Earnings Call Transcript - LFMD Q3 2025

Operator, Operator

Good afternoon. Thank you for joining us today to discuss LifeMD's results for the third quarter ended September 30, 2025. Joining the call today are Justin Schreiber, Chairman and Chief Executive Officer; and Marc Benathen, Chief Financial Officer. Following management's prepared remarks, we will open the call for a question-and-answer session. Before we begin, I would like to remind everyone that during this call, the company will make a number of forward-looking statements, which are subject to numerous risks and uncertainties that may cause actual results to differ materially from those projected. These risks and uncertainties are described in the company's 10-K and 10-Q filings, and within other filings that LifeMD may make with the SEC from time to time. Forward-looking statements made during this call are based on current information available to the company as of today, November 17, 2025. The company assumes no obligation to update or revise any forward-looking statements after today's call, except as required by law. Also, please note that management will be discussing certain non-GAAP financial measures that the company believes are important in evaluating LifeMD's performance. Details on the relationship between these non-GAAP measures to the most comparable GAAP measures and reconciliations thereof can be found in the press release issued earlier today. Finally, I would like to remind everyone that today's call is being recorded and will be available for replay in the Investor Relations section of the company's website. Now I'd like to turn the call over to LifeMD's CEO, Justin Schreiber. Please go ahead.

Justin Schreiber, CEO

Thank you, and good afternoon, everyone. After the market closed, we issued a news release announcing our third quarter financial results and posted an updated corporate presentation on our website at ir.lifemd.com. LifeMD made considerable progress executing on our strategic plan in the third quarter. Our RexMD business returned to growth, adding approximately 10,000 net new subscribers, and our weight management offering has stabilized and is now well positioned for significant growth in 2026. We also continued to deliver strong year-over-year performance with telehealth revenue up 18% and adjusted EBITDA increasing 30% compared to the prior year period. That said, the most exciting thing about LifeMD today is not our past performance or even the results this quarter, but the important foundational steps we have taken to set the company up for an exceptional 2026. During and following the third quarter, we made substantial progress on our women's health and behavioral health offerings, two verticals that we believe have the potential to each become 9-figure businesses over the next 3 years. We also advanced the development of our LifeMD+ membership and in-app health marketplace, which we expect will meaningfully enhance patient experience, deepen engagement, and strengthen long-term retention. In addition, we secured regulatory approval for our nonsterile 503-A compounding pharmacy, a major milestone that will dramatically expand our ability to produce personalized medications at scale with significantly improved economics compared to relying on third-party pharmacy partners. We were also pleased to successfully divest our majority interest in WorkSimpli. This transaction strengthened our balance sheet and allows us to operate as a pure-play virtual care and pharmacy company. While it was a difficult decision, the opportunity in front of our core business is so substantial that we felt it was essential to dedicate 100% of our focus and resources to our core health care platform. As we look ahead to 2026, our strategic priorities are clear. One, accelerating high-quality growth in our weight management offering by leveraging our collaborations with Novo Nordisk, Eli Lilly, and others. Two, scaling our virtual women's and behavioral health businesses built around synchronous care delivered by highly trained providers and personalized therapies. Three, expanding and diversifying RexMD, particularly through personalized compounded medications and hormone therapies. And four, launching a more robust unified LifeMD platform and marketplace designed to increase patient engagement, improve cross-care participation and deliver a significantly enhanced experience across both mobile and desktop applications. LifeMD has made a deliberate decision to play the long game in the GLP-1 space. We are one of the few virtual care providers fully integrated with both Novo Nordisk and Eli Lilly. And we believe these collaborations represent a significant and durable competitive advantage, especially as prices come down on branded therapies and oral therapies come to market. The last 2 quarters have been challenging in the weight management category due to intense competition from low-cost and, in many cases, low-quality compounded GLP-1 makers offering prices we cannot and will not match. While many of these compounded products are less effective and in some cases, unsafe, aggressive marketing and artificially low entry price points have drawn in a portion of consumers and created near-term pressure. Despite this environment, we have maintained our market share, remained disciplined, and continued investing in the high-quality, clinically sound weight management model that we believe will create long-term shareholder value. We have consistently believed that branded GLP-1 manufacturers would ultimately reduce pricing to broaden patient access. And that moment is now clearly underway. Just this morning, we announced that through our collaboration with Novo Nordisk, LifeMD will begin offering Wegovy and Ozempic to self-pay patients for $199 for the first 2 doses, a 60% reduction from current prices. Higher doses will be available to self-pay patients for $349 per month, representing a 30% reduction. Eli Lilly also recently announced that self-pay patients will be able to access the Zepbound multi-dose pen, if FDA approved, at $299 for the lowest dose and up to $449 for the highest dose. Even more exciting is the expected approval of the Wegovy pill with a PDUFA date in late December. Analysts widely anticipate FDA approval and commercial availability in early January. LifeMD will be among the first virtual care providers to offer oral Wegovy through our collaboration with Novo Nordisk. While formal pricing has not been publicly released, we expect lower dose levels to be approximately $149 per month based on recent public remarks from President Trump. The Wegovy pill is expected to be the most effective oral medication for weight loss ever approved by the FDA. In clinical trials, patients achieved an average of 15% weight loss over 68 weeks with side effect profiles comparable to the injectable formulation. In addition, Eli Lilly plans to launch its oral GLP-1, orforglipron, later in 2026, which we also anticipate offering through our platform at accessible pricing. The bottom line is clear. Oral therapies, combined with substantial price reductions, will fundamentally broaden access, accelerate demand, and reshape the GLP-1 landscape. With more than 130 million Americans eligible for treatment, LifeMD is uniquely positioned to be a leading virtual destination for high-quality longitudinal care. Care is essential for patients to achieve the long-term outcomes these medications can deliver. Our men's health platform, RexMD, also had a strong quarter overall. Demand for our personalized ED medications, which combines sildenafil and tadalafil, has been exceptional. These formulations now represent 25% of all new ED prescriptions on the platform. These medications are currently fulfilled through a third-party pharmacy partner, so we plan to bring the majority of this fulfillment into LifeMD's in-house pharmacy in early 2026. This transition will meaningfully reduce COGS, improve gross margins, and give us full control of the end-to-end patient experience. Our hormone replacement therapy offering is also demonstrating strong momentum and clear signs of future scalability. Early patient retention has been strong. New patient acquisition continues to grow. Demand is robust across age groups, and we have expanded into men's HRT coverage to 35 states. In addition, RexMD continues to broaden its portfolio with new men's-focused pharmacy products across behavioral health, weight loss, dermatology, and more. We believe that our recently licensed 503-A compounding pharmacy will be a major enabler of RexMD's growth, allowing us to offer personalized therapies, lower-cost compounded options, and superior margins across multiple men's health categories in 2026 and beyond. In addition to our weight management and men's health businesses, we are very optimistic about the 2026 opportunity in both women's health and behavioral health. Demand in both categories is very strong. And while these businesses are not yet contributing meaningfully to revenue, the initial engagement metrics, interest levels, click-through rates, and acquisition costs are on par with categories like ED and weight loss that scaled rapidly within their first year. In both verticals, our focus is on building high-quality, high-retention revenue streams. In my view, industry-leading retention is driven by three things: an exceptional product, great patient care and customer service, and transparent pricing and strong value proposition. We also believe that enabling patients to use their commercial or government insurance is a critical part of the equation. While insurance enablement has been slower to deploy on our platform than planned, it remains a top strategic priority and will be an important component of our 2026 story. Our women's health business is highly differentiated. We have built and continue to expand an exceptional advisory board of national leaders in women's hormonal health, menopause, bone health, and longevity. We've also assembled a dedicated, highly trained clinical team to deliver this care, and we are confident in our ability to scale as demand accelerates. Patients can choose between bundled care and prescription cash pay programs or flexible models where they pay a la carte or use insurance to cover visits, lab work, and commercially available medications. In addition, our in-house compounding pharmacy will enable affordable access to compounded therapies for hormone optimization, sexual health, dermatology, and more. We believe this will be the highest quality, most comprehensive, and most accessible virtual women's health offering in the country, and we expect demand to be extremely strong. Our psychiatry offering follows a similar structure, combining a la carte consults with bundled care plus medication programs that deliver discounted access and long-term, high-quality care. Most patients begin with a synchronous consultation with a state-licensed provider before transitioning into asynchronous message-based ongoing care. While the current patient count is small relative to our overall business, we saw meaningful quarter-over-quarter traction and expect psychiatry to become a sizable business in 2026. We believe this category will be another powerful, durable growth engine for LifeMD. Given the strength of our balance sheet and the promise of these new offerings, we intend to invest in growth in these verticals early on in 2026 to rapidly build the patient base in these two verticals and in our offering to drive superior long-term retention. Lastly, we are investing significant energy and resources into launching the core functionality and features that will enable LifeMD to execute on its long-term vision, building the leading integrated marketplace for virtual care, pharmacy, laboratory services, and wellness. Much of this functionality, including a comprehensive relaunch of the LifeMD website and mobile app, we'll be rolling out between now and early Q1 2026. These upgrades will allow patients to effortlessly participate across multiple care programs, access a broad suite of pharmacy offerings, and order convenient in-home lab testing through a partnership we expect to formally announce early next year. Enabling seamless navigation across cash pay and insurance-supported workflows is not easy, but it is essential to our long-term strategy. When completed, these enhancements will not only broaden the depth and breadth of services we provide, but they will also deliver a significantly improved patient experience with clear pricing, more flexibility, and expanded a la carte options. Our objective is for patients to view LifeMD as a true virtual care destination, a place where they can access synchronous or asynchronous visits with trusted clinicians, obtain generic, branded, or compounded medications at transparent prices, and conveniently order the labs that support their health goals and inform long-term care plans across both primary and specialty programs. We believe the integration of these capabilities will meaningfully differentiate LifeMD, deepen patient relationships, and serve as a key driver of sustainable growth as we move into 2026 and beyond. With that, I'll now turn the call over to our CFO, Marc Benathen, to provide more detail on our third quarter financial results and outlook.

Marc Benathen, CFO

Thank you, Justin. Good afternoon, everyone, and thank you for your flexibility as we rescheduled this call from November 6 to today. Our third quarter telehealth business results were solid with year-over-year growth of 18% in revenue and 30% in adjusted EBITDA. Our Rex business rebounded from its late second quarter lows with a net gain of 10,000 new members in the third quarter. We've also executed initiatives to significantly strengthen our balance sheet, including the divestiture of our majority ownership position in WorkSimpli and the payoff of all of our debt. Following these transactions, LifeMD has the strongest balance sheet and liquidity position in the company's history. This will enable us to operate from a position of strength in 2026 as we continue to invest in scaling our core offerings, plus further diversifying our platform through growth and recently launched offerings. Now turning to third quarter numbers. Consolidated revenue grew 13% versus the year ago period to $60.2 million. Telehealth revenue increased 18% to $47.3 million with telehealth adjusted EBITDA growing 30% to $2.9 million. Telehealth subscriber growth remained strong with the number of active subscribers increasing 14% year-over-year to over 310,000 at quarter end. Gross margin for the third quarter was 88%, a decline of 290 basis points versus the prior year due to revenue mix. Gross profit was $52.8 million, an increase of 9% from the year-ago period. Telehealth gross margin was 86% as compared to 89% in the year-ago period, driven by the revenue mix. Our GAAP net loss attributable to common stockholders for the third quarter of 2025 was $4.6 million or a loss of $0.10 per share. This compares with a GAAP net loss attributable to common stockholders for the third quarter of 2024 of $5.4 million or a loss of $0.13 per share. Adjusted EBITDA as a non-GAAP measure we define as income or loss attributable to common shareholders before various items as outlined in today's news release. Adjusted EBITDA totaled $5.1 million for the third quarter of 2025 as compared with $4.3 million in the year-ago period. Telehealth adjusted EBITDA as a non-GAAP measure defined as adjusted EBITDA for only the ongoing telehealth business, excluding WorkSimpli. This measure was $2.9 million for the third quarter of 2025 as compared to $2.2 million in the year ago period. We exited the third quarter with $23.8 million in cash and no debt. As previously disclosed on November 5, we identified adjustments following system migrations related to the recognition of revenue with offsetting related balance sheet accounts for 2022, 2023, 2024, and 6 months ended June 30, 2025. This resulted in an approximate $4.6 million impact in over-recognition of revenue attributable for the total period. This adjustment had no impact on the company's cash flow or cash position. Turning to financial guidance. Following the divestiture of our majority ownership in WorkSimpli, resulting in a pure-play, stand-alone telehealth business, we expect fourth quarter revenue in the range of $45 million to $46 million, with adjusted EBITDA in the range of $3 million to $4 million. For the full year 2025, we expect revenue in the range of $192 million to $193 million and adjusted EBITDA in the range of $13.5 million to $14.5 million. Full year guidance represents growth of 24% for revenue and 254% for adjusted EBITDA versus 2024.

Operator, Operator

Our first question comes from David Larsen with BTIG.

David Larsen, Analyst

Congratulations on a good quarter. Can you talk a little bit about the mix of telehealth product revenue, especially in weight loss, like how much is coming from branded scripts? How much is coming from compounded scripts? There was obviously a sequential decline. Just any color of why that happened? Just any thoughts around 2026 in the obesity health sort of product line.

Marc Benathen, CFO

Yes, David, this is Marc. I'll let Justin address the second part of your question regarding our future product strategy. Regarding our revenue mix, weight management continues to account for over 50% of our total revenue. There was a slight decline quarter-on-quarter, with our subscriber base remaining relatively stable, decreasing by about 1,000. However, this has stabilized and is expected to remain steady through the remainder of Q4. With upcoming product innovation in 2026, we anticipate a return to growth. The notable trend in new patient sign-ups is that more than half are coming from branded therapy. This category contributes less than half of total revenue since it takes time for the new patient base to establish itself compared to the existing patients who are already utilizing branded therapy, which currently represents a significant portion. The main difference in our economics is the fulfillment fee associated with personalized compounds, which we have lost. This fee was approximately $50 per order for most of the period, so this has had an impact. We expect to see additional effects in Q4, which are reflected in our guidance provided today. We are optimistic about achieving solid growth next year, especially with the ongoing product innovations in the market and our collaborations with partners.

Justin Schreiber, CEO

This is Justin. I want to quickly touch on 2026. There are two main factors that we believe will boost the weight management business. First, as we highlighted in the call, better pricing for branded therapies is something we've invested significantly in, and you are likely starting to see the positive effects of that. Additionally, as the costs for cash pay programs decrease, more payers are expected to cover these medications. We are also seeing a program outlined for Medicare to cover these drugs, which aligns well with LifeMD's capabilities. Therefore, we are quite optimistic about 2026. Another significant factor that could benefit us is potential action from the Trump administration. I believe it is likely that as FDA-approved branded therapies become more affordable for patients, we may see the FDA take action against compounding practices. This would be highly beneficial for our business, as we are currently facing tough competition from a variety of low-priced semaglutide and tirzepatide offers that are compounded, making it challenging for us to compete in that market.

David Larsen, Analyst

So Justin, you mentioned earlier that the percentage of new obesity health members joining the platform in December of '25 is expected to be around either 50% or 75%. Is that still accurate, meaning that the majority of new patients are using branded products?

Justin Schreiber, CEO

Yes. I mean that's what Marc just said. I don't have the precise number as of the last 30 days, David. But I mean, I still think that, that range is certainly extremely likely. I think we're at the lower end of that range now. But I think as these prices come down and especially when the initial doses come down into the $200 to $300 range per month, it makes it very competitive with a lot of the other compounded offers that are out there. So I mean, I think you easily could see that number going to 75% or even higher in the very near future.

David Larsen, Analyst

Okay. That's very helpful. And then in terms of your coverage, your insurance coverage like Medicare, Medicaid, commercial, just I mean, it seems to me like now that Medicare and Medicaid apparently will cover these branded products in 2026. I'm not sure when that's going to start in '26, but assuming that it does happen, I mean, it seems like that could be a significant revenue stream for you. What portion of your revenue now is, I guess, Medicare or Medicaid or insurance covered versus cash pay? And by the end of '26, what percentage of your revenue do you think will be insurance related?

Justin Schreiber, CEO

I'm not able to provide an exact percentage for the end of '26. However, we are fully prepared to engage with Medicare once these drugs receive coverage, which will be very important for our business. Recently, we have approximately 100 to 150 million lives under coverage, and we activated this broadly last week. We observed a significant reduction in our CPA, which is very encouraging for acquisition costs. The team at LifeMD is truly excited about this development, as it sets us apart. Although it has been frustratingly slow to launch these programs, it highlights the challenges others face in establishing a nationwide payer network. I believe this will positively impact our business, and I’m hopeful we will begin to see its benefits in the upcoming quarters and be able to discuss its increasing share of our patient base in more detail.

David Larsen, Analyst

What percentage of the members currently on your platform have insurance? Additionally, what percentage of potential members who haven't joined the platform might consider doing so due to the upcoming insurance offerings in 2026? Can you provide any numbers or insights regarding the potential increase in revenue from providing insurance coverage?

Justin Schreiber, CEO

I can tell you that around 25% of patients who enroll in our program do not continue because they lack insurance coverage for the medication. This is a significant issue. As insurance coverage for these medications improves, it will greatly impact our business. On the care side, this is important. We saw a 33% reduction in customer acquisition costs when we began allowing the use of health insurance for about one-third of the population, possibly even less. This indicates there is a strong demand. Once we implement these programs effectively at scale, it will positively affect our overall business.

David Larsen, Analyst

And then just one more before I hop back in the queue. Can you talk about your clinical services and your retention levels amongst members? So let's say these GLP-1s go solid oral in early '26. Like the value that LifeMD brings to members that, say, for example, an Amazon would not or a typical like Costco maybe would not. Can you maybe just talk about the value you bring and the retention levels or the weight loss that your members typically see that they may not see otherwise at a different platform?

Justin Schreiber, CEO

Sure. Some partners like Costco will have these drugs in inventory, and it's likely that LifeMD will also be able to ship these medications directly from our pharmacy to patients. However, the real differentiator lies in the variety of services and products that LifeMD provides. I envision that people may choose LifeMD over Costco or their family doctor. They typically start with an excellent visit with a state-licensed provider, aiming to access GLP-1 medication and possibly use their insurance for pharmacy coverage or the visit itself. However, people usually have multiple health needs beyond just one. Many individuals using GLP-1 medications may have other health concerns that require attention, such as preventative care, lab work, or even discussions about hormone health, which many have not had before. Additionally, LifeMD is launching a cardiovascular program soon, which is exciting given the current shortage of cardiologists in the country. We can provide different medications as well. While we do not compound GLP-1 medications, we have a full compounding pharmacy for anyone needing hormone or dermatology products, which we can ship at a fair price. Many retailers would like to have this kind of marketplace and the associated brand. This is what sets LifeMD apart from these other places. It's also important to note that Costco does not employ a doctor or nurse practitioner to write prescriptions. While you can pick up medication from Costco or another pharmacy, you still need a provider. That’s where LifeMD comes in. Although Amazon also provides access to a provider, there's a significant difference between the LifeMD brand and Amazon's brand. Some people will remain loyal to Amazon, but there is ample opportunity for multiple high-quality players in this market.

David Larsen, Analyst

Great. And last one, Marc, was there any revenue impact from that restatement? Would revenue have been $4 million higher, or was there no impact?

Marc Benathen, CFO

No. So it was not a restatement; it was a revision. The revision had a $1.1 million impact on this year. However, the revisions were made in the quarters that they applied to. So there was no impact to this quarterly results from it.

Operator, Operator

We'll now move on to Steven Valiquette with Mizuho.

Steven Valiquette, Analyst

So I think you kind of touched on this a little bit, but I guess I was kind of curious just also on kind of like the brand uptake, how that's going to track relative to your expectations. You gave some comments on less than half is still on brand. But I guess what kind of jumps out to me is just the fact that since you guys announced your brand drug partnership deals with Novo back in April and May, we've seen Novo Nordisk sign partnership deals for low-cost branded drive with a whole bunch of other companies in the virtual care space and pharmaceutical supply channel. So I'm wondering if some of those deals have diluted your expected uptake in any way, some of those other deals actually helped you in some ways again. Just trying to get a better sense of your ability to capture your fair share of customers seeking the lower-cost brand drugs in the weight management category and diabetes, too.

Justin Schreiber, CEO

Sure. This is Justin. I'll address that. We anticipated that Novo and Lilly would engage in multiple deals. I don't believe their collaborations with other retailers, pharmacies, and telehealth companies affect the demand or the take rate on our platform. The key factor really comes down to price. In an environment where the FDA overlooks developments in the compounding sector, it's possible to obtain compounded therapies for often half or even more than the price of branded therapies. This situation complicates things considerably. The competitiveness in the compounding sector has increased unexpectedly since these drugs were removed from the shortage list, with a surge in the number of players and direct marketing firms in the compounded GLP-1 space. We had hoped for improvement, but it has actually become much more challenging and competitive. Consumers are noticing that while a branded therapy may cost between $349 to $499, they are also encountering multiple ads for compounded drugs that can be as low as $99 for the first month of treatment. Typically, those prices rise quickly in ways that are not always clearly communicated to consumers. That's the current situation. We remain optimistic about the continued performance of branded therapies on our platform, as we believe there is significant demand. For these therapies to be competitive, they need to be priced between $200 and $300. Improved coverage is essential, and we are particularly hopeful about the Wegovy pill expected to launch in January, which could act as a substantial catalyst for our business. That's the status as of today.

Operator, Operator

We'll now move to Anderson Schock with B. Riley Securities.

Anderson Schock, Analyst

So first, on the return to RexMD growth, how much of this volume has been driven by the men's HRT offering versus the ED business returning to historical levels? And how does ED patient acquisition outlook compare to historic levels? I know you previously mentioned it was back to around 80% to 90% of historic levels as of the call in August.

Marc Benathen, CFO

Yes. This is Marc. Most of the growth, so the 10,000, about 8,000 came from the sexual health business, which is mostly ED. The balance of it came from a mix of the HRT business, hair loss, and insomnia. As far as the acquisition volume, I mean, the acquisition volume is very close to where it was at historical levels. I'd say the caps are about $5 to $10 higher than what they had been, but still healthy unit economics comparable to where they have been, and the levels are very close to where they have been historically.

Anderson Schock, Analyst

Got it. And then telehealth's gross margin declined around 350 basis points. Could you provide some more color on what drove this? And how should we think about the telehealth?

Marc Benathen, CFO

Yes, this is Marc. There was nothing in the business that drove the changes. The margins for like-for-like product lines or service lines remained the same, but there were a couple of factors at play. First, as we noted, we are moving more towards branded products in the weight management sector. These branded products don't involve the medication processing or fulfillment fees we incurred with personalized compounds, which likely accounted for about 150 basis points of the change. We've discussed this transition from compounding to branded products before. The remaining impact was due to a mix in our business. Currently, weight management represents over 50% of the company’s total revenue. A year ago, Rex was our largest revenue source, with Rex sexual health showing the highest gross margins in the upper 80s. The shift in business mix and this transition contributed to the rest of the change.

Anderson Schock, Analyst

Okay. Got it. And how should we think about the telehealth margins going forward with the new offerings in women's and behavioral health and also as you scale the 503-A compounding pharmacy?

Marc Benathen, CFO

Yes, we generally anticipate that gross margins on a rate basis will likely decrease slightly from their current levels. This is due to several factors. Firstly, mental health presents a significant opportunity for us and is expected to positively impact both our top line and bottom line. However, the gross margins in that sector are not going to reach the 85% to 87% range; instead, we expect them to be lower, typically starting with a 7, assuming we continue to operate efficiently, which we do. Additionally, some of our compounded offerings will have slightly reduced gross margins, even post-transition. Yet, once we fully shift to our pharmacy, those margins should return to levels similar to generics or very close. In the interim, we will see slightly lower gross margins. We also project that the ratio of branded therapy will continue to increase, which could affect margins due to current arrangements where products are fully passed through to customers. Despite this, we believe all these business areas will contribute positively to our bottom line and possess substantial growth potential. Some may also incur lower advertising costs compared to other segments we’ve been involved in. Overall, we expect some mild erosion in gross margin rates due to the mix of business.

Operator, Operator

We'll now move on to Sarah James with Cantor.

Sarah James, Analyst

Earlier, you mentioned turning on insurance broadly last week and you talked about an observation of customer acquisition costs being down 33%. I'm wondering if you have any other observations from turning it on broadly. And then just if you could clarify the 33%, was that the lower cost of customers with insurance coming on? Or was it that the cost per customer, customer acquisition costs for those with insurance would be even lower and you just had a big mix shift to those with insurance.

Justin Schreiber, CEO

Sarah, it's Justin. I'll take that one. I think what this shows is that many patients entering the medical intake process have interacted with LifeMD ads or its television marketing. This indicates that many people prefer to use their insurance for healthcare. One of the unique aspects of our platform, which is mostly synchronous, is that we can engage with the benefits world. It's simply a matter of more people moving through the process and checking the insurance option versus self-payment; naturally, they notice a lower price if they choose insurance. We also need to reassess the financial model and see how it evolves. However, this is very encouraging, and I believe there is plenty of room for further optimization. I’m particularly excited about opportunities like Medicare, where broad coverage is available for these drugs, and we know we will be compensated for consultations. It primarily hinges on the patient completing the initial benefits verification process. After that, both the visit and medication are covered, allowing us to ship the medication directly from our pharmacy to the patient. This is very promising, and we have always believed it would have a significant impact. It was just a pleasant surprise to see such a considerable impact without further optimization.

Sarah James, Analyst

Great. And the new consumer-facing app and website that you're launching, do you have any thoughts on how that could impact cross-selling ability?

Justin Schreiber, CEO

Absolutely. The number of cross-care sign-ups per day is significant. I believe it could easily reach 50 or 100 consultations daily right from the start, solely due to the technology working effectively. I'm very optimistic about this as I see it has the potential to profoundly change our business profile, as well as improve lifetime value and retention rates. It has required considerable effort, and the new app is going to be stunning. I think our current app is good, but what we're launching will be a significant leap forward. I expect it to greatly influence our brand as well as the cross-care rate, ultimately enhancing the lifetime value for the business.

Operator, Operator

We'll now move on to Yi Chen with HCW.

Eduardo Martinez-Montes, Analyst

This is Eduardo on for Yi. I had a question regarding the 503-A pharmacy. You mentioned that you're licensed in 14 states now. I'm just curious if you have an anticipated time line to reach the 50-state coverage and how much margin impact do you think that will have once you're fully scaled.

Justin Schreiber, CEO

Yes, this is Justin again. The licensing process is quite rapid for a pharmacy like ours that is already licensed nationwide. I anticipate we will be licensed in 35 states within the next 60 to 90 days at the latest, possibly even sooner. The remaining 15 states will follow, likely within another 30 to 90 days, with states like California being the most challenging. Overall, I believe we can achieve 50-state licensing for compounding in the next couple of months, aside from one or two states that may pose difficulties.

Eduardo Martinez-Montes, Analyst

Got it. And then regarding the...

Justin Schreiber, CEO

Regarding your question about the margin, owning and operating a 503-A compounding pharmacy provides us with a significant competitive advantage. Achieving the desired cost of goods sold can be quite challenging when working with a third-party pharmacy. While we have excellent partnerships with third-party compounding pharmacies that will remain intact, bringing these services in-house allows us to better manage the patient experience and leverage our strong supply chain capabilities to reduce costs. This approach makes our services much more accessible for patients.

Eduardo Martinez-Montes, Analyst

Got it. And regarding the oral obesity products that we expect to hit the market soon, do you have any insights? Is there any market research indicating how many patients are hesitant due to their aversion to needles? I'm trying to understand your thoughts on the impact these orally bioavailable obesity products will have on the adoption of these therapies.

Justin Schreiber, CEO

I think it's big, but I think your guess is as good as mine and probably as good as the drug manufacturers, right? I don't think there's never been an oral medication for weight loss with the type of efficacy profile that Wegovy pill will have that's been approved by the FDA. So it's really difficult. I think it's enormous. I mean, in my social circles, especially people that are a little bit older, I think it could expand the market by 25% to 50%. I personally know a number of people that I would never think would avoid a very small needle like this or injectable, but that are just waiting for the oral product to come to market. So I think it's going to be very big. I mean, to put a number on it, it's very difficult, but there is going to be massive demand is what I think.

Operator, Operator

Thank you. At this time, we've reached our allotted time for questions. I'll now turn the call back over to Justin Schreiber.

Justin Schreiber, CEO

Thank you for your questions and for your interest in LifeMD. We look forward to speaking with you again when we report our fourth quarter results in March of next year. Have a great evening.

Operator, Operator

Thank you. This brings us to the end of today's meeting. We appreciate your time and participation. You may now disconnect.