Why did Medifast's operating expenses drop sharply in Q4 2024?

Medifast's operating expenses dropped sharply in Q4 2024 due to a significant decrease in revenue-related expenses, particularly in the areas of coaching and marketing: 1. **Decrease in Revenue-Related Expenses**: With a revenue decline of 37.7% to $119.0 million in Q4 2024 compared to $191.0 million in the same period of the previous year, Medifast's operating expenses, which are heavily tied to its coaching and marketing efforts, were inevitably affected. The company's revenue per active earning coach dropped to $4,391, and the number of independent active earning OPTAVIA coaches decreased to 27,100. 2. **Strategic Adjustments**: Medifast has been transforming its business to adapt to the evolving health and wellness market, particularly in response to the rising acceptance of GLP-1 medications. This transformation includes a focus on reestablishing growth across key metrics, such as driving coach productivity and expanding the number of active earning coaches. The strategic adjustments likely involved cost-cutting measures to maintain profitability in a challenging market environment. In conclusion, Medifast's operating expenses dropped sharply in Q4 2024 primarily due to a substantial decrease in revenue, which in turn led to reduced expenses related to coaching and marketing activities. This drop in expenses is a strategic response to the company's goals of adapting to market changes and maintaining financial health.