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01/11 16:21
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call presents mixed signals. Financial metrics show improvement, with increased gross profit margin and reduced SG&A expenses, but cash reserves have decreased. The Q&A reveals concerns about clinic attrition and lack of clear improvement timelines. Despite positive restructuring efforts, tangible results are yet to manifest. The stock price impact is likely neutral as the market waits for clearer signs of recovery.
Second quarter revenue Approximately flat at $48.9 million, reflecting an 8.4% decrease in procedure revenue that was partially offset by more than 30% sales growth in dietary supplements. The decrease in procedure revenue was due to slower growth rate of new clinic additions, higher-than-normal attrition of established clinics, and lower procedure volume. The increase in dietary supplement revenue was driven by growth in the e-commerce channel.
Dietary supplement revenue Increased 30.4% to $10.7 million, primarily driven by the growth of the e-commerce channel.
Gross profit margin 71.6%, a 280 basis point increase. The improvement was primarily due to cost savings from the continued vertical integration of the 503(B) manufacturing facility.
Selling, general and administrative (SG&A) expenses Decreased 12.2% to $24.2 million. The decrease was partly due to the timing of the annual marketing event, which shifted $2 million of SG&A spend to the third quarter, and temporarily lower expenses due to headcount adjustments.
Net income $3.9 million, inclusive of a $1.8 million loss due to the change in the fair value of the earn-out liabilities. This compares to a net loss of $10.4 million in the second quarter of 2024.
Diluted earnings per share $0.10 per share, compared to a diluted loss per share of $0.21 in the second quarter of 2024.
Adjusted EBITDA Increased 19.1% to $15.2 million with an adjusted EBITDA margin of 31.1%. This compares to adjusted EBITDA of $12.7 million and adjusted EBITDA margin of 25.9%. The increases were due to improved gross profit and lower operating expenses, including the timing shift of the annual provider event.
Second quarter cash flow from operations $7.1 million, contributing to $13.6 million for the first half of 2025.
Cash and cash equivalents $19.6 million as of June 30, 2025, compared to $41.7 million as of March 31, 2025. The reduction was due to payments for previously announced share repurchases related to the founder and affiliated parties.
Dietary Supplements: Revenue increased by 30.4% to $10.7 million, driven by growth in the e-commerce channel.
Hormone Replacement Therapy and Therapeutic Wellness: Focused on capturing a large and underpenetrated addressable market opportunity.
Strategic Organizational Restructuring: Implemented in May 2025 to drive sustainable growth, including changes to people, processes, and culture.
Sales Compensation Structure: Updated to align incentives with sales growth strategy, focusing on new clinic additions and revenue from the quick start program.
Sales Training Program: Expanded depth and implemented targeted strategies to align with a performance-based culture.
Operational Efficiency: Undertook a top-to-bottom review of core functions and internal processes to enhance efficiency and consistency.
Leadership Changes: Appointed Joey Lopes as Senior VP of Strategy and Commercial Operations to reaccelerate procedure growth and improve commercial productivity.
Financial Guidance Adjustment: Revised fiscal 2025 revenue guidance to above $190 million and adjusted EBITDA guidance to above $50 million due to stronger dietary supplement growth and weaker procedure revenue.
Procedure Revenue Decline: The company experienced an 8.4% decrease in procedure revenue, attributed to slower growth in new clinic additions, higher-than-normal attrition of established clinics, and lower procedure volume. Organizational changes and disruptions in clinical decision support software also contributed to this decline.
Organizational Restructuring Impact: The strategic reorganization, while aimed at long-term growth, has been disruptive to the business, particularly affecting procedure-related sales and causing short-term operational challenges.
Cash Flow Reduction: Cash and cash equivalents dropped significantly from $41.7 million to $19.6 million due to share repurchases, which could limit financial flexibility.
Revenue Guidance Adjustment: The company revised its fiscal 2025 revenue guidance downward, reflecting anticipated high single-digit declines in procedure revenue and slower-than-expected recovery in this segment.
Attrition of Established Clinics: Higher-than-normal attrition rates among established clinics are negatively impacting procedure revenue and overall business stability.
Dependence on Dietary Supplements: While dietary supplements showed strong growth, the company is increasingly reliant on this segment to offset declines in procedure revenue, which may not be sustainable long-term.
Fiscal 2025 Revenue Guidance: Biote has adjusted its fiscal 2025 revenue guidance to be above $190 million, reflecting a combination of procedure revenue declines and dietary supplement growth.
Fiscal 2025 Adjusted EBITDA Guidance: The company forecasts adjusted EBITDA to be above $50 million for fiscal 2025.
Procedure Revenue Trends: Procedure revenue is expected to decline by high single digits for the full year, with second-half trends similar to the second quarter.
Dietary Supplement Revenue Growth: Dietary supplement revenue is projected to grow at approximately a mid-teens percentage rate for fiscal 2025.
share repurchases: The reduction in cash and cash equivalents reflected payments for the previously announced share repurchases related to our founder and affiliated parties.
The earnings call reveals several concerns: declining net income and adjusted EBITDA, high attrition rates, and procedural revenue decline. Although there's positive cash flow and growth in the supplements business, the lack of clear guidance on procedural growth and high attrition are worrying. The Q&A highlighted ongoing challenges with sales turnover and attrition, which could continue to pressure the stock. Overall, despite some positives, the negatives outweigh them, leading to a negative sentiment.
The earnings call presents mixed signals. Financial metrics show improvement, with increased gross profit margin and reduced SG&A expenses, but cash reserves have decreased. The Q&A reveals concerns about clinic attrition and lack of clear improvement timelines. Despite positive restructuring efforts, tangible results are yet to manifest. The stock price impact is likely neutral as the market waits for clearer signs of recovery.
The earnings call presents a mixed picture: strong dietary supplement revenue growth and improved gross profit margins are offset by declining procedure revenue and increased SG&A expenses. The strategic restructuring and vertical integration are positive, but operational risks and potential challenges in achieving procedure revenue growth temper optimism. The Q&A reveals management's cautious stance on procedure revenue growth and a lack of clarity on certain inefficiencies. Given these factors, the stock price is likely to remain stable, resulting in a neutral sentiment.
Biote's earnings call presents mixed signals. The company shows strong revenue growth and cost management, but guidance has been lowered, and net income has decreased. The software transition has affected procedure volumes, causing short-term disruptions. The lack of a shareholder return plan and uncertainties around new practitioner growth add to the neutral sentiment. However, the positive cash flow and gross margin improvements provide some optimism. With no market cap data, the overall prediction is neutral, considering the potential for recovery post-software transition and ongoing cost management efforts.
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