Medifast Inc. (NYSE: MED) reported fourth‑quarter 2025 results that saw revenue fall 36.9% to $75.1 million from $119.0 million a year earlier, while the active earning coach base dropped 40.6% to 16,100 coaches. Average revenue per coach rose 6.2% to $4,664, the first year‑over‑year increase since 2022.
Gross profit declined 40.9% to $52.1 million, and gross margin contracted to 69.4% from 74.1% in Q4 2024. The decline was driven by a 420‑basis‑point loss of leverage on fixed costs and a one‑time restructuring charge that added 40 basis points to the cost structure.
Operating loss widened to $7.8 million and net loss reached $18.1 million, or $1.65 per diluted share, on 11.0 million shares outstanding. The loss per share was impacted by a $12.1 million non‑cash valuation allowance recorded against deferred tax assets, which represented $1.10 of the $1.65 loss on a per‑share basis. Before the allowance, the loss per share was $0.55, better than the guidance range provided.
Management highlighted that coach productivity turned positive year‑over‑year for the first time since 2022, a key indicator of broader improvement. Dan Chard, Chairman and CEO, said, "As we enter 2026, Medifast is moving from defining its business transformation strategy to executing on a new path to growth, leading to profitability as we become wholly focused on optimal metabolic health." He added, "In the fourth quarter, we saw coach productivity turn positive year‑over‑year for the first time since 2022, which has historically been a lead indicator of broader improvement. We also saw a significant increase in coach‑led meetings, an indication our coach base is energized and dialed‑in to the opportunities ahead."
CFO Jim Maloney noted, "Our fourth quarter 2025 revenue was within our guidance range, with revenue per active earning coach showing year‑over‑year growth for the first time since Q2 of 2022 and reaching its highest level since Q3 of 2024." He also mentioned, "The loss per share was impacted by a $12.1 million non‑cash valuation allowance we recorded against our deferred tax assets in the current quarter, which on a per‑share basis represented a $1.10 of the $1.65 loss." He added, "The loss per share before the non‑cash deferred tax valuation allowance was $0.55, which was better than the guidance range we provided."
The company’s guidance for the first quarter of 2026 projects revenue of $65–$80 million and a loss per share of $0.15–$0.70, a downward revision from prior expectations. Full‑year 2026 guidance is revenue $270–$300 million and loss per share $1.55–$2.75, both below analyst consensus estimates. The guidance reflects management’s concern about continued headwinds from GLP‑1 medication competition and the need to accelerate the metabolic‑health pivot.
Medifast’s CEO transition is underway, with Dan Chard stepping down on June 1 2026 and President Nick Johnson expected to take over. The company has also announced restructuring actions targeting over $30 million in future annual savings, which are incorporated into the 2026 guidance.
Investors are focusing on the forward guidance and the significant EPS miss relative to the consensus estimate of $-0.76. The company’s strong balance sheet, with substantial cash and no debt, provides a cushion for the transformation period.
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