Medifast (MED -1.75%), the nutrition and weight-loss company behind the OPTAVIA brand and its coach-based direct selling approach, reported its second quarter 2025 results on August 4, 2025. The company delivered revenue and earnings per share ahead of subdued Wall Street estimates, with GAAP revenue at $105.6 million and diluted GAAP earnings per share at $0.22 for Q2 2025. These results topped analyst expectations of $101.8 million for GAAP revenue. However, on a year-over-year basis, GAAP revenue fell sharply, down 37.4%, and the number of active earning coaches also continued to decline. The period saw margin resilience and effective cost-cutting, yet fundamental demand indicators such as active coach count and revenue per coach continued to slide. Management signaled caution for Q3 2025, forecasting further revenue declines and a possible return to net losses. Overall, while the results for Q2 2025 were slightly better than anticipated (GAAP revenue of $105.6 million exceeded the analysts' estimate of $101.8 million), the company continues to face heavy top-line pressure from industry shifts and structural headwinds.
Metric | Q2 2025 | Q2 2025 Estimate | Q2 2024 | Y/Y Change |
---|---|---|---|---|
Revenue (GAAP) | $105.6 million | $101.8 million | $168.6 million | (37.4%) |
EPS (GAAP, diluted) | $0.22 | ($0.19) | ($0.75) | NM |
Gross Profit | $76.6 million | $123.4 million | (37.9%) | |
Gross Margin | 72.6% | 73.2% | (0.6 pp) | |
Net Income (GAAP) | $2.5 million | ($8.2 million) | NM |
Source: Analyst estimates provided by FactSet. Management expectations based on management's guidance, as provided in Q1 2025 earnings report.
Medifast’s Business and Strategic Focus Areas
Medifast’s core business centers on weight management products, nutrition plans, and direct selling under its OPTAVIA brand. The heart of its model is a large network of independent coaches, most of whom were once customers themselves. These coaches deliver personalized support, encouraging clients to adopt healthier habits and stick with nutrition plans.
In response to changing trends in weight loss, Medifast has prioritized integrating medically-supported solutions, such as GLP-1 weight-loss medications, through a collaboration with telehealth provider LifeMD. It has also invested in specialized product lines such as OPTAVIA ASCEND, which are designed to support clients using these new medications. Ensuring the productivity and retention of its coach network—while navigating regulatory and competitive pressures—has become a major area of focus for the company.
Quarter in Detail: Results, Trends, and Key Drivers
GAAP revenue of $105.6 million for Q2 2025 showed a $3.8 million upside against consensus but represented a steep decline versus last year, with a 37.4% drop from Q2 2024. Leadership cited a reduction in the network of active earning coaches as the primary driver of this revenue contraction. The number of active earning OPTAVIA coaches, a leading business metric, decreased 32.7% to 22,800. This figure has been in decline since Q1 2023, pointing to sustained challenges in acquiring and retaining both coaches and new clients.
Average revenue per active earning coach also fell 6.9% year-over-year to $4,630, compared to $4,972 for the second quarter last year. Management attributed this to ongoing difficulties in attracting new clients. Specific market shifts—the rapid adoption of GLP-1 medications for weight loss—have softened demand for traditional weight-loss programs. Management stated, “The number of active earning OPTAVIA coaches has been trending downward year-over-year since the first quarter of 2023, driven by continued challenges with client acquisition.”
GAAP gross profit of $76.6 million was down 37.9% for Q2 2025, consistent with the drop in revenue. GAAP gross margin remained strong at 72.6% in Q2 2025, slipping only slightly from the prior year’s 73.2%. This stability was due in part to ongoing cost controls and supply chain optimization. Selling, general, and administrative (SG&A) expenses fell 40.8% to $77.7 million. The company reduced expenses by cutting variable costs linked to coach compensation and canceling its annual OPTAVIA coach convention, among other reductions. SG&A as a share of revenue was 73.6%, an improvement from 77.9% in Q2 2024.
The company posted net income of $2.5 million (GAAP), or $0.22 per diluted share, for Q2 2025, reversing a net loss of $8.2 million (GAAP) in Q2 2024. However, this result included a $2.0 million net-of-tax gain from the sale of stock in LifeMD, a company it partners with for GLP-1 telehealth services. Excluding this one-time gain, underlying profit would have been near breakeven or slightly negative. The company remains debt-free with $162.7 million in cash, cash equivalents, and investment securities, and $30.2 million in inventory as of June 30, 2025.
At the end of Q1 2025, the ASCEND line represented 'basically in the mid-teens' as a percent of orders. Management indicated that newer coach cohorts, many of whom are trained specifically to support GLP-1 clients, are showing higher productivity than prior groups, though this has not yet offset attrition in the overall coach base. Investments in digital tools, coach training, and tailored nutritional plans remain ongoing, as does the partnership with LifeMD following the sale of Medifast’s equity investment.
Management did mention continued focus on risk management, pointing to the importance of Federal Trade Commission compliance and adapting to changes in direct selling regulations.
The company did not mention any dividend in its release.
Looking Ahead: Guidance and What to Watch
For Q3 2025, management issued cautious guidance. It expects GAAP revenue between $70 million and $90 million, a sequential decline from the current period’s result. Diluted earnings per share (GAAP) are forecasted to range from a $0.60 loss to breakeven, indicating a likely return to net losses as cost reductions and one-time gains will not offset ongoing sales pressure.
Medifast did not provide a full-year outlook. Going forward, investors should keep an eye on coach network trends—whether the rate of decline can stabilize and eventually reverse. MED does not currently pay a dividend.
Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.