Q4 2023 LifeMD Inc Earnings Call
Participants
Justin Schreiber; Chairman & CEO; LifeMD Inc
Marc Benathen; CFO; LifeMD Inc
David Larsen; Analyst; BTIG, LLC
William Wood; Analyst; B. Riley Securities, Inc
Alex Fuhrman; Analyst; Craig-Hallum Capital Group LLC
Ilya Zubkov; Analyst; Freedom Broker
Yi Jen; Analyst; HC. Wainwright
Presentation
Operator
Good afternoon. Thank you for joining us today to discuss LifeMD's results for the fourth quarter and year ended December 31, 2023.
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, March 11, 2024, company assumes no obligation to update or revise any forward-looking statements after today's call, except as required by law and also, please note that management will be discussing certain non-GAAP financial measures that the company believes are important like MD's performance details on the relationship between these non-GAAP measures. 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 CEO, Justin Schreiber. Please go ahead.
Justin Schreiber
Thank you and good afternoon, everyone. After the market close, we issued a press release announcing our fourth quarter and year-end results. Later today, we will post an updated corporate presentation on our website at ir.lifemd.com as well as our shareholder letter.
I share a lot of my thoughts on our journey and where we're headed. So I encourage everyone on this call to give it a read. With that said, 2023 was a tremendous and record-setting year for LifeMD. Our revenue patient subscriber base and profitability all increased sharply versus 2020 to catalyzing. This growth was the launch of our nationwide GLP-1 weight management program in April 2023, which has since grown to become one of the largest and fastest growing businesses of its kind in the US.
In fact, our weight management program finished 2023 with over 22,000 active patient subscribers, well ahead of the 20,000 patients we previously guided to. As of today's call, we have over 35,000 weight management patients, and that number is growing rapidly.
In addition, as we announced in December, we made our largest foray to date within the business-to-business market when we executed a collaboration agreement with Medifast, one of the largest diet coaching and nutrition companies in the US, this collaboration included $10 million of collaboration fees and a $10 million equity investment while providing Medifast 40,000 coaches and their customers with access to our industry-leading telehealth platform and affiliated medical group.
I believe this transaction truly validates the strength of our highly differentiated direct-to-patient telehealth platform and offerings. Our lifestyle health care business led by Rex&D had its fourth consecutive year of double digit annual revenue growth beyond the consistently strong growth we've seen with Rex&D, the brand continues to be immensely profitable, finishing 2023 with a contribution margin in excess of 30%.
In addition, our noncore subsidiary work simply continued its consistent growth trajectory with 50% year over year, revenue growth and EBITDA margins exceeding 25%. I am pleased to report that 2024 is off to a strong start, and we remain well positioned for sustained growth and profitability. We remain laser focused on continuing to deliver outstanding performance and long-term value for our shareholders through the execution of four key objectives in 2024 First, we expect to continue our rapid growth in the GLP-1 supported weight loss market.
As stated earlier, our weight management program has grown from nothing when we started in April 2023 to over 22,000 active patients subscribers by year end 2023 and over 35,000 subscribers. As of today, our tremendous growth, which continues to accelerate in pace. It's largely attributable to our highly differentiated service based offering leveraging our primary care platform to provide our weight management patients comprehensive end to end care for their weight loss goals.
Early retention results continue to be impressive, with over 80% of patients who start therapy remaining on therapy after 90 days. Economics for these patient groups remain very strong with day one, net revenue over ad spend exceeding one X, while daily acquisition volumes have continued to trend up as we scale our medical operations and patient services groups to create additional employment capacity. We continue to make significant investments in these areas as well as in our technology platform to meet the needs of this market where demand continues to outstrip supply.
Second we remain focused on continuing to grow our more mature lifestyle health care business led by Rex & D's consistent double digit growth rates while maintaining its high contribution margins since launching in December 2019, [Reckson D] has grown to become one of the most trusted and largest men's health brands in telemedicine to date. This has largely been achieved through growth in our men's sexual health market. We expect continued double-digit growth in this market while also introducing complementary new products designed not only to capture share in adjacent markets, but to provide substantial cross-sell opportunities for our existing Rex patients.
Over 160,000 and growing Rex patients tend to be well established in their lives with ample disposable income, and they appreciate the quality of care they receive from LifeMD affiliated providers. The investments we are making in product and operational expansion will only serve to elevate our market share and enhance the experience we deliver.
Third, we have made and will continue to make significant progress in building our infrastructure to accept reimbursement from private and government payers for medical services provided by our affiliated medical group. Over the past several quarters, we have successfully enrolled our medical group in 10 major health plans, spanning seven of the 10 states.
We are initially focused on as part of this effort, we have built out a best in class compliance program for both private payer reimbursement and Medicare and have made significant enhancements to our technology platform to support this program. While we are slightly delayed from our initial time line, largely due to resources being focused on meeting the outsized demand we've had in our weight management business. This initiative remains a top priority for us.
We are now expecting to turn this on by the middle of 2024. We will start with a select group of our largest states and those states largest carriers where we have enrolled our affiliated medical group and expect to expand this to all 50 states over the next 18 months. We believe that allowing our patients to use their insurance to offset the costs of our virtual and in-home care services will accelerate demand for our service offering and drive better retention.
Our fourth key initiative is maintaining our laser focus on delivering growth levels above our 2024 guidance while continuing to drive profitability margins.
In 2023, we made sizable progress in this area growing our adjusted EBITDA from a loss of $14 million in 2022 to a profit of $12 million in 2023. More importantly, our cash flow from operations grew to almost $9 million in 2023 versus negative cash flow from operations of $23 million in 2022. We also ended the year with our strongest balance sheet yet with more than $33 million of cash.
As we guided in January, we expect both our top line and bottom line results to improve substantially in 2024, and we remain focused on turning our telehealth business profitable on a stand-alone basis by the middle of 2024.
Lastly, work simply continues to deliver strong financial results, finishing 2023 with 50% year-over-year growth and adjusted EBITDA margins exceeding 25%. The self-managed business continues to be a meaningful contributor to LifeMD's overall profitability and positive cash flow work simply has recently pivoted their offering from a mostly PTS and some HR Solutions business into a diversified workplace and Document Services business for consumers and small businesses in doing so.
The business has also refocused its marketing and retention efforts on domestic and global markets that produce the highest revenue per user relative to ad spend in doing so work simply is active. Subscriber count has declined slightly year over year, but the unit economics have continued to improve, which has in turn supported sizable growth and improving bottom line margins. In short, there is a lot to be excited about in 2024 for shareholders.
And with that, I'll turn the call over to our CFO, Mark Benathen, who will provide a summary of our financial results. Marc?
Marc Benathen
Thank you, Justin, and good afternoon. Everyone. LifeMd had record fourth quarter performance on both the top and bottom line with consolidated net revenues growing to $44.9 million and adjusted EBITDA growing to $5.5 million. These figures included the recognition of $5 million of program fees paid by Medifast less life and the related expenses.
Additionally, we ended the quarter with over $33 million in cash and positive free cash flow in 2023. Cash flow from operations was nearly $9 million versus negative $23 million in 2022. We remain in the strongest financial position in the company's history and are well positioned to execute upon our aggressive growth and profitability plans. In addition, based on the strong start to the year, led by performance in our GLP-1 weight management business, we are raising our consolidated revenue guidance to at least $200 million from the previous guidance of $195 million to $205 million.
Now turning to the results for the fourth quarter of 2023. As I mentioned, consolidated revenues in the fourth quarter totaled $44.9 million, an increase of 60% compared with the same year ago period. Telehealth net revenues grew 90% versus the year ago period and 28% sequentially. Net revenues from our weight management business more than doubled sequentially.
Subscriber growth remained very strong with the number of telehealth active subscribers increasing 27% to approximately 215,000 while works simply active subscribers contracted 6% to over 158,000, both versus a year ago period. As Justin mentioned, work simply continued to refocus our marketing and retention efforts on the highest value customer markets, thus generating materially higher revenue per user and enhanced profitability. The number of weight management active subscribers grew to over 22,000 as of year end 2023 and ahead of our previous guidance of 20,000 active patient subscribers by year end.
Consolidated gross margin for the fourth quarter was 88.1%, up 260 basis points versus the prior year period. Gross profit for the quarter totaled $39.5 million, an increase of 64% from the year ago period. Operating expenses for the fourth quarter totaled $41.7 million, an increase of $7.3 million versus the year ago period, largely due to a $3 million increase in discretionary selling marketing, clinical and patient care expenses to support the rapid growth of our weight management program, expenses to support the launch of the Medifast partnership and a $2.5 million increase in non-cash expenses for stock-based compensation and depreciation and amortization.
Net of these items, operating expenses were up only $1 million or 3% year over year. Our GAAP net loss attributable to common stockholders for the fourth quarter totaled $4.5 million or a loss of $0.12 per share. This compares to a GAAP net loss attributable to common stockholders of $12.7 million or a loss of $0.4 per share in the fourth quarter of 2022.
Adjusted EPS is a non-GAAP financial measure that excludes interest taxes, non-cash expenses, dividends, Klaassen insurance acceptance, readiness, litigation, non-controlling interests, M&A financing, transaction costs and foreign currency translation. Reflecting those adjustments.
Adjusted diluted EPS for the fourth quarter of 2023 was $0.15 per share compared with $0.02 in the same year ago period.
Adjusted EBITDA, which is a non-GAAP financial measure that excludes the same items I noted for adjusted EPS totaled $5.5 million in the fourth quarter of 2023. This compares with adjusted EBITDA of $1 million in the same year ago quarter.
Now turning to the results for the full year of 2023. Consolidated revenues for 2023 were $152.5 million, an increase of 28% compared to 2022. Telehealth revenue net revenues grew 19% versus the prior year, while work simply revenues grew 50%. Gross margin for the full year was 87.6%, up 330 basis points for 2022. Gross profit for the year totaled $133.6 million, an increase of 33% from 2022.
Our GAAP net loss attributable to common stockholders for full year of 2023 totaled $23.7 million or a loss of $0.7 per share. This compares to a GAAP net loss attributable to common stockholders of $48.6 million or a loss of $1.57 per share in 2022, reflecting the same adjustments, as I mentioned in the fourth quarter results.
Adjusted EPS for 2023 was $0.35 per share compared with a loss of $0.45 per share in 2022. Adjusted EBITDA a non-GAAP financial measure that excludes the same items I noted for adjusted EPS totaled $12 million in 2023. This compares with an adjusted EBITDA loss of $14 million in 2022.
Cash totaled $33.1 million as of December 31, 2023. As I mentioned earlier, we are raising our 2024 guidance for consolidated net revenues to at least $200 million while reaffirming our adjusted EBITDA guidance of between $18 million and $22 million.
This wraps up our financial results. I'd now like to turn the call back over to Justin.
Justin Schreiber
Thanks, Marc. As we wrap up, I want to reflect on our journey so far and the path ahead. Over the past few years, I've consistently stressed our commitment to building a best-in-class telehealth technology platform, everything we achieved in 2023 stands as testament to our execution of this commitment today, we are stronger than ever before financially operationally clinically and technologically. This is an exciting time to be a shareholder. We're still in the early days of our growth.
And I believe that 2024 will be an even greater year than 2023 in terms of growth and the long-term value we are building for our shareholders. The fact is we're still in the earliest days of telehealth and life. Md is at the forefront of this health care revolution. Our focus on building an incredible health care experience for our patients is paying dividends.
Our industry-leading affiliated medical group, operational capabilities and proprietary platform are allowing us to seamlessly expand our healthcare presence with our existing and future offerings. Our work is helping to build a healthcare system that makes more sense, helps more people and creates better outcomes across the board for patients.
Thanks to our strategic vision and execution over the past few years. The opportunity that lies ahead for us is immense as we prepare to finish the first quarter of 2024 I remain confident in our ability to deliver on our expectations and beyond this year to our patients who trust us with their health, our employees and providers who believe in advance our mission and our shareholders who continue to support us by Thank you for joining us on this journey towards a healthier future.
With that, I would like to open the call for Q&A.
Question and Answer Session
Operator
Thank you. We will now be conducting a question-and-answer session. (Operator Instructions)
Thank you. David Larson, BTIG.
David Larsen
Hi. Congratulations on a fantastic quarter. Can you maybe just talk a little bit more about the weight management program in particular, like what sort of returns are you seeing with the Medifast relationship in terms of I'm sending you members and also you sending them members? And then if you could talk a little bit about the pace of onboarding.
It was my understanding that, you know, over the past six months, there have been periods of time where you're adding maybe 2 or 300 a day, maybe this has increased to 500 a day. Just any thoughts around sort of the investments in the platform to make sure that the pace of adds clean and neat? And then just any color on pricing for the drugs themselves would be great. Thanks a lot.
Justin Schreiber
Yeah, hi, David. It's Justin. I'll take the first stab at your question, maybe Mark has some comments you'd like to add. First of all, with regards to Medifast, we're really happy with the progress of that collaboration in Q1 in the shareholder letter that just got pushed live to the website. We talk about that in some more detail. We're not going to release specific numbers on Medifast as we've kind of publicly said, I think that's their job, not ours, but I can tell you we're very happy we've exceeded our expectations and is I think for the first quarter of the collaboration and we're certainly super excited about the rest of the year.
To your second question, we actually just today, I think had a first couple of patients that have signed up to be to be part of their coaching and diet program. So it took us a while to just get the compliance and all the infrastructure in place for that. But we think there's a meaningful percentage of our patients that will really be helped by that program alongside of the therapy.
On the obviously, there's second question relating to the scale of the weight loss program, Mark and I are comfortable sharing that over the last 30 days, we've been averaging over 400 new patient acquisitions per day. And so it's been a very, very strong month. And as we said in the US, as we said in our remarks, those numbers, yes, we're seeing excellent growth and we're extremely bullish on this business overall. Also, super bullish for what it's doing for our platform.
And just as we continue to add tens and tens of thousands of new patients, the technology enhancements we're making, the improvements we're making in the data infrastructure and patient experience. I mean, it's really, really exciting when you think about all the learnings from this and how we can apply this to other very large chronic conditions down the road.
On the pricing question of yours, we haven't really made any changes to pricing. We still have a lot of patients that are purchasing three to six month memberships for the weight management program. So there's a lot of deferred revenue that you'll see in that in the 10-K that's filed today.
And we haven't we haven't had to change pricing at all. We look at ourselves. We're not the cheapest provider out there, but we think we're the highest quality. We're still the only platform that I know of that operates at the scale that we do that is you extend visits for every single new patient on the life from the platform.
And across the board, we're focused on delivering high-quality care to patients. And I really think that's paying off, right? I mean, I think that one of the reasons why we continue to see the kind of demand that we do is not just because of our amazing patient acquisition and media teams, but it's also because of the brand that we've built out there in the market.
We have a lot of I think we have a lot of people that have friends that are on a life in the treatment plan and they just know they're getting good care and they know they're getting great prices on these on these medications. We're doing everything we can to help them access branded therapies. And if not, we're referring them to high-quality compounding pharmacies on that, I think are delivering them a very high-quality therapy until they're able to get insurance coverage for branded therapy.
David Larsen
That's very helpful. Thank you very much. And one follow-up to my first three-part question like if the GLP ones are caught because at around $1,000 or $1,200 a month right now, have you seen a generic product launch and if not like, when do you think it will launch? And what do you think the pricing on the generics will be? And then one of the pushbacks I've heard from some investors is like, hey, let's have a solid oil comes to market.
And as generics enter into the market, kind of pricing pulls back and will we continue to see the sort of demand that we're seeing now for life MDs platform in my view. So I guess what is your sort of response to that? Assuming pricing does improve significantly over the next two years from the drugs themselves. How do you think that will impact your platform will be a tailwind or a headwind for you think?
Justin Schreiber
Yeah. What you mean with a number of questions there again. But on the first question, the first generic GLP-1 is coming to market in June of 2024, that that's the generic version of Victoza. That's a once-daily administered GLP-1 that doesn't have. I don't think that the efficacy Pro efficacy profile is not quite the same as semaglutide interest appetite.
So we're certainly like we have amazing relationships across the board, you're going to see multiple generic players in this space and life. And you will certainly offer that generic. If I mean, there's going to be demand for it we don't know how much demand is going to be, and we're certainly well positioned for that. And we're also making really, really, really big investments in our prior off infrastructure. We're evaluating a number of companies that have their just best in class when it comes to getting prior offs approved these medications are there a lot of companies now that are using artificial intelligence and to really optimize the whole prior off process. So we're working with Ford.
We are not working with yet, but we're talking to a number of those companies and this is a major, major priority for life, indeed to be as good as anybody out there. I'd love to use the word the best, but they're going to be other.
They're going to be other other market participants that are great at this, but we're going to be as good as anybody else out there at getting these prior offs approved for patients so that's the one thing that I think investors need to keep in mind, even though a lot of patients right now, the majority of patients are not are not getting approved for branded therapy and they're having to resort to a high quality compounded therapy because of that life is going to be positioned to second that private and government payers or employers decide that there's enough long-term outcomes associated with these drugs to justify the price tag of them.
So I think that's an important thing to note. As far as and I think that. I think that kind of leads really well into your last question. If there's an oral drug, it's going to be it's going to improve the compliance for patients. You're going to have greater demand for these therapies. A lot of you will think the orally administered administered drugs are going to be more efficacious.
We can rely on that same prior U.S. infrastructure. We're going to be as the role of virtual care companies like life and DI and others. It's not going to change. If anything, there will be more demand for platforms like ours, you're still going to need a priori. You're still going to need a comprehensive solution. You're still going to need labs. You're still going to need coaching.
You're still going to need diet. You know, it's not like an oral for an oral therapy comes onto the market and all of a sudden all that goes out the window. So I don't think it changes the investment thesis that offer LifeMD. And I think it actually fits perfectly with everything we're focused on over the next couple of years.
David Larsen
Okay, fantastic. I'll hop back in the queue. Thanks very much and congrats on a good quarter.
Justin Schreiber
Thank you.
Operator
William Wood, B. Riley.
William Wood
Thank you so much, and I really appreciate you taking our questions. And obviously, a really nice quarter and great year overall. So I think the first question I'd love to get a little bit of additional color on the first quarter weight management number. You noting about 13,000 so far, maybe a little bit above that and how we should be thinking about that in terms of your first quarter, 40 to 43 million guidance on how that should be fitting in in the sort of the makeup there?
Marc Benathen
Yes. So this is Marc. So obviously, that does all fit into the guidance. However, as I mentioned before, about 55% of our new sales are six month subscriptions, and we've had a significant ramp in our new patient activity in onboarding as we've created more capacity in our clinical teams to handle additional appointments and patient volumes really in the second half of the first quarter.
So starting around the second week or so of February on where you're going to see a significant amount of deferred revenue related to that. In fact, by the end of the first quarter, we could see a $4 million increase in deferred revenue by the end of the first quarter versus the end of the year, could potentially be even higher than that, obviously a contributor to some of the revenue growth that we're seeing in the business.
If you net out the $5 million of Medifast fees in Q4 and you add back about $1 million of Medifast fees were forecasting in the first quarter. You're still saying a couple of million of sequential growth. That number would be materially higher would be $4 million to $5 million higher than that sort of in $6 million or $7 million without that deferred revenue.
So we're really started to see very meaningful numbers from those acquisition volumes. Obviously, that deferred revenue is going to come back to us with a big chunk of it in Q2. And then obviously a portion even then our two three as the six months of subscriptions have to be amortized over six months and then outside of the six month subscriptions and other 35% or three months. So you really only have about 10% to 12% of the subs at a one month subscription. So it's phenomenal for us on a cash basis. It always creates a lot of deferred revenue that's invoiced start to come back to us in the second quarter.
William Wood
Got it. Very helpful. Appreciate that. On a follow-up on your Rex MD, you noted the continued strength there, doubling our double digit growth year over year, I believe on.
And just curious, you also mentioned the possibly entering this new market maybe with new offerings. I was wondering if you could add a little bit a color on what those markets end or offerings may be and maybe when we can expect them?
Justin Schreiber
The biggest thing we're focused on, William is launching an HRT offering under X and D, and we're plan to launch that in the coming months. We have some some opinion leaders that have kind of recently gotten involved, not in a position right now to disclose their names, but they're some of the top people in the world in this space and we're developing it what I think is going to become the gold standard in hormone replacement therapy clinically, I think we're going to reach a lot of patients with this offering.
And I think it's going to be a really interesting stepping stone into more more meant more like proprietary mental health offerings as well that really cater to this 165,000 patient population that we have. That's part of Rex MD. So meaning that brand has matured a little bit. And you've I don't think I think that we certainly need to add some some new product offerings on top of our sexual health offerings there.
But our mix, our mix, I'm very, very exciting. I'm very, very excited and optimistic about the potential for Rex. I think it's also worth noting that these offerings that we're launching will have I expect to have extremely high retention rates, which is what we're all focused on. And retention, of course, equals as a result of high patient satisfaction and efficacy and a great job by the medical group. But for shareholders, retention equals earnings, right? So I'm really really excited about this offering and getting it live in the next couple of months.
William Wood
Got it understand. And then one last, if I may. On in terms of your insurance, you're continuing to expand that on. I'm just curious if there's any expectations maybe or color on on what we might be expecting for for increasing your insurance and payer coverage over the year course of the year, maybe?
Justin Schreiber
Yes, this is Justin. Again, William. I mean, we're not we're not I'm not really comfortable releasing a specific number. I do feel good about saying that this certainly over the next couple of quarters, we will have very, very broad coverage and most, if not all, of the top 10 states that we targeted. We also are we also we also are planning a rollout into into all 50 states and we're working on that plan and investing in it already.
I think that the subsequent states are going to be much easier since we've worked out a lot of the kinks with these with these top 10 states that we have started to enroll that we started to enroll with. But look, we're this is an important initiative for us. We also, we also got into several Medicare plans in the last couple of weeks, one in Florida and one in another state.
So that like that continues to continues to positively evolve as well. So I think I think this is like the businesses, the business is doing great. As you can tell by our remarks and the numbers we put out and and but this is something that like we have a we have a we're putting a lot of resources into internally. And I think that this year it's going to be we're going to start to see we're going to start to see patients using their insurance to subsidize the cost of their life and D care. And I think it's I think it's a big milestone for the Company.
William Wood
Got it. I appreciate you taking the questions. I'll hop back in queue and congratulations again on the great quarter. Thanks.
Justin Schreiber
Thanks.
Operator
Alex Fuhrman, Craig-Hallum.
Alex Fuhrman
Thanks very much for taking my question and congratulations on a really strong year and launch of the weight management program on just one of the things that really seems to differentiate your weight management program from a lot of the others that are out there as it was launched within virtual primary care. Wondering if you can talk a little bit about how many of your weight management patients are receiving some type of treatment for related conditions or maybe medications other than just GLP-1?
Justin Schreiber
Yeah thanks for compliment, Alex. It's a great question. We are we do take a lot of pride in the fact that we offer these services through our primary care platform and that we have we have a basically a full-time task force of medical providers that work on that platform. I can't I can't really I don't have a specific number for you, Alex.
And I would say that I would say that I know that every single patient he's speaking with a provider about each other other aspects of their health when they are onboarded onto our weight management program. However, I don't I don't have a specific number that we can share with you that would be like a certain percentage of patients that's treated for another chronic condition.
A lot of these, a lot of these, the majority of these patients that are coming to us are very, very focused and very intent on the GLP-1 medication and using that to jumpstart their kind of weight loss or weight loss program. And that's that's where a lot of the interest is.
So for the most part, that's where our providers have been focused focused on where I think you're going to see more where I think you're going to see more of this is actually like as a lot of people start to hit their goal weight and think about what's next, what other aspects of their health could use improvement or even optimization. That's where I really think you're going to see the life of the platform shine, and you're going to see kind of more of our other capabilities that we have come out.
(multiple speakers) I don't mean to not answer the question. It's a great question. We just don't have we just don't have the data to answer that question properly. And initially, we're very focused on these. These patients are just focused on their weight, and that's understandable, right. But I think longer term, as we are going to see us. We're going to see a lot of these are there conditions being treated and optimized.
Alex Fuhrman
Okay. That's great. Thanks very much for those answers, Justin.
Operator
[Elliot Zucker, Freedom broker].
Ilya Zubkov
And good afternoon, and thank you for taking my question and congrats with another record quarter on could you please comment on, could you please give us more details on how has the work simply offering change? So has the transformation process already been completed? And I do expect user growth to recover in the nearest quarters?
Marc Benathen
Yes, Mark, yes, we do expect years ago to recover. I mean, the main way that it's evolved and they've already tried to diversify their platform as well as focus on certain regions of the world where they've gotten the highest return on investment. I'm not going to say which regions to divulge as part of their strategy of buying on how it's evolved, most notably.
So obviously, down two years ago, they acquired a residential business broken into the HR space has since evolved that business to include cover letters as well as AI technology to enable the automation of several of those functions, which has actually increased the adoption.
And that business has won two within this past year. In 2023, they launched the legal simply legal forms business and began our launching the early stages of their proprietary forms library. In addition, they also launched the science simply product, which essentially is a smaller version of a DocuSign for consumers and small businesses.
And then lastly on they've begun to penetrate gig workers consumer, the consortiums of small businesses essentially they've taken their small business penetration from single digits to about 15% today over the last about 18 months. So those are just examples of ways that they've continued to in doing so they've continued to refine their marketing strategy.
They've tested some new strategies of these were all things will be pretty typical that a business their size would do, especially if they were private and obviously not owned by us, but those are all things that are pending after increasing the Company's profitability.
So even though they took a small step back and subscribers similar to what we did in 2022 when we refined our base on the telehealth business to lop off a lot of those trial offers that were not as profitable on, they're now earning more per user and their economics and their margins have gotten substantially better while still being able to grow the top line of their business. And there are going to return to subscriber growth again in 2024. Now that they're back to the right base and they have better economics, you're going to see their margins expand even beyond where they are today.
Ilya Zubkov
Thank you, Marc. Appreciate this, and congrats again with the strong quarter.
Justin Schreiber
Thank you.
Operator
Yi Jen, HC. Wainwright.
Yi Jen
Please proceed with your question figure for Perkin reporter or first question was could you comment on what percentage of market share do you currently have was over 22,000 patients for GLP-1 program with that in that day,
Marc Benathen
It's not impossible, but it's like a pinball.The point everybody has pretty much been borne first, sending of the weight management market. I mean, look, at the end of the day, most analysts think by 2030, this is a$ 100 billion plus market. More and more people are coming from the fact that we ended the year with 22,000 patients, your 129 months with discounting, say like 90, 95 a month. And we've already in the first quarter between the end of last year and today's call, March 11 was out about 70 days, 71 days on we're already up to 35,000. So we added another 13,000 on.
There's massive runway here. Nobody has a big share. Obviously, at the pharma side, there's two dominant players. But from the provider side, nobody has a big share massive runway on. We're in a situation where substantially more demand than there is supply on our side. If we had an infinite number of providers and could service people all day long we could sign up even more on the what we're doing today are not showing no signs of slowing down.
Yi Jen
And would you be able to comment on the age groups of these patients who recently signed a further zero point management program or they are the majority of them towards the younger age group are older age group? And do you think the these patients receiving GLP-1 drugs will stay on it for a very long period of time.
Justin Schreiber
Yes, this is Justin. The average average age right now is in the mid 40s for these patients. We as we've shared in our remarks, retention rates so far have been very, very strong. It's very difficult to say. We know our goal is that our goal is to help patients hit their goal weight with one of these therapies in a comprehensive way in and hopefully they can change their their diet and lifestyle in the process and they're not all one of these medications for the rest of their life. I think that there are likely going to be some patients that are on these therapies for the rest of their life and need to be in the mix and they're out with their health outcomes are going to be better because of that. But as far as predicting, I think as far as predicting that right now, it's impossible to do study.
Yi Jen
Well, thank you and congratulations for the strong strong performance.
Marc Benathen
Thank you, Jen.
Operator
David Larsen, BTIG.
David Larsen
Can you just my quick follow-up, can we get an update on customer acquisition cost companies like Teladoc and other entities out in mental health space have talked about increased pricing pressure there. Just any thoughts there would be great.
Marc Benathen
Yeah. I mean, look, there's been some increased pricing pressure, but we've been able to counteract the I mean, like in the Rx business, we've seen this quarter slightly higher increases in cash, but we were also getting much longer and bigger LTVs. The past year than we had in the prior year. So we've been able to more than offset that and actually are holding ourselves to a higher return on ad spend than what we used to get a year ago on that business and the wealth management business, we're actually as we scale to more volume.
And I'm not saying this is going to always hold this way, but we're actually have seen tax slightly decline. We're actually seeing some of the best return on ad spend investment within the last 30 days that we've had in the history of the weight management program that will fluctuate a little in our office.
I mean those things do fluctuate a little, but you know, in general, we've consistently even as we've scaled to the highest volumes per day that we've seen have seen really strong economics. So yes, I mean, look, in our CPMs and pricing out there, ebbs and flows have certainly had some increases in the first quarter, but we've been able to manage to that contract alone.
David Larsen
So if it's $99 a month and somebody signs up in a day was sorry and it's and it's $300 for three months and they sign up. What's your return like on day one is it is the tax-free average total?
Marc Benathen
Yes, look, the real numbers are, you know, we're getting on average a little over $300 for an average order value of more than one times our money day one.
David Larsen
Okay. Great. And then last quarter you mentioned an agreement with IQVI for sales and marketing effort. Can you just provide a little more color there?
Justin Schreiber
What exactly was Sure David, this is Justin. So we signed a collaboration or a marketing joint venture type agreement with IQVI. We've explored several different medium to large pharma opportunities with a Euvia as since signing that agreement on no date like nothing has nothing has turned into a commercial opportunity for us, but we're optimistic. I give you as a great company and we really like the team there, and we're optimistic that and some of that will be a fruitful relationship down the road.
David Larsen
Okay. And I think what that means is they're working with pharma manufacturers are trying to identify products that you could help them bring to market.
Justin Schreiber
Is that right? Yes, exactly. I mean, I think, yes. So like Akebia QBO provides a lot of different commercial solutions directly to pharma companies. And one of the one of the things that's interesting for them or that they were interested in was finding a partner that could enable them to offer or enable their clients in the pharma world of direct care plus a platform to deliver direct care to their patients.
So I think that I think I think the whole opportunity in Pharma has just been has taken a lot more time to materialize, then people thought, including me, I mean, I think if you listen to prior calls, I was much more bullish and excited on the whole direct-to-patient telehealth opportunity as it relates to pharma companies over the past several years, I think for a number of reasons it's been that the adoption rates have been very slow. I think a large part of that is pharma doesn't pharmacy very careful about having anything to do delivering health care there are a lot of compliance issues. And so I just think they're very difficult business models to sync the sync with each other.
David Larsen
Okay. Thanks very much. Congrats on a good quarter.
Operator
Thank you. We have reached the end of our question-and-answer session, and I'd like to turn the floor back over to Mr. Justin, Justin Schreiber for closing remarks.
Justin Schreiber
Thanks, [Camilla]. We appreciate everyone dialing into our earnings call today and look forward to next quarter and giving a very positive update next quarter. Thank you very much. Have a good evening.
Operator
This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.
