AMWL American Well Corporation

Amwell® (NYSE: AMWL), a leader in digital healthcare enablement, today announced financial results for the first quarter ended March 31, 2023.

Amwell First Quarter 2023 Highlights:

• Recorded Total Revenue of $64.0 million

• Achieved subscription revenue of $28.7 million

• Recorded AMG Visit revenue of $32.5 million

• Reported gross margin of 39.5%

• Net loss was ($398.5) million, compared to ($61.6) million in fourth quarter of 2022 which reflects a non-cash goodwill impairment charge of $330.3 million recorded in the first quarter of 2023

• Adjusted EBITDA was ($44.6) million compared to ($43.4) million in fourth quarter of 2022

• Total active providers rose 8% to 108,000 compared to 100,000 in the first quarter of 2022

• Total visits were 1.7 million; visits on Converge grew to 36% of total visits, from 28% in fourth quarter of 2022

• Cash and short-term securities as of quarter-end were approximately $507.2 million

“Q1 was a very busy quarter for our company, one that provided a strong start to the year,” said Dr. Ido Schoenberg, Chairman and CEO of Amwell. “We made great progress with customer migrations and strategic clients went live on Converge, our unique, one-stop-shop, hybrid care enablement platform. These successes provide valuable, in-market validation of the power and scale of Converge. Converge streamlines the simple, cohesive, and efficient delivery of hybrid healthcare. We also had a successful quarter of initiatives aimed at accelerating our momentum in the market.”

Schoenberg continued, “With an expanding stable of reference accounts, we are demonstrating our role as an enabling partner for healthcare leaders, empowering hybrid, digital-first approaches to healthcare as they converge and consolidate their own transformative strategies.”

Financial Outlook

The Company reiterated its guidance, which calls for:

• Revenue in the range of $275 and $285 million
• AMG visits between 1.45 and 1.65 million
• An Adjusted EBITDA range of between ($150) million and ($160) million

Other than with respect to GAAP Revenue, the Company only provides guidance on a non-GAAP basis. The Company does not provide a reconciliation of forward-looking Adjusted EBITDA (non-GAAP) to GAAP net income (loss), due to the inherent difficulty in forecasting and quantifying certain amounts that are necessary for such reconciliation. Because other deductions used to calculate projected net income (loss) vary dramatically based on actual events, the Company is not able to forecast on a GAAP basis with reasonable certainty all deductions needed in order to provide a GAAP calculation of projected net income (loss) at this time. The amount of these deductions may be material and, therefore, could result in projected GAAP net income (loss) being materially less than projected Adjusted EBITDA (non-GAAP).

Quarterly Conference Call Details

The company will host a conference call to review the results today, Wed., May 3, 2023 at 5:00 p.m. E.T. to discuss its financial results. The call can be accessed via a live audio webcast at https://investors.amwell.com or by dialing 1-888-510-2008 for U.S. participants, or 1-646-960-0306 for international participants, referencing conference ID #7830032. 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 Amwell

Amwell is a leading digital care delivery enablement platform in the United States and globally, connecting and enabling providers, insurers, patients, and innovators to deliver greater access to more affordable, higher quality care. Amwell believes that digital care delivery will transform healthcare. The Company offers a single, comprehensive platform to support all digital health needs from urgent to acute and post-acute care, as well as chronic care management and healthy living. With over a decade of experience, Amwell powers the digital care of more than 55 health plans, which collectively represent more than 90 million covered lives, and many of the nation’s largest health systems, representing over 2,000 hospitals, have access to Amwell solutions. For more information, please visit https://business.amwell.com/.

American Well, Amwell, Converge, Conversa, SilverCloud and Carepoints are registered trademarks or trademarks of American Well Corporation in the United States and other countries. All other trademarks used herein are the property of their respective owners.

Forward-Looking Statements

This press release contains forward-looking statements about us and our industry that involve substantial risks and uncertainties and are based on our beliefs and assumptions and on information currently available to us. All statements other than statements of historical facts contained in this press release, including statements regarding our future results of operations, financial condition, business strategy and plans and objectives of management for future operations, are forward-looking statements. In some cases, you can identify forward-looking statements because they contain words such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “should,” “will,” or “would,” or the negative of these words or other similar terms or expressions.

Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Forward-looking statements represent our beliefs and assumptions only as of the date of this release. These statements, and related risks, uncertainties, factors and assumptions, include, but are not limited to: weak growth and increased volatility in the telehealth market; inability to adapt to rapid technological changes; increased competition from existing and potential new participants in the healthcare industry; changes in healthcare laws, regulations or trends and our ability to operate in the heavily regulated healthcare industry; our ability to comply with federal and state privacy regulations; the significant liability that could result from a cybersecurity breach; and other factors described under ‘Risk Factors’ in our most recent form 10-K filed with the SEC. These risks are not exhaustive. Except as required by law, we assume no obligation to update these forward-looking statements, or to update the reasons actual results could differ materially from those anticipated in the forward-looking statements, even if new information becomes available in the future. Further information on factors that could cause actual results to differ materially from the results anticipated by our forward-looking statements is included in the reports we have filed or will file with the Securities and Exchange Commission. These filings, when available, are available on the investor relations section of our website at investors.amwell.com and on the SEC’s website at www.sec.gov.

AMERICAN WELL CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except share and per share amounts)

(unaudited)

 

 

March 31, 2023

 

 

December 31, 2022

 

Assets

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

112,887

 

 

$

538,546

 

Investments

 

 

394,309

 

 

 

—

 

Accounts receivable ($1,700 and $2,597, from related parties and net of allowances of $2,069 and $1,884, respectively)

 

 

55,871

 

 

 

58,372

 

Inventories

 

 

8,438

 

 

 

8,737

 

Deferred contract acquisition costs

 

 

1,472

 

 

 

1,394

 

Prepaid expenses and other current assets

 

 

15,275

 

 

 

19,567

 

Total current assets

 

 

588,252

 

 

 

626,616

 

Restricted cash

 

 

795

 

 

 

795

 

Property and equipment, net

 

 

719

 

 

 

1,012

 

Goodwill

 

 

106,707

 

 

 

435,279

 

Intangible assets, net

 

 

135,401

 

 

 

134,980

 

Operating lease right-of-use asset

 

 

12,609

 

 

 

13,509

 

Deferred contract acquisition costs, net of current portion

 

 

3,645

 

 

 

3,394

 

Other assets

 

 

2,199

 

 

 

1,972

 

Investment in minority owned joint venture

 

 

178

 

 

 

—

 

Total assets

 

$

850,505

 

 

$

1,217,557

 

Liabilities and Stockholders’ Equity

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Accounts payable

 

$

7,050

 

 

$

7,236

 

Accrued expenses and other current liabilities

 

 

39,922

 

 

 

54,258

 

Operating lease liability, current

 

 

3,011

 

 

 

3,057

 

Deferred revenue ($1,232 and $1,665 from related parties, respectively)

 

 

65,607

 

 

 

49,505

 

Total current liabilities

 

 

115,590

 

 

 

114,056

 

Other long-term liabilities

 

 

1,611

 

 

 

1,574

 

Operating lease liability, net of current portion

 

 

10,850

 

 

 

11,787

 

Deferred revenue, net of current portion ($7 and $10 from related parties, respectively)

 

 

8,178

 

 

 

6,289

 

Total liabilities

 

 

136,229

 

 

 

133,706

 

Commitments and contingencies

 

 

 

 

 

 

Stockholders’ equity:

 

 

 

 

 

 

Preferred stock, $0.01 par value; 100,000,000 shares authorized, no shares issued or outstanding as of March 31, 2023 and as of December 31, 2022

 

 

—

 

 

 

—

 

Common stock, $0.01 par value; 1,000,000,000 Class A shares authorized, 247,762,793

and 244,193,727 shares issued and outstanding, respectively; 100,000,000 Class B shares

authorized, 27,390,397 shares issued and outstanding; 200,000,000 Class C shares

authorized 5,555,555 issued and outstanding as of March 31, 2023 and as of

December 31, 2022

 

 

2,801

 

 

 

2,766

 

Additional paid-in capital

 

 

2,182,627

 

 

 

2,160,108

 

Accumulated other comprehensive income

 

 

(10,588

)

 

 

(16,969

)

Accumulated deficit

 

 

(1,479,717

)

 

 

(1,082,028

)

Total American Well Corporation stockholders’ equity

 

 

695,123

 

 

 

1,063,877

 

Non-controlling interest

 

 

19,153

 

 

 

19,974

 

Total stockholders’ equity

 

 

714,276

 

 

 

1,083,851

 

Total liabilities and stockholders’ equity

 

$

850,505

 

 

$

1,217,557

 

AMERICAN WELL CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(in thousands, except share and per share amounts)

(unaudited)

 

 

Three Months Ended March 31,

 

 

 

2023

 

 

2022

 

Revenue

 

 

 

 

 

 

($988 and $1,215 from related parties, respectively)

 

$

64,001

 

 

$

64,232

 

Costs and operating expenses:

 

 

 

 

 

 

Costs of revenue, excluding depreciation and amortization of intangible assets

 

 

38,752

 

 

 

36,765

 

Research and development

 

 

25,923

 

 

 

37,481

 

Sales and marketing

 

 

22,726

 

 

 

21,154

 

General and administrative

 

 

36,370

 

 

 

32,716

 

Depreciation and amortization expense

 

 

7,243

 

 

 

6,598

 

Goodwill Impairment

 

 

330,309

 

 

 

—

 

Total costs and operating expenses

 

 

461,323

 

 

 

134,714

 

Loss from operations

 

 

(397,322

)

 

 

(70,482

)

Interest income and other income (expense), net

 

 

940

 

 

 

108

 

Loss before expense from income taxes and loss from equity method investment

 

 

(396,382

)

 

 

(70,374

)

(Expense) Benefit from income taxes

 

 

(1,475

)

 

 

332

 

Loss from equity method investment

 

 

(652

)

 

 

(211

)

Net loss

 

 

(398,509

)

 

 

(70,253

)

Net loss attributable to non-controlling interest

 

 

(821

)

 

 

(216

)

Net loss attributable to American Well Corporation

 

$

(397,688

)

 

$

(70,037

)

Net loss per share attributable to common stockholders, basic and diluted

 

$

(1.42

)

 

$

(0.26

)

Weighted-average common shares outstanding, basic and diluted

 

 

279,966,645

 

 

 

268,002,110

 

Net loss

 

$

(398,509

)

 

$

(70,253

)

Other comprehensive income (loss), net of tax:

 

 

 

 

 

 

Unrealized (loss) gain on available-for-sale investments

 

 

4,319

 

 

 

(1,251

)

Foreign currency translation

 

 

2,062

 

 

 

(2,951

)

Comprehensive loss

 

 

(392,128

)

 

 

(74,455

)

Less: Comprehensive loss attributable to non-controlling interest

 

 

(821

)

 

 

(216

)

Comprehensive loss attributable to American Well Corporation

 

$

(391,307

)

 

$

(74,239

)

AMERICAN WELL CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands, except share and per share amounts)

(unaudited)

 

 

Three Months Ended March 31,

 

 

 

2023

 

 

2022

 

Cash flows from operating activities:

 

 

 

 

 

 

Net loss

 

$

(398,509

)

 

$

(70,253

)

Adjustments to reconcile net loss to net cash used in operating activities:

 

 

 

 

 

 

Goodwill impairment

 

 

330,309

 

 

 

—

 

Depreciation and amortization expense

 

 

7,242

 

 

 

6,598

 

Provisions for credit losses

 

 

199

 

 

 

(200

)

Amortization of deferred contract acquisition costs

 

 

476

 

 

 

391

 

Amortization of deferred contract fulfillment costs

 

 

107

 

 

 

133

 

Noncash compensation costs incurred by selling shareholders

 

 

—

 

 

 

2,025

 

Stock-based compensation expense

 

 

21,008

 

 

 

12,075

 

Loss on equity method investment

 

 

652

 

 

 

211

 

Deferred income taxes

 

 

(13

)

 

 

(443

)

Changes in operating assets and liabilities, net of acquisition:

 

 

 

 

 

 

Accounts receivable

 

 

2,340

 

 

 

4,290

 

Inventories

 

 

299

 

 

 

(495

)

Deferred contract acquisition costs

 

 

(793

)

 

 

(501

)

Prepaid expenses and other current assets

 

 

4,198

 

 

 

(1,838

)

Other assets

 

 

(210

)

 

 

(169

)

Accounts payable

 

 

(247

)

 

 

(4,601

)

Accrued expenses and other current liabilities

 

 

(14,159

)

 

 

(8,446

)

Other long-term liabilities

 

 

—

 

 

 

(16

)

Deferred revenue

 

 

17,953

 

 

 

(952

)

Net cash used in operating activities

 

 

(29,148

)

 

 

(62,191

)

Cash flows from investing activities:

 

 

 

 

 

 

Purchases of property and equipment

 

 

(18

)

 

 

(68

)

Capitalized software development costs

 

 

(6,751

)

 

 

—

 

Investment in less than majority owned joint venture

 

 

(980

)

 

 

—

 

Purchases of investments

 

 

(389,990

)

 

 

(499,223

)

Net cash used in investing activities

 

 

(397,739

)

 

 

(499,291

)

Cash flows from financing activities:

 

 

 

 

 

 

Proceeds from exercise of common stock options

 

 

289

 

 

 

2,536

 

Proceeds from employee stock purchase plan

 

 

1,268

 

 

 

1,501

 

Payments for the purchase of treasury stock

 

 

(1

)

 

 

—

 

Payment of contingent consideration

 

 

—

 

 

 

(11,790

)

Net cash provided by (used in) financing activities

 

 

1,556

 

 

 

(7,753

)

Effect of exchange rates changes on cash, cash equivalents, and restricted cash

 

 

(328

)

 

 

(247

)

Net decrease in cash, cash equivalents, and restricted cash

 

 

(425,659

)

 

 

(569,482

)

Cash, cash equivalents, and restricted cash at beginning of period

 

 

539,341

 

 

 

747,211

 

Cash, cash equivalents, and restricted cash at end of period

 

$

113,682

 

 

$

177,729

 

Cash, cash equivalents, and restricted cash at end of period:

 

 

 

 

 

 

Cash and cash equivalents

 

 

112,887

 

 

 

176,934

 

Restricted cash

 

 

795

 

 

 

795

 

Total cash, cash equivalents, and restricted cash at end of period

 

$

113,682

 

 

$

177,729

 

Supplemental disclosure of cash flow information:

 

 

 

 

 

 

Cash paid (refunded) for income taxes

 

$

458

 

 

$

(454

)

Supplemental disclosure of non-cash investing and financing activities:

 

 

 

 

 

 

Issuance of common stock in settlement of earnout

 

$

—

 

 

$

4,298

 

Receivable related to exercise of common stock options

 

$

—

 

 

$

4

 

Non-GAAP Financial Measures:

To supplement our financial information presented in accordance with generally accepted accounting principles in the United States, of US GAAP, we use adjusted EBITDA, which is a non-U.S GAAP financial measure to clarify and enhance an understanding of past performance. We believe that the presentation of adjusted EBITDA enhances an investor’s understanding of our financial performance. We further believe that adjusted EBITDA is a useful financial metric to assess our operating performance from period-to-period by excluding certain items that we believe are not representative of our core business. We use certain financial measures for business planning purposes and in measuring our performance relative to that of our competitors. We utilize adjusted EBITDA as the primary measure of our performance.

We calculate adjusted EBITDA as net loss adjusted to exclude (i) interest income and other income, net, (ii) tax benefit and expense, (iii) depreciation and amortization, (iv) goodwill impairment, (v) stock-based compensation expense, (vi) severance expenses, (vii) capitalized software costs, (viii) litigation expenses related to the defense of our patents in the patent infringement claim filed by Teladoc and (ix) other items affecting our results that we do not view as representative of our ongoing operations, including noncash compensation costs incurred by selling shareholders and adjustments made to the contingent consideration.

We believe adjusted EBITDA is a commonly used by investors to evaluate our performance and that of our competitors. However, our use of the term adjusted EBITDA may vary from that of others in our industry. Adjusted EBITDA should not be considered as an alternative to net loss before taxes, net loss, loss per share or any other performance measures derived in accordance with U.S. GAAP as measures of performance.

Adjusted EBITDA has important limitations as an analytical tool and you should not consider it in isolation or as a substitute for analysis of our results as reported under U.S. GAAP. Some of the limitations of adjusted EBITDA include (i) adjusted EBITDA does not properly reflect capital commitments to be paid in the future, and (ii) although depreciation and amortization are non-cash charges, the underlying assets may need to be replaced and adjusted EBITDA does not reflect these capital expenditures. Our legal, accounting and other professional expenses reflect cash expenditures and we expect such expenditures to recur from time to time. Our adjusted EBITDA may not be comparable to similarly titled measures of other companies because they may not calculate adjusted EBITDA in the same manner as we calculate the measure, limiting its usefulness as a comparative measure.

In evaluating adjusted EBITDA, you should be aware that in the future we will incur expenses similar to the adjustments in this presentation. Our presentation of adjusted EBITDA should not be construed as an inference that our future results will be unaffected by these expenses or any unusual or non-recurring items. Adjusted EBITDA should not be considered as an alternative to loss before benefit from income taxes, net loss, earnings per share, or any other performance measures derived in accordance with U.S. GAAP. When evaluating our performance, you should consider adjusted EBITDA alongside other financial performance measures, including our net loss and other GAAP results.

The following table presents a reconciliation of adjusted EBITDA from the most comparable GAAP measure, net loss, for the three months ended March 31, 2023 and 2022:

 

 

Three Months Ended March 31,

 

(in thousands)

 

2023

 

 

2022

 

Net loss

 

$

(398,509

)

 

$

(70,253

)

Add:

 

 

 

 

 

 

Depreciation and amortization

 

 

7,243

 

 

$

6,598

 

Interest income and other income (expense), net

 

 

(940

)

 

 

(108

)

(Expense) Benefit from income taxes

 

 

1,475

 

 

 

(332

)

Goodwill Impairment

 

 

330,309

 

 

 

—

 

Stock-based compensation

 

 

20,997

 

 

 

12,085

 

Severance(1)

 

 

1,575

 

 

 

—

 

Capitalized software costs

 

 

(6,751

)

 

 

—

 

Noncash expenses and contingent consideration adjustments(2)

 

 

—

 

 

 

3,737

 

Litigation expense(3)

 

 

—

 

 

 

1,138

 

Adjusted EBITDA

 

$

(44,601

)

 

$

(47,135

)

(1) Severance costs associated with the termination of employees during the three months ended March 31, 2023.

(2) Noncash expenses and contingent consideration adjustments include, noncash compensation costs incurred by selling shareholders and adjustments made to the contingent consideration.

(3) Litigation expense relates to legal costs related to the Teladoc litigation which was dismissed pursuant to a confidential settlement between the parties in 2022.

View source version on businesswire.com: https://www.businesswire.com/news/home/20230503005727/en/

Media: Angela Vogen Press@amwell.com Investors: Sue Dooley sue.dooley@amwell.com