Biote (BTMD) Q2 FY26 earnings call: guidance and Q&A

What is the ideal type of inorganic opportunity for Biote, and how adjacent would it be to the core business?

The company is evaluating opportunities that can support and strengthen its current platform, expand its reach, and accelerate strategic objectives. These include capabilities to complement core offerings, adjacent products, and ways to enhance practitioner engagement.

“We are evaluating opportunities that can really support and strengthen the position that we're in now, the platform that we're participating in. And I would just say to really dive into your question a little bit is really we want to get into things that can expand our reach and accelerate our strategic objectives. These opportunities would include the capabilities to complement our core offering, adjacent products, too, and to basically enhance the practitioner engagement and other opportunities to broaden our footprint within the space.”

asked by Kaumil Gajrawala · answered by Robert Peterson

Are there any lingering effects from the Asteria recall, such as lost practitioners or changes in strategy, beyond the immediate financial impact?

The Asteria brand remains strong, and supply/inventory levels are solid. The company does not anticipate significant pushback on shifting inventory back to Asteria, indicating no material lingering effects on brand perception or practitioner loss.

“Specifically related to Asteria, I have to say that the Asteria brand itself remains quite strong. People appreciated what we had done. And I can say that as it relates to building inventory and driving stock, we're really in a solid place. And we don't see that there will be any challenges in pushing back shifting that inventory back over to Asteria.”

asked by Kaumil Gajrawala · answered by Robert Peterson

What led to lower volume than expected, specifically regarding elevated clinic attrition, and what measures are being implemented in H2 to drive better retention?

Attrition is stable at high single digits (~8%). The recall and supply challenges hurt same-store sales and procedure volumes. Supply issues are now resolved. H2 focus is on strengthening clinic retention and practitioner experience. The company found that monthly rep visits to accounts prevent attrition, which will be a key activity-based focus.

“Attrition is still sitting at the high single digits rate. No material change. I would just say we're sitting at around that 8% level. The biggest thing that I would say just from a driver, the recall and the supply challenges that we incurred did hit -- did hurt in the same-store sales area and on procedure volumes. ... when we are in accounts every month and in front of the practitioner, we don't lose that account. So with that in mind, knowing that attrition should improve.”

asked by Jungwon Kim · answered by Robert Peterson

Does the company currently have the right number of sales force personnel, or is further expansion needed?

The company has a full sales force. The current focus is on driving activity and performance through improved processes and operational systems, rather than further expansion.

“No, absolutely. I think the real key now we are -- we've got a full sales force, which is fantastic. And now really, it comes down to driving that activity focus on performance.”

asked by Jungwon Kim · answered by Robert Peterson

Is slower new clinic productivity due to delayed onboarding or lower utilization? Does guidance assume H2 improvement in productivity?

New customers haven't ramped as quickly, primarily because the sales force was focused on supporting recall-impacted clinics. Guidance assumes sequential quarter-over-quarter improvement in procedure revenue in H2, driven by the Phase 2 sales force productivity approach.

“I would say that from a new customer perspective that we bring in, we haven't seen them ramp as quickly as we would have liked. And I would think that, that is primarily due to the sales force being really focused on supply challenges in Q2. ... we are expecting to see quarter-over-quarter improvement sequentially. And I would just say that, that is going to be the primary driver that we expect on procedure revenue in the second half of the year based on the Phase 2 approach that we're going to be driving from a sales force productivity perspective.”

asked by Jailendra Singh · answered by Robert Peterson

What gives the company confidence in sequential improvement for procedure revenue in Q3, considering July trends or late Q2?

Confidence stems from the recall and supply challenges being resolved, ensuring adequate supply. Historical data showed growth before the recall, and the non-Asteria cohort maintained steady growth during the shortage. With supply normalized and increased field accountability, sequential improvement in H2 is a realistic expectation.

“we have to make sure that everybody is aware, the recall and the supply challenges are behind us. That's the -- knowing that we have adequate supply that is absolutely key. ... As we reviewed performance of our customers from the time of the recall to the end of Q2, what we saw was, as you're aware, well over 50% of our business was tied in to Asteria and the remaining portion of our business is tied into pellets from other providers. What we saw is that the Asteria cohort declined in overall procedure volume. And comparatively, when we looked at the non-Asteria cohort, those -- that cohort showed steady growth over a period during the supply shortage.”

asked by George Kelly · answered by Robert Peterson

SG&A was over $32 million, with legal expenses flagged. Was the settlement included in SG&A, and what is the normalized SG&A outlook?

Non-adjusted SG&A included legal expenses, which increased in Q2 due to accelerating several legal matters. These matters have been settled positively, with a total adjusted impact of around $6 million in H1. These settlements are expected to eliminate all material outstanding legal matters, leading to decreased legal expenses in the latter part of the year.

“So SG&A on -- non-adjusted SG&A included a lot of legal expense and the increases in legal for Q2 was due to the acceleration of several legal matters that involve depositions and a bunch of pre-litigation support. These legal matters were settled and resolved in a positive way, which will assist in decreasing expense in the latter part of the year. And I think the big thing to note here, George, is that with all of the -- with these settlements, this will pretty much eliminate all material outstanding legal matters. Many of these will now be resolved. So looking into -- from a modeling perspective, the total adjusted impact is around $6 million in the front half of the year.”

asked by George Kelly · answered by Robert Peterson