Teladoc(TDOC) - 2019 Q2 - Quarterly Report

Revenue Growth - Revenue increased by 38% to $130.3 million for the quarter ended June 30, 2019, including $14.6 million from the Advance Medical acquisition[140] - For the six months ended June 30, 2019, revenue increased by 41% to $258.9 million, including $34.8 million from the Advance Medical acquisition[140] - Total revenue for Q2 2019 was $130.3 million, a 38% increase from $94.6 million in Q2 2018, with organic growth contributing a 24% increase[169] - Subscription access fee revenue increased to $111.3 million for Q2 2019, representing a 39% growth compared to Q2 2018[169] - The acquisition of Advance Medical contributed $14.6 million to revenue in Q2 2019 and $34.8 million for the first half of 2019[169] Membership and Utilization - Membership increased by approximately 4.0 million Members to 26.8 million from December 31, 2018, through June 30, 2019[142] - The company aims to increase Member utilization rates and penetration into existing and new health plan Clients to drive revenue growth[151] - The number of paid Members increased by 19% from June 30, 2018, contributing to revenue growth[169] Telehealth Services - Telehealth visits increased by 70% to approximately 908,000 for the quarter ended June 30, 2019, compared to the same period in 2018[151] - The company completed approximately 908,000 visits in Q2 2019, generating $19.0 million in visit fees, a 29% increase from Q2 2018[170] Expenses and Losses - Cost of revenue for Q2 2019 was $41.6 million, a 50% increase from $27.7 million in Q2 2018, primarily due to costs associated with Advance Medical services[171] - Advertising and marketing expenses rose to $26.6 million in Q2 2019, a 36% increase from $19.6 million in Q2 2018[173] - Net loss for Q2 2019 was $29.3 million, a 17% increase from a net loss of $25.1 million in Q2 2018[169] - General and administrative expenses increased to $38.5 million in Q2 2019, a 47% increase from $26.1 million in Q2 2018[171] - Technology and development expenses increased to $16.7 million for Q2 2019, up 16% from $14.3 million in Q2 2018, primarily due to hiring additional personnel[176] - Legal and regulatory expenses surged to $2.0 million for Q2 2019, a 216% increase from $0.6 million in Q2 2018, driven by litigation support costs[177] - Depreciation and amortization expenses were $9.8 million for Q2 2019, reflecting a 22% increase from $8.1 million in Q2 2018, attributed to acquisitions[180] - Interest expense, net increased to $7.2 million for Q2 2019, compared to $6.9 million in Q2 2018, reflecting costs associated with Convertible Senior Notes issued in May 2018[183] Cash Flow and Financial Position - Cash used in operating activities was $1.7 million for the six months ended June 30, 2019, a significant improvement from $17.5 million in the same period of 2018[188] - Cash provided by investing activities was $2.2 million for the six months ended June 30, 2019, contrasting with cash used of $215.6 million in the same period of 2018[192] - Cash provided by financing activities was $15.9 million for the six months ended June 30, 2019, down from $296.8 million in the same period of 2018[194] - As of June 30, 2019, the company had cash and cash equivalents totaling $440.4 million, sufficient to meet working capital needs for at least the next 12 months[187] - The company anticipates positive Adjusted EBITDA results for 2019, building on positive performance in the first half of the year[196] Debt and Obligations - The company issued $275 million aggregate principal amount of 3% convertible senior notes due 2022, with net proceeds of $263.7 million after deducting offering costs of approximately $11.3 million[206] - As of June 30, 2019, the company had total contractual obligations of $650.8 million, including $562.5 million in debt obligations under the convertible notes and $48.1 million in interest associated with the convertible notes[209] - The company was in compliance with all debt covenants as of June 30, 2019[208] - The company has no floating rate debt with its New Revolving Credit Facility as of June 30, 2019, and does not expect cash flows to be significantly affected by changes in market interest rates[211] - Total operating lease obligations amount to $40.2 million, with $7.4 million due within one year[209] Compliance and Risk Management - The company has not engaged in off-balance sheet arrangements, thus avoiding exposure to financing, liquidity, market, or credit risk[210] - Management concluded that disclosure controls and procedures were effective at the reasonable assurance level as of June 30, 2019[216] - The company operates primarily in the United States, executing over 80% of transactions in U.S. dollars, with limited foreign currency translation risk expected to have a material impact on financial statements[212] - No client represented over 10% of revenues or accounts receivable for the quarters ended June 30, 2019, and 2018[214] Acquisitions and Investments - The company completed the acquisition of MedicineDirect for an aggregate consideration of $11.2 million on April 30, 2019[148] - The company made a $5.0 million minority investment in Vida Health on June 19, 2019[148]