Greetings, and welcome to the Medifast Fourth Quarter 2025 Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Steven Zenker, Vice President, Investor Relations. Thank you. You may begin.

Good afternoon, and welcome to Medifast's Fourth Quarter 2025 Earnings Conference Call. On the call with me today are Dan Chard, Chairman and Chief Executive Officer; Nick Johnson, President; and Jim Maloney, Chief Financial Officer. By now, everyone should have access to the earnings release for the fourth quarter ended December 31, 2025, that went out this afternoon at approximately 4:05 p.m. Eastern Time. If you have not received the release, it is available on the Investor Relations portion of Medifast's website at www.medifastinc.com. This call is being webcast, and a replay will also be available on the company's website. Before we begin, we would like to remind everyone that today's prepared remarks contain forward-looking statements, and management may make additional forward-looking statements in response to your questions. The words believe, expect, anticipate and other similar expressions generally identify forward-looking statements. These statements do not guarantee future performance, and therefore, undue reliance should not be placed on them. Actual results could differ materially from those projected in any forward-looking statements. All of the forward-looking statements contained herein speak only as of the date of this call. Medifast assumes no obligation to update any forward-looking statements that may be made in today's release or call. Now I would like to turn the call over to Medifast's Chairman and Chief Executive Officer, Dan Chard.

Thank you, Steve, and good afternoon, everyone. We appreciate you joining us today as we discuss our fourth quarter and full year 2025 results and as we share an update on the progress we're making building the next chapter of Medifast. Before I get into performance and strategy, I do want to briefly acknowledge a leadership update we communicated in January. I recently informed the Board that I plan to step down as Chief Executive Officer, effective June 1, 2026. I've led this company for close to 10 years now, and it's no exaggeration to say that it has been one of the great privileges of my career. This decision was made thoughtfully and deliberately as part of a planned transition that I have been talking to the Board about over recent months. I will continue to serve as Chairman following the transition and will be fully engaged as CEO through the end of May as we execute against our priorities and support a smooth intentional handoff. As part of the transition, the Board appointed Nick Johnson as President of Medifast with the expectation that he will assume the CEO role following my departure. Nick has been a central leader in the work we've done over the past several years, strengthening our coach-led model, helping reposition the company around metabolic health and working in tandem with our independent coaches to build the operational discipline required to sustain change. He has been with us on recent earnings calls, and you'll have the opportunity to hear from him today about the progress we're seeing with the field and how that's translating into early and measurable progress. What made my decision easier is my absolute conviction in the direction that Medifast is heading, the strength of our leadership team and the path we…

Thank you, Dan, and good afternoon, everyone. I'm grateful for the opportunity to continue working closely with Dan and the Board throughout this transition. I joined the company in 2018, and I've been deeply involved in the work to reposition the company over the last several years. My focus now is on executing this transition to a metabolic health company, particularly in the field where our strategy becomes real. Our coach-led model remains Medifast's greatest strength, and the data reinforces that belief. By working with a coach, clients are capable of achieving significantly better metabolic health outcomes, losing up to 10x more weight and 17x more fat on our flagship 5 & 1 metabolic health plan compared to those attempting to lose weight on their own. That difference underscores why we continue to invest in the coach experience and why we believe our model provides us with a real structural advantage in a crowded market. In a world where many solutions are increasingly virtual or transactional, our model is built on human connection, accountability and community, and we believe that matters now more than ever. As Dan referenced, we're seeing early signs of improved productivity, and we're pairing that with targeted actions designed to make productivity sustainable. Premier+ and EDGE are both central to our work here. Premier+ has enabled us to simplify our offer, and we expect it to strengthen client acquisition and retention, making it easier for clients to start our program, understand the value and stay engaged in their metabolic transformation beyond month 1. EDGE is a program that incentivizes the duplication of highly productive coaches by rewarding the behaviors that drive client acquisition, coach sponsoring and leadership development. In the fourth quarter, we achieved a double-digit percentage of active earning coaches reaching the important coach business…

Thanks, Nick. Before I hand over to Jim, I want to emphasize 2 points. First, we are staying consistent. We are not pivoting our strategy. We are executing on what we've been building, moving upstream to address metabolic dysfunction with a clinically proven system built on science and a coach-led model that differentiates us. Second, we are focused on disciplined execution on retaining profitability. We are deepening our leadership in metabolic health through ongoing research and a new product line being developed with our metabolic science at the center. And both Nick and I will share more at the appropriate time as we move through the year. We will continue strengthening and simplifying the coach and client experience and we will maintain cost discipline and protect our financial flexibility so we can invest in the areas that matter most. Our balance sheet remains strong, and our operating model is tightly aligned to the market realities we're operating in today. We have more work to do, but we're encouraged by the early indicators we're seeing. And as a result, we're confident in the direction we're headed. Now I'll turn it over to Jim to review the financials and our outlook.

Thank you, Dan. Good afternoon, everyone. Fourth quarter 2025 revenue was within our guidance range with revenue per active earning coach showing year-over-year growth for the first time since Q2 of 2022 and reaching its highest level since Q3 of 2024. Our fourth quarter loss per share was $1.65. The loss per share is impacted by a $12.1 million noncash valuation allowance we recorded against our deferred tax assets in the current quarter, which on a per share basis represented $1.10 of the $1.65 loss. The loss per share before the noncash deferred tax valuation allowance was $0.55, which was better than the guidance range we provided. Revenue for the fourth quarter was $75.1 million, a decrease of 36.9% versus the year earlier period, primarily driven by a decrease in the number of active earning coaches. We ended the quarter with approximately 16,100 active earning coaches, a decrease of 40.6% from the fourth quarter of 2024. This decline was driven in part by the rapid adoption of GLP-1 medications, which continues to impact the traditional weight loss category. It's also reflective of the work we have been doing to build a new coach leadership structure comprised of the most productive executive director organizations described by Nick. Accelerating the exit of less productive and less profitable coaches contributed to average revenue per active earning coach for the fourth quarter reaching $4,664, a year-over-year increase of 6.2%. This represents a much anticipated green shoot during the current quarter with coach productivity turning positive both year-over-year and sequentially. As we have discussed previously, we view increases in revenue per active earning coach as an early indicator for future coach growth, which we believe will in turn lead to revenue growth. As a reminder, revenue growth is expected to take several quarters to materialize…

[Operator Instructions] The first question is from Jim Salera from Stephens Inc.

I want to start off by asking about the coach productivity and how we should think about the sequencing of that into 2026. Particularly, can you give us any detail around the guests or the consumers that are matched up with these coaches? You mentioned you noticed a younger composition of coach, but does that also apply to the consumers that are tethered to the coach? Can you offer any insight in how we see that progressing through '26?

Sure, Jim. Thanks for the question. This is Dan. Yes, you're focused on the right area. This is one of the big changes from where we've been in the last few years. As we indicated in our prepared remarks, this is the first time since mid-2022 that we've seen a year-over-year improvement in productivity, and it's an improvement over where we've been over the last several quarters as well. So it's reflective of our coaches -- actually 2 things happening. Our coach is telling a new story focused on metabolic health, which is resonating in an environment where weight loss has been largely a story that's changed to focus -- be focused on GLP-1 weight loss. So as we've said, metabolic health goes beyond just weight loss. So we're seeing a new type of customer coming in who's looking for a different kind of health benefit. And we've seen that new client be tied to this -- as we said, this new story. This is largely a function of our coaches now being largely retrained and able to tell this metabolic health story, and we're seeing that expected improvement. And we anticipate that, that as we get the story continues to build and we introduce new products in the back half of this year, that productivity level should be -- or we expect that to be sustained and even improve. The other thing that is a big part of this new quarter that we're reporting on is some very significant improvements on our cost structure. As Jim said, we were able to restructure the business to be more reflective of where we are as a company and pulled approximately $30 million out, which we anticipate to be reflected both a little bit in the fourth quarter of last year and moving into this current year.

If I think about the sequencing of the top line, particularly against the backdrop of the $270 million to $300 million that you gave for the full year. If my math is correct, at the midpoint, 1Q is down like 37%, but the midpoint for the full year is only down around 27%. So that would imply improving generally throughout the year. Is it possible that we can get to a point where revenues are flat or maybe even modestly positive by 4Q? Or is it more of kind of a gradual improvement, but we should still exit the year with productivity positive, but absolute top line year-over-year still negative?

Yes. I mean we're not -- obviously, Jim, we're not giving quarterly guidance. When you think back in 2022, we took away full year guidance at that point because we were disrupted by the introduction of GLP-1 medications, and we needed the flexibility as a company to invest in certain areas to make sure we were getting to the path forward the company needed to. Now that we landed on metabolic health, and we're past, I'll call it, the transformation stage and more on the execution, we're able to provide longer-term guidance. So we're happy to share the annual guidance as we did today. And you should think of that as that we're more confident in the movement into metabolic health. With the information that we have provided investors, you would think of the way you're thinking of it. So it's not unreasonable to think that when you look at a top line basis of our company, that things are going to stabilize, and that would be the anticipation.

If you look at the customers that have used GLP-1 either in the past or maybe currently actively using it, can you just offer any thoughts around how the new lineup and some of the new product innovation that you talked about and it sounds like coming this year as well is going to match up with kind of that change in the composition of the consumer base? And also, any thoughts you can offer around the fill format rolling out this year and anything that you've kind of modeled into impacts from that?

Yes, I'll take the first part of this question, and then I'll have Nick Johnson, who's also here with us, comment on what they're seeing in the field. But what we're seeing now is this -- what we refer to as the off-ramp or people who are coming off GLP-1 drugs is getting significantly larger because that's -- because I think there's a recent study that showed after 2 years, roughly 2/3 of GLP-1 patients transition off for a variety of reasons. It also shows that they regain the weight and in some cases, gain more than what they -- where they started back after being on GLP-1 drugs. So we're seeing that large inflow of clients inside of the group that our coaches are now able to attract. I think we have roughly 1/4 of our patients either have or are on GLP-1 drugs. But I'll let Nick comment on where our coaches are having success in attracting both those who have never used as well as those who have used or are current users or who have used in the past.

Thanks, Dan. Jim, as Dan was mentioning, the story in the field around metabolic health and specifically about what's to come. I think it's important for us to talk about some of those foundational pillars of our proprietary science metabolic synchronization, which focuses on a 14% reduction in visceral fat and 98% preservation of lean mass and then protecting healthy muscle. And when you think about that off-ramp group, and you think about the body composition, specifically around the type of weight that's being lost and you think about a healthy portion of that weight loss coming from lean mass, lean muscle, it's on consumers' minds. So when you think about what's coming with new plan, new program and system in the back half of the year, you can be thinking about solving for some of those outages, which are on people's minds today. And just to further articulate the point, our field are very excited about what's to come because they understand it's the quality of the weight that's coming off, where it's coming off, the type of dangerous visceral fat that's coming off as opposed to the type of weight that you want to maintain, specifically lean mass.

There are no further questions at this time. I would like to turn the floor back over to Dan Chard for closing comments.

I'd like to thank you all for joining the call today. We appreciate your continued interest in Medifast and the thoughtful dialogue that we've had this afternoon. We remain focused, as Jim said, on executing the transition to a more differentiated metabolic health company. We feel like we're well on our way to doing that and to strengthening our coach community and positioning the business for sustainable long-term performance. We look forward to updating you on our progress in the quarters ahead, and we thank you again for being with us today.

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