The following is a summary of the Medifast, Inc. (MED) Q3 2024 Earnings Call Transcript:

Financial Performance:

• Medifast reported a significant decrease in revenue, earning $140.2 million for Q3 2024, a 40.6% decline from the previous year.

• The decline is attributed to reduced number of active earning OPTAVIA Coaches and decreased productivity per coach, impacted by competition from GLP-1 medications and consumer spending patterns.

• Net income for Q3 2024 was $1.1 million or $0.10 per diluted share, a stark decline from $23.1 million or $2.12 per diluted share in Q3 2023.

Business Progress:

• Medifast is focusing on three core customer segments to support growth: users of GLP-1 medications, individuals transitioning off these medications, and those targeting weight loss through non-medicated methods.

• The company has trained 95% of coach leaders to support clients using GLP-1 medications, with an increase in customer and coach engagement in these programs.

• Anticipating further expansion, Medifast plans to launch new products under OPTAVIA ASCEND in 2025, designed specially for these customer segments.

Opportunities:

• The company estimates the GLP-1 support market could grow to over $50 billion by 2030, presenting a significant opportunity for tailored health and wellness programs.

• Medifast plans to introduce new programs tailored for GLP-1 medication users and transitioning clients, expecting to enhance customer retention and engagement.

Risks:

• Continuing challenges in customer acquisition due to the rising popularity of GLP-1 medications impacting the traditional coach-driven business model.

• Expected further decline in revenue as forecasted in the upcoming quarter's guidance, with loss per share ranging from $0.10 to $0.65 due to decreased coach and client numbers and competitive pressure.

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