Medifast's Q2 2025: Navigating Contradictions in Coach Productivity, Marketing Strategy, and GLP-1 Integration

Coach productivity and growth expectations, marketing strategy and investment, coach focus and GLP-1, ASCEND sales and engagement, GLP-1 drug integration and coaching impact are the key contradictions discussed in Medifast's latest 2025Q2 earnings call.



Coach Composition and Adaptation:
- Medifast ended the quarter with approximately 22,800 active earning OPTAVIA coaches, a decrease of 32.7% from the second quarter of 2024.
- The company's coaches have adapted to the changing landscape, with 60% of them supporting at least one client who has used a GLP-1 drug and 23% having personal experience with such drugs.
- This adaptation is driven by an increased focus on metabolic health, with Medifast integrating GLP-1 drug knowledge into coach training and product offerings.

Revenue and Profitability Trends:
- Revenue for the second quarter was $105.6 million, a decrease of 37.4% versus the year earlier period, primarily due to a decrease in the number of active earning OPTAVIA coaches.
- Gross profit decreased by 37.9% year-over-year to $76.6 million, while SG&A expense was down 40.8% due to fewer active earning coaches and lower volumes.
- The decline in gross profit was offset by lower SG&A, resulting in a loss from operations of $1.1 million, an improvement of $6.8 million versus the year earlier period.

New Pricing and Incentive Structure:
- Medifast introduced a new pricing and incentive structure called Premier+ for auto-ship clients, representing over 90% of its client base.
- This new structure integrates discounts beyond the first order, simplifying the value proposition for clients and providing a more consistently priced client offer for coaches.
- The new structure aims to make the program more compelling to clients, easier for coaches to explain, and more predictable for coach compensation.

Focus on Metabolic Health and Product Innovation:
- Medifast is focused on addressing the growing challenge of poor metabolic health, affecting 93% of U.S. adults, by expanding its product offerings to include the ACTIVE and ASCEND lines.
- The company is leveraging science and clinical research to enhance its programs, with a focus on supporting clients at every stage, from weight loss to optimal and metabolic health.
- The introduction of the ACTIVE and ASCEND lines is part of an integrated phased approach to deliver actionable insights and simplify coach reporting, ultimately enhancing client support and coach productivity.