• Fourteenth consecutive quarter of record consolidated revenue. Third quarter 2022 consolidated revenue of $31.4 million up 26% from the same year ago period.

• Adjusted EPS of $(0.03), 91% improvement versus the prior year, 86% sequentially versus prior quarter.

• Remain on track to achieve consolidated Adjusted EBITDA profitability in fourth quarter 2022.

• Consolidated Adjusted EBITDA loss for the third quarter reduced to $889,000.

NEW YORK, Nov. 10, 2022 (GLOBE NEWSWIRE) -- LifeMD, Inc. (NASDAQ: LFMD), a leading direct-to-patient telehealth company, reported results for the third quarter ended September 30, 2022. All figure comparisons are to the same year-ago quarter unless otherwise noted. Management will host a conference call today, November 10, 2022, at 4:30 p.m. Eastern Time to discuss the results.

Q3 2022 Financial Highlights

• Record revenue of $31.4 million, up 26%.

• Consolidated Gross Margin of 85%, up from 80% in the same year-ago period. Gross profit totaled $26.7 million.

• 93% of revenue generated by subscriptions.

• Consolidated Adjusted EBITDA loss reduced to $889,000 in the third quarter; remain on track to achieve consolidated Adjusted EBITDA profitability in the fourth quarter 2022.

• Adjusted EPS $(0.03), up 91% versus same year-ago period and a 86% sequential improvement versus the prior quarter (see definition of this non-GAAP financial measure and reconciliation to GAAP, below).

• Continued leverage of Selling and Marketing expenses, with third quarter expenses as a percentage of revenue reducing to 55%, a 1,700-basis point improvement versus the prior quarter and a 2,600-basis point improvement versus the same year-ago period.

• Virtual primary care business saw average daily patient acquisition increase by 440% from prior quarter with strong retention and high patient satisfaction scores.

• Telehealth active subscribers increased 36% to approximately 176,000.

• Reduced blended telehealth Customer Acquisition Costs (CAC) by 18% versus year-ago period and by 8% sequentially versus prior quarter.

• Executed an agreement with our third pharmaceutical partner using LifeMD’s technology and affiliated medical group for 4 additional branded prescription medications.

• In final stages of WorkSimpli divestiture process. Actively in negotiations and received interest from multiple bidders.

• WorkSimpli active subscribers increased by 45% to approximately 150,000 worldwide subscribers.

• WorkSimpli performance remains on a tremendous trajectory with third quarter results producing 57% year-over-year revenue growth with mid-teens EBITDA margins. WorkSimpli remains on track to deliver 2023 EBITDA margins of 25%-plus coupled with significant growth in revenue.

 Key Performance Metrics

Management Commentary

“During the third quarter, LifeMD made significant progress against our top strategic and operational priorities. We came significantly closer this quarter toward our goal of achieving consolidated Adjusted EBITDA profitability by the fourth quarter 2022, performing even better than our profitability expectations and reducing our consolidated Adjusted EBITDA loss to under $(1) million for the quarter. This significant improvement in profitability was driven by strengthening unit economics, reduced CAC’s and improved efficiency brought by scale. In addition, our WorkSimpli business continued to exponentially grow both top and bottom-line results driven by 45% growth in active subscribers versus prior year, while achieving record profitability,” said Justin Schreiber, Chairman & CEO of LifeMD. “Additionally, beyond our core direct-to-consumer telehealth businesses, we continue to successfully build out our Business-to-Business operation, leveraging our best-in-class healthcare marketing and patient service capabilities to partner directly with pharmaceutical clients. We recently executed an agreement with our third client in this vertical and have a robust pipeline of additional deals under discussion that we expect to become accretive to our 2023 results. We have also made sizeable progress in the WorkSimpli process and are currently in late-stage negotiations after attracting interest from multiple bidders. We remain laser-focused though on maximizing value for our shareholders from this asset as the fundamentals of this business continue to support tremendous future profitability and free cash flow growth that is accretive to LifeMD overall.”

LifeMD CFO Marc Benathen, commented: “During the quarter, we executed extremely well against our initiative to achieve consolidated Adjusted EBITDA profitability by the fourth quarter 2022, exceeding even our own expectations for bottom-line performance. In doing so, we reduced our consolidated Adjusted EBITDA loss to under $1 million. While we experienced a slight sequential decline in telehealth revenue versus the second quarter, this was intentional and a result of the continued work we’ve done to re-focus our growth efforts on our most profitable offerings that will drive long-term margin expansion and growth. In doing so, we cut back all activities related to consumer offerings that did not meet our profitability thresholds which while eliminating some short-term growth ensures that we maintain a base of patients and offerings that will drive continued growth at high levels of profitability. As previously guided in the second quarter, this reset process will continue to play out through year-end with a return to higher levels of growth supported by strong bottom-line margins in 2023 and beyond. In addition, our WorkSimpli subsidiary continued to post record results ahead of our own expectations on both the top and bottom-line including achieving EBITDA margins in the mid-teens. We are increasingly bullish on the financial and cash flow growth for WorkSimpli as we work through the late stages of the current process with a focus on maximizing long-term shareholder value. In addition to WorkSimpli, we currently have access to additional non-dilutive financing options that can further augment liquidity. We expect to consummate a transaction before the end of the year.”

Q3 2022 Financial Summary

• Revenue for the quarter ended September 30, 2022 increased 26% to $31.4 million from $24.9 million in 2021. The increase in revenues was attributable to a 15% increase in telehealth revenue and a 57% increase in WorkSimpli revenue versus the year-ago period.
  
  

• Gross profit increased by 35% to $26.7 million, compared to $19.9 million in the prior year. Gross margins reached 85% on a consolidated basis for the third quarter ended September 30, 2022. Gross margins for the telehealth business totaled 79%.
  
  

• Net loss attributable to common stockholders was $8.1 million or $(0.26) per share, as compared to a net loss attributable to common stockholders of $14.4 million or $(0.54) per share in the prior year.
  
  

• Adjusted EBITDA, a non-GAAP financial measure, totaled a loss of $889,000, an improvement of 90% versus the same year-ago period and 87% sequentially versus the prior quarter. (see definition of this non-GAAP financial measure and reconciliation to GAAP, below).
  
  

• Adjusted EPS, a non-GAAP financial measure, totaled a loss of $(0.03) per share, compared to an adjusted EPS loss of $(0.34) in the same year-ago period. Adjusted EPS improved 87% sequentially versus the prior quarter (see definition of this non-GAAP financial measure and reconciliation to GAAP, below).

Financial Guidance

For the Fourth Quarter 2022, the Company expects:

• Consolidated Revenue to total between $33.0 million and $34.0 million

• Consolidated Adjusted EBITDA between $0 million and $2 million, reflecting Adjusted EBITDA margins of between 0% and 6%

Conference Call

LifeMD’s management will host a conference call today, November 10, 2022 at 4:30 pm Eastern Time to discuss the company’s financial results and outlook, followed by a question-and-answer period. Details for the call are as follows:

The conference call will be webcast live and available for replay via a link provided in the Investors section of the company’s website at ir.lifemd.com. Please call the conference telephone number five minutes prior to the start time. An operator will register your name and organization.

Listeners are encouraged to review the Company's periodic reports filed with the U.S. Securities and Exchange Commission, including the discussion of risk factors, historical results of operations and financial condition as provided in these reports.

About LifeMD

LifeMD is a 50-state direct-to-patient telehealth company with a portfolio of brands that offer virtual primary care, diagnostics, and specialized treatment for men’s and women’s health, allergy & asthma, and dermatological conditions. By leveraging its proprietary technology platform, 50-state affiliated medical group, and nationwide mail-order pharmacy network, LifeMD is increasing access to top-notch healthcare that is affordable to anyone. To learn more, go to LifeMD.com.

Cautionary Note Regarding Forward Looking Statements

This news release includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended; Section 21E of the Securities Exchange Act of 1934, as amended; and the safe harbor provision of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements contained in this news release may be identified by the use of words such as: “believe,” “expect,” “anticipate,” “project,” “should,” “plan,” “will,” “may,” “intend,” “estimate,” predict,” “continue,” and “potential,” or, in each case, their negative or other variations or comparable terminology referencing future periods. Examples of forward-looking statements include, but are not limited to, statements regarding our financial outlook and guidance, short and long-term business performance and operations, future revenues and earnings, regulatory developments, legal events or outcomes, ability to comply with complex and evolving regulations, market conditions and trends, new or expanded products and offerings, growth strategies, underlying assumptions, and the effects of any of the foregoing on our future results of operations or financial condition.

Forward-looking statements are not historical facts and are not assurances of future performance. Rather, these statements are based on our current expectations, beliefs, and assumptions regarding future plans and strategies, projections, anticipated and unanticipated events and trends, the economy, and other future conditions, including the impact of any of the aforementioned on our future business. As forward-looking statements relate to the future, they are subject to inherent risk, uncertainties, and changes in circumstances and assumptions that are difficult to predict, including some of which are out of our control. Consequently, our actual results, performance, and financial condition may differ materially from those indicated in the forward-looking statements. These risks and uncertainties include, but are not limited to, “Risk Factors” identified in our filings with the Securities and Exchange Commission, including, but not limited to, our most recently filed Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, and any amendments thereto. Even if our actual results, performance, or financial condition are consistent with forward-looking statements contained in such filings, they may not be indicative of our actual results, performance, or financial condition in subsequent periods.

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