LifeMD, Inc. (NASDAQ:LFMD) Q4 2023 Earnings Call Transcript

LifeMD, Inc. (NASDAQ:LFMD) Q4 2023 Earnings Call Transcript March 11, 2024

LifeMD, Inc. isn’t one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here).

Operator: Good afternoon. Thank you for joining us today to discuss LifeMD’s Results for the Fourth Quarter and Year Ended December 31, 2023. Joining on the call today are Justin Schreiber, Chairman and Chief Executive Officer; and Marc Benathen, Chief Financial Officer. Following management’s prepared remarks, we will open the call for a question-and-answer session. Before we begin, I would like to remind everyone that during this call, the company will make a number of forward-looking statements, which are subject to numerous risks and uncertainties that may cause actual results to differ materially from those projected. These risks and uncertainties are described in the company’s 10-K and 10-Q filings and within other filings that LifeMD may make with the SEC from time to time.

Forward-looking statements made during this call are based on current information available to the company as of today, March 11, 2024. The company assumes no obligation to update or revise any forward-looking statements after today’s call except as required by law. Also, please note that management will be discussing certain non-GAAP financial measures that the company believes are important in evaluating LifeMD’s performance. Details on the relationship between these non-GAAP measures to the most comparable GAAP measures and reconciliations thereof can be found in the press release issued earlier today. Finally, I would like to remind everyone that today’s call is being recorded and will be available for replay in the Investor Relations section of the company’s website.

Now I’d like to turn the call over to LifeMD’s CEO, Justin Schreiber. Please go ahead.

Justin Schreiber: Thank you, and good afternoon, everyone. After the market close, we issued a press release announcing our fourth quarter and year-end results. Later today, we will post an updated corporate presentation on our website at ir.lifemd.com as well as our shareholder letter. I share a lot of my thoughts on our journey and where we’re headed. So I encourage everyone on this call to give it a read. With that said, 2023 was a tremendous and record-setting year for LifeMD. Our revenue, patient subscriber base and profitability all increased sharply versus 2022. Catalyzing this growth was the launch of our nationwide GLP-1 weight management program in April 2023, which has since grown to become one of the largest and fastest-growing businesses of its kind in the U.S. In fact, our weight management program finished 2023 with over 22,000 active patient subscribers, well ahead of the 20,000 patients we previously guided to.

As of today’s call, we have over 35,000 weight management patients, and that number is growing rapidly. In addition, as we announced in December, we made our largest foray to date within the business-to-business market when we executed a collaboration agreement with Medifast, one of the largest diet, coaching and nutrition companies in the U.S. This collaboration included $10 million of collaboration fees and a $10 million equity investment while providing Medifast’s 40,000 coaches and their customers with access to our industry-leading telehealth platform and affiliated medical group. I believe this transaction truly validates the strength of our highly differentiated direct-to-patient telehealth platform and offering. Our Lifestyle Healthcare business, led by RexMD, had its fourth consecutive year of double-digit annual revenue growth.

Beyond the consistently strong growth we’ve seen with RexMD, the brand continues to be immensely profitable, finishing 2023 with a contribution margin in excess of 30%. In addition, our noncore subsidiary WorkSimpli continued its consistent growth trajectory with 50% year-over-year revenue growth and EBITDA margins exceeding 25%. I am pleased to report that 2024 is off to a strong start and that we remain well positioned for sustained growth and profitability. We remain laser-focused on continuing to deliver outstanding performance and long-term value for our shareholders through the execution of four key objectives in 2024. First, we expect to continue our rapid growth in the GLP-1 supported weight loss market. As stated earlier, our weight management program has grown from nothing when we started in April 2023 to over 22,000 active patient subscribers by year-end 2023.

And over 35,000 subscribers as of today. Our tremendous growth, which continues to accelerate in pace is largely attributable to our highly differentiated service-based offering leveraging our primary care platform to provide our weight management patients comprehensive end-to-end care for their weight loss goals. Early retention results continue to be impressive with over 80% of patients who start therapy remaining on therapy after 90 days. Economics for these patient groups remain very strong with day one net revenue over ad spend exceeding 1x. While daily acquisition volumes have continued to trend up as we scale our medical, operations, and patient services groups to create additional appointment capacity. We continue to make significant investments in these areas as well as in our technology platform to meet the needs of this market where demand continues to outstrip supply.

Second, we remain focused on continuing to grow our more mature lifestyle healthcare business, led by RexMD’s consistent double-digit growth rates, while maintaining its high contribution margins. Since launching in December 2019, RexMD has grown to become one of the most trusted and largest men’s health brands in telemedicine. To date, this has largely been achieved through growth in our men’s sexual health market. We expect continued double-digit growth in this market while also introducing complementary new products designed not only to capture share in adjacent markets, but to provide substantial cross-sell opportunities for our existing REX patients. Over 160,000 and growing REX patients tend to be well established in their lives with ample disposable income, and they appreciate the quality of care they receive from LifeMD affiliated providers.

The investments we are making in product and operational expansion will only serve to elevate our market share and enhance the experience we deliver. Third, we have made and will continue to make significant progress in building our infrastructure to accept reimbursement from private and government payers for medical services provided by our affiliated medical group. Over the past several quarters, we have successfully enrolled our medical group in 10 major health plans, spanning seven of the 10 states we are initially focused on. As part of this effort, we have built out a best-in-class compliance program for both private payer reimbursement and Medicare and have made significant enhancements to our technology platform to support this program.

While we are slightly delayed from our initial timeline, largely due to resources being focused on meeting the outsized demand we’ve had in our weight management business. This initiative remains a top priority for us. We are now expecting to turn this on by the middle of 2024. We will start with a select group of our largest states and those states largest carriers where we have enrolled our affiliated medical group and expect to expand this to all 50 states over the next 18 months. We believe that allowing our patients to use their insurance to offset the cost of our virtual and in-home care services will accelerate demand for our service offering and drive better retention. Our fourth key initiative is maintaining our laser focus on delivering growth levels above our 2024 guidance while continuing to drive profitability margins.

In 2023, we made sizable progress in this area, growing our adjusted EBITDA from a loss of $14 million in 2022 to a profit of $12 million in 2023. More importantly, our cash flow from operations grew to almost $9 million in 2023 versus negative cash flow from operations of $23 million in 2022. We also ended the year with our strongest balance sheet yet, with more than $33 million of cash. As we guided in January, we expect both our top line and bottom line results to improve substantially in 2024, and we remain focused on turning our telehealth business profitable on a standalone basis by the middle of 2024. Lastly, WorkSimpli continues to deliver strong financial results, finishing 2023 with 50% year-over-year growth and adjusted EBITDA margins exceeding 25%.

This self-managed business continues to be a meaningful contributor to LifeMD’s overall profitability and positive cash flow. WorkSimpli has recently pivoted their offering from mostly PDF and some HR solutions business into a diversified workplace and document services business for consumers and small businesses. In doing so, the business has also refocused its marketing and retention efforts on domestic and global markets that produce the highest revenue per user relative to ad spend. In doing so, WorkSimpli’s active subscriber count has declined slightly year-over-year, but their unit economics have continued to improve, which has, in turn, supported sizable growth and improving bottom line margins. In short, there is a lot to be excited about in 2024 for shareholders.

And with that, I’ll turn the call over to our CFO, Marc Benathen, who will provide a summary of our financial results. Marc?

Marc Benathen: Thank you, Justin, and good afternoon, everyone. LifeMD had record fourth quarter performance on both the top and bottom line with consolidated net revenues growing to $44.9 million and adjusted EBITDA growing to $5.5 million. These figures included the recognition of $5 million of program fees paid by Medifast less LifeMD related expenses. Additionally, we ended the quarter with over $33 million in cash and positive free cash flow. In 2023, cash flow from operations was nearly $9 million versus negative $23 million in 2022. We remain in the strongest financial position in the company’s history and are well positioned to execute upon our aggressive growth and profitability plans. . In addition, based on the strong start to the year, led by performance in our GLP-1 weight management business, we are raising our consolidated revenue guidance to at least $200 million from the previous guidance of $195 million to $205 million.

Now turning to the results for the fourth quarter of 2023. As I mentioned, consolidated revenues in the fourth quarter totaled $44.9 million, an increase of 60% compared with the same year ago period. Telehealth net revenues grew 90% versus the year ago period and 28% sequentially. Net revenues from our weight management business more than doubled sequentially. Subscriber growth remained very strong with the number of telehealth active subscribers increasing 27% to approximately 215,000 while WorkSimpli active subscribers contracted 6% to over 158,000 both versus the year ago period. As Justin mentioned, WorkSimpli continued to refocus on marketing and retention efforts on the highest value customer markets, thus generating materially higher revenue per user and enhanced profitability.

The number of Weight Management active subscribers grew to over 22,000 as of year-end 2023 and ahead of our previous guidance of 20,000 active patient subscribers by year-end. Consolidated gross margin for the fourth quarter was 88.1%, up 260 basis points versus the prior year period. Gross profit for the quarter totaled $39.5 million, an increase of 64% from the year ago period. Operating expenses for the fourth quarter totaled $41.7 million, an increase of $7.3 million versus the year ago period, largely due to a $3 million increase in discretionary selling, marking, clinical and patient care expenses to support the rapid growth of our weight management program, expenses to support the launch of the Medifast partnership and a $2.5 million increase in noncash expenses for stock-based compensation and depreciation and amortization.

Net of these items, operating expenses were up only $1 million or 3% year-over-year. Our GAAP net loss attributable to common stockholders for the fourth quarter totaled $4.5 million or a loss of $0.12 per share. This compares to a GAAP net loss attributable to common stockholders of $12.7 million or a loss of $0.40 per share in the fourth quarter of 2022. Adjusted EPS is a non-GAAP financial measure that excludes interest, taxes, noncash expenses, dividends, stocks and insurance acceptance, readiness, litigation, noncontrolling interest, M&A, financing, transaction costs and foreign currency translation. Reflecting those adjustments, adjusted diluted EPS for the fourth quarter of 2023, was $0.15 per share compared with $0.02 in the same year ago period.

Adjusted EBITDA, which is a non-GAAP financial measure that excludes the same items I noted for adjusted EPS, totaled $5.5 million in the fourth quarter of 2023. This compares with adjusted EBITDA of $1 million in the same year ago quarter. Now turning to the results for the full year of 2023. Consolidated revenues for 2023 were $152.5 million, an increase of 28% compared to 2022. Telehealth net revenues grew 19% versus the prior year, while WorkSimpli revenues grew 50%. Gross margin for the full year was 87.6%, up 330 basis points versus 2022. Gross profit for the year totaled $133.6 million, an increase of 33% from 2022. Our GAAP net loss attributable to common stockholders for full year 2023 totaled $23.7 million or a loss of $0.70 per share.

This compares to a GAAP net loss attributable to common stockholders of $48.6 million or a loss of $1.57 per share in 2022. Reflecting the same adjustments, as I mentioned in the fourth quarter results, adjusted EPS for 2023 was $0.35 per share compared with a loss of $0.45 per share in 2022. Adjusted EBITDA, a non-GAAP financial measure that excludes the same items I noted for adjusted EPS totaled $12 million in 2023. This compares with an adjusted EBITDA loss of $14 million in 2022. The cash totaled $33.1 million as of December 31, 2023. As mentioned earlier, we are raising our 2024 guidance for consolidated net revenues to at least $200 million while reaffirming our adjusted EBITDA guidance of between $18 million and $22 million. This wraps up our financial results.

I’d now like to turn the call back over to Justin.

Justin Schreiber: Thanks, Marc. As we wrap up, I want to reflect on our journey so far and the path ahead. Over the past few years, I’ve consistently stressed our commitment to building a best-in-class telehealth technology platform. Everything we achieved in 2023 stands as a testament to our execution of this commitment. Today, we are stronger than ever before. Financially, operationally, clinically and technologically. This is an exciting time to be a shareholder. We’re still in the early days of our growth, and I believe that 2024 will be an even greater year than 2023 in terms of growth and the long-term value we are building for our shareholders. The fact is we’re still in the earliest days of telehealth, and LifeMD is at the forefront of this healthcare revolution.

Our focus on building an incredible healthcare experience for our patients is paying dividends. Our industry-leading affiliated medical group, operational capabilities and proprietary platform are allowing us to seamlessly expand our healthcare presence with our existing and future offerings. Our work is helping to build a healthcare system that makes more sense, helps more people and creates better outcomes across the board for patients. Thanks to our strategic vision and execution over the past few years, the opportunity that lies ahead for us is immense. As we prepare to finish the first quarter of 2024, I remain confident in our ability to deliver on our expectations and beyond this year to our patients who trust us with their health, our employees and providers who believe in and advance our mission and our shareholders who continue to support us.

I thank you for joining us on this journey towards a healthier future. With that, I would like to open the call for Q&A.

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Q&A Session

Operator: [Operator Instructions] Thank you. Our first question comes from the line of David Larsen with BTIG. Please proceed with your question.

David Larsen: Hi. Congratulations on the fantastic quarter. Can you maybe just talk a little bit more about, the weight management program? In particular like, what sort of, returns are you seeing with the Medifast relationship, in terms of them sending you members and also you sending them members? And then if you could talk a little bit about the pace of onboarding. It was my understanding that, over the past six months, there have been periods of time where you’re adding maybe 200 or 300 a day. Maybe this has increased to 500 a day. Just any thoughts around sort of the investments in the platform, to make sure that the pace of ads, is clean and neat. And then just any color on pricing for the drugs themselves would be great? Thanks a lot.

Justin Schreiber: Yes. Hi, David. This is Justin. I’ll take the first stab at your question. Maybe Marc has some comments he’d like to add. First of all, with regards to Medifast, we’re really happy with the progress of that collaboration in Q1. In the shareholder letter that just got pushed live to the website, we talk about that in some more detail. We’re not going to release specific numbers on Medifast, as we’ve kind of publicly said. I think that’s their job, not ours. But I can tell you we’re very happy. We’ve exceeded our expectations and theirs, I think, for the first quarter of the collaboration. And we’re certainly super excited, about the rest of the year. To your second question, we actually just today, I think, had, first couple patients that signed up to be part of their coaching and diet program.

So it took us a while, to just get the compliance and all the infrastructure in place for that. But we think there’s a meaningful percentage of our patients that, will really be helped by that program alongside of a therapy. On your second question relating, to the scale of the weight loss program, Marc and I, are comfortable sharing that over the last 30 days, we’ve been averaging over 400 new patient acquisitions per day. So it’s been a very, very strong month. And as we said – in our remarks, we’re seeing excellent growth and we’re extremely bullish on this business overall. Also super bullish, for what it’s doing for our platform. I mean, just as we continue, to add tens and tens of thousands of new patients, the technology enhancements we’re making, the improvements we’re making, and the data infrastructure and patient experience.

I mean, it’s really, really exciting when you think about all the learnings from this, and how we can apply this to other, very large chronic conditions down the road. On the pricing question of yours, we haven’t really made any changes to pricing. We still have a lot of patients that, are purchasing three to six month memberships, for the weight management program. So, there’s a lot of deferred revenue that, you’ll see in the 10-K that’s filed today. And we haven’t had, to change pricing at all. We look at ourselves, we’re not the cheapest provider out there, but we think we’re the highest quality. We’re still the only platform that, I know of that operates at the scale that we do that, is doing sync visits for every single new patient on the LifeMD platform.

Across the board, we’re focused on delivering high quality care to patients. And I really think that’s paying off, right? I mean, I think that one of the reasons why we continue to see the kind of demand that we do, is not just because of our amazing patient acquisition and media teams, but it’s also because of the brand that we’ve built out there in the market. You know, we have a lot of, I think we have a lot of people that, have friends that are on a LifeMD treatment plan. And they just know they’re getting good care, and they know they’re getting great prices, on these medications. We’re doing everything we can to help them access branded therapies. And if not, we’re referring them to high quality compounding pharmacies that, I think are delivering them, a very high quality therapy, until they’re able to get insurance coverage, for branded therapy.

David Larsen: That’s very helpful. Thank you very much. And one follow-up to my first three-part question. If the GLP-1s are – they cost around $1,000 or $1,200 a month right now, have you seen a generic product launch? And if not like, when do you think it will launch? And what do you think the pricing on the generics will be? And then one of the pushbacks I’ve heard from some investors is like, hi, look, if a solid oil comes to market and its generics enter into the market and as pricing pulls back in, will we continue to see the, sort of demand that we’re seeing now for LifeMD’s platform? And in my view, so I guess what, is your sort of response to that? Assuming pricing does improve significantly, over the next two years for the drugs themselves, how do you think that will impact your platform? Will it be a tailwind or a headwind? What do you think?

Justin Schreiber: Yes, well, you hit me with a number of questions there again, but on the first question, the first generic GLP-1 is coming to market in June of 2024. That’s a generic version of Victoza. That’s a once-daily administered GLP-1 that doesn’t have, I don’t think the efficacy profile, is not quite the same as semaglutide and trizepatide. So, we’re certainly like, we have amazing relationships across the board. You’re going to see multiple generic players in the space, and LifeMD will certainly offer that generic if, I mean, there’s going to be demand for it. We just don’t know how much demand there’s going to be. And we’re certainly well-positioned for that. We’re also making really, really, we’re making big investments in our prior auth infrastructure.

We’re evaluating a number of companies that have, they’re just best-in-class when it comes to getting prior auth approved for these medications. There are a lot of companies now that are using artificial intelligence, to really optimize the whole prior auth process. So, we’re working with, we’re not working with yet, but we’re talking to a number of those companies. And this is a, it’s a major, major priority for LifeMD, to be as good as anybody out there. I’d love to use the word the best, but there are going to be other, there are going to be other, other market participants that are great at this. But we’re going to be as good as anybody else out there, at getting these prior auth approved, for patients. So, that’s the one thing that I think investors need, to keep in mind.

Even though a lot of patients right now, the majority of patients, are not getting approved for a brand of therapy, and they’re having to resort to a high quality compounded therapy because of that. LifeMD is going to be positioned the second that private and government payers, or employers decide that, you know, there’s enough long-term outcomes associated with these drugs, to justify the price tag of them. So, I think that’s an important thing to note as far as, and I think that, I think that kind of leads really well into your last question, that there’s an oral drug. It’s going to be, it’s going to improve the compliance for patients. You’re going to have greater demand for these therapies. A lot of people think the orally administered drugs are going to be more efficacious.

We’re going to rely on the same prior auth infrastructure. We’re going to be as, it’s not – like the role of virtual care companies like LifeMD and others, it’s not going to change. If anything, there’ll be more demand for platforms like ours. You’re still going to need a prior auth. You’re still going to need a comprehensive solution. You’re still going to need labs. You’re still going to need coaching. You’re still going to need diet. You know, it’s not like an oral, an oral therapy comes onto the market and all of a sudden all that goes out the window. So, I don’t think it changes the investment thesis at all for LifeMD, and I think it actually fits perfectly with, everything we’re focused on over the next couple of years.

David Larsen: Okay, fantastic. I’ll hop back in the queue. Thanks very much. Congrats on a good quarter.

Justin Schreiber: Thank you.

Operator: Our next question comes from a line of William Wood with B. Riley. Please proceed with your question.

William Wood: Thank you so much, and I really appreciate you taking our questions and obviously a really nice quarter – and great year overall. So, I think, the first question, I’d love to get a little bit of additional color, on the first quarter weight management number, you’re noting about 13,000 so far, maybe a little bit above that. And how we should be thinking about that in terms of your first quarter, $42 million, $43 million guidance. How that should be fitting in, and this sort of the makeup there?

Marc Benathen: Yes, William, this is Marc. So obviously that does all fit into the guidance. However, as I mentioned before, about 55% of our new sales are six-month subscriptions. And we’ve had a significant ramp in our new patient activity and onboarding as we’ve created more capacity in our clinical teams, to handle additional appointments, and patient volumes really in the second half of the first quarter. So starting around the second week or so of February. We’re going to see a significant amount of deferred revenue related to that. In fact, by the end of the first quarter, we could see a $4 million increase in deferred revenue, by the end of the first quarter, versus the end of the year. It could potentially be even higher than that.

Obviously, it contributes to some of the revenue growth that we’re seeing in the business. If you net out the 5 million of Medifast fees in Q4, and you add back about the 1 million of Medifast fees, we’re forecasting in the first quarter, you’re still seeing a couple million dollars of sequential growth. That number would be materially higher. It would be $4 million to $5 million higher than that, so it would have been $6 million or $7 million without that deferred revenue. So, we’re really starting to see very meaningful numbers, from those acquisition volumes. Obviously, that deferred revenue is going to come back to us, with a big chunk of it in Q2. And then obviously a portion even in Q3 as the six-month subscriptions, have to be amortized over six months.

And then outside of the six-month subscriptions, another 35% are three months, so you really only have about 10% to 12% of the subs that are one-month subscriptions. So it’s phenomenal for us on a cash basis. It obviously creates a lot of deferred revenue that’s going to really start to come back to us in the second quarter.

William Wood: Got it. That was very helpful. Appreciate that. Follow-up on your RexMD, you noticed that the continued strength there, doubling, double-digit growth year-over-year, I believe. And just curious, you also mentioned possibly entering some new markets, maybe with some new offerings. I was wondering if you could add a little bit of a color, on what those markets and/or, offerings may be, and maybe when we can expect them?

Justin Schreiber: The biggest thing we’re focused on, William, is launching an HRT offering under RexMD. We’re planning to launch that in the coming months. We have some opinion leaders that have, kind of, recently gotten involved, not in a position right now to disclose their names, but they’re some of the top people in the world in this space. And we’re developing – what I think is going to become, the gold standard in hormone replacement therapy clinically. I think, we’re going to reach a lot of patients with this offering. And I think it’s going to be a really interesting stepping stone into – more like proprietary men’s health offerings as well that, really cater to this 165,000 patient population that we have that’s part of RexMD.

So that brand has matured a little bit. And I think that, we certainly need to add some new product offerings on top of our sexual health offerings there. But I’m very, very exciting. I’m very, very excited and optimistic about the potential for Rex. I think it’s also worth noting that these offerings that we’re launching will have, I expect to have, extremely high retention rates, which is what we’re all focused on. And retention, of course, equals as a result of high patient satisfaction and efficacy, and a great job by the medical group. But for shareholders, retention equals earnings, right. So, I’m really, really excited about this offering and getting it live in the next couple months.

William Wood: Got it. I understand. And then one last, if I may, in terms of your insurance, you’re continuing to expand that. I’m just curious, if there’s any expectations maybe, or color on what we might be expecting for increasing your insurance, and payer coverage over the course of the year maybe?

Justin Schreiber: Yes, this is Justin again, William. I mean we’re not – I’m not really comfortable releasing a specific number. I do feel good about saying that, certainly over the next couple of quarters, we will have very, very broad coverage in most, if not all of the top 10 states that we targeted. We also are planning to roll out into all 50 states, and we’re working on that plan and investing in it already. I think that the subsequent states, are going to be much easier, since we’ve worked out a lot of the kinks with these top 10 states that, we’ve started to enroll with. But look, this is an important initiative for us. We also got into several Medicare plans in the last couple weeks, one in Florida and one in another state.

So that – like that continues to positively evolve as well. So, I think this is – look, the business is doing great, as you can tell by our remarks, and the numbers we put out and, but this is something that like we have, we’re putting a lot of resources into internally. And I think that this year, it’s going to be – we’re going to start to see patients using their insurance to subsidize the cost of their LifeMD care. And I think it’s a big milestone for the company.

William Wood: Got it. I appreciate you taking our questions. I’ll hop back in queue and congratulations again on a great quarter. Thanks.

Justin Schreiber: Thanks.

Operator: Our next question comes from the line of Alex Fuhrman with Craig-Hallum. Please proceed with your question.

Alex Fuhrman: Hi guys, thanks very much for taking my question, and congratulations on a really strong year and launch of the weight management program. Justin, one of the things that, really seems to differentiate your weight management program from a lot of the others that are out there, is it was launched within virtual primary care. Wondering if you can talk a little bit about how many of your weight management patients, are receiving some type of treatment for related conditions, or maybe medications other than just GLP-1?

Justin Schreiber: Yes. Thanks for the compliment, Alex. It’s a great question. We do take a lot of pride in the fact that, we offer these services through our primary care platform and that we have basically a full-time force of medical providers that work on that platform. I can’t really – I don’t have a specific number for you, Alex. And I would say that, I know that every single patient, is speaking with a provider about other aspects of their health, when they are onboarded onto our way management program. However, I don’t have a specific number that we can share with you that, would be like a percentage of patients that’s, treated for another chronic condition. A lot of these, a lot of these – the majority of these patients that are coming to us are very, very focused, they’re very intent on the GLP-1 medication.

And using that to jump start their kind of weight loss their weight loss program. And that’s where a lot of the interest is. So for the most part, that’s where our providers have been focused on, where I think you’re going to see more. Where I think you’re going to see more of this is actually, like as a lot of people start to hit their goal weight, and think about what’s next, what other aspects of their health could use improvement or even optimization. That’s where I really think you’re going to see the LifeMD platform shine. And you’re going to see kind of, more of our – those other capabilities that we have come out.

Alex Fuhrman: Okay. That’s really helpful. And then….

Justin Schreiber: Yes Alex, I don’t mean to not answer the question, and it’s a great question. We just don’t have – we just don’t have the data to answer that question properly. And initially, we’re very focused on – these patients are just focused on their way, and that’s understandable, right? But I think longer term is we’re going to see us. We’re going to see a lot of these other conditions, being treated and optimized.

Alex Fuhrman: Okay. That’s great. Thanks very much for those answers, Justin and Mark.

Operator: Our next question comes from the line of Ilya Zubkov with Freedom Broker. Please proceed with your question.

Ilya Zubkov: Yes. Good afternoon. And thank you for taking my question. And congrats with another record quarter. Could you please comment? Could you please give us more details on how has the WorkSimpli offering changed? So has the transformation process already been completed? And do you expect user growth to recover in the nearest quarters? Thanks.

Marc Benathen: Yes, it’s Marc. Yes, we do expect user growth to recover. I mean the main way that it’s evolved and they’ve really tried to diversify their platform as well as focus on certain regions of the world where they’ve gotten the highest return on investment. I’m not going to say which regions, because that divulge is part of their strategy. But how it’s evolved most notably. So obviously, about – two years ago, they acquired a resume business broke into the HR space, they’ve since evolved that business to include cover letters as well as AI technology to enable the automation of several of those functions, which has actually increased the adoption in that business. That’s one. Two, within this past year in 2023, they launched the Legal Simply legal forms business.

And again, launching the early stages of their proprietary forms library. In addition, they also launched the Sign Simply product, which essentially is a smaller version of a DocuSign for consumers and small businesses. And then lastly, they’ve begun to penetrate gig workers – consortiums of small businesses. Essentially, they’ve taken their small business penetration from single-digits to about 15%. Today, over the last about 18 months. So, those are just examples of ways that they’ve continued to. In doing so, they’ve continued to refine their marketing strategy. They’ve tested some new strategies. These are all things will be pretty typical that a business, their size would do especially if they were private and obviously not owned by us.