10-Q: Biote Corp. Q1 2026 Earnings Decline Amidst Recall and Legal Costs

Biote Corp. reported a significant decrease in revenue and net income for Q1 2026, impacted by a product recall, increased legal expenses, and a shift in revenue streams.

Summary

• Biote Corp. reported total revenue of $44.9 million for the three months ended March 31, 2026, a decrease of 8.3% compared to $49.0 million in the same period of 2025.
• Net income attributable to Biote Corp. stockholders was $2.3 million for Q1 2026, a substantial drop from $13.7 million in Q1 2025.
• Adjusted EBITDA also decreased to $8.7 million in Q1 2026 from $13.8 million in Q1 2025.
• The company experienced a $4.7 million decrease in revenue from pellet procedures due to lower volumes and inventory availability issues related to a voluntary recall.
• Revenue from Biote-branded dietary supplements increased by $1.8 million, partially offsetting the decline.
• Cost of revenue increased by 10.9% to $14.0 million, driven by a shift in pellet sourcing and increased costs for dietary supplements and continuing education programs.
• Selling, general, and administrative expenses rose by 4.1% to $27.8 million, largely due to a $3.3 million increase in legal-related expenses.
• The company fully repaid its share repurchase liability of $18.5 million during the quarter.
• Cash and cash equivalents decreased to $5.3 million as of March 31, 2026, from $24.1 million as of December 31, 2025.

Sentiment

Score: 3

Explanation: StockSavvy.ai views this filing as negative due to the significant decline in revenue and net income, increased operational costs, and the impact of a product recall and legal expenses, despite some positive steps in debt management and supplement sales.

Positives

• Revenue from Biote-branded dietary supplements increased by $1.8 million, indicating growing demand for these products.
• The company fully repaid its share repurchase liability, strengthening its balance sheet.
• The company entered into an amended and restated credit agreement for $175.0 million, providing increased financial flexibility.
• The company is working to improve hormone pellet inventory and has added a second manufacturing shift to address supply constraints.

Negatives

• Total revenue decreased by 8.3% to $44.9 million in Q1 2026 compared to Q1 2025.
• Net income attributable to stockholders dropped significantly to $2.3 million from $13.7 million year-over-year.
• Adjusted EBITDA decreased by $5.0 million to $8.7 million.
• Revenue from pellet procedures decreased by $4.7 million due to lower volumes and inventory availability issues.
• Cost of revenue increased by 10.9% while pellet procedure revenue decreased by 13.2%.
• Selling, general, and administrative expenses increased by $1.1 million, primarily due to higher legal costs.
• Cash and cash equivalents significantly decreased to $5.3 million from $24.1 million.
• The company recorded an inventory impairment charge of $1.3 million in Q4 2025 related to a voluntary recall.

Risks

• The company faces ongoing risks related to compounded drug formulations leading to patient injury, death, or product recalls, potentially resulting in significant liabilities and reputational harm.
• The success of dietary supplements in gaining significant market acceptance among clinics, practitioners, and patients is a key risk.
• The ability to effectively support the manufacturing of bioidentical hormones by the company and third parties is critical.
• Sensitivity to regulatory, economic, environmental, and competitive conditions in various geographic regions poses a risk.
• The company's ability to increase the use of the Biote Method by practitioners and clinics at anticipated rates is a risk.
• Significant competition in the industry presents a challenge.
• The impact of strategic acquisitions and the implementation of growth strategies carry inherent risks.
• Protecting intellectual property is a stated risk.
• Heavy regulatory oversight in the industry is a significant risk factor.
• Changes in applicable laws or regulations could adversely affect the business.
• The inability to profitably expand in existing and new markets is a potential risk.
• Adverse impacts from other economic, business, and/or competitive factors are possible.
• Future exchange and interest rates could pose risks.
• The company has a material weakness in internal control over financial reporting that has not been remediated, increasing the risk of errors.
• The company's reliance on a single lender for its outstanding debt and revolving loans presents a concentration risk.

Future Outlook

The company believes its business model is well-positioned for future growth. Management expects operating and capital expenditures to increase as they expand headcount, operations, and the clinic base. They anticipate that current cash, cash generated from operations, and revolving loan capacity will be sufficient to fund operations and debt service obligations for at least the next 12 months. The company may seek additional debt or equity financing if required for working capital, acquisitions, or other purposes.

Management Comments

• Management believes that its business model has been successful, remains differentiated, and is well positioned for future growth.
• The company is focused on vertical integration through strategic transactions to strengthen control over its supply chain, enhance operational efficiency, and reduce production costs.
• Management believes they are well-positioned to continue meeting product demands and expanding the Biote-certified clinic network.
• Management believes that its current cash position, coupled with anticipated cash generated from operations and revolving loan capacity, is sufficient to fund operations and debt service obligations for at least the next 12 months.

Industry Context

StockSavvy.ai notes that Biote Corp. operates in the hormone optimization and bioidentical hormone replacement therapy market, a sector that has seen increasing interest due to aging populations and a focus on wellness. The company's model of training practitioners and providing a platform for practice building is a key differentiator. However, the industry is subject to significant regulatory oversight and competition, as highlighted by the company's own risk factors.

Comparison to Industry Standards

• The filing does not provide specific comparisons to industry benchmarks or competitors' performance metrics.
• The company's revenue decline of 8.3% in Q1 2026, coupled with a significant drop in net income, suggests a performance that may be below industry averages for companies experiencing growth, especially given the impact of the product recall and increased legal costs.
• The increase in cost of revenue as a percentage of revenue, particularly for pellet procedures, indicates potential pressure on margins compared to industry standards, possibly due to supply chain disruptions and sourcing changes.

Legal Proceedings

• Right Value Litigation: Settled for $5.0 million, with the final payment made in February 2026.
• Yosaki and Mioko Trusts lawsuit: Filed in July 2024, alleging breaches of fiduciary duties; case closed on January 7, 2026.
• Cindy Latch lawsuit: Filed in November 2024, alleging misappropriation of likeness; settled for $0.08 million, paid on May 11, 2026.

Related Party Transactions

• Consulting agreement with Teresa S. Weber for strategic advisory services, with payments of $0.02 million in Q1 2026 and $0.04 million in Q1 2025.
• Purchases of dietary supplement inventories from a vendor in which the company's founder holds a minority interest; no purchases in Q1 2026, $0.08 million in Q1 2025.

Stakeholder Impact

• Shareholders: Negative impact due to decreased net income and potential dilution if future equity financing is pursued.
• Employees: Potential impact from increased legal expenses and the ongoing remediation of internal control weaknesses.
• Customers (Clinics): Potential disruption due to temporary contraction of bioidentical hormone pellet inventory availability and recall-related issues.
• Suppliers: The recall and shift in sourcing may impact relationships and demand.
• Creditors: The company's liquidity has decreased, but it has secured a larger credit facility.

Next Steps

• Continue to improve hormone pellet inventory at Asteria Health.
• Execute the plan to add a second manufacturing shift to relieve supply constraints in Q2 2026.
• Continue to monitor global economic trends and their potential impact on the business.
• Continue to assess the need for additional debt or equity financing.
• Continue efforts to remediate the material weakness in internal control over financial reporting.

Key Dates

Recommendation

While the company faces significant headwinds with declining revenue, profitability, and increased legal costs, the full repayment of share repurchase liabilities, the secured larger credit facility, and the growth in dietary supplement sales provide some stability. The ongoing remediation of internal control weaknesses and the impact of the product recall warrant caution. A 'hold' recommendation reflects the need to observe the company's ability to navigate these challenges and improve operational performance before considering a more definitive stance.

Keywords

Biote Corp, 10-Q, Quarterly Report, Hormone Optimization, Bioidentical Hormone Replacement Therapy, Pellet Therapy, Dietary Supplements, Financial Results, Revenue, Net Income, Adjusted EBITDA, Product Recall, Legal Proceedings, SEC Filing