Teladoc Health, Inc. (NYSE: TDOC), the global leader in
whole-person virtual care, today reported financial results for the
fourth quarter and full year ended December 31, 2023.
"With approximately 90 million members and thousands of
clients around the world, Teladoc Health continues to be the leader
in whole person virtual care," said Jason Gorevic, CEO of Teladoc
Health. "In 2023 – in the midst of a challenging macro-economic
environment – we reported meaningful progress in generating higher
margins and delivering strong bottom-line performance. During the
year, we delivered 33% growth in adjusted EBITDA as well as free
cash flow of $194 million while driving 8% consolidated top-line
growth. At the same time, we brought forward innovative offerings
like our integrated app experience and provider-based chronic
condition management that differentiate us in the marketplace.
“As we look at 2024 and beyond, we are excited for the future.
We remain focused on serving our clients globally, delivering
world-class health care while at the same time, expanding our
bottom line through a combination of operating leverage and expense
reduction.”
| Key Financial
Data |
|
|
|
|
|
|
|
|
|
|
|
| ($ in thousands,
except per share data, unaudited) |
|
|
|
|
|
|
|
|
|
| |
Quarter Ended |
|
|
|
Year Ended |
|
|
| |
December 31, |
|
Year-over- |
|
December 31, |
|
Year-over- |
|
|
|
2023 |
|
|
|
2022 |
|
|
Year Change |
|
|
2023 |
|
|
|
2022 |
|
|
Year Change |
| Revenue |
$ |
660,527 |
|
|
$ |
637,709 |
|
|
4% |
|
$ |
2,602,415 |
|
|
$ |
2,406,840 |
|
|
8% |
| |
|
|
|
|
|
|
|
|
|
|
|
| Net loss |
$ |
(28,890 |
) |
|
$ |
(3,810,071 |
) |
|
99% |
|
$ |
(220,368 |
) |
|
$ |
(13,659,531 |
) |
|
98% |
| Net loss per share, basic and
diluted |
$ |
(0.17 |
) |
|
$ |
(23.49 |
) |
|
99% |
|
$ |
(1.34 |
) |
|
$ |
(84.60 |
) |
|
98% |
| |
|
|
|
|
|
|
|
|
|
|
|
| Adjusted EBITDA (1) |
$ |
114,443 |
|
|
$ |
94,094 |
|
|
22% |
|
$ |
328,120 |
|
|
$ |
246,513 |
|
|
33% |
See note (1) in the Notes section that follows.
Fourth Quarter 2023
Revenue increased 4% to $660.5 million from
$637.7 million in the fourth quarter of 2022. Access fees revenue
grew 4% to $573.9 million and other revenue grew 3% to $86.6
million. U.S. revenue grew 2% to $564.8 million and International
revenue grew 15% to $95.8 million.
Teladoc Health Integrated Care ("Integrated Care") segment
revenue increased 8% to $384.4 million in the fourth quarter of
2023 and BetterHelp segment revenue was essentially flat at $276.2
million.
Net loss totaled $28.9 million, or $0.17 per
share, for the fourth quarter of 2023, compared to $3,810.1
million, or $23.49 per share, for the fourth quarter of 2022.
Results for the fourth quarter of 2023 included stock-based
compensation expense of $46.8 million, or $0.28 per share, and
amortization of acquired intangibles of $70.8 million, or $0.43 per
share. The amortization of acquired intangibles increased over the
prior year period reflecting a change in the useful lives of
certain intangibles.
Results for the fourth quarter of 2022 primarily included
non-cash goodwill impairment charges of $3,772.8 million, or
$23.26 per share, stock-based compensation expense of $50.8
million, or $0.31 per share, and amortization of acquired
intangibles of $50.2 million, or $0.31 per share. Net loss for the
fourth quarter of 2022 also included $3.7 million, or $0.02 per
share, of restructuring costs primarily related to the abandonment
of certain excess leased office space.
Adjusted EBITDA(1) increased 22% to $114.4
million, compared to $94.1 million for the fourth quarter of 2022.
Integrated Care segment adjusted EBITDA increased 28% to $56.0
million in the fourth quarter of 2023 and BetterHelp segment
adjusted EBITDA increased 11% to $58.5 million in the fourth
quarter of 2023.
GAAP gross margin, which includes depreciation
and amortization, was 68.8% for the fourth quarter of 2023,
compared to 68.6% for the fourth quarter of 2022.
Adjusted gross margin(1) was 70.7% for the
fourth quarter of 2023, compared to 70.4% for the fourth quarter of
2022.
Full Year Ended December 31, 2023
Revenue increased 8% to $2,602.4 million from
$2,406.8 million for the year ended December 31, 2022. Access fees
revenue grew 8% to $2,282.5 million, and other revenue grew 6% to
$319.9 million. U.S. revenue grew 6% to $2,237.5 million, and
International revenue grew 19% to $364.9 million for the year ended
December 31, 2023.
Revenue increased 7% to $1,468.8 million for the Integrated Care
segment for the year ended December 31, 2023 and increased 11% to
$1,133.6 million for the BetterHelp segment.
Net loss totaled $220.4 million, or $1.34 per
share, for the year ended December 31, 2023, compared to $13,659.5
million, or $84.60 per share, for the year ended December 31, 2022.
Results for the year ended December 31, 2023 included stock-based
compensation expense of $201.6 million, or $1.22 per share,
restructuring costs of $16.9 million, or $0.10 per share, and
amortization of acquired intangibles of $243.0 million, or $1.48
per share.
Results for the year ended December 31, 2022 included non-cash
goodwill impairment charges of $13,402.8 million, or $83.01 per
share, as well as stock-based compensation expense of $217.9
million, or $1.35 per share, and amortization of acquired
intangibles of $198.5 million, or $1.23 per share. Net loss for the
year ended December 31, 2022 also included $7.4 million, or $0.05
per share, of restructuring costs related to the abandonment of
certain excess leased office space and severance.
Adjusted EBITDA(1) increased 33% to $328.1
million, compared to $246.5 million for the year ended December 31,
2022. Integrated Care segment adjusted EBITDA increased 42% to
$191.9 million in the year ended December 31, 2023 and BetterHelp
segment adjusted EBITDA increased 19% to $136.2 million in the year
ended December 31, 2023.
GAAP gross margin, which includes depreciation
and amortization, was 68.2% for the year ended December 31, 2023,
compared to 67.8% for the year ended December 31, 2022.
Adjusted gross margin(1) was 70.8% for the year
ended December 31, 2023, compared to 69.1% for the year ended
December 31, 2022.
Capex and Cash Flow
Cash flow from operations was $130.1 million in the fourth
quarter of 2023, compared to $65.5 million in the fourth quarter of
2022, and was $350.0 million in the year ended December 31, 2023,
compared to $189.3 million in the year ended December 31, 2022.
Capitalized expenditures and capitalized software (together,
“Capex”) totaled $36.5 million in the fourth quarter of 2023,
compared to $53.9 million in the fourth quarter of 2022, and
totaled $156.3 million for the year ended December 31, 2023,
compared to $172.8 million for the year ended December 31, 2022.
Free cash flow was $93.6 million in the fourth quarter of 2023,
compared to $11.7 million in the fourth quarter of 2022, and was
$193.7 million for the year ended December 31, 2023, compared to
$16.5 million for the year ended December 31, 2022.
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 first quarter
of 2024, we expect:
|
|
|
| |
1Q 2024 Outlook Range |
| Revenue |
$630 - $645 million |
| Adjusted EBITDA |
$52 - $62 million |
| Net loss per share |
($0.55) - ($0.45) |
| U.S. Integrated Care Members
(2) |
89.5 - 90.5 million |
|
Integrated Care |
|
| Revenue growth percentage
(year-over-year) |
5% - 7% |
| Adjusted EBITDA margin |
10.5% - 12% |
|
BetterHelp |
|
| Revenue growth percentage
(year-over-year) |
(6%) - (3%) |
| Adjusted EBITDA margin |
5.5% - 6.5% |
| |
|
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) |
90 - 92 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 expect:
Low to mid-single-digit annual consolidated revenue growth,
including mid-single-digit Integrated Care and low single-digit
BetterHelp annual revenue growth; and
50 -100 basis points of annual margin expansion, and at least
$425 million of adjusted EBITDA for the full year of 2025(9)
inclusive of cost actions associated with our efficiency
program.
See note (9) in the Notes section that follows.
Efficiency Program
As part of the previously announced comprehensive operational
review of the business to drive efficiency in order to reduce costs
and improve profit growth, we expect pre-tax expense reductions of
an approximate net $43 million in 2024, which is reflected in our
financial outlook, and approximately $85 million on an annualized
basis. Included in the expense reductions is stock-based
compensation expense of approximately $8 million in both 2024 and
on an annualized basis.
In relation to the efficiency program, we expect to incur
pre-tax restructuring charges in the range of $12 million to
$16 million in 2024, of which approximately $11 million is
expected to occur in the first quarter of 2024. The charges will
primarily relate to employee transition, severance, employee
benefits, and other costs needed to execute on various optimization
initiatives. In addition, we expect a reduction in stock-based
compensation of approximately $3 million in the first quarter of
2024 associated with the forfeiture of stock awards.
Earnings Conference Call
The fourth quarter and full year 2023 earnings conference call
and webcast will be held Tuesday, February 20, 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 #
825968. 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.
CONSOLIDATED STATEMENTS OF
OPERATIONS(In thousands, except share and per
share data, unaudited)
|
|
Quarter EndedDecember 31, |
|
Year EndedDecember 31, |
|
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
| Revenue |
$ |
660,527 |
|
|
$ |
637,709 |
|
|
$ |
2,602,415 |
|
|
$ |
2,406,840 |
|
| Expenses: |
|
|
|
|
|
|
|
|
Cost of revenue (exclusive of depreciation and amortization, which
are shown separately below) |
|
193,424 |
|
|
|
188,873 |
|
|
|
760,031 |
|
|
|
743,987 |
|
|
Operating expenses: |
|
|
|
|
|
|
|
|
Advertising and marketing |
|
147,156 |
|
|
|
146,443 |
|
|
|
688,854 |
|
|
|
623,536 |
|
|
Sales |
|
53,451 |
|
|
|
56,278 |
|
|
|
213,780 |
|
|
|
227,172 |
|
|
Technology and development |
|
89,938 |
|
|
|
82,930 |
|
|
|
348,521 |
|
|
|
333,629 |
|
|
General and administrative |
|
108,957 |
|
|
|
119,845 |
|
|
|
464,659 |
|
|
|
449,855 |
|
|
Acquisition, integration, and transformation costs |
|
4,262 |
|
|
|
6,627 |
|
|
|
21,110 |
|
|
|
15,620 |
|
|
Restructuring costs |
|
899 |
|
|
|
3,738 |
|
|
|
16,942 |
|
|
|
7,416 |
|
|
Depreciation |
|
2,793 |
|
|
|
2,598 |
|
|
|
11,138 |
|
|
|
11,407 |
|
|
Amortization |
|
94,728 |
|
|
|
73,118 |
|
|
|
325,933 |
|
|
|
244,620 |
|
|
Goodwill impairment |
|
— |
|
|
|
3,772,811 |
|
|
|
— |
|
|
|
13,402,812 |
|
|
Total expenses |
|
695,608 |
|
|
|
4,453,261 |
|
|
|
2,850,968 |
|
|
|
16,060,054 |
|
| Loss from operations |
|
(35,081 |
) |
|
|
(3,815,552 |
) |
|
|
(248,553 |
) |
|
|
(13,653,214 |
) |
| Interest income |
|
(13,707 |
) |
|
|
(6,482 |
) |
|
|
(46,782 |
) |
|
|
(12,674 |
) |
| Interest expense |
|
5,538 |
|
|
|
4,590 |
|
|
|
22,282 |
|
|
|
21,944 |
|
| Other (income) expense,
net |
|
(1,537 |
) |
|
|
(1,749 |
) |
|
|
(4,445 |
) |
|
|
859 |
|
| Loss before provision for
income taxes |
|
(25,375 |
) |
|
|
(3,811,911 |
) |
|
|
(219,608 |
) |
|
|
(13,663,343 |
) |
| Provision for income
taxes |
|
3,515 |
|
|
|
(1,840 |
) |
|
|
760 |
|
|
|
(3,812 |
) |
| Net loss |
|
(28,890 |
) |
|
|
(3,810,071 |
) |
|
|
(220,368 |
) |
|
|
(13,659,531 |
) |
| |
|
|
|
|
|
|
|
| Net loss per share, basic and
diluted |
$ |
(0.17 |
) |
|
$ |
(23.49 |
) |
|
$ |
(1.34 |
) |
|
$ |
(84.60 |
) |
| |
|
|
|
|
|
|
|
| Weighted-average shares used
to compute basic and diluted net loss per share |
|
166,059,023 |
|
|
|
162,169,564 |
|
|
|
164,578,219 |
|
|
|
161,457,123 |
|
Stock-based Compensation Summary
Compensation costs for stock-based awards were classified as
follows (in thousands):
| |
Quarter EndedDecember 31, |
|
Year EndedDecember 31, |
|
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
| Cost of revenue (exclusive of
depreciation and amortization, which are shown separately) |
$ |
1,418 |
|
$ |
1,474 |
|
$ |
5,478 |
|
$ |
6,468 |
| Advertising and marketing |
|
3,773 |
|
|
3,561 |
|
|
15,300 |
|
|
14,083 |
| Sales |
|
8,393 |
|
|
9,337 |
|
|
35,449 |
|
|
43,183 |
| Technology and
development |
|
15,352 |
|
|
14,461 |
|
|
58,336 |
|
|
64,577 |
| General and
administrative |
|
17,906 |
|
|
21,921 |
|
|
86,987 |
|
|
89,541 |
| Total stock-based compensation
expense (3) |
$ |
46,842 |
|
$ |
50,754 |
|
$ |
201,550 |
|
$ |
217,852 |
See note (3) in the Notes section that follows.
Revenues
| |
Quarter Ended |
|
|
|
Year Ended |
|
|
| |
December 31, |
|
Year-over- |
|
December 31, |
|
Year-over- |
|
($ in thousands, unaudited) |
|
2023 |
|
|
2022 |
|
Year Change |
|
|
2023 |
|
|
2022 |
|
Year Change |
| Revenue by
Type |
|
|
|
|
|
|
|
|
|
|
|
| Access fees |
$ |
573,920 |
|
$ |
553,668 |
|
4% |
|
$ |
2,282,521 |
|
$ |
2,103,814 |
|
8% |
| Other |
|
86,607 |
|
|
84,041 |
|
3 % |
|
|
319,894 |
|
|
303,026 |
|
6% |
| Total Revenue |
$ |
660,527 |
|
$ |
637,709 |
|
4 % |
|
$ |
2,602,415 |
|
$ |
2,406,840 |
|
8% |
| |
|
|
|
|
|
|
|
|
|
|
|
| Revenue by
Geography |
|
|
|
|
|
|
|
|
|
|
|
| U.S. Revenue |
$ |
564,763 |
|
$ |
554,416 |
|
2% |
|
$ |
2,237,533 |
|
$ |
2,101,015 |
|
6% |
| International Revenue |
|
95,764 |
|
|
83,293 |
|
15% |
|
|
364,882 |
|
|
305,825 |
|
19% |
| Total Revenue |
$ |
660,527 |
|
$ |
637,709 |
|
4% |
|
$ |
2,602,415 |
|
$ |
2,406,840 |
|
8% |
Summary Operating Metrics
Consolidated
| |
Quarter Ended |
|
|
|
Year Ended |
|
|
| |
December 31, |
|
Year-over- |
|
December 31, |
|
Year-over- |
|
(In millions) |
2023 |
|
2022 |
|
Year Change |
|
2023 |
|
2022 |
|
Year Change |
| Total Visits |
4.4 |
|
4.8 |
|
(8)% |
|
18.4 |
|
18.5 |
|
(1)% |
| |
|
|
|
|
|
|
|
|
|
|
|
Integrated Care
| |
As of December 31, |
|
Year-over- |
|
(In millions) |
2023 |
|
2022 |
|
Year Change |
| U.S. Integrated Care Members
(2) |
89.6 |
|
83.3 |
|
8% |
| Chronic Care Program
Enrollment (4) |
1.158 |
|
1.019 |
|
14% |
| |
Quarter Ended |
|
|
|
Year Ended |
|
|
| |
December 31, |
|
Year-over- |
|
December 31, |
|
Year-over- |
|
|
|
2023 |
|
|
2022 |
|
Year Change |
|
|
2023 |
|
|
2022 |
|
Year Change |
| Average Monthly Revenue Per
U.S. Integrated Care Member (5) |
$ |
1.42 |
|
$ |
1.44 |
|
(1)% |
|
$ |
1.41 |
|
$ |
1.42 |
|
(1)% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BetterHelp
| |
Average for Quarter Ended |
|
|
|
Average for Year Ended |
|
|
| |
December 31, |
|
Year-over- |
|
December 31, |
|
Year-over- |
| (In millions) |
2023 |
|
2022 |
|
Year Change |
|
2023 |
|
2022 |
|
Year Change |
| BetterHelp Paying Users
(6) |
0.425 |
|
0.450 |
|
(6)% |
|
0.457 |
|
0.419 |
|
9% |
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:
| |
Quarter Ended |
|
|
|
Year Ended |
|
|
| |
December 31 |
|
Year-over- |
|
December 31 |
|
Year-over- |
|
($ in thousands, unaudited) |
|
2023 |
|
|
2022 |
|
Year Change |
|
|
2023 |
|
|
2022 |
|
Year Change |
| Teladoc Health
Integrated Care |
|
|
|
|
|
|
|
|
|
|
|
| Revenue |
$ |
384,356 |
|
$ |
357,100 |
|
8% |
|
$ |
1,468,794 |
|
$ |
1,373,900 |
|
7% |
| Adjusted EBITDA |
$ |
55,971 |
|
$ |
43,686 |
|
28% |
|
$ |
191,871 |
|
$ |
135,153 |
|
42% |
| Adjusted EBITDA Margin % |
|
14.6% |
|
|
12.2% |
|
233 bps |
|
|
13.1% |
|
|
9.8% |
|
323 bps |
| |
|
|
|
|
|
|
|
|
|
|
|
|
BetterHelp |
|
|
|
|
|
|
|
|
|
|
|
| Therapy Services |
$ |
271,272 |
|
$ |
274,495 |
|
(1)% |
|
$ |
1,116,693 |
|
$ |
1,012,574 |
|
10% |
| Other Wellness Services |
|
4,898 |
|
|
2,513 |
|
95% |
|
|
16,928 |
|
|
7,072 |
|
139% |
| Total Revenue |
$ |
276,170 |
|
$ |
277,008 |
|
— % |
|
$ |
1,133,621 |
|
$ |
1,019,646 |
|
11% |
| Adjusted EBITDA |
$ |
58,472 |
|
$ |
52,846 |
|
11% |
|
$ |
136,249 |
|
$ |
114,116 |
|
19% |
| Adjusted EBITDA Margin % |
|
21.2% |
|
|
19.1% |
|
210 bps |
|
|
12.0% |
|
|
11.2% |
|
83 bps |
TELADOC HEALTH,
INC.CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands, unaudited)
| |
Year EndedDecember 31, |
|
|
|
2023 |
|
|
|
2022 |
|
| Cash flows from operating
activities: |
|
|
|
| Net loss |
$ |
(220,368 |
) |
|
$ |
(13,659,531 |
) |
| Adjustments to reconcile net
loss to net cash flows from operating activities: |
|
|
|
|
Goodwill impairment |
|
— |
|
|
|
13,402,812 |
|
|
Depreciation |
|
11,138 |
|
|
|
11,407 |
|
|
Amortization |
|
325,933 |
|
|
|
244,620 |
|
|
Depreciation of rental equipment |
|
2,602 |
|
|
|
2,859 |
|
|
Amortization of right-of-use assets |
|
11,650 |
|
|
|
11,757 |
|
|
Provision for allowances |
|
4,686 |
|
|
|
2,815 |
|
|
Stock-based compensation |
|
201,550 |
|
|
|
217,852 |
|
|
Deferred income taxes |
|
(1,903 |
) |
|
|
(7,840 |
) |
|
Accretion of interest |
|
3,400 |
|
|
|
3,345 |
|
|
Other, net |
|
(310 |
) |
|
|
7,584 |
|
| Changes in operating assets
and liabilities: |
|
|
|
|
Accounts receivable |
|
(10,252 |
) |
|
|
(49,058 |
) |
|
Prepaid expenses and other current assets |
|
12,461 |
|
|
|
(41,081 |
) |
|
Inventory |
|
24,095 |
|
|
|
14,800 |
|
|
Other assets |
|
(23,052 |
) |
|
|
(27,767 |
) |
|
Accounts payable |
|
(4,185 |
) |
|
|
1,876 |
|
|
Accrued expenses and other current liabilities |
|
9,069 |
|
|
|
61,217 |
|
|
Accrued compensation |
|
19,180 |
|
|
|
(12,290 |
) |
|
Deferred revenue |
|
(4,900 |
) |
|
|
15,240 |
|
|
Operating lease liabilities |
|
(10,224 |
) |
|
|
(11,525 |
) |
|
Other liabilities |
|
(549 |
) |
|
|
200 |
|
| Net cash provided by operating
activities |
|
350,021 |
|
|
|
189,292 |
|
| Cash flows from investing
activities: |
|
|
|
|
Capital expenditures |
|
(11,464 |
) |
|
|
(16,480 |
) |
|
Capitalized software |
|
(144,884 |
) |
|
|
(156,284 |
) |
|
Proceeds from marketable securities |
|
— |
|
|
|
2,507 |
|
|
Other, net |
|
1 |
|
|
|
2,514 |
|
| Net cash used in investing
activities |
|
(156,347 |
) |
|
|
(167,743 |
) |
| Cash flows from financing
activities: |
|
|
|
|
Net proceeds from the exercise of stock options |
|
1,481 |
|
|
|
5,884 |
|
|
Proceeds from employee stock purchase plan |
|
9,651 |
|
|
|
6,501 |
|
|
Cash received for withholding taxes on stock-based compensation,
net |
|
(278 |
) |
|
|
124 |
|
|
Other, net |
|
— |
|
|
|
(6,012 |
) |
| Net cash provided by financing
activities |
|
10,854 |
|
|
|
6,497 |
|
| Net increase in cash and cash
equivalents |
|
204,528 |
|
|
|
28,046 |
|
| Effect of foreign currency
exchange rate changes |
|
965 |
|
|
|
(3,344 |
) |
| Cash and cash equivalents at
beginning of the period |
|
918,182 |
|
|
|
893,480 |
|
| Cash and cash equivalents at
end of the period |
$ |
1,123,675 |
|
|
$ |
918,182 |
|
The following table presents the selected cash flow information
for the following quarters (in thousands, unaudited):
| |
Quarter EndedDecember 31, |
|
|
2023 |
|
|
|
2022 |
|
|
Net cash provided by operating activities |
$ |
130,082 |
|
|
$ |
65,549 |
|
|
Net cash used in investing activities |
|
(36,506 |
) |
|
|
(53,891 |
) |
|
Net cash (used in) provided by financing activities |
|
(1,775 |
) |
|
|
4,381 |
|
|
Effect of foreign currency exchange rate changes |
|
1,347 |
|
|
|
2,512 |
|
| Net increase in cash and cash
equivalents |
$ |
93,148 |
|
|
$ |
18,551 |
|
CONSOLIDATED BALANCE
SHEETS(In thousands, except share and per share
data, unaudited)
|
|
December 31,2023 |
|
December 31,2022 |
| Assets |
|
|
|
| Current assets: |
|
|
|
|
Cash and cash equivalents |
$ |
1,123,675 |
|
|
$ |
918,182 |
|
|
Accounts receivable, net of allowance for doubtful accounts of
$4,240 and $4,324 at December 31, 2023 and December 31,
2022, respectively |
|
217,423 |
|
|
|
210,554 |
|
|
Inventories |
|
29,513 |
|
|
|
56,342 |
|
|
Prepaid expenses and other current assets |
|
118,437 |
|
|
|
130,310 |
|
|
Total current assets |
|
1,489,048 |
|
|
|
1,315,388 |
|
|
Property and equipment, net |
|
32,032 |
|
|
|
29,641 |
|
|
Goodwill |
|
1,073,190 |
|
|
|
1,073,190 |
|
|
Intangible assets, net |
|
1,677,781 |
|
|
|
1,836,765 |
|
|
Operating lease - right-of-use assets |
|
40,060 |
|
|
|
41,831 |
|
|
Other assets |
|
80,258 |
|
|
|
48,540 |
|
|
Total assets |
$ |
4,392,369 |
|
|
$ |
4,345,355 |
|
| Liabilities and stockholders’
equity |
|
|
|
| Current liabilities: |
|
|
|
|
Accounts payable |
$ |
43,637 |
|
|
$ |
47,690 |
|
|
Accrued expenses and other current liabilities |
|
178,634 |
|
|
|
168,693 |
|
|
Accrued compensation |
|
102,686 |
|
|
|
81,554 |
|
|
Deferred revenue-current |
|
95,659 |
|
|
|
101,832 |
|
| Total current liabilities |
|
420,616 |
|
|
|
399,769 |
|
|
Other liabilities |
|
1,080 |
|
|
|
1,618 |
|
|
Operating lease liabilities, net of current portion |
|
42,837 |
|
|
|
38,042 |
|
|
Deferred revenue, net of current portion |
|
13,623 |
|
|
|
11,954 |
|
|
Deferred taxes, net |
|
49,452 |
|
|
|
50,939 |
|
|
Convertible senior notes, net |
|
1,538,688 |
|
|
|
1,535,288 |
|
| Commitments and
contingencies |
|
|
|
| Stockholders’ equity: |
|
|
|
|
Common stock, $0.001 par value; 300,000,000 shares authorized;
166,658,253 shares and 162,840,360 shares issued and outstanding as
of December 31, 2023 and December 31, 2022,
respectively |
|
167 |
|
|
|
163 |
|
|
Additional paid-in capital |
|
17,591,551 |
|
|
|
17,358,645 |
|
|
Accumulated deficit |
|
(15,228,655 |
) |
|
|
(15,008,287 |
) |
|
Accumulated other comprehensive loss |
|
(36,990 |
) |
|
|
(42,776 |
) |
|
Total stockholders’ equity |
|
2,326,073 |
|
|
|
2,307,745 |
|
|
Total liabilities and stockholders’ equity |
$ |
4,392,369 |
|
|
$ |
4,345,355 |
|
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 (income) expense, net, including foreign currency
exchange gains or losses; provision for income taxes; depreciation;
amortization; and goodwill impairment. Adjusted EBITDA consists of
net loss before interest income; interest expense; other (income)
expense, net, including foreign currency exchange gains or losses;
provision for income taxes; depreciation; amortization; goodwill
impairment; 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 (together,
"Capex").
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 goodwill impairment, interest
income, interest expense, or other (income) expense, 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 depreciation and amortization 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)
|
|
Quarter EndedDecember 31, |
|
Year EndedDecember 31, |
|
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
| Revenue |
$ |
660,527 |
|
|
$ |
637,709 |
|
|
$ |
2,602,415 |
|
|
$ |
2,406,840 |
|
| Cost of revenue (exclusive of
depreciation and amortization, which are shown separately
below) |
|
(193,424 |
) |
|
|
(188,873 |
) |
|
|
(760,031 |
) |
|
|
(743,987 |
) |
| Depreciation and amortization
of intangible assets |
|
(12,658 |
) |
|
|
(11,109 |
) |
|
|
(67,751 |
) |
|
|
(30,773 |
) |
| Gross Profit |
|
454,445 |
|
|
|
437,727 |
|
|
|
1,774,633 |
|
|
|
1,632,080 |
|
| Depreciation and amortization
of intangible assets |
|
12,658 |
|
|
|
11,109 |
|
|
|
67,751 |
|
|
|
30,773 |
|
| Adjusted gross profit |
$ |
467,103 |
|
|
$ |
448,836 |
|
|
$ |
1,842,384 |
|
|
$ |
1,662,853 |
|
| |
|
|
|
|
|
|
|
| Gross margin |
|
68.8 |
% |
|
|
68.6 |
% |
|
|
68.2 |
% |
|
|
67.8 |
% |
| Adjusted gross margin |
|
70.7 |
% |
|
|
70.4 |
% |
|
|
70.8 |
% |
|
|
69.1 |
% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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
|
|
|
|
|
|
|
|
|
|
Outlook (8) |
| |
Quarter Ended |
|
Year Ended |
|
First |
|
|
|
|
December 31, |
|
December 31, |
|
Quarter |
|
Full Year |
|
($ in thousands, except for outlook data, unaudited) |
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
|
2024(in millions) |
|
2024(in millions) |
| Net loss |
$ |
(28,890 |
) |
|
$ |
(3,810,071 |
) |
|
$ |
(220,368 |
) |
|
$ |
(13,659,531 |
) |
|
$(91) - (74) |
|
$(185) - (134) |
| Add: |
|
|
|
|
|
|
|
|
|
|
|
| Goodwill impairment |
|
— |
|
|
|
3,772,811 |
|
|
|
— |
|
|
|
13,402,812 |
|
|
|
|
|
| Interest income |
|
(13,707 |
) |
|
|
(6,482 |
) |
|
|
(46,782 |
) |
|
|
(12,674 |
) |
|
|
|
|
| Interest expense |
|
5,538 |
|
|
|
4,590 |
|
|
|
22,282 |
|
|
|
21,944 |
|
|
|
|
|
| Other (income) expense,
net |
|
(1,537 |
) |
|
|
(1,749 |
) |
|
|
(4,445 |
) |
|
|
859 |
|
|
|
|
|
| Provision for income
taxes |
|
3,515 |
|
|
|
(1,840 |
) |
|
|
760 |
|
|
|
(3,812 |
) |
|
|
|
|
| Depreciation |
|
2,793 |
|
|
|
2,598 |
|
|
|
11,138 |
|
|
|
11,407 |
|
|
|
|
|
| Amortization |
|
94,728 |
|
|
|
73,118 |
|
|
|
325,933 |
|
|
|
244,620 |
|
|
|
|
|
| Total Adjustments |
|
91,330 |
|
|
|
3,843,046 |
|
|
|
308,886 |
|
|
|
13,665,156 |
|
|
|
|
|
| Consolidated
EBITDA |
|
62,440 |
|
|
|
32,975 |
|
|
|
88,518 |
|
|
|
5,625 |
|
|
|
|
|
| Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
| Stock-based compensation |
|
46,842 |
|
|
|
50,754 |
|
|
|
201,550 |
|
|
|
217,852 |
|
|
|
|
|
| Acquisition, integration, and
transformation costs |
|
4,262 |
|
|
|
6,627 |
|
|
|
21,110 |
|
|
|
15,620 |
|
|
|
|
|
| Restructuring costs |
|
899 |
|
|
|
3,738 |
|
|
|
16,942 |
|
|
|
7,416 |
|
|
|
|
|
| Total Adjustments |
|
52,003 |
|
|
|
61,119 |
|
|
|
239,602 |
|
|
|
240,888 |
|
|
126 - 153 |
|
484 - 575 |
| Consolidated Adjusted
EBITDA |
$ |
114,443 |
|
|
$ |
94,094 |
|
|
$ |
328,120 |
|
|
$ |
246,513 |
|
|
$52 - 62 |
|
$350 - 390 |
| |
|
|
|
|
|
|
|
|
|
|
|
| Segment Adjusted
EBITDA |
|
|
|
|
|
|
|
|
|
|
|
| Teladoc Health Integrated
Care |
$ |
55,971 |
|
|
$ |
43,686 |
|
|
$ |
191,871 |
|
|
$ |
135,153 |
|
|
|
|
|
| BetterHelp |
|
58,472 |
|
|
|
52,846 |
|
|
|
136,249 |
|
|
|
114,116 |
|
|
|
|
|
| Other |
|
— |
|
|
|
(2,438 |
) |
|
|
— |
|
|
|
(2,756 |
) |
|
|
|
|
| Consolidated Adjusted
EBITDA |
$ |
114,443 |
|
|
$ |
94,094 |
|
|
$ |
328,120 |
|
|
$ |
246,513 |
|
|
|
|
|
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
| |
Quarter Ended |
|
Year Ended |
|
Outlook (10) |
| |
December 31, |
|
December 31, |
|
Full Year |
|
($ in thousands, except for outlook data, unaudited) |
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
|
2024(in millions) |
| Net cash provided by operating
activities |
$ |
130,082 |
|
|
$ |
65,549 |
|
|
$ |
350,021 |
|
|
$ |
189,292 |
|
|
$354 - 374 |
|
Capital expenditures |
|
(1,404 |
) |
|
|
(6,194 |
) |
|
|
(11,464 |
) |
|
|
(16,480 |
) |
|
|
|
Capitalized software |
|
(35,103 |
) |
|
|
(47,697 |
) |
|
|
(144,884 |
) |
|
|
(156,284 |
) |
|
|
| Capex |
|
(36,507 |
) |
|
|
(53,891 |
) |
|
|
(156,348 |
) |
|
|
(172,764 |
) |
|
(144) - (134) |
| Free Cash Flow |
$ |
93,575 |
|
|
$ |
11,658 |
|
|
$ |
193,673 |
|
|
$ |
16,528 |
|
|
$210 - 240 |
See note (10) in the Notes section that follows.
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 amounts related to capitalized software
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.
Other includes certain revenues and charges not related to ongoing
segment operations.
- 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.
- We have not provided a reconciliation for net loss/income to
adjusted EBITDA outlook for the full year of 2025 because it is
impracticable to do so. Reconciling items like income taxes,
stock-based compensation, and certain other costs have not yet been
determined so a net loss/income amount for the full year of 2025 is
not available to provide. Accordingly, a full line-item
reconciliation of the GAAP measure to the corresponding non-GAAP
financial measure outlook is not available without unreasonable
effort.
- 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:Patrick
Feeley914-265-7925IR@teladochealth.com
Media:Chris
Stenrud860-491-8821pr@teladochealth.com
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