Teladoc Health Reports First Quarter 2024 Results
PURCHASE, NY, April 25, 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 March 31, 2024 (“First Quarter 2024”). Unless otherwise noted, percentage and other changes are relative to the three months ended March 31, 2023 (“First Quarter 2023”).
Financial and Operational Highlights for First Quarter 2024
- First Quarter 2024 revenue grows 3% year-over-year to $646.1 million
- First Quarter 2024 net loss of $81.9 million, or $0.49 per share
- First Quarter 2024 adjusted EBITDA of $63.1 million, up 20% year-over-year
“We are pleased to report a solid start to the year, with strength in both revenue and adjusted EBITDA in the first quarter,” said Mala Murthy, acting chief executive officer and chief financial officer of Teladoc Health. “During this period of transition, our team remains laser focused on our key initiatives, which include building upon our market leadership position; driving increased product penetration through our large installed base of over 90 million virtual care members; and accelerating our bottom-line performance.”
| Key Financial Data | ||||||||||
| ($ in thousands, except per share data, unaudited) | ||||||||||
| Three Months Ended | ||||||||||
| March 31, | ||||||||||
| 2024 | 2023 | Change | ||||||||
| Revenue | $ | 646,131 | $ | 629,244 | 3 | % | ||||
| Net loss | $ | (81,889 | ) | $ | (69,228 | ) | (18 | )% | ||
| Net loss per share, basic and diluted | $ | (0.49 | ) | $ | (0.42 | ) | (17 | )% | ||
| Adjusted EBITDA (1) | $ | 63,140 | $ | 52,765 | 20 | % | ||||
See note (1) in the Notes section that follows.
First Quarter 2024
Revenue increased 3% to $646.1 million from $629.2 million in First Quarter 2023. Access fees revenue grew 1% to $557.2 million and other revenue grew 14% to $89.0 million. U.S. revenue grew 1% to $547.6 million and International revenue grew 13% to $98.5 million.
Teladoc Health Integrated Care ("Integrated Care") segment revenue increased 8% to $377.1 million in First Quarter 2024 and BetterHelp segment revenue decreased 4% to $269.0 million.
Net loss totaled $81.9 million, or $0.49 per share, for First Quarter 2024, compared to $69.2 million, or $0.42 per share, for First Quarter 2023. Results for First Quarter 2024 included stock-based compensation expense of $42.3 million, or $0.25 per share, and amortization of acquired intangibles of $64.2 million, or $0.38 per share. The amortization of acquired intangibles increased over the prior year period reflecting a change in the useful lives of certain intangibles in the third quarter of 2023. Net loss for First Quarter 2024 also included $9.7 million, or $0.06 per share, of restructuring costs, primarily related to severance payments.
Results for First Quarter 2023 primarily included stock-based compensation expense of $46.0 million, or $0.28 per share, and amortization of acquired intangibles of $50.3 million, or $0.31 per share. Net loss for First Quarter 2023 also included $8.1 million, or $0.05 per share, of restructuring costs related to the abandonment of certain excess leased office space.
Adjusted EBITDA(1) increased 20% to $63.1 million, compared to $52.8 million for First Quarter 2023. Integrated Care segment adjusted EBITDA increased 36% to $47.7 million in First Quarter 2024 and BetterHelp segment adjusted EBITDA decreased 12% to $15.5 million in First Quarter 2024.
GAAP gross margin, which includes amortization of intangible assets and depreciation of property and equipment, was 65.8% for First Quarter 2024, compared to 67.8% for First Quarter 2023.
Adjusted gross margin(1) was 69.9% for First Quarter 2024, compared to 69.8% for First Quarter 2023.
Capex and Cash Flow
Cash flow from operations was $8.9 million in First Quarter 2024, compared to $13.2 million in First Quarter 2023. Capitalized expenditures and capitalized software development costs (together, “Capex”) was $35.5 million in First Quarter 2024, compared to $45.6 million in First Quarter 2023. Free cash flow was a net outflow of $26.6 million in First Quarter 2024, compared to a net outflow of $32.5 million in First Quarter 2023.
Financial Outlook
Teladoc Health provides an outlook 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.
For the second quarter of 2024, we expect:
| 2Q 2024 Outlook Range | |
| Revenue | $635 - $660 million |
| Adjusted EBITDA | $70 - $80 million |
| Net loss per share | ($0.45) - ($0.35) |
| U.S. Integrated Care Members (2) | 92 - 93 million |
| Integrated Care | |
| Revenue growth percentage (year-over-year) | 2.0% - 5.0% |
| Adjusted EBITDA margin | 12.0% - 14.0% |
| BetterHelp | |
| Revenue growth percentage (year-over-year) | (8.0%) - (4.0%) |
| Adjusted EBITDA margin | 9.0% - 10.0% |
For the full year of 2024, we expect:
| Full Year 2024 Outlook Range | |
| Revenue | $2,635 - $2,735 million |
| Adjusted EBITDA | $350 - $390 million |
| Net loss per share | ($1.10) - ($0.80) |
| Free Cash Flow | $210 - $240 million |
| U.S. Integrated Care Members (2) | 92 - 94 million |
| Integrated Care | |
| Revenue growth percentage (year-over-year) | Low to mid-single digits |
| Adjusted EBITDA margin expansion (year-over-year) | +150bps to +250bps |
| BetterHelp | |
| Revenue growth percentage (year-over-year) | Flat to low single digits |
| Adjusted EBITDA margin expansion (year-over-year) | Flat +/- 50bps |
See note (2) in the Notes section that follows.
Three Year Outlook
We are reiterating the three-year outlook that we disclosed in our earnings release on February 20, 2024.
Earnings Conference Call
The First Quarter 2024 earnings conference call and webcast will be held Thursday, April 25, 2024 at 5:00 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 # 901506. For international participants, please visit the following link for global dial-in numbers: https://www.netroadshow.com/conferencing/global-numbers?confId=60046. 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 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 March 31, | |||||||
| 2024 | 2023 | ||||||
| Revenue | $ | 646,131 | $ | 629,244 | |||
| Expenses: | |||||||
| Cost of revenue (exclusive of depreciation and amortization, which are shown separately below) | 194,538 | 190,107 | |||||
| Operating expenses: | |||||||
| Advertising and marketing | 183,329 | 176,790 | |||||
| Sales | 54,364 | 54,490 | |||||
| Technology and development | 81,388 | 86,985 | |||||
| General and administrative | 111,697 | 114,145 | |||||
| Acquisition, integration, and transformation costs | 373 | 5,944 | |||||
| Restructuring costs | 9,673 | 8,102 | |||||
| Amortization of intangible assets | 95,057 | 66,860 | |||||
| Depreciation of property and equipment | 2,834 | 2,923 | |||||
| Total expenses | 733,253 | 706,346 | |||||
| Loss from operations | (87,122 | ) | (77,102 | ) | |||
| Interest income | (13,942 | ) | (8,911 | ) | |||
| Interest expense | 5,649 | 5,263 | |||||
| Other expense (income), net | 370 | (4,907 | ) | ||||
| Loss before provision for income taxes | (79,199 | ) | (68,547 | ) | |||
| Provision for income taxes | 2,690 | 681 | |||||
| Net loss | $ | (81,889 | ) | $ | (69,228 | ) | |
| Net loss per share, basic and diluted | $ | (0.49 | ) | $ | (0.42 | ) | |
| Weighted-average shares used to compute basic and diluted net loss per share | 167,730,746 | 162,922,691 | |||||
Stock-based Compensation Summary
Compensation costs for stock-based awards were classified as follows (in thousands):
| Three Months Ended March 31, | |||||
| 2024 | 2023 | ||||
| Cost of revenue (exclusive of depreciation and amortization, which are shown separately) | $ | 1,394 | $ | 1,353 | |
| Advertising and marketing | 3,789 | 3,126 | |||
| Sales | 7,967 | 8,075 | |||
| Technology and development | 9,299 | 12,729 | |||
| General and administrative | 19,876 | 20,755 | |||
| Total stock-based compensation expense (3) | $ | 42,325 | $ | 46,038 | |
See note (3) in the Notes section that follows.
Revenues
| Three Months Ended | ||||||||
| March 31, | ||||||||
| ($ in thousands, unaudited) | 2024 | 2023 | Change | |||||
| Revenue by Type | ||||||||
| Access fees | $ | 557,174 | $ | 550,870 | 1 | % | ||
| Other | 88,957 | 78,374 | 14 | % | ||||
| Total Revenue | $ | 646,131 | $ | 629,244 | 3 | % | ||
| Revenue by Geography | ||||||||
| U.S. Revenue | $ | 547,600 | $ | 541,662 | 1 | % | ||
| International Revenue | 98,531 | 87,582 | 13 | % | ||||
| Total Revenue | $ | 646,131 | $ | 629,244 | 3 | % | ||
Summary Operating Metrics
Consolidated
| Three Months Ended | ||||||
| March 31, | ||||||
| (In millions) | 2024 | 2023 | Change | |||
| Total Visits | 4.6 | 4.9 | (6 | )% | ||
Integrated Care
| As of March 31, | ||||||
| (In millions) | 2024 | 2023 | Change | |||
| U.S. Integrated Care Members (2) | 91.8 | 84.9 | 8 | % | ||
| Chronic Care Program Enrollment (4) | 1.121 | 1.028 | 9 | % | ||
| Three Months Ended |
By: GlobeNewswire
- 25 Apr 2024
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