Teladoc(TDOC) - 2025 Q1 - Earnings Call Transcript

Financial Data and Key Metrics Changes - First quarter consolidated revenue was $629.4 million, down 3% year over year, but at the high end of the guidance range [20] - Adjusted EBITDA was $58.1 million, representing a margin of 9.2% [20] - Consolidated net loss per share was $0.53, compared to a net loss per share of $0.49 in the same quarter of the previous year [20][21] - Free cash flow was a net outflow of $16 million, an improvement of $11 million compared to the prior year [22] Business Line Data and Key Metrics Changes - Integrated Care segment revenue was $389.5 million, an increase of 3.3% year over year, exceeding the top end of guidance [22] - BetterHelp segment revenue was $239.9 million, down 11% year over year, but above the midpoint of guidance [26] - U.S. Integrated Care segment membership reached 102.5 million, up 12% year over year [24] - Virtual visit volume in the U.S. increased by 7%, while Chronic Care enrollment rose by 3% [24] Market Data and Key Metrics Changes - The international business of Integrated Care showed revenue growth in the mid-teens on a constant currency basis [13][24] - BetterHelp served over 1 million unique users globally in 2024, with 40% being new to therapy [8] Company Strategy and Development Direction - The acquisition of Uplift aims to enhance the BetterHelp segment's position in virtual mental health services [6][7] - The company is focused on expanding its international markets and enhancing product offerings, including new pricing models [11] - The strategy includes leveraging BetterHelp's consumer expertise to provide more options for mental health care [7] Management's Comments on Operating Environment and Future Outlook - The healthcare industry faces challenges from medical cost trends and mental health issues, but these dynamics also present opportunities [16] - The broader economic environment is being monitored closely, with signs of weakening business and consumer sentiment [18] - The company remains on track with its 2025 revenue outlook and is optimistic about future growth potential despite macro uncertainties [19] Other Important Information - The company has a strong cash position with nearly $1.2 billion in cash and cash equivalents [38] - The acquisition of Uplift was valued at $30 million in cash, with potential additional earn-out consideration [32] Q&A Session Summary Question: Impact of shorter duration contracts on BetterHelp - Management noted that the weekly offering has led to stronger conversion rates but also higher churn, resulting in a net positive effect [41][44] Question: Evaluation of BetterHelp network's payer coverage - Management clarified that the focus was on technical capabilities and that they paused payer contracts to avoid mixed signals during the Uplift acquisition [47][49] Question: Trends in BetterHelp member growth and revenue per member - Management explained that while revenue per member has declined, the significant increase in membership provides opportunities for upselling additional services [56][58] Question: BetterHelp margin improvement expectations - Management indicated that the second half of the year would see revenue growth driven by international efforts and insurance initiatives, with a planned pullback in ad spend [75][77] Question: Customer acquisition cost trends - Management reported stable customer acquisition costs, with favorable trends due to improved conversion rates from the weekly offering [85][86] Question: Cost-saving opportunities in technology and G&A - Management emphasized ongoing efforts to streamline costs, with a focus on technology and development spending being down year over year [92][95]