Teladoc (TDOC) Q2 Revenue Tops Estimates

Teladoc Health (TDOC 0.54%), a virtual healthcare provider offering telemedicine and digital health services, released its second quarter earnings results on July 29, 2025, covering the period ending June 30. The most notable news from the release was that GAAP revenue reached $631.9 million, exceeding the $622.5 million analyst estimate, and earnings per share (EPS) (GAAP) were $(0.19), beating expectations of $(0.26). Compared to the same quarter last year, both revenue and adjusted EBITDA, a measure of profit before interest, taxes, and certain expenses, declined. Overall, the quarter was mixed: the company surpassed expectations, but underlying metrics showed ongoing challenges in parts of its business, particularly in direct-to-consumer mental health services.

Source: Analyst estimates provided by FactSet. Management expectations based on management's guidance, as provided in Q1 2025 earnings report.

Business Overview and Recent Priorities

Teladoc Health is a global leader in virtual healthcare, offering a broad suite of digital medical services, including telemedicine (real-time remote doctor visits), chronic disease management, and mental health solutions. The company operates in both the business-to-business (B2B) market -- supporting employers, health plans, and public systems -- and in direct-to-consumer mental health through its BetterHelp platform.

Recently, Teladoc's priorities have centered on expanding its array of services, adding new platform features such as artificial intelligence (AI)–enabled care, and enhancing member engagement. Key success factors include growing its member base, increasing engagement and service adoption per member, and quickly monetizing additions, particularly across its Integrated Care segment. The company's ability to innovate in digital health tools and integrate new acquisitions, such as UpLift and Catapult Health, has also been a major strategic focus.

Quarter in Review: Notable Financial and Operational Developments

Teladoc reported GAAP revenue that beat estimates by $9.4 million. However, this result was down 2 % from the same period last year. Adjusted EBITDA declined 23% year-over-year. Free cash flow, the amount of cash the business generates after essential expenses, remained flat compared to the prior year quarter.

The Integrated Care segment, which targets employer-sponsored and government-backed health plans, saw revenue increase 4% year-over-year, helped by an increase in U.S. membership to 102.4 million, up from 92.4 million as of Q2 2024. However, average monthly revenue per U.S. Integrated Care member fell 7%. Chronic care program enrollment, which focuses on managing long-term diseases like diabetes, dropped 5% compared to Q2 2024. The company attributed the lower per-member revenue to onboarding large cohorts of new members with fewer up-sold services so far. Segment profit margin decreased from 17.0% in Q2 2024 to 14.7%.

The BetterHelp segment, which offers online mental health services directly to consumers, experienced a 9% revenue decline and a 53% drop in adjusted segment EBITDA. The segment’s average number of paying users fell 5% year-over-year. The company noted that most new users now come through a weekly billing option rather than monthly subscriptions, increasing churn but improving overall conversion rates—a trend observed over the past several months. Teladoc began to integrate its UpLift acquisition, aiming to expand access to insured therapy options, but noted that this will likely put further pressure on profit margins in 2025 due to the costs of ramping up new insurance-based mental health services.

Teladoc completed several strategic moves during the quarter, including the acquisition of UpLift (focused on insurance-covered mental health services) and Catapult Health (preventative care). The company also retired $550.6 million in convertible senior notes and arranged a new $300 million credit facility, which remains undrawn. Cash reserves (GAAP) at quarter-end stood at $679.6 million, down from $1,298.3 million at the end of 2024, reflecting debt retirement, acquisitions, and investment-related outflows. Management stated that the new credit facility, entered into on July 17, 2025, is intended to maintain financial flexibility but acknowledged the cash decline from prior periods.

Operating expenses were largely flat or slightly down across categories such as technology, development, general administration, and marketing compared to Q2 2024, reflecting cost-cutting measures. Teladoc reduced its forecast for stock-based compensation (a non-cash expense that can dilute shareholders), aiming for a total $15 million decrease compared to prior guidance for the full year 2025. The company stated that achieving measurable growth in higher-margin recurring services through new products and successful integration of recent acquisitions is a key next step, noting that 86% of consolidated revenue in FY2024 was derived from access fees (recurring revenue).

Product Update and Segment Details

Within digital health, Integrated Care combines primary care, specialist visits, and disease management in a unified ecosystem for members. The segment offers AI-driven tools and partnerships with pharmacy providers such as LillyDirect to enhance care for issues like obesity management. The Catapult Health acquisition, completed at the end of February 2025, aimed to strengthen preventive care and cross-sell opportunities, supporting Teladoc’s goal of being a 'front door' to healthcare. Despite growing the member base by 12% year-over-year, the immediate impact has been lower revenue per member due to onboarding large, lower-acuity groups without up-selling (so far) to high-value services like chronic disease management.

BetterHelp, the direct-to-consumer segment, offers online therapy through an app and web platform. The acquisition of UpLift is intended to broaden coverage from self-pay to insurance-backed clients. While UpLift brings relationships covering more than 100 million insured lives, management noted up to $15 million in additional near-term expenses as it integrates the business, representing an incremental headwind to adjusted EBITDA in 2025. The main challenge remains transitioning users to insurance coverage, which generally yields higher conversion and usage but at lower profit margins. Advertising and member acquisition costs remained stable, helped in part by the new weekly offering, although this also increased churn rates. Concurrently, segment revenue from other wellness services dropped 16%.

Internationally, Teladoc delivered double-digit revenue growth. Enhancements to its AI-powered PRISM platform, which integrates care management and patient records, were rolled out to boost member experience and operational efficiency. Segment diversification and ongoing improvements are central to driving future profit growth, according to management’s statements.

Outlook and What’s Ahead

For FY2025, Teladoc expects total revenue (GAAP) between $2.50 billion and $2.55 billion, with flat to low single-digit growth for Integrated Care, as guided for the full year and a mid- to high-single-digit revenue decline for BetterHelp is expected for the full year. Adjusted EBITDA (non-GAAP) is projected at $263 million to $294 million for the full year, matching prior guidance. Free cash flow (non-GAAP) is forecast between $170 million and $200 million for the full year. The company guided for U.S. Integrated Care membership in the range of 101 million to 103 million for the full year. For BetterHelp, adjusted EBITDA margin (non-GAAP) is expected to fall between 4.0% and 5.5% for the full year due to integration costs, business mix change, and investment in scaling UpLift.

Management did not announce any dividend and has not paid one in recent quarters. TDOC does not currently pay a dividend. Looking ahead, investors are likely to focus on management’s ability to improve monetization of its growing membership base, reverse chronic care enrollment declines, and successfully integrate recent acquisitions. Segment performance, especially the stabilization and growth of BetterHelp in a more insurance-oriented model, will remain a key area to watch.

Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.