LifeMD, Inc. (NASDAQ:LFMD) Q3 2022 Earnings Conference Call November 10, 2022 4:30 PM ET
Company Participants
Justin Schreiber – Chief Financial Officer
Marc Benathen – Chierf Financial Officer
Conference Call Participants
David Larsen – BTIG
Marc Wiesenberger – B. Riley Securities
Operator
Good afternoon. Thank you for joining us today to discuss the results for LifeMD’s Third Quarter Ended September 30, 2022.
Joining the call today are Justin Schreiber, Chairman and Chief Executive Officer; and Marc Benathen, Chief Financial Officer of LifeMD. Following management’s prepared remarks, we will open the call for a question-and-answer session. I’d like to remind everyone that today’s call is being hosted via webcast and the recording will be made available via the link in today’s press release, which is available in the Investor Relations section of the company’s website.
Before we begin, I would like to remind everyone that during this call, the company will make a number of forward-looking statements, which are subject to numerous risks and uncertainties that may cause the company’s actual results to differ materially from those projected. These risks and uncertainties are described in the company’s 10-K and 10-Q filings and within other filings that LifeMD may make with the SEC from time to time.
Forward-looking statements made during this call are based on current information available to the company as of today, November 10, 2022. The company assumes no obligation to update or revise any forward-looking statements after today’s call, except as required by law. Also, please note that management will be discussing certain non-GAAP financial measures that does company belief are important in evaluating LifeMD’s performance.
Details on the relationship between these non-GAAP measures to the most comparable GAAP measures and reconciliations thereof can be found in the press release issued earlier today. Finally, I would like to remind everyone that today’s call is being recorded and will be available for replay in the Investor Relations section of the company’s website.
Now, I would like to turn the call over to LifeMD’s CEO, Justin Schreiber, Please go ahead. Justin Schreiber?
Justin Schreiber
Thank you, and good afternoon, everyone. Today, after the market closed, we issued a press release containing our third quarter results and uploaded an updated corporate presentation for Q3 2022. I encourage everyone to download and review this presentation on our Investor Relations website at ir.lifemd.com.
During the third quarter, LifeMD made significant progress on multiple strategic and operational initiatives to position the company for its next phase of growth and more importantly, an imminent path to profitability.
I’d like to highlight the following five strategic and operational objectives we executed. First, we significantly bolstered LifeMD’s profitability across all business lines and on a consolidated basis, which served to drive our consolidated adjusted EBITDA loss to below $1 million for the quarter.
Second, we continue to scale and create significant growth in our virtual primary care business. This strong growth was enabled by successfully launching a host of new features on our primary care platform, such as our prescription drug discount card program, Symptom Checker and more.
Third, we meaningfully optimized advertising spend and customer acquisition costs. And fourth, we further diversified our telehealth business through the continued scaling of recently launched telehealth products and growth in our B2B partnership business.
And fifth, we made extensive progress in both the WorkSimpli divestiture progress, plus significantly enhancing the long-term fundamentals, revenue and profit growth potential of WorkSimpli.
Our continued execution of these initiatives further reinforces our commitment to creating long-term value for our shareholders and underscores our drive to deliver upon major areas of guidance that we have provided, mainly in the areas of profitability and the creation of primary care business with strong patient satisfaction and retention.
Perhaps our biggest accomplishment this quarter was the tremendous traction we gained in profitability. We concluded our third quarter with an adjusted EBITDA loss of just $889,000. This represented an 86% improvement versus even the prior quarter sequentially, when our adjusted EBITDA loss totaled $6.9 million and is a testament to the tremendous focus we’ve placed on optimizing our customer acquisition and retention investment, while pairing back areas that produce growth but not long-term profitability.
This coupled with the tremendous leverage that we are gaining against our fixed operating expenses is laying the foundation on which we will continue our long-term growth with expanding profit margins. As we undertook this process, we eliminated investment in select product offerings that while being growth drivers did not meet our internal profitability thresholds. Now that we have established a solid base to build on, we expect sequential growth to return in the first quarter of 2023 with steadily increasing profit margins.
LifeMD also saw continued momentum in the growth of our virtual primary care platform since its launch in the second quarter. I reiterate my belief that VPC, or primary care platform, represents one of the largest, if not the largest, business opportunity for LifeMD in the years ahead.
We eclipsed our previous guidance of ending the third quarter with 2,000 subscribers by nearly 20% and continue to remain ahead of our previous expectations with growing momentum for this business. In fact, as of today, VPC has almost 4,000 subscribers. Moreover, in recent weeks, we have begun to increase our daily new acquisitions per day from approximately 30 new patients a day to 60 to 90 new patients a day without increasing our marketing spend budgets.
I’m very encouraged by the continued strong retention we continue to see in this business, which reflects the large unmet need for high-quality, affordable cash pay virtual primary care. LifeMD currently offers one of the most comprehensive virtual primary care offerings in the U.S., one where our members gained access to incredible doctors and nurse practitioners, discounted prescription medications, labs, imaging, referrals to specialists when needed and expert wellness guidance.
Our platform not only supports urgent and generalized primary care offerings but also can facilitate treatment for hundreds of different conditions. And our programs are designed so that patients can see the same doctor over time, which I believe enhances outcomes and the patient experience. As I mentioned earlier, we made major headway in optimizing our marketing spend and CACs in the third quarter. We reduced our blended CAC by 18% versus prior year and 8% versus the prior quarter.
This is a key driver behind both our ability to significantly reduce our marketing spend as a percentage of revenue and rapidly improve profitability of the business. By operating effectively with these newly reduced CACs and focusing our capital on the offerings that drive the best long-term return on investment, we are well positioned amongst our peer group for a balanced combination of growth and profitability, which we believe will be a key driver of long-term shareholder value.
Lastly, during this quarter, we continued to make significant progress in diversifying our telehealth business through new telehealth service offerings. As mentioned previously, VPC continues to rapidly scale with increasing momentum. Two recently launched indications, LEAP and our proprietary topical pain management offering, have also begun to rapidly expand. Following their launch in the second quarter, where they account for only about 1% of total revenue and subscriber base, these two offerings have grown to become just under 5% of our total revenue as of the end of the third quarter and combined to become nearly 12% of our total new patient acquisition volume in the third quarter.
Beyond our direct-to-consumer telehealth business, we’re continuing to successfully build out our business-to-business operation, leveraging our best-in-class telehealth technology platform and affiliated medical group to partner directly with pharmaceutical companies. We recently completed our third pharma partnership, which adds four branded prescription products to our platform. We have built an impressive pipeline of potential deals, of which we expect to see several close in 2023, which will help us further diversify our revenue mix with high-margin B2B revenue while providing additional opportunities for cross-selling on our VPC platform.
WorkSimpli continues to be a tremendous performing asset for the consolidated company, producing rapidly increasing levels of profitability, coupled with strong revenue growth. We are currently in the late stage of the divestiture process and actively in negotiations after receiving interest from multiple bidders. Given the extreme value and profit accretion from WorkSimpli, which Marc will speak about later, we remain focused on ensuring that any divestiture maximizes value for LifeMD and our shareholders relative to the value WorkSimpli can create as part of our consolidated company. We are currently in the late stage of the WorkSimpli processed and remain in a strong position to create significant value for shareholders with this asset.
With that, I will now turn the call over to our CFO, Marc Benathen, who will provide a summary of our financial results. Marc?
Marc Benathen
Thank you, Justin, and good afternoon, everyone. The third quarter of 2022 is a major breakthrough quarter for LifeMD in realizing our pathway to profitability and sustainable long-term profitable growth. We drove our adjusted EBITDA loss to $889,000, which was a 90% improvement versus prior year and ahead of even our internal expectations. We remain on track to achieve consolidated adjusted EBITDA profitability in the fourth quarter.
As Justin mentioned, we have made extensive progress on the WorkSimpli process and are currently in the final stage of the process after receiving interest from multiple qualified bidders. At the same time, we are extremely cognizant of the tremendous growth and profit potential of this asset. During the third quarter, WorkSimpli not only grew revenue 57% year-over-year but also finished with over $1 million of EBITDA in the quarter, which is expected to exponentially grow in the quarters and years to come.
In fact, we believe WorkSimpli has the potential to produce $20 million to $25 million or more in EBITDA in 2023 while producing significant double-digit top line growth. We plan to provide a further update on WorkSimpli prior to the end of this year.
Now, turning to the results for the third quarter of 2022. Revenue in the third quarter totaled the record $31.4 million, up 26% as compared to the same quarter a year ago. 93% of total revenues in the third quarter were generated by recurring subscriptions.
Telehealth net revenues grew by 15% to $21.4 million while WorkSimpli net revenues grew by 57% to $10 million. WorkSimpli revenues grew 23% sequentially as compared to the second quarter. Additionally, WorkSimpli achieved Q3 EBITDA margins of mid teens. We expect WorkSimpli’s growth and rising profitability to continue at a rapid pace.
On the telehealth side of the business, we increased our active subscriber base by 36% versus prior year to end the quarter with over 176,000 active subscribers. We were able to accomplish this subscriber growth while refocusing our efforts on our offerings that meet our profitability thresholds, redirecting investment into new verticals, and reducing our tax by 18% versus prior year.
Gross margins for the third quarter reached 85% up 500 basis points versus prior year. Gross profit for the quarter totaled $26.7 million, an increase of 35% from the same year ago period.
Operating expenses for the third quarter totaled $33.5 million, an increase of $1.1 million versus a year ago period, excluding non-cash expenses of $4.5 million associated with stock-based comp, depreciation and amortization. Net of these expenses, operating expenses as a percentage of company revenue decreased by 1,900 basis points as compared to prior year. Equally important, we reduced our marketing expense as a percentage of revenue to 55% versus 81% of revenue in the same year ago period, and improved leverage in this key spend area by 1,700 basis points versus the prior quarter.
Our GAAP net loss attributable to common stockholders for the third quarter totaled $8.1 million or $0.26 per share. This compares to a net loss attributable to common stockholders of $14.4 million or $0.54 per share in the third quarter of 2021.
Adjusted EPS, non-GAAP financial measure that excludes non-cash expenses, preferred stock dividend, litigation expense and foreign currency translation totaled the loss of $0.03 per share as compared to $0.34 per share in the same year ago period.
Adjusted EPS also improved 87% sequentially versus the prior quarter. Adjusted EBITDA, non-GAAP financial measure, excluding the same categories as noted in adjusted EPS, totaled the loss of 889,000 in the third quarter of 2022. This compares to an adjusted EBITDA loss of $9 million in the same year ago quarter.
Now, turning to our balance sheet. Cash totaled $5.8 million as of September 30, 2022, and we have reduced our cash burn rate to approximately 500,000 per month with the burn rate expected to continue to trend down. In fact, we expect to eliminate the cash burn on a consolidated basis by the end of this year. This underscores the company’s commitment to prudent capital management, growing our profitability and eliminating our cash burn. In addition to the potential monetization of the WorkSimpli asset, LifeMD has secured non-binding offers for attractive nondilutive financing options that can further augment our balance sheet and capitalize the company regardless of the WorkSimpli transaction.
This wraps up our financial results. I’d now like to turn the call back over to Justin.
Justin Schreiber
Thanks, Marc. In summary, third quarter results were strong demonstrating our commitment and ability to build a profitable long-term business with strong margins. While growth slowed as we had guided, this was the intentional result of shifting our spend into areas producing the best balance of growth and profitability, while responsibly investing in the scaling of new verticals, including primary care, pain, sleep, and B2B partnerships with pharma companies. I believe we have one of the strongest business and clinical teams in telehealth coupled with amazing technology and have never been more excited to watch our continued transition into a world class provider of diversified telehealth services and products.
Additionally, beyond our core telehealth business, WorkSimpli remains a tremendously attractive asset with a rapidly increasing financial profile that is solidly accretive to our overall company results.
In closing, I would like to thank our entire team for their hard work and tenacious commitment to building a platform that positively impacts the lives and health of so many people. Also, I’d like to thank our shareholders who’ve been very supportive in a difficult economic environment. The future is bright for LifeMD.
With that, I would like to open the call for Q&A.
Question-and-Answer Session
Operator
Thank you. [Operator Instructions] We’ll take our first question from David Larsen, BTIG.
David Larsen
Hi,. Congratulations on a good quarter, especially the progress on earnings. Can you maybe talk a little bit more about sort of the disciplined approach that you’ve been taking to, I guess, focus on like more profitable product sales areas and basically, I guess focus less on lower profit areas, like what exactly are those areas that you kind of exited and maybe can you talk a little bit more about the decline in or improvement in marketing spend in certain areas? Thanks a lot.
Marc Benathen
Yes, David, this is Marc. So firstly, we focus pretty heavily obviously on data. As we’ve done more data, we’ve been able to see more so for us there’s been a greater focus on longer-term subscriptions, which we’ve found to be stickier, have stronger unit economics. There were certain, without getting into specifics of certain subscriptions products, but a couple of products in our core portfolio where the returns on investments were nowhere near the typical 1.5 to two x that we earned in the first year while they drove sales growth.
As we’ve gotten more data, we’ve taken away marketing dollars from there and reallocated it to the growth of some of the new areas like VPC, sleep and pain, which we’re all going to continue to pay significant dividends for us, especially heading into 2023. So a lot of it was having more data available to us beginning to test in the last nine months, moving to a longer subscription terms, and then having diversified our product mix a little bit more, being able to take away from some of those more shorter-term subscription, lower performing from an ROI standpoint areas that we were investing in.
David Larsen
Okay. That’s very helpful. And I think you mentioned that the number of subscribers was up pretty significantly on a year-over-year basis. Can you talk about how that impacts the actual telehealth net orders? It looks like the net orders may have declined sequentially, but I think that’s by design, right?
Marc Benathen
Yes, so as I mentioned before, we’ve been moving more and more towards three, six, 12 months subscription versus a lot of the one monthers. So what ended up happening is you’re getting more per order, which is obviously also positively affecting your return on investment, your gross margin. And quite frankly, many of these people that make the bigger commitment are also stickier customers.
So you’re getting more subscribers but just given the cadence of how those orders are being shipped, the fact that we’ve also increased our ability to cross sell more than one prescription or more than one product in a given customer means that we’re getting more per order, but you’re not necessarily going to have as many orders to us. The most relevant metric, particularly as we’ve made this transition is subscribers. We’ve obviously always shared orders with Streets, so we continue to share that, but subscribers is really the measure of the health and the growth of the business.
David Larsen
Okay. And then, Justin, can you talk a little bit about the virtual primary care platform? Like how many providers are actually in the virtual primary care solution, how many physicians or nurses do you have on staff? And can you share any metrics around the number of patients that are being added on a daily or monthly or quarterly basis? And then also I think importantly what the cross-sell and in-sell and up-sell potential looks like with the virtual primary care platform?
Justin Schreiber
Sure, David, happy to. Right now we have just on the virtual primary care platform, we have around 15 full-time doctors and nurse practitioners they’re treating patients. We’re actively recruiting new nurse practitioners and doctors, and one of the limitations of scaling is, it’s not a limitation, but we’ve just been very careful about kind of scaling this the right way and also keeping our [indiscernible] need to be. But one of the – we’re constantly recruiting new providers for that platform. As we said, earlier in the call, the last couple weeks have been just the growth has been stellar. I mean, we went from 25 or 30 patients a day to closer to a 100 new patients a day.
One thing I’m really happy about is with the patient reviews of their experience with LifeMD are practically every indication. I mean, their reviews are out of five stars. They’re almost all 4.8, 4.8 to five, which is great. I mean, that’s the number one metric that we look at internally. And the retention rates look good as well. Even the retention rates for patients that are coming in for one off treatments like an STD or something to do with COVID or the urgent care appointments. So we’re really happy with the – we’re really happy with the metrics. We’re really focused on launching some new offerings that we think will improve the return or ad spend even more, make it clear to patients what the value add that they’re getting from their LifeMD membership is.
We’re now beginning to mail out physical prescription discount cards to all of our members, which we think, will really reinforce the value that people are getting. We launched the symptom checker on desktop, and we’re soon really met out on mobile. We’re working on some new features that we’re launching in Q1, which will one of the big initiatives for this is to offer immediate consults to patients. So right now most patients are getting a consult within a couple hours. A lot of times it’s within one hour, but one of the things we’ve seen is patients, a lot of patients when you can give them an appointment within 10 or 15 minutes, or even immediately from a waiting room, it’s much more desirable and our acquisition costs go down and patients are happier. So we’ve got a of new initiatives.
We’ve got a complete overhaul of our dashboard that we’re going to be rolling out in the next 30 to 60 days, which is going to be very transformative for the entire patient experience. We’re talking to a number of big partners, which I’ve mentioned to you in the past, David, but we’re getting closer on some big national partnerships that I think will also really enhance the offering and really strengthen LifeMD’s brand as well.
And yes, this platform is also facilitating what we’re doing on the B2B side, that’s something that we’re really excited about as well. We added – we’re adding this month an additional four branded pharmaceutical products where the LifeMD primary care platform will be kind of be serving patients that are driven to the platform from the pharmaceutical partners’ website, and we’ve put a lot of work into that technology, and we’re excited to be rolling that out as well.
David Larsen
Okay. That’s very exciting. And then just one more for me. You mentioned – you used the phrase a couple of big partnerships. I mean, can you maybe provide a little more color around that to the extent you’re able to, like could LifeMD be a brand that we see it like a large retail channel or perhaps some large health plans? Just any more color around that would be helpful, I think?
Justin Schreiber
There are two partnership areas that we’re very focused on as a company. One is partnering – is a partnership within the pharma services world. That could just really help us scale the B2B business as quickly as possible.
And the second is partnering with national retailers. Most of those retailers have pharmacies as well. And so we think that there’s a lot that we could do there to increase the visibility of the LifeMD brand, make it easier for our patients to access on-demand prescriptions. And I think there is – we’re in talks with a number of potential partners, and I believe that’s something that we’ll execute on in the coming quarter or two.
David Larsen
Okay. Congratulations on a good quarter, especially the profitability, and I will hop back in the queue.
Operator
Thank you. And next, we’ll move on to Marc Wiesenberger of B. Riley Securities.
Marc Wiesenberger
Thank you. Good afternoon. Continuing on with the VPC segment, you talked about really accelerating patient adoption without increasing the spend. I’m wondering if you could talk a little bit more about where you’re getting these patients and through what channels? And is the level of spend that you’re currently using to acquire them kind of sustainable going forward?
Justin Schreiber
Yes, Marc, sure. This is Justin. I’ll take that one. So most of the new patient acquisition for the primary care platform is coming from search right now. So their high intent searches people looking for treatment from a virtual provider. We’ve seen a big improvement, as Marc alluded to in the call. We’ve seen a big improvement in CAC since we launched the private care platform, where I still believe that even as we scale it.
We can reduce acquisition costs and improve return on that spend considerably. There’s just a lot of opportunity there. And so look, the unit economics, we’ve got a little bit of work to do to get them where we want them to be, but we’ve got a very, very clear game plan for getting there. And I mean, I believe that when you look at the urgent conditions we’re treating, the chronic care management opportunity and then some of the other specialty areas that we’re imminently going into, this platform could grow very quickly.
Marc Wiesenberger
Understood. Helpful. And right now, I believe VPC is all cash paid. But I think in the past, you might have alluded to opportunities to expand beyond that, is that still on the radar? And how do you think about moving beyond just purely cash pay?
Justin Schreiber
We’ve had – in the past 90 days, we’ve spoken with multiple payers. Some of those conversations are still ongoing. And we’re trying to figure out the right strategy there, right? I mean, remember, we now enable patients to use their insurance card for – of course, they can use their insurance card for prescriptions that were our affiliated providers are sending to a local pharmacy, they can use their insurance cards.
If they want to for imaging, they can use their insurance cards for diagnostics, request lab core or any local lab. So most of our business is actually covered. We have had some conversations with payers about getting coverage for the virtual consults. But if you really think about the delta between most people’s co-pay and what we’re charging for a consult, it’s not that material.
So the conversations are ongoing. We’re looking at some stuff in the managed care world as well. It’s tough for me to say whether it’s going to be something that’s imminent. I don’t look at it – the more that we – the more time we spend looking at it, the less I think it’s that material to really scaling our primary care business.
Marc Wiesenberger
Got it. Okay. And then you guys talked about the transition to the – to more multi-month subscriptions. And then previous – on the previous call, you had indicated that growth in the back half of this year would moderate, but looking for that to inflect at the start of next year. Wondering, I guess, how – with those longer subscriptions, how churn has been progressing relative to your expectations? And do you still expect to see that growth inflect beginning of 2023?
Marc Benathen
Yes. And so yes, we do expect a return to growth in the first quarter of 2023. As far as churn, yes, the early read is it’s in line with our expectations. It’s been consistent with some of the other subscription lines. The difference is they’re getting more at every single cycle. So the economics proved to be a lot better with the payback being a lot stronger, the margins being a lot higher as well.
Marc Wiesenberger
Great. And then would love to hear some commentary about the ad market and pricing trends and maybe any changes in potential strategy for attracting new patients across the whole portfolio going into calendar 2023 ?
Justin Schreiber
Yes, Marc, we’ve got some really exciting stuff in the pipeline. Actually, one big national campaign launching in the next 7 to 10 days. They could really materially – we think will materially and positively impact the growth of our business and then a couple of other things behind that.
So I’d rather not into too much detail on those competitive reasons. But we’ve got a couple of initiatives. We’ve put a lot of time into over the last six months that we’re extremely optimistic about and that, coupled with improving retention and cross-sell and just doing better on a very – with a very disciplined acquisition strategy, that’s why Marc and I are very optimistic about Q1 of next year and putting up some great growth numbers.
Marc Wiesenberger
Great. And then just a final one for me on WorkSimpli. It seems maybe the language has changed a little bit. I think previously, you had maybe talked about progressing with one specific bidder, maybe moving a little bit further along. Curious if that entity is still the one that you’re focusing on? Or maybe just a little bit more detail on how that divestiture process is progressing? Thank you.
Marc Benathen
Yes. Since it’s in a privately-governed process right now, I can’t speak to too much detail other than – yes, everything is progressing. Look, the big thing WorkSimpli has continued to economically become more and more valuable. And it’s result have continued to accelerate. And quite frankly, the numbers we think it can put up in the coming year and even coming years are substantially higher than when we first entered the process.
So those are all things that we’re weighing vis-à-vis the valuation. We have a very good idea of what the valuation is today. Most of the bidders were pretty consistent. Yes, we’re far along such that we’re not working with, obviously, all those bidders. I can’t say exactly what we’re doing right now, but it’s pretty consistent with there. And there will be an ultimate decision we just put a pin in this by the end of the year.
Marc Wiesenberger
Great. Thank you very much. Congrats on a good quarter.
Operator
Thank you. We’ll take a follow-up question from David Larsen, BTIG.
David Larsen
One more quick one for me. Can you maybe talk a little bit about what drove this significant increase in WorkSimpli revenue from $5 million a quarter in 1Q of 2021 to $10 million this quarter? And then also, it sounds to me like you don’t really have to sell WorkSimpli. One of the questions I’ve been getting from investors is why sell it, why not hang on to it? Has that been a consideration? Thanks.
Marc Benathen
Yes. So first of all, as we mentioned last year, WorkSimpli, like a lot of growth businesses, did some testing, tested a few different types of approaches that are funnel trials, pricing. Obviously, some of that contributed to short-term stagnation at the end of last year heading into the beginning of this year. That’s all behind us. We’ve gotten to a point where we really well defined the business model. And look, they run themselves. We’re not – they’ve got a great leadership team over there. So that’s been the big reason. I mean, it’s a business that – it’s a cash cow, runs itself. They’ve got a really good machine over there. They’ve diversified their business. They no longer just PDF. They’re in resume HR market and a couple of other adjacent markets will be coming down the pipe pretty soon in relevant areas.
To your second question, yes, I’d say it is something that we are definitely considering. This asset is becoming more and more valuable. And quite frankly, generates a significant amount of – or will generate a significant amount of cash flow that can very easily be used funds and invest in core telehealth operations because the CapEx in WorkSimpli is pretty de minimis. So those are all things that we’re weighing.
And as I said, we’re going to put a pin in it [ph] and provide a final update by the end of the year. And look, we’re going to make the decision that we think maximizes value for our shareholders. We do have options. We have other things on the table, and we are not in a position where we’re obviously forced to have to sell the asset for a price that would not fully recognize the value and/or even sell the asset.
David Larsen
Okay, great. Thanks very much.
Justin Schreiber
David, I’ll just mention – David, I’ll mention quickly, too. A lot of people forget about the asset that LifeMD finance the acquisition of – which is part of WorkSimpli simply earlier this year, which is resumebuild.com. And so why is shown growing just like Marc said on the PDF side of the business, I mean, he’s just like, he’s found a formula that works, and you put it – as we’ve said many times before, I mean, this thing is a cash cow. You put $1 in, you generate at least $3 if not more, within a year.
On the ResumeBuild business, this is like – this asset is perfectly positioned for the economy that we’re likely going into it in a recessionary environment. The unit economics are even better than the PDF business. I mean, they’re considerably better than that three to one LTV to CAC the PDF business, and he bought this thing in pretty much the best economy that we’ve had in the last many decades, right? And so what you’re going to see now as the economy gets worse and more and more people look for jobs, they need to build resumes. You couldn’t ask to own a better asset than resumebuild.com, which Sean Fitzpatrick’s abilities to scale.
I mean it is – I mean it’s amazing. So that’s the part of the story that gets on people, but that really hasn’t started to even contribute to the numbers yet. But in Q1, that will start to contribute to WorkSimpli’s numbers. And I mean this has just too much upside the PDF and document business, maybe even more. So it’s – he’s done – Sean’s done an amazing job building these things. He’s an awesome operator and marketer and leader. And this thing is – now is diversified. There’s multiple assets.
And we think the world Sean the business he’s built, and this thing is really valuable. And it’s going to be valuable one way or another to license these shareholders. And we will not – I mean, Marc and I had this conversation regularly like we’re not going to rush to sell it, we’re not going to do a bad deal. We have multiple other options given kind of our growth and the profitability profile of the company now. We’re not going to have to go out and do some sort of an equity raise at this level. And we just – we feel really good about the fundamentals of the business and the consolidated business, quite frankly.
David Larsen
Okay, great. Thanks very much.
Operator
Thank you. And there are no further questions today, and that will also conclude today’s question-and-answer and teleconference. We do appreciate your participation. At this time, you may now disconnect. Thank you, and have a great day.
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