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01/11 03:35
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
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.
Third quarter revenue $48.0 million, a decrease of 6.7%. Procedure revenue declined 10.4% and dietary supplements revenue grew 8.4%. The decline in procedure revenue was primarily due to a slower rate of net new clinic additions and lower procedure volume, impacted by the ongoing transformation of the commercial team. Dietary supplement revenue growth was driven by the continued growth of the e-commerce channel.
Gross profit margin 71.8%, a 150 basis point increase. The improvement was primarily due to cost savings from the vertical integration of the 503(B) manufacturing facility and effective cost management.
Selling, general and administrative expenses $26.2 million, an increase of 9.3%. The increase was due to the timing of the annual marketing event and continued investment in sales and marketing to drive new customer growth.
Net income $9.2 million, compared to $12.7 million in the prior year. The decrease was influenced by a lower gain from changes in the fair value of earn-out liabilities ($2.9 million in 2025 vs. $7.2 million in 2024).
Adjusted EBITDA $12.9 million, a decrease of 20.5%, with an adjusted EBITDA margin of 26.9% (compared to $16.2 million and 31.5% in the prior year). The decrease was due to lower sales, reduced gross profit, and higher operating expenses, including the shift of the annual marketing event to the third quarter of 2025.
Third quarter cash flow from operations $27.6 million, an increase of $14.1 million. This increase reflects improved operational cash generation.
Cash and cash equivalents $28.0 million as of September 30, 2025, compared to $19.6 million as of June 30, 2025. The increase was supported by strong cash flow from operations.
Dietary Supplements Revenue: Increased by 8.4% to $11.2 million, driven by e-commerce channel growth. Expected mid-teens revenue growth for fiscal 2025.
New Product Offerings: Identifying promising opportunities to optimize the portfolio.
Clinic Network Expansion: Continued expansion of clinic network, though impacted by slower pace of new business in the past year.
Sales Team Growth: Approximately 50% of the commercial team joined in the past year. Sales territory coverage is at 75%-80% of the target. Targeted sales rep headcount expected by end of 2025.
Operational Improvements: Implemented changes to internal processes and systems, enhancing data insights, productivity, and execution.
Cost Savings: Achieved through vertical integration of the 503(B) manufacturing facility, improving gross profit margin by 150 basis points to 71.8%.
Strategic Priorities: Focused on accelerating growth from new providers, maximizing value from top-tier clinics, and improving financial performance through accountability and discipline.
Marketing Event: Hosted a major event in Cancun with over 800 attendees and renowned speakers, strengthening relationships and market leadership.
Sales Team Rebuilding: The ongoing process of rebuilding the sales team and enhancing sales and marketing functions has negatively impacted procedure revenue in the near term. Approximately half of the commercial team is new, and the team is currently at 75%-80% of the desired size, which has created a temporary headwind to revenue growth.
Procedure Revenue Decline: Procedure revenue declined by 10.4% in Q3 2025 due to a slower rate of new clinic additions and lower procedure volumes. This decline is attributed to the transformation of the commercial team and slower pace of new business in the prior year.
Increased Operating Expenses: Selling, general, and administrative expenses increased by 9.3%, driven by the timing of the annual marketing event and continued investments in sales and marketing. This has contributed to reduced adjusted EBITDA and margin.
Adjusted EBITDA Decline: Adjusted EBITDA decreased by 20.5% to $12.9 million, with a margin decline from 31.5% to 26.9%, due to lower sales, reduced gross profit, and higher operating expenses.
Strategic Investments and Capital Deployment: The company undertook share repurchases and amended settlement agreements, which required significant capital outflows. While these actions aim to provide long-term value, they represent immediate financial commitments that could impact liquidity.
Revenue Guidance for 2025: Biote reiterates its fiscal 2025 revenue guidance of above $190 million.
Adjusted EBITDA Guidance for 2025: Biote reiterates its fiscal 2025 adjusted EBITDA guidance of above $50 million.
Dietary Supplements Revenue Growth: Biote expects mid-teens revenue growth from its dietary supplements business for the 2025 fiscal year.
Sales Team Expansion: Biote anticipates reaching its targeted sales representative headcount by the end of 2025, which is expected to support a return to procedure revenue growth.
Operational Efficiency: Biote plans to leverage improvements in internal processes and systems to enhance operational efficiency and scale its business more effectively.
New Product Offerings: Biote continues to identify and pursue promising new opportunities to optimize its product portfolio, particularly in dietary supplements.
Share Repurchase Program: Biote repurchased approximately 1 million shares of Class A common stock at an average price of $3.28 per share. These repurchases were made within the $20 million common share repurchase program approved by the Board in 2024.
Settlement Agreement Amendments: Biote amended its settlement agreement with Marci Donovitz to repurchase her remaining shares at a savings to the original agreement. Biote paid $12.5 million in October to fully settle the multiyear payment obligation. Additionally, Biote amended its settlement agreement with Dr. Gary Donovitz to repurchase his remaining shares at a savings to the original agreement, agreeing to pay $18.5 million in January 2026 to fully settle the multiyear payment obligation.
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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