It's been a dismal year for American Well (AMWL -3.74%) so far. Shares of the telehealth-services provider have fallen close to 28%. And that downtrend could continue.
Amwell announced its fourth-quarter results after the market closed on Wednesday. The healthcare stock slipped over 1% in after-hours trading. Here are the highlights from Amwell's Q4 update.
By the numbers
Amwell reported fourth-quarter revenue of $60.4 million, a 34% increase from the $45 million reported in the same quarter of the previous year. This result topped the average analyst's revenue estimate of $54 million.
The company delivered a net loss in Q4 of $50.6 million. In the prior-year period, Amwell posted a net loss of $22.7 million.
Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) also trended in the wrong direction. Amwell recorded an adjusted EBITDA loss in the fourth quarter of $35.4 million, versus an adjusted EBITDA loss of $16.9 million in the prior-year period.
The telehealth provider ended the fourth quarter with cash, cash equivalents, and investments totaling a little over $1 billion. Amwell reported a cash position of $177.6 million as of Dec. 31, 2019.
Behind the numbers
It's easy to discern why Amwell's revenue grew considerably in the fourth quarter. The COVID-19 pandemic continued to drive the company's growth.
Amwell's total active providers increased to around 72,000 in the fourth quarter of 2020 from around 7,000 in the prior-year period and 62,000 in the third quarter. The company reported roughly 1.6 million total visits in Q4, up from 355,000 visits in the same period of 2019.
Around 23% of that total came from Amwell Medical Group (AMG) visits. AMG is a physician-owned medical practice that uses Amwell platforms to provide virtual care.
The company's bottom line suffered as operating expenses increased significantly. Amwell's gross margin also slipped to 37.4% from 44.7% in the prior-year period, due primarily to a shift in the company's revenue mix.
Amwell projects that revenue for full-year 2021 will be between $260 million and $270 million. The midpoint of this range reflects a year-over-year increase of 8%. Analysts were expecting revenue to fall close to the upper end of the range.
The company also looks for its adjusted EBITDA to deteriorate in 2021. Amwell's outlook calls for negative adjusted EBITDA between $157 million and $147 million.
Investors will definitely want to watch the changing competitive dynamics for Amwell. Internet giant Amazon.com recently announced plans to expand its Amazon Care telehealth services to other employers beginning this summer. It's too early, though, to predict what the impact of Amazon's entry into the market might be for Amwell.