American Well (AMWL 20.45%), a major telehealth solutions provider, reported second-quarter 2025 results on August 5, 2025. The standout detail: GAAP revenue of $70.9 million in Q2 2025 outpaced analyst expectations by more than $7.4 million, alongside a record gross margin of 56.1% in Q2 2025. Adjusted EBITDA loss improved sharply to $(4.7 million) in Q2 2025 The quarter saw software subscriptions become the dominant revenue driver, but management revised full-year revenue guidance to $245–$250 million for 2025 as the planned divestiture of Amwell Psychiatric Care trimmed short-term sales. Overall, the period showed robust progress on profitability and strategic execution.
| Metric | Q2 2025 | Q2 2025 Estimate | Q2 2024 | Y/Y Change |
|---|---|---|---|---|
| EPS (GAAP) | $(1.24) | $(1.77) | $(3.36) | N/A |
| Revenue | $70.9 million | $63.5 million | $62.8 million | 12.9 % |
| Adjusted EBITDA | $(4.7 million) | $(34.95 million) | -86.6 % |
Source: Analyst estimates provided by FactSet. Management expectations based on management's guidance, as provided in Q1 2025 earnings report.
Business Overview and Key Success Factors
American Well provides a digital health platform designed for virtual care delivery. Its core offering connects patients, providers, and healthcare systems for a range of clinical and behavioral health services. The mainstay product, called Converge, is a software platform that supports telehealth visits, patient scheduling, and care coordination across healthcare networks.
The company's success relies on scaling its technology, signing partnerships with large health systems and payers, and transitioning to recurring software subscription revenue. Strength in software, interoperability with other healthcare systems, and maintaining regulatory compliance help differentiate American Well from traditional and newer telehealth competitors. Recent business focus areas include technological upgrades, deepening relationships with government contracts, and expanding its software client base while reducing reliance on lower-margin clinical volume.
Quarterly Highlights and Performance Drivers
GAAP revenue of $70.9 million surpassed analyst estimates. Subscription revenue reached $40.4 million in Q2 2025, up from $32.2 million in Q1 2025. This shift reflects management’s focus on growing a more predictable, high-margin business model and signals momentum in platform adoptions among health systems and payers.
Profitability improved as adjusted EBITDA (non-GAAP) loss narrowed to $(4.7 million) in Q2 2025, a dramatic improvement from $(35.0 million) in Q2 2024. Gross margin (GAAP) also increased to 56.1% in Q2 2025.
The quarter featured new strategic client wins, most notably Florida Blue, a leading health plan. The period also brought an extension award from the Defense Health Agency (DHA), solidifying American Well’s position among government health contracts. Both deals lend credibility to the Converge platform and highlight its reach in serving large populations, with the DHA contract alone covering 9.6 million military health system members and their families.
Leadership flagged persistent risks, such as ongoing declines in visit volumes—total visits dropped to 1.2 million in Q2 2025 from 1.3 million in Q1 2025. Management also noted that the DHA contract is expected to represent Amwell's largest revenue component on an annualized basis, making its renewal essential for longer-term stability.
Look Ahead: Guidance and Investor Focus Areas
For fiscal 2025, American Well lowered its GAAP revenue forecast to a range of $245–$250 million, down from the previous $250–$260 million. This change reflects the divestiture of its psychiatric care segment. Adjusted EBITDA loss for FY2025 is now forecast at $(50) to $(45) million, a narrower range that marks progress on improving operating performance. For Q3 2025, revenue is expected to be between $53 million and $56 million, with adjusted EBITDA loss (non-GAAP) anticipated to widen sequentially. Management reiterated it expects positive cash flow from operations in 2026, with leverage coming from subscription growth and further cost alignment.
No dividend is paid to shareholders at this time. Guidance for patient visit volumes remains unchanged.—Subscription revenue is on track to account for nearly 60% of total revenue in 2025. Investor attention will likely remain on the pace of platform adoption, the outcome of government contract renewals, and continued improvement in profit metrics as American Well navigates a rapidly evolving telehealth sector.
Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.
