biote Corp. (BTMD) Q1 2026 Earnings Call Transcript
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Overview
The earnings call highlights several concerns: a significant decline in procedure revenue, gross profit margin, net income, and adjusted EBITDA. The recall and supply constraints have negatively impacted performance, with ongoing issues expected to affect Q2. Although management expresses confidence in future growth, the lack of specific metrics and continued inventory issues raise doubts. The Q&A session reveals analyst concerns about stabilization and supply constraints. Despite some positive signs, the overall sentiment is negative due to financial declines and uncertainties.
Key Financial Performance
Revenue Decreased 8.3% to $44.9 million year-over-year. The decline was due to a 13.2% drop in procedure revenue, which included a $1.7 million impact from the voluntary recall of hormone pellets. Factors included lower procedure volume in existing clinics and slower productivity from new clinics as sales reps focused on recall-impacted clinics.
Procedure Revenue Declined 13.2% to $31.3 million year-over-year. This included a $1.7 million impact from the voluntary recall of hormone pellets. The decline was driven by lower procedure volume in existing clinics and slower productivity from new clinics.
Dietary Supplement Revenue Increased 19.1% to $11.0 million year-over-year. The growth was primarily driven by the continued expansion of the e-commerce channel.
Gross Profit Margin Decreased to 68.9% from 74.3% year-over-year. The decline was primarily due to $1.1 million of incremental costs related to the recall and a higher reliance on third-party supply for hormone pellets.
Selling, General and Administrative Expenses Increased 4.1% to $27.8 million year-over-year. The increase was attributed to higher legal expenses and $0.4 million of SG&A costs associated with the product recall.
Net Income Decreased to $2.7 million from $15.8 million year-over-year. The decline was influenced by a lower gain from changes in the fair value of earn-out liabilities ($2.1 million in 2026 compared to $10.7 million in 2025).
Adjusted EBITDA Decreased to $8.7 million with an adjusted EBITDA margin of 19.4%. The decline was due to lower sales, reduced gross profit, and higher operating expenses.
Cash Flow from Operations Reported at $3.9 million for the first quarter of 2026. The company also fully repaid its share repurchase liabilities in January 2026.
Cash and Cash Equivalents Reported at $5.3 million as of March 31, 2026.
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Operating Highlights
Bio-identical hormone pellet inventory: Biote voluntarily withdrew certain bio-identical hormone pellet inventory from the market in January 2026 due to safety concerns. This caused a $1.7 million revenue impact and $1.5 million in incremental costs.
Practitioner network expansion: Biote trained over 200 new practitioners in Q1 2026, a 16.5% increase from Q1 2025. The company is focusing on recruiting higher-value OB/GYN and general practitioners to enhance long-term revenue potential.
Sales team expansion: Biote expanded its sales team by hiring over 25 new personnel in Q1 2026, increasing the team size to approximately 120.
Dietary supplement revenue growth: Dietary supplement revenue grew by 19.1% to $11.0 million in Q1 2026, driven by e-commerce channel growth.
Gross profit margin impact: Gross profit margin decreased to 68.9% from 74.3% due to $1.1 million in incremental costs related to the recall.
Focus on top-tier clinics: Biote introduced measures to improve retention and lifetime revenue outcomes for top clinics, reinforcing its value proposition.
Sales pipeline quality improvement: The company is focusing on a more disciplined qualification process to recruit practitioners aligned with its product offerings, aiming for predictable performance.
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Risk or Challenges
Voluntary Product Recall: The recall of certain bio-identical hormone pellet inventory in January 2026 caused a $1.7 million revenue impact and $1.5 million in incremental costs. This disruption affected supply continuity, distracted the sales force, and hindered growth objectives. The impacts are expected to continue into the second quarter.
Supply Chain Disruption: The recall led to supply constraints, forcing reliance on third-party suppliers, which negatively impacted gross margins. Full restoration of supply continuity is anticipated by the end of the second quarter.
Lower Procedure Volume: Existing clinics experienced lower procedure volumes due to supply constraints and the recall, while new clinics faced slower productivity as sales reps focused on supporting affected clinics.
Increased Operating Costs: Selling, general, and administrative expenses rose by 4.1%, partly due to $0.4 million in costs associated with the recall and higher legal expenses.
Gross Margin Decline: Gross profit margin decreased from 74.3% to 68.9%, primarily due to $1.1 million in incremental costs related to the recall and reliance on third-party suppliers.
Revenue Decline: Revenue decreased by 8.3% to $44.9 million, with procedure revenue declining by 13.2%, driven by the recall and supply constraints.
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Guidance & Outlook
Revenue Outlook: Biote maintains its 2026 revenue guidance, forecasting revenue above $190 million. Procedure revenue is expected to return to growth in the second half of 2026, despite temporary impacts from the voluntary product recall.
Adjusted EBITDA: The company forecasts 2026 adjusted EBITDA of greater than $38 million.
Dietary Supplement Revenue: Dietary supplement revenue is expected to grow at a mid- to high single-digit rate for 2026.
Procedure Revenue: Procedure revenue growth is anticipated to resume in the second half of 2026, following temporary impacts from the product recall and supply constraints.
Asteria Health Supply Restoration: The company expects to fully restore Asteria Health supply continuity by the end of the second quarter of 2026, which will impact gross margins in the short term.
Sales Team Expansion: Biote has expanded its sales team from over 90 at the end of 2025 to approximately 120 in 2026, aiming to enhance commercial capabilities and support future growth.
Practitioner Training: The company trained over 200 new practitioners in Q1 2026, a 16.5% increase from Q1 2025. New practitioners typically contribute meaningfully to financial performance after six months.
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Shareholder Return Plan
Share Repurchase Liabilities: Biote fully repaid the remaining amount due under its share repurchase liabilities in January 2026.
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Key Q&A
Q:How did the clinic attrition trend in the first quarter as the recent hires ramp up? Are you seeing some stabilization here if you normalize for the voluntary recall?
A:Attrition has stabilized and been stable for several quarters, though it remains higher than desired. The supply constraints from the recall disrupted Q1, making it hard to assess improvement. Positive signs in daily volumes were observed before the recall, with a $1.7 million impact cited. The sales force expansion to 120 reps in Q1 was affected by supply constraints, but growth is expected in Q2 as inventory normalizes.
Q:Why is the recall still having an impact in Q2, and why are there still supply constraints at this point?
A:The recall, announced in January, involved a large volume of product manufactured before October 2025, requiring replacement. Asteria scaled production, added a second shift, and sought help from third-party partners, but the process has been lengthy. Inventory allocation and rescheduling of patients caused field uncertainty. Safety stock is being rebuilt, and the situation has improved significantly since February and March, with normalization expected in weeks.
Q:What gives you confidence that the second half will be even better than previously implied in guidance despite Q1 shortfalls and Q2 guidance down?
A:Confidence stems from temporary demand headwinds due to inventory constraints, positive signs in daily volumes before the recall, and expected recapture of pent-up demand. The new team of 120 territory reps, fully trained for six months, is anticipated to drive growth. Additionally, 200+ practitioners trained in Q1 are expected to contribute meaningfully in the next six months.
Q:Was there anything preventing doctors from sourcing pellets elsewhere during Q1 and Q2 allocation issues?
A:Not significantly, but the entire industry faced production constraints, especially for estrogen estradiol pellets, which are difficult to produce at scale. Biote's third-party partners helped supply product, but demand strained their capacity. Physicians had limited alternatives, and Biote's efforts with Asteria and third-party pharmacies improved the situation.
Q:Did the recall result in much clinic attrition?
A:No significant clinic attrition was observed. While procedure volumes reduced, there is potential pent-up demand to be captured. Patient attrition, such as switching modalities, remains uncertain but is not seen as meaningful.
Q:What is the current status of inventory build and catch-up efforts? What has been observed in April regarding procedure volumes?
A:Inventory normalization is weeks away, with Asteria building safety stock and utilizing third-party partners. April showed continued pressure, but the situation is much improved. Inventory allocation persists, but confidence is growing as safety stock levels increase. A second production shift at Asteria is expected to eliminate constraints and enable future growth.
Q:Review of Unclear Management Responses
A:Management avoided directly addressing specific numerical details about April procedure volumes and the exact timeline for achieving full inventory normalization. Additionally, while they expressed confidence in second-half growth, they did not provide detailed evidence or metrics to substantiate this optimism.
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Earnings Word Cloud
The most frequently occurring keywords in this quarter's earning call
account
capability
capacity practitioner
clinic
continuity
digit rate
distraction
earn liability
effort sale
factor
gain change
hormone pellet
income gain
income share
increase
inventory
level
margin
market
measure
month
network
pellet Health
practitioner patient
priority sale
procedure
product recall
recall supply
sale personnel
supplement
supply constraint
term
value
BTMD Transcript
biote Corp. (BTMD) Q1 2026 Earnings Call Transcript
Unknown5-7
The earnings call highlights several concerns: a significant decline in procedure revenue, gross profit margin, net income, and adjusted EBITDA. The recall and supply constraints have negatively impacted performance, with ongoing issues expected to affect Q2. Although management expresses confidence in future growth, the lack of specific metrics and continued inventory issues raise doubts. The Q&A session reveals analyst concerns about stabilization and supply constraints. Despite some positive signs, the overall sentiment is negative due to financial declines and uncertainties.
biote Corp. (BTMD) Q4 2025 Earnings Call Transcript
Positive3-11
Biote's earnings call highlights strong financial performance with a 20% revenue increase and improved gross margins. Despite risks related to macroeconomic conditions and regulatory processes, the optimistic guidance for 2025 and strategic plans for growth, including sales team expansion and new product offerings, provide a positive outlook. The absence of negative Q&A feedback further supports a positive sentiment, likely resulting in a stock price increase of 2% to 8% over the next two weeks.
biote Corp. (BTMD) Q3 2025 Earnings Call Transcript
Unknown11-5
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.
biote Corp. (BTMD) Q2 2025 Earnings Call Transcript
Unknown8-7
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.
BTMD Report
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