LifeMD, Inc.: Driving Growth Through Strategic Transformation in Fiscal Year 2025

This summary offers retail investors a clear, comprehensive overview of LifeMD, Inc.'s performance and strategic direction for the fiscal year ended December 31, 2025.

Executive Summary: Reshaping for Growth

Fiscal year 2025 marked a period of significant strategic transformation for LifeMD. The company sold its non-core WorkSimpli business to sharpen its focus on telehealth and simultaneously expanded its core offerings by acquiring the OHHMD brand. Financially, LifeMD generated $120 million in revenue from ongoing operations, a robust 25% year-over-year increase that demonstrates strong momentum in its core telehealth services. Despite this growth, the company posted a net loss of $15 million as it heavily invested in scaling its platforms and integrating new acquisitions. LifeMD actively managed its capital structure, raising funds through various mechanisms to support strategic initiatives and maintain liquidity.

Business Overview: Pioneering Telehealth Solutions

LifeMD is a leading provider of virtual primary care and specialty telehealth services, operating across the United States, particularly in key markets like California and Texas. Its core business includes:

• Telehealth Subscriptions: Offers recurring access to virtual consultations, personalized treatment plans, and prescription management for various conditions, emphasizing convenience and continuous care.
• Specialty Programs: Focuses on specific health areas like weight management, men's health, and dermatology, delivering services through its proprietary telehealth platform.
• Strategic Partnerships: Maintains a significant collaboration with Medifast, providing telehealth services to support Medifast's weight management programs and expanding its reach and service integration.

Strategic Shifts & Portfolio Optimization

1. Divestiture of WorkSimpli: In November 2025, LifeMD sold its non-core WorkSimpli business, which focused on digital tools and services. This strategic move streamlined operations, enhanced profitability, and allowed LifeMD to fully concentrate its resources on its high-growth telehealth segment. Consequently, we reclassified financial figures for prior periods (2024 and parts of 2025) to reflect only ongoing operations, offering investors a clearer "apples-to-apples" comparison of the core business's performance.

2. Acquisition of the OHHMD Brand: Conversely, in April 2025, LifeMD acquired the OHHMD brand. This acquisition strategically strengthens LifeMD's presence in weight management and metabolic health, integrating OHHMD's established patient base and clinical protocols into LifeMD's existing telehealth platform. LifeMD funded the approximately $10 million acquisition through a combination of cash and stock. We expect it to contribute to subscriber growth and revenue diversification in fiscal year 2026.

Financial Performance: A Look at the Numbers (Fiscal Year Ended December 31, 2025)

• Revenue: LifeMD generated $120 million in revenue from ongoing operations for FY2025, a robust 25% increase compared to the reclassified $96 million in FY2024. Increased telehealth subscriptions and expanded services through the Medifast partnership primarily drove this growth.
• Net Income/Loss: The company posted a net loss of $15 million for FY2025, compared to a net loss of $10 million in FY2024. The expanded loss reflects increased investments in technology, marketing for subscriber acquisition, and integration costs associated with the OHHMD acquisition, though improved gross margins partially offset these costs.
• Gross Margin: Gross margin improved to 70% from 68% in the prior year, indicating better efficiency in service delivery.
• Cash Position: As of December 31, 2025, LifeMD held $30 million in cash and cash equivalents, providing liquidity for ongoing operations and strategic investments.
• Impact of Reclassification: Investors should note that we adjusted historical financial data in the 10-K to exclude WorkSimpli's results, ensuring comparisons accurately reflect the performance of LifeMD's ongoing telehealth business.

Capital Management & Funding Activities

LifeMD actively managed its capital structure throughout 2025 and early 2026:

• ATM Sales Agreement: The company used an "At-The-Market" (ATM) Sales Agreement, a flexible mechanism that allowed it to sell shares directly into the market over time. This agreement raised approximately $20 million in gross proceeds during FY2025, providing capital for general corporate purposes and working capital without requiring a large, single offering.
• Convertible Long-Term Debt: LifeMD secured $25 million in convertible long-term debt during the year. This debt can convert into company stock at a predetermined price, offering lower initial interest rates but potentially diluting existing shareholders if converted. LifeMD primarily used this capital to fund the OHHMD acquisition and support growth initiatives.
• New Credit Agreement: In January 2026, after year-end, LifeMD secured a new $35 million credit agreement with a group of banks. This facility provides additional financial flexibility and access to capital for future operational needs and potential strategic opportunities.

Operational Highlights & Growth Drivers

• Subscriber Growth: Active telehealth subscribers grew by 20% across LifeMD's platforms, reaching approximately 300,000 subscribers by year-end 2025.
• Medifast Collaboration Expansion: The Medifast partnership deepened, with LifeMD now supporting a larger percentage of Medifast's client base and significantly contributing to recurring revenue streams.
• Technology & Platform Enhancements: Ongoing investment in its proprietary telehealth platform improved user experience, provider efficiency, and data security, supporting scalability.

Competitive Position

LifeMD operates in a dynamic and increasingly competitive telehealth market. The company's competitive advantages stem from its:

• Proprietary Technology Platform: LifeMD's integrated telehealth platform provides a seamless patient and provider experience, supporting a wide range of virtual care services from initial consultations to ongoing treatment and prescription management. LifeMD continuously enhances this platform to improve user engagement, operational efficiency, and data security.
• Specialized Clinical Programs: By focusing on high-demand areas like weight management, men's health, and dermatology, LifeMD developed specialized clinical protocols and provider networks. These offer targeted, effective care, differentiating the company from more generalized telehealth providers. The OHHMD acquisition further strengthens its position in metabolic health.
• Strategic Partnerships: Its significant collaboration with Medifast provides a unique channel for patient acquisition and integrated care delivery, leveraging Medifast's established customer base and LifeMD's clinical expertise. Such partnerships can create barriers to entry and expand market reach.
• Provider Network and Clinical Expertise: LifeMD builds and maintains a robust network of licensed healthcare professionals, ensuring access to quality care across its service areas. Its focus on evidence-based treatment plans and clinical outcomes also contributes to its reputation and patient trust.
• Subscription-Based Model: Its recurring revenue model fosters patient loyalty and provides predictable revenue streams, a competitive advantage in a market often characterized by transactional services.

To maintain and enhance its competitive position, LifeMD continues to invest in its technology platform, expand its specialized clinical offerings, explore new strategic partnerships, and focus on delivering high-quality, convenient, and affordable virtual care.

Key Risks & Challenges

Investors face several key risks:

• Regulatory Environment: Evolving and complex healthcare regulations in the telehealth industry could impact operations and profitability.
• Competition: LifeMD operates in a highly competitive market with numerous established and emerging telehealth providers.
• Data Security & Privacy: Protecting sensitive patient data is paramount; any breach could lead to significant financial and reputational damage.
• Physician Availability: Dependence on a network of licensed healthcare providers presents potential challenges in recruitment and retention.
• Economic Conditions: Broader economic downturns can impact consumer spending on healthcare services.

Outlook & Strategic Vision

Looking ahead, LifeMD's strategy centers on accelerating growth in its core telehealth segments, leveraging the OHHMD acquisition for market expansion, and achieving profitability through operational efficiencies and subscriber scale. The company plans to continue investing in technology, expanding its service offerings, and exploring further strategic partnerships to solidify its leadership in virtual care. Management anticipates continued revenue growth in 2026, driven by OHHMD's full-year contribution and organic subscriber acquisition, with a focus on improving net income towards profitability.