Teladoc Health Reports Second Quarter 2024 Results
Teladoc Health reported its Q2 2024 financial results, showing mixed performance across segments. Revenue decreased 2% year-over-year to $642.4 million. The company recorded a net loss of $837.7 million, including a $790 million goodwill impairment charge related to BetterHelp. Adjusted EBITDA increased 24% to $89.5 million.
The Integrated Care segment grew 5% to $377.4 million in revenue with a 17% adjusted EBITDA margin. However, the BetterHelp segment declined 9% to $265 million with a 9.6% adjusted EBITDA margin. Teladoc withdrew its full-year 2024 guidance for consolidated operations and BetterHelp, as well as its three-year outlook, citing market conditions.
Teladoc Health ha pubblicato i risultati finanziari del secondo semestre 2024, evidenziando una performance mista tra i vari segmenti. I ricavi sono diminuiti del 2% rispetto all'anno precedente, raggiungendo i 642,4 milioni di dollari. L'azienda ha registrato una perdita netta di 837,7 milioni di dollari, inclusa una rettifica di avviamento di 790 milioni di dollari relativa a BetterHelp. L'EBITDA rettificato è aumentato del 24%, arrivando a 89,5 milioni di dollari.
Il segmento Cure Integrate è cresciuto del 5%, raggiungendo i 377,4 milioni di dollari in ricavi, con un margine EBITDA rettificato del 17%. Tuttavia, il segmento BetterHelp è diminuito del 9%, scendendo a 265 milioni di dollari, con un margine EBITDA rettificato del 9,6%. Teladoc ha ritirato le previsioni per l'intero anno 2024 per le operazioni consolidate e BetterHelp, oltre alle previsioni triennali, citando le condizioni di mercato.
Teladoc Health presentó sus resultados financieros del segundo trimestre de 2024, mostrando un rendimiento mixto entre los segmentos. Los ingresos disminuyeron un 2% en comparación con el año anterior, alcanzando los 642,4 millones de dólares. La compañía registró una pérdida neta de 837,7 millones de dólares, incluyendo un cargo por deterioro de goodwill de 790 millones de dólares relacionado con BetterHelp. El EBITDA ajustado aumentó un 24%, llegando a 89,5 millones de dólares.
El segmento de Atención Integrada creció un 5% hasta los 377,4 millones de dólares en ingresos, con un margen de EBITDA ajustado del 17%. Sin embargo, el segmento BetterHelp disminuyó un 9% hasta los 265 millones de dólares, con un margen de EBITDA ajustado del 9,6%. Teladoc retiró su guía de operaciones consolidadas y BetterHelp para todo el año 2024, así como su perspectiva trienal, citando condiciones de mercado.
텔라닥 헬스(Teladoc Health)는 2024년 2분기 재무 실적을 발표하며 부문 간 혼합된 성과를 나타냈습니다. 매출은 전년 대비 2% 감소하여 6억 4천 2백 40만 달러에 달했습니다. 회사는 8억 3천 7백 70만 달러의 순손실을 기록했으며, 여기에는 BetterHelp와 관련된 7억 9천만 달러의 상각 손실이 포함됩니다. 조정된 EBITDA는 24% 증가해 8천 9백 50만 달러에 달했습니다.
통합 치료 부문은 5% 증가하여 매출이 3억 7천 7백 40만 달러에 달했습니다며, 조정된 EBITDA 마진은 17%에 이릅니다. 그러나 BetterHelp 부문은 9% 감소하여 2억 6천 5백만 달러에 달했습니다며, 조정된 EBITDA 마진은 9.6%입니다. 텔라닥은 통합 운영 및 BetterHelp에 대한 2024년 전체 연도 전망과 3개년 전망을 시장 상황을 이유로 철회했습니다.
Teladoc Health a publié ses résultats financiers pour le deuxième trimestre de 2024, montrant une performance mixte dans différents segments. Les revenus ont diminué de 2 % par rapport à l'année précédente pour atteindre 642,4 millions de dollars. L'entreprise a enregistré une perte nette de 837,7 millions de dollars, incluant une charge de dépréciation de goodwill de 790 millions de dollars liée à BetterHelp. L'EBITDA ajusté a augmenté de 24 % pour atteindre 89,5 millions de dollars.
Le segment des Soins Intégrés a connu une croissance de 5 % pour atteindre 377,4 millions de dollars de revenus avec une marge EBITDA ajustée de 17 %. Cependant, le segment BetterHelp a diminué de 9 % pour atteindre 265 millions de dollars, avec une marge EBITDA ajustée de 9,6 %. Teladoc a retiré ses prévisions pour l'année 2024 pour les opérations consolidées et BetterHelp, ainsi que ses perspectives triennales, citant les conditions du marché.
Teladoc Health hat seine finanziellen Ergebnisse für das zweite Quartal 2024 veröffentlicht und dabei eine gemischte Leistung in den verschiedenen Segmenten gezeigt. Der Umsatz sank im Jahresvergleich um 2% auf 642,4 Millionen Dollar. Das Unternehmen verzeichnete einen Nettoverlust von 837,7 Millionen Dollar, einschließlich einer Wertminderung des Goodwills in Höhe von 790 Millionen Dollar, die mit BetterHelp zusammenhängt. Das bereinigte EBITDA stieg um 24% auf 89,5 Millionen Dollar.
Das Segment Integrierte Versorgung wuchs um 5% auf 377,4 Millionen Dollar Umsatz mit einer bereinigten EBITDA-Marge von 17%. Allerdings sank das Segment BetterHelp um 9% auf 265 Millionen Dollar bei einer bereinigten EBITDA-Marge von 9,6%. Teladoc hat seine Jahresprognose 2024 für konsolidierte Betriebe und BetterHelp sowie seine Dreijahresprognose aufgrund der Marktbedingungen zurückgezogen.
- Adjusted EBITDA increased 24% year-over-year to $89.5 million
- Integrated Care segment revenue grew 5% to $377.4 million
- Integrated Care segment adjusted EBITDA margin reached 17%
- International revenue grew 12% to $101.6 million
- Cash flow from operations was $88.7 million in Q2 2024
- Overall revenue decreased 2% year-over-year to $642.4 million
- Net loss of $837.7 million, including a $790 million goodwill impairment charge
- BetterHelp segment revenue declined 9% to $265 million
- BetterHelp segment adjusted EBITDA decreased 26% to $25.5 million
- Company withdrew full-year 2024 guidance and three-year outlook
- Access fees revenue decreased 3% to $559.6 million
- U.S. revenue decreased 4% to $540.8 million
Teladoc Health's Q2 2024 results present a mixed picture, with some concerning trends that warrant investor attention:
- Overall revenue declined
2% year-over-year to$642.4 million , driven by a9% drop in BetterHelp segment revenue. This suggests challenges in the direct-to-consumer mental health business. - The company reported a massive net loss of
$837.7 million , largely due to a$790 million goodwill impairment charge related to BetterHelp. This non-cash charge indicates a significant downward revision in future cash flow expectations for this segment. - On a positive note, the Integrated Care segment grew revenue by
5% and improved its adjusted EBITDA margin to17.0% , showing strength in the core telehealth business. - Adjusted EBITDA increased
24% to$89.5 million , demonstrating improved operational efficiency despite revenue headwinds.
The withdrawal of full-year 2024 guidance and three-year outlook is concerning, suggesting significant uncertainty in the business. Investors should closely monitor BetterHelp's performance and the company's efforts to address challenges in this segment.
Teladoc's Q2 results reveal important shifts in the telehealth market landscape:
- The
5% growth in Integrated Care segment revenue suggests continued demand for enterprise telehealth solutions, likely driven by ongoing healthcare digitization trends. - However, the
9% decline in BetterHelp revenue indicates potential saturation or increased competition in the direct-to-consumer mental health space. This could be due to the post-pandemic normalization of in-person care or the entry of new players in the market. - International revenue growth of
12% highlights opportunities in global markets, where telehealth adoption may still be in earlier stages. - The
8% increase in 'other revenue' suggests potential diversification of service offerings, which could be a strategic move to reduce reliance on core telehealth services.
The market appears to be evolving, with enterprise solutions showing resilience while consumer-focused mental health services face headwinds. Teladoc's ability to navigate these shifts and potentially pivot its strategy will be important for long-term success in the changing telehealth landscape.
From a technology perspective, Teladoc's Q2 results highlight several key points:
- The company's capex decreased to
$27.7 million from$36.6 million year-over-year. This24% reduction could indicate either improved efficiency in tech infrastructure or potential underinvestment in platform development. - Despite revenue challenges, Teladoc maintained a healthy adjusted gross margin of
70.7% . This suggests the company's technology platform is scalable and cost-effective, even in the face of market headwinds. - The significant goodwill impairment for BetterHelp raises questions about the long-term viability of its technology stack and user acquisition strategy in a competitive digital mental health landscape.
- The growth in the Integrated Care segment indicates that Teladoc's enterprise-focused technology solutions remain competitive and valuable to healthcare providers and payers.
Looking ahead, Teladoc's technology strategy should focus on enhancing its Integrated Care offerings while potentially reimagining its approach to the direct-to-consumer mental health market. Investments in AI, data analytics and user experience could be critical to maintaining a competitive edge in the evolving telehealth industry.
PURCHASE, NY, July 31, 2024 (GLOBE NEWSWIRE) -- Teladoc Health, Inc. (NYSE: TDOC), the global leader in whole-person virtual care, today reported financial results for the three months ended June 30, 2024 (“Second Quarter 2024”). Unless otherwise noted, percentage and other changes are relative to the three months ended June 30, 2023 (“Second Quarter 2023”).
Financial and Operational Highlights for Second Quarter 2024
- Second Quarter 2024 revenue of
$642.4 million , down2% year-over-year - Second Quarter 2024 net loss of
$837.7 million , or$4.92 per share, including a goodwill impairment charge of$790.0 million , or$4.64 per share - Second Quarter 2024 adjusted EBITDA of
$89.5 million , up24% year-over-year - Integrated Care segment revenue of
$377.4 million , up5% year-over-year and adjusted EBITDA margin of17.0% - BetterHelp segment revenue of
$265.0 million , down9% year-over-year and adjusted EBITDA margin of9.6%
“I am excited to have joined Teladoc Health and for the opportunity to lead the company going forward, building on our strengths while driving higher levels of performance. Our scaled position, core capabilities, and talented employees position us well in this regard,” said Chuck Divita, Chief Executive Officer of Teladoc Health.
“I also see opportunities to strengthen execution and to streamline the organization to ensure we are delivering for our customers and stakeholders. While we achieved solid performance in the Integrated Care segment, continued headwinds in the BetterHelp segment impacted overall results. We are focused on addressing the work ahead of us with urgency to unlock greater value across the company over time,” Divita added.
| Key Financial Data | |||||||||||||||||||||||
| ($ in thousands, except per share data, unaudited) | |||||||||||||||||||||||
| Three Months Ended | Six Months Ended | ||||||||||||||||||||||
| June 30, | June 30, | ||||||||||||||||||||||
| 2024 | 2023 | Change | 2024 | 2023 | Change | ||||||||||||||||||
| Revenue | $ | 642,444 | $ | 652,406 | (2 | )% | $ | 1,288,575 | $ | 1,281,650 | 1 | % | |||||||||||
| Net loss | $ | (837,671 | ) | $ | (65,177 | ) | N/M | $ | (919,560 | ) | $ | (134,405 | ) | N/M | |||||||||
| Net loss per share, basic and diluted | $ | (4.92 | ) | $ | (0.40 | ) | N/M | $ | (5.44 | ) | $ | (0.82 | ) | N/M | |||||||||
| Adjusted EBITDA (1) | $ | 89,481 | $ | 72,155 | 24 | % | $ | 152,621 | $ | 124,920 | 22 | % | |||||||||||
See note (1) in the Notes section that follows.
N/M – not meaningful
Second Quarter 2024
Revenue decreased
Teladoc Health Integrated Care ("Integrated Care") segment revenue increased
Non-cash goodwill impairment charge of
Net loss totaled
Results for Second Quarter 2023 primarily included stock-based compensation expense of
Adjusted EBITDA(1) increased
GAAP gross margin, which includes amortization of intangible assets and depreciation of property and equipment, was
Adjusted gross margin(1) was
Six Months Ended June 30, 2024
Revenue increased
Revenue increased
Non-cash goodwill impairment charge of
Net loss totaled
Results for the first six months of 2023 primarily included stock-based compensation expense of
Adjusted EBITDA(1) increased
GAAP gross margin, which includes depreciation and amortization, was
Adjusted gross margin(1) was
Capex and Cash Flow
Cash flow from operations was
Financial Outlook
Teladoc Health is withdrawing the financial outlook for the Full Year of 2024 for its Consolidated operations and its BetterHelp segment that was last provided on April 25, 2024. It is also withdrawing its three year outlook on its Consolidated operations and its operating segments that had last been reaffirmed on April 25, 2024.
The outlook provided for the Integrated Care segment is based on current market conditions and expectations and what we know today. Accordingly, we believe our outlook ranges provide a reasonable baseline for future financial performance.
Integrated Care
| For the third quarter of 2024, we expect | |
| Revenue growth percentage (year-over-year) | (1)% - |
| Adjusted EBITDA margin | |
| U.S. Integrated Care Members (2) | 92.5 - 93.5 million |
| For the full year of 2024, we expect | |
| Revenue growth percentage (year-over-year) | Low single digits to mid-single digits |
| Adjusted EBITDA margin expansion (year-over-year) | +150bps to +200bps |
| U.S. Integrated Care Members (2) | 92.5 - 94.0 million |
Earnings Conference Call
The Second Quarter 2024 earnings conference call and webcast will be held Wednesday, July 31, 2024 at 4:30 p.m. E.T. The conference call can be accessed by dialing 1-833-470-1428 for U.S. participants and using the access code #453227. For international participants, please visit the following link for global dial-in numbers: https://www.netroadshow.com/conferencing/global-numbers?confId=68682. A live audio webcast will also be available online at http://ir.teladoc.com/news-and-events/events-and-presentations/. A replay of the call will be available via webcast for on-demand listening shortly after the completion of the call, at the same web link, and will remain available for approximately 90 days.
About Teladoc Health
Teladoc Health empowers all people everywhere to live their healthiest lives by transforming the healthcare experience. As the world leader in whole-person virtual care, Teladoc Health uses proprietary health signals and personalized interactions to drive better health outcomes across the full continuum of care, at every stage in a person’s health journey. Teladoc Health leverages more than two decades of expertise and data-driven insights to meet the growing virtual care needs of consumers and healthcare professionals. For more information, please visit www.teladochealth.com.
Cautionary Note Regarding Forward-Looking Statements
This press release contains “forward-looking statements” within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by words such as: “anticipate,” “intend,” “plan,” “believe,” “project,” “estimate,” “expect,” “may,” “should,” “will” and similar references to future periods. Examples of forward-looking statements include, among others, statements we make regarding future financial or operating results, future numbers of members, BetterHelp paying users or clients, litigation outcomes, regulatory developments, market developments, new products and growth strategies, and the effects of any of the foregoing on our future results of operations or financial condition.
Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are based only on our current beliefs, expectations and assumptions regarding the future of our business, future plans and strategies, projections, anticipated events and trends, the economy and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of our control. Our actual results and financial condition may differ materially from those indicated in the forward-looking statements. Important factors that could cause our actual results and financial condition to differ materially from those indicated in the forward-looking statements include, among others, the following: (i) changes in laws and regulations applicable to our business model; (ii) changes in market conditions and receptivity to our services and offerings, including our ability to effectively compete; (iii) results of litigation or regulatory actions; (iv) the loss of one or more key clients or the loss of a significant number of members or BetterHelp paying users; (v) changes in valuations or useful lives of our assets; (vi) changes to our abilities to recruit and retain qualified providers into our network; (vii) the impact of and risk related to impairment losses with respect to goodwill or other assets; and (viii) the success of our operational review of the company to achieve a more balanced approach to growth and margin. For a detailed discussion of the risk factors that could affect our actual results, please refer to the risk factors identified in our SEC reports, including, but not limited to, our Annual Report on Form 10-K and Quarterly Reports on Form 10-Q, as filed with the SEC.
Any forward-looking statement made by us in this press release is based only on information currently available to us and speaks only as of the date on which it is made. We undertake no obligation to publicly update any forward-looking statement, whether written or oral, that may be made from time to time, whether as a result of new information, future developments or otherwise.
| TELADOC HEALTH, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except share and per share data, unaudited) | |||||||||||||||
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||||||
| Revenue | $ | 642,444 | $ | 652,406 | $ | 1,288,575 | $ | 1,281,650 | |||||||
| Costs and expenses: | |||||||||||||||
| Cost of revenue (exclusive of depreciation and amortization, which are shown separately below) | 188,059 | 190,540 | 382,597 | 380,647 | |||||||||||
| Advertising and marketing | 170,270 | 178,756 | 353,599 | 355,546 | |||||||||||
| Sales | 50,438 | 53,530 | 104,802 | 108,020 | |||||||||||
| Technology and development | 76,751 | 87,309 | 158,139 | 174,294 | |||||||||||
| General and administrative | 109,552 | 125,841 | 221,249 | 239,986 | |||||||||||
| Goodwill impairment | 790,000 | — | 790,000 | — | |||||||||||
| Acquisition, integration, and transformation costs | 457 | 5,080 | 830 | 11,024 | |||||||||||
| Restructuring costs | 1,500 | 7,530 | 11,173 | 15,632 | |||||||||||
| Amortization of intangible assets | 94,862 | 72,511 | 189,919 | 139,371 | |||||||||||
| Depreciation of property and equipment | 1,703 | 2,954 | 4,537 | 5,877 | |||||||||||
| Total costs and expenses | 1,483,592 | 724,051 | 2,216,845 | 1,430,397 | |||||||||||
| Loss from operations | (841,148 | ) | (71,645 | ) | (928,270 | ) | (148,747 | ) | |||||||
| Interest income | (13,572 | ) | (11,558 | ) | (27,514 | ) | (20,469 | ) | |||||||
| Interest expense | 5,648 | 5,835 | 11,297 | 11,098 | |||||||||||
| Other expense (income), net | 563 | 207 | 933 | (4,700 | ) | ||||||||||
| Loss before provision for income taxes | (833,787 | ) | (66,129 | ) | (912,986 | ) | (134,676 | ) | |||||||
| Provision for income taxes | 3,884 | (952 | ) | 6,574 | (271 | ) | |||||||||
| Net loss | $ | (837,671 | ) | $ | (65,177 | ) | $ | (919,560 | ) | $ | (134,405 | ) | |||
| Net loss per share, basic and diluted | $ | (4.92 | ) | $ | (0.40 | ) | $ | (5.44 | ) | $ | (0.82 | ) | |||
| Weighted-average shares used to compute basic and diluted net loss per share | 170,229,583 | 164,171,372 | 168,980,165 | 163,550,481 | |||||||||||
Stock-based Compensation Summary
Compensation costs for stock-based awards were classified as follows (in thousands):
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||||||
| Cost of revenue (exclusive of depreciation and amortization, which are shown separately) | $ | 1,313 | $ | 1,243 | $ | 2,707 | $ | 2,596 | |||||||
| Advertising and marketing | 3,378 | 4,002 | 7,167 | 7,128 | |||||||||||
| Sales | 6,953 | 9,870 | 14,920 | 17,947 | |||||||||||
| Technology and development | 9,683 | 15,689 | 18,982 | 28,416 | |||||||||||
| General and administrative | 20,780 | 24,921 | 40,656 | 45,676 | |||||||||||
| Total stock-based compensation expense (3) | $ | 42,107 | $ | 55,725 | $ | 84,432 | $ | 101,763 | |||||||
See note (3) in the Notes section that follows.
Revenues
| Three Months Ended | Six Months Ended | ||||||||||||||||||||||
| June 30, | June 30, | ||||||||||||||||||||||
| ($ in thousands, unaudited) | 2024 | 2023 | Change | 2024 | 2023 | Change | |||||||||||||||||
| Revenue by Type | |||||||||||||||||||||||
| Access fees | $ | 559,648 | $ | 575,661 | (3 | )% | $ | 1,116,822 | $ | 1,126,531 | (1 | )% | |||||||||||
| Other | 82,796 | 76,745 | 8 | % | 171,753 | 155,119 | 11 | % | |||||||||||||||
| Total Revenue | $ | 642,444 | $ | 652,406 | (2 | )% | $ | 1,288,575 | $ | 1,281,650 | 1 | % | |||||||||||
| Revenue by Geography | |||||||||||||||||||||||
| U.S. Revenue | $ | 540,802 | $ | 561,787 | (4 | )% | $ | 1,088,402 | $ | 1,103,448 | (1 | )% | |||||||||||
| International Revenue | 101,642 | 90,619 | 12 | % | 200,173 | 178,202 | 12 | % | |||||||||||||||
| Total Revenue | $ | 642,444 | $ | 652,406 | (2 | )% | $ | 1,288,575 | $ | 1,281,650 | 1 | % | |||||||||||
Summary Operating Metrics
Consolidated
| Three Months Ended | Six Months Ended | ||||||||||||||||||||||
| June 30, | June 30, | ||||||||||||||||||||||
| (In millions) | 2024 | 2023 | Change | 2024 | 2023 | Change | |||||||||||||||||
| Total Visits | 4.2 | 4.7 | (11 | )% | 8.8 | 9.5 | (7 | )% | |||||||||||||||
Integrated Care
| As of June 30, | |||||||||||
| (In millions) | 2024 | 2023 | Change | ||||||||
| U.S. Integrated Care Members (2) | 92.4 | 85.9 | 8 | % | |||||||
| Chronic Care Program Enrollment (4) | 1.173 | 1.073 | 9 | % | |||||||
| Three Months Ended | Six Months Ended | ||||||||||||||||||||||
| June 30, | June 30, | ||||||||||||||||||||||
| 2024 | 2023 | Change | 2024 | 2023 | Change | ||||||||||||||||||
| Average Monthly Revenue Per U.S. Integrated Care Member (5) | $ | 1.36 | $ | 1.41 | (4 | )% | $ | 1.37 | $ | 1.40 | (2 | )% | |||||||||||
BetterHelp
| Average for | Average for | ||||||||||||||||||||||
| Three Months Ended | Six Months Ended | ||||||||||||||||||||||
| June 30, | June 30, | ||||||||||||||||||||||
| (In millions) | 2024 | 2023 | Change | 2024 | 2023 | Change | |||||||||||||||||
| BetterHelp Paying Users (6) | 0.407 | 0.476 | (14 | )% | 0.411 | 0.471 | (13 | )% | |||||||||||||||
See notes (2), (4), (5), and (6) in the Notes section that follows.
Operating Results by Segment (see note (7) in the Notes section that follows)
The following table presents operating results by reportable segment for the periods indicated:
| Three Months Ended | Six Months Ended | ||||||||||||||||||||||
| June 30, | June 30, | ||||||||||||||||||||||
| ($ in thousands, unaudited) | 2024 | 2023 | Change | 2024 | 2023 | Change | |||||||||||||||||
| Teladoc Health Integrated Care | |||||||||||||||||||||||
| Revenue | $ | 377,421 | $ | 360,050 | 5 | % | $ | 754,532 | $ | 710,022 | 6 | % | |||||||||||
| Adjusted EBITDA | $ | 64,028 | $ | 37,968 | 69 | % | $ | 111,702 | $ | 73,095 | 53 | % | |||||||||||
| Adjusted EBITDA Margin % | 17.0 | % | 10.5 | % | 642 bps | 14.8 | % | 10.3 | % | 451 bps | |||||||||||||
| BetterHelp | |||||||||||||||||||||||
| Therapy Services | $ | 259,073 | $ | 288,288 | (10 | )% | $ | 522,785 | $ | 564,216 | (7 | )% | |||||||||||
| Other Wellness Services | 5,950 | 4,068 | 46 | % | 11,258 | 7,412 | 52 | % | |||||||||||||||
| Total Revenue | $ | 265,023 | $ | 292,356 | (9 | )% | $ | 534,043 | $ | 571,628 | (7 | )% | |||||||||||
| Adjusted EBITDA | $ | 25,453 | $ | 34,187 | (26 | )% | $ | 40,919 | $ | 51,825 | (21 | )% | |||||||||||
| Adjusted EBITDA Margin % | 9.6 | % | 11.7 | % | (209) bps | 7.7 | % | 9.1 | % | (140) bps | |||||||||||||
| TELADOC HEALTH, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands, unaudited) | |||||||
| Six Months Ended June 30, | |||||||
| 2024 | 2023 | ||||||
| Cash flows from operating activities: | |||||||
| Net loss | $ | (919,560 | ) | $ | (134,405 | ) | |
| Adjustments to reconcile net loss to net cash flows from operating activities: | |||||||
| Goodwill impairment | 790,000 | — | |||||
| Amortization of intangible assets | 189,919 | 139,371 | |||||
| Depreciation of property and equipment | 4,537 | 5,877 | |||||
| Amortization of right-of-use assets | 4,902 | 5,778 | |||||
| Provision for allowances for doubtful accounts | 810 | 3,048 | |||||
| Stock-based compensation | 84,432 | 101,763 | |||||
| Deferred income taxes | 1,368 | (3,557 | ) | ||||
| Other, net | 2,695 | 7,587 | |||||
| Changes in operating assets and liabilities: | |||||||
| Accounts receivable | (2,971 | ) | (7,032 | ) | |||
| Prepaid expenses and other current assets | (13,017 | ) | 16,625 | ||||
| Inventory | (6,032 | ) | 20,613 | ||||
| Other assets | 676 | (17,463 | ) | ||||
| Accounts payable | 12,614 | (31,788 | ) | ||||
| Accrued expenses and other current liabilities | 154 | 20,742 | |||||
| Accrued compensation | (45,802 | ) | (15,532 | ) | |||
| Deferred revenue | (1,638 | ) | 7,546 | ||||
| Operating lease liabilities | (5,424 | ) | (4,946 | ) | |||
| Other liabilities | (60 | ) | 111 | ||||
| Net cash provided by operating activities | 97,603 | 114,338 | |||||
| Cash flows from investing activities: | |||||||
| Capital expenditures | (3,061 | ) | (4,267 | ) | |||
| Capitalized software development costs | (60,199 | ) | (77,927 | ) | |||
| Net cash used in investing activities | (63,260 | ) | (82,194 | ) | |||
| Cash flows from financing activities: | |||||||
| Net proceeds from the exercise of stock options | 2,677 | 677 | |||||
| Proceeds from employee stock purchase plan | 2,798 | 5,435 | |||||
| Cash received for withholding taxes on stock-based compensation, net | 83 | 1,450 | |||||
| Other, net | (2 | ) | (1 | ) | |||
| Net cash provided by financing activities | 5,556 | 7,561 | |||||
| Net increase in cash and cash equivalents | 39,899 | 39,705 | |||||
| Effect of foreign currency exchange rate changes | (1,191 | ) | 808 | ||||
| Cash and cash equivalents at beginning of the period | 1,123,675 | 918,182 | |||||
| Cash and cash equivalents at end of the period | $ | 1,162,383 | $ | 958,695 | |||
The following table presents the selected cash flow information for the following quarters (in thousands, unaudited):
| Three Months Ended June 30, | |||||||
| 2024 | 2023 | ||||||
| Net cash provided by operating activities | $ | 88,683 | $ | 101,182 | |||
| Net cash used in investing activities | (27,748 | ) | (36,570 | ) | |||
| Net cash provided by financing activities | 3,805 | 4,208 | |||||
| Effect of foreign currency exchange rate changes | (292 | ) | 1,296 | ||||
| Net increase in cash and cash equivalents | $ | 64,448 | $ | 70,116 | |||
| CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands, except share and per share data, unaudited) | |||||||
| June 30, 2024 | December 31, 2023 | ||||||
| ASSETS | |||||||
| Current assets: | |||||||
| Cash and cash equivalents | $ | 1,162,383 | $ | 1,123,675 | |||
| Accounts receivable, net of allowance for doubtful accounts of | 218,420 | 217,423 | |||||
| Inventories | 34,896 | 29,513 | |||||
| Prepaid expenses and other current assets | 130,956 | 118,437 | |||||
| Total current assets | 1,546,655 | 1,489,048 | |||||
| Property and equipment, net | 29,330 | 32,032 | |||||
| Goodwill | 283,190 | 1,073,190 | |||||
| Intangible assets, net | 1,547,498 | 1,677,781 | |||||
| Operating lease—right-of-use assets | 35,538 | 40,060 | |||||
| Other assets | 81,427 | 80,258 | |||||
| Total assets | $ | 3,523,638 | $ | 4,392,369 | |||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||
| Current liabilities: | |||||||
| Accounts payable | $ | 56,111 | $ | 43,637 | |||
| Accrued expenses and other current liabilities | 173,804 | 178,634 | |||||
| Accrued compensation | 54,656 | 102,686 | |||||
| Deferred revenue—current | 95,434 | 95,659 | |||||
| Convertible senior notes, net—current | 550,722 | — | |||||
| Total current liabilities | 930,727 | 420,616 | |||||
| Other liabilities | 1,007 | 1,080 | |||||
| Operating lease liabilities, net of current portion | 37,716 | 42,837 | |||||
| Deferred revenue, net of current portion | 11,743 | 13,623 | |||||
| Deferred taxes, net | 50,673 | 49,452 | |||||
| Convertible senior notes, net—non-current | 989,686 | 1,538,688 | |||||
| Total liabilities | 2,021,552 | 2,066,296 | |||||
| Commitments and contingencies | |||||||
| Stockholders’ equity: | |||||||
| Common stock, | 171 | 167 | |||||
| Additional paid-in capital | 17,689,096 | 17,591,551 | |||||
| Accumulated deficit | (16,148,215 | ) | (15,228,655 | ) | |||
| Accumulated other comprehensive loss | (38,966 | ) | (36,990 | ) | |||
| Total stockholders’ equity | 1,502,086 | 2,326,073 | |||||
| Total liabilities and stockholders’ equity | $ | 3,523,638 | $ | 4,392,369 | |||
Non-GAAP Financial Measures:
To supplement our financial information presented in accordance with generally accepted accounting principles in the United States (“GAAP”), we use certain non-GAAP financial measures to clarify and enhance an understanding of past performance, which include adjusted gross profit, adjusted gross margin, adjusted EBITDA, and free cash flow. We believe that the presentation of these financial measures enhances an investor’s understanding of our financial performance, and are commonly used by investors to evaluate our performance and that of our competitors. We further believe that these financial measures are useful financial metrics to assess our operating performance and financial and business trends from period-to-period by excluding certain items that we believe are not representative of our core business, and that free cash flow reflects an additional way of viewing our liquidity that, when viewed together with GAAP results, provides management, investors, and other users of our financial information with a more complete understanding of factors and trends affecting our cash flows. We use these non-GAAP financial measures for business planning purposes and in measuring our performance relative to that of our competitors. We utilize adjusted EBITDA as a key measure of our performance.
Adjusted gross profit is our total revenue minus our total cost of revenue (exclusive of depreciation and amortization, which are shown separately) and adjusted gross margin is adjusted gross profit as a percentage of our total revenue.
Adjusted EBITDA consists of net loss before provision for income taxes; other expense (income), net; interest income; interest expense; depreciation of property and equipment; amortization of intangible assets; restructuring costs; acquisition, integration, and transformation cost; goodwill impairment; and stock-based compensation.
Free cash flow is net cash provided by operating activities less capital expenditures and capitalized software development costs.
Our use of these non-GAAP terms may vary from that of others in our industry, and other companies may calculate such measures differently than we do, limiting their usefulness as comparative measures.
Non-GAAP measures have important limitations as analytical tools and you should not consider them in isolation, and they should not be considered as an alternative to net loss before provision for income taxes, net loss, net loss per share, net cash from operating activities or any other measures derived in accordance with GAAP. Some of these limitations are:
- adjusted gross margin has been and will continue to be affected by a number of factors, including the fees we charge our clients, the number of visits and cases we complete, the costs paid to providers and medical experts, as well as the costs of our provider network operations center;
- adjusted gross margin does not reflect the significant depreciation and amortization to cost of revenue;
- adjusted EBITDA eliminates the impact of the provision for income taxes on our results of operations, and it does not reflect other expense (income), net, interest income, or interest expense;
- adjusted EBITDA does not reflect restructuring costs. Restructuring costs may include certain lease impairment costs, certain losses related to early lease terminations, and severance;
- adjusted EBITDA does not reflect significant acquisition, integration, and transformation costs. Acquisition, integration and transformation costs include investment banking, financing, legal, accounting, consultancy, integration, fair value changes related to contingent consideration, and certain other transaction costs related to mergers and acquisitions. It also includes costs related to certain business transformation initiatives focused on integrating and optimizing various operations and systems, including upgrading our customer relationship management (CRM) and enterprise resource planning (ERP) systems. These transformation cost adjustments made to our results do not represent normal, recurring, operating expenses necessary to operate the business but, rather, incremental costs incurred in connection with our acquisition and integration activities;
- adjusted EBITDA does not reflect goodwill impairment; and
- adjusted EBITDA does not reflect the significant non-cash stock-based compensation expense which should be viewed as a component of recurring operating costs.
In addition, although amortization of intangible assets and depreciation of property and equipment are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, and adjusted gross profit, adjusted gross margin, and adjusted EBITDA do not reflect any expenditures for such replacements.
We compensate for these limitations by using these non-GAAP measures along with other comparative tools, together with GAAP measurements, to assist in the evaluation of operating performance. Such GAAP measurements include net loss, net loss per share, net cash provided by operating activities, and other performance measures.
In evaluating these financial measures, you should be aware that in the future we may incur expenses similar to those eliminated in this presentation. Our presentation of these non-GAAP measures should not be construed as an inference that our future results will be unaffected by unusual or nonrecurring items.
The following is a reconciliation of gross profit, the most directly comparable GAAP financial measures, to adjusted gross profit:
| Reconciliation of GAAP Gross Profit to Adjusted Gross Profit (In thousands, unaudited) | |||||||||||||||
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||||||
| Revenue | $ | 642,444 | $ | 652,406 | $ | 1,288,575 | $ | 1,281,650 | |||||||
| Cost of revenue (exclusive of depreciation and amortization, which are shown separately below) | (188,059 | ) | (190,540 | ) | (382,597 | ) | (380,647 | ) | |||||||
| Amortization of intangible assets and depreciation of property and equipment | (26,146 | ) | (21,474 | ) | (52,458 | ) | (34,005 | ) | |||||||
| Gross Profit | 428,239 | 440,392 | 853,520 | 866,998 | |||||||||||
| Amortization of intangible assets and depreciation of property and equipment | 26,146 | 21,474 | 52,458 | 34,005 | |||||||||||
| Adjusted gross profit | $ | 454,385 | $ | 461,866 | $ | 905,978 | $ | 901,003 | |||||||
| Gross margin | 66.7 | % | 67.5 | % | 66.2 | % | 67.6 | % | |||||||
| Adjusted gross margin | 70.7 | % | 70.8 | % | 70.3 | % | 70.3 | % | |||||||
The following is a reconciliation of net loss, the most directly comparable GAAP financial measure, to adjusted EBITDA:
| Reconciliation of GAAP Net Loss to Adjusted EBITDA (In thousands, except for outlook data, unaudited) | |||||||||||||||
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||||||
| Net loss | $ | (837,671 | ) | $ | (65,177 | ) | $ | (919,560 | ) | $ | (134,405 | ) | |||
| Add: | |||||||||||||||
| Provision for income taxes | 3,884 | (952 | ) | 6,574 | (271 | ) | |||||||||
| Other expense (income), net | 563 | 207 | 933 | (4,700 | ) | ||||||||||
| Interest expense | 5,648 | 5,835 | 11,297 | 11,098 | |||||||||||
| Interest income | (13,572 | ) | (11,558 | ) | (27,514 | ) | (20,469 | ) | |||||||
| Depreciation of property and equipment | 1,703 | 2,954 | 4,537 | 5,877 | |||||||||||
| Amortization of intangible assets | 94,862 | 72,511 | 189,919 | 139,371 | |||||||||||
| Restructuring costs | 1,500 | 7,530 | 11,173 | 15,632 | |||||||||||
| Acquisition, integration, and transformation costs | 457 | 5,080 | 830 | 11,024 | |||||||||||
| Goodwill impairment | 790,000 | — | 790,000 | — | |||||||||||
| Stock-based compensation | 42,107 | 55,725 | 84,432 | 101,763 | |||||||||||
| Total Adjustments | 834,064 | 68,335 | 886,435 | 128,419 | |||||||||||
| Consolidated Adjusted EBITDA | $ | 89,481 | $ | 72,155 | $ | 152,621 | $ | 124,920 | |||||||
| Segment Adjusted EBITDA | |||||||||||||||
| Teladoc Health Integrated Care | $ | 64,028 | $ | 37,968 | $ | 111,702 | $ | 73,095 | |||||||
| BetterHelp | 25,453 | 34,187 | 40,919 | 51,825 | |||||||||||
| Consolidated Adjusted EBITDA | $ | 89,481 | $ | 72,155 | $ | 152,621 | $ | 124,920 | |||||||
The following is a reconciliation of net cash provided by operating activities, the most directly comparable GAAP financial measure, to free cash flow:
| Reconciliation of GAAP Net Cash Provided by Operating Activities to Free Cash Flow (In thousands, unaudited) | |||||||||||||||
| Three Months Ended | Six Months Ended | ||||||||||||||
| June 30, | June 30, | ||||||||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||||||
| Net cash provided by operating activities | $ | 88,683 | $ | 101,182 | $ | 97,603 | $ | 114,338 | |||||||
| Capital expenditures | (1,912 | ) | (1,904 | ) | (3,061 | ) | (4,267 | ) | |||||||
| Capitalized software development costs | (25,836 | ) | (34,666 | ) | (60,199 | ) | (77,927 | ) | |||||||
| Capex | (27,748 | ) | (36,570 | ) | (63,260 | ) | (82,194 | ) | |||||||
| Free Cash Flow | $ | 60,935 | $ | 64,612 | $ | 34,343 | $ | 32,144 | |||||||
Notes:
- A reconciliation of each non-GAAP measure to the most comparable measure under GAAP has been provided in this press release in the accompanying tables. An explanation of these non-GAAP measures is also included under the heading “Non-GAAP Financial Measures.”
- U.S. Integrated Care Members represent the number of unique individuals who have paid access and visit fee only access to our suite of integrated care services in the U.S. at the end of the applicable period.
- Excluding the amount capitalized related to software development projects.
- Chronic Care Program Enrollment represents the total number of enrollees across our suite of chronic care programs at the end of a given period.
- Average monthly revenue per U.S. Integrated Care member is calculated by dividing the total revenue generated from the Integrated Care segment by the average number of U.S. Integrated Care Members (see note 2) during the applicable period.
- BetterHelp Paying Users represent the average number of global monthly paying users of our BetterHelp therapy services during the applicable period.
- We have two segments: Teladoc Health Integrated Care (“Integrated Care”) and BetterHelp. The Integrated Care segment includes a suite of global virtual medical services including general medical, expert medical services, specialty medical, chronic condition management, mental health, and enabling technologies and enterprise telehealth solutions for hospitals and health systems. The BetterHelp segment includes virtual therapy and other wellness services provided on a global basis which are predominantly marketed and sold on a direct-to-consumer basis.
Investors:
Michael Minchak
617-444-9612
ir@teladochealth.com
Media:
Chris Stenrud
860-491-8821
pr@teladochealth.com
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