Teladoc Health (NYSE:TDOC) boosted its fiscal 2020 first-quarter revenue outlook on Tuesday to between $180 million and $181 million, up from its previous guidance for revenue between $169 million and $172 million. The company stated that the increase was based on "an unprecedented surge in demand" for its telehealth services due to the COVID-19 pandemic.
The number of virtual medical visits per day that Teladoc Health facilitates in the U.S. has more than doubled to above 20,000 since the first week of March. Teladoc said that more than 60% of those recent visits were from members who are new to its platform. Many Americans are under shelter-in-place orders and are turning to telehealth to seek medical care rather than visiting healthcare professionals in their offices or in hospitals, where they would be at higher risk of contracting COVID-19.
Based on the recent spike, Teladoc now expects to report that total visit volume during the first quarter, which ended March 31, rose to more than 1.8 million. That would be a 70% jump from the prior-year period.
Teladoc has implemented several initiatives to handle the surging demand for its telehealth services. It has streamlined the provider onboarding process to quickly add physicians. It has temporarily boosted physicians' pay in some cases. And it has also enhanced its visit queue algorithms to better serve patients.
While Teladoc's revenue will rise at least in the short term, so will its expenses. The company incurred additional costs of around $4 million related to its efforts to deal with higher patient volumes. Still, though, Teladoc now projects its Q1 adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) will land between $10 million and $11 million, with the lower end of the range up from its previous guidance of $9 million.