Medifast (MED) Q4 2025 Earnings Call Transcript

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Date

Tuesday, Feb. 17, 2026 at 4:30 p.m. ET

Call participants

• Chairman and Chief Executive Officer — Daniel R. Chard
• President — Nicholas M. Johnson
• Chief Financial Officer — James P. Maloney

Takeaways

• CEO Transition -- Daniel R. Chard announced a planned step-down as CEO effective June 1, 2026, with Nicholas M. Johnson expected to assume the role while Chard remains Chairman.
• Revenue -- $75.1 million in the quarter, down 36.9%, driven primarily by a 40.6% reduction in active earning coaches.
• Coach Productivity -- Average revenue per active earning coach rose 6.2% to $4,664; first year over year and sequential increase since mid-2022.
• Active Earning Coaches -- Ended quarter at approximately 16,100, representing a 40.6% decline.
• Loss Per Share -- $(1.65); includes a $1.10 impact from a $12.1 million non-cash valuation allowance against deferred tax assets.
• Loss Per Share (Excl. Valuation Allowance) -- $(0.55), which was above internal guidance expectations.
• Gross Profit -- $52.1 million, a decrease of 40.9%; gross profit margin fell 470 basis points to 69.4%, primarily due to 420 basis points of lost leverage on fixed costs and a 40 basis-point restructuring charge.
• SG&A Expense -- $59.9 million, down 31.5%, with reductions of $18.6 million in coach compensation, $5.8 million in marketing-related expenses, and $4.2 million from employee realignment; partially offset by a $1.9 million restructuring charge and $1.6 million increase in coach event costs.
• SG&A as % of Revenue -- Up 630 basis points over the prior year, attributable to higher fixed costs and event costs, and the restructuring charge.
• Restructuring Actions -- Targeted $30 million in future annual savings across all business functions, with reductions already reflected in Q4 and 2026 guidance.
• Operating Loss -- $(7.8) million, or 10.4% of revenue, compared to operating income of $0.7 million (0.6% margin) a year prior.
• Other Income -- $1.4 million, up 151.1%, as Q4 2024’s unrealized loss on LifeMD stock did not recur.
• Effective Tax Rate -- Negative 183.9% due to the deferred tax valuation allowance; income tax expense was $11.7 million this quarter versus $0.5 million last year.
• Net Loss -- $(18.1) million, or $(1.65) per share, compared to net income of $0.8 million ($0.07 per share) last year.
• Cash and Investments -- $167.3 million, with no debt; working capital was $158.7 million as of year-end.
• Q1 2026 Guidance -- Revenue expected at $65 million–$80 million; loss per share projected at $(0.15)–$(0.70); sequential and year-over-year coach productivity growth anticipated.
• Full-Year 2026 Guidance -- Revenue of $270 million–$300 million; loss per share of $(1.55)–$(2.75); projected return to profitability beginning Q4 2026, following new product launches.
• Business Model Shift -- Management emphasized transition from weight loss to a broader metabolic health positioning, supported by clinical results from its “metabolic synchronization” platform and new products targeting visceral fat and body composition.
• Coach Field Trends -- Highest percentage of active earning coaches reaching Executive Director rank since mid-2023; retention rates at this level hit post-2022 highs.
• Client Profile and Acquisition -- Company noted an increase in coach-led meetings and a shift in new client demographics, with approximately 25% having experience with GLP-1 drugs.
• Annual Guidance Reinstated -- Management stated “confidence level up regarding visibility for the entire upcoming year” as rationale for providing full-year guidance again.

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Risks

• Chief Financial Officer James P. Maloney reported, “Revenue for the fourth quarter was $75,100,000, a decrease of 36.9%,” emphasizing continued significant pressure from a declining coach base.
• Gross profit margin contraction by 470 basis points, largely from lost leverage and a restructuring charge, underlined ongoing cost headwinds.
• Executive team acknowledged, “we continue to expect a decline in the overall active earning coach count through most of the current year,” signaling lasting pressures on top-line growth.
• Loss from operations was $(7.8) million in the quarter, compared to positive operating income a year ago, reflecting persistently reduced scale and profitability.

Summary

Medifast (NYSE:MED) reported a 36.9% revenue drop and a 40.6% decrease in active earning coaches, citing GLP-1 adoption and coach realignment as key drivers. The quarter marked the first year over year and sequential improvement in coach productivity since 2022, but cost reductions and restructuring charges resulted in a net loss of $(18.1) million and a negative effective tax rate. CEO Daniel R. Chard announced a June 2026 step-down with an explicit transition plan to President Nicholas M. Johnson. The company emphasized its repositioning as a metabolic health business, new product launches for the back half of the year, and restored full-year guidance based on improved confidence in operational visibility.

• Management stated productivity gains are being achieved without reliance on price or promotional activity, “but by the new positioning of our coach-led program as a metabolic health solution, complemented with new tools and behavior changes inside our coach base.”
• CFO James P. Maloney said, “loss per share before the non-cash deferred tax valuation allowance was $0.55, which was better than the guidance range we provided.”
• President Nicholas M. Johnson highlighted that on the flagship “5 & 1 Metabolic Health Plan,” clients lost “up to 10 times more weight and 17 times more fat” versus self-directed dieters, based on internal clinical results.
• Leadership cited a sizable opportunity among clients transitioning off GLP-1 therapies, with Daniel R. Chard noting “roughly a quarter of our patients either have or are on GLP-1 drugs.”

Industry glossary

• GLP-1: Glucagon-like peptide 1, a class of weight loss and diabetes drugs affecting appetite and metabolic processes, referenced as a major influence on industry demand and Medifast, Inc.’s client base dynamics.
• Metabolic Synchronization: Medifast, Inc.’s proprietary scientific approach aimed at resetting and improving key metabolic processes to address metabolic dysfunction and optimize health outcomes, forming the basis of new products and marketing positioning.

Full Conference Call Transcript

Daniel R. Chard, Chairman and Chief Executive Officer, Nicholas M. Johnson, President, and James P. Maloney, Chief Financial Officer. By now, everyone should have access to the earnings release for the fourth quarter ended 12/31/2025 that went out this afternoon at approximately 4: 05 PM Eastern Time. If you have not received the release, it is available on the Investor Relations portion of Medifast, Inc.'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, Inc. assumes no obligation to update any forward-looking statements that may be made in today's release or call. I will now turn the call over to Medifast, Inc. Chairman and Chief Executive Officer, Daniel R. Chard. Thank you, Steven, and good afternoon, everyone.

Daniel R. Chard: 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 are making building the chapter of Medifast, Inc. 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 06/01/2026. I have led this company for close to ten years now, and it is 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 May as we execute against our priorities and support a smooth, intentional handoff. As part of the transition, the Board appointed Nicholas M. Johnson as President of Medifast, Inc. with the expectation that he will assume the CEO role following my departure.

Nick has been a central leader in the work we have 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 will have the opportunity to hear from him today about the progress we are seeing with the field and how that is translating into early and measurable progress. What made my decision easier is my absolute conviction in the direction that Medifast, Inc. is heading, the strength of our leadership team, and the path we are on as a metabolic health company.

Over the past two years, Medifast, Inc. has been in a period of transformation. We have navigated fundamental disruption in the weight loss industry, driven by rapid adoption of GLP-1 medications and shifting consumer expectations. During 2025, we made a series of intentional choices to reposition the company, not to abandon weight loss as a concept, but to put it in the right context under the broader umbrella of metabolic health. At a fundamental level, many of the health challenges people struggle with today stem from poor metabolic health, often referred to as metabolic dysfunction. That dysfunction often shows up downstream as a whole set of symptoms.

Weight gain is certainly one of the most visible of those, but it is far from the only health challenge. The problem is if we only focus on the symptoms, we are not fixing what is driving them. Improvement requires restoring metabolic health itself. At the center of our work in this space is a scientific approach we refer to as metabolic synchronization. Rather than just helping people with short-term weight loss, the science behind our clinically supported system works with the body to help reset key metabolic processes that have fallen out of balance over time. That approach allows us to reverse metabolic dysfunction and help create conditions for improvement in body composition, energy, and overall health.

To better understand how Americans view metabolic health, we partnered with KRC Research on a national survey that found that nearly 94% of American adults expressed concern about at least one aspect of metabolic health. Importantly, 85% of respondents believe metabolic dysfunction can be reversed and 84% view it as central to overall health and well-being. That combination of widespread concern and belief in reversibility highlights a large underserved market and reinforces our view on why a clinically proven coach-led approach is well positioned to meet it. Clinical results show that our metabolic synchronization approach reverses metabolic dysfunction and can deliver a targeted metabolic reset of key metabolic processes that improves body composition in meaningful ways.

Specifically, during a 16-week clinical study, participants using our 5 & 1 Metabolic Plan reduced harmful visceral fat by 14% while retaining 98% of lean mass and experienced clinically significant weight loss. These outcomes impact metabolic health, going beyond just weight loss. We are actively leveraging our metabolic synchronization science platform to develop a new product line designed to further support reduction of bad visceral fat and improve body composition, metabolic efficiency, and overall health. These products will utilize a proprietary formula of clinically studied ingredients and are designed to support metabolic health. In parallel, we are simplifying how we support clients across every phase of their metabolic health journey.

While most clients will begin in a targeted reset phase, the science of metabolic synchronization now provides a clear road map to guide and support them through additional phases that aid in achieving optimal metabolic health. We will share more as we move through the year, but this innovation is a direct extension of the foundation we have built. Rebuilding our core offer has taken time, but today, we believe that process is largely complete. That does not mean that our work is finished, but we believe the foundational elements we needed to move forward are now in place. We have a clear science-driven strategy that is supported by clinical research.

We have strengthened our clinical and scientific foundation, and we have positioned the company to expand our claims over time. We have revitalized and simplified key parts of our model and leadership systems in the coach-driven field structure, and we have taken disciplined steps to align our cost structure and operations with the realities of the market while preserving the resources we need to invest in growth. So as we enter 2026, we are moving from transformation to execution, and in the fourth quarter, we started to see early evidence that our strategy is impacting key metrics. This includes the emergence of a green shoot in coach productivity, along with bright spots developing across the business.

While these early performance metrics are yet to have an appreciable impact on our revenue, we believe they are nonetheless early signs of the improving performance of our coaches in support of our efforts to get back to growth and profitability. This quarter marks the first time since mid-2022 that quarterly coach productivity turned positive on a year-over-year basis, up 6% in the fourth quarter over the prior year. That is a meaningful milestone because productivity performance like this has historically been a leading indicator of broader improvement in client acquisition and coach growth.

We are seeing a sharp increase in coach-led product and business opportunity meetings, with activity in January showing a significant rise compared to the same period last year. This is a clear sign of the energy and excitement that our coach base is bringing into 2026. We have talked about the importance of coach productivity and the associated positive metrics like these in previous earnings calls, and the role that they could play in future growth. Their emergence now is consistent with the idea that the foundational work of the past two years is translating into measurable progress against our transformation objectives.

While we continue to expect a decline in the overall active earning coach count through most of the current year, another positive early trend that we expect to see soon is a more favorable mix in coach tenure, as a higher proportion of new coaches come in and longer-tenured, less productive coaches transition off as part of the coach life cycle. This should create a younger tenured coach base, which is a sweet spot for productivity and the sponsoring of new coaches. We saw this in prior cycles, including in 2016 and 2017, and we are expecting to see some shift in the current year.

Importantly, in this current environment, productivity is not being driven by price or business promotions, but by the new positioning of our coach-led program as a metabolic health solution, complemented with new tools and behavior changes inside our coach base as they focus on the new business opportunity around the large and growing metabolic health market. Nicholas is now going to share more detail on what we are seeing from coaches, and how programs including Premier Plus, EDGE, and our client referral activity are set up to drive coach productivity and engagement, and how the metabolic health story is energizing our coach base in a way we have not seen in some time. Thank you, Dan, and good afternoon, everyone.

I am grateful for the

Nicholas M. Johnson: opportunity to continue working closely with Dan and the Board throughout this transition. I joined the company in 2018, and I have been deeply involved in the work to reposition the company over the last several years. The 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, Inc.'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 10 times more weight and 17 times 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 are seeing early signs of improved productivity and we are pairing that with targeted actions designed to make productivity sustainable. Premier Plus and EDGE are both central to our work here.

Premier Plus 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 one. 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 leadership rank of Executive Director, the highest percentage since mid-2023, and the retention rate of those coaches hitting that rank for the following two months was the highest since 2022.

This matters because duplication of this core rank is what ultimately grows their businesses. The more we can find ways to help new coaches reach this important rank, the more we expect we will be able to stabilize then scale the business. In addition, building on that, we are seeing higher engagement and activity levels in the field. As Dan mentioned earlier, coach-led opportunity meetings and training activity have increased significantly across the nation. Our optimal metabolic health story and the science behind it is giving coaches a sharper focus and stronger confidence delivering meaningful value to their clients.

We have invested in equipping them to share our breakthrough metabolic synchronization science, responsibly and consistently, through efforts like our annual scientific symposium, as well as continuing education for our coaches. All of that is translating into more frequent and effective conversations, better follow through, and a larger investment in-person events across the country. We are also seeing signals that the word-of-mouth engine is strengthening. We have introduced an expanded referral-oriented activity, and we are seeing indications that a higher share of clients are recommending the program to prospective clients. There are also indicators that sponsoring is improving, and when you combine that with a younger tenured coach mix, it can create a flywheel of momentum.

Historically, when productivity improvement was sustained, we have typically seen active earning coach trends improve within the following six to nine months. Delivering on that is what we are focused on for 2026. With that, I will turn it back to Dan.

Daniel R. Chard: Thanks, Nick. Before I hand over to Jim, I want to emphasize two points. First, we are staying consistent. We are not pivoting our strategy. We are executing on what we have been building, moving upstream to address metabolic dysfunction with a clinically proven system built on science, a coach-led model that differentiates us. Second, we are focused on disciplined execution on reattaining 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 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 operating today. We have more work to do, but we are encouraged by the early indicators we are seeing, and as a result, we are confident in the direction we are headed. I will now turn the call over to James P. Maloney 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 2022 and reaching its highest level since 2024. Our fourth quarter loss per share was $1.65. The loss per share is impacted by a $12,100,000 non-cash valuation allowance

James P. Maloney: 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 non-cash deferred tax valuation allowance was $0.55, which was better than the guidance range we provided. Revenue for the fourth quarter was $75,100,000, 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 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 is 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, and productivity per coach needs to sustain in order for revenue growth to occur. Gross profit for Q4 2025 decreased 40.9% year over year to $52,100,000, driven by lower sales volumes. Gross profit margin decreased 470 basis points to 69.4%, primarily driven by the loss of leverage on fixed costs of 420 basis points and a one-time restructuring charge of 40 basis points.

SG&A expense for Q4 2025 was down 31.5% year over year to $59,900,000, primarily due to an $18,600,000 decrease in coach compensation, a $5,800,000 decrease in company-led marketing-related expenses, and a $4,200,000 decrease resulting from the realignment of the employee base to lower revenue levels, partially offset by a $1,900,000 increase due to a one-time restructuring charge and a $1,600,000 increase in coach event costs.

Q4 2025 SG&A as a percentage of revenue increased 630 basis points from last year, primarily reflecting 370 basis points of loss of leverage on fixed costs, a 300 basis point increase for higher coach event costs, and a 250 basis point increase due to a one-time restructuring charge, partially offset by 440 basis points of reduced company-led marketing-related expenses. During Q4 2025, we executed a restructuring across all of our business functions and further scaled back our marketing spend, with targeted future savings of over $30,000,000. These restructured costs, along with other initiatives, are incorporated in our 2026 guidance.

Loss from operations was $7,800,000 in 2025, compared to income from operations of $700,000 for the year-earlier period, driven by lower gross profit partially offset by lower SG&A. As a percentage of revenue, loss from operations was 10.4% in the fourth quarter, compared to income from operations of 0.6% for the year-earlier period. Other income increased 151.1% year over year to $1,400,000, primarily due to unrealized losses on our investment in LifeMD common stock in Q4 2024 that did not recur in 2025. Income tax expense was $11,700,000 for the fourth quarter, an effective tax rate of negative 183.9%, as compared to $500,000, an effective tax rate of 37.3%, recorded in the prior year's fourth quarter.

As I alluded to earlier, we recorded a $12,100,000 non-cash valuation allowance against our deferred tax assets in the current quarter, which was equal to our ending deferred tax asset balance. We assess deferred tax assets for realizability on a quarterly basis, and the current quarter's analysis warranted the establishment of the valuation allowance. Net loss in 2025 was $18,100,000, or $1.65 per diluted share, compared to net income of $800,000, or $0.07 per diluted share, in the year-earlier period. The $12,100,000 valuation allowance represents $1.10 of the loss on a per share basis. The loss per share before the non-cash deferred tax valuation allowance was $0.55.

With respect to our balance sheet, we ended the year with $167,300,000 in cash, cash equivalents, and investment securities, and no debt. Additionally, our working capital, defined as current assets less current liabilities, was $158,700,000 as of 12/31/2025. Now I will turn to guidance. We are expecting our first quarter revenue to range from $65,000,000 to $80,000,000, and our loss per share for the quarter to range from $0.15 to $0.70 per share. We expect to see continued coach productivity growth during the quarter, up both year over year and sequentially. With our confidence level up regarding visibility for the entire upcoming year, as we focus on metabolic health, we are reinstituting annual guidance.

For the full year 2026, we expect to make significant headway on our efforts to get back to profitability, with revenue of $270,000,000 to $300,000,000 and loss per share between $1.55 and $2.75. Also included in our guidance is that we believe improvements to get back to profitability will start in Q4 2026, following the launch of our new product line, and we will be targeting improvements in earnings to continue into 2027 and beyond. Finally, we believe our working capital will be more than $140,000,000 at 12/31/2026. With that, let me turn the call back to the operator for questions. Thank you.

Operator: We will now be conducting a question and answer session. The first question is from James Ronald Salera from Stephens Inc. Please go ahead.

James Ronald Salera: I wanted to start off by asking about the coach productivity and how we should think about the sequencing of that

Daniel R. Chard: into 2026, particularly

James Ronald Salera: can you give us any detail around the guests or the consumers that are up with these coaches, do you do you mentioned you noticed a younger composition of coach, but does that also apply to the consumers that are tethered to the coach?

Nicholas M. Johnson: He offer any insight in how we see that progressing through '26?

Daniel R. Chard: Sure, Jim. Thanks for the question. This is Dan. You are focused on the right area. This is one of the big changes from work in the last few years, as we indicated in our prepared remarks. This is the first time since 2022 that we have seen a year-over-year improvement in productivity, and it is an improvement over where we have been over the last several quarters as well. So it is reflective of our coaches, actually two things happening: our coaches telling a new story focused on metabolic health, which is resonating in an environment where weight loss has been largely a story that has changed to be focused on GLP-1 weight loss.

So as we have said, metabolic health goes beyond just weight loss. So we are seeing a new type of customer coming in who is looking for a different kind of health benefit, and we have 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 the metabolic health story, and we are seeing that expected improvement. We anticipate that as 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 improved.

The other thing that is a big part of this new quarter that we are 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 $30,000,000 out, which we anticipate to be reflected both a little bit in the fourth quarter of last year and moving into this current year.

James Ronald Salera: I think about the sequencing of the top line, particularly against the backdrop of the $270 to $300, 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 is still negative.

James P. Maloney: Yeah. I mean, we are not, obviously, Jim, we are not giving quarterly guidance

James Ronald Salera: You know, when you think back in

James P. Maloney: 2022, you know, we took away

James Ronald Salera: 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

James P. Maloney: to make sure we were

James Ronald Salera: getting to the path forward the company needed to. Now that we landed on metabolic health, and were past, I will call it, the transformation stage and more on the execution, we are able to provide longer-term guidance. So we are happy to share the annual guidance as we did today, and you should think of that as that we are more confident in the movement into metabolic health

James P. Maloney: With the information that we have provided,

James Ronald Salera: investors, you would think of the way you are thinking of it. So it is not unreasonable to think that

James P. Maloney: when you look at a top-line basis of our company, that things are going to stabilize, and that would be

James Ronald Salera: the anticipation.

Steven Zenker: If you look at the

James Ronald Salera: customers that have used GLP-1 either in the past or maybe currently, actively using it, you shop for any thoughts around how the new lineup and then 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 bill format rolling out this year and anything that you have kind of modeled into impacts from that. Yeah. I will take the first part of this question, and I will have Nicholas M.

Johnson, who is also here with us, comment on what they are seeing in the field. But what we are saying now, and this is what we refer to as the off-ramp, where people who are coming off GLP-1 drugs is getting significantly larger because I think there is a recent study that showed after two years, roughly two-thirds of GLP-1 patients transition off for a variety of reasons. It also shows that they regained the weight and in some cases more than where they started back after being on a GLP-1 drug. So we are seeing that large inflow of clients inside of the group

Daniel R. Chard: that our coaches are now able to attract. And we have roughly a quarter of our patients either have or are on GLP-1 drugs. But I will let Nick comment on where our coaches are having success in attracting both those who have never used

James Ronald Salera: as well as those who have used or are current users or who have used it the best.

Nicholas M. Johnson: Thanks, Dan. Jim, as Dan was mentioning, the story in the field around metabolic health and specifically about what is to come, I think it is 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 is being lost, you think about a healthy portion of that weight loss coming from lean mass, lean muscle, it is on consumers' minds.

So when you think about what is 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 is to come because they understand it is the quality of the weight that is coming off, where it is coming off, the type of dangerous visceral fat that is coming off, as opposed to the type of weight that you want to maintain, specifically lean mass.

James Ronald Salera: Well, I appreciate the detail. Hop back in the queue.

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

Daniel R. Chard: I would like to thank you all for joining the call today. We appreciate your continued in Medifast, Inc. and the thoughtful dialogue that we have had afternoon. We remain focused, as Jim said, on executing the transition to a more differentiated metabolic health company. We feel like we are well on our way

Nicholas M. Johnson: doing that and to strengthening our coach community, and positioning the business for sustainable long

Daniel R. Chard: 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.

Nicholas M. Johnson: This concludes today's teleconference. You may disconnect your lines at this time.

Operator: Thank you for your participation.

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