LifeMD (LFMD) Q1 2026 Earnings Transcript

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DATE

Wednesday, May 6, 2026 at 4:30 p.m. ET

CALL PARTICIPANTS

• Chief Executive Officer — Justin Schreiber
• Chief Financial Officer — Atul Kavikar

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TAKEAWAYS

• Revenue -- $50.2 million, flat compared to $50.9 million in the prior-year period, and above the $48 million to $49 million guidance range.
• Net Subscriber Additions -- Over 42,000 net subscribers added, marking the largest quarterly increase in the company’s history.
• Total Subscribers -- Active subscriber base grew approximately 26% to more than 365,000 by quarter end.
• Gross Margin -- Expanded by about 420 basis points to reach 88%, driven by lower shipping and fulfillment expenses and pharmacy integration.
• Weight Management Growth -- New patient sign-ups rose around 120% sequentially, reaching nearly 100,000 patients by quarter end.
• Women’s Health Performance -- Subscribers increased more than sevenfold from the Q4 base; on-therapy retention rates exceeded 80%.
• RexMD Metrics -- Approximately 215,000 active patients, with personalized ED medications combining sildenafil and tadalafil growing more than 40% compared to Q4.
• Pharmacy Volume -- In-house facility processed about 20,000 prescriptions monthly with capability for greater throughput during the year.
• Insurance Coverage Expansion -- Approximately 112 million covered lives at quarter end, with a target to reach around 230 million by month’s end.
• Operating Expenses -- Selling and marketing increased 34% year over year to $29.8 million due to front-loaded acquisition investment; marketing spend expected to decrease from Q2 onward.
• Adjusted EBITDA (non-GAAP) -- First-quarter loss of approximately $4.5 million, in line with guidance, versus a $3.7 million gain in the prior-year period.
• Cash & Liquidity -- $34.5 million in cash, no debt, and a $30 million undrawn revolving credit facility at quarter end.
• Full-Year Guidance Reaffirmed -- Revenue expected between $220 million and $230 million (13%-19% annual growth), with adjusted EBITDA forecast at $12 million to $17 million.
• Q2 Guidance -- Revenue projected at $47 million to $50 million and adjusted EBITDA in the range of negative $2 million to positive $1 million.
• Customer Acquisition Cost (CAC) Dynamics -- CAC improved by 4%-5% sequentially for weight management and dropped by as much as 50% for insurance patients.

SUMMARY

Management emphasized the validation of its platform-based strategy as reflected by record subscriber additions and robust patient acquisition in weight management and women’s health. The company’s pivot toward insurance-supported programs and branded medication access resulted in meaningful reductions in customer acquisition costs and improvements in retention for insurance cohorts. LifeMD (NASDAQ:LFMD) signaled a continued shift in revenue mix, driven by lower-priced but higher-retention insurance and women’s health offerings, impacting short-term revenue growth. Planned margin improvements are underpinned by pharmacy integration, expanding pharmaceutical and payer partnerships, and broad AI adoption to enhance scalability and provider capacity. Execution progress on expanding coverage, new product launches, and cross-selling opportunities was presented as key levers expected to drive financial acceleration and adjusted EBITDA profitability in the second half.

• In response to analyst inquiry, management stated, The changes to the bulk drug list have zero impact on the business—totally irrelevant to us. We do not compound these medications.
• The upcoming Medicare GLP-1 Bridge launch was highlighted as a potentially significant growth catalyst for the back half, though not currently modeled in guidance.
• AI implementation is projected to enable operating leverage by increasing provider capacity and streamlining multiple administrative workflows.
• The company identified collaborations with pharmaceutical manufacturers as an evolving and increasingly material revenue stream, including ongoing discussions with new and existing partners.

INDUSTRY GLOSSARY

• GLP-1: Glucagon-like peptide-1 receptor agonists, a class of medications for weight management and related metabolic conditions.
• 503A Compounding Pharmacy: A pharmacy that formulates custom medications for individual patients based on a practitioner’s prescription, compliant with Section 503A of the Federal Food, Drug, and Cosmetic Act.
• Medicare GLP-1 Bridge: A specific program to provide Medicare beneficiaries access to GLP-1 therapies pending broader standard coverage adoption.
• Order Flow: The sequential user interface steps through which patients interact with LifeMD to access its services and indicate insurance or self-pay preferences.

Full Conference Call Transcript

Justin Schreiber: Thank you, and good afternoon, everyone. After the market closed today, we issued a press release announcing our first quarter financial results. We have also posted an updated corporate presentation, our Form 10-Q, and our shareholder letter on our Investor Relations website at ir.lifemd.com. I encourage everyone to review those materials. Q1 was a strong start to 2026. We delivered revenue of $50.2 million, ahead of guidance, and added more than 42 thousand net telehealth subscribers, the largest quarterly net addition in our history. We ended the quarter with over 365 thousand subscribers. In weight management, sign-ups increased approximately 120% sequentially from Q4, and we exited the quarter with strong momentum across all of our key growth areas.

We are seeing clear early validation of the strategy we laid out on our last call. But what matters most is not just the quarter; it is what this quarter says about the platform we are building. As I outlined in our shareholder letter, I think about LifeMD, Inc. in very simple terms: quality care, quality products, quality revenue. When we deliver high-quality care, patients trust us. When we offer products and services that genuinely improve their lives, they come back. And when patients engage across more of the platform and stay with us longer, the revenue becomes more durable, higher quality, and ultimately more profitable.

Today, we have a 50-state affiliated medical group, a fully integrated pharmacy, in-home and national lab capabilities, expanding insurance coverage, deep pharmaceutical collaborations, and a growing set of specialty care programs. Increasingly, we are layering AI across that infrastructure to make it faster, more efficient, and more personalized. LifeMD, Inc. is no longer just a telehealth company focused on a handful of conditions. We are building what we believe can become one of the most important virtual healthcare platforms in the country, a trusted destination where patients can access care, medications, labs, insurance-supported services, and ongoing clinical support through one connected experience. Let me walk you through where we are seeing the most progress. First, weight management.

This remains the largest opportunity in our business. More than 100 million Americans are clinically eligible for GLP-1 therapy, and it is estimated that fewer than 15% have tried one. These medications represent one of the most significant breakthroughs in consumer healthcare in decades. Importantly, the market is becoming more dynamic, not less. We are entering the next phase of GLP-1 adoption. The first phase was access to injectables. The second phase is broader access, including oral therapies, lower-cost self-pay options, insurance coverage, and a deep pipeline of next-generation drugs. We are built for this phase. We have already benefited from the introduction of oral GLP-1s.

Customer acquisition costs improved 4% to 5% sequentially in Q1 even as volumes effectively doubled, from roughly 300 to 400 new patients per day to 600 to 1 thousand patients per day. We ended the quarter with just under 100 thousand weight management patients. And this opportunity is only getting bigger. There are roughly 40 GLP-1 therapies currently in development, including oral formulations, longer-acting injectables, and multi-pathway treatments. As these therapies come to market, we believe platforms like LifeMD, Inc. that combine affordable access, insurance integration, and real clinical care will be the long-term winners. Second, Women’s Health. This continues to be one of the programs I am most excited about. The need is enormous.

Tens of millions of women are entering or living through menopause, and access to thoughtful, evidence-based, coordinated care remains limited. We built this program differently, around longitudinal care, not just prescriptions. That includes comprehensive intake, appropriate lab work, structured clinical protocols, and ongoing management by providers trained specifically in women’s health. The early results have exceeded our expectations. Subscriber count grew more than 7x from the Q4 base, customer acquisition costs remain attractive, and on-therapy retention is tracking north of 80%. We believe that performance is a direct reflection of the quality of the program.

Over the coming months, we plan to introduce seven new compounded pharmacy products focused on hormone and bone health, highly complementary to patient needs and well aligned with our in-house pharmacy capabilities. Women’s Health has the potential to become one of the largest and most important programs in our company, not just a growth driver, but a category where we can build deep, trusted patient relationships. Third, RexMD and Men’s Health. RexMD remains one of the most recognized men’s health brands in the country and a critical part of our platform. We now have approximately 215 thousand active patients, with growth across ED, sleep, and hair loss, with sleep currently the fastest-growing category.

ED remains the core, and our personalized ED medications combining sildenafil and tadalafil grew more than 40% versus Q4. As more fulfillment shifts in-house, we expect continued margin expansion. But RexMD is evolving beyond ED. We are expanding into personalized pharmacy products across sexual health, dermatology, pain management, and longevity. Just as importantly, RexMD provides a large, engaged patient base that can expand into the broader LifeMD, Inc. ecosystem over time, strengthening retention and lifetime value. Fourth, operating leverage and AI. This is one of the most important components of the LifeMD, Inc. story for 2026. We are deploying AI aggressively but thoughtfully, with quality as the nonnegotiable.

AI is not just a cost initiative; it is becoming foundational to how we build software, how providers deliver care, and how we operate the business. Our clinical decision support tools will integrate health records, lab data, biomarker insights, and patient intake information to enable more personalized and efficient care. Over time, we expect AI to increase provider capacity without adding headcount, which is a key lever for scaling efficiently. We are also embedding AI across intake, documentation, patient support, revenue cycle, compliance, and back-office workflows. This is not about replacing providers. It is about enabling them to spend more time practicing medicine and less time on administrative work. We expect the margin impact to become more visible in 2026.

And when AI is combined with our 503A compounding pharmacy, it unlocks something powerful: personalized prescribing at scale, enabled by data, clinical infrastructure, pharmacy capabilities, and national reach. Very few platforms have that combination, and LifeMD, Inc. is one of them. Fifth, pharmacy, insurance, and partnerships. Our affiliated pharmacy continues to scale. We now operate a 22.5 thousand square foot facility licensed in all 50 states with both commercial and 503A compounding capabilities. The pharmacy is currently processing approximately 20 thousand prescriptions per month, with significant capacity to expand throughout this year as our pharmacy offerings expand. We view pharmacy as one of our most important long-term margin expansion levers, improving economics, patient experience, and speed to market.

On the payer side, our insurance and Medicare infrastructure continues to expand. We ended the quarter with approximately 112 million covered lives and expect to reach approximately 230 million by the end of this month. The Medicare GLP-1 Bridge launching July 1 is particularly important, as it expands access to GLP-1 therapies for Medicare patients at an affordable monthly cost. We also continue to see strong momentum with pharmaceutical partners as the industry increasingly shifts toward direct-to-patient models. Our GLP-1 collaborations are a strong proof point of that trend. On the employer side, we are making progress with enterprise relationships and direct GLP-1 coverage for self-insured groups, a meaningful upside opportunity not yet fully reflected in our outlook.

Stepping back, we feel very good about where we are. We are serving more patients, expanding into larger and more durable categories, strengthening the platform, and building a business we believe can compound over the long term. We are reaffirming our full-year guidance of $220 million to $230 million in revenue and $12 million to $17 million in adjusted EBITDA. We continue to expect annualized run-rate revenue above $250 million and adjusted EBITDA above $25 million by the fourth quarter. With that, I will turn the call over to our new CFO, Atul Kavikar, to walk through the quarter in more detail. Atul?

Atul Kavikar: Thank you, and good afternoon, everyone. I am delighted to be joining my first quarterly call as CFO of LifeMD, Inc., and pleased to be leading its financial operations. It has been a positive first few weeks, and I have been impressed by the team, their commitment to continuous improvement, their entrepreneurial mindset, and their general curiosity. I will be doing everything I can to continue that culture. As for results, the first quarter played out largely as we expected: strong subscriber momentum following a planned step-up in patient acquisition spend, and the early benefits of platform efficiency beginning to show in our gross margin.

As a reminder, all year-over-year comparisons are on a continuing operations basis excluding WorkSimply, which was divested on 11/04/2025. Revenue for the first quarter was $50.2 million, exceeding our guidance of $48 million to $49 million, and essentially flat versus the prior-year period of $50.9 million, with nearly all revenue derived from recurring subscriptions. Active subscribers grew approximately 26% year over year to over 365 thousand at quarter end, with over 42 thousand net adds in Q1, the largest quarterly net addition in our history. Gross margin for the quarter expanded approximately 420 basis points to 88%, primarily reflecting improvements in lower shipping and fulfillment costs, including the continued scaling of our in-house pharmacy fulfillment that Justin described previously.

Gross profit was $44.2 million, up 3% from the year-ago period despite the flat year-over-year revenue growth. Selling and marketing expenses were $29.8 million, an increase of 34% year over year, reflecting the strategic, front-loaded patient acquisition investment designed to drive subscriber growth in subsequent quarters. Q1 was the peak of our marketing investment for the year. Marketing spend has begun normalizing, and we expect sales and marketing to step down in Q2 and remain at more typical levels throughout the back half.

GAAP net loss from continuing operations attributable to common stockholders was $9.6 million, or $0.20 per diluted share, compared to a net loss from continuing operations attributable to common stockholders of $2.4 million, or $0.06 per diluted share, in the prior-year period. Stock-based compensation was $1.4 million, down from $2.5 million in the prior-year period, reflecting our continued focus on aligning our management with long-term goals. Adjusted EBITDA, a non-GAAP measure we define as income or loss attributable to common stockholders before various items as outlined in today’s news release, was a loss of approximately $4.5 million for the first quarter, in line with our previously issued first-quarter guidance range of a loss of $4 million to $5 million.

This compares with an adjusted EBITDA of approximately $3.7 million in the prior-year period. We will now turn to the balance sheet. We exited the quarter with $34.5 million in cash, no debt, and a $30 million undrawn revolving credit facility that we put into place at the start of the year. Our balance sheet remains a strategic asset, providing ample flexibility to fund our expanding growth initiatives. Looking forward, we are reaffirming our 2026 full-year guidance: revenue of $220 million to $230 million, representing 13% to 19% year-over-year growth, and adjusted EBITDA of $12 million to $17 million.

We expect to return to adjusted EBITDA profitability in the second half of the year as customer acquisition costs decline sequentially and the patient volumes added in Q1 become accretive. This is in addition to multiple initiatives around our business that we expect to impact the second half. These include the expansion of our pharmacy offerings, which will allow us to capture revenue and margin we do not currently benefit from. As was established during our 2025 Q4 call, we continue to expect annualized run-rate revenue exceeding $250 million and annualized run-rate adjusted EBITDA exceeding $25 million by the end of 2026.

For Q2, we are expecting the business to continue its transition to branded GLP-1s; as such, we expect to see Q2 revenue between $47 million and $50 million and adjusted EBITDA between negative $2 million and positive $1 million as we continue to realize efficiencies and cost savings in our business. With that, I will turn it back to Justin.

Justin Schreiber: Thanks, Atul. As we close our prepared remarks, I want to come back to the larger point. Q1 was always going to be an investment quarter. We leaned into the launch of oral GLP-1s, accelerated patient acquisition, made big progress in Women’s Health, expanded our pharmacy and insurance infrastructure, and advanced the AI tools that we believe will make this platform more scalable over time. What gives me confidence is that the early signals are showing up exactly where we would want to see them: record subscriber additions, strong demand in weight management, rapid early growth in Women’s Health, improving pharmacy economics, and a clear path to operating leverage as the year progresses.

As I laid out in our shareholder letter, the model is simple: quality care, quality products, quality revenue. If we deliver high-quality care and build products patients value, they stay longer, use more of the platform, and create more durable revenue. That is the foundation of LifeMD, Inc.’s strategy. The opportunity ahead is tremendous. GLP-1 therapy is entering a new phase with oral medications, broader access, and a deep pipeline of next-generation therapies. Women’s Health is scaling from a small base into what we believe can become one of the most important programs we have ever built. RexMD continues to give us a large, engaged patient base and a trusted men’s health brand.

And across the company, AI, pharmacy, and insurance are becoming real levers for better care, stronger retention, and margin expansion. We are not building a point solution. We are building a platform patients can come back to for more of their healthcare needs over time. That is what makes this business more durable, and that is what makes me so excited about the rest of 2026. I want to thank the LifeMD, Inc. team for their continued execution and our shareholders for their support. With that, we will open the call for questions. Operator? Thank you.

Operator: We will now open the call for questions. If you would like to withdraw your question, please follow the prompts. The first question comes from David Larsen with BTIG.

David Larsen: Hi, congratulations on the good start to the year. Can you talk a little bit about your relationship with Novo and also Lilly? Obviously, you are leaders in the industry with regards to partnering with the brand manufacturers, as opposed to continuing with a sort of aggressive compounded GLP-1 effort. How are you making money with Novo and Lilly? How is the oral pill launch progressing? Any more color there would be helpful. Thank you.

Justin Schreiber: Hi, Dave. Thanks for the question. We have commented extensively, both in press releases and on calls like this, about how important both of these relationships are to LifeMD, Inc., and I would emphasize we view them as very long-term collaborations. Relatively speaking, both are still pretty new, and we have been working through strategies that we think are going to drive long-term patient growth and really help patients access these therapies. I cannot go into a lot more detail on either relationship. What I will say is that we have had very productive conversations with both companies about compliant ways that we can help more patients access these therapies.

Those discussions are ongoing, and we are extremely optimistic that in the near term—being the next quarter or two—at least one, if not both, of those relationships will continue to evolve in a way that helps our overall unit economics and enables more people to access these therapies. Both companies also have next-generation therapies in the pipeline. We are going to be a platform for products from those companies, and we have already spoken to a number of other large pharma companies that have next-generation GLP-1 therapies. We expect those therapies to be available on the LifeMD, Inc. platform. We also spend a lot of time looking at the unit economics for the branded therapy business.

We have some areas where unit economics are softer than we like and some areas where unit economics are incredible. One area where unit economics are really strong is on the insurance side of the business. When people are using their health insurance to subsidize the care component, and even still paying cash for these medications, the unit economics look outstanding, and there is a lot of demand. I hope that answers your question. We are under NDA with both companies, so we are limited in what we can say on an earnings call.

David Larsen: Okay, great. It sounds like your relationships with both Novo and Lilly are evolving, and you will reach some sort of understanding that benefits both them and you and, most importantly, the patients and members that are benefiting from the medications. And then can you maybe talk a little bit about the incremental marketing spend in 1Q? Obviously, that put a little bit of pressure on EBITDA in the quarter. What is the nature of that incremental spend? Is it just Google Ads and online ads, or something more than that?

Atul Kavikar: Yeah, Dave. The elevated marketing spend in the first quarter was very productive. The various channels and media buys were many of the same that we have used, including Google Ads and other social media channels where people begin their research. The upshot of the elevated spend is that it was a tremendous opportunity to acquire customers at CPAs that, relative to the last several quarters, were very attractive. We were able to add to the active base by almost 13% in the quarter. Almost equally important, we really added to our database—our pool of potential targets that we have the ability to market to going forward.

So in many respects, it was a broad-based set of campaigns that we believe will help the company in Q2, Q3, and through the rest of the year.

David Larsen: Okay. Congrats on a good quarter. I think you probably have a bunch of people on the line, so I will hop back in the queue.

Atul Kavikar: Thanks, Dave.

Operator: The next question comes from Ryan Meyers with Lake Street Capital.

Ryan Robert Meyers: Hey, thanks for taking my questions. Thinking about the approximately 230 million lives you expect to have covered this month, what are you seeing so far in terms of conversion rates, retention, and customer acquisition synergies from these insurance-supported programs?

Justin Schreiber: Thanks, Ryan. High level, we are seeing a considerable improvement in retention rates for insurance patients, which is one of the reasons we are very optimistic. We are also seeing a significant reduction in customer acquisition cost—as much as 50%. We do expect that to go up a little bit as we scale these offerings. In short, we are seeing a significant reduction in CAC, and these patients are paying a much lower platform or membership fee to LifeMD, Inc. than patients who are not using their insurance. We are seeing at least a 10% improvement in retention. Some cohorts are newer, but over the first three to six months it is meaningful.

So while we are getting fewer dollars per patient and spending less to acquire them, overall we think the unit economics profile of this patient is superior to a self-pay patient.

Atul Kavikar: Let me add one thing. For patients coming through our order flow on the site, they have an opportunity to indicate if they are interested in insurance or not. I anticipated a lot of interest, but I did not expect it would be in the 75% to 80% range, which indicates very strong demand. It points to where the business and the makeup of the patient population is going to go over the next quarters and the next few years. We are really excited about this business.

Ryan Robert Meyers: Got it. And then while you did come in ahead of expectations, there was a year-over-year decline in revenue. Can you remind us if there were any dynamics in the first quarter of last year, and how we should think about that and the potential impact during the second quarter of this year and how that relates to the guidance?

Atul Kavikar: Yes, absolutely. In 2025 we had heavy use of compounded GLP-1s. We have continued to migrate this business to where we think the future is—around branded drugs—and that is really the delta you are seeing. Today, we have a different set of unit economics. We do not make as much; we have been upfront about that. But we also think those are exceptional patients with meaningfully better retention. We think that is the right direction for the business. It is simply the change in product mix.

Operator: The next question comes from Sarah James with Cantor Fitzgerald.

Analyst: Hey, everyone. This is Gabby on for Sarah. Could you help us get a little bit more comfortable with the second-quarter to third-quarter EBITDA ramp and expand on what initiatives are kicking in? Maybe the second-quarter EBITDA was just slightly softer than we had modeled, so any additional color would be great.

Atul Kavikar: Nice to meet you, Gabby. Let me paint the picture for Q2, Q3, and the full year. We are getting a lot of momentum behind the insurance business. CPAs, as Justin said, were really attractive. We see insurance-supported programs being a more important part of the revenue growth story, and a way to strategically capture better-quality patients. We see that really ramping up in the second half. We have made a lot of technical improvements to the platform. We are significantly expanding coverage—next week we are planning to expand to roughly 147 additional plans—which will be a big part of the story in the second half.

Another driver is enhanced economics from our collaborations; those are expected to improve both revenue and EBITDA, and under our accounting that is essentially incremental revenue that drops to both top line and EBITDA. There is also cross-care opportunity. Many patients on GLP-1 drugs may be interested in other products we sell—ED, sleep, etc. For technical reasons that have recently been solved or are about to be solved, we can now open up that cross-sell opportunity. On costs, you will start to see marketing step down. It is a front-loaded first half of marketing spend. For Q2, we are expecting marketing in the $26 million to $27 million range.

In the back half, we are penciling in $42 million to $44 million across Q3 and Q4 combined, so from first half to second half it comes down quite a bit. You will also see efficiencies across SG&A and gross margin—shipping costs, provider efficiencies, fulfillment costs—showing up more in the second half. That mix of revenue drivers and expense efficiencies gives us confidence in the EBITDA ramp.

Analyst: Great, that was very helpful. One more: the CMS Bridge program was extended through 2027. How does that impact you? Does that give you a more positive outlook on your contribution to that program, or what is the right read-through?

Justin Schreiber: We are very excited about Medicare beneficiaries having access to GLP-1 medications. As most people listening know, we put an enormous amount of energy into building a 50-state Medicare program. It is working. It is already on in some states for weight management. We are turning it on for Women’s Health in the next couple of weeks. We are thinking through the right strategy for Medicare beneficiaries using Bridge. We have not built this into our model, but I am excited about it. We are working with outside counsel on the particulars.

If it works the way we think it will, it could be a really big opportunity for us in the back half of the year and, more importantly, help a lot of Medicare beneficiaries access these medications affordably.

Operator: The next question comes from Steven Valiquette with Mizuho Securities.

Steven Valiquette: Thanks, and good afternoon. First, it is early days for the new oral launches, but curious to get your thoughts on the uptake so far. At a national level, investors are comparing the week-by-week launch of one oral against the comparable weeks post the launch of the oral Wegovy earlier this year, and so far the uptake of the other oral, at least nationally, is trailing the initial oral Wegovy uptake. Are you seeing that same trend within your own platform? And if so, what do you think is driving that? Second, one of the manufacturers commented that roughly 55% of their new patient starts are cash-pay customers, which seems positive for you.

I might have expected your Q2 revenue guidance to be a little stronger sequentially versus Q1 because of that backdrop. I know you mentioned the evolution of shifting patients off compounded drugs to brands is still taking shape in Q2, but is there something about the falloff on the compounded patients that is more rapid? Hopefully that makes sense.

Justin Schreiber: I know this is not the exact answer you are looking for, but we want to be a good collaborator to both companies, and I do not think it is appropriate for us to comment on traction of one therapy versus another on our platform. What I will say is that we have [inaudible] live, and we have a lot of patients choosing both [inaudible] and the Wegovy pill. It does seem like the Wegovy pill has more awareness in the space, and that may be why it is still slightly more popular on our platform, but we do not want to get into specifics. On your second question: demand for oral therapies is very strong—stronger than I expected.

The success of these self-pay programs has surprised everyone. I will not speak for Lilly or Novo, but it seems clear the programs are working, and I think payers are probably surprised as well. LifeMD, Inc. was built to help patients access branded medications and to create the types of collaborations we have done with Lilly and Novo. That has opened the door for the rest of the industry, and we have a number of other large pharma companies interested in collaborations, some of which could be very transformational.

Interestingly, coverage appears to be slightly declining for some GLP-1 medications because of the success of the self-pay programs, which is a tailwind for a platform like LifeMD, Inc. that facilitates direct-to-patient programs while also supporting insurance on both the pharmacy and care sides. Regarding the modest softness in Q2 revenue, our revenue model has changed as part of the company’s transformation and our focus on quality revenue. We are charging less for some services, such as Women’s Health, which is more of an à la carte model. The insurance population is paying less because we are billing their insurance, and we are still optimizing some RCM processes.

We are being patient and focused on building services and products with strong retention and value propositions. That is the reason for a little softness, but we are very confident in the back half.

Operator: The next question comes from Steven Craig Dechert with KeyBanc.

Steven Craig Dechert: Hey, thanks for the questions. I was hoping you could give some outlook on the cadence of weight management subscribers through the rest of the year. And could you talk more about the opportunity with self-insured employers and what you think the upside could be there?

Atul Kavikar: The cadence going forward: the first quarter was very strong, and we will probably see a similar growth pattern through the year. There may be ebbs and flows quarter to quarter, but fundamentally the tailwinds are very strong. We have a very large group of patients we can market to who have engaged with us before, and we feel good about maintaining a pretty consistent level, with an eye toward accelerating it—particularly with the insurance offering. Notwithstanding challenges some managed care plans have around coverage, there still are many that will cover, and the Bridge program is a big opportunity to grow and maybe even accelerate penetration and patient counts in GLP-1s.

Justin Schreiber: I dedicated time in the shareholder letter to the revenue streams that will be part of LifeMD, Inc.’s future over the next year. We focused on revenue from pharmaceutical collaborations; we think that will be meaningful, and we have a deep pipeline of significant partnerships—very similar to enterprise revenue—where large partners effectively offer our services to their customer bases or memberships. We are excited about those. We also think the employer channel is pretty big, and we are working on programs for self-insured employers.

There is tremendous interest from the pharma and strategic partner channels, and because of that interest we have been deprioritizing employer programs in the near term, but they are certainly in the plans, and we understand the attractiveness of that revenue.

Operator: The next question comes from Yi Chen with H.C. Wainwright.

Analyst: Hey, this is Katie on for Yi. Looking at the FDA’s proposal to exclude semaglutide and that sort of drug from the bulk list, your shift to branded drugs puts you ahead of that a little bit. How should we think about where you stand and how this could play out whether it goes either way? And as a follow-up, what is your prescriber documentation framework for the individualized medical necessity standard? Have you talked to the FDA about that at all?

Justin Schreiber: The changes to the bulk drug list have zero impact on the business—totally irrelevant to us. We do not compound these medications. We have some patients still on a personalized compound from third-party pharmacies. This is not something we spend much time on because of our overwhelming focus on helping patients access branded therapies. As for documentation, all of our provider documentation is best in class.

Operator: Does that answer your question? Maybe we lost Katie. We will now conclude the Q&A session and turn the conference back over to Justin for any closing remarks.

Justin Schreiber: I just want to say thank you, everybody, for your time and for tuning in for our earnings call. We look forward to talking to you next quarter, and I hope everybody has a good evening. Thanks.

Operator: The conference has now concluded. Thank you for attending today’s presentation. You may now disconnect.

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