The coronavirus pandemic offered Teladoc Health (TDOC -3.06%) a significant boost in 2020. When scheduling face-to-face medical appointments was risky, difficult -- or sometimes, impossible -- patients flocked to virtual medical appointments. Revenue climbed by triple-digit percentages from quarter to quarter, and its share price surged by 138% for the year.
But this year, investors began to worry about the company's future. The concern was that Teladoc's business would lose a lot of steam as the pandemic waned and patients could comfortably return to doctors' offices. As a result, Teladoc's share price has slipped by more than 20% year to date. But these concerns look exaggerated to me -- especially when considering one key number in Teladoc's second-quarter earnings report.
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3.5 million
The number of patient visits facilitated on Teladoc's platform climbed 28% in the second quarter to 3.5 million. Why is that so significant? Because that growth is being measured against 2020's second quarter -- when pandemic-related shutdowns and fears were at their peak intensity.
"This means that even as more people are being vaccinated and restrictions are lifting in many parts of the world, consumers and providers are increasingly relying on Teladoc Health's virtual care," CEO Jason Gorevic said during the earnings call.
Such results aren't coming completely out of the blue. Last year, Teladoc already was seeing signs that growth would continue -- even as businesses in the U.S. reopened over the summer.
Other data points support the idea that the company's growth will last. During Teladoc's third-quarter earnings call last fall, Gorevic said noninfectious disease-related visits were driving growth. That trend is continuing. In its earnings report this week, Teladoc said that 80% of visits were noninfectious disease-related -- up from 50% prior to the pandemic.
This means people aren't just visiting online doctors to check on possible coronavirus symptoms. They're turning to Teladoc for a broad range of medical needs. Once the pandemic is over, demand for this type of virtual care is likely to continue.
The "whole person"
And this leads me to another point. Teladoc says it aims to treat the "whole person." That means it's working to enroll patients in multiple programs to address all of their health issues -- and it's making progress. In the second quarter, 20% of chronic care members were enrolled in multiple programs. That's up from 6% in the same period a year ago. If patients choose to become involved in more than one program and they're satisfied with their treatment, they'll be more likely to stick around.
Teladoc's acquisition of Livongo -- which brought in its specialty of virtual management of chronic conditions-- is playing an important role in this "whole person" goal and the company's pursuit of lasting growth.
In the short term, the impact of the Livongo acquisition and the purchase of InTouch Health -- also last year -- are weighing on its bottom line. Teladoc reported a second-quarter loss of $0.86 a share compared with a loss of $0.34 a share in the year-earlier period. But that recent loss includes the amortization of acquired intangibles related to those acquisitions. It also includes expenses linked to Livongo stock awards.
What's ahead
Teladoc isn't forecasting profitability right away. Eventually, though, I expect its investments in growth to fully bear fruit. Meanwhile, the annual outlook is encouraging. Teladoc raised its revenue guidance to the range of $2 billion to $2.02 billion. That's up slightly from its earlier forecast of $1.97 billion to $2.02 billion. And the company is on its way to 13.5 million to 14 million visits this year.
Now, let's get back to the most important number: patient visits. The steady growth in this metric makes me confident Teladoc can indeed meet its forecasts for this year and beyond. It excelled during the pandemic. And the great news for long-term investors is, it looks like Teladoc can perform well in a post-pandemic world too.
