biote Corp. SEC 10-K Report

Biote Corp., a leading company in the hormone optimization space, has released its annual Form 10-K report, detailing significant financial growth, strategic initiatives, and operational highlights for the fiscal year. The report underscores the company's commitment to expanding its market presence and enhancing operational efficiency through strategic acquisitions and vertical integration.

Financial Highlights

• Total Revenue: $197.2 million, increased by 6.4% compared to the previous year, driven by a rise in procedure revenue and service revenue.
• Cost of Revenue: $58.1 million, reflecting a slight increase due to higher volumes at sustained unit costs.
• Income from Operations: $31.6 million, showing an improvement from the previous year, attributed to increased revenue and cost management.
• Net Income: $0.05 million, a turnaround from a net loss of $2.8 million in the prior year, indicating improved profitability.
• Adjusted EBITDA: $58.2 million, up from $55.3 million, highlighting operational efficiency and cost control measures.

Business Highlights

• Business Model: Biote Corp. operates a high-growth practice-building business in the hormone optimization space, providing a comprehensive platform for practitioners to optimize hormone levels using personalized solutions. The Biote Method includes education, training, certification, practice management software, and marketing support.
• Revenue Segments: The company generates revenue primarily from service fees associated with the Biote Method and sales of Biote-branded dietary supplements, which account for approximately 18% of annual revenues.
• Geographical Performance: As of December 31, 2024, Biote's operations are concentrated in 10 core states, including Texas, Oklahoma, New Mexico, Colorado, Arkansas, Louisiana, Mississippi, Alabama, Georgia, and Florida, which collectively generated approximately 55% of the company's revenue.
• Sales Units: Biote has contracted with over 8,600 practitioners in more than 4,700 clinics, with approximately five million hormone optimization procedures performed to date, including more than 400,000 active patients.
• New Product Launches: The company has expanded its line of Biote-branded dietary supplements to include 24 products, leveraging its practitioner base for distribution.
• Practitioner Growth: In 2024, Biote contracted with over 900 new partnered clinics, contributing to 66% of the company's revenue growth for the year.
• Future Outlook: Biote plans to expand its U.S. geographic footprint and increase its field sales and support staff in 2025. The company is also exploring international expansion opportunities in Latin America, Europe, and Asia.
• Competitive Strengths: Biote's proprietary end-to-end hormone optimization platform, strong brand recognition, and comprehensive training and support for practitioners are key competitive advantages.
• Supply Chain Management: The company maintains a stable supply chain for its dietary supplements, with 11 U.S.-based suppliers and a third-party logistics partner for distribution.
• Intellectual Property: Biote holds three U.S. design patents related to trocars and a portfolio of 25 trademark registrations or applications worldwide, supporting its competitive position in the market.

Strategic Initiatives

• Vertical Integration: The company has focused on vertical integration to enhance operational efficiency and reduce production costs, exemplified by the acquisition of Asteria Health, a 503B manufacturer of compounded bioidentical hormones, for $9.0 million. This strategic move is part of a broader effort to strengthen control over the supply chain and manage the vendor network more effectively.
• Asset Acquisitions: The company executed asset purchase agreements with BioSana ID LLC and Simpatra, LLC to acquire certain assets and intellectual property, further supporting its strategic growth initiatives.
• Capital Management: The company has been actively managing its capital through various activities, including a significant share repurchase liability payment of $62.2 million related to litigation settlements. It also repurchased $5.6 million of Class A common stock during the year. The company maintains a revolving loan capacity of $50.0 million under its Truist credit agreement, which remains available for future liquidity needs.
• Future Outlook: Looking ahead, the company plans to continue its focus on vertical integration and strategic acquisitions to support growth and operational efficiency. It anticipates increased operating and capital expenditures as it expands its operations and clinic base. The company is also exploring additional debt or equity financing options to support working capital requirements and potential acquisitions, while being mindful of the potential impact of market conditions on its ability to raise capital.

Challenges and Risks

• Market Acceptance: The company's success heavily depends on the market acceptance of the Biote Method and Biote-branded dietary supplements. There is uncertainty regarding how quickly clinics, practitioners, and patients will adopt these methods. Demonstrated health risks or side effects associated with hormone replacement therapy (HRT) could negatively impact perception and adoption, leading to a material adverse effect on the business.
• Supply Chain Risks: The company relies on third-party outsourcing facilities for the production of bioidentical hormone pellets and dietary supplements. Any failure by these facilities to comply with regulatory requirements or to maintain quality control could disrupt supply and adversely affect the business. The termination of the Pharmacy Services Agreement with AnazaoHealth Corporation, effective May 1, 2025, poses a risk to the supply chain. The company may face challenges in negotiating new agreements with alternative suppliers, which could impact operations.
• Geographic Concentration: Geographic concentration of Biote-certified practitioners and Biote-partnered clinics in certain U.S. states makes the company sensitive to regional regulatory, economic, and competitive conditions. Any adverse changes in these regions could materially affect the business.
• Competition: The company faces significant competition in the hormone replacement therapy and dietary supplement markets. Competitors with greater resources may impact Biote's ability to maintain market share and achieve growth.
• Regulatory Risks: Regulatory risks are significant, as the healthcare industry is highly regulated. Non-compliance with federal and state healthcare laws, including the Anti-Kickback Statute and HIPAA, could result in severe penalties and harm the company's operations.
• Expansion Challenges: Management acknowledges the challenges of expanding into new geographic areas, both domestically and internationally. The company plans to grow its presence in Puerto Rico, Mexico, the Dominican Republic, and potentially expand into Argentina, Brazil, Colombia, and Canada. However, this expansion involves significant operational challenges and regulatory compliance risks.
• Long-term Growth Focus: The company is focused on long-term growth, which may negatively impact short-term financial results. Investments in marketing, acquisitions, and international expansion are expected to drive future growth, but may not yield immediate returns.
• Market Risks: The company is exposed to market risks, including fluctuations in interest rates due to variable rate debt under the Credit Agreement. Recent increases in interest rates have impacted borrowing costs, and further increases could adversely affect financial performance.
• Natural Disasters: The company is also subject to risks related to extreme weather conditions and natural disasters, which could disrupt operations and supply chains. Recent hurricane-related closures of medical clinics in key markets highlight the potential impact of such events on the business.

SEC Filing: biote Corp. [ BTMD ] - 10-K - Mar. 14, 2025