Teladoc's (NYSE:TDOC) first-quarter results kicked off a good start to 2018. Their now fully integrated acquisition of Best Doctors helped revenue more than double for the second straight quarter and U.S. membership reach more than 20 million people.

The U.S. healthcare system is very expensive, paving the way for the disruptive new industry of telemedicine. Teladoc is America's largest provider of virtual medical consultations, providing the IT infrastructure for doctor's appointments to take place at home using mobile devices. While not meant to replace your primary care doctor, they do offer immediate diagnoses for non-emergency medical issues.

Teladoc makes money by charging insurers and employers recurring subscription access fees and also by charging patients per-visit fees. Both revenue streams grew nicely in the first quarter, which suggests that the company is gaining traction in America's fast-changing healthcare space.

Let's take a closer look at the results. 

Doctor pressing stethoscope up to various medical symbols

Image source: Getty Images

Teladoc results: The raw numbers


Q1 2018

Q1 2017

Year-Over-Year Change


$89.6 million

$42.9 million


Operating income

($19.1 million)

($14.8 million)


Earnings per share




Data source: Teladoc. Earnings per share is on a fully diluted basis.

What happened this quarter?

Teladoc's demonstrated strong top-line growth as more members joined the platform.

  • Revenue growth of 109% made headlines, though organic revenue growth came in at 47%. Much of Teladoc's growth came from its recent acquisition of Best Doctors.
  • Revenue from subscription access fees was up 109%, to $71.7 million during the quarter. U.S.-based fees increased 78% (including those from Best Doctors). Teladoc generated $10.7 million of international subscription fees this quarter, compared to zero a year ago.
  • Per-visit revenue also increased 109% to $17.9 million, largely driven by general medical visits like dermatology and behavioral health.
  • The number of visits from U.S. paid membership shot up 44% to 554,000. U.S. paid membership also increased significantly, to 20.8 million people.
  • Utilization, which is defined as quarterly visits divided by total membership, was 2.6% during the quarter. This is roughly in line with where it was a year ago.
  • Adjusted EBITDA (which removes stock-based compensation and acquisition-related costs) was a loss of $1.4 million, compared to a loss of $9.1 million last year.

What management had to say

Teladoc CEO Jason Gorevic sounded optimistic about his company's start to 2018: "Teladoc is off to an excellent start in 2018, posting strong first quarter results across all key financial and operating metrics. I'm very pleased with our performance during the intense 2018 flu season, providing yet another proof point for the inevitability of virtual care as a critical component of the healthcare system."

Looking forward

Teladoc's growing membership base is providing more subscription revenue, which the company can allocate to improving its platform or in making future acquisitions. Analysts might watch to see if utilization increases, which could indicate that members value and are actually using their platform. Management believes the company has a very large market opportunity and investors should closely monitor if this accelerated growth rate can continue.

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