Key Points
- Revenue of $642.4 million was within management’s guidance range.
- Adjusted EBITDA significantly exceeded expectations at $89.5 million.
- The bulk of its $4.92 per share net loss came from a $4.64 per share goodwill impairment charge.
Teladoc Health (TDOC 4.91%), a leading provider of virtual healthcare services, delivered its second-quarter results on July 31, and the report showcased a blend of achievements and challenges. Revenue reached $642.4 million, in the lower half of management’s guidance range. Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) came in strong at $89.5 million, well above the range forecast by management. However, a significant goodwill impairment charge related to its BetterHelp segment left it with a net loss per share of $4.92, well beyond the $0.35 to $0.45 loss it had forecast.
| Metric | Q2 2024 | Q2 2024 Guidance | Q2 2023 | % Change (YoY) |
|---|---|---|---|---|
| Revenue | $642.4 million | $635 million to $660 million | $652.4 million | (2%) |
| Adjusted EBITDA | $89.5 million | $70 million to $80 million | $72.2 million | 24% |
| Net Loss Per Share | ($4.92) | ($0.45 to $0.35) | ($0.42) | N/A |
| U.S. Integrated Care Members | 92.4 million | 92 million to 93 million | 91.8 million | 0.7% |
| Source: Guidance from the Q1 earnings report published April 25. |
Company Overview
Teladoc Health provides a comprehensive suite of integrated virtual healthcare services, including general medical visits, mental health care, and chronic condition management. Recurring access fees make up 88% of its consolidated revenue. Although there was a slight decline in access fees in Q2, other revenue sources, such as telehealth visits and hardware sales, increased by 8% year over year.
Teladoc leverages advanced technology and data analytics to offer personalized care. Its recent efforts have been centered around enhancing member engagement.
Quarterly Highlights
Total revenue slid 2%, but the integrated care segment reported revenue growth of 5% year over year to $377.4 million, the top end of management’s 2% to 5% growth outlook. The segment also showed a significant margin improvement, reaching 17% vs. management’s 12% to 14% guidance range. The BetterHelp segment, however, posted revenue of $265 million, a 9% decline when management had been guiding for a decrease of 4% to 8%.
Net loss surged to $4.92 per share, primarily due to a goodwill impairment charge of $4.64 per share in the BetterHelp segment. Without that charge, its net loss would have been in line with expectations for a loss per share of $0.35 to $0.45. Gross margin was 66.7%, a slight year-over-year decrease from 67.5%. Adjusted gross margin was 70.7%, similar to last year’s 70.8%.
Total visits dropped by 11% to 4.2 million in Q2 2024 from 4.7 million in Q2 2023. Free cash flow also saw a 5.7% decline to $60.9 million.
Looking Ahead
Management has withdrawn its full-year financial guidance for its consolidated operations and the BetterHelp segment, citing uncertainty. However, it maintained its guidance for the integrated care segment for Q3 and the full year. For Q3, it anticipates revenue in the range of down 1% to up 2%, an adjusted EBITDA margin of 14.5% to 16%, and U.S. membership of between 92.5 million and 93.5 million. For the full year, it projects low- to mid-single-digit percentage revenue growth and a 150 to 200 basis point expansion in the adjusted EBITDA margin.
