Good day, and welcome to the Biote Third Quarter 2025 Earnings Conference Call. Please note this event is being recorded. I would now like to turn the conference over to Szymon Serowiecki, Investor Relations. Please go ahead.

Thank you for joining us today. This afternoon, Biote published financial results for the third quarter ended September 30, 2025. This news release is available in the Investor Relations section of the company's website. Hosting today's call are Bret Christensen, Chief Executive Officer; and Bob Peterson, Chief Financial Officer. Before we get started, I'd like to remind everyone that management will make statements during this call that include forward-looking statements regarding, among other things, the company's financial results, future performance and growth opportunities, business outlook, strategies, goals, research and development, manufacturing and commercialization activities, its competitive position, regulatory process operations, benefits of its solutions, anticipated impact of macroeconomic condition on its business, results of operations, financial conditions and other matters that do not relate to historical facts. These statements are not guarantees of future performance. They are subject to a variety of risks and uncertainties, some of which are beyond the company's control. Actual results could differ materially from expectations reflected in any forward-looking statements. These statements are subject to risks, uncertainties and assumptions that are based on management's current expectations as of today. Biote undertakes no obligation to update them in the future. Therefore, these statements should not be relied upon as representing the company's views as of any subsequent date. For discussion of risks and other important factors that could affect our actual results, please refer to our SEC filings available on the SEC's website and the Investor Relations section of our website as well as risks and other important factors discussed in the earnings release. Management will also refer to adjusted EBITDA and adjusted EBITDA margin, which are non-GAAP financial measures to provide additional information for investors. A reconciliation of the non-GAAP to GAAP measures is provided in our earnings release, the primary differences being stock-based compensation, fair value adjustment to certain liabilities, transaction-related expenses and other non-operating expenses. Please refer to our third quarter 2025 earnings release for a reconciliation of these non-GAAP measures to the most comparable GAAP measures. I'll now turn the call over to Bret Christensen.

Thank you, Szymon, and thank you all for joining us. I'll provide an update on the state of our business and our ongoing corporate initiatives. And then I'll turn the call over to Bob for a review of our third quarter financials and our 2025 financial outlook. After our comments, we'll open the call up for questions. During the third quarter, we continued to make solid progress, advancing our top strategic priorities that we believe will drive increased and sustainable growth. As you'll recall, these 3 priorities are: one, accelerate growth from new providers; two, maximize value from our top-tier clinics; and three, improve our financial performance through greater accountability and discipline. I'll begin with priority one, accelerating growth from new providers. To achieve this goal, we are rebuilding our commercial organization and instilling a high-performance culture while also directly aligning sales incentives with our growth objectives. In doing so, we are significantly enhancing the quality, capabilities and effectiveness of our sales team. With new commercial leadership in place, we have implemented fundamental improvements to how we recruit, train and equip our sales reps to ensure their success in the field. We continue to invest in talent to address our market opportunity, and I have been pleased with the performance-oriented approach and positive energy our new team members bring to Biote every day. To add some color to the scope of this ongoing transition, approximately half of our commercial team joined Biote in the past year. In terms of team size and sales territory coverage, we are currently at about 75% to 80% of where we would like to be. We are consistently onboarding new sales reps and expect to achieve our planned sales rep headcount for 2025. To more efficiently expand and scale our network, we continue to refine our training and onboarding methods for new practitioners. To meet our practitioners' diverse needs, for example, we have expanded the availability of training sessions. This flexibility helps practitioners achieve certification more efficiently, enabling a quicker path to clinic productivity that we believe is important for optimizing long-term clinic success. As I noted in last quarter's call, the process of rebuilding our sales team and enhancing our core sales and marketing functions has impacted procedure revenue in the near term. Even as we expanded our clinic network in the third quarter, the third quarter sales contribution from new clinics was impacted by last year's slower pace of new business. While our financial results don't yet demonstrate the improvements we have made to the quality and capabilities of our commercial team, I'm highly confident we remain on the right path to return our core hormone optimization business to a growth trajectory. Turning to our second priority, maximizing value from top-tier clinics. As an established leader in hormone optimization therapy, Biote has been long recognized for our science and evidence-based approach to care. It's one of the primary reasons practitioners choose our innovative solutions to treat their patients and sets Biote apart in the marketplace. In September, we hosted our annual Sun, Sea and Biote marketing event in Cancun. More than 800 attendees from our provider network participated to share insights and align on Biote's vision of advancing health span and vitality with innovative hormone optimization and healthy aging solutions. At our marketing event, we were joined by several world-renowned speakers, including Dr. David Sinclair, Dr. Rhonda Patrick, Dr. Jim Simon, Dr. A. B. Morgentaler and more. Each of these experts delivered compelling perspectives on the future of personalized medicine. Attracting these high-profile speakers to our event reinforces Biote as the leader in evidence-based hormone optimization and therapeutic wellness. We will continue to invest in education and training to further strengthen our market leadership position. An event of this size and caliber served to further strengthen our relationships with our practitioners and advanced our goal of integrating hormone optimization into mainstream health care. We aim to leverage the positive energy and momentum from this event into potential new growth opportunities as we move into 2026. Turning to our third strategic priority, improving our financial performance through greater accountability and discipline. Over the past 6 months, we have successfully implemented many fundamental changes and improvements to our internal processes and systems. While not visible externally, these actions are essential to driving operational excellence and long-term value creation. The upgrades we have implemented are already beginning to deliver positive results, enhancing our data insights, productivity and facilitating more consistent and disciplined execution across the organization. As we continue to build our commercial team and expand our clinic network, our strength in infrastructure and internal processes will support our ability to scale our business more efficiently. In summary, I am pleased with the solid progress the Biote team has achieved over the past 6 months. While we have further work ahead of us, we have laid much of the groundwork to achieve outstanding commercial execution that I am confident will translate into improved financial performance. I'll now turn the call over to Bob.

Thank you, Bret, and good afternoon, everyone. Unless otherwise noted, all quarterly financial comparisons in my prepared remarks are made against the third quarter of 2024. Third quarter revenue was $48.0 million, a decrease of 6.7%. Procedure revenue declined 10.4% and dietary supplements revenue grew 8.4%. Similar to the second quarter of 2025, procedure revenue was primarily impacted by a slower rate of net new clinic additions and lower procedure volume during the third quarter of 2025. While necessary to achieve our long-term strategic objectives, the ongoing transformation of our commercial team was a headwind to procedure revenue in the third quarter, as Bret noted. Moving forward, we will continue to add new sales talent to expand our sales coverage and make additional strategic investments to further strengthen our sales and marketing capabilities. We anticipate reaching our targeted sales rep headcount by the end of this year, which should help us return to procedure revenue growth. Despite a challenging comparison due to a successful product launch in last year's third quarter, dietary supplement revenue increased 8.4% to $11.2 million, primarily driven by the continued growth of our e-commerce channel. New product offerings are an important market opportunity for Biote, and we continually identify promising new opportunities to optimize our portfolio. Looking forward, we continue to expect mid-teens revenue growth from our dietary supplements business for the 2025 fiscal year. Gross profit margin was 71.8%, a 150 basis point increase. The improvement primarily reflected cost savings from the vertical integration of our 503(B) manufacturing facility and effective cost management. As our primary pellet production facility, Asteria has secured 44 state licenses to date and is currently supplying more than 50% of the pellets ordered by practitioners. Selling, general and administrative expenses increased 9.3% to $26.2 million. The increase reflected the timing of our annual marketing event, which was held in the second quarter last year as well as continued investment in sales and marketing to drive new customer growth. Net income was $9.2 million and diluted earnings per share attributed to Biote Corp. stockholders was $0.22 as compared to net income of $12.7 million and diluted earnings per share attributable to Biote Corp.'s stockholders of $0.33. Net income for the third quarter of 2025 included a gain of $2.9 million due to the changes in the fair value of the earn-out liabilities. Net income for the third quarter of 2024 included a gain of $7.2 million due to the changes in the fair value of the earn-out liabilities for that period. Adjusted EBITDA decreased 20.5% to $12.9 million with an adjusted EBITDA margin of 26.9%. This compares to adjusted EBITDA of $16.2 million and adjusted EBITDA margin of 31.5%. Both adjusted EBITDA and adjusted EBITDA margin decreased due to lower sales, reduced gross profit and higher operating expenses, which included the shift of our annual marketing event to the third quarter of 2025. Third quarter cash flow from operations increased $14.1 million to $27.6 million. As of September 30, 2025, cash and cash equivalents were $28.0 million compared to $19.6 million as of June 30, 2025. Supported by our strong balance sheet and liquidity, Biote recently undertook two separate actions to deploy capital that the company believes will provide long-term value to shareholders. First, Biote repurchased approximately 1 million shares of our Class A common stock at an average price of $3.28 per share. These repurchases were made within our $20 million common share repurchase program approved by the Board in 2024. Second, Biote amended its settlement agreement with Marci Donovitz to repurchase her remaining shares at a savings to the original agreement. Under this amended agreement, Biote paid Mrs. Donovitz $12.5 million in October, which fully settled the multiyear payment obligation. In addition, earlier this week, Biote amended its settlement agreement with Dr. Gary Donovitz to repurchase his remaining shares at a savings to the original agreement. Biote agreed to pay Dr. Donovitz $18.5 million in January 2026, which when paid, will fully settle the multiyear payment obligation. Now turning to our financial outlook for 2025. As Bret noted, Biote continues to make solid progress in pursuit of our strategic priorities. As a result, we reiterate our fiscal 2025 revenue guidance of above $190 million and our fiscal 2025 adjusted EBITDA guidance of above $50 million.

Thanks, Bob. While the full impact of our initiatives will take time to realize, I remain confident in the strategic path we've set. Our teams are fully aligned on our vision and we are executing with discipline, strategic clarity and a shared commitment to delivering a higher level of financial performance that builds long-term shareholder value. Operator, let's now open the call for questions.

Our first question comes from Kaumil Gajrawala with Jefferies.

I guess a couple of questions. First on this, I guess, the speed of hiring the sales folks. We hear some of these sort of oscillations between really difficult time to hire, maybe it's getting a little bit better. Is it going about according to pace? And is it also going at about the cost you had expected? Or is it a tighter market and maybe it's taking longer, it might cost more than you thought?

Yes. Kaumil, this is Bret. Thanks for the question. Let me start by just saying, as you remember, in May, when we did our restructure, we did a couple of things. We changed a lot of incentives, a lot of compensation, a lot of definitions of the roles. We also did a restructure that essentially increased the size of our sales force by about 25% as we made everybody a salesperson and everybody responsible for growing revenue. That created quite a number of openings starting in May. Since May, we've had some turnover due to the culture change, and we've been actively hiring a new and improved profile of rep that we think could be even more effective here at Biote. And so I'm pleased with the progress. For a few months, it was a little bit of ups, a little bit of downs, but we've made great progress recently and are about 85% of where we want to be by the end of the year and we're committed to getting there by the end of the year. It just means full territories so that we can give the attention to our customers that they deserve and that we can protect our business and that we can have every territory growing at the rate that we need it to. So making good progress as of late, and we'll make further progress in the coming quarter.

Okay. Great. And can you maybe just lay out like in sort of practical terms, how the transition is impacting the number of procedures? Just maybe just talking about how you're adding folks but the procedures are coming off. Is it just year-over-year or something else going on in practical terms that leads to that?

Sure. At the beginning of the year, we pointed out that the primary challenge to our volume started at the end of last year with the launch of our CDSS system. This shift required our sales force to concentrate on ensuring a smooth training and onboarding process for that new system. Additionally, we've experienced some changes and restructuring this year, which has led to openings and put pressure on our volumes. We've seen slightly higher attrition compared to previous quarters and, consequently, slower new customer starts. These two factors, the slower new starts and the increased attrition, have resulted in lower volumes compared to last year. Currently, we are focused on addressing both issues: attracting more new customers and enhancing our existing business, which were two of the three initiatives I mentioned earlier.

And then Bret, just one other thing to add to that. Just one other thing to add would be, as we look at the new hires, you highlighted just a second ago that they were a little bit lower and we've started to ramp up. But to kind of bring both of your questions together, Kaumil, I mean, as you look at where we were in July, we're in that kind of mid-60s zone. We have ramped up at the tail end of Q3 up to around 80 people on board. And so the second half of Q3, we have really started to see that increase. So as we start getting into the end of Q3 and even into Q4, we expect to see that impact of having a more full staff on board. So as we progress, I think that's just another practical aspect of this. It's tough to sell without the people. And back to Bret's earlier comment, we're progressing well on that.

Got it. And maybe sneaking just one more in is the new structure with the Donovitz. How does it involve less money? What was the motivation from their side to accept less money now instead of a multiyear payout? I'm just trying to understand their intentions. I think I get the intent from your side more than from theirs.

No. Look, I mean, I can't speculate on the drivers for either Marci Donovitz or Gary. I can only imagine it was personal reasons. But what I can tell you is that we are confident that this makes sense for the company given the future cash flow savings that we're seeing now. So to know that we got the cash flow savings on both of these transactions and a couple of other benefits, that's a really good move for us.

And the next question comes from Leszek Sulewski with Truist.

So coming out of the marketing event, can you provide any feedback that you received from some of the practitioners in attendance? What is the area of focus or improvement? Or what are they essentially saying? And do you have a sense of trends following the event? And how has October and November been trending, if you can comment on that? And then the second part, does the focus still remain on the top-tier accounts? And eventually, when could you expect an inflection point in procedural growth? And is it more of a bolus or a step-up?

Thank you, Les. I'll make sure to address all your questions, starting with the marketing event you mentioned. Approximately every 18 months, we host an event called Sun, Sea and Biote, where we gather our top-tier providers off-site for learning. This event isn't solely focused on current Biote products but also highlights innovations in the field. The speakers we had this year were exceptional, and the turnout was impressive with nearly 800 providers attending in Cancun. Many attendees, as well as our employees who have participated in previous events, indicated this was our best event yet. The sense of community was strong, with collaboration and discussions among attendees. Although we took our key customers out of the field for three days, we anticipate seeing our volumes pick up quickly afterward. This event reinforces our relationships with customers and showcases the value we provide through education and learning. Overall, it was a fantastic experience that really energized everyone as we wrapped up September. Regarding trends following the event, it's still early to provide a clear picture. However, we believe attending this event enhances retention as it allows providers to understand Biote's leadership and offerings in the industry. It would be ideal to have all of our nearly 9,000 trained Biote providers attend this powerful event. We'll monitor trends closely, and we believe it will yield positive outcomes. Now, concerning our focus on top-tier providers, this is our second priority after accelerating new practitioner growth. It's crucial to ensure we have representatives in the field, addressing customer needs and driving value. We have implemented internal initiatives to closely monitor volumes from our top-tier providers so that we can engage proactively. While we haven't yet seen the results from these efforts, reducing attrition and maintaining business while attracting new customers remains essential for growth. As for when we might observe a shift, it's too soon to say. We believe we're on the right path and expect results eventually, but forecasting remains challenging at this point. Our focus is on achieving consistent growth over multiple months before confidently declaring a shift in direction. We'll remain cautious until we see a sustained positive trend.

And the next question comes from Jeff Van Sinderen with B. Riley Securities.

I guess since we're just touching on the attrition rate, I'm just wondering, has that stabilized? Has it? Has the attrition rate declined from Q2 sequentially? Or has it accelerated? And then I guess when you're out in the field, you're talking to your providers, what do you think is driving that attrition rate at this point?

Yes, Jeff, thanks for the question. I would say we didn't quote an attrition rate this call, but it's been similar to the elevated rate. We said historically, it's been around 5%. I think Q2, we said it had elevated to around 8%. It was similar to that in Q3. And so not improvement but not material declines in attrition, but that is still higher than we'd like it to be. I think the issues are multiple. There is more competition in the field today. When we took our eye off the ball with the launch of CDSS, we certainly lost some accounts and started to lose some accounts. Again, that was the end of last year. But in this annuity model, those losses follow you for a year. And so that's probably the start of it. And then the other factor that we just got to make sure we remedy is just having a rep in every territory. And frankly, I think we've gotten better here, not just with our hiring, which we spoke about earlier to an earlier question but the hiring profile, the interview process, the training for sure. We've improved all of those processes to make sure that we get a better prepared and we think better individual in the field. Now it's about just making sure we fill all the territories. I'd say on top of that, we need these early warning systems, and we need to improve the value proposition. And that is multiple-faceted. There's things we can do in the short term, rep coverage, service, education. But longer term, there's things that we're working on. We haven't talked about yet but that materially add, we think, to the value proposition and further separate us from any of the competitors out there. Essentially, those things are around doing business with Biote, making it easier to do business with us and then probably some portfolio enhancements and potentially further investments in sales and marketing. And so we'll probably talk about those things more in the future. For now, it's getting good hygiene in the field and making sure that we're serving our customers in the best way that we can.

Could you provide an update on the Marci and Gary accelerated situation? Specifically, how much are you saving compared to the previous agreements in total?

Okay. Yes. No problem. So on the Marci agreement, we owed installments of $10 million in June of '26 and $10 million in June of '27. We have agreed to pay $12.5 million or we did pay $12.5 million in October 6 for a cash flow savings of around $7.5 million. On the Dr. Donovitz deal, we had two installments, one in April of '26 for $19.1 million and one in April of '27 for $10.5 million. So rather than paying $29.6 million, we will pay Dr. Donovitz $18.5 million on or before January 2, 2026. So the overall cash flow savings there is around $11.1 million.

Okay, great. That's a significant amount of savings.

Absolutely.

Could you share your insights from the providers you spoke with in Cancun regarding the decline in procedures? Are the high-tier providers experiencing any declines, or are they maintaining their procedures? Also, what key takeaways from the Cancun event do you think could benefit your business?

Yes, Jeff. It's important to acknowledge that the data might be somewhat skewed, as we have our most dedicated customers attending these events. I've received a lot of positive feedback about our offerings, particularly about CDSS, though there were some valid points raised regarding the software launch. There is significant enthusiasm for our current product lineup. Our customers had numerous inquiries about our direction with Biote, and we must be careful about what information we can disclose. Overall, I didn't notice any major changes in their volumes. We have made minor adjustments to CDSS, which could either shorten or extend the timeline for when a patient receives their treatment. It's challenging to measure this impact precisely; for instance, if a patient comes in every four to six months and we suggest delaying their treatment based on lab results, it could push their next appointment back by 30 days. Nonetheless, these effects are likely to be short-lived, and we will recover from any potential impacts. Our customers are expressing a desire for more of these offerings and they particularly value our education efforts. They appreciate advanced training opportunities and want to engage with us more. The approximately 800 providers who attended Sun, Sea & Biote are very satisfied and eager to be involved with us. We tend to gain valuable insights from customers we have recently lost or those who are at risk. This feedback often arises when we have a lull in field activity or lack a representative to meet our customers' needs. We need to remain aware of our competitors' actions to stay proactive and responsive.

And the next question comes from Jonna Kim with TD Cowen.

Curious on the ramp cycle of your sales force when they're hired, is there typically a couple of months that you have to wait until they're more productive? And any color on the supplements business, whether that's tracking in line to your expectations? And what are some of the growth drivers that you look forward to next year?

I will start with the last point and then go back to the ramp period, with Bret able to provide additional insights. We are continuing to see strong performance in our Amazon channel for the Nutra business. However, we should expect in the upcoming quarters to begin seeing some of the gains from the past come to an end. There has been a slight reduction in growth, which I previously mentioned relates to a product we launched at the end of Q3. It’s important to note that 70% of our Nutra business comes from clinic sales, which have largely followed the procedure business trends. We are still identifying growth opportunities, and on the Nutra side, our performance aligns with expectations, as indicated in our mid-teens growth guidance. Regarding hiring, there is typically a ramp-up period of about 3 to 6 months for new employees. This is one reason we are focused on bringing as many people as possible on board by year-end so they can be trained in our new training operation and ready by our national sales meeting in early Q1. While there is this ramp period, it is accounted for in our expectations. Bret, do you have anything else to add?

We are aware of the need for a ramp-up because immediate productivity in the field is essential. We are customizing our two-week training courses to ensure new hires do not have to wait too long before they start their training. Our goal is for them to receive training quickly and then transition into the field with a trainer. We believe they are well-prepared to begin growing their business. They still need to build relationships and establish a value proposition. Recently, during a plan of action meeting, we showcased some effective behaviors from representatives, which included role plays. Out of the five representatives we called on, four had been hired in the last three months, and they shared success stories about new accounts they secured. This suggests we are enabling new hires to start faster than in the past due to improved training and recruitment processes. However, as Bob mentioned, we still need to consider the ramp-up period.

And better targeting, Bret, I think that's the other side. We highlighted on who we want to bring in, and we're starting to see some of that. I think that's a testament to what you just said.

And the next question comes from George Kelly with ROTH Capital.

First, back to the marketing event. Can you quantify what the spend was in the quarter?

Yes, it was around $1.3 million, which was a little bit less than what we had expected because of sponsorship.

Okay. Great. And then for my second question on Asteria, I believe you mentioned that it provided over 50% of your procedure fulfillments in the last quarter. Do you anticipate that this will increase? How do you see that trend developing in the upcoming quarters?

Yes, George, that's a good question. Reflecting on where we were during the last call, we were in the 42% range, and by the end of September, we exceeded 50%. We have consistently stated that our goal is to advance this gradually to avoid affecting our providers. Looking ahead, we anticipate our next wave of conversion will likely occur in the next month to month and a half, so it probably won’t significantly impact Q4. However, as you know, ordering patterns vary throughout the period, so it's difficult to pinpoint an exact figure. We are still in the process of converting clinics and expect to see some growth through the remainder of the year.

Okay. And then on the Donovitz transactions, can you remind me, you're buying 2.8 million shares from Marci and 6.1 million from Gary? Is that correct?

That is correct. Both the shares.

Are they having any of the other terms of those agreements changed?

That was a great point, and I wanted to briefly address it. The Marci Donovitz transaction was primarily focused on eliminating cash flow and restructuring the original settlement. We did incorporate some important elements into the Dr. Donovitz transaction. Along with settling the cash flow liability, Dr. Donovitz agreed to extend his non-compete and non-solicitation agreement for an additional year, lasting until April 2027. He also agreed to dismiss all pending litigation between Biote and himself, which is a significant win for the company.

That's great. I have one last question. Regarding your guidance and the procedure revenue growth, which was down 10.4% this quarter, I understand you may not want to provide too much detail. However, could you give any insights into the monthly trends? I'm trying to assess your full year guidance, which suggests that the growth rate might decline again in Q4. Any expectations you can share about the near-term growth rate would be helpful.

Yes. Good question, George. And I think the way that I would characterize it is quarter-over-quarter, sequential quarter-over-quarter, one thing to keep in mind, when we think about how this operation works, it's very workday focused, very retail focused. So in Q3 compared to Q4 of this year, we will have 3 less business days in Q4 than we did in Q3. So just be thinking about it from that perspective. The only other thing that I would highlight is we also are dealing with some uncertainty around the holiday period. We've seen some ups and downs around the holiday period. And as you can imagine, I know you were only focusing on procedure growth. But I would also just say those 3 less days also impact that 70% of our B2B sales. And just remember, from a B2B perspective, that week between Christmas and New Year is typically a bit of a slower period also. So on both, you've seen the guide. I think when we think about procedures in the high single digits from a reduction perspective and then mid-teens growth, I think puts you in the right place from a revenue perspective. Hopefully, that adds a little bit of color.

This concludes our question-and-answer session. I would like to turn the conference back over to Bret Christensen for any closing remarks.

Thank you, everyone, for joining us today. We appreciate your interest in Biote and look forward to speaking with you on our next conference call.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.