Core Points - Amwell granted 3,451 RSUs of Class A common stock to a new employee as an inducement for employment, with a vesting schedule of 25% after one year and the remaining 75% vesting in equal increments every three months over three years [1][2] - The grants were approved by Amwell's Compensation Committee under the Inducement Plan and comply with NYSE's Listed Company Manual Rule 303A.08 [2] Company Overview - Amwell provides a comprehensive, technology-enabled care platform for payers and health systems, enhancing patient access to convenient, affordable, and effective care [3] - The platform supports various clinical programs and offers integrated solutions that are scalable, serving millions of patients and healthcare organizations globally [3]

Core Viewpoint - American Well Corporation (AMWL) has received an upgrade to a Zacks Rank 2 (Buy), indicating a positive trend in earnings estimates which is a significant factor influencing stock prices [1][3]. Earnings Estimates and Revisions - The Zacks Consensus Estimate for American Well for the fiscal year ending December 2025 is projected at -$8.72 per share, reflecting a 37.2% change from the previous year's reported figure [8]. - Over the past three months, the Zacks Consensus Estimate for American Well has increased by 5.7%, indicating a positive revision trend [8]. Zacks Rating System - The Zacks rating system is based on changes in earnings estimates, which are crucial for determining stock price movements, making it a valuable tool for investors [2][4]. - The system classifies stocks into five groups, with Zacks Rank 1 (Strong Buy) stocks historically generating an average annual return of +25% since 1988 [7]. - The upgrade of American Well to a Zacks Rank 2 places it in the top 20% of Zacks-covered stocks, suggesting potential for market-beating returns in the near term [10].

Core Viewpoint - American Well Corporation (AMWL) has seen an 11.8% increase in share price over the past four weeks, closing at $7.31, with a potential upside of 46.5% based on Wall Street analysts' mean price target of $10.71 [1][11]. Price Targets and Analyst Estimates - The mean price target is derived from seven short-term estimates with a standard deviation of $2.58, indicating variability among analysts [2]. - The lowest estimate is $7.50, suggesting a 2.6% increase, while the highest estimate predicts a surge of 105.2% to $15 [2]. - A low standard deviation signifies strong agreement among analysts regarding the stock's price direction [9]. Earnings Estimates and Market Sentiment - Analysts have shown increasing optimism about AMWL's earnings prospects, as evidenced by a positive trend in earnings estimate revisions [11]. - Over the past 30 days, one estimate has increased, leading to a 6.7% rise in the Zacks Consensus Estimate for the current year [12]. - AMWL holds a Zacks Rank 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks based on earnings estimate factors, indicating strong potential for upside [13].

Group 1 - American Well Corporation (AMWL) is performing better than the Medical sector with a year-to-date return of approximately 0.8%, while the sector has lost an average of 2.4% [4] - The Zacks Rank for American Well Corporation is 2 (Buy), indicating a favorable outlook based on earnings estimate revisions [3] - The Zacks Consensus Estimate for AMWL's full-year earnings has increased by 5.7% in the past quarter, reflecting improved analyst sentiment [4] Group 2 - American Well Corporation is part of the Medical Info Systems industry, which consists of 38 stocks and currently ranks 69 in the Zacks Industry Rank [6] - Stocks in the Medical Info Systems industry have gained about 8.4% year-to-date, indicating that AMWL is slightly underperforming its industry [6] - Claritev Corporation (CTEV), another stock in the Medical sector, has shown a year-to-date return of 44.6% and also holds a Zacks Rank of 2 (Buy) [5]

Core Insights - American Well Corporation (AMWL) reported revenue of $66.83 million for the quarter ended March 2025, reflecting a year-over-year increase of 12.3% and exceeding the Zacks Consensus Estimate by 11.18% [1] - The company's EPS was -$1.73, an improvement from -$5.00 in the same quarter last year, with a surprise of 44.01% compared to the consensus estimate of -$3.09 [1] Revenue Breakdown - Platform subscription revenue was $32.21 million, slightly below the average estimate of $32.89 million, but showed a year-over-year increase of 29.6% [4] - Other revenue reached $8 million, significantly surpassing the average estimate of $3.61 million, marking a year-over-year increase of 122.8% [4] - Revenue from visits was $26.63 million, which was above the average estimate of $23.70 million, but represented a year-over-year decline of 14.3% [4] Stock Performance - Over the past month, shares of American Well have returned +2.5%, contrasting with a -0.7% change in the Zacks S&P 500 composite [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating expected performance in line with the broader market in the near term [3]

Group 1 - American Well Corporation (AMWL) reported a quarterly loss of $1.73 per share, significantly better than the Zacks Consensus Estimate of a loss of $3.09, and an improvement from a loss of $5 per share a year ago, resulting in an earnings surprise of 44.01% [1] - The company achieved revenues of $66.83 million for the quarter ended March 2025, exceeding the Zacks Consensus Estimate by 11.18% and showing an increase from $59.52 million in the same quarter last year [2] - American Well has surpassed consensus EPS estimates in all four of the last quarters and has topped consensus revenue estimates three times during the same period [2] Group 2 - The stock's immediate price movement will largely depend on management's commentary during the earnings call, with American Well shares having increased by about 1.1% since the beginning of the year, contrasting with a -5.3% decline in the S&P 500 [3] - The current consensus EPS estimate for the upcoming quarter is -$2.26 on revenues of $65.45 million, and for the current fiscal year, it is -$9.34 on revenues of $254.97 million [7] - The Medical Info Systems industry, to which American Well belongs, is currently ranked in the top 18% of over 250 Zacks industries, indicating a favorable outlook compared to the bottom 50% [8]

Financial Data and Key Metrics Changes - Total revenue for Q1 was $66.8 million, a 12% increase compared to Q1 2024, and a 25% increase when normalizing for the sale of Amwell Psychiatric Care [23][24] - Subscription software revenue accounted for 48% of total revenue at $32.2 million, up 30% year-over-year [24][29] - Adjusted EBITDA improved to negative $12.2 million from negative $45.6 million in Q1 2024, reflecting ongoing cost reduction efforts [29] Business Line Data and Key Metrics Changes - The company completed approximately 1.3 million visits in Q1, which is about 23% lower than the previous year, but normalized visits were only 21% lower [25] - AMG's visit revenue trended 14.3% lower year-over-year at $26.6 million, but normalized visits were up 6.6% [26] - Average revenue per visit was $71, which is 8% lower compared to last year's Q1, but normalized revenue per visit was 8% higher [26] Market Data and Key Metrics Changes - The company is experiencing a shift towards technology-enabled care, with increasing consumer demand for online healthcare services [15][21] - The military health system is now fully utilizing the platform for virtual visits, positioning the company strongly in the federal market [11][12] Company Strategy and Development Direction - The company aims to achieve positive cash flow from operations by 2026, focusing on increasing the mix of subscription software revenues [6][30] - The recent hire of Dan Zemanski as Chief Product and Technology Officer is expected to enhance the company's technological capabilities and streamline consumer experiences [10][40] - The company is committed to driving efficiencies and optimizing cash flow while expanding its market presence [11][20] Management's Comments on Operating Environment and Future Outlook - Management noted that despite macroeconomic uncertainties, the demand for their platform is increasing as it provides significant ROI for clients [52][63] - The company remains confident in the renewal of its contract with the Defense Health Agency, which is expected to be finalized soon [32][70] - Management expressed optimism about the future, highlighting the potential for growth in technology-enabled care [21][35] Other Important Information - The company ended Q1 with $222 million in cash and marketable securities and zero debt [29] - The guidance for 2025 includes expected revenue in the range of $250 million to $260 million, with subscription revenue anticipated to represent nearly 60% of total revenues [30][31] Q&A Session Summary Question: Can you talk about bookings trends for CONVERGE and the impact of Dan's hire? - Management noted good receptivity to the platform beyond the DHA, with Dan's expertise expected to enhance consumer experience and data infrastructure [37][39] Question: Is the current gross margin rate sustainable for the rest of the year? - Management indicated that gross margins should improve as software revenues increase, with expectations of reaching 75-90% margins [44][45] Question: Have macroeconomic factors impacted sales timelines? - Management acknowledged market uncertainty but emphasized that their platform is seen as a solution to efficiency and revenue growth [51][53] Question: What is the status of the DHA contract and other government opportunities? - Management expects no significant changes in the economics of the DHA contract and highlighted the successful implementation of their platform across the military health system [56][58] Question: What is the company's direct exposure to tariffs? - Management stated that direct exposure to tariffs is minimal, as most hardware is sourced from third parties, and the business primarily focuses on software [62][63] Question: How is churn being managed, and what is the outlook for the selling season? - Management reported lower-than-expected churn and noted increased interest from both health systems and payers in their products [82][84]

Financial Data and Key Metrics Changes - Total revenue for Q1 2025 was $66.8 million, a 12% increase compared to Q1 2024, and a 25% increase when normalizing for the sale of Amwell Psychiatric Care [21] - Subscription software revenue accounted for 48% of total revenue at $32.2 million, up 30% year-over-year [22] - Adjusted EBITDA improved to negative $12.2 million, compared to negative $45.6 million in Q1 2024, indicating a significant reduction in losses [26] Business Line Data and Key Metrics Changes - The number of completed visits in Q1 was approximately 1.3 million, which is about 23% lower than the previous year, but normalized for APC, it was 21% lower [22] - AMG's visit revenue trended 14.3% lower than last year at $26.6 million, but normalized for APC, visits were higher by 6.6% [23] - CarePoint revenue increased to $8 million from $4.9 million in the previous quarter, reflecting variable revenues due to consumer buying patterns [24] Market Data and Key Metrics Changes - The military health system is now fully utilizing Amwell's platform for virtual visits, positioning the company strongly in the federal market [10] - Patient and provider satisfaction on the platform is reported at over 90% [11] - The company anticipates a significant shift towards technology-enabled care as consumer demand for online services increases [14] Company Strategy and Development Direction - The company aims to achieve positive cash flow from operations by 2026, focusing on increasing the mix of subscription software revenues [20] - Amwell is positioned as a key enabler in the shift towards technology-enabled care, providing a unified platform for payers and providers [15] - The company is committed to driving efficiencies and optimizing cash flow while expanding its market reach [18] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ongoing partnership with the DHA and the renewal of the contract with Leidos, indicating a strong future outlook [29] - The company is optimistic about its ability to navigate macroeconomic challenges, viewing its platform as a solution for efficiency and cost savings [48] - Management highlighted the importance of their unique offerings in a growing market, with expectations for continued growth and expansion [19] Other Important Information - The company ended Q1 2025 with $222 million in cash and marketable securities and zero debt [26] - The guidance for 2025 remains unchanged, with expected revenue in the range of $250 million to $260 million, excluding anticipated revenue from APC [27] Q&A Session Summary Question: Can you talk about bookings trends for CONVERGE and the impact of Dan's hire? - Management noted good receptivity to the AMOLED platform beyond DHA, with a focus on improving consumer experience and data infrastructure [35] Question: Is the current gross margin rate sustainable for the rest of the year? - Management indicated that gross margins should improve as software revenues increase, with expectations of reaching 75-90% margins [42] Question: Have macroeconomic factors impacted sales timelines? - Management acknowledged market uncertainty but noted that their platform is seen as part of the solution, leading to an acceleration in interest [48] Question: What is the status of the DHA contract and other government opportunities? - Management expects no significant changes in the economics of the DHA contract and highlighted their successful execution as a competitive advantage for future opportunities [55] Question: What is the company's exposure to tariffs? - Management stated that direct exposure to tariffs is minimal, as most software is developed in the U.S., and emphasized the platform's ROI for clients [58] Question: How is churn being managed, and what is the outlook for the selling season? - Management reported lower-than-expected churn and noted increased interest from both payers and health systems, indicating a positive outlook for the selling season [83]

Financial Performance - Total subscription fees received were $32.2 million for the three months ended March 31, 2025, compared to $24.9 million for the same period in 2024, representing a 29.2% increase [98]. - For the three months ended March 31, 2025, the company reported revenue of $66.8 million, a 12% increase from $59.5 million in the same period of 2024, driven by subscription revenue growth and professional services [142]. - The company recorded a net loss of $18.4 million for the three months ended March 31, 2025, a 75% reduction compared to a net loss of $73.4 million in the same period of 2024 [142]. - Adjusted EBITDA for the three months ended March 31, 2025, was $(12.2) million, an improvement from $(45.7) million in the same period of 2024, reflecting operational efficiencies [121]. - The company incurred a loss from operations of $30.4 million for the three months ended March 31, 2025 [156]. - Cash used in operating activities was $25.1 million for the three months ended March 31, 2025, a decrease from $59.8 million in the same period in 2024 [159][160]. - The company expects to generate operating losses in future periods and may require additional equity or debt financing [158]. Client Engagement - Clients completed a total of 1.3 million visits using the enterprise software in the three months ended March 31, 2025, down from 1.7 million visits in the same period in 2024, indicating a 23.5% decrease [115]. - AMG providers accounted for 29% of total visits performed using the enterprise software in the three months ended March 31, 2025, compared to 24% in the same period in 2024 [115]. - The company has powered approximately 34.4 million virtual care visits since inception, with 1.3 million visits in the three months ended March 31, 2025 [93]. Revenue Sources - Fees received from AMG-related visits were $26.6 million for the three months ended March 31, 2025, down from $31.1 million in the same period in 2024, reflecting a 14.4% decline [108]. - Fees received from the provision of services and Carepoint devices were $8.0 million for the three months ended March 31, 2025, compared to $3.6 million in the same period in 2024, showing a 122.2% increase [112]. - Subscription revenue increased by $7.3 million due to timing of revenue recognition with strategic customers, while visit revenue decreased by $6.1 million due to the sale of APC [143]. Cost Management - Costs of revenue decreased by 23% to $31.6 million for the three months ended March 31, 2025, down from $41.2 million in 2024, primarily due to a reduction in provider costs following the sale of APC [142]. - Research and development expenses decreased by 17% to $22.1 million for the three months ended March 31, 2025, compared to $26.7 million in 2024, as the company optimizes its cost structure [142]. - Sales and marketing expenses saw a significant decrease of 51%, totaling $12.6 million for the three months ended March 31, 2025, down from $25.7 million in 2024, reflecting cost-saving measures [142]. - The company incurred severance and strategic transformation costs of $3.5 million in the three months ended March 31, 2025, compared to $8.7 million in the same period in 2024 [123]. - General and Administrative expenses decreased by $6.9 million, primarily due to a 25% reduction in headcount and decreased stock compensation [147]. Strategic Initiatives - The Amwell Converge™ platform is designed to support a hybrid care delivery model, integrating in-person, virtual, and automated care experiences [94]. - As of December 31, 2024, Amwell powered digital care programs for approximately 50 health plans, representing over 80 million covered lives [93]. - The company achieved a gain on divestiture of $10.7 million related to the sale of the APC Business, which was completed to streamline operations and focus on the Converge platform [140]. - The company expects research and development expenses to decrease over the next year and remain flat in future periods, aligning with its revenue growth strategy [132]. - Research and Development expenses decreased by $2.0 million due to an 8% reduction in headcount and lower stock compensation [145]. - Sales and Marketing expenses decreased by $7.9 million, driven by a 34% reduction in headcount and cost-saving measures [146]. Tax and Cash Position - Income tax expense was $0.6 million for the three months ended March 31, 2025, compared to $1.3 million for the same period in 2024 [151]. - Cash provided by investing activities was $19.4 million for the three months ended March 31, 2025, primarily from proceeds of $20.4 million from divestiture [161]. - The company had cash and cash equivalents of $222.4 million as of March 31, 2025, down from $228.3 million as of December 31, 2024 [155][170].

Financial Performance - Total revenue for Q1 2025 was $66.8 million, an increase from $59.5 million in Q1 2024[16] - Subscription revenue reached $32.2 million, while Amwell Medical Group visit revenue was $26.6 million[8] - Gross margin reported at 53%[8] - Net loss narrowed to $18.4 million compared to a net loss of $44.6 million in Q4 2024[8] - Adjusted EBITDA improved to a loss of $12.2 million from a loss of $22.8 million in Q4 2024[8] - Net loss for the three months ended March 31, 2025, was $18,356 thousand, a significant improvement from a net loss of $73,449 thousand in the same period of 2024, representing a reduction of approximately 75%[18] - Adjusted EBITDA for the three months ended March 31, 2025, was $(12,238) thousand, compared to $(45,651) thousand in the same period of 2024, indicating a 73% improvement year-over-year[24] Cash Flow and Liquidity - Cash flows from operating activities resulted in a net cash outflow of $25,108 thousand for Q1 2025, down from $59,756 thousand in Q1 2024, reflecting a 58% decrease in cash used[18] - Total cash, cash equivalents, and restricted cash at the end of Q1 2025 was $223,206 thousand, down from $309,394 thousand at the end of Q1 2024, a decrease of approximately 28%[18] - Cash paid for income taxes in Q1 2025 was $827 thousand, up from $630 thousand in Q1 2024, reflecting a 31% increase[18] Operational Metrics - Total visits for the quarter were 1.3 million, with projected AMG visits between 1.3 and 1.35 million[8] - The company reiterated its 2025 revenue guidance in the range of $250 to $260 million[8] - Q2 2025 revenue is expected to be between $62 million and $67 million, with adjusted EBITDA projected to be between ($12) million and ($10) million[8] Cost Management - Significant progress was made in revenue quality and cost alignment measures, targeting margin expansion for the year[3] - Stock-based compensation expense decreased to $7,339 thousand in Q1 2025 from $16,238 thousand in Q1 2024, a reduction of about 55%[18] - The company incurred $3,465 thousand in severance and strategic transformation costs in Q1 2025, compared to $8,659 thousand in Q1 2024, marking a 60% decrease[24] Revenue Recognition - Deferred revenue increased by $3,525 thousand in Q1 2025, compared to an increase of $14,589 thousand in Q1 2024, indicating a slowdown in revenue recognition[18] - The company reported a net gain on divestiture of $10,713 thousand in Q1 2025, which was not present in Q1 2024[18] - The company reported a decrease in accounts receivable by $6,120 thousand in Q1 2025, compared to a decrease of $27,506 thousand in Q1 2024, indicating a change in collection efficiency[18]