Medifast’s second quarter results featured a sharp decline in revenue year over year, consistent with the ongoing contraction in its coach network. Management attributed the weak top-line performance primarily to a continued drop in active OPTAVIA coaches and lower client acquisition, due in part to reduced promotional activity. CEO Dan Chard acknowledged the challenging environment and emphasized the company’s focus on “transforming the business” to adapt to changes in the weight management landscape. Notably, Medifast reported that average revenue per coach increased sequentially, reflecting some stabilization in core operations despite the overall decline.
Is now the time to buy MED? Find out in our full research report (it’s free).
Medifast (MED) Q2 CY2025 Highlights:
- Revenue: $105.6 million vs analyst estimates of $101.8 million (37.4% year-on-year decline, 3.7% beat)
- EPS (GAAP): $0.22 vs analyst estimates of -$0.19 (significant beat)
- Adjusted EBITDA: $2.51 million vs analyst estimates of $500,000 (2.4% margin, significant beat)
- Revenue Guidance for Q3 CY2025 is $80 million at the midpoint, below analyst estimates of $93.8 million
- EPS (GAAP) guidance for Q3 CY2025 is -$0.30 at the midpoint
- Operating Margin: -1%, up from -4.7% in the same quarter last year
- Market Capitalization: $135.4 million
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Medifast’s Q2 Earnings Call
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James Ronald Salera (Stephens): asked about changes in coach composition given the rise of GLP-1 use. CEO Dan Chard and Chief Field Operations Officer Nick Johnson explained that newer coaches are now trained specifically for the GLP-1 environment, and 60% of coaches have supported at least one client using GLP-1s.
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James Ronald Salera (Stephens): followed up on ASCEND, inquiring about engagement and its role for GLP-1 users. Chard responded that ASCEND is meeting expectations, supporting both GLP-1 clients and those entering maintenance phases, complementing the flagship 5 & 1 plan.
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James Ronald Salera (Stephens): also asked about company-supported marketing versus coach-led acquisition. Chard stated that while company-led marketing is effective for re-engaging past clients, coach-driven messages are more successful and efficient for new client acquisition, leading to a pared-back marketing budget.
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The analyst questions on the call focused exclusively on the impact of GLP-1 medications on coach composition and product engagement, the role of ASCEND in supporting GLP-1 users and maintenance, and the relative effectiveness of company-supported marketing versus coach-led acquisition. No other analysts participated in the Q&A session.
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Overall, analysts sought clarity on how Medifast is evolving its business model and training to address the competitive threat and opportunity presented by GLP-1 medications, with management emphasizing new product lines, coach program enhancements, and a shift in marketing strategy.
Catalysts in Upcoming Quarters
Looking ahead, the StockStory team will be monitoring (1) whether the Premier+ pricing and EDGE coach initiatives can slow the decline in coach numbers, (2) how well new product lines like ASCEND and ACTIVE perform with clients using or transitioning off GLP-1 medications, and (3) signs that client retention and acquisition can stabilize without heavy promotional activity. Continued adaptation to the evolving weight management landscape will also be a key focus.
Medifast currently trades at $13.19, down from $13.46 just before the earnings. In the wake of this quarter, is it a buy or sell? Find out in our full research report (it’s free).
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