MEDIFAST INC

Previous wording

We believe that we are a well-capitalized business with strong and effective leadership that has grown its lifestyle brand, OPTAVIA, into a significant health and wellness brand. We have a powerful business model, building a network of approximately 22,800 active earning OPTAVIA coaches and impacting more than 3 million lives. Backed by more than 40 years of experience, clinically proven plans, innovative products, and a powerful integrated coach model, Medifast stands at the forefront of evidence-based wellness solutions. This coach-first model creates an opportunity for coaches’ individual businesses, and has a flywheel effect as new clients join, which drives revenue and leads to new active earning coaches joining, which generates further revenue and leads to more new clients.

Current wording

Medifast is the 40+ year old health and wellness company known for its science-backed, coach-guided lifestyle system. The Company is currently executing a strategic transformation focused on metabolic health and a return to growth strategy by fueling coach productivity and coach growth. We operate a well-capitalized business with strong and effective leadership that has a powerful lifestyle brand and business model that boasts a network of approximately 19,500 active earning independent coaches that has impacted more than 3 million lives. Medifast stands at the forefront of evidence-based wellness solutions and its coach-first model creates an opportunity for coaches’ individual businesses, and has a flywheel effect as new clients join, which drives revenue and leads to new active earning coaches joining, which leads to more new clients and generates further revenue.

Previous wording

Medifast offers a simple, yet comprehensive approach to achieving optimal health and wellbeing. Our lifestyle program, OPTAVIA, empowers people to make lasting changes. Through the support of our independent OPTAVIA coaches, about 90% of whom were clients first, our clients are guided through every step of their wellness journey.

Current wording

Medifast offers a simple, yet comprehensive approach to achieving optimal health and wellbeing. Our lifestyle program empowers people to make lasting changes. Through the support of our coaches, about 90% of whom were clients first, our clients are guided through every step of their wellness journey.

Previous wording

OPTAVIA's lifestyle plans deliver proven health benefits as well as evidence-based tools, including scientifically developed products and a framework for habit creation reinforced by independent coaches and community support. We continue to innovate and build upon our scientific and clinical heritage to fulfill our mission of offering Lifelong Transformation, Making a Healthy Lifestyle Second Nature™.

Current wording

Our lifestyle plans deliver proven health benefits as well as evidence-based tools, including scientifically developed products and a framework for habit creation reinforced by coaches and community support. We continue to innovate and build upon our scientific and clinical heritage to fulfill our mission of offering Lifelong Transformation, Making a Healthy Lifestyle Second Nature.

Previous wording

OPTAVIA coaches are people who are navigating weight loss at different moments in life, providing unparalleled coaching support along with community, nutrition, and healthy habits. In a world where health and wellbeing are often a difficult and solitary journey, OPTAVIA provides intensely personalized support to people who want to transform their health. We believe this holistic approach empowers people to master their weight loss journey through each stage of life and gives them the freedom to do it on their terms. The lifestyle solution is designed for real life and built around four key components:

Current wording

Coaches provide unparalleled coaching support along with community, nutrition, and healthy habits. In a world where health and wellbeing are often a difficult and solitary journey, our comprehensive system provides intensely personalized support to people who want to transform their health. We believe this holistic approach empowers people to master their weight loss journey through each stage of life and gives them the freedom to do it on their terms. The lifestyle solution is designed for real life and built around four key components:

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•Independent OPTAVIA Coaches: Independent OPTAVIA coaches provide individualized support and guidance to clients on the path to optimal health and wellbeing.

Current wording

•Independent Coaches: Coaches provide individualized support and guidance to clients on the path to optimal health and wellbeing.

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•OPTAVIA Community: A Community of like-minded people provide real-time connection and support.

Current wording

•Community: A Community of like-minded people provide real-time connection and support.

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To ensure that Medifast continues to thrive as a health and wellness business in the rapidly evolving weight-loss market, we have developed distinct coach-supported program offerings tailored to meet the unique needs of three specific client categories on their health and wellness journeys:

Current wording

As part of our strategy to remain competitive in the rapidly evolving weight-loss market, we have developed distinct coach-supported program offerings tailored to meet the unique needs of three specific client categories on their health and wellness journeys:

Previous wording

Those who have never used medications and want to use coach-supported habit-based programs as the core of their weight loss journey;

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Individuals who want to use coach-supported habit-based programs as the core of their weight loss journey;

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People looking to manage weight loss and improved health when they come off GLP-1 medications for whatever reason, including cost, side effects, or any other cause.

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People looking to manage weight loss and improve health when they come off GLP-1 medications for whatever reason, including cost, side effects, or any other cause.

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For each of these client categories, we are taking an intentional and methodical approach to building out our offerings to ensure that we can provide compelling products and services to new, former, and current coaches and clients, regardless of where they are on their personal health and wellness journeys.

Current wording

We are taking an intentional and methodical approach to tailoring our offerings for each of these groups, to ensure that we can provide compelling products and services to new, former, and current coaches and clients, regardless of where they are on their personal health and wellness journeys.

Previous wording

While the usage of GLP-1 medications continue to accelerate, recent research showed that about one-third of users quit taking the medication after six months, and that rose to as much as 74% after a year.2 Furthermore, research also shows that two-thirds of weight lost on GLP-1 medications is typically regained within 12 months of stopping treatment, with cardiometabolic

Current wording

While GLP-1 medication usage, which can be powerful appetite suppressants, continues to accelerate, medication alone does not produce sustainable lifestyle change. Recent research indicated that approximately one-third of users discontinue taking the medication after six months, and as many as 74% stop after a year.1 Furthermore, research also shows that two-thirds of weight

Previous wording

For audiences looking for a GLP-1 based solution, we have built a collaboration with national virtual primary care provider, LifeMD. Eligible OPTAVIA clients have access to board-certified affiliated clinicians and medications, where appropriate, such as GLP-1 medications, that support treatment plans for obesity. With the medications having been shown to be highly effective in conjunction with lifestyle changes, we believe there is strong compatibility with our experience of helping people achieve change through habit-based systems. In the second quarter of 2025 we made the decision to sell our investment in LifeMD, Inc (Nasdaq: LFMD) common stock; however, we continue to collaborate with LifeMD, Inc. and offer our clients access to clinicians and GLP-1 weight loss medications, where clinically appropriate.

Current wording

With the medications having been shown to be highly effective in conjunction with lifestyle changes, we believe there is strong compatibility with our experience of helping people achieve change through habit-based systems, supported by a coach.

Previous wording

OPTAVIA coaches are central to everything that we do, helping to foster a continuous cycle of growth, and attracting and activating new clients, many of whom go on to become OPTAVIA coaches. We offer economic incentives designed to support each OPTAVIA coach’s long-term success, which we believe plays an important role in their financial wellness, providing the opportunity to improve their finances while changing the health trajectory of families, communities and generations.5

Current wording

Coaches remain central to everything that we do. They aim to foster a continuous cycle of growth by attracting and activating new clients, some of whom go on to become coaches. We provide economic incentives designed to support long-term coach success, which we believe contributes to their financial wellness, and offers the opportunity to improve their personal finances while elevating the health trajectories of their families, communities, and future generations.4

Previous wording

Medifast is ensuring our OPTAVIA coaches are best positioned for success in the GLP-1 environment. Regardless of need state, our integrated coach-supported, lifestyle-based approach helps clients achieve their health goals. OPTAVIA coaches, about 90% of whom were clients first, introduce clients to a set of healthy habits, in most cases starting with the habit of healthy eating, and offer exclusive OPTAVIA-branded products. OPTAVIA products and plans are one component that support the Company’s mission, and our portfolio of products help make it easier for clients to create healthy habits in their lives.

Current wording

Medifast is ensuring our coaches are positioned to succeed in the GLP-1 environment. Regardless of their need states, our integrated, coach-supported, lifestyle-based approach helps clients achieve their health goals. Coaches introduce clients to a set of healthy habits, often beginning with healthy eating, alongside exclusive products and plans. These offerings are one component that support the Company’s mission, and help make it easier for clients to build and sustain healthy habits in their lives.

Previous wording

Finding new clients and reactivating former clients who do not wish to use medications remains an important area of focus for our business. Our scientifically designed Fuelings, as well as innovative products like OPTAVIA ASCEND and OPTAVIA ACTIVE® continue to address the needs of these clients. We also continue to work on enhancing our digital tools and improving the client experience to help us achieve our goals. We believe our coach-based model is scalable and drives both client success and growth, and is a key competitive advantage.

Current wording

Finding new clients and reactivating former clients who do not wish to use medications remains an important area of focus for our business and our coaches. Our scientifically designed Fuelings, as well as innovative product lines like OPTAVIA ASCEND and OPTAVIA ACTIVE continue to address the needs of these clients. We also continue to work on enhancing our digital tools and improving the client experience to help us achieve our goals. We believe our coach-based model is scalable and drives both client success and growth, and is a key competitive advantage.

Previous wording

In all cases, the OPTAVIA coaching model is heavily focused on clients’ needs, helping place them into supportive and energized health and wellness communities that share similar challenges and goals. With a coach, clients successfully lost 10 times more weight and 17 times more fat than those who tried to lose weight on their own 4. OPTAVIA coaches provide highly tailored and personalized support to clients and motivate them by sharing their passion for healthy living and lifestyle transformation. Despite the vast geographies and backgrounds, our coaches are a tight-knit community that supports, encourages and inspires one another.

Current wording

In all cases, the coaching model is anchored on clients’ needs, helping place them into supportive and energized health and wellness communities that share similar challenges and goals. With a coach, clients successfully lost 10 times more weight and 17 times more fat than those attempting to lose weight on their own.5 Coaches deliver highly tailored and personalized support and motivation, sharing their passion for healthy living and lifestyle transformation. Despite their diverse geographies and backgrounds, our coaches form a tight-knit community that supports, encourages and inspires one another.

Previous wording

OPTAVIA coaches are independent contractors, not employees, who support clients and market our products and services primarily through word of mouth, email, and via social media channels such as Facebook, Instagram, X (formerly known as Twitter), and video conferencing platforms. As independent contractors, OPTAVIA coaches market our products to friends, family, and other people in their communities. OPTAVIA products are shipped directly to OPTAVIA clients. OPTAVIA coaches do not handle or deliver merchandise to clients. This arrangement frees our OPTAVIA coaches from having to manage inventory and allows them to maintain an arms-length transactional relationship while focusing their attention on support and encouragement.

Current wording

Our coaches are independent contractors, not employees, who support clients and market our products and services to friends, family, and other people in their communities, primarily through word of mouth, email, and via social media channels including Facebook, Instagram, X (formerly known as Twitter), and video conferencing platforms. Products are shipped directly to clients; coaches do not handle or deliver products. This model enables our coaches to focus on client support and encouragement without having to manage inventory and allows them to maintain an arms-length transactional relationship.

Previous wording

Medifast supports coaches by providing tools and resources to help them build their business while incorporating the latest scientific research into innovations. This includes leveraging shared success stories, leadership development, and best practices from experienced coaches. Recently launched programs offer a clear roadmap, incentives, and recognition to help coaches grow their business. One such initiative is the new EDGE program, which emphasizes progressive business building behaviors and rewards, designed to be easily adoptable by new and experienced coaches alike. The behavior-designed system is focused on leading indicators of success, not just outcomes or ranking. While the main goals of the program are to provide a structured approach for coaches to maximize their potential, improve their leadership skills, expand their reach, and achieve recognition for their progress, the Company also expects that an outcome of the program will be increased client acquisition and conversion of clients into new coaches. We also rolled out Premier+ in early July, a refresh of OPTAVIA’s autoship program. Premier+ offers a new tiered pricing discount on monthly orders, reduces list pricing on some of the most popular products, and provides a more reliable and predictable compensation structure. These changes were implemented with the intent of making acquiring and retaining clients easier for our coaches. Medifast also remains focused on providing enhanced digital tools to support the management of the coach business to streamline administrative tasks, freeing up coaches to focus their efforts on what matters most: supporting their clients.

Current wording

Medifast continues to invest strategically in tools, programs, and digital resources to support our coaches - the Company’s most effective client acquisition engine. We incorporate the latest scientific research into our innovations, including leveraging shared success stories, leadership development, and best practices from experienced coaches. Recently launched programs offer a clear roadmap, incentives, and recognition to help coaches grow their business. One such initiative is the new EDGE program, a behavior-designed program that emphasizes progressive business building behaviors and rewards, designed to be easily adoptable by new and experienced coaches alike. It prioritizes leading indicators of success, not just outcomes or ranking. While the main goals of the program are to provide a structured approach for coaches to maximize their potential, improve their leadership skills, expand their reach, and achieve recognition for their progress, we also expect it to increase client acquisition and the conversion of clients into new coaches. We also rolled out Premier+, a refreshed auto-ship program, launched in July 2025, that offers a new tiered pricing discount on monthly orders, reduces list pricing on several popular products, and provides a more reliable and predictable compensation structure for coaches. These enhancements were designed to make client

Previous wording

3 Wilding, et al; STEP 1 Study Group. Diabetes Obes Metab. 2022; https://pubmed.ncbi.nlm.nih.gov/35441470/

Current wording

2 Wilding, et al; STEP 1 Study Group. Diabetes Obes Metab. 2022; https://pubmed.ncbi.nlm.nih.gov/35441470/

Previous wording

5 OPTAVIA makes no guarantee of financial success. Success with OPTAVIA results from successful sales efforts, which require hard work, diligence, skill, persistence, competence and leadership. Please see the OPTAVIA Income Disclosure Statement (http://bit.ly/ids OPTAVIA) for statistics on actual earnings of coaches.

Current wording

4 OPTAVIA makes no guarantee of financial success. Success with OPTAVIA results from successful sales efforts, which require hard work, diligence, skill, persistence, competence, and leadership. Please see the OPTAVIA Income Disclosure Statement (http://bit.ly/4lFIPRP) for statistics on actual earnings of Coaches.

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4 In a clinical study, the group on the OPTAVIA 5 & 1 Plan® lost 17x more fat than the self-directed control group.

Current wording

5 In a clinical study, the group on the OPTAVIA 5 & 1 Plan lost 17x more fat than the self-directed control group.

Previous wording

We believe the Company’s integrated approach that combines lifestyle coaching, community support, and where warranted, access to medical solutions through LifeMD, positions the business to meet the needs of a broader spectrum of clients. By focusing on innovative products, enhanced client experiences, and effective marketing strategies, Medifast has created and is continuing to enhance a differentiated and compelling offer. Its financial strength, operational flexibility, and client-centric philosophy equip the Company to navigate the changing weight loss market and drive sustainable growth.

Current wording

We believe Medifast is uniquely positioned to serve a broader range of clients and lead the advancement of metabolic health through its personalized coaching, community support, and science-backed nutrition solutions. By addressing the silent crisis of metabolic dysfunction with our innovative products, enhanced client experiences, and unmatched support system, we have created and are continuing to enhance a differentiated and compelling offer. Our financial strength, operational flexibility, and client-centric philosophy position us to navigate the changing weight loss market and drive sustainable growth.

Previous wording

In response to changing macroeconomic conditions, the Company may take further actions that alter its business operations as may be required by governmental authorities, or that are determined to be in the best interests of employees, OPTAVIA coaches and clients, and stockholders. Our ability to effectively navigate these developments is critical to maintaining operational resilience and achieving our long-term strategic objectives. These macroeconomic uncertainties make it challenging for our management to estimate our future business performance. However, we intend to continue to actively monitor the impact of these developments on our business and will update our practices accordingly.

Current wording

In response to changing macroeconomic conditions, the Company may take further actions that alter its business operations as may be required by governmental authorities, or that are determined to be in the best interests of employees, coaches and clients, and stockholders. Our ability to effectively navigate these developments is critical to maintaining operational resilience and achieving our long-term strategic objectives. These macroeconomic uncertainties make it challenging for our management to estimate our future business performance. However, we intend to continue to actively monitor the impact of these developments on our business and will update our practices accordingly.

Previous wording

The weight loss industry is very competitive and encompasses a multitude of weight loss products and programs. These include a wide variety of commercial weight loss programs, pharmaceutical products, surgical interventions, books, self-help diets, dietary meal replacements, and appetite suppressants as well as digital tools, app-based health and wellness monitoring solutions, and wearable trackers. The weight loss market is served by a diverse array of competitors. Potential clients seeking to manage their weight can turn to traditional center-based competitors, online diet-oriented sites, self-directed dieting and self-administered products such as prescription medications, over-the-counter medications and supplements, as well as medically supervised programs. Recently, it became clear that medical weight loss solutions, such as GLP-1 medications, have become an increasingly key component of the overall health and wellness ecosystem, and the recent surging awareness and popularity of these weight loss medications serve as another major competitor, as these products have prompted a huge change in the way that consumers think about weight loss and lifestyle modification solutions in general. We recognize that these weight loss medications have attracted significant attention from the market and pose a threat to our interactions with our traditional client base. Importantly, the efficacy claims of GLP-1 medications for weight loss are based specifically on their incorporation of lifestyle changes that include a reduced calorie diet and increased physical activity. As a result, under Medifast’s OPTAVIA offering, weight loss medications can be an important element that fits into the overall tailored OPTAVIA lifestyle plans that also include coaching, community support, nutritionally balanced meals, and exercise.

Current wording

The weight loss industry is very competitive and encompasses a multitude of weight loss products and programs. These include a wide variety of commercial weight loss programs, pharmaceutical products, surgical interventions, books, self-help diets, dietary meal replacements, and appetite suppressants as well as digital tools, app-based health and wellness monitoring solutions, and wearable trackers. The weight loss market is served by a diverse array of competitors. Potential clients seeking to manage their weight can turn to traditional center-based competitors, online diet-oriented sites, self-directed dieting and self-administered products such as prescription medications, over-the-counter medications and supplements, as well as medically supervised programs. Recently, it became clear that medical weight loss solutions, such as GLP-1 medications, have become an increasingly key component of the overall health and wellness ecosystem, and the recent surging awareness and popularity of these weight loss medications serve as another major competitor, as these products have prompted a huge change in the way that consumers think about weight loss and lifestyle modification solutions in general. We recognize that these weight loss medications have attracted significant attention from the market and pose a threat to our interactions with our traditional client base. Importantly, the efficacy claims of GLP-1 medications for weight loss are based specifically on their incorporation of lifestyle changes that include a reduced calorie diet and increased physical activity. As a result, under Medifast’s OPTAVIA offerings, weight loss medications can be an important element that fits into the overall tailored OPTAVIA lifestyle plans that also include coaching, community support, nutritionally balanced meals, and exercise.

Previous wording

•Offers a solution that focuses on holistic wellness; it views healthy weight as a catalyst to greater changes and has impacted more than 3 million lives.

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•Offers a solution that focuses on metabolic health powered by a breakthrough apporach and human coaching and has impacted more than 3 million lives.

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We also compete with other direct-selling organizations, some of which have a longer operating history and greater visibility, name recognition and financial resources than we do. We also believe we have advantages over traditional direct selling companies:

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We also compete with other direct-selling organizations, some of which have a longer operating history and greater visibility, name recognition and financial resources than we do. We also believe we have advantages over traditional direct selling companies. The OPTAVIA model:

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•OPTAVIA’s innovative model is client-centric, with one sales price for both OPTAVIA coaches and clients. There is no tiered pricing.

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•Is client-centric, with one sales price for both OPTAVIA coaches and clients. There is no tiered pricing.

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•OPTAVIA boasts a health and wellness community, which promotes a holistic health and wellness program and is not focused solely on product sales.

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•Boasts a health and wellness community, which promotes a holistic health and wellness program and is not focused solely on product sales.

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•OPTAVIA offers a differentiated direct-to-consumer model, with 100% of products shipped directly to clients.

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•Offers a differentiated direct-to-consumer model, with 100% of products shipped directly to clients.

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•The field promotes a unified Habits of Health training system that aligns its leaders around a common mission of Lifelong Transformation, Making a Healthy Lifestyle Second Nature.

Current wording

•Promotes a unified Habits of Health training system that aligns its coach leaders around a common mission of Lifelong Transformation, Making a Healthy Lifestyle Second Nature.

Previous wording

The preparation of our financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the reporting period. Management develops, and changes periodically, these estimates and assumptions based on historical experience and on various other factors that are believed to be reasonable under the circumstances. Actual results may differ from these estimates under different assumptions or conditions. Our unaudited condensed consolidated financial statements are prepared in accordance with GAAP. Our significant accounting policies are described in Note 2 to the audited consolidated financial statements included in the 2024 Form 10-K. There were no significant changes in our critical estimates or policies during the first six months of 2025.

Current wording

The preparation of our financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the reporting period. Management develops, and changes periodically, these estimates and assumptions based on historical experience and on various other factors that are believed to be reasonable under the circumstances. Actual results may differ from these estimates under different assumptions or conditions. Our unaudited condensed consolidated financial statements are prepared in accordance with GAAP. Our significant accounting policies are described in Note 2 to the audited consolidated financial statements included in the 2024 Form 10-K. There were no significant changes in our critical estimates or policies during the first nine months of 2025.

Previous wording

Our product sales accounted for approximately 96% and 97% of our revenues for the three months ended June 30, 2025 and 2024, respectively, and approximately 97% for each of the six months ended June 30, 2025 and 2024.

Current wording

Our product sales accounted for approximately 96% and 97% of our revenues for the three months ended September 30, 2025 and 2024, respectively, and approximately 96% and 97% for the nine months ended September 30, 2025 and 2024.

Previous wording

Revenue: Revenue decreased $63.0 million, or 37.4%, to $105.6 million for the three months ended June 30, 2025 from $168.6 million for the three months ended June 30, 2024. The decline in revenue for the three months ended June 30, 2025 was primarily driven by a decrease in the number of active earning OPTAVIA coaches to 22,800 as of June 30, 2025, a 32.7% decrease from 33,900 as of June 30, 2024. Revenue decreased $122.0 million, or 35.5%, to $221.3 million for the six months ended June 30, 2025 from $343.3 million for the six months ended June 30, 2024. The decline in revenue for the six months ended June 30, 2025 was driven by a decrease in the number of active earning OPTAVIA coaches. The number of active earning OPTAVIA coaches has been trending downward year-over-year since the first quarter of 2023. The decrease in active earning OPTAVIA coaches for the three and six months ended June 30, 2025 was driven by continued challenges with client acquisition. The average revenue per active earning OPTAVIA coach was $4,630 for the three months ended June 30, 2025, a 6.9% decrease compared to $4,972 for the three months ended June 30, 2024. Revenue per active earning OPTAVIA coach has been trending downward year-over-year since the third quarter of 2022 due to lower sales volumes. The decrease in productivity per active earning OPTAVIA coach for the three months ended June 30, 2025 was driven by continued pressure with client acquisition reflecting broader challenges in the operating environment, including rapid adoption of GLP-1 medications for weight loss.

Current wording

Revenue: Revenue decreased $50.8 million, or 36.2%, to $89.4 million for the three months ended September 30, 2025 from $140.2 million for the three months ended September 30, 2024. The decline in revenue for the three months ended September 30, 2025 was primarily driven by a decrease in the number of active earning OPTAVIA coaches to 19,500 as of September 30, 2025, a 35.0% decrease from 30,000 as of September 30, 2024. Revenue decreased $172.8 million, or 35.7%, to $310.7 million for the nine months ended September 30, 2025 from $483.5 million for the nine months ended September 30, 2024. The decline in revenue for the nine months ended September 30, 2025 was driven by a decrease in the number of active earning OPTAVIA coaches. The number of active earning OPTAVIA coaches has been trending downward year-over-year since the first quarter of 2023. The decrease in active earning OPTAVIA coaches for the three and nine months ended September 30, 2025 was driven by continued challenges with client acquisition. The average revenue per active earning OPTAVIA coach was $4,585 for the three months ended September 30, 2025, a 1.9% decrease compared to $4,672 for the three months ended September 30, 2024. Revenue per active earning OPTAVIA coach has been trending downward year-over-year since the third quarter of 2022 due to lower sales volumes. The decrease in productivity per active earning OPTAVIA coach for the three months ended September 30, 2025 was driven by continued pressure with client acquisition reflecting broader challenges in the operating environment, including rapid adoption of GLP-1 medications for weight loss. We continue to see moderating year-over-year declines in this key metric.

Previous wording

Cost of sales: Cost of sales decreased $16.2 million, or 35.9%, to $28.9 million from $45.1 million for the three months ended June 30, 2025 from the corresponding period in 2024. The decrease in cost of sales for the three months ended June 30, 2025 was primarily driven by decreased volumes. Cost of sales decreased $32.2 million, or 34.8%, to $60.4 million from $92.6 million for the six months ended June 30, 2025. The decrease in cost of sales for the six months ended June 30, 2025 was primarily driven by decreased volumes.

Current wording

Cost of sales: Cost of sales decreased $7.2 million, or 21.0%, to $27.3 million from $34.5 million for the three months ended September 30, 2025 from the corresponding period in 2024. The decrease in cost of sales for the three months ended September 30, 2025 was primarily driven by a $12.2 million decrease attributable to lower volumes, partially offset by $4.0 million attributable to loss of leverage on fixed costs and a $1.6 million reserve for the reformulation of the Essential product line. Cost of sales decreased $39.4 million, or 31.0%, to $87.6 million from $127.1 million for the nine months ended September 30, 2025. The decrease in cost of sales for the nine months ended September 30, 2025 was primarily driven by a $43.9 million decrease attributable to lower volumes, partially offset by $4.9 million attributable to loss of leverage on fixed costs.

Previous wording

Gross profit: Gross profit decreased $46.8 million, or 37.9%, to $76.6 million from $123.4 million for the three months ended June 30, 2025 from the corresponding period in 2024. The decrease in gross profit for the three months ended June 30, 2025 was due to lower revenue. As a percentage of revenue, gross profit decreased 60 basis points to 72.6% for the three months ended June 30, 2025 from 73.2% for the corresponding period in 2024. For the six months ended June 30, 2025, gross profit decreased $89.8 million, or 35.8%, to $160.9 million from $250.7 million for the six months ended June 30, 2024. The decrease in gross profit for the six months ended June 30, 2025 was due to lower revenue. As a percentage of revenue, gross profit decreased 30 basis points to 72.7% for the six months ended June 30, 2025 from 73.0% for the corresponding period in 2024.

Current wording

Gross profit: Gross profit decreased $43.5 million, or 41.2%, to $62.2 million from $105.7 million for the three months ended September 30, 2025 from the corresponding period in 2024. The decrease in gross profit for the three months ended September

Previous wording

Selling, general, and administrative (“SG&A”): SG&A expenses were $77.7 million for the three months ended June 30, 2025, a decrease of $53.6 million, or 40.8%, as compared to $131.3 million from the corresponding period in 2024. SG&A expenses decreased for the three months ended June 30, 2025 primarily due to a $24.3 million decrease in OPTAVIA coach compensation as a result of fewer active earning coaches and lower volumes. Additionally, the Company incurred costs in the second quarter of 2024 that did not recur in the second quarter of 2025, including $12.5 million for supply chain optimization, $3.0 million for cancellation of the OPTAVIA convention in future years, and $2.0 million for the Company’s collaboration with LifeMD. As a percentage of revenue, SG&A expenses were 73.6% for the three months ended June 30, 2025 as compared to 77.9% for the corresponding period in 2024. SG&A expenses as a percentage of revenue decreased for the three months ended June 30, 2025 primarily reflecting approximately 740 basis points for supply chain optimization initiatives and 180 basis points for cancellation of OPTAVIA convention incurred in the second quarter of 2024 that did not recur in the second quarter of 2025, partially offset by 440 basis points attributable to the loss of leverage on fixed costs due to lower sales volumes. SG&A expenses included research and development costs of$1.1 million for both the three months ended June 30, 2025 and 2024, in connection with the development of new products and plans, and clinical research activities. SG&A expenses were $163.2 million for the six months ended June 30, 2025, a decrease of $87.4 million, or 34.9%, as compared to $250.7 million from the corresponding period in 2024. SG&A expenses decreased for the six months ended June 30, 2025 primarily due to an approximately $46.8 million decrease in OPTAVIA coach compensation as a result of fewer active earning coaches and lower volumes. Additionally, the Company incurred costs during the six months ended June 30, 2024 that did not recur during the six months ended six months ended June 30, 2025, including $12.5 million for supply chain optimization, $5.2 million of market research and LifeMD collaboration costs related to medically support weight loss, and $3.0 million for cancellation of the OPTAVIA convention in future years. As a percentage of revenue, SG&A expenses were 73.8% for the six months ended June 30, 2025 as compared to 73.0% for the corresponding period in 2024 primarily reflecting 410 basis points attributable to the loss of leverage on fixed costs due to lower sales volumes and 130 basis points attributable to company led marketing efforts, partially offset by approximately 360 basis points for supply chain optimization initiatives and 150 basis points for market research and LifeMD collaborations costs incurred during the six months ended June 30, 2024 that that did not recur in the six months ended June 30, 2025. SG&A expenses included r…

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Current wording

Selling, general, and administrative (“SG&A”): SG&A expenses were $66.2 million for the three months ended September 30, 2025, a decrease of $37.3 million, or 36.0%, as compared to $103.6 million from the corresponding period in 2024. SG&A expenses decreased for the three months ended September 30, 2025 primarily due to a $19.7 million decrease in coach compensation as a result of fewer active earning coaches and lower volumes. Additionally, SG&A expenses in the third quarter of 2025 reflected decreases of $5.6 million related to Company-led marketing compared to 2024, as well as $2.9 million for the Company’s convention costs, and $2.0 million for the Company’s collaboration with LifeMD that did not recur. As a percentage of revenue, SG&A expenses were 74.1% for the three months ended September 30, 2025 as compared to 73.9% for the corresponding period in 2024. SG&A expenses as a percentage of revenue increased for the three months ended September 30, 2025 primarily reflecting approximately 520 basis points associated to loss of leverage on fixed costs and other smaller increases, partially offset by a 360 basis point reduction related to Company-led marketing, and 210 basis points for the Company’s convention costs during the three months ended September 30, 2024, that did not recur. SG&A expenses included research and development costs of$1.1 million for both the three months ended September 30, 2025 and 2024, in connection with the development of new products and plans, and clinical research activities. SG&A expenses were $229.5 million for the nine months ended September 30, 2025, a decrease of $124.8 million, or 35.2%, as compared to $354.2 million from the corresponding period in 2024. SG&A expenses decreased for the nine months ended September 30, 2025 primarily due to a $66.5 million decrease in coach compensation as a result of fewer active earning coaches and lower volumes. Additionally, SG&A expenses for the nine months ended September 30, 2025 reflected decreases of $7.4 million related to Company-led marketing compared to the same period in 2024, as well as $12.5 million for supply chain optimization, $7.2 million of market research and LifeMD collaboration costs related to medically support weight loss, and $7.3 million related to the Company’s convention and other coach incentives that did not recur. As a percentage of revenue, SG&A expenses were 73.9% for the nine months ended September 30, 2025 as compared to 73.3% for the corresponding period in 2024 primarily reflecting 480 basis points associated to loss of leverage on fixed costs, partially offset by 260 basis points for supply chain optimization and 150 basis points of market research and LifeMD collaborations costs incurred during the nine months ended September 30, 2024 that that did not recur in the nine months ended September 30, 2025. SG&A expenses included research and development costs of$3.3 million for both the nine months ended September 30, 2025 and 2024, respect…

Excerpt shortened here; the source contains the full paragraph.

Previous wording

Income (loss) from operations: For the three months ended June 30, 2025, the Company’s loss from operations was $1.1 million, a $6.8 million improvement from the $7.9 million loss from operations for the corresponding period in 2024 primarily as a result of decreased SG&A expenses partially offset by decreased gross profit. For the three months ended June 30, 2025 the Company’s loss from operations as a percentage of revenue was 1.0% as compared to 4.7% for the corresponding period in 2024, due to the factors described above impacting SG&A expenses, partially offset by the factors impacting gross profit. For the six months ended June 30, 2025, the Company’s loss from operations was $2.3 million, a $2.4 million decrease as compared to the Company’s income from operations of less than $0.1 million for the corresponding period in 2024 primarily as a result of decreased gross profit, partially offset by the factors impacting SG&A expenses. Loss from operations as a percentage of revenue decreased to 1.1% for the six months ended June 30, 2025 from income from operations as a percentage of revenue of less than 0.1% for the corresponding period in 2024 due to the factors above impacting gross profit, partially offset by the factors impacting SG&A expenses.

Current wording

Income (loss) from operations: For the three months ended September 30, 2025, the Company’s loss from operations was $4.1 million, a $6.2 million decrease from the $2.1 million income from operations for the corresponding period in 2024 primarily as a result of decreased gross profit partially offset by decreased SG&A expenses. For the three months ended September 30, 2025 the Company’s loss from operations as a percentage of revenue was 4.6% as compared to 1.5% income from operations as a percentage of revenue for the corresponding period in 2024, due to the factors described above impacting gross profit and the factors impacting SG&A expenses. For the nine months ended September 30, 2025, the Company’s loss from operations was $6.4 million, an $8.6 million decrease as compared to the Company’s income from operations of $2.2 million for the corresponding period in 2024 primarily as a result of decreased gross profit and the factors impacting SG&A expenses. Loss from operations as a percentage of revenue decreased to 2.1% for the nine months ended September 30, 2025 from income from operations as a percentage of revenue of 0.4% for the corresponding period in 2024 due to the factors above impacting gross profit and the factors impacting SG&A expenses.

Previous wording

Other income: Other income for the three months ended June 30, 2025 was $3.9 million, an increase of $6.7 million, or 242.1%, as compared to other expenses of $2.8 million for the corresponding period in 2024. The increase in other income for the three months ended June 30, 2025 was primarily due to a $2.6 million gain on our investment in LifeMD common stock, compared to a loss on investment of $4.2 million for the corresponding period in 2024. The Company sold its investment in LifeMD during the current quarter. Other income for the six months ended June 30, 2025 was $5.7 million, an increase of $4.9 million, or 557.1%, as compared to other income of $0.9 million for the corresponding period in 2024. The increase in other income for the six months ended June 30, 2025 was primarily due to a $3.2 million gain on our investment in LifeMD common stock, compared to a loss on investment of $1.8 million for the corresponding period in 2024.

Current wording

Other income: Other income for the three months ended September 30, 2025 was $1.4 million, an increase of $2.0 million, or 369.7%, as compared to other expenses of $0.5 million for the corresponding period in 2024. The increase in other income for the three months ended September 30, 2025 was primarily due to the absence of a loss on our investment in LifeMD common stock that occurred during the corresponding period in 2024. The Company sold its investment in LifeMD during the six months ended June 30, 2025. Other income for the nine months ended September 30, 2025 was $7.2 million, an increase of $6.8 million, or 1,985.4%, as compared to other income of $0.3 million for the corresponding period in 2024. The increase in other income for the nine months ended September 30, 2025 was primarily due to a $3.2 million gain on our investment in LifeMD common stock, compared to a loss on investment of $3.7 million for the corresponding period in 2024.

Previous wording

Provision for income taxes: For the three months ended June 30, 2025, the Company recorded $0.4 million in income tax expense, an effective tax rate of 13.7%, as compared to an income tax benefit of $2.5 million, an effective tax rate of 23.4%, for the three months ended June 30, 2024. The decrease in the effective tax rate for the three months ended June 30, 2025 was primarily driven by the increase in the limitation for executive compensation, which was magnified by the near break-even pre-tax position in the current year. For the six months ended June 30, 2025, the Company recorded $1.7 million in income tax expense, an effective tax rate of 49.8%, as compared to $0.8 million, an effective tax rate of 82.6%, for the six months ended

Current wording

Provision for income taxes: For the three months ended September 30, 2025, the Company recorded $0.4 million in income tax benefit, an effective tax rate of 14.9%, as compared to an income tax expense of $0.4 million, an effective tax rate of 28.5%, for the three months ended September 30, 2024. The decrease in the effective tax rate for the three months ended September 30, 2025 was primarily driven by the decrease in the tax benefit of research and development tax credits, which represented 115.3% of the change, partially offset by an increase in the impact of states taxes of 85.6%. These changes were magnified by the near break-even pre-tax position in both periods. For the nine months ended September 30, 2025, the Company recorded $1.3 million in income tax expense, an effective tax rate of 174.4%, as compared to $1.2 million, an effective tax rate of 48.6%, for the nine months ended September 30, 2024. The increase in the effective tax rate for the nine months ended September 30, 2025 was primarily driven the impact of state taxes, which represented 85.6% of the change, a change in unrecognized tax benefits which represented 62.0% of the change, a change in the tax shortfall for stock compensation which represented 49.4% of the change, partially offset by the tax benefit of research and development tax credits of 115.3%. These changes were magnified by the near break-even pre-tax position in both periods.

Previous wording

Net income (loss): Net income was $2.5 million, or $0.22 per diluted share for the three months ended June 30, 2025 as compared to a net loss of $8.2 million, or $0.75 per diluted share, for the three months ended June 30, 2024. Net income was $1.7 million, or $0.15 per diluted share for the six months ended June 30, 2025, as compared to $0.2 million, or $0.01 per diluted share for the six months ended June 30, 2024. The period-over-period changes were driven by the factors described above.

Current wording

Net income (loss): Net loss was $2.3 million, or $0.21 loss per diluted share for the three months ended September 30, 2025 as compared to a net income of $1.1 million, or $0.10 per diluted share, for the three months ended September 30, 2024. Net loss was $0.6 million, or $(0.05) per diluted share for the nine months ended September 30, 2025, as compared to net income of $1.3 million, or $0.12 per diluted share for the nine months ended September 30, 2024. The period-over-period changes were driven by the factors described above.