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Teladoc Health Reports First Quarter 2024 Results

Teladoc Health, Inc.
Teladoc Health, Inc.

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

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“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

 

 

 

 

March 31,

 

 

 

 

 

2024

 

 

2023

 

Change

Average Monthly Revenue
Per U.S. Integrated Care Member (5)

$

1.38

 

$

1.39

 

(1

)%

BetterHelp

 

Average for

 

 

 

 

Three Months Ended

 

 

 

 

March 31,

 

 

 

(In millions)

2024

 

2023

 

Change

BetterHelp Paying Users (6)

0.415

 

0.467

 

(11

)%

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

 

 

 

March 31,

 

 

($ in thousands, unaudited)

 

2024

 

 

 

2023

 

 

Change

Teladoc Health Integrated Care

 

 

 

 

 

Revenue

$

377,111

 

 

$

349,972

 

 

8

%

Adjusted EBITDA

$

47,674

 

 

$

35,127

 

 

36

%

Adjusted EBITDA Margin %

 

12.6

%

 

 

10.0

%

 

260 bps

 

 

 

 

 

 

BetterHelp

 

 

 

 

 

Therapy Services

$

263,712

 

 

$

275,928

 

 

(4

)%

Other Wellness Services

 

5,308

 

 

 

3,344

 

 

59

%

Total Revenue

$

269,020

 

 

$

279,272

 

 

(4

)%

Adjusted EBITDA

$

15,466

 

 

$

17,638

 

 

(12

)%

Adjusted EBITDA Margin %

 

5.7

%

 

 

6.3

%

 

(60) bps



TELADOC HEALTH, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands, unaudited)

 

Three Months Ended
March 31,

 

 

2024

 

 

 

2023

 

Cash flows from operating activities:

 

 

 

Net loss

$

(81,889

)

 

$

(69,228

)

Adjustments to reconcile net loss to net cash flows from operating activities:

 

 

 

Amortization of intangible assets

 

95,057

 

 

 

66,860

 

Depreciation of property and equipment

 

2,834

 

 

 

2,923

 

Amortization of right-of-use assets

 

2,614

 

 

 

3,056

 

Provision for allowances for doubtful accounts

 

86

 

 

 

3,794

 

Stock-based compensation

 

42,325

 

 

 

46,038

 

Deferred income taxes

 

(1,600

)

 

 

(355

)

Other, net

 

1,403

 

 

 

3,244

 

Changes in operating assets and liabilities:

 

 

 

Accounts receivable

 

2,133

 

 

 

(14,046

)

Prepaid expenses and other current assets

 

(23,691

)

 

 

(6,165

)

Inventory

 

(3,091

)

 

 

10,000

 

Other assets

 

1,009

 

 

 

(9,939

)

Accounts payable

 

(5,870

)

 

 

(9,132

)

Accrued expenses and other current liabilities

 

25,185

 

 

 

15,452

 

Accrued compensation

 

(51,973

)

 

 

(32,265

)

Deferred revenue

 

7,297

 

 

 

5,648

 

Operating lease liabilities

 

(2,861

)

 

 

(2,858

)

Other liabilities

 

(48

)

 

 

129

 

Net cash provided by operating activities

 

8,920

 

 

 

13,156

 

Cash flows from investing activities:

 

 

 

Capital expenditures

 

(1,149

)

 

 

(2,363

)

Capitalized software development costs

 

(34,363

)

 

 

(43,261

)

Net cash used in investing activities

 

(35,512

)

 

 

(45,624

)

Cash flows from financing activities:

 

 

 

Net proceeds from the exercise of stock options

 

131

 

 

 

296

 

Proceeds from employee stock purchase plan

 

1,516

 

 

 

2,731

 

Cash received for withholding taxes on stock-based compensation, net

 

106

 

 

 

496

 

Other, net

 

(2

)

 

 

(170

)

Net cash provided by financing activities

 

1,751

 

 

 

3,353

 

Net decrease in cash and cash equivalents

 

(24,841

)

 

 

(29,115

)

Effect of foreign currency exchange rate changes

 

(899

)

 

 

(488

)

Cash and cash equivalents at beginning of the period

 

1,123,675

 

 

 

918,182

 

Cash and cash equivalents at end of the period

$

1,097,935

 

 

$

888,579

 



CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share data, unaudited)

 

March 31,
2024

 

December 31,
2023

Assets

 

 

 

Current assets:

 

 

 

Cash and cash equivalents

$

1,097,935

 

 

$

1,123,675

 

Accounts receivable, net of allowance for doubtful accounts of $3,530 and $4,240 at March 31, 2024 and December 31, 2023, respectively

 

214,293

 

 

 

217,423

 

Inventories

 

32,268

 

 

 

29,513

 

Prepaid expenses and other current assets

 

141,769

 

 

 

118,437

 

Total current assets

 

1,486,265

 

 

 

1,489,048

 

Property and equipment, net

 

29,550

 

 

 

32,032

 

Goodwill

 

1,073,190

 

 

 

1,073,190

 

Intangible assets, net

 

1,614,238

 

 

 

1,677,781

 

Operating lease - right-of-use assets

 

37,506

 

 

 

40,060

 

Other assets

 

80,007

 

 

 

80,258

 

Total assets

$

4,320,756

 

 

$

4,392,369

 

Liabilities and stockholders’ equity

 

 

 

Current liabilities:

 

 

 

Accounts payable

$

37,674

 

 

$

43,637

 

Accrued expenses and other current liabilities

 

199,418

 

 

 

178,634

 

Accrued compensation

 

50,523

 

 

 

102,686

 

Deferred revenue-current

 

101,229

 

 

 

95,659

 

Total current liabilities

 

388,844

 

 

 

420,616

 

Other liabilities

 

1,023

 

 

 

1,080

 

Operating lease liabilities, net of current portion

 

39,971

 

 

 

42,837

 

Deferred revenue, net of current portion

 

15,002

 

 

 

13,623

 

Deferred taxes, net

 

47,472

 

 

 

49,452

 

Convertible senior notes, net

 

1,539,546

 

 

 

1,538,688

 

Commitments and contingencies

 

 

 

Stockholders’ equity:

 

 

 

Common stock, $0.001 par value; 300,000,000 shares authorized; 169,314,029 shares and 166,658,253 shares issued and outstanding as of March 31, 2024 and December 31, 2023 respectively

 

169

 

 

 

167

 

Additional paid-in capital

 

17,637,902

 

 

 

17,591,551

 

Accumulated deficit

 

(15,310,544

)

 

 

(15,228,655

)

Accumulated other comprehensive loss

 

(38,629

)

 

 

(36,990

)

Total stockholders’ equity

 

2,288,898

 

 

 

2,326,073

 

Total liabilities and stockholders’ equity

$

4,320,756

 

 

$

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 non-GAAP financial measures to clarify and enhance an understanding of past performance, which include adjusted gross profit, adjusted gross margin, EBITDA, 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.

EBITDA consists of net loss before interest income; interest expense; other expense (income), net, including foreign currency exchange gains or losses; provision for income taxes; amortization of intangible assets; and depreciation of property and equipment. Adjusted EBITDA consists of net loss before interest income; interest expense; other expense (income), net, including foreign currency exchange gains or losses; provision for income taxes; amortization of intangible assets; depreciation of property and equipment; stock-based compensation; restructuring costs; and acquisition, integration, and transformation costs.

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;

  • EBITDA and adjusted EBITDA eliminate the impact of the provision for income taxes on our results of operations, and they do not reflect interest income, interest expense or other expense (income), net;

  • 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; 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, EBITDA 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 and gross margin, the most directly comparable GAAP financial measures, to adjusted gross profit and adjusted gross margin, respectively:


Reconciliation of GAAP Gross Profit to Adjusted Gross Profit and Adjusted Gross Margin
(In thousands, unaudited)

 

Three Months Ended
March 31,

 

 

2024

 

 

 

2023

 

Revenue

$

646,131

 

 

$

629,244

 

Cost of revenue (exclusive of depreciation and amortization, which are shown separately below)

 

(194,538

)

 

 

(190,107

)

Amortization of intangible assets and depreciation of property and equipment

 

(26,312

)

 

 

(12,531

)

Gross profit

 

425,281

 

 

 

426,606

 

Amortization of intangible assets and depreciation of property and equipment

 

26,312

 

 

 

12,531

 

Adjusted gross profit

$

451,593

 

 

$

439,137

 

 

 

 

 

Gross margin

 

65.8

%

 

 

67.8

%

Adjusted gross margin

 

69.9

%

 

 

69.8

%


The following is a reconciliation of net loss, the most directly comparable GAAP financial measure, to EBITDA and adjusted EBITDA:

Reconciliation of GAAP Net Loss to EBITDA and Adjusted EBITDA
(In thousands, except for outlook data, unaudited)

 

 

 

 

 

Outlook in millions (8)

 

Three Months Ended
March 31,

 

Second Quarter

 

Full Year

 

 

2024

 

 

 

2023

 

 

2024

 

2024

Net loss

$

(81,889

)

 

$

(69,228

)

 

$(77) - (60)

 

$(185) - (134)

Add:

 

 

 

 

 

 

 

Interest income

 

(13,942

)

 

 

(8,911

)

 

 

 

 

Interest expense

 

5,649

 

 

 

5,263

 

 

 

 

 

Other expense (income), net

 

370

 

 

 

(4,907

)

 

 

 

 

Provision for income taxes

 

2,690

 

 

 

681

 

 

 

 

 

Amortization of intangible assets

 

95,057

 

 

 

66,860

 

 

 

 

 

Depreciation of property and equipment

 

2,834

 

 

 

2,923

 

 

 

 

 

Total Adjustments

 

92,658

 

 

 

61,909

 

 

 

 

 

Consolidated EBITDA

 

10,769

 

 

 

(7,319

)

 

 

 

 

Adjustments:

 

 

 

 

 

 

 

Stock-based compensation

 

42,325

 

 

 

46,038

 

 

 

 

 

Acquisition, integration, and transformation costs

 

373

 

 

 

5,944

 

 

 

 

 

Restructuring costs

 

9,673

 

 

 

8,102

 

 

 

 

 

Total Adjustments

 

52,371

 

 

 

60,084

 

 

130 - 157

 

484 - 575

Consolidated Adjusted EBITDA

$

63,140

 

 

$

52,765

 

 

$70 - 80

 

$350 - 390

 

 

 

 

 

 

 

 

Segment Adjusted EBITDA

 

 

 

 

 

 

 

Teladoc Health Integrated Care

$

47,674

 

 

$

35,127

 

 

 

 

 

BetterHelp

 

15,466

 

 

 

17,638

 

 

 

 

 

Consolidated Adjusted EBITDA

$

63,140

 

 

$

52,765

 

 

 

 

 

See note (8) in the Notes section that follows.


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

 

Outlook (9)

 

March 31,

 

Full Year

 

 

2024

 

 

 

2023

 

 

2024 (in millions)

Net cash provided by operating activities

$

8,920

 

 

$

13,156

 

 

$354 - 374

Capital expenditures

 

(1,149

)

 

 

(2,363

)

 

 

Capitalized software development costs

 

(34,363

)

 

 

(43,261

)

 

 

Capex

 

(35,512

)

 

 

(45,624

)

 

(144) - (134)

Free cash flow

$

(26,592

)

 

$

(32,468

)

 

$210 - 240

See note (9) in the Notes section that follows.

Notes:

  1. 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.”

  2. 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.

  3. Excluding the amount capitalized related to software development projects.

  4. Chronic Care Program Enrollment represents the total number of enrollees across our suite of chronic care programs at the end of a given period.

  5. 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.

  6. BetterHelp Paying Users represent the average number of global monthly paying users of our BetterHelp therapy services during the applicable period.

  7. 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.

  8. We have not provided a full line-item reconciliation for net loss to adjusted EBITDA outlook because we do not provide outlook on the individual reconciling items between net loss and adjusted EBITDA. This is due to the uncertainty as to timing, and the potential variability, of the individual reconciling items such as impairments, stock-based compensation and the related tax impact, provision for income taxes, acquisition, integration, and transformation costs, and restructuring costs, the effect of which may be significant. Accordingly, a full line-item reconciliation of the GAAP measure to the corresponding non-GAAP financial measure outlook is not available without unreasonable effort.

  9. We have not provided a line-item reconciliation for free cash flow to net cash from operating activities for this future period because we believe such a reconciliation would imply a degree of precision and certainty that could be confusing to investors and we are unable to reasonably predict certain items contained in the GAAP measure without unreasonable efforts.

Investors:
617-444-9612
ir@teladochealth.com

Media:
Chris Stenrud
860-491-8821
pr@teladochealth.com