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How Teladoc Health Wowed With Its Q4 Results

By Keith Speights - Feb 27, 2020 at 7:03AM

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The telehealth provider easily beat Wall Street top- and bottom-line estimates.

You might have thought that Teladoc Health (TDOC 3.57%) would struggle to deliver the kind of performance it did last year. Shares of the telehealth leader skyrocketed 69% in 2019, fueled by the company's tremendous revenue growth. But Teladoc is already up 40% so far in 2020. And it just had another positive catalyst.

The company announced its 2019 fourth-quarter and full-year results after the market closed Wednesday. The report wowed investors, with the stock jumping nearly 15% in after-hours trading. Here are the highlights from Teladoc's Q4 update.

Hands holding a smartphone with a physician on the screen

Image source: Getty Images.

By the numbers

Teladoc Health reported revenue of $156.5 million in the fourth quarter. This reflected an impressive 27% year-over-year increase. It also topped the consensus Wall Street revenue estimate of $152.95 million.

The company announced a Q4 net loss of $19 million, or $0.26 per share, based on generally accepted accounting principles (GAAP). This was an improvement from Teladoc's net loss of $24.9 million, or $0.35, in the prior-year period and its net loss of $20.3 million, or $0.28 per share, in the third quarter of 2019. And it beat the average analysts' estimate of a Q4 net loss of $0.33 per share.

Teladoc delivered positive adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) of $15.2 million in the fourth quarter. This non-GAAP metric also trended in the right direction, up from adjusted EBITDA of $5.8 million in the same quarter of 2018, and an increase from the $9 million posted in the third quarter of 2019.

Behind the numbers

CEO Jason Gorevic said that the company's "diversified growth strategies are driving strong growth across our channels." He noted that the results "were at the high end or exceeded our expectations on all key metrics."

One big key to Teladoc's success was its tremendous membership growth in the U.S. The number of total paid U.S. members at the end of 2019 jumped 61.1% year over year to 36.7 million. It saw even greater growth in its U.S. visit-fee-only membership, with the count more than doubling from the prior-year period to 19.3 million.

Acquisitions have been an important part of Teladoc's growth strategy. But the company said that its organic growth rate of 27% in the fourth quarter was achieved excluding the impact of its purchase of French telehealth company MedecinDirect in 2019.

Teledoc's bottom-line improvement stemmed in large part from its strong revenue growth. The company also kept its operational spending growth rate at 22% year over year. In addition, Teladoc received a $4.1 million boost from an income tax benefit in the fourth quarter.

Looking ahead

The company expects first-quarter revenue between $169 million and $172 million. Even the low end of this range is well above the consensus Wall Street estimate of $163.9 million. Teladoc looks for a net loss per share in Q1 between $0.34 and $0.37. Analysts expect a net loss of $0.36.

For the full year 2020, it forecasts revenue between $695 million and $710 million. The average analysts' estimate is for 2020 revenue of $692.9 million. The company anticipates a full-year net loss per share of between $1.06 and $1.19. Wall Street predicts Teladoc will deliver a net loss in 2020 of $1.19 per share.

The acquisition of InTouch Health for $600 million is expected to close in the second quarter of 2020. This big buyout should significantly boost the company's performance in the second half of the year.

It's possible that Teladoc could also be among the healthcare stocks that benefit from the coronavirus outbreak. If the virus continues to spread, concerns about possibly being infected by the virus while visiting physicians' offices could steer more patients to use Teladoc's services.

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