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DATE

Feb. 4, 2026 at 4:30 p.m. ET

CALL PARTICIPANTS

  • President and Chief Executive Officer — Steve Fife
  • Chief Financial Officer — Carl Aure

TAKEAWAYS

  • Net Revenue -- $48.9 million, down 27.8% from $67.8 million, but up 2.9% sequentially from the prior quarter.
  • MINDBODY GLP-1 System Revenue Decline -- Sales decreased by $16.2 million compared to the prior period, significantly impacting overall results.
  • LoveBiome Product Line Impact -- Contributed $4.1 million in revenue following the acquisition, partially offsetting declines in other product lines.
  • Americas Region Revenue -- Declined 32.6% to $38.5 million, driven primarily by a 25.2% decrease in total active accounts, mostly among customers.
  • Asia Pacific & Europe Revenue -- Down 2.1% to $10.4 million, with a 6.5% decrease in total active accounts; Japan revenue increased slightly on a constant currency basis.
  • Gross Profit Percentage -- 74%, down from 80.5% due to a $2.4 million inventory obsolescence allowance for MINDBODY and increased logistics costs; non-GAAP adjusted gross profit percentage was 78.8%.
  • Commissions & Incentive Expense -- 40.7% of revenue, down from 48%, reflecting lower incentive costs and customer/consultant mix changes.
  • SG&A Expenses -- $15.8 million or 32.3% of revenue, versus $18.6 million or 27.5%, with percentage increase driven by lower revenue and higher event-related costs.
  • GAAP Operating Income -- $500,000, compared to $3.4 million previously.
  • Adjusted Non-GAAP Operating Income -- $2.6 million, down from $3.9 million.
  • GAAP Net Income -- $300,000 or $0.02 per diluted share, compared to $2.6 million or $0.19 per diluted share.
  • Adjusted Non-GAAP Net Income -- $1.9 million or $0.15 per diluted share, versus $3 million or $0.22 per diluted share.
  • Adjusted EBITDA -- $3.9 million or 7.9% of revenue, down from $6.5 million and 9.6%.
  • Cash Position -- $10.2 million and no debt at quarter-end.
  • Cash Flow from Operations -- $500,000 for the first half versus $8.6 million prior, mainly due to timing of incentives, liabilities, and working capital.
  • Capital Expenditures -- $1.5 million for the first six months, up from $800,000, reflecting increased technology investment.
  • LoveBiome Acquisition Price -- $3.7 million in cash, with additional earn-out possible based on future results.
  • Shareholder Returns -- Over $20 million returned in dividends and buybacks since the start of fiscal 2024.
  • New Share Repurchase Program -- $60 million authorized through December 2027, replacing the previous program.
  • Dividend Announcement -- Quarterly cash dividend of $0.45 per share, payable on March 16, 2026 to holders of record March 2, 2026.
  • Fiscal Year Guidance -- Revenue expected at $185 million to $200 million, adjusted EBITDA of $15 million to $19 million, and adjusted EPS of $0.60 to $0.80.
  • Cost Management Measures -- Management is "taking a hard look at cost reduction opportunities" in response to the competitive landscape.
  • Inventory Reserve Actions -- MINDBODY inventory reserve instituted due to over-projection of demand from the prior launch cycle.
  • Shopify Partnership -- E-commerce modernization pilot on track, with goals to improve conversion and customer experience.
  • Product Pipeline Expansion -- Two new LoveBiome products launched (Axila X and Phytopower B), with more products planned in coming months.
  • P84 Product Performance -- Patent-pending P84 continues to be positioned as a "hero product" with strong consultant adoption, validated by scientific studies.
  • Leadership Transition -- CEO Steve Fife announced planned retirement in April, with the board overseeing succession planning for leadership continuity.

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RISKS

  • Steve Fife stated "our Q2 revenue and earnings were down significantly" and described performance as not meeting company or shareholder expectations.
  • Management acknowledged that "the overall market has become significantly more competitive" for GLP-1 products due to affordable pharmaceutical alternatives and insurance coverage, creating sales headwinds for the MINDBODY system.
  • A $2.4 million inventory reserve was recorded for MINDBODY GLP-1 inventory, with management noting they "got a little bit ahead of ourselves" in forecasting demand post-launch.
  • Carl Aure reported that operating cash flow dropped to $500,000 for the first half from $8.6 million, citing timing of incentive and accrual payments.

SUMMARY

LifeVantage (LFVN +3.55%) reported a substantial year-over-year revenue and earnings decline, primarily attributed to the downturn in MINDBODY GLP-1 system sales as the market shifted toward lower-priced pharmaceutical alternatives. The recently acquired LoveBiome product line provided incremental revenue and operational integration benefits, while new product launches are expected to support broader portfolio engagement. A $60 million share repurchase program and continued dividend payments demonstrate an ongoing commitment to shareholder returns, even as leadership transition plans were announced.

  • Management emphasized cost control and inventory measures to address volatile demand and shifting competitive pressures.
  • The company is investing in e-commerce modernization via Shopify and actively diversifying its wellness product portfolio to reduce dependence on any single hero product.
  • International operations remained steadier than the Americas, with Asia Pacific and Europe revenue only modestly lower and Japan showing improvement on a constant currency basis.
  • Ongoing investments in scientific validation and technology, along with succession planning for the CEO role, signal management's intent to adapt and position for long-term growth.

INDUSTRY GLOSSARY

  • GLP-1: Glucagon-like peptide-1, a hormone targeted by pharmaceutical and nutraceutical products for weight management and metabolic wellness.
  • P84: Patent-pending gut health supplement marketed as a key product innovation by LifeVantage.
  • MINDBODY GLP-1 System: LifeVantage's proprietary all-natural supplement targeting GLP-1 pathways for weight management.
  • LoveBiome: Recently acquired gut health and wellness product portfolio and team, integrated into LifeVantage operations.
  • NRF2: Nuclear factor erythroid 2–related factor 2, a protein involved in cellular antioxidant defense; productized by LifeVantage in its Protandim brand.

Full Conference Call Transcript

Steve Fife, President and Chief Executive Officer, and Carl Aure, Chief Financial Officer. By now, everyone should have access to the earnings release which went out this afternoon at approximately 4: 05 PM Eastern Time. If you have not received the release, it is available on the Investor Relations portion of LifeVantage's website at www.lifevantage.com. This call is being webcast. A replay will be available on the company's website as well. Before we begin, I would like to remind everyone that our prepared remarks contain forward-looking statements, and management may make additional forward-looking statements in response to your questions. These statements do not guarantee future performance, and therefore undue reliance should not be placed upon them. These statements are based on current expectations of the company's management and involve inherent risks and uncertainties, including those identified in the Risk Factors section of LifeVantage's most recently filed forms 10-K and 10-Q.

Please note that during today's call, we will discuss non-GAAP financial measures, including results on an adjusted basis. Management believes these financial measures can facilitate a more complete analysis and greater transparency into LifeVantage's ongoing results of operations, particularly when comparing underlying operating results from period to period. We have included reconciliation of these non-GAAP measures with today's release. This call also contains time-sensitive information that is accurate only as of the date of this live broadcast, 02/04/2026. LifeVantage assumes no obligation to update any forward-looking projection that may be made in today's release or call. Now I will turn the call over to Steve Fife, the President and Chief Executive Officer of LifeVantage.

Steve Fife: Thanks, Reed, and good afternoon, everyone. Thank you for joining us today. The second quarter presented both challenges and opportunities as we navigated a rapidly evolving competitive landscape while executing on our strategic initiatives. While our Q2 revenue and earnings were down significantly from prior year levels, we were cycling the explosive launch of our MINDBODY GLP-1 system in October. Despite this headwind, we made significant progress on several key fronts and remain well-positioned for long-term growth in the broader health and wellness ecosystem.

As a management team, we acknowledge that our performance during the quarter did not meet your expectations or ours, and we are redoubling our efforts to stabilize our GLP-1 business and make the other changes necessary to return to revenue growth. Let me start by addressing the primary driver for our revenue decline: the competitive dynamics we have experienced in the natural GLP-1 market since launching our MINDBODY GLP-1 system last year. Our product is scientifically validated and proven effective, and we have a loyal customer base. However, the overall market has become significantly more competitive with pharmaceutical GLP-1 drugs becoming more accessible and affordable, along with new formulations and formats, including pills.

When we launched MINDBODY, pharmaceutical options were in short supply and cost several hundred dollars per month to consumers. At that time, MINDBODY was a compelling value proposition, plus it had the added benefit of not requiring any injections and being a proven all-natural solution. Today, pharmaceutical options have come down significantly in price and are increasingly covered by insurance, which has led to much broader use by consumers. In addition, the drug is now available in more convenient formats, including pills. This rapidly shifting competitive dynamic has dramatically impacted the sale of our GLP-1 offering.

As a result, to be conservative, we are recognizing a reserve against a portion of our GLP-1 inventory and evaluating all options to respond to the changing competitive landscape. We are also taking a hard look at cost reduction opportunities to ensure we continue to maintain strong levels of profitability. We remain committed to our MINDBODY GLP-1 system. It is a great product that works, and we continue to believe strongly in the positioning of natural weight management solutions. The science supporting our approach is robust, and we see this as a temporary market adjustment. What excites us most about this quarter is the continued momentum from our LoveBiome acquisition.

From an operational perspective, we successfully integrated the LoveBiome team and systems, and we are realizing the operational synergies. The combined expertise of our teams is already in our product development pipeline and go-to-market strategies. Two new products from the LoveBiome portfolio launched earlier this week that should drive engagement, consultant growth, and continue to diversify our product portfolio. First is Axila X, a new addition to our Axial line that focuses on pre-workout consumers looking for long-lasting energy, enhancing oxygen uptake, and stamina. Second is Phytopower B, where the B stands for blocker, an innovative approach that helps to slow sugar absorption and support a healthy metabolism.

These launches represent the power of our combined innovation capabilities and demonstrate how the LoveBiome acquisition is already paying dividends in terms of product diversification and market growth. Over the next couple of months, we will be launching additional LoveBiome products, further leveraging and expanding the LoveBiome portfolio. Our now patent-pending P84 product continues to be a hero product with strong positioning in the rapidly growing gut microbiome market. The in vitro testing results we announced in October at our Momentum event further validate the science behind this comprehensive gut health activator, and we are seeing strong adoption among both our combined consultant and consumer base.

The HealthyEdge stack, which combines our proven Protandim NRS-2 synergizer with P84, has become a lead enrollment story for our consultants. In January, we released the results of our third-party cell study that shows this combination delivers foundational health support throughout the entire body, and the synergistic benefits are resonating strongly with health-conscious consumers. I am also pleased to report continued progress on our Shopify partnership. This strategic initiative represents a significant modernization in our technology infrastructure and will deliver enhanced e-commerce capabilities that benefit both LifeVantage and our consultants. We are on track for our pilot program and expect this platform to drive improved conversion rates and customer experience.

Looking at our international expansion efforts, we continue to see opportunities for growth in key markets. The infrastructure we have built through the LoveBiome integration positions us well to scale our operations globally and serve the evolving needs of health-conscious consumers worldwide. Now as we look ahead, I am optimistic about our positioning. We have a comprehensive wellness ecosystem that addresses multiple aspects of human health, from cellular health with Protandim to metabolic wellness with MINDBODY, to gut health with P84, to beauty and longevity with TruScience liquid collagen. Combined with our industry-leading EVOLVE compensation plan and vibrant consulting community, we are uniquely positioned to serve the evolving needs of both consumers and entrepreneurs.

The direct sales industry continues to evolve, and companies that can combine innovative products, compelling compensation, modern technology, and authentic communities will be the winners. We believe LifeVantage, enhanced by our LoveBiome partnership and strengthened by our commitment to science validation, is perfectly positioned to lead in this new era. We also continue to have a strong balance sheet and a proven track record of returning excess capital to shareholders. Since the beginning of fiscal 2024, we have returned over $20 million to shareholders through dividends and share repurchases. And today, we announced a new $60 million share repurchase authorization, underscoring our commitment to the future and commitment to driving long-term value.

The board remains committed to this perspective, as evidenced by the quarterly dividend and new share repurchase program just announced. With that, let me turn the call over to Carl for the detailed review of our financial results and outlook.

Carl Aure: Thank you, Steve, and good afternoon, everyone. Let me walk you through our second quarter financial results. Please note that I will be discussing our non-GAAP adjusted results where applicable. You can refer to the GAAP to non-GAAP reconciliations in today's press release for additional details. For 2026, we delivered net revenue of $48.9 million, which was down 27.8% compared to $67.8 million in 2025, but was up 2.9% sequentially from the first quarter. The decrease compared to the prior year period was primarily driven by declines in sales of our MINDBODY GLP-1 system, which decreased $16.2 million compared to the prior year period.

This decline was partially offset by sales of the LoveBiome product line, which contributed $4.1 million in revenue following our October acquisition. Breaking down our regional performance, revenue in the Americas region decreased 32.6% to $38.5 million, while revenue in the Asia Pacific and Europe region decreased 2.1% to $10.4 million. The Americas decline was primarily driven by lower sales of our 25.2% decrease in total active accounts, mostly from decreases in our active customer base. In Asia Pacific and Europe, the decline in revenue reflected a 6.5% decrease in total active accounts. Revenues did increase slightly in Japan on a constant currency basis.

Our gross profit percentage for the second quarter was 74%, down from 80.5% in the prior year period, reflecting a one-time allowance for inventory obsolescence related to MINDBODY along with increases in shipping and warehouse-related expenses. Excluding the $2.4 million one-time inventory reserve, our non-GAAP adjusted gross profit percentage was 78.8%. Commissions and incentive expense as a percentage of revenue was 40.7% in the second quarter compared to 48% in the prior year period. The decrease as a percentage of revenue was primarily due to elevated incentive-related expenses recorded in the prior year period and impact from changes to the mix of customers and consultants in our overall active account base.

Selling, general, and administrative expenses were $15.8 million or 32.3% of revenue compared to $18.6 million or 27.5% of revenue in the prior year period. The increase as a percentage of revenue was primarily due to the overall decrease in sales volume and elevated event-related expenses in comparison to the prior year period. GAAP operating income was $500,000 compared to $3.4 million in the prior year period. Adjusted non-GAAP operating income was $2.6 million compared to $3.9 million in the prior year period. GAAP net income was $300,000 or $0.02 per diluted share compared to $2.6 million or $0.19 per diluted share in the prior year period.

Adjusted non-GAAP net income was $1.9 million or $0.15 per diluted share compared to $3 million or $0.22 per diluted share in the prior year period. Adjusted EBITDA for the second quarter was $3.9 million or 7.9% of revenues, compared to $6.5 million and 9.6% in the same period a year ago. Our financial position remains strong with $10.2 million of cash and no debt at the end of the second quarter. We generated $500,000 of cash from operations during the first six months of fiscal 2026, compared to $8.6 million in the same period in fiscal 2025, mostly due to the timing of incentive payments, payments of other accrued liabilities, and other working capital changes.

Capital expenditures totaled $1.5 million for the first six months of fiscal 2026 compared to $800,000 in the prior year period, reflecting our continued investment in technology infrastructure. We also utilized $3.7 million in cash during the second quarter relating to the closing of the LoveBiome transaction. Turning to capital allocation, we did not repurchase any shares during the second quarter. During the first six months of fiscal 2026, we repurchased 44,000 shares for an aggregate purchase price of $600,000.

We are also pleased to announce the company's board of directors recently approved a new $60 million share repurchase program, which replaces in its entirety the prior share repurchase program and authorizes the company to repurchase shares in both open market and private transactions through 12/31/2027. Today, we also announced a quarterly cash dividend of $0.45 per share of common stock. This dividend will be paid on 03/16/2026, to stockholders of record as of 03/02/2026. Turning to our outlook for fiscal 2026, we now expect revenue in the range of $185 million to $200 million, adjusted EBITDA of $15 million to $19 million, and adjusted earnings per share in the range of $0.60 to $0.80 per fully diluted share.

This guidance reflects the current trends in our business, including the competitive dynamics in the GLP-1 market, the positive momentum from our LoveBiome integration, and the expected impact of our February product launches. We remain committed to improving our profitability metrics and driving long-term value for our shareholders. And with that, let me turn the call back over to Steve.

Steve Fife: Thanks, Carl. Immediately following our earnings release today, we also issued another press release announcing my planned retirement in April. While these decisions are never easy, I am confident now is the right time for this transition after accomplishing so much as a team over the last nine years and laying the foundation for LifeVantage's next chapter of growth. The board has been working closely with me on a comprehensive succession planning process for my eventual retirement that ensures leadership continuity and positions LifeVantage for continued success. Leading LifeVantage has been one of the most rewarding experiences of my career, and I am incredibly proud of what we have achieved.

From evolving our business model to strengthening our market position and impacting the lives of thousands of individuals, our entrepreneurial opportunity is unlike any other industry, and I have complete confidence in our talented team and the board's ability to guide LifeVantage into its future. Operator, we are now ready to open up the call for questions.

Operator: Thank you. If you would like to ask a question, please press 1 on your telephone keypad. A confirmation tone will indicate the line is in the question queue. You may press 2 to remove your question from the queue. And for participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. Our first question is from Doug Lane with Water Tower Research. Please proceed.

Doug Lane: Yes. Thank you, and good afternoon, everybody. And, so Steve, best wishes on your retirement here. All the best. Let me ask about LoveBiome. You mentioned the $3.7 million cash at closing, is that a transaction cost, or is that the actual purchase price for LoveBiome?

Carl Aure: Yeah, Doug. That's the actual cash transaction price related to the LoveBiome piece. And so I think that we have also talked a little bit more if you look in the details of the 10-Q, I think we have talked about this in, you know, some of our previous discussions. But the deal was structured in two pieces. You had the cash down payment component, which worked out to be that $3.7 million number. And then there's also the ability for a future earn-out that's based off of future revenue targets. And so, those are really the two components of that. So any further either cash or stock compensation there would be subject to the long-term earn-out amounts.

Doug Lane: Got it. So that explains about almost half of the $10 million reduction in cash on your balance sheet. What are the other big things that impacted that reduction in cash on your balance sheet from the first quarter?

Carl Aure: Yeah. That was definitely one of the big items. The other big items, just the timing of accrued payables. If you look at where we were at the June, we had some pretty significant accrued payables that just the timing of those turned here during the first half of the year. And then the other component that we had is that one of the other items we do is when we settle stock-based compensation, the withholding tax from employees vesting, the company utilized about $3 million of cash associated with that during the first half of the year.

So I would say just between those three buckets, that really accounts for the $10 million decline from where we were in June. But looking forward, as I look at the back half of the year, I would anticipate that we will start to really start to build cash here in the back half of the year from now through the end of our fiscal year.

Doug Lane: Okay. That makes sense. And can you give us an update with MINDBODY so far this year as you enter the weight loss season? What are your marketing plans? How are you approaching that? And what's sort of an early read on how things are going?

Steve Fife: Yeah. We kicked off in our fiscal Q2 and in November and December a whole go-to-market strategy around MINDBODY. It included a 20% off sale for the product, which we have carried over through January and now into February. So our product has been discounted by the 20% promotion we have. We also had an event in December that people could qualify for. We call it our Activate Ninety event, which is a weekly access to professional trainers, lifestyle, and business individuals that on every week on Thursday evenings, they have access to these individuals that talk to them, you know, holistically about health and wealth maintenance and management.

Those calls, you know, the people qualified to be on those calls live. We record them and now distribute them out or they are made available to everyone now, you know, after the events occur. So that's kind of this weekly reminder for the field. We have also in January introduced a new feature in our app. Our app has previously been, you know, really consultant-driven and to help them with their businesses. But we also now have provided access to a tracking mechanism for customers and consultants to go through and utilize it to help track their calories, their activities, daily reminders, and goal setting.

We all know that having those kinds of devices and reminders help all of us be more mindful of our activities regardless of what it is. And so we are pleased to be able to introduce that in January, and we see and receive positive feedback from that.

We also, I guess the last thing that I would say is we have a very active win-back campaign where we target consumers of MINDBODY that were part of, you know, that had utilized it in the past and maybe even going back to a year ago, where all of our minds tend to drift a little bit as it relates to weight management in this time of year, but win-back campaigns and incentives to come back and, you know, get back on the product or try the product again. So it's really, I would say, multi-pronged in terms of what we are doing to focus our attention on that.

Doug Lane: Okay. Getting back to LoveBiome. I see in the queue, got a chance to look briefly at it, that it contributed about $4 million to the quarter. That sound about right? I did not see what if you even disclose how it impacted your consultant numbers and your customer numbers.

Carl Aure: Yes. On the product revenue, that $4 million that we disclosed, that relates to the actual LoveBiome products that were sold during the quarter. So just the products that they brought over through the transaction. There would have also been other revenue of LoveBiome consultants that came over that purchased LifeVantage products. We did not break that out separately in the queue. But so that's what that $4 million refers to. It's just the LoveBiome product line itself. And then as far as on the consultants, we have not disclosed the number of active consultants that came over. But they have been integrated correctly, and that's something that maybe we can speak to at a future time.

Steve Fife: The other thing just to add on to that, I did say in my prepared remarks, you know, we did launch two LoveBiome products on Monday. We had a kickoff. We had just under a thousand participants on Monday night and Tuesday night this week, where we launched two of LoveBiome's previous products, Axio X, which fits into our Axio product line. It's targeting more, you know, a higher level of energy and people use it for pre-workouts and or when they would need a boost during the day. And then Phytopower B, and that B stands for blocker.

And so it's a product designed to be not necessarily a daily use product, but one where all, you know, in anticipation of a big meal, it helps to combat, you know, the downside of sugar and carbs as we consume them. So these kickoff calls that we had on Monday and Tuesday night, it was really expanding the knowledge of those launching the products and then educating, you know, the LifeVantage consultants as to the phenomenal products that they are. A lot of it was actually led by LoveBiome individuals, you know, because they had access to the products previously.

So we're thrilled to now make them available to everyone and expect them to, you know, provide some growth in the second half of the year. And then also, mentioned there will be two products that will be launched here that were, again, were previous LoveBiome products that will be launched in the next couple of months. And that will kind of then round out the portfolio of products that came to us through that acquisition.

Doug Lane: Okay. Got it. And, just looking at the sales, you know, I get the tough comparison with MINDBODY. That, you know, we saw coming. But I noticed in the previous three years in the second quarter, you were north of $50 million pretty consistently. And then now you are a little bit below that and maybe even more so if you exclude LoveBiome. So I'm just wondering if there's something else, one or two things besides MINDBODY that maybe wasn't working up to your expectations in December?

Steve Fife: Well, no. I think it has been we've seen a decline in our especially in our customer base and modest in our consultant base. And really, you know, I think the top-line story there is over the last year, MINDBODY became the enrollment story for many of our consultants. And as, you know, some of the challenges that we described in, again, the prepared remarks, started to play out throughout the year. You know, the consultants continued to push MINDBODY, but we lost some momentum around, you know, the other hero products that we have.

You know, and specifically, NRF2 collagen and it's one of the reasons why, you know, we're so excited about now having added LoveBiome to the mix and having another hero product that has really reengaged a lot of our consultants. With a new story and really opening up a whole new white space for LifeVantage consultants to take a gut health activator to. And so it's just, you know, that shift doesn't turn overnight. The enthusiasm, excitement about P84 and, you know, I've we talked you and I have spoken. We've spoken in the past around our HealthyEdge stack, which is the combination of P84 and NRF2.

And that combination, I think, will very shortly be our biggest and highest enrollment product. Because of how, you know, the synergistic benefits and where our consultant, you know, base heads are right now. So we're repositioning. You know, MINDBODY is still a great product for us. It's contributed just under 10% of our revenue for the quarter, and, you know, the science behind it, the benefits that people feel, you know, and are achieving are real. They're demonstrable. But we're trying to now also balance the other great products that we have and incorporating them into that, you know, enrollment story.

Doug Lane: Thanks, Steve. That's good color. Just one more for me. You know, the Shopify thing you've been talking about, and it looks like it's about to be underway here. Can you take a little bit deeper dive into how you're going to use Shopify? Are there other direct sellers that use Shopify, or are you basically pioneering that for the channel? Just a little more color on how Shopify is going to impact your business.

Steve Fife: Yeah. You know, Shopify is probably the best known and leader from an e-commerce customer experience platform standpoint. They started off as really a solution to the mom-and-pop small business areas, you know, people that didn't have resources to address, you know, the technology associated with owning a business. And since those early years and that's really how they cut their teeth. They built their reputation and the high technology standard that they are known for today. And over the past several years, they have expanded and are working up the food chain, if you will, to larger and larger companies and expanding their capabilities to address bigger companies and e-commerce in those platforms.

And there's a lot of benefit that we are going to see from this. You know, some of them would, you know, I again, I think I mentioned these in the prepared remarks. Around conversion rates. And just the ease of a customer experience of going through checkout and having a modern approach. I'm sure you've been on our site and purchased product. It has not been a seamless experience for consumers. And the data, you know, that's been provided by Shopify in conversions of previous systems to Shopify is pretty staggering around the improvement in that conversion. So that's one aspect of it. The other aspect is just ease of use from a corporate standpoint.

When we do promotions, how we display our products, our internal pricing, and how do we get it, you know, onto our e-commerce website. The technology that we're currently using is fairly dated, and it takes a lot of internal resources to navigate that. And so we think that there will be benefits from a process improvement standpoint. And I guess the last one, just again at a high level, this gives us the opportunity to, although not directly tied to Shopify per se, gives us the opportunity, and we're taking it to look at our whole consultant tool base.

So the, you know, what we refer to as the back office, what their consultants are looking at to run their business. We are taking the opportunity to also make enhancements to that so that it again ties in now with the ease of use from a Shopify standpoint. And, you know, one of the things about Shopify is, again, that they are the industry leader in this space. And by creating this partnership with them, we're really putting our future in a position where we're not chasing what's next.

We've partnered with someone who is always going to be at the forefront of technology as it relates to e-commerce, and we are going to be able to leverage that and not, you know, be in a constant catch-up mode like we are today.

Doug Lane: Okay. Thank you. Thanks, Doug.

Operator: Our next question is from Ryan Myers with Lake Street Capital. Please proceed with your question.

Ryan Myers: Yeah, guys. Thanks for taking my questions. Given the demand and competitive dynamics in the MINDBODY and GLP-1 space, you know, why do you feel like that's a category that you guys can return to growth in, and why is that a category that you feel like you guys can actually win in?

Steve Fife: We believe that because of our solution. There are we still when you look at our clinical studies, our science, and our results, and you layer on top of that a natural solution versus it doesn't matter really if it's an injectable or a pill that you're taking. It is still introducing the GLP-1 hormone into your body and not helping your body to actually produce more effective in the production of that natural hormone. So there are millions of people out there that look more to prevention and natural holistic alternatives that are still going to be very interested in our option.

And that will always be the case with our products, versus synthetic drugs that might tout the same kind of results, but without, you know, by but are able to do it in a natural way.

Ryan Myers: Got it. And then, you know, walk us through the decision to take the inventory charge and just the background information on that.

Steve Fife: Yeah. No, I can share some more insight there, Ryan. You know, as you know, when we launched the GLP-1 product last October, a year and a half ago, we just had an incredible response to the demand of that product. We sold out really quickly. We sold out the initial stock that we had within a three-week period. And just based off of that demand, we really ramped up our supply chain, and based off of that, those early months of demand, we really felt like we needed to build up inventory. And frankly, we got a little bit ahead of ourselves.

I think it's now that we've got the more right-sized demand that MINDBODY has really settled in and we have more visibility into what the seasonality looks like. We decided to take a conservative approach and put a reserve against some of the inventory that we have. The shelf life, I mean, the shelf life of the product is two years. But we felt that it was appropriate to put a reserve against it to be conservative. We'll still look for other ways to find a way to either sell that or find other uses for it. But that was really the background behind why we went ahead with the inventory reserve.

Ryan Myers: Got it. And then just lastly, you know, how should we be thinking about the revenue split in the second half of the year? I mean, have you guys seen a rebound at all here in the third quarter? Just any commentary on what we should be thinking about for Q3 and Q4 in terms of revenue split would be helpful.

Steve Fife: Yes. I think when we think about the back half of the year, we do believe that the MINDBODY trends have stabilized a bit, and this is a traditional weight loss season. But I do think that we anticipate the build to build from the third quarter and then also again into the fourth quarter. So especially coming from as we integrate the LoveBiome acquisition and we get their leaders more engaged in the continued rollout of the LoveBiome product, I would anticipate that when you're balancing between the two quarters, that Q4 will likely have a higher proportion of the revenue versus Q3.

Ryan Myers: Got it. That's helpful. Thank you.

Operator: Thanks, Ryan. We have reached the end of our question and answer session. I would like to turn the conference back over to Steve for closing remarks.

Steve Fife: Thanks, operator, and thank you, everyone, for joining us today. Clearly, the second quarter presented some challenges for us. And although that's the case, you know, we do remain confident in our strategic direction and the strength of our diversified both product portfolio and our business model. The successful integration of LoveBiome and our incredible consultants and our recent product and future product launches, our international expansion plans, and our continued focus on scientific innovation position us well for sustainable growth. As we move forward, we remain committed to our mission of activating optimal health processes at a cellular level while providing our independent consultants with the tools and opportunities they need to build successful businesses.

I want to extend my appreciation to our dedicated employees, outstanding consultants, loyal stockholders, and faithful customers. And while I'm approaching my end as tenure as CEO, I'm excited about the bright future ahead of LifeVantage, and I'm confident in the strong foundation we've built together. We'll continue to drive innovation and growth for years to come. Thank you once again for your continued support and trust in our mission.

Operator: Thank you. This will conclude today's conference. You may disconnect at this time, and thank you for your participation.