PURCHASE, NY, Oct. 30, 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 September 30, 2024 ("Third Quarter 2024”). Unless otherwise noted, percentage and other changes are relative to the three months ended September 30, 2023 ("Third Quarter 2023”).
Third Quarter 2024 Highlights
- Third Quarter 2024 revenue of $640.5 million, down 3% year-over-year
- Third Quarter 2024 net loss of $33.3 million, or $0.19 per share
- Third Quarter 2024 adjusted EBITDA of $83.3 million, down 6% year-over-year
- Integrated Care segment revenue of $383.7 million, up 2% year-over-year, and adjusted EBITDA margin improved to 17.7%
- BetterHelp segment revenue of $256.8 million, down 10% year-over-year, and adjusted EBITDA margin of 5.9%
"As we close out 2024, we are moving with urgency and making changes to more effectively leverage our leadership position in the complex and dynamic markets we serve. There is more work ahead of us, and 2025 will be an important repositioning year. Our focus remains on delivering consistent performance and driving long term shareholder value,” Divita added.
| Key Financial Data | |||||||||||||||||||||
| ($ in thousands, except per share data, unaudited)
| |||||||||||||||||||||
| Three Months Ended | Nine Months Ended | ||||||||||||||||||||
| September 30, | September 30, | ||||||||||||||||||||
| 2024 | 2023 | Change | 2024 | 2023 | Change | ||||||||||||||||
| Revenue | $ | 640,508 | $ | 660,238 | (3 | )% | $ | 1,929,083 | $ | 1,941,888 | (1 | )% | |||||||||
| Net loss | $ | (33,276 | ) | $ | (57,073 | ) | 42 | % | $ | (952,836 | ) | $ | (191,478 | ) | N/M | ||||||
| Net loss per share, basic and diluted | $ | (0.19 | ) | $ | (0.35 | ) | 46 | % | $ | (5.61 | ) | $ | (1.17 | ) | N/M | ||||||
| Adjusted EBITDA (1) | $ | 83,255 | $ | 88,757 | (6 | )% | $ | 235,876 | $ | 213,677 | 10 | % | |||||||||
N/M - not meaningful
Third Quarter 2024
Revenue decreased 3% to $640.5 million from $660.2 million in Third Quarter 2023. Access fees revenue decreased 5% to $555.3 million and other revenue grew 9% to $85.2 million. U.S. revenue decreased 6% to $536.2 million and International revenue grew 15% to $104.3 million.
Teladoc Health Integrated Care ("Integrated Care") segment revenue increased 2% to $383.7 million in Third Quarter 2024 and BetterHelp segment revenue decreased 10% to $256.8 million.
Net loss totaled $33.3 million, or $0.19 per share, for Third Quarter 2024, compared to $57.1 million, or $0.35 per share, for Third Quarter 2023. Results for Third Quarter 2024 included stock-based compensation expense of $34.0 million, or $0.20 per share pre-tax, and amortization of acquired intangibles of $51.1 million, or $0.30 per share pre-tax. Net loss for Third Quarter 2024 also included $3.6 million, or $0.02 per share pre-tax, of restructuring costs, related to severance costs and costs associated with office space reduction.
Results for Third Quarter 2023 primarily included stock-based compensation expense of $52.9 million, or $0.32 per share pre-tax, and amortization of acquired intangibles of $69.2 million, or $0.42 per share pre-tax.
Adjusted EBITDA(1) decreased 6% to $83.3 million, compared to $88.8 million for Third Quarter 2023. Integrated Care segment adjusted EBITDA increased 8% to $68.0 million in Third Quarter 2024 and BetterHelp segment adjusted EBITDA decreased 41% to $15.2 million in Third Quarter 2024.
GAAP gross margin, which includes amortization of intangible assets and depreciation of property and equipment, was 67.2% for Third Quarter 2024, compared to 68.6% for Third Quarter 2023.
Adjusted gross margin(1) was 71.9% for Third Quarter 2024, compared to 71.8% for Third Quarter 2023.
Nine Months Ended September 30, 2024
Revenue decreased 1% to $1,929.1 million from $1,941.9 million in the first nine months of 2023. Access fees revenue decreased 2% to $1,672.1 million, and other revenue grew 10% to $257.0 million. U.S. revenue decreased 3% to $1,624.6 million, and International revenue grew 13% to $304.5 million for the first nine months of 2024.
Revenue for the Integrated Care segment increased 5% to $1,138.2 million and for the BetterHelp segment decreased 8% to $790.9 million in the first nine months of 2024.
Non-cash goodwill impairment charge of $790.0 million was recorded in the first nine months of 2024 and was attributable to changes in estimates of future cash flows related to the company's BetterHelp segment. The non-cash charge had no impact on the provision for income taxes.
Net loss totaled $952.8 million, or $5.61 per share, for the first nine months of 2024, compared to $191.5 million, or $1.17 per share, for the first nine months of 2023. Results for the first nine months of 2024 included a non-cash goodwill impairment charge of $790.0 million, or $4.65 per share pre-tax, stock-based compensation expense of $118.5 million, or $0.70 per share pre-tax, restructuring costs of $14.8 million, or $0.09 per share pre-tax, primarily related to severance costs, and amortization of acquired intangibles of $179.4 million, or $1.06 per share pre-tax.
Results for the first nine months of 2023 primarily included stock-based compensation expense of $154.7 million, or $0.94 per share pre-tax, and amortization of acquired intangibles of $172.2 million, or $1.05 per share pre-tax. Net loss for the first nine months of 2023 also included $16.0 million, or $0.10 per share pre-tax, of restructuring costs related to the abandonment of certain excess leased office space.
Adjusted EBITDA(1) increased 10% to $235.9 million, compared to $213.7 million for the first nine months of 2023. Integrated Care segment adjusted EBITDA increased 32% to $179.7 million in the first nine months of 2024 and BetterHelp segment adjusted EBITDA decreased 28% to $56.1 million in the first nine months of 2024.
GAAP gross margin, which includes depreciation and amortization, was 66.6% for the first nine months of 2024, compared to 68.0% for the first nine months of 2023.
Adjusted gross margin(1) was 70.8% for the first nine months of 2024 and 2023.
Capex and Cash Flow
Cash flow from operations was $110.2 million in Third Quarter 2024, compared to $105.6 million in Third Quarter 2023, and was $207.8 million in the first nine months of 2024, compared to $219.9 million in the first nine months of 2023. Capitalized expenditures and capitalized software development costs (together, "Capex”) were $31.1 million in Third Quarter 2024, compared to $37.6 million in Third Quarter 2023, and were $94.4 million for the first nine months of 2024, compared to $119.8 million for the first nine months of 2023. Free cash flow was $79.0 million in Third Quarter 2024, compared to $68.0 million in Third Quarter 2023, and was $113.4 million for the first nine months of 2024, compared to $100.1 million for the first nine months of 2023.
Financial Outlook
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 fourth quarter of 2024, we expect | |
| Revenue growth percentage (year-over-year) | 0% - 2.5% |
| Adjusted EBITDA margin | 12.25% - 13.75% |
| U.S. Integrated Care Members (2) | 93.5 - 94.5 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 | 14.9% - 15.3% |
| U.S. Integrated Care Members (2) | 93.5 - 94.5 million |
Earnings Conference Call
The Third Quarter 2024 earnings conference call and webcast will be held Wednesday, October 30, 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 #781291. For international participants, please visit the following link for global dial-in numbers: https://www.netroadshow.com/events/global-numbers?confId=72270. 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 September 30, | Nine Months Ended September 30, | ||||||||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||||||
| Revenue | $ | 640,508 | $ | 660,238 | $ | 1,929,083 | $ | 1,941,888 | |||||||
| Costs and expenses: | |||||||||||||||
| Cost of revenue (exclusive of depreciation and amortization, which are shown separately below) | 179,745 | 185,960 | 562,342 | 566,607 | |||||||||||
| Advertising and marketing | 177,462 | 186,152 | 531,061 | 541,698 | |||||||||||
| Sales | 47,465 | 52,309 | 152,267 | 160,329 | |||||||||||
| Technology and development | 72,383 | 84,289 | 230,522 | 258,583 | |||||||||||
| General and administrative | 114,245 | 115,716 | 335,494 | 355,702 | |||||||||||
| Goodwill impairment | - | - | 790,000 | - | |||||||||||
| Acquisition, integration, and transformation costs | 457 | 5,824 | 1,287 | 16,848 | |||||||||||
| Restructuring costs | 3,580 | 411 | 14,753 | 16,043 | |||||||||||
| Amortization of intangible assets | 86,906 | 91,834 | 276,825 | 231,205 | |||||||||||
| Depreciation of property and equipment | 2,666 | 2,468 | 7,203 | 8,345 | |||||||||||
| Total costs and expenses | 684,909 | 724,963 | 2,901,754 | 2,155,360 | |||||||||||
| Loss from operations | (44,401 | ) | (64,725 | ) | (972,671 | ) | (213,472 | ) | |||||||
| Interest income | (15,326 | ) | (12,606 | ) | (42,840 | ) | (33,075 | ) | |||||||
| Interest expense | 5,660 | 5,646 | 16,957 | 16,744 | |||||||||||
| Other (income) expense, net | (2,239 | ) | 1,792 | (1,306 | ) | (2,908 | ) | ||||||||
| Loss before provision for income taxes | (32,496 | ) | (59,557 | ) | (945,482 | ) |
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