Teladoc Health Reports Fourth-Quarter and Full-Year 2019 Results

Mittwoch, 26. Februar 2020 22:02

Year-over-year Q4 revenue grows 27% to $156.5 million and total visits increase 44% to 1.2 million

Year-over-year full year revenue grows 32% to $553.3 million and total visits increase 57% to 4.1 million

Issues Initial 2020 guidance

PURCHASE, NY, Feb. 26, 2020 (GLOBE NEWSWIRE) -- Teladoc Health, Inc. (NYSE: TDOC), the global leader in virtual care, today reported financial results for the fourth quarter and full year ending December 31, 2019.

“We demonstrated outstanding performance in the fourth quarter and full year of 2019 as we reported record results that were at the high end or exceeded our expectations on all key metrics. Our diversified growth strategies are driving strong growth across our channels,” said Jason Gorevic, chief executive officer. “Looking forward, we are well positioned with significant momentum to extend our leadership position and to meet the increasing demand for our comprehensive service offering.”

Financial Highlights for the Fourth Quarter and Full Year Ended December 31, 2019

                
Revenue               
($ thousands)               
 Quarter Ended  Year over Year Year Ended  Year over Year
 December 31,  Growth December 31,  Growth
 2019 2018   2019 2018  
Subscription Access Fees Revenue               
U.S.$98,052 $78,340 25% $356,656 $277,091 29%
International 28,924  24,362 19%  106,640  73,693 45%
Total 126,976  102,702 24%  463,296  350,784 32%
                
Visit Fee Revenue               
U.S. Paid Visits 21,265  15,752 35%  68,738  53,074 30%
U.S. Visit Fee Only 7,957  3,751 112%  19,931  12,508 59%
International Paid Visits 291  536 (46)%  1,342  1,541 (13)%
Total 29,513  20,039 47%  90,011  67,123 34%
                
Total Revenue*$156,489 $122,741 27% $553,307 $417,907 32%
                
*Organic fourth-quarter 2019 revenue, excluding MedecinDirect, increased by 27 percent year over year.
Organic full year ended 2019 revenue, excluding Advance Medical and MedecinDirect, increased by 24 percent year over year.
 


       
Membership & Visit Fee Only Access      
(millions)      
 Year Ended  Year over Year
 December 31,  Growth
 2019 2018  
Total U.S. Paid Membership36.7 22.8 61.1%
       
Total U.S. Visit Fee Only Access19.3 9.5 104.2%
 


                   
Visits                  
(thousands)            Quarter Full Year 
             Year over Year Year over Year 
 2019  2018  Growth Growth 
 Q1Q2Q3Q4YTD Q1Q2Q3Q4YTD     
Paid Visits from U.S. Paid Membership365 291 278 441 1,375  298 218 202 302 1,020  46 % 35 % 
Percent of Paid Visits from U.S. Paid Membership51%48%45%52%49% 54%50%46%50%50% 4 % (2)% 
Visits Included from U.S. Paid Membership353 319 344 409 1,425  256 218 237 305 1,016  34 % 40 % 
                   
Total Visits from U.S. Paid Membership718 610 622 850 2,800  554 436 439 607 2,036  40 % 38 % 
                   
U.S. Visit Fee Only63 54 62 125 304  51 37 36 49 173  154 % 76 % 
                   
International Visits282 244 244 264 1,034  1 60 166 205 432  29 % 139 % 
Total Visits1,063 908 928 1,239 4,138  606 533 641 861 2,641  44 % 57 % 
                   
Utilization11.00%9.10%7.98%9.49%9.34% 10.90%8.04%7.81%10.75%9.35% (126)pt 1 pt 
                   
  • Net loss was $(19.0) million for the fourth quarter 2019 compared to $(24.9) million for the fourth quarter 2018. Net loss was $(98.9) million for the full year 2019 compared to $(97.1) million for the full year 2018.
  • Net loss per basic and diluted share was $(0.26) for the fourth quarter 2019 compared to $(0.35) for the fourth quarter 2018. Net loss per basic and diluted share was $(1.38) for the full year 2019 compared to $(1.47) for the full year 2018.
  • Gross margin was 64.6 percent for the fourth quarter 2019 compared to 67.4 percent for the fourth quarter 2018. Gross margin was 66.7 percent for the full year 2019 compared to 69.2 percent for the full year 2018.
  • EBITDA was $(5.7) million for the fourth quarter 2019 compared to $(8.3) million for the fourth quarter 2018. EBITDA was $(41.5) million for the full year 2019 compared to $(35.3) million for the full year 2018.
  • Adjusted EBITDA was a positive $15.2 million for the fourth quarter 2019 compared to a positive $5.8 million for the fourth quarter 2018. Adjusted EBITDA was a positive $31.8 million for the full year 2019 compared to a positive $13.4 million for the full year 2018.

A reconciliation of generally accepted accounting principles (“GAAP”) in the United States to non-GAAP results has been provided in this press release in the accompanying tables. An explanation of these measures is also included below under the heading “Non-GAAP Financial Measures”.

Financial Outlook
Teladoc Health provides guidance based on current market conditions and expectations.

For the first-quarter 2020, we expect:

  • Total revenue to be in the range of $169 million to $172 million.
  • EBITDA loss to be in the range of $(9) million to $(7) million.
  • Adjusted EBITDA to be in the range of $9 million to $11 million.
  • Total U.S. paid membership to be approximately 40 million to 41 million members and visit-fee-only access to be available to approximately 19.2 million individuals.
  • Total visits to be between 1.4 million and 1.6 million.
  • Net loss per share, based on 73.1 million weighted average shares outstanding, to be between $(0.37) and $(0.34).

For the full-year 2020, we expect:

  • Total revenue to be in the range of $695 million to $710 million.
  • EBITDA loss to be in the range of $(15) million to $(5) million.
  • Adjusted EBITDA to be in the range of positive $60 million to $70 million.
  • Total U.S. paid membership to be approximately 43 million to 45 million members and visit-fee-only access to be available to approximately 19 to 20 million individuals.
  • Total visits to be between 5.5 million to 5.9 million.
  • Net loss per share, based on 73.7 million weighted average shares outstanding, to be between $(1.19) and $(1.06).

Quarterly Conference Call

The fourth quarter and full year 2019 earnings conference call and webcast will be held Wednesday, February 26, 2020 at 4:30 p.m. EST. The conference call can be accessed by dialing 1-833-241-4255 for U.S. participants, or 1-647-689-4206 for international participants, and including the following Conference ID Number: 8784129 to expedite caller registration; or via a live audio webcast available online at http://ir.teladoc.com/news-and-events/events-and-presentations/. A webcast replay will be available for on-demand listening shortly after the completion of the call at the same web link.

About Teladoc Health

A mission-driven organization, Teladoc Health, Inc. is successfully transforming how people access and experience healthcare, with a focus on high quality, lower costs, and improved outcomes around the world. The company’s award-winning, integrated clinical solutions are inclusive of telehealth, expert medical services, AI and analytics, and licensable platform services. With more than 2,400 employees, the organization delivers care in more than 175 countries and in more than 40 languages, partnering with employers, hospitals and health systems, and insurers to transform care delivery. For more information, please visit www.teladochealth.com or follow @TeladocHealth on Twitter.

Cautionary Note Regarding Forward-Looking Statements

This press release contains “forward-looking statements” within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by words such as: “anticipate,” “intend,” “plan,” “believe,” “project,” “estimate,” “expect,” “may,” “should,” “will” and similar references to future periods. Examples of forward-looking statements include, among others, statements we make regarding future revenues, future earnings, future numbers of members or clients, litigation outcomes, regulatory developments, market developments, new products and growth strategies, and the effects of any of the foregoing on our future results of operations or financial conditions.
           
Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are based only on our current beliefs, expectations and assumptions regarding the future of our business, future plans and strategies, projections, anticipated events and trends, the economy and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of our control. Our actual results and financial condition may differ materially from those indicated in the forward-looking statements. Important factors that could cause our actual results and financial condition to differ materially from those indicated in the forward-looking statements include, among others, the following: (i) changes in laws and regulations applicable to our business model; (ii) changes in market conditions and receptivity to our services and offerings; (iii) results of litigation; (iv) the loss of one or more key clients; and (v) changes to our abilities to recruit and retain qualified providers into our network. For a detailed discussion of the risk factors that could affect our actual results, please refer to the risk factors identified in our SEC reports, including, but not limited to our Annual Report on Form 10-K and Quarterly Reports on Form 10-Q, as filed with the SEC.

Any forward-looking statement made by us in this press release is based only on information currently available to us and speaks only as of the date on which it is made. We undertake no obligation to publicly update any forward-looking statement, whether written or oral, that may be made from time to time, whether as a result of new information, future developments or otherwise.

 
CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share data, unaudited)
      
 December 31,  December 31,
 2019 2018
     
Assets     
Current assets:     
Cash and cash equivalents$514,353  $423,989 
Short-term investments 2,711   54,545 
Accounts receivable, net of allowance of $3,787 and $3,382, respectively 56,948   43,571 
Prepaid expenses and other current assets 13,990   10,631 
Total current assets 588,002   532,736 
Property and equipment, net 10,296   10,148 
Goodwill 746,079   737,197 
Intangible assets, net 225,453   247,394 
Operating lease - right-of-use assets 26,452   0 
Other assets 6,545   1,401 
Total assets$1,602,827  $1,528,876 
Liabilities and stockholders’ equity     
Current liabilities:     
Accounts payable$9,075  $7,769 
Accrued expenses and other current liabilities 49,848   26,801 
Accrued compensation 31,258   27,869 
Total current liabilities 90,181   62,439 
Other liabilities 11,539   6,191 
Operating lease liabilities, net of current portion 24,994   0 
Deferred taxes 21,678   32,444 
Convertible senior notes, net 440,410   414,683 
Commitments and contingencies     
Stockholders’ equity:     
Common stock, $0.001 par value; 150,000,000 shares authorized as of December 31, 2019
and 2018; 72,761,941 shares and 70,516,249 shares issued and
outstanding as of December 31, 2019 and 2018, respectively
 73   70 
Additional paid-in capital 1,538,716   1,434,780 
Accumulated deficit (507,525)  (408,661)
Accumulated other comprehensive loss (17,239)  (13,070)
Total stockholders’ equity 1,014,025   1,013,119 
Total liabilities and stockholders’ equity$1,602,827  $1,528,876 
        



 
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except share and per share data, unaudited)
            
 Quarter Ended December 31,  Year Ended December 31,
 2019  2018  2019  2018 
Revenue$156,489  $122,741  $553,307  $417,907 
Expenses:           
Cost of revenue (exclusive of depreciation and amortization shown separately below) 55,355   40,028   184,465   128,735 
Operating expenses:           
Advertising and marketing 25,356   23,555   109,697   85,109 
Sales 16,751   14,509   64,915   59,154 
Technology and development 16,246   13,544   64,644   54,373 
Legal and regulatory 1,523   1,490   6,762   3,981 
Acquisition and integration related costs 2,477   1,434   6,620   10,391 
Gain on sale 0   0   0   (5,500)
General and administrative 44,482   36,461   157,694   116,916 
Depreciation and amortization 9,887   9,557   38,952   35,602 
Total expenses 172,077   140,578   633,749   488,761 
Loss from operations (15,588)  (17,837)  (80,442)  (70,854)
Interest expense, net 7,581   6,663   29,013   26,112 
Net loss before taxes (23,169)  (24,500)  (109,455)  (96,966)
Income tax benefit (4,125)  379   (10,591)  118 
Net loss$(19,044) $(24,879) $(98,864) $(97,084)
            
Net loss per share, basic and diluted$(0.26) $(0.35) $(1.38) $(1.47)
            
Weighted-average shares used to compute basic and diluted net loss per share 72,564,855   70,239,511   71,844,535   65,844,908 
                



 
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands, unaudited)
 
      
 Year Ended December 31,
 2019
 2018
Cash flows provided by (used in) operating activities:     
Net loss$(98,864) $(97,084)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:     
Depreciation and amortization 44,952   35,602 
Allowance for doubtful accounts 2,665   2,243 
Stock-based compensation 66,702   43,769 
Deferred income taxes (10,868)  (2,247)
Accretion of interest 25,438   19,487 
Gain on sale 0   (5,500)
Changes in operating assets and liabilities:     
Accounts receivable (15,884)  (10,931)
Prepaid expenses and other current assets (2,685)  (2,612)
Other assets (105)  (414)
Accounts payable 905   (391)
Accrued expenses and other current liabilities 14,841   3,993 
Accrued compensation 4,546   8,480 
Operating lease liabilities (2,417)  0 
Other liabilities 643   745 
Net cash provided by (used in) operating activities 29,869   (4,860)
Cash flows provided by (used in) investing activities:     
Purchase of property and equipment (3,510)  (4,011)
Purchase of internal-use software (7,390)  (4,396)
Purchase of marketable securities 0   (56,347)
Proceeds from marketable securities 52,100   84,170 
Sale of assets (0)  5,530 
Investment in securities (5,000)  0 
Acquisition of business, net of cash acquired (11,187)  (282,442)
Net cash provided by (used in) investing activities 25,013   (257,496)
Cash flows provided by financing activities:     
Net proceeds from the exercise of stock options 33,283   31,322 
Proceeds from issuance of convertible notes 0   279,152 
Proceeds from borrowing under bank and other debt 0   10 
Proceeds from issuance of common stock 0   330,843 
Proceeds from employee stock purchase plan 3,380   2,564 
Cash (paid) received for withholding taxes on stock-based compensation, net (1,569)  1,721 
Net cash provided by financing activities 35,094   645,612 
Net increase in cash and cash equivalents 89,976   383,256 
Foreign exchange difference 388   (2,084)
Cash and cash equivalents at beginning of the period 423,989   42,817 
Cash and cash equivalents at end of the period$514,353  $423,989 
      
Income taxes paid$1,310  $441 
      
Interest paid$12,224  $10,303 
        

Non-GAAP Financial Measures:

To supplement our financial information presented in accordance with generally accepted accounting principles in the United States, or U.S. GAAP, we use gross margin, EBITDA and Adjusted EBITDA, which are non-U.S. GAAP financial measures to clarify and enhance an understanding of past performance. We believe that the presentation of these financial measures enhances an investor’s understanding of our financial performance. We further believe that these financial measures are useful financial metrics to assess our operating performance from period-to-period by excluding certain items that we believe are not representative of our core business. We use certain financial measures for business planning purposes and in measuring our performance relative to that of our competitors. We utilize Adjusted EBITDA as the primary measure of our performance.

Gross margin is our total revenue minus our total cost of revenue (exclusive of depreciation and amortization shown separately) as a percentage of our total revenue. We believe that it provides investors meaningful information to understand our results of operations and the ability to analyze financial and business trends on a period-to-period basis.

EBITDA consists of net loss before interest, taxes, depreciation and amortization. We believe that making such adjustment provides investors meaningful information to understand our results of operations and the ability to analyze financial and business trends on a period-to-period basis.

Adjusted EBITDA consists of net loss before interest, taxes, depreciation, amortization, stock-based compensation, gain on sale and acquisition and integration related costs. We believe that making such adjustment provides investors meaningful information to understand our results of operations and the ability to analyze financial and business trends on a period-to-period basis.

We believe the above financial measures are commonly used by investors to evaluate our performance and that of our competitors. However, our use of the term gross margin, EBITDA and Adjusted EBITDA may vary from that of others in our industry. Neither EBITDA nor Adjusted EBITDA should be considered as an alternative to net loss before taxes, net loss, loss per share or any other performance measures derived in accordance with U.S. GAAP as measures of performance.

Gross margin, EBITDA and Adjusted EBITDA have important limitation as analytical tools and you should not consider them in isolation or as a substitute for analysis of our results as reported under U.S. GAAP. Some of these limitations are:

  • Gross margin has been and will continue to be affected by a number of factors, including the fees we charge our Clients, the number of visits and cases we complete the costs paid to Providers and medical experts as well as the costs of our provider network operations center;
  • Gross margin does not reflect the significant depreciation and amortization to cost of revenue;
  • EBITDA and Adjusted EBITDA do not reflect the significant interest expense on our debt;
  • EBITDA and Adjusted EBITDA eliminate the impact of income taxes on our results of operations;
  • Adjusted EBITDA does not reflect the significant gain on sale of certain non-core business contracts;
  • Adjusted EBITDA does not reflect the significant acquisition and integration related costs related to mergers and acquisitions;
  • Adjusted EBITDA does not reflect the significant non-cash stock compensation expense which should be viewed as a component of recurring operating costs; and
  • other companies in our industry may calculate EBITDA and Adjusted EBITDA differently than we do, limiting the usefulness of EBITDA and Adjusted EBITDA as comparative measures.

In addition, although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, and gross margin, EBITDA and Adjusted EBITDA do not reflect any expenditures for such replacements.

We compensate for these limitations by using gross margin, EBITDA and Adjusted EBITDA along with other comparative tools, together with U.S. GAAP measurements, to assist in the evaluation of operating performance. Such U.S. GAAP measurements include net loss, net loss per share and other performance measures.

In evaluating these financial measures, you should be aware that in the future we may incur expenses similar to those eliminated in this presentation. Our presentation of gross margin, EBITDA and Adjusted EBITDA should not be construed as an inference that our future results will be unaffected by unusual or nonrecurring items.

 
Reconciliation of EBITDA and Adjusted EBITDA to Net Loss
(In thousands, unaudited)
 
 Quarter Ended Year Ended 
 December 31,  December 31,
 2019  2018  2019  2018 
Net loss$(19,043) $(24,879) $(98,864) $(97,084)
Add:           
Interest expense, net 7,581   6,663   29,013   26,112 
Income tax benefit (4,125)  379   (10,591)  118 
Depreciation expense 682   939   3,382   4,057 
Amortization expense 9,205   8,618   35,570   31,545 
EBITDA (5,700)  (8,280)  (41,490)  (35,252)
Stock-based compensation 18,457   12,683   66,702   43,769 
Gain on sale 0   0   0   (5,500)
Acquisition and integration related costs 2,477   1,434   6,620   10,391 
Adjusted EBITDA$15,234  $5,837  $31,832  $13,408 
                

Media:
Courtney McLeod
914-265-6789
cmcleod@teladochealth.com

Investors:
Patrick Feeley
914-265-7925
pfeeley@teladochealth.com

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