Teladoc(TDOC) - 2025 Q1 - Quarterly Report

Membership and Enrollment - U.S. Integrated Care members increased by 10.7 million, or 12%, to 102.5 million at March 31, 2025, compared to the same period in 2024[108]. - Chronic care program enrollment increased by 3% to 1.151 million at March 31, 2025, compared to 1.121 million at March 31, 2024[109]. Revenue and Financial Performance - Total revenue for the three months ended March 31, 2025, was $629.4 million, a decrease of$16.8 million, or 3%, compared to $646.1 million in the same period of 2024[125]. - Integrated Care segment revenue increased by$12.4 million, or 3%, to $389.5 million for the three months ended March 31, 2025, driven by higher chronic care program enrollment and telemedicine product revenue[143]. - BetterHelp total revenues decreased by$29.1 million, or 11%, to $239.9 million for the three months ended March 31, 2025, driven by a 4$93.0 million, an increase of $11.1 million, or 14$81.9 million in the same period of 2024[124]. - Adjusted EBITDA for the three months ended March 31, 2025, was $58.1 million, a decrease of$5.0 million, or 8%, compared to $63.1 million in the same period of 2024[125]. - Adjusted EBITDA decreased by$7.8 million, or 50%, to $7.7 million, with an adjusted EBITDA margin of 3.2$15.1 million, or 8%, to $168.2 million for the three months ended March 31, 2025, primarily due to lower digital and media advertising costs[128]. - Technology and development expenses decreased by$11.4 million, or 14%, to $70.0 million for the three months ended March 31, 2025, reflecting lower employee compensation costs[129]. - Cost of revenue increased by$2.3 million, or 1%, to $196.8 million for the three months ended March 31, 2025, primarily driven by higher labor and technology costs[126]. - Cost of revenue, exclusive of depreciation, amortization, and stock-based compensation, decreased by$7.6 million, or 10%, to $65.2 million, primarily due to lower therapist costs[148]. Cash Flow and Capital Expenditures - Net cash provided by operating activities was$15.9 million for the three months ended March 31, 2025, compared to $8.9 million for the same period in 2024[157]. - Cash used in investing activities was$123.3 million, including $64.6 million for the acquisition of Catapult Health and$27.0 million for acquiring securities of a private company[159]. - Free cash flow was an outflow of $15.7 million for the three months ended March 31, 2025, compared to an outflow of$26.6 million for the same period in 2024[161]. - As of March 31, 2025, cash and cash equivalents totaled $1,193.3 million, with expectations of continuing positive operating cash flows for 2025[151]. Impairments and Restructuring - Goodwill impairment of$59.1 million was recognized in the three months ended March 31, 2025, related to the acquisition of Catapult Health[132]. - Restructuring costs decreased to $4.3 million for the three months ended March 31, 2025, from$9.7 million in the same period of 2024, reflecting a reduction in employee transition and severance costs[134][135]. Market and Competitive Environment - The company faces risks related to competition, particularly from health plans that may develop solutions replicating its services[108]. - The company expects tariffs on imported goods to impact consolidated results of operations due to retaliatory tariffs from affected countries[107]. - The company’s business is subject to seasonality, with the highest level of visit and fee revenue typically occurring in the first and fourth quarters[112]. Financial Metrics and Estimates - Adjusted EBITDA is used as a key measure of performance, consisting of net loss before provision for income taxes and other specified expenses[117]. - Free cash flow is defined as net cash provided by operating activities less capital expenditures and capitalized software development costs[118]. - The company evaluates its estimates and judgments related to revenue recognition and other financial metrics on an ongoing basis[115]. - Revenue from the five largest customers accounted for 31% of total Integrated Care segment revenue for the three months ended March 31, 2025[166]. - A 1% change in interest rates would result in a change of interest income generated from cash and cash equivalents by approximately $7.2 million over the next 12 months[163].