biote Corporation
11/07/2025 | Press release | Distributed by Public on 11/07/2025 15:07
Quarterly Report for Quarter Ending September 30, 2025 (Form 10-Q)
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.
The following discussion and analysis provides information that management believes is relevant to an assessment and understanding of our consolidated results of operations and financial condition. You should read this discussion and analysis in conjunction with the accompanying unaudited condensed consolidated financial statements and notes thereto included elsewhere in this Quarterly Report. Certain amounts may not foot due to rounding. This discussion and analysis contains forward-looking statements and involves numerous risks and uncertainties, including, but not limited to, those discussed in Part I, Item 1A. "Risk Factors" in the 2024 Form 10-K, as supplemented by the risks and uncertainties discussed in Part II. Item 1A. "Risk Factors" in this Quarterly Report on Form 10-Q. You should carefully read the information under "Cautionary Note Regarding Forward-Looking Statements" in this Quarterly Report. We assume no obligation to update any of these forward-looking statements except as required by law. Actual results may differ materially from those contained in any forward-looking statements.
Overview
Biote trains physicians and nurse practitioners in hormone optimization using bioidentical hormone replacement pellet therapy in men and women experiencing hormonal imbalance. The "Biote Method" is a comprehensive, end-to-end practice building platform that provides Biote-certified practitioners with the following components specifically developed for practitioners in the hormone optimization space: Biote Method education, training and certification, practice management software, inventory management software, and information regarding available HRT products, as well as digital and point-of-care marketing support. We also sell a complementary Biote-branded line of dietary supplements. By virtue of our historical performance over the past 13 years, we believe that our business model has been successful, remains differentiated, and is well positioned for future growth.
Our go-to-market strategy focuses on:
•
Increase the number of Biote-certified practitioners. Our primary objective in marketing to healthcare providers is to inform them of the value in joining the Biote network. We accomplish this through provider referrals, a dedicated sales force, and through digital and traditional marketing channels. We target specific physicians based on their specialty, prescribing data, demographic information and location match within our existing geographic footprint.
•
Grow the practice of our Biote-certified practitioners and Biote-partnered clinics. When the practices of our Biote-certified practitioners and Biote-partnered clinics grow, we grow. We help our Biote-certified practitioners and Biote-partnered clinics grow by, among other things:
•
providing mentorship, practice management and marketing capability necessary to operate an efficient hormone optimization practice;
•
providing high-quality Biote-branded dietary supplement products;
•
providing Biote-certified practitioners and Biote-partnered clinics a full array of wellness education and marketing materials;
•
directing consumers that are actively seeking care to Biote-certified practitioners via the "Find A Provider" feature on our company website; and
•
utilizing our growing digital outreach capabilities to connect with consumers seeking general information.
•
Increasing sales of Biote-branded dietary supplements. Our Biote-branded dietary supplement line currently includes 25 dietary supplements that we offer to our Biote-certified practitioners through our eCommerce site, efficiently leveraging our core Biote provider platform. Practitioners then re-sell Biote-branded dietary supplements to their patients, enabling patients to receive physician-guided therapies to manage the related effects of aging. Our direct-to-patient eCommerce platform enables practitioners to invite their patients to buy Biote-branded dietary supplements online via our online store. In addition to our direct-to-patient eCommerce platform, our Biote-branded dietary supplements are also offered through our eCommerce platform with Amazon.
A portion of the bioidentical hormone pellets used by Biote-certified practitioners are manufactured by our 503B compounding pharmacy, Asteria Health; therefore, in order to meet demand we have agreements with AnazaoHealth and Carie Boyd each of which are FDA registered 503B outsourcing facilities. Bioidentical hormone pellets are shipped directly to Biote-certified practitioners. Custody of the pellets is with Biote-certified practitioners. However, the bioidentical hormone pellets are recorded as inventory on our unaudited condensed consolidated balance sheets from the date of shipment until the point in time they are dispensed by a Biote-certified practitioner. Biote-certified practitioners record the dispensation of bioidentical hormone pellets and monitor inventory levels in the inventory management system that is offered as part of the Biote Method.
Bioidentical hormone pellets have a finite life ranging from six to twelve months. We assume the risk of loss due to expiration, damage or otherwise. Additionally, the products offered in our Biote-branded dietary supplement portfolio are produced by third-party manufacturers located in the United States. We contract with a third party to provide warehousing, co-packing and logistics services for our Biote-branded dietary supplements.
To strengthen control over our supply chain, enhance operational efficiency and reduce production costs, we are focused on vertical integration through strategic transactions. For example, in March 2024, we acquired Asteria Health, a 503B manufacturer of compounded bioidentical hormones. Although Asteria Health has been integrated into our processes, we continue to utilize our current vendor network to manage our supply chain to meet the demands of our Biote-certified clinics. On November 1, 2024, AnazaoHealth provided notice that it was exercising its right to terminate the Pharmacy Services Agreement (the "AnazaoHealth Pharmacy Services Agreement"), which we previously entered into on October 30, 2020, with such termination to be effective as of May 1, 2025. In the second quarter of 2025, we executed a second amendment to the AnazaoHealth Pharmacy Services Agreement effective July, 19, 2025 (the "Second Amendment"), which extends the AnazaoHealth Pharmacy Services Agreement through December 31, 2027 and provides for a one-year extension at our discretion. With the Second Amendment in place and through our existing direct manufacturing capabilities, we believe we are well-positioned to continue meeting the product demands of our current Biote-practitioners while focusing on expanding our Biote-certified clinic network.
The following table presents a summary of our key financial results:
|
Three Months Ended September 30, |
Nine Months Ended September 30, |
|||||||||||||||
|
(in thousands) |
2025 |
2024 |
2025 |
2024 |
||||||||||||
|
Total revenue |
$ |
47,956 |
$ |
51,384 |
$ |
145,811 |
$ |
147,357 |
||||||||
|
Net income (loss) |
9,216 |
12,657 |
28,980 |
(3,437 |
) |
|||||||||||
|
Adjusted EBITDA* |
12,881 |
16,202 |
41,807 |
43,102 |
||||||||||||
*Please refer to "Non-GAAP Measures" below for reconciliations of Adjusted EBITDA to the most directly comparable U.S. GAAP measure, net loss, and for additional information about Adjusted EBITDA.
Impact of Global Economic Trends
Global economic conditions have been challenging, with disruptions to, and volatility in, the credit and financial markets in the U.S. and worldwide resulting from the effects of public health crises, uncertainties associated with the changes to and by the U.S. federal government and otherwise. If these conditions persist and deepen, we could experience an inability to access additional capital or our liquidity could otherwise be impacted. If we are unable to raise capital when needed or on attractive terms, we would be forced to delay, reduce or eliminate our research and development programs and/or other efforts. A recession or additional market corrections resulting from the impact of the effects of global health crises or geopolitical turmoil, could materially affect our business and the value of our securities. The impact of global health crises and the related disruptions caused to the global economy did not have a material impact on our business during the three and nine months ended September 30, 2025 and 2024. Additionally, we continue to monitor ongoing changes to global trade policies, including the imposition of tariffs. Although the impact of these policies have not had a material impact on our business in 2025 thus far, the broader economic impact is uncertain, and while we may experience additional operational expenses related to the costs of obtaining materials, we do not expect to be materially impacted in future periods.
Additionally, inflationary factors, such as increases in the cost of our materials and supplies, interest rates and overhead costs may adversely affect our business and operating results. Inflation and relatively high interest rates also present a recent challenge impacting the U.S. economy and could make it more difficult for us to obtain traditional financing on acceptable terms, if at all, in the future. Although we do not believe that inflation has had a material impact on our financial position or results of operations to date, we may experience increases in the near future (especially if inflation rates continue to rise) on our operating costs, including our labor costs and research and development costs, due to supply chain constraints, international tariffs, consequences associated with global health crises and ongoing international conflicts such as the conflict between Russia and Ukraine and conflicts in the Middle East, and employee availability and wage increases, which may result in additional stress on our working capital resources.
Chief Executive Officer Transition
On February 1, 2025, we appointed Bret Christensen as Chief Executive Officer. In connection with his appointment, we entered into an employment agreement with Mr. Christensen, dated as of January 29, 2025 which provides for Mr. Christensen's at-will employment as the Chief Executive Officer for a term commencing on February 1, 2025 and continuing until terminated by either us or Mr. Christensen. Teresa S. Weber, our prior Chief Executive Officer, transitioned out of her role, effective February 1, 2025. On January 30, 2025, Ms. Weber entered into a consulting agreement with us, which provides that Ms. Weber serves as a strategic advisor to us and our Board of Directors for up to one year, to assist with the transition and to work on special projects.
Recent U.S. Tax Developments
On July 4, 2025, the One Big Beautiful Bill Act (the "Act") was signed into law in the United States, which contains a broad range of tax reform provisions affecting businesses, including the temporary and permanent extension of expiring provisions of the Tax Cuts and Jobs Act of 2017. ASC 740, Income Taxes, requires the effects of changes in tax rates and laws on deferred tax balances to be recognized in the period in which the legislation is enacted. Accordingly, we have evaluated the provisions of the Act including the potential implications for its deferred tax assets, valuation allowance assessments, and effective tax rate. As of September 30, 2025, the change in legislation did not have an impact on our tax provision.
Components of Results of Operations
Revenue
We generate revenue by charging the Biote-partnered clinics fees associated with the Biote Method and from the sale of Biote-branded dietary supplements. Generally, under our master service agreements ("MSAs") we provide a bundle of goods and services to customers, including initial training to medical practitioners, bioidentical hormone pellets, access to software tools used for inventory and practice management, access to our enhanced proprietary clinical decision support software, and ongoing practice development and marketing support services, which includes a license to use our trademarks and trade names in the customer's marketing materials.
Substantially all of our revenue originates from sales to clinics located in the United States.
Revenue generated from individual Biote-partnered clinics varies significantly due to many factors, including but not limited to, the tenure of practitioners as Biote-certified practitioners; the number of certified practitioners in an individual clinic; the number of patients served by a clinic; the clinic's patient demographics; and the clinic's geographic location and population density. The MSAs we enter into with Biote-partnered clinics contain tiered pricing provisions for the management fees. These provisions provide for decreasing management fees owed to us based on the number of new patients treated. This can result in declines in revenue we realize from management fees from existing Biote-partnered clinics unless these are offset by revenue generated from new Biote-partnered clinics which begin at higher fee levels under the MSA.
Our revenue fluctuates in response to a combination of factors, including the following:
•
sales volumes;
•
the mix of male and female patients treated by Biote-certified practitioners, as treatment for males generates more revenue per patient than treatment for females;
•
our overall product mix of dietary supplements sold;
•
the effects of competition on market share and pricing;
•
new Biote-partnered clinics acquired as customers, less any existing clinics lost as customers ("net new clinics");
•
number of procedures performed by practitioners;
•
medical industry acceptance of hormone optimization generally as a solution to unmet medical needs;
•
the effectiveness of our sales and marketing personnel;
•
the number of business days in a particular reporting period, including as a result of holidays;
•
weather disruptions impacting medical offices' ability to maintain regular operating schedules;
•
the effects of competition and competitive pricing strategies;
•
governmental regulations influencing our markets; and
•
global and regional economic cycles.
Product Revenue
Product revenue includes both bioidentical hormone pellets, in connection with the service described above, and the related inventory and practice management services provided to clinics. Product revenue is recognized at the point in time when the Biote-partnered clinic obtains ownership of the bioidentical hormone pellet, which we determined to be when the Biote-certified practitioner performs the procedure to implant the bioidentical hormone pellet into their patient. The consideration allocated to this performance obligation is a procedure-based service fee which we refer to as procedure revenue. Our product revenue also includes revenue earned from sales of pellet insertion kits and Biote-branded dietary supplements. Revenue from the sale of pellet insertion kits and Biote-branded dietary supplements is recognized when the clinic or clinic's patient (supplements only) obtains control of the product, which generally occurs at the time of shipment from our third-party distribution facility or supplier. Any shipping or handling fees paid by clinics are also recorded within product revenue.
Service Revenue
Service revenue is revenue earned from fees paid by Biote-partnered clinics for Biote Method education, training and certification services and other contract-term services pursuant to our MSAs. While the option to receive and right to use the reusable trocars through the term of the contract represents an embedded lease, we have adopted the practical expedient within ASC 842 to combine the lease and non-lease components and account for the combined component under ASC 606.
For Biote Method arrangements, we recognize revenue for training and for management services over time. For initial training, progress is measured by the number of training sessions completed, and for contract-term services, progress is measured on a time-elapsed basis.
The training completion and time-elapsed bases represent the most reliable measure of transfer of control to the clinic for training and contract-term services, respectively. Revenue is deferred for amounts billed or received prior to delivery of the services.
Cost of Revenue
Cost of product revenues include the pass-through cost of bioidentical hormone pellets purchased from outsourcing facilities, the cost of pellet insertion kits and Biote-branded dietary supplements purchased from manufacturing facilities, and the shipping and handling costs incurred to deliver these products to Biote-partnered clinics. Cost of service revenue consists primarily of costs incurred to deliver trainings to Biote-partnered clinics.
Selling, General and Administrative Expense
Selling, general and administrative expense consists primarily of software licensing and maintenance, the cost of our sales force and the cost of employees who engage in corporate functions, such as finance and accounting, information technology, marketing, human resources, legal, and executive management. Also included are rent occupancy costs, office expenses, recruiting expenses, entertainment allocations, depreciation and amortization, share-based compensation, transaction-related expenses, other general overhead costs, insurance premiums, professional service fees, research and development and costs related to regulatory and legal matters and marketing expenses.
Interest Expense, Net
Interest expense, net consists primarily of cash and non-cash interest under our Term Loan, commitment fees for our unused Revolving Loans, accreted interest related to our share repurchase liability, net of interest income earned on our money market account.
Gain (Loss) from Change in Fair Value of Earnout Liabilities
Gain (loss) from change in fair value of earnout liabilities consists of the change in fair value during the period of the Member and Sponsor earnouts and the earnout related to the acquisition of Simpatra.
Other Income (Expense), net
Other income (expense), net consists of the foreign currency exchange losses for sales denominated in foreign currencies and other expenses not appropriately classified as operating expenses.
Income Tax (Benefit) Expense
We are subject to federal and state income taxes in the United States and taxes in foreign jurisdictions in which we operate. We recognize deferred tax assets and liabilities based on temporary differences between the financial reporting and income tax bases of assets and liabilities using statutory rates. We regularly assess the need to record a valuation allowance against net deferred tax assets if, based upon the available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized.
Results of Operations
The table and discussion below present our results for the three months ended September 30, 2025 and 2024:
|
Three Months Ended September 30, |
||||||||
|
(in thousands) |
2025 |
2024 |
||||||
|
Revenue: |
||||||||
|
Product revenue |
$ |
46,953 |
$ |
49,806 |
||||
|
Service revenue |
1,003 |
1,578 |
||||||
|
Total revenue |
47,956 |
51,384 |
||||||
|
Cost of revenue |
||||||||
|
Cost of products |
12,795 |
14,537 |
||||||
|
Cost of services |
743 |
741 |
||||||
|
Cost of revenue |
13,538 |
15,278 |
||||||
|
Selling, general and administrative |
26,151 |
23,922 |
||||||
|
Income from operations |
8,267 |
12,184 |
||||||
|
Other income (expense), net: |
||||||||
|
Interest expense, net |
(2,733 |
) |
(3,542 |
) |
||||
|
Gain from change in fair value of earnout liabilities |
2,920 |
7,213 |
||||||
|
Other income (expense), net |
(3 |
) |
- |
|||||
|
Total other income (expense), net |
184 |
3,671 |
||||||
|
Income before provision for income taxes |
8,451 |
15,855 |
||||||
|
Income tax (benefit) expense |
(765 |
) |
3,198 |
|||||
|
Net income |
$ |
9,216 |
$ |
12,657 |
||||
Revenue
Revenue for the three months ended September 30, 2025 decreased $3.4 million, or 6.7%, to $48.0 million compared to the three months ended September 30, 2024. The decrease was driven primarily by a $4.0 million decrease in revenue from pellet procedures and a $0.6 million decrease in service revenue for the three months ended September 30, 2025 compared to the three months ended September 30, 2024. The decrease in revenue from pellet procedures resulted from a reduction in new clinic additions coupled with clinic attrition and lower procedure volumes from our existing clinics, compared to the three months ended September 30, 2024. The decrease in our service revenue for the three months ended September 30, 2025 was primarily related to a decrease in training revenue, which was driven by the reduction in new clinic additions and a decrease in technology fees earned from physician orders placed through our BioteRx platform compared to the three months ended September 30, 2024. These decreases in revenue were partially offset by a $0.9 million increase in revenue from Biote-branded dietary supplements which resulted from an increase in activity on our e-commerce site with Amazon for the three months ended September 30, 2025, compared to the three months ended September 30, 2024.
Cost of revenue
Cost of revenue for the three months ended September 30, 2025 decreased $1.7 million, or 11.4%, to $13.5 million compared to the three months ended September 30, 2024. Cost of pellet procedures decreased 22.7% while revenue from pellet procedures decreased 10.4%, reflecting the continued cost savings from the vertical integration of Asteria Health coupled with the decrease in revenue from pellet procedures compared to the three months ended September 30, 2024. Cost of Biote-branded dietary supplements decreased $0.3 million for the three months ended September 30, 2025, primarily as a result of product mix, compared to the three months ended September 30, 2024.
Selling, General and Administrative
Selling, general and administrative expense for the three months ended September 30, 2025 increased $2.2 million, or 9.3%, to $26.2 million compared to the three months ended September 30, 2024. This increase was primarily due to the recognition of $1.2 million in expenses related to our annual marketing event for the three months ended September 30, 2025 due to a shift in the timing of the event to the third quarter of 2025. In 2024, the Company hosted this annual marketing event and incurred the related expenses during the three months ended June 30, 2024. Additionally, for the three months ended September 30, 2025, marketing expenses increased $0.9 million due to increased activity on our e-commerce site with Amazon and other strategic marketing activities, compared to the three months ended September 30, 2024. Additionally, fees for consulting services increased $0.8 million compared to the three months ended September 30, 2024, partially due to an increase in our SOX 404 readiness activities and material weakness remediation efforts and other consulting fees incurred in connection with our commercial organization transformation initiative. These increases were partially offset by a $0.8 million decrease in legal expenses compared to the three months ended September 30, 2024.
Interest Expense, Net
Interest expense, net for the three months ended September 30, 2025, decreased $0.8 million to $2.7 million compared to the three months ended September 30, 2024 primarily due to a lower principal balance on our Term Loan and lower monthly interest rates, compared to the three months ended September 30, 2024.
Gain from Change in Fair Value of Earnout Liabilities
The change in fair value of the earnout liabilities was due to a $1.02 decrease in the closing price of our Class A common stock during the three months ended September 30, 2025, compared with a decrease of $1.89 for the three months ended September 30, 2024. The decrease in the closing price of our Class A common stock for the three months ended September 30, 2024 outpaced the decrease in the closing price of our Class A common stock for the three months ended September 30, 2025, resulting in a decrease in the gain from change in the fair value of the earnout liabilities during 2025. In addition to the changes in the closing price of our Class A common stock during the three months ended September 30, 2025 and 2024, other assumptions used to calculate the fair value of the earnout liability, such as stock price volatility, estimated timing of satisfying the Triggering Events and the risk-free rate varied from period to period, each of which impacted the fair value of the earnout liability and the associated loss recorded for the periods presented.
Other Income, Net
The change in other income, net for the three months ended September 30, 2025, compared to the three months ended September 30, 2024, was primarily due to foreign currency fluctuations during the period.
Income Tax (Benefit) Expense
Income tax expense for the three months ended September 30, 2025 decreased $4.0 million to an income tax benefit of $0.8 million, compared to the three months ended September 30, 2024. This decrease in expense was primarily driven by a larger decrease in the year-to-date and forecasted profit before tax as of September 30, 2025, compared to September 30, 2024, combined with a decrease in the forecasted annual effective tax rate as of September 30, 2025.
The table and discussion below present our results for the nine months ended September 30, 2025 and 2024:
|
Nine Months Ended September 30, |
||||||||
|
(in thousands) |
2025 |
2024 |
||||||
|
Revenue: |
||||||||
|
Product revenue |
$ |
141,635 |
$ |
143,952 |
||||
|
Service revenue |
4,176 |
3,405 |
||||||
|
Total revenue |
145,811 |
147,357 |
||||||
|
Cost of revenue |
||||||||
|
Cost of products |
37,260 |
41,924 |
||||||
|
Cost of services |
2,763 |
2,167 |
||||||
|
Cost of revenue |
40,023 |
44,091 |
||||||
|
Selling, general and administrative |
77,066 |
74,422 |
||||||
|
Income from operations |
28,722 |
28,844 |
||||||
|
Other income (expense), net: |
||||||||
|
Interest expense, net |
(8,490 |
) |
(7,779 |
) |
||||
|
Gain (loss) from change in fair value of earnout liabilities |
11,776 |
(18,825 |
) |
|||||
|
Other expense, net |
(27 |
) |
(4 |
) |
||||
|
Total other income (expense), net |
3,259 |
(26,608 |
) |
|||||
|
Income before provision for income taxes |
31,981 |
2,236 |
||||||
|
Income tax expense |
3,001 |
5,673 |
||||||
|
Net income (loss) |
$ |
28,980 |
$ |
(3,437 |
) |
|||
Revenue
Revenue for the nine months ended September 30, 2025 decreased $1.5 million, or 1.0%, to $145.8 million compared to the nine months ended September 30, 2024. The decrease was primarily driven by an $8.5 million decrease in revenue from pellet procedures that resulted from a slowdown in new clinic additions coupled with lower procedure volumes from our existing clinics, compared to the nine months ended September 30, 2024. This decrease was partially offset by a $5.3 million increase in revenue from Biote-branded dietary supplements and a $0.8 million increase in service revenue for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024. The increase in Biote-branded dietary supplements resulted from the continued focus on promoting our e-commerce site with Amazon for the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024 when we were transitioning a portion of this business from a third-party distributor to our e-commerce site. The
increase in our service revenue for the nine months ended September 30, 2025, was related to a rise in technology fees earned from physician orders placed through our BioteRx platform compared to the nine months ended September 30, 2024.
Cost of revenue
Cost of revenue for the nine months ended September 30, 2025 decreased $4.1 million, or 9.2%, to $40.0 million compared to the nine months ended September 30, 2024. Cost of pellet procedures decreased 22.5% while revenue from pellet procedures decreased 7.5%, reflecting the continued cost savings from the vertical integration of Asteria Health coupled with the decrease in revenue from pellet procedures compared to the nine months ended September 30, 2024. Cost of Biote-branded dietary supplements increased $0.9 million for the nine months ended September 30, 2025 primarily as a result of the increase in Biote-branded dietary supplement revenue, compared to the nine months ended September 30, 2024.
Selling, General and Administrative
Selling, general and administrative expense for the nine months ended September 30, 2025 increased $2.6 million, or 3.6%, to $77.1 million compared to the nine months ended September 30, 2024. This increase was due to a $2.0 million increase in marketing expenses and was primarily driven by increased activity on our e-commerce site with Amazon as well as other strategic marketing activities, compared to the nine months ended September 30, 2024. Expenses related to our annual marketing event increased $0.4 million compared to the nine months ended September 30, 2024, partially due to a reduction in contributions from sponsors. For the nine months ended September 30, 2025, our bad debt expense increased $0.7 million compared to the nine months ended September 30, 2024 due to an increase in aging receivables and the timing of collections as of September 30, 2025. These increases were partially offset by a $0.7 million decrease in legal expenses incurred in connection with the 2024 acquisitions of Asteria Health and Simpatra.
Interest Income, Net
Interest expense, net for the nine months ended September 30, 2025 increased $0.7 million, or 9.1%, to $8.5 million compared to the nine months ended September 30, 2024 due to a $1.2 million increase in accreted interest related to our share repurchase liabilities and a decrease in interest income earned on our money market account as a result of lower cash balances during the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024. This increase was partially offset by a decrease in interest expense on our Term Loan due to a lower principal balance and lower monthly interest rates during the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024.
Gain (Loss) from Change in Fair Value of Earnout Liabilities
The change in fair value of the earnout liabilities was primarily due to a 51.4% decrease in the closing price of our Class A common stock during the nine months ended September 30, 2025, compared with an increase of 13.0% for the nine months ended September 30, 2024. In addition to the changes in the closing price of our Class A common stock during the nine months ended September 30, 2025 and 2024, other assumptions used to calculate the fair value of the earnout liability, such as stock price volatility, estimated timing of satisfying the Triggering Events and the risk-free rate varied from period to period, each of which impacted the fair value of the earnout liability and the associated loss recorded for the periods presented.
Other Income (Expense),Net
The change in other income (expense), net for the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024, was primarily due to foreign currency fluctuations during the period.
Income Tax Expense
Income tax expense for the nine months ended September 30, 2025 decreased $2.7 million compared to the nine months ended September 30, 2024. This decrease in expense was primarily driven by the decrease in the year-to-date and forecasted profit before tax as of September 30, 2025, compared to September 30, 2024, and a decrease in the forecasted annual effective tax rate.
Non-GAAP Measures
Adjusted EBITDA is a non-GAAP performance measure that provides supplemental information that we believe is useful to analysts and investors to evaluate the Company's ongoing results of operations when considered alongside net income (the most directly comparable U.S. GAAP measure).
We use Adjusted EBITDA as alternative measures to evaluate our operational performance. We calculate Adjusted EBITDA by excluding from net income: interest expense; depreciation and amortization expenses; and income taxes. Additionally, we exclude certain expenses we believe are not indicative of our ongoing operations or operational performance. We present Adjusted EBITDA because it is a key measure used by our management to evaluate our operating performance, generate future operating plans and determine payments under compensation programs. Accordingly, we believe that Adjusted EBITDA provides useful information to investors and others in understanding and evaluating our operating results in the same manner as our management. However, non-GAAP financial information is presented for supplemental informational purposes only, has limitations as an analytical tool and
should not be considered in isolation or as a substitute for financial information presented in accordance with U.S. GAAP. Some of these limitations are as follows:
•
although depreciation and amortization are non-cash charges, the assets being depreciated and amortized may have to be replaced in the future, and Adjusted EBITDA does not reflect cash capital expenditure requirements for such replacements or for new capital expenditure requirements;
•
Adjusted EBITDA does not reflect changes in, or cash requirements for, our working capital needs; and
•
Adjusted EBITDA does not reflect tax payments that may represent a reduction in cash available to us.
In addition, Adjusted EBITDA is subject to inherent limitations as it reflects the exercise of judgment by Biote's management about which expenses are excluded or included. Other companies, including companies in our industry, may calculate Adjusted EBITDA or similarly titled non-GAAP measures differently or may use other measures to evaluate their performance, all of which could reduce the usefulness of our Adjusted EBITDA as a tool for comparison. Investors are encouraged to review the reconciliation, and not to rely on any single financial measure to evaluate our business.
The following table presents a reconciliation of net income (loss) to Adjusted EBITDA for the three and nine months ended September 30, 2025 and 2024:
|
Three Months Ended September 30, |
Nine Months Ended September 30, |
|||||||||||||||
|
(in thousands) |
2025 |
2024 |
2025 |
2024 |
||||||||||||
|
Net income (loss) |
$ |
9,216 |
$ |
12,657 |
$ |
28,980 |
$ |
(3,437 |
) |
|||||||
|
Interest expense, net(1) |
2,733 |
3,542 |
8,490 |
7,779 |
||||||||||||
|
Income tax (benefit) expense |
(765 |
) |
3,198 |
3,001 |
5,673 |
|||||||||||
|
Depreciation and amortization(2) |
952 |
810 |
2,719 |
2,436 |
||||||||||||
|
Share-based compensation expense(3) |
2,410 |
2,245 |
` |
6,723 |
6,849 |
|||||||||||
|
Litigation expenses-former owner(4) |
68 |
122 |
300 |
711 |
||||||||||||
|
Litigation-other(5) |
323 |
401 |
1,215 |
493 |
||||||||||||
|
Legal settlement and related expenses(6) |
- |
18 |
(226 |
) |
18 |
|||||||||||
|
Inventory fair value write-up(7) |
- |
118 |
- |
1,324 |
||||||||||||
|
Transaction-related expenses(8) |
- |
37 |
- |
82 |
||||||||||||
|
Restructuring-related expenses(9) |
31 |
- |
586 |
- |
||||||||||||
|
Other expenses(10) |
833 |
67 |
1,685 |
1,354 |
||||||||||||
|
Merger and acquisition expenses(11) |
- |
200 |
110 |
995 |
||||||||||||
|
(Gain) loss from change in fair value of earnout liabilities |
(2,920 |
) |
(7,213 |
) |
(11,776 |
) |
18,825 |
|||||||||
|
Adjusted EBITDA |
$ |
12,881 |
$ |
16,202 |
$ |
41,807 |
$ |
43,102 |
||||||||
(1)
Represents cash and non-cash interest on our debt obligations, commitment fees for our unused Revolving Loans, net of interest income earned on our money market account. Interest expense, net, included accreted interest related to the share repurchase liabilities of $0.7 million and $2.7 million for the three and nine months ended September 30, 2025, respectively, and $1.1 million and $1.5 million for the three and nine months ended September 30, 2024, respectively.
(2)
Represents depreciation expense on property and equipment, amortization expense on capitalized software and amortization expense on purchased intangible assets. Depreciation expense included in cost of products was $0.2 million for each of the three and nine months ended September 30, 2025, respectively, and $0.01 million and $0.03 million for the three and nine months ended September 30, 2024, respectively.
(3)
Represents employee compensation expense associated with equity-based stock awards. This includes expense associated with equity incentive instruments including stock options and restricted stock units.
(4)
Represents legal expenses to defend the Company against claims asserted by the Company's former owner.
(5)
Represents litigation expenses other than those incurred in connection with claims asserted by the Company's former owner that are not related to the Company's ongoing business.
(6)
Represents litigation settlement gains or losses and related legal expenses.
(7)
Represents the fair market value write-up of inventory accounted for under ASC 805 related to the acquisition of Asteria Health.
(8)
Represents transaction costs including legal fees of $0.04 million and $0.08 million during the three and nine months ended September 30, 2024, respectively, which were incurred in connection with the filing of, and transactions contemplated by, the Company's securities offerings. No such filing fees were incurred during the three and nine months ended September 30, 2025.
(9)
Represents restructuring costs incurred during the three and nine months ended September 30, 2025 related to a workforce reduction primarily within our commercial organization.
(10)
Represents executive severance costs of $0.7 million and $1.2 million, strategic consulting and legal expenses related to the Chief Executive Officer transition of $0.1 million and $0.4 million and realized foreign currency losses of less than $0.01 million and $0.01 million for the three and nine months ended September 30, 2025. For the three months ended September 30, 2024, represents professional services fees of $0.07 million incurred related to the accounting treatment of the share repurchase liabilities and a realized foreign currency loss of less than $0.01 million. For the nine months ended September 30, 2024, represents professional services fees of $0.2 million incurred related to the accounting treatment of the share repurchase liability, strategic consulting and advisory services of $0.6 million, executive severance costs of $0.3 million, excise tax related to repurchases of Class A common stock of $0.2 million and a realized foreign currency loss of less than $0.01 million for the nine months ended September 30, 2024.
(11)
Represents legal fees and professional fees totaling $0.1 million incurred during the nine months ended September 30, 2025, to finalize the purchase price allocation of Asteria Health and for other strategic opportunities to expand the business. For the three months ended September 30, 2024, represents legal fees of $0.2 million and for the nine months ended September 30, 2024, represents legal fees of $0.7 million and professional services fees of $0.3 million incurred during the nine months ended September 30, 2024, respectively, related to our recent acquisitions and other strategic opportunities.
Liquidity and Capital Resources
Our liquidity is derived primarily from available cash and cash equivalents, cash generated from operations, capacity under our Revolving Loans and, when necessary, debt and equity financing activities. We believe that for at least the next 12 months, our current cash position, coupled with anticipated cash generated from operations and the capacity under our revolving loans, is sufficient to fund our operations and our debt service obligations. As of September 30, 2025 and December 31, 2024, we had cash and cash equivalents of $28.0 million and $39.3 million, respectively. Additionally, as of each September 30, 2025 and December 31, 2024, we had $50.0 million of Revolving Loans available under our Truist Credit Agreement.
Since our inception, we have financed our operations and capital expenditures primarily through capital investment from our founder and other members, debt financing in the form of short-term lines of credit and long-term notes payable, and net cash inflows from operations.
We expect our operating and capital expenditures to increase as we continue to execute our corporate growth plans designed to elevate our growth, achieve our strategic objectives and further advance patient health and wellness. If additional funds are required to support our working capital requirements, acquisitions or other purposes, we may seek to raise funds through additional debt or equity financings or from other sources. If we raise additional funds through the issuance of equity or convertible debt securities, the percentage ownership of our equity holders could be significantly diluted, and these newly issued securities may have rights, preferences or privileges senior to those of existing equity holders. If we raise additional funds by obtaining loans from third parties, the terms of those financing arrangements may include negative covenants or other restrictions on our business that could impair our operating flexibility and also require us to incur additional interest expense. We can provide no assurance that additional financing will be available at all or, if available, that we would be able to obtain additional financing on terms favorable to us.
Cash Flows
The following table summarizes our unaudited condensed consolidated cash flows:
|
Nine Months Ended September 30, |
||||||||
|
(in thousands) |
2025 |
2024 |
||||||
|
Consolidated Statements of Cash Flows Data: |
||||||||
|
Net cash provided by operating activities |
$ |
27,625 |
$ |
32,875 |
||||
|
Net cash used in investing activities |
$ |
(4,500 |
) |
$ |
(17,487 |
) |
||
|
Net cash used in financing activities |
$ |
(34,424 |
) |
$ |
(66,149 |
) |
||
Operating Activities
Cash flows from operating activities result primarily from fees associated with the Biote Method and from the sale of Biote-branded dietary supplements. Cash flows from operating activities are affected by earnings levels and changes in working capital related to our business. Working capital varies from period to period and can be affected by changes in our inventory levels due to varying demand for our products, the timing and amount of deposits required by our suppliers for future inventory purchases, the timing of cash collections on accounts receivable and the timing of repayments of our liabilities.
Net cash provided by operating activities for the nine months ended September 30, 2025 decreased $5.3 million to $27.6 million compared to $32.9 million for the nine months ended September 30, 2024. Our cash flow from working capital for the nine months ended September 30, 2025 was primarily impacted by a $4.7 million increase in cash used for inventory attributed to (i) the purchase
of raw materials, (ii) an increase in pellet inventory due to the slowdown in new clinic additions and lower procedure volumes from our existing clinics and (iii) our Biote-branded dietary supplement inventory depleting at a slower pace compared to the nine months ended September 30, 2024. Working capital for the nine months ended September 30, 2025 was also impacted by a $1.6 million increase in cash used to fund accounts payable, which was attributed to the timing of the receipt of invoices for inventory and other operating expenses and the subsequent payment of those invoices.
Investing Activities
Net cash used in investing activities decreased $13.0 million to $4.5 million for the nine months ended September 30, 2025, compared to $17.5 million for the nine months ended September 30, 2024. This decrease was principally driven by the acquisition of Asteria Health, Simpatra and BioSana during the nine months ended September 30, 2024, partially offset by an increase in purchases of property and equipment and capitalized software during the nine months ended September 30, 2025 of $0.8 million and $0.6 million, respectively.
Financing Activities
Net cash used in financing activities decreased $31.7 million to $34.4 million for the nine months ended September 30, 2025, compared to $66.1 million for the nine months ended September 30, 2024. Cash payments required under our repurchase liabilities decreased $37.1 million in 2025 to $25.1 million compared to $62.2 million in 2024. As of September 30, 2025, we have repaid approximately 67.4% of the liabilities. Additionally, cash used to repurchase Class A common stock decreased $2.2 million for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024, due to a decrease in the number of shares of Class A common stock repurchased and a lower average price paid per share in 2025. These decreases were partially offset by a $10.0 million repayment on borrowings under our revolving loans during 2024.
Critical Accounting Policies and Estimates
The discussion and analysis of our financial condition and results of operations are based upon our unaudited condensed consolidated financial statements, which have been prepared in accordance with U.S. GAAP. In preparing the unaudited condensed consolidated financial statements, we make estimates and judgments that affect the reported amounts of assets, liabilities, revenue, expenses, and related contingent liabilities. The methods, estimates, and judgments that we use in applying our accounting policies have a significant impact on the results that we report in our unaudited condensed consolidated financial statements. Some of our accounting policies require us to make difficult and subjective judgments, often as a result of the need to make estimates regarding matters that are inherently uncertain. Our estimates are based on historical experience, current economic and industry conditions and on various other assumptions that we believe to be reasonable under the circumstances. Because of the uncertainty inherent in these matters, actual results may differ from these estimates and could differ based upon other assumptions or conditions.
See Note 2, Significant Accounting Policies, to the audited consolidated financial statements included in our 2024 Form 10-K for more information about our significant accounting policies, including our critical accounting policies. The critical accounting estimates that reflect our most significant judgments and estimates used in the preparation of our consolidated financial statements are described in Part II, Item 7 "Management's Discussion and Analysis of Financial Condition and Results of Operations," included in our 2024 Form 10-K. During the three and nine months ended September 30, 2025, there were no material changes to our critical accounting policies and estimates from those discussed in our 2024 Form 10-K.
Recently Issued and Adopted Accounting Pronouncements
For a description of recent accounting pronouncements, see "Recently Adopted Accounting Pronouncements" and "Recent Accounting Pronouncements Not Yet Adopted" in Note 2 to the unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report.
JOBS Act Accounting Election
We are an emerging growth company, as defined in Section 2(a) of the Securities Act of 1933, as amended (the "Securities Act"), as modified by the Jumpstart Our Business Startups Act of 2012 (the "JOBS Act"). Section 107 of the JOBS Act provides that an emerging growth company can take advantage of an extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards applicable to public companies, allowing them to delay the adoption of those standards until those standards would otherwise apply to private companies. We have elected to use this extended transition period under the JOBS Act. As a result, our consolidated financial statements may not be comparable to the financial statements of companies that are required to comply with the effective dates for new or revised accounting standards that are applicable to public companies, which may make our common stock less attractive to investors.
We will remain an emerging growth company under the JOBS Act until the earliest of (i) December 31, 2026, (ii) the last date of our fiscal year in which we have total annual gross revenue of at least $1.235 billion, (iii) the date on which we are deemed to be a "large accelerated filer" under the rules of the SEC with at least $700.0 million of outstanding securities held by non-affiliates or (iv) the date on which we have issued more than $1.0 billion in non-convertible debt securities during the previous three years.
biote Corporation published this content on November 07, 2025, and is solely responsible for the information contained herein. Distributed via Edgar on November 07, 2025 at 21:07 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]