biote NASDAQ: BTMD reported lower second-quarter revenue and a net loss as a voluntary recall of certain hormone pellets supplied by Asteria Health disrupted procedure volumes, while management said supply conditions have since normalized and should support sequential improvement in the second half of 2026.
Revenue for the quarter ended June 30 declined 9.5% year over year to $44.2 million. Procedure revenue fell 13.9% to $30.3 million, including an estimated $3.3 million impact from the recall. Dietary supplements revenue rose 5.7% to $11.4 million, driven primarily by continued growth in the company’s e-commerce channel.
“As we exited the second quarter with these challenges largely resolved, Asteria Health is once again operating at normalized inventory and increased production levels,” Interim Chief Executive Officer and Chief Financial Officer Bob Peterson said. He noted that Asteria added a second production shift and that the company expects profitability to improve as internally manufactured hormone-pellet supply increases in the second half.
Recall, supply constraints weighed on procedure business
Peterson said procedure revenue was affected by lower volumes at existing clinics, procedure deferrals and pellet supply constraints associated with the recall. He also cited elevated clinic attrition and slower productivity at new clinics, as the sales force concentrated on supporting clinics affected by the recall.
Asteria supplied approximately 30% of Biote’s shipped pellets during the second quarter, similar to the first quarter but down from more than 50% in the fourth quarter of 2025. The company turned to higher-cost third-party pellet suppliers during the disruption, contributing to a decline in gross margin to 65.4% from 71.6% a year earlier. The margin decline also included $600,000 in incremental recall-related costs and reduced operating efficiency at Asteria.
Peterson told analysts that the supply challenges are now behind the company and inventory levels have normalized. He said Biote expects its third-quarter product mix to improve as it reduces third-party sourcing, which should support gross-margin improvement over time.
When asked whether the recall had created lasting damage to the Asteria brand, Peterson said the brand “remains quite strong” and that the company has not received significant resistance as it shifts inventory back toward Asteria-produced pellets.
Profitability declines as expenses increase
Biote posted a net loss of $7.4 million, or $0.23 per diluted share attributable to Biote corporate stockholders, compared with net income of $3.9 million, or $0.10 per diluted share, in the prior-year quarter. The second-quarter loss included an $800,000 loss from changes in the fair value of earn-out liabilities.
Adjusted EBITDA declined to $5.6 million, representing an adjusted EBITDA margin of 12.6%. Cash used in operations was $1.2 million during the quarter. Cash and cash equivalents totaled $11.2 million as of June 30, up from $5.3 million at the end of the first quarter.
Selling, general and administrative expenses increased to $32.4 million from $24.2 million a year earlier. Peterson said higher legal costs reflected accelerated activity on several legal matters, including depositions and pre-litigation support. He said many of those matters have now been settled or resolved, which Biote expects to reduce legal expenses later in the year.
According to Peterson, the total adjusted impact of legal matters was approximately $6 million during the first half of 2026. He added that the settlements should eliminate “all material outstanding legal matters.”
Company reduces full-year outlook
Biote reduced its 2026 outlook, now forecasting revenue above $175 million and adjusted EBITDA above $25 million. The company had previously projected revenue above $190 million and adjusted EBITDA above $38 million.
Management expects procedure revenue to improve sequentially in both the third and fourth quarters, aided by more consistent supply and new-clinic growth. However, Peterson said procedure revenue is still expected to decline year over year in those periods, reflecting the first-half disruption and other near-term factors.
The company maintained its expectation that dietary supplements revenue will grow at a mid- to high-single-digit rate for the full year. Peterson said the supplements business has remained resilient because of adoption and penetration among existing clinicians, as well as product recommendations generated through Biote’s clinical decision support software.
Focus shifts to retention and sales productivity
Peterson said clinic attrition remains in the high single digits, at roughly 8%, with no material change from prior levels. He said the company’s next phase of operational work will focus on improving clinic retention, practitioner experience, sales-force productivity and the success rate of newly added clinics.
Biote has completed what Peterson described as an initial phase centered on organizational structure, commercial-team expansion, operating processes, data and systems. The second phase will emphasize activity-based sales performance and accountability.
“When we’re in accounts every month and in front of the practitioner, we don’t lose that account,” Peterson said, adding that the company will use a more data-driven approach to encourage field engagement with clinics.
The company said it now has a full sales force and is focused on improving productivity rather than adding more personnel. Peterson also said competitive pressures have remained consistent and were not a new driver of attrition.
Beyond organic initiatives, Biote is evaluating potential acquisitions or other inorganic opportunities. Peterson said the company is seeking opportunities that could broaden its market footprint, expand its reach and complement its core offerings, while emphasizing that organic growth remains the priority.
About biote (NASDAQ:BTMD)
biote Corp. operates in practice-building business within the hormone optimization space. It trains physicians and nurse practitioners in hormone optimization using bioidentical hormone replacement pellet therapy in men and women experiencing hormonal imbalance. The company offers Biote Method, a comprehensive end-to-end practice building platform that provides Biote-certified practitioners with the components developed for practitioners in the hormone optimization space comprising Biote Method education, training, and certification services; practice management software that allows Biote-certified practitioners to order, track, and manage hormone optimization product inventory and other administrative requirements; inventory management software to monitor pellet inventory; and information regarding available hormone replacement therapy products, as well as digital and point-of-care marketing support.
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