Medifast Reports 33.8% Revenue Decline and Net Loss in Q1 2025

Medifast, Inc. reported a significant decline in financial performance for the first quarter of 2025, with revenues falling to $115.7 million, a decrease of 33.8% from $174.7 million in the same period of 2024. The company's net loss for the quarter was $0.8 million, or $0.07 per share, compared to a net income of $8.3 million, or $0.76 per share, in the prior year. The decline in revenue was primarily attributed to a reduction in the number of active earning OPTAVIA coaches, which decreased to 25,400 from 37,800 year-over-year, reflecting ongoing challenges in customer acquisition and market conditions.

Cost of sales also decreased, falling by 33.6% to $31.5 million, which was in line with the drop in revenue. Gross profit for the quarter was $84.2 million, maintaining a gross margin of 72.8%, consistent with the previous year. Selling, general, and administrative expenses were reduced by 28.4% to $85.5 million, driven by lower OPTAVIA coach compensation and decreased marketing and operational costs. Despite these reductions, the company reported a loss from operations of $1.3 million, a stark contrast to the income from operations of $7.9 million recorded in the first quarter of 2024.

Operationally, Medifast's business model continues to evolve, with a focus on enhancing its OPTAVIA segment. The company has introduced new nutrition plans tailored for individuals using GLP-1 medications, which are gaining popularity in the weight management market. This strategic shift aims to address the changing landscape of weight loss solutions and to better serve a broader customer base. The company is also enhancing its digital tools and customer experience to improve engagement and retention.

As of March 31, 2025, Medifast's total assets were reported at $280.0 million, with stockholders' equity increasing slightly to $211.0 million. The company had cash and cash equivalents of $91.7 million, reflecting a stable liquidity position. However, the decline in active coaches and revenue per coach indicates potential challenges ahead. The average revenue per active earning OPTAVIA coach was $4,556, down from $4,623 in the previous year, highlighting the need for improved customer acquisition strategies.

Looking forward, Medifast acknowledges the competitive pressures from the growing acceptance of GLP-1 medications and the broader weight loss market. The company is committed to adapting its offerings and enhancing its coach-supported model to drive growth. Management remains optimistic about the potential for recovery and growth, emphasizing the importance of innovation and customer-centric strategies in navigating the evolving health and wellness landscape.