Medifast (MED) Q3 2026 Earnings Call: Coach Productivity Rises, Q4 Profitability Target Reaffirmed

Key Takeaways

• Q3 2026 revenue fell 19.4% year over year to $72 million, within management’s guidance range, primarily due to a lower number of active earning coaches.
• Active earning coaches declined to approximately 10,200 from 19,500 a year earlier. However, average revenue per active earning coach increased 54.1% to $7,064.
• GAAP net loss widened to $17.5 million, or $1.57 per diluted share, reflecting lower gross profit and Project Catalyst restructuring costs. Adjusted net loss was $2.1 million, or $0.19 per diluted share.
• Medifast ended the quarter with $172.5 million in cash, cash equivalents and investments and no debt.
• Management expects Q4 revenue of $55 million to $75 million, EPS of $0.00 to $0.25, and adjusted EBITDA excluding interest income of $2 million to $6 million.
• Management said Medifast remains on track to deliver profitability in Q4 2026, supported by cost reductions and continued coach productivity growth, although coach count is expected to keep declining through year-end.

Key Financial Data

Business and Operating Performance

Medifast continued the rollout of its 3.0 strategy during the quarter. The company launched the Trilivy brand, Reset products, an enhanced coach compensation plan and the Trilivy Business Blueprint training platform.

The compensation plan is designed to simplify coach advancement and emphasize the development of productive Executive Director organizations. Management said the percentage of active earning coaches at Executive Director rank or above increased both year over year and sequentially.

Early adoption of Trilivy Reset was high. According to preliminary company data, 95% of active earning coaches were offering the product line to clients in September. Medifast expects all SKUs to be converted to the new Reset Fuelings by the end of Q4.

Trilivy is structured around three phases: Reset, Refine and Renew. Management said the system is intended to broaden Medifast’s positioning from weight loss to metabolic health, with an emphasis on reducing fat while preserving lean mass and supporting longer-term client engagement.

The company cited an independent 16-week clinical study in which its Reset 5 & 1 plan reduced visceral fat by 14% while retaining 98% of lean mass.

Project Catalyst was largely executed during Q3. The restructuring included facility closures, the retirement of internal software, workforce reductions and other cost realignment measures. Management said the program is intended to lower expenses without reducing the company’s ability to scale if revenue returns to growth.

Management Guidance

Management expects active earning coach count to continue declining through the end of 2026. It nevertheless anticipates coach productivity will improve both year over year and sequentially in Q4.

The company reiterated its target of achieving profitability in Q4 2026. Management expects the Catalyst savings, process improvements and greater use of artificial intelligence to support operating leverage, while noting that additional efficiency opportunities may remain in 2027.

Risks and Watch Items

• The active earning coach base remains substantially below the prior-year level and is expected to decline further through year-end.
• Management identified rapid GLP-1 adoption across the traditional weight-loss category as a contributor to the decline in coaches and revenue.
• Q3 GAAP results were significantly affected by $13.8 million of Catalyst restructuring charges within SG&A, along with additional charges in cost of sales.
• Revenue stabilization depends partly on higher coach productivity offsetting a smaller coach network. A return to coach and revenue growth has not yet occurred.
• Medifast does not centrally track GLP-1 use at the individual customer-order level, limiting its ability to quantify spending differences between customers using GLP-1 medications and those who are not.

Analyst Q&A Highlights

Management said field engagement remained high following the Trilivy launch. It attributed rising productivity alongside falling coach count partly to the redesigned compensation plan, which prioritizes productive Executive Director organizations over the absolute number of active coaches.

On competition from GLP-1 medications, management said coaches are increasingly focusing client discussions on the quality of weight loss, including lean-mass preservation and muscle health. Medifast views medication as a potential catalyst for clients to begin a health program rather than as a standalone substitute for nutrition, lifestyle support and coaching.

The company could not provide comparative customer-spending data for GLP-1 users because it does not track medication use by individual order. Available information is based on anonymous surveys and anecdotal field feedback.

On expenses, management said further savings may come from process improvements and artificial intelligence. It also expects the leaner operating structure to reduce the amount of fixed costs that would need to be restored if revenue returns to growth.

Full Earnings Call Transcript

Complete Earnings Call Transcript

Management Remarks

Operator

Greetings. Welcome to Medifast's Third Quarter 2026 Earnings Conference Call. [Operator Instructions] Please note that this conference is being recorded. At this time, I'll turn the conference over to Matt Daryman, Manager of Investor Relations. Thank you, Matt. You may now begin.

Matthew Daryman

Good morning, and welcome to Medifast's Third Quarter 2026 Earnings Conference Call. On the call with me today are Nick Johnson, Chief Executive Officer; and Jim Maloney, Chief Financial Officer. By now, everyone should have access to the earnings release for the third quarter ended September 30, 2026, that went out this morning at approximately 8:05 a.m. Eastern Time. If you have not received the release, it is available on the Investor Relations portion of Medifast's website at www.medifastinc.com. This call is being webcast, and a replay will also be available on the company's website.

Before we begin, we would like to remind everyone that today's prepared remarks contain forward-looking statements, and management may make additional forward-looking statements in response to your questions. The words believe, expect, anticipate and other similar expressions generally identify forward-looking statements. These statements do not guarantee future performance, and therefore, undue reliance should not be placed on them. Actual results could differ materially from those projected in any forward-looking statements. All of the forward-looking statements contained herein speak only as of the date of this call. Medifast assumes no obligation to update any forward-looking statements that may be made in today's release or call. Now I would like to turn the call over to Medifast's Chief Executive Officer, Nick Johnson.

Nicholas Johnson

Thanks, Matt, and good morning, everyone. Thanks for joining us on the call today and for your continued interest in Medifast. Our third quarter was all about execution. With our new brand, Trilivy, now live, new products available and an enhanced compensation plan and unified coach training platform launched, our 3.0 business is rolling out. Early results are already showing up in the field. We delivered revenue in line with guidance at $72 million, continuing the trend of stabilizing revenue around $75 million for the fourth consecutive quarter, and coach productivity continues to improve.

We believe these trends leave us well positioned to deliver profitability in the fourth quarter. We ended the quarter with $173 million in cash and investments and no debt, and our enterprise value continues to sit below the value of our cash and investments. A debt-free balance sheet and a leaner cost structure give us a stable base from which to grow and invest in initiatives that can help deliver scale and profitability. Trilivy is differentiating Medifast in a large and growing metabolic health market, a market that we believe our coaches are well positioned to own.

Over the past few months, we launched the Medifast Metabolic Health Institute, introduced our MetaVantage Technology ingredient platform and brought new products and trainings to market that are designed to give us a solid foundation to deliver for clients in the metabolic health category. The brand marks the latest step in our transition from a weight loss company to a metabolic health business, where weight loss is just one outcome of better overall metabolic health. Weight loss remains important, but the quality of the weight loss matters more than ever. That means preserving lean mass, protecting muscle and over time, building it. Our 3-phase metabolic health system is designed to deliver those outcomes, starting with Reset as the first phase.

Our 10-year growth strategy is a road map that is designed to expand what we offer coaches and clients within a comprehensive metabolic health system. We are still at the start of that journey. But with our major launches now in market, we are shifting our focus to getting the best possible return out of what we have built. Whether we are talking to investors, coaches or employees, I consistently emphasize how we are building our 3.0 organization around 4 core tenets: speed, simplicity, scale and stewardship. Each of these showed up across our business in concrete ways this quarter.

Speed is evident in the pace of the launches we've brought to market this year. We took Reset Fuelings from an employee and coach pilot in the spring to having products available for coaches and clients by August, with all SKUs expected to be converted to the new Reset Fuelings by the end of Q4. We also introduced our new compensation plan and product line within days of each other. We have to make decisions quickly and move resources toward the areas that we believe can best drive growth and do that on a consistent and effective basis.

Simplicity is at the heart of the new compensation plan and the new unified training system called the Trilivy Business Blueprint. The new compensation plan simplifies the structure of our coach organization, rewards coach productivity and streamlines how coaches advance through the plan. The Trilivy Business Blueprint consists of the 6 fundamental skill sets every coach needs to build their business. By focusing on these 6 core fundamentals, we reduce low value-add administrative tasks, which allows coaches to focus their energy on activities that fuel the flywheel, namely consistent client acquisition, quality client support and sponsoring new coaches.

An example of our commitment to scaling is the Coach Hub. The Coach Hub, created by a group of our top field leaders, is where coaches go to learn how to put those 6 fundamental skill sets into practice with everything they need housed in one place. Alongside this, our Trilivy Coach Certification sets a consistent standard of knowledge across the field. When coaches increase their productivity and reach the rank of Executive Director, then sponsor new coaches and teach them to do the same, we fuel the flywheel that grows our business.

Finally, stewardship is our commitment to making sure that we are providing coaches with an environment in which they can grow their businesses over the long term while also being profitable as a business. That means holding firm on cost while protecting the capabilities that drive growth. This is the principle behind Catalyst, which I'll speak more about in a moment. On the whole, the indicators we are seeing in our business right now are those that have historically come before coach growth and revenue growth.

Coach productivity improved year-over-year for the fourth consecutive quarter to 54% in Q3 and grew an estimated 8% sequentially, and we expect that trend to continue through the rest of 2026. The percentage of active earning coaches at Executive Director rank or above rose both year-over-year and sequentially. Retention among Premier+ clients from the first to the second month has stabilized with September coming in 6 percentage points higher than Premier. Our enhanced compensation plan was designed to accelerate this kind of leadership development, and we are encouraged by what we have seen in the first 2 months since launch.

While these results are promising and represent historical indicators of growth, the total number of active earning coaches remains below last year's level, and we expect that trend to continue in the near term. Our Trilivy metabolic health system is designed as a 3-part system. Our foundational phase, Reset, is followed by Phase II and Phase III, Refine and Renew, respectively. These will support clients in maintaining their progress over time and ultimately help them to achieve optimal metabolic health. Refine is designed to improve metabolic flexibility and refine body composition with the overall goal to help enhance metabolism through better fuel use, leading to less fat storage and more muscle mass. The Renew phase is focused on optimizing metabolic health for long-term vitality. For our coaches, they provide additional tools to help support long-term client engagement with the Trilivy metabolic system.

The energy we saw at our sold-out convention in July has carried through this quarter. We're seeing coaches embrace the new brand and products enthusiastically, and we're hearing from them that their conversations with clients increasingly center on metabolic health markers like visceral fat and lean mass. That shift in how our coaches describe what we do is an important part of what makes Trilivy different. Trilivy is giving our coaches something new to talk about as well as a clearer way to talk about it. Medifast's work is built on more than 45 years of clinical and scientific heritage. It's that understanding that has led us to metabolic synchronization, our proprietary science focused on burning fat, preserving lean muscle and protecting metabolic health. In an independent clinical study, our Reset 5 & 1 plan reduced visceral fat by 14% while retaining 98% of lean mass over 16 weeks.

Reset Fuelings are the first products to fully use our MetaVantage Technology platform, a set of proprietary ingredient formulas designed to optimize metabolic health. The MetaVantage Reset formula helps unlock key metabolic pathways, reducing waist circumference while also supporting normal fat metabolism and healthy insulin. Since the new Trilivy brand and Reset launch in August, MetaVantage has been well received. Early feedback indicates strong interest in the new formula and its role in supporting the full spectrum of metabolic health.

We are continuing to monitor results and coach feedback to determine the impact of launch, but preliminary data indicates fast adoption of our new Trilivy Reset products with 95% of our active earning coaches in September already offering the line to clients. We believe that this product line will extend our ability to meet the needs of an expanded set of clients and deepen our differentiation in a crowded market.

Metabolic health is a large global business opportunity. Key members of our Medifast Metabolic Health Institute recently attended McKinsey and Stanford Medicine's Metabolic Health Business Building Summit 2026, where panelists size the existing metabolic health market at $12 trillion with an additional $16 trillion in prevention and optimization that is still largely untapped. The panelists expect that the biggest returns will go to companies that build ecosystems and business models, not just new interventions.

Our own view of the market opportunity supports this. More than 90% of U.S. adults are metabolically unhealthy, and we see similar issues around the globe. Our survey of more than 1,000 U.S. adults conducted last September shows that nearly 94% of Americans are concerned about at least one aspect of their metabolic health and 85% believe metabolic dysfunction can be reversed, yet 80% say they have limited understanding of what metabolic health means. That gap between concern and understanding is an area of opportunity for our coaches to educate and support.

GLP-1 medications continue to accelerate interest in metabolic health. Our view is that long-lasting and sustainable results depend on lifestyle change, nutrition, support and coaching in addition to the medications and that the businesses that win will be capable of providing an offer that works alongside them rather than competing with them. Weight loss remains important, but the quality of the weight loss matters more than ever. That means preserving lean mass, protecting muscle and over time, building it. Our 3-phase Trilivy system is designed to do exactly that, supporting people across the entire spectrum of their health journey, whether they are on medication, transitioning off it or never started.

One of the clearest signs of confidence in our direction this quarter comes from further developments in the field. This company was built on the belief of our founder of the mission and independent Trilivy Coach, Dr. Wayne Scott Andersen, who after leaving his medical practice as a critical care physician, dedicated himself to a new mission of lifelong transformation. He invested capital into the business, but also brought incredible energy to the mission as well as deep trust in the power of people to carry that mission into the world. Dr. Andersen continues to play a leadership role in our coach community today. And what we're seeing now is the next generation of leaders stepping forward with that same level of conviction.

Like Dr. Andersen did all those years ago, a select group of coach leaders are now raising their hands to lead the future growth of the business. They are choosing to invest their time and leadership as well as their own capital through ownership in the company. The same energy and sense of collaboration that we saw earlier in our journey with Dr. Andersen and others is now being demonstrated by a new generation of leaders at key events such as the Trilivy Leadership Symposium or even at the ringing of the closing bell at the New York Stock Exchange in September. This all reflects their deep belief in our mission, confidence in the direction we're headed and their clear view of the market opportunity in front of us.

We view this as a generational moment for our company. What started with the vision and belief of one founder is now being amplified by a new generation of leaders who are choosing to put something meaningful behind their belief and take greater ownership for building what comes next. I'm proud of the partnership with our leaders in the field, which was built and strengthened through my almost 10 years as President. I'm also honored to work alongside the incredible team members at Medifast.

Since I stepped into the CEO role in June, my focus has been on accelerating the 3.0 strategy that our leadership team developed together. That means changing the way our teams work so that we can move faster while keeping firm control on cost. Bringing a comprehensive metabolic health system to market this year, built on new science and new products and supported by a new digital ecosystem and a dedicated research arm shows what we can accomplish when we align around our 4 tenets. Together, they give us the platform to deliver our 10-year growth strategy and become a global leader in metabolic health.

With the organizational and structural work now complete, our team is focused on delivery. We launched our Catalyst program in the second quarter and the majority of its execution took place this quarter. These cost realignment initiatives are designed to accelerate our path to profitability and growth. Catalyst is driving additional savings through facility rationalization, AI-related efficiencies, sunsetting of nonstrategic IT applications and reductions in force to align with our current revenue levels. The program is designed so that it brings down costs while not negatively impacting our ability to grow. It builds on initiatives over the past several years that significantly reduced our cost base while preserving our core capabilities, and we will continue to review our costs for further opportunities.

We are also applying AI more broadly across the business. And over time, we anticipate it helping us move faster in product development and in the tools used by our coaches. Our near-term commitment has not changed. We are targeting profitability in the fourth quarter of 2026, and we believe we are on track to deliver it. Speed, simplicity, scale and stewardship are how we will get there. This quarter, we moved quickly to put 3.0 into the market, made it simpler for coaches to build their businesses, put in place standards and systems that will allow the field to grow and held firm on costs.

We believe we have a solid strategy for long-term growth, a brand and product line that set us apart, science that continues to strengthen and a coach network that is leaning into the metabolic health opportunity. We still have work to do, particularly in growing our coach count, but we enter the fourth quarter with each piece of our strategy in place. Our attention is now on delivering results. With that, I'll hand over to Jim to run through the financials.

James Maloney

Thank you, Nick. Good morning, everyone. Third quarter 2026 revenue and EPS were within our guidance range, supported by a successful Trilivy launch and a fourth consecutive quarter of year-over-year coach productivity growth. Revenue for the third quarter was $72 million, a decrease of 19.4% versus the year earlier period, primarily due to a decrease in the number of active earning coaches. We ended the quarter with approximately 10,200 active earning coaches compared to 19,500 for the third quarter of 2025.

The company continues to see an impact from the rapid adoption of GLP-1 medication across the traditional weight loss category, which is contributing to this decline. During the third quarter, we continued to focus on developing a network of the most productive Executive Director organizations, which we believe is an important step in returning to coach growth and ultimately, revenue growth. This work resulted in average revenue per active earning coach for the third quarter of $7,064, a year-over-year increase of 54.1%. As Nick mentioned, this metric is now at its highest level in many years, trending notably higher on both a year-over-year and sequential basis.

We executed on a restructuring action during the quarter, Project Catalyst, which included facility closures, sunsetting of internal use software and other related restructuring activities. These changes primarily impacted SG&A with smaller amounts impacting cost of sales. The specific actions were designed to realign the cost structure of the business with current sales volumes while maintaining sufficient capacity to scale the business upon our return to growth. Gross profit for Q3 2026 decreased 19.5% year-over-year to $50 million, driven by lower sales volumes. Gross profit margin for the current quarter was 69.5% for both the current and prior period, with current period Catalyst charges of 230 basis points, substantially offset by 220 basis points of costs to reformulate the Essential line in the prior period.

On a non-GAAP adjusted basis, which excludes expenses related to Catalyst, gross profit decreased 16.9% to $51.7 million and moved 220 basis points higher as a percent of revenue to 71.7%. SG&A expense was up 4.8% year-over-year to $69.4 million, primarily due to $13.8 million of Catalyst Restructuring charges, partially offset by a $6.6 million decrease in coach compensation on lower volume and fewer active earning coaches and a $1.4 million decrease in IT consulting spend. SG&A as a percentage of revenue increased 22 percentage points, primarily due to approximately 19 percentage points of Catalyst Restructuring costs and 3 percentage points related to our Trilivy convention, for which no convention was held in the comparable year ago period. On a non-GAAP adjusted basis, which excludes expenses related to Catalyst, SG&A decreased 16% to $55.6 million and moved 310 basis points higher as a percent of revenue to 77.2%.

Loss from operations was $19.4 million in the third quarter of 2026 as compared to $4.1 million for the year earlier period, primarily as a result of lower gross profit and Project Catalyst costs impacting SG&A. As a percentage of revenue, loss from operations was 26.9% in the third quarter as compared to 4.6% in the year earlier comparable period. On a non-GAAP adjusted basis, loss from operations improved by 3.2% to $4 million and moved 90 basis points lower as a percent of revenue to 5.5%. Other income, which is primarily comprised of interest income on cash, cash equivalents and investments in both the current and comparable period, increased $0.1 million year-over-year to $1.5 million.

Income tax benefit for the period was $0.3 million, an effective rate of 1.8%, as compared to $0.4 million for the third quarter of 2025, an effective rate of 14.9%. Due to the existence of a full valuation allowance against its deferred tax assets recorded as of December 31, 2025, the company calculated income tax expense for the current period based on actual results for the quarter. The company's income tax provision for the period reflects discrete items, primarily a $0.4 million change in unrecognized tax benefits due to finalization of a state tax examination, partially offset by $0.1 million of state income taxes. The non-GAAP adjustments do not impact the income tax benefit for the period as a result of the valuation allowance.

Net loss in the third quarter of 2026 was $17.5 million or $1.57 per diluted share, compared to $2.3 million or $0.21 per share in the year earlier period. On a non-GAAP adjusted basis, net loss in the third quarter was $2.1 million or $0.19 per diluted share. Adjusted EBITDA, which excludes stock-based compensation and Catalyst charges, increased 29.7% to $0.4 million, and adjusted EBITDA, excluding interest income, increased 9.7% to $1.9 million. With respect to our balance sheet, we ended the quarter with $172.5 million in cash, cash equivalents and investments, and no debt as of September 30, 2026.

Now I'll turn to guidance. We are expecting fourth quarter revenue to range from $55 million to $75 million and income per share for the quarter to range from $0 to $0.25. While we expect to continue to see the active earning coach count to decline through the end of the year, we expect to see continued coach productivity growth during the quarter, up both year-over-year and sequentially. For the full year 2026, we expect revenue to range from $280 million to $300 million and loss per share between $1.80 and $2.05. For the full year 2026, on a non-GAAP basis, we expect loss per share between $0.45 and $0.70. We are expecting fourth quarter adjusted EBITDA, excluding interest income, to range from $2 million to $6 million. For the full year 2026, we are expecting adjusted EBITDA, excluding interest income, to range from $10 million to $14 million. With that, let me turn the call back to the operator for questions.

Operator

[Operator Instructions] And our first question is from the line of Jim Salera with Stephens.

Question-and-Answer Session

James Salera

Nick, I wanted to start with some conversations you've had with folks in the field given the continued increase in the coach productivity, kind of, balanced against the decline in the active number of coaches. Can you just share some thoughts, given you guys have a lot of these operational changes, how they're responding, how they're responding to the new product rebranding, reformulation and just, kind of, engagement that you're seeing with the field team?

Nicholas Johnson

Sure. Thanks for the question. What we're experiencing since the launches that took place in the quarter is actually high engagement and energy levels. From -- if you look at the compensation plan enhancement, what we did was we simplified the compensation plan, and we anchored the new plan on the creation of healthy Executive Directors, and Executive Directors are high-producing coaches. So we would expect productivity to improve while the quantity of active earning coaches goes down, we're expecting the quality of those coaches to actually improve, and that was a design change in the plan itself.

The other launches have been received very positively. As I said in my prepared remarks, we had a sold-out convention where we launched all of these 3.0 initiatives for this first phase. And we see generally excitement continue to build. As I also said in my prepared remarks, the field has unified their training system around the Trilivy Business Blueprint that's anchored on those 6 foundational core training principles. And then they launched a Coach Hub, which is really a one-stop shop for their training system, all anchored on the metabolic health opportunity.

James Salera

Can you share any feedback from the coaches just about the competitive landscape? I know if you look at any sort of sporting event or really any prominent television event, there's a lot of advertisements for all these, kind of, online places you can order GLP-1s and people talking about various kind of AI-enabled or AI-assisted weight loss. Can you just, kind of, talk about how the field team deals with that competitive set, if you see more of the customers blending some of those offerings with your offerings and how we should think about that as we, sort of, try to look at a point of stabilization for the top line?

Nicholas Johnson

I think a good way to think about that, well, first of all, yes, the GLP-1s are ubiquitous in the marketplace, and our coaches do experience them with their clients. Many of them have coached multiple clients on GLP-1s, and we have stats to support that. So they're not running away from the conversation. The conversation is inside of their conversations with their clients and their coaches.

And so what I can tell you is that the nature of the conversation has changed from simply the amount of weight that you're losing, which is just one indication, to the quality of the weight that you're losing. And that's very, very encouraging, because what we see with people who are on GLP-1s without the type of system to support the changes that they're undergoing is that many people are losing a lot of lean mass. They're losing lean muscle, skeletal muscle, which is very difficult to rebuild after a certain age in particular. And so those conversations are happening. So the shift, I would characterize as a conversation from just the quantity of the weight that's being lost to the quality of the weight that is lost, the preservation of lean mass, the building of lean muscle.

And not only that, it's the key role that, that muscle plays in resetting one's metabolism and then building metabolic flexibility. So I would say that the conversations are evolving, and they're developing in the metabolic health space in the field today. And in the words of many of our top leaders, the GLP-1s are simply a catalyst for many people to start on their health journey. But they know because they've seen and watch these clients progress through that cycle that the GLP-1s alone without a system to support those changes are simply not enough to sustain long-term and lifelong transformation.

James Salera

Do you have any color around average spending per customer that's on a GLP-1 versus one that's just exclusively using your program?

James Maloney

Yes. I mean, Jim, this is Jim Maloney. So that -- that data, we have some anecdotal data, which we don't want to really share anecdotal data, but it's -- we have -- we don't know exactly each and every customer that's on a GLP-1 centrally as a company. To get the data we have presented before, we have taken surveys of people that are anonymous that we know the percent of clients that are on a GLP-1, but we don't specifically track it by order, if that makes sense.

James Salera

Yes. Understood. Maybe, Jim, one more on your end. Is there anything else in SG&A? I know you guys have had this kind of ongoing cost-out program. Is there anything else in SG&A that we should think about as being able to come out other than the coach compensation adjustment, which is obviously variable based on the top line? But any other, sort of, efficiencies that we can extract from the operating model?

James Maloney

Yes. I mean we're not -- the Catalyst program was designed around the concept of, as Nick mentioned, speed and simplicity, and we're looking at removing costs all the time that do not impact growth. And we believe we've got a good balance there. So we're continuing to look at process improvement. In our prepared remarks, we mentioned regarding AI and capabilities with AI. We're actually starting to see real results on that. I would say the Q4 results, we feel very -- when you look at the bottom line, we feel good about where we're at in removing costs that don't impact growth.

But we're -- as we're looking into 2027, we believe there's more to do on that front. And it's going to be more regarding process improvement, looking at artificial intelligence and capabilities on that front. And as we get back to growth, and this is the more important part of that, as we get back to growth, we believe we're not going to have to add back certain fixed costs that we had in the past because of process improvement in AI. So we do believe there's going to be leverage in our P&L as we grow in the out quarters that are very improved that will help our operating income in the future.

Operator

At this time, I'll turn the floor back to Nicholas Johnson for any closing comments.

Nicholas Johnson

Thank you for joining us today and for your continued interest in Medifast. Our quarter was all about execution, and we remain focused on delivering 3.0, which is our 10-year growth strategy. We are energized by the positive momentum in coach productivity and engagement, and we are confident that the foundational work we are doing today, centering on speed, simplicity, scale and stewardship, leave us well positioned to deliver profitability in the fourth quarter. We look forward to seeing you all on our next call. Have a great day.

Operator

Ladies and gentlemen, thank you for your participation. This does conclude today's teleconference. You may disconnect your lines at this time, and have a wonderful day.