Biote Corp. ((BTMD)) has held its Q3 earnings call. Read on for the main highlights of the call.
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Biote Corp.’s latest earnings call revealed a mixed sentiment, with challenges and opportunities shaping the company’s financial landscape. While the company faced hurdles such as declining procedure revenue and adjusted EBITDA due to commercial team transformations and higher attrition rates, there were positive developments. Growth in dietary supplements, improved gross profit margins, increased cash flow, and strategic share repurchases provided a silver lining. Additionally, a successful marketing event reinforced Biote’s market leadership.
Dietary Supplements Revenue Growth
Biote reported an 8.4% increase in dietary supplements revenue, reaching $11.2 million. This growth was primarily driven by the e-commerce channel, and the company anticipates mid-teens revenue growth for this segment by fiscal year 2025.
Gross Profit Margin Improvement
The company achieved a 150 basis point increase in gross profit margin, reaching 71.8%. This improvement reflects cost savings from the vertical integration of their 503(B) manufacturing facility and effective cost management strategies.
Increased Cash Flow from Operations
Biote’s cash flow from operations surged by $14.1 million, totaling $27.6 million for the third quarter. This increase underscores the company’s strong operational performance despite other challenges.
Share Repurchase Program
Under its $20 million common share repurchase program, Biote repurchased approximately 1 million shares of Class A common stock at an average price of $3.28 per share, signaling confidence in its long-term value.
Successful Marketing Event
The annual Sun, Sea and Biote marketing event attracted over 800 attendees and featured notable speakers, reinforcing Biote’s leadership in hormone optimization and enhancing its brand presence.
Revenue Decline
Biote’s third-quarter revenue was $48.0 million, marking a 6.7% decrease from the previous year. The decline was attributed to a 10.4% drop in procedure revenue due to slower net new clinic additions and lower procedure volumes.
Adjusted EBITDA Decrease
Adjusted EBITDA fell by 20.5% to $12.9 million, with the margin decreasing from 31.5% to 26.9%. This decline was due to lower sales and increased operating expenses.
Sales Team Transition Impact
The transformation of Biote’s commercial team posed a challenge, impacting procedure revenue in the third quarter. Approximately half of the team joined within the past year, contributing to the revenue headwinds.
Elevated Attrition Rate
Biote experienced an elevated attrition rate of around 8%, higher than the historical rate of approximately 5%. This increase in attrition has been a concern for the company.
Forward-Looking Guidance
Biote reiterated its fiscal 2025 revenue guidance of over $190 million and adjusted EBITDA guidance of over $50 million. Despite the third-quarter revenue decline, the company remains optimistic about returning to growth, driven by dietary supplements and strategic initiatives.
In conclusion, Biote Corp.’s earnings call highlighted a complex financial picture, with both challenges and growth opportunities. While procedure revenue and adjusted EBITDA faced setbacks, dietary supplements growth, improved margins, and strategic initiatives provided optimism for the future. The company’s forward-looking guidance reflects confidence in overcoming current challenges and achieving long-term growth.