Biote Corp. 10-Q Summary: Q1 2026
Business Context and Reporting Period
This summary covers the quarterly period ended March 31, 2026. Biote Corp. operates as a single segment business providing the "Biote Method," a platform for hormone optimization using bioidentical hormone replacement pellet therapy, alongside a line of dietary supplements. The company trains physicians and nurse practitioners and manages inventory for its network of clinics.
Key Financial Metrics
| Metric | Q1 2026 | Q1 2025 |
|---|---|---|
| Total Revenue | $44.9 million | $49.0 million |
| Net Income | $2.7 million | $15.8 million |
| Net Income Attributable to Stockholders | $2.3 million | $13.7 million |
| Adjusted EBITDA | $8.7 million | $13.8 million |
| Operating Cash Flow | $3.9 million | $6.5 million |
| Cash and Equivalents (End of Period) | $5.3 million | $41.7 million |
| Total Debt (Term + Revolving) | $106.6 million | $108.1 million |
| Stockholders' Deficit | ($48.0 million) | ($50.4 million) |
Material Changes vs. Prior Period
- Revenue Decline: Total revenue decreased 8.3% year-over-year. Product revenue from pellet procedures dropped $4.7 million due to lower procedure volumes and inventory constraints caused by a voluntary recall. This was partially offset by a $1.8 million increase in dietary supplement revenue.
- Profitability Drop: Net income fell significantly, primarily driven by a reduction in the non-cash "Gain from change in fair value of earnout liabilities" (from $10.7 million in Q1 2025 to $2.1 million in Q1 2026) and increased legal expenses.
- Cash Position: Cash and cash equivalents decreased by $18.8 million to $5.3 million. This was largely due to a $18.5 million payment to settle share repurchase liabilities and $1.1 million in open market share repurchases.
- Cost Structure: Cost of revenue increased 10.9% despite lower revenue, reflecting a shift in sourcing pellets to third-party vendors due to the recall. SG&A expenses rose 4.1% due to increased legal-related expenses ($3.3 million increase).
Outlook, Risks, and Unusual Items
- Voluntary Recall: In January 2026, the company initiated a voluntary recall of specific hormone pellet lots due to potential metal particulate matter. Management estimates this negatively impacted revenue growth by approximately $1.7 million and incurred $1.5 million in recall-related costs. No additional impairment charges were recorded in Q1 2026.
- Legal Proceedings: The company settled the "Right Value Litigation" for $5.0 million (paid in installments) and settled a lawsuit with Cindy Latch for $0.08 million. Legal expenses were a primary driver of increased SG&A.
- Debt Refinancing: On May 8, 2026 (subsequent to period end), the company entered into an amended credit agreement for $175.0 million to refinance existing debt.
- Internal Controls: The company disclosed a material weakness in internal controls over financial reporting related to the control environment and IT general controls, which remains unremediated as of March 31, 2026.
- Guidance: The filing does not provide specific numerical guidance for the full year 2026. Management expects to incur additional costs related to the recall in future periods.
Investor Verification Checklist
- Recall Impact: Verify the extent of the revenue impact from the January 2026 voluntary recall and the timeline for full inventory restoration.
- Liquidity Position: Assess the company's ability to service debt with a cash balance of $5.3 million, despite the recent refinancing announcement.
- Internal Controls: Review the remediation plan for the material weakness in internal controls and its potential impact on future reporting reliability.
- Earnout Liability: Monitor the fair value of earnout liabilities, which are highly sensitive to stock price volatility and significantly impact reported net income.
- Legal Exposure: Confirm that the settled legal matters (Right Value, Cindy Latch) are fully resolved with no further contingent liabilities.