forms business. And again, launching the early stages of their proprietary forms library. In addition, they also launched the Sign Simply product, which essentially is a smaller version of a DocuSign for consumers and small businesses. And then lastly, they've begun to penetrate gig workers - consortiums of small businesses. Essentially, they've taken their small business penetration from single-digits to about 15%. Today, over the last about 18 months. So, those are just examples of ways that they've continued to. In doing so, they've continued to refine their marketing strategy. They've tested some new strategies. These are all things will be pretty typical that a business, their size would do especially if they were private and obviously not owned by us. But those are all things that are panning out. They're increasing the company's profitability. So even though they took a small step back in subscribers. Similar to what we did in 2022, when we refined our base in the Telehealth business to lop off a lot of those trial offers that, were not as profitable. They are now earning more per user, and their economics and their margins have gotten substantially better while still being able to grow the top line of their business. They are going to return to subscriber growth again in 2024. Now that they're back to the right base, and they have better economics. And you're going to see their margins expand even beyond where they are today.

Thank you, Marc. I appreciate this. And congrats again with the strong quarter.

Thank you

Our next question comes from the line of Yi Chen with H.C. Wainwright. Please proceed with your question.

Thank you for taking my question. My first question is, could you comment, on what percentage of market share do you currently have with over 22,000 patients for GLP-1 program, where that's going?

I mean, it's impossible, but it's like a pinball at this point, everybody else pretty much a pinball -- we're in the first inning of the weight management market. I mean, look, at the end of the day, both analysts think by 2030, this is a $100 billion plus market. More and more people are coming around to that. And - consider the fact that we ended the year with 22,000 patients, 129 a month with discounting, say you're like 90, 95 a month. And we've already in the first quarter, between the end of last year and today's call, March 11, so is at about 70 days, 71 days. We're already up to 35,000. So, we added another 13,000. There's massive runway here. Nobody has a big share. Obviously, at the pharma side, there's two dominant players, but from the provider side, nobody has a big share, massive runway. We're in a situation we're in substantially more demand than there is supply on our side. If we had an infinite number of providers, and could service people all day long, we could sign up even more than, what we're doing today. That's showing no signs of slowing down.

Would you be able to comment on the age groups of these patients, who recently set up for the weight management program? Are they - are the majority of them, towards the younger age group, or older age group? And do you think these patients receiving GLP-1 drugs will stay on it for a very long period of time?

Yes. This is Justin. Look, the average age right now is in the mid-40s for these patients. As we've shared in our remarks, retention rates so far have been very, very strong. It's very difficult to say our goal, is to help patients hit their goal weight, with one of these therapies in a comprehensive way. And hopefully, they can change their diet and lifestyle in the process, and they're not on one of these medications, for the rest of their life. I think that they're likely going, to be some patients that, are on these therapies for the rest of their life, and need to be and it makes - and their health outcomes are going to be better, because of that. But as far as predicting, I think as far as predicting that right now, it's impossible.

Got it. Well, thank you and congratulations for the strong performance.

Thank you.

Thank you.

Our next question comes from the line of David Larsen with BTIG. Please proceed with your question.

Hi. Just one quick follow-up. Can we get an update on customer acquisition costs, companies like Teladoc and other entities in the mental health space, have talked about increased pricing pressure there. Just any thoughts there would be great?

Yes. I mean, look, there's been some increased pricing pressure, but we've been able to counteract it. I mean, look, in the Rex business, we've seen this quarter, slightly higher increases in CACs, but we were also getting much longer and bigger LTVs in the past year than we had in the prior year. So, we've been able to more than offset that, and actually are holding ourselves to a higher return on ad spend than what we used to get a year ago in that business. And the weight management business, we're actually - as we've scaled to more volume, and I'm not saying this is going to always hold this way, but - we actually have seen CAC slightly decline. We're actually seeing some of the best return on ad spend investments, within the last 30 days that, we've had in the history of the weight management program. That will fluctuate a little. We're obviously, I mean, those things do fluctuate a little. But in general, we've consistently even if we've scaled to the highest volumes per day that we've seen have seen really strong economics. So yes, I mean, look, CPMs and pricing out there, ebbs and flows. It certainly had some increases in the first quarter, but we've been able to manage through that, and counteract a lot of it.

So if it's $99 a month, and somebody signs up in a day basically - and it's $300 for three months and they sign up, what's your return like on day one? Is it CAC $300 so?

Yes. Look, the real numbers are - we're getting, on average, a little over $300 for an average order value, and we're earning more than one times our money day one.

Okay. Great. And then last quarter, you mentioned an agreement with IQVIA for a sales and marketing effort. Can you just provide a little more color there? What exactly was that?

Sure. David, this is Justin. So we signed a collaboration, there was a marketing joint venture type agreement with IQVIA. We've explored several different medium to large pharma opportunities, with IQVIA since signing that agreement. To-date, like nothing has turned into a commercial opportunity for us, but - we're optimistic. IQVIA is a great company, and we really like the team there, and we're optimistic that some - that, that will be a fruitful relationship down the road.

Okay. And I think what that means is they're working with pharma manufacturers are trying to identify products that, you could help them bring to market. Is that right?

Yes, exactly. I mean, I think, yes. So IQVIA provides, a lot of different commercial solutions directly, to pharma companies. And one of the things that's interesting for them, or that they were interested in was, finding a partner that could enable them to offer - or enable their clients in the pharma world direct care platform to deliver direct care to their patients. So, I think that - look, I think the whole opportunity in pharma has just been - has taken a lot more time to materialize, than people thought, including me. I mean I think if you listen to prior calls, I was much more bullish, and excited on the whole direct-to-patient Telehealth opportunity as it relates to pharma companies over the past several years. I think for a number of reasons, it's been - the adoption rates have been very slow. I think a large part of that is pharma doesn't - pharma has to be very careful about having anything to do with delivering healthcare. There are a lot of compliance issues. And so, I just - I think they're very difficult business models to sync - to sync with each other.

Okay. Thanks very much. Congrats on a good quarter.

Thank you. We have reached the end of our question-and-answer session. And I'd like to turn the floor back over to Mr. Justin Schreiber for closing remarks.

Thanks, Camila. We appreciate everyone dialing into our earnings call today and look forward to next quarter, and giving you a very positive update next quarter. Thank you very much. Have a good evening.

This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.