LifeMD (LFMD) Q2 Revenue Rises 23%

LifeMD (LFMD -1.39%), a telehealth platform specializing in virtual care and digital health subscriptions, reported its second quarter 2025 financial results on August 5, 2025. Revenue (GAAP) was $62.2 million, up 23% from the same period last year but $4.1 million below consensus estimates (GAAP). Earnings per share (EPS) came in at a loss of $0.06 (GAAP), which was also below analyst expectations by $0.0517 (GAAP). Despite year-over-year expansion in core business metrics, results missed both revenue and GAAP earnings projections. The quarter showcased strong telehealth growth and improved operational profitability, but also included a guidance reduction for the full year, pointing to segment-specific pressures, especially within men’s health. Overall, the period highlighted robust subscriber and adjusted EBITDA gains alongside mounting challenges in forecasting and segment execution.

Source: Analyst estimates provided by FactSet. Management expectations based on management's guidance, as provided in Q1 2025 earnings report.

Understanding LifeMD’s Business Model and Key Growth Factors

LifeMD delivers virtual healthcare services directly to consumers in all 50 states, focusing on subscription-based telehealth for chronic condition management, primary care, and specialty health segments. It operates two main businesses: a telehealth segment delivering care through a vertically integrated platform (including pharmacy and labs), and WorkSimpli, a smaller software platform targeting administrative business solutions.

In recent quarters, LifeMD has sharpened its emphasis on recurring telehealth subscriptions, platform expansion, and expansion into new clinical verticals such as behavioral and women’s health. Key drivers for success include strong regulatory compliance, platform-driven patient retention, and the ability to introduce services efficiently at scale. Partnerships with healthcare brands and continued technology investment also feature heavily among its strategies for differentiation and sustainable growth.

Quarterly Highlights and Segment Performance

LifeMD’s total revenue (GAAP) climbed 23% year over year, led by a 30% surge in telehealth segment revenue and a significant jump in operational profitability, as reflected by adjusted EBITDA (non-GAAP) increasing to $7.1 million from $2.2 million in Q2 2024. Active telehealth subscribers reached nearly 297,000, up 16% year over year. However, while overall revenue grew, the outcome was $4.1 million behind analyst forecasts on a GAAP basis, highlighting gaps versus external expectations.

The telehealth segment continues to be LifeMD’s main growth engine. Telehealth Adjusted EBITDA, a non-GAAP measure used to assess core profitability before certain accounting deductions, surged 560% to $3.4 million from the year-ago period. The segment benefited from strong demand for subscription-based chronic care, weight management, and expanded men’s health services such as hormone therapy. Management reported that new offerings in behavioral and women’s health delivered limited revenue during the quarter, but these areas are expected to contribute more materially over time.

WorkSimpli revenue (GAAP) edged up 3% compared to the same period last year, active subscribers in this segment fell 6%, as the company shifted its strategy to focus on higher-value, longer-term clients rather than maximizing subscriber count. As a result, WorkSimpli’s adjusted EBITDA more than doubled compared to Q2 2024, underscoring the company’s drive to maximize cash flow from this asset ahead of any potential future divestiture.

Gross margin, which measures the proportion of revenue retained after accounting for direct service costs, slipped to 88% from 90% last year (GAAP). Management attributed this margin compression chiefly to changes in revenue mix, as the telehealth segment’s component services grew at varying rates. Operating cash flow was robust, exceeding $8 million, and the company ended the period with a cash position of $36.2 million after fully repaying its senior debt post-quarter.

LFMD does not currently pay a dividend.

Key Business Developments, Risks, and Strategic Initiatives

Several forces shaped LifeMD’s second quarter. First, the company’s rapid expansion in telehealth continued as it grew recurring, subscription-based revenue streams and lifted its active user base. Telehealth subscriptions remain the backbone of LifeMD’s financial model, accounting for most segment revenue.

The company took notable steps to widen its clinical reach. It launched a national behavioral health service, providing both real-time (synchronous) and on-demand (asynchronous) care for mental health. Through a recent acquisition, it is rolling out subscription-based virtual women’s health programs, starting with VIP concierge offerings and plans to extend to broader insurance-supported and cash-pay options. In parallel, LifeMD enhanced its LifeMD+ membership program to aggregate telehealth, pharmacy, laboratory, and wellness services under one umbrella for better patient retention.

From a financial perspective, cost discipline played a visible role, as selling and marketing expenses increased, but general and administrative spending was trimmed year on year. The company succeeded in improving net losses (GAAP) from $7.7 million to $2.9 million versus Q2 2024. and more than tripled its overall Adjusted EBITDA (non-GAAP). At the same time, margin pressure appeared, as gross margins (GAAP) dipped to 88% from 90% in Q2 2024, reflecting a greater share of lower-margin revenue. Legal and regulatory risk remains the most notable external issue, particularly surrounding LifeMD’s reliance on the supply of GLP-1 weight-loss medications. Shifts in either FDA policy or supply dynamics could have a direct effect on future results.

Strategic partnerships made headlines this quarter. LifeMD moved forward with collaborations with weight management drug providers LillyDirect and NovoCare, aimed at helping patients access branded therapies like Wegovy and Zepbound when lacking insurance. The company does not receive financial incentives from these collaborations, which it views as a competitive advantage in virtual obesity care. Early revenue from these verticals remains small, and integration is ongoing.

On the technology front, the company remains aggressive, capitalizing on its proprietary telehealth infrastructure, pharmacy network, software, and integrated patient experience. Platform upgrades, enhanced CRM (customer relationship management) systems, and new patient-facing technology continued as investment priorities, fueling opportunities to bring new services to market more quickly and deepen relationship-based retention.

Despite top-line growth, mounting uncertainty underpinned the revised full-year outlook. In response to challenges in the Rex MD men’s health brand -- involving both business execution and regulatory complexity -- LifeMD lowered its forward guidance for total revenue, telehealth revenue, and Adjusted EBITDA for the full year. Guidance now stands at $250–$255 million in total revenue (GAAP basis), $195–$200 million telehealth revenue (GAAP, full year), and $27–$29 million in Adjusted EBITDA for the full year, as both market conditions and regulatory situations continue evolving.

Looking Forward: Guidance and Investor Considerations

For Q3 2025, LifeMD’s leadership projects total revenue between $61 million and $63 million, with telehealth revenue expected to contribute $48 million to $50 million and Adjusted EBITDA ranging from $6 million to $7 million. Management does not expect a material one-time boost from newly launched verticals or drug collaborations for the remainder of the year, though moderate growth is reflected from early ramp-up in women’s and behavioral health.

These updates represent a notable reduction from previous management forecasts, reflecting ongoing impacts from earlier Rex MD disruptions. The company’s near-term performance will depend on its ability to stabilize subscriber growth, control marketing and service costs, and successfully integrate new verticals without additional unforeseen challenges. Ongoing legal actions and changing rules around compounded drugs remain watch points for the business and shareholders alike.

LFMD does not currently pay a dividend.

Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.