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5 Really Impressive Numbers in Teladoc Health's Q1 Update

By Keith Speights – Updated Apr 30, 2020 at 10:07AM

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The telehealth services provider's bottom line didn't look great. But pretty much everything else did.

If you just look at the headline numbers in Teladoc Health's (TDOC -3.50%) first-quarter results, you might miss some important details. Sure, the telehealth services provider missed the consensus Wall Street earnings estimate by reporting a net loss of $0.40 per share while analysts expected a loss of $0.36 per share. But that still reflected improvement for the company's bottom line compared to the prior-year period.

More importantly, Teladoc performed exceptionally well on all other fronts. There were five numbers in the company's Q1 update that especially stood out.

Laptop screen showing a smiling physician holding a stethoscope

Image source: Getty Images.

1. Total revenue up 41% 

Let's start right at the top of Teladoc's income statement. The company reported that its revenue grew by 41% year over year to $180.8 million, right in line with Teladoc's sneak peek at its Q1 results a few weeks ago. And that growth was across the board.

Subscription access fee revenue rose 29% to more than $137 million. The U.S. market fueled much of this growth, with revenue jumping 33% year over year to $107.9 million. However, Teladoc also performed well internationally, with ex-U.S. subscription access fee revenue rising 17% to $29.1 million. Meanwhile, visit fee revenue zipped 93% higher to $43.7 million. Nearly all of this total stemmed from the U.S. market. 

Teladoc did benefit some in the first quarter from its acquisition of MedicinDirect. However, practically all of its year-over-growth -- 40% of the 41% -- was organic.

2. Total visits soared 92% 

Perhaps the most impressive number of all in Teladoc Health's Q1 update was 92%. That's the year-over-year increase in total visits reported by the company in the first quarter.

Teladoc stated that it logged over 2 million visits in Q1. Of particular note was that U.S. fee-only visits (which aren't part of employer subscriptions) skyrocketed 263% year over year to 227,000.

3. Paid membership jumped nearly 61%

Teladoc Health's bread and butter is its paid memberships where businesses pay subscription fees for their employees to use Teladoc's telehealth services. The company reported that total paid membership jumped nearly 61% year over year to 43 million.

Teladoc clearly benefited from the COVID-19 pandemic. CEO Jason Gorevic said that "clients and consumers have turned to us during these unprecedented times."

4. Utilization vaulted 237 basis points higher

One number that might not seem all that big of a deal was Teladoc's utilization increase of 237 basis points. In the first quarter, the company reported utilization of 13.36% compared to 11% in the prior-year period.

Why is this utilization increase significant? Gorevic noted in his comments during the company's Q4 conference call in February that "once members use our services for the first time, they are much more likely to use us again." An increased utilization rate now could very well translate to higher visit volume for Teladoc in the future.

5. Full-year revenue expected to top $800 million

Speaking of the future, Teladoc Health looks for a bright rest of 2020. The company projects that its full-year revenue will be between $800 million and $825 million. The midpoint of that range represents year-over-year growth of 49%. The low end of the range is also well above the average analysts' full-year revenue estimate of nearly $744 million.

Two assumptions are key to Teladoc hitting its guidance. The company expects total U.S. paid membership to top 50 million members by the end of the year. It also looks for total visits in 2020 to be between 8 million and 9 million.

A not-so-impressive (but improving) number

The biggest knock against Teladoc is that it remains unprofitable. However, growth stocks like Teladoc Health don't have to be profitable to still deliver tremendous gains for investors, especially if they can demonstrate they're on a path to profitability. 

The company doesn't expect to turn a profit in 2020, with its guidance calling for a net loss per share between $1.27 and $1.13. Still, though, this range reflects improvement from 2019 when Teladoc posted a net loss of $1.38 per share.

Also, the company continues to generate positive adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA). Teladoc anticipates adjusted EBITDA of between $70 million and $80 million for full-year 2020. That's not the same thing as true profitability, but it's still a good sign for a fast-growing company that's the global leader in an industry that should become much larger over the next few years. 

Keith Speights owns shares of Teladoc Health. The Motley Fool owns shares of and recommends Teladoc Health. The Motley Fool has a disclosure policy.

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