Teladoc(US:TDOC)2023-02-23 01:55Financial Data and Key Metrics Changes - Fourth quarter consolidated revenue increased 15% year-over-year to $638 million, nearing the high end of guidance range [64] - Consolidated adjusted EBITDA for the fourth quarter was $94 million, reflecting a $43 million sequential increase [75] - Consolidated net loss per share in the fourth quarter was $23.49, compared to a net loss per share of $0.07 in the same quarter of 2021, primarily due to a noncash goodwill impairment charge of $3.8 billion [3] Business Line Data and Key Metrics Changes - Integrated Care segment revenue grew 6% year-over-year to $357 million, driven by Chronic Care Management and Telemedicine product revenue [1] - BetterHelp segment revenue increased 29% year-over-year in the fourth quarter to $277 million, primarily due to growth in membership [103] - Total Chronic Care program enrollment exceeded 1 million, representing a 16% increase over the prior year's fourth quarter [52] Market Data and Key Metrics Changes - Integrated Care segment U.S. membership increased to 83.3 million, with paid members reaching 58.7 million, exceeding prior guidance [1][4] - For 2023, the company expects Integrated Care segment U.S. membership to reach 84 million to 86 million members [4] - The company anticipates revenue growth of 6% to 11% for the full year 2023, with adjusted EBITDA growth of 12% to 32% [70][78] Company Strategy and Development Direction - The company is focusing on a balanced approach to growth and margin improvement, aiming for GAAP profitability while maintaining sustainable top-line growth [47][68] - Strategic priorities include expanding the whole person suite of services, particularly the Primary360 offering and BetterHelp brand [46][68] - The management is optimizing the cost structure, including layoffs and restructuring, to improve efficiency [45][86] Management's Comments on Operating Environment and Future Outlook - Management noted ongoing economic uncertainty and a moderation in overall market growth rates, but remains optimistic about the demand for integrated virtual care solutions [67][68] - The company is experiencing strong interest in value-based arrangements from health plans, with a fourfold increase in interest year-over-year [83] - Management expects to generate free cash flow of at least $100 million in 2023, driven by growth in adjusted EBITDA and a decline in capitalized software development costs [55] Other Important Information - The company reported a goodwill impairment charge reflecting the overall operating environment and decreased market multiples, which is noncash and does not impact financial position [54] - The company generated free cash flow of $12 million and $17 million for the fourth quarter and full year, respectively, ending the year with $918 million in cash and short-term investments [104] Q&A Session Summary Question: Expectations for BetterHelp user growth - Management indicated that there is a strong long-term growth potential for BetterHelp, with significant year-over-year increases in user base [7] Question: Drivers of margin improvement - Key drivers for margin improvement include leveraging advertising and marketing expenses, technology development expense leverage, and G&A efficiency [10][12] Question: Impact of macroeconomic factors on membership - Management stated that there has not been a significant impact on membership from recent job cuts, although there is a heightened sensitivity to consumer behavior in the BetterHelp segment [26][27] Question: Integration of virtual and physical care - The company emphasized that their Primary360 product serves different purposes than general medical services, and they do not see cannibalization between the two [16] Question: Future growth expectations for Primary360 - Management expects to triple the revenue from Primary360 in 2023 compared to 2022, indicating strong growth potential [87][90]