Teladoc Health has been on the up-and-up throughout the course of the COVID-19 pandemic, and yesterday's earnings report suggests that the company is having little trouble booking new business.
In Q3 2020, the virtual care company outperformed its revenue and total visit projections, and fell about in line with its prediction of total U.S. paid membership and visit-fee-only access. However, the company's net losses came in well higher than anticipated.
Teladoc's stock dipped nearly 5% upon market open, but as of midday Thursday has recouped a small portion of that share-value loss.
Alongside the latest financials, Teladoc CEO Jason Gorevic gave an update on his company's integration with the staff and systems of Livongo. He drew focus to the companies' first major cross-sale to Florida Blue parent company GuideWell Health (announced earlier this month) and hinted that another cross-sale had just wrapped up earlier that day.
In addition, he said that the companies are in the process of building a new unit that will conduct integrated research and development using the combined data sets of Livongo and Teladoc. And as of today, shareholders from both companies voted to approve the merger.
Of particular note, Gorevic took time during the earnings call to highlight the increased demand his company has been seeing for specific specialties of virtual care. Within the company's B2B channel, both dermatology and behavioral health services grew more than 500% over the previous year, he said.
Looking overseas, Gorevic said that the company's expansion into the Nordic region has taken its first steps with "a significant new client partnership with a large financial institution in this area" that has already led to new sales. It also has kicked off a program with European and Latin American telecom provider Telefónica that will see Teladoc's B2B and D2C virtual care services distributed within Spain.
TOP-LINE
Total revenue for the quarter came in at $288.8 million, a 109% year-over-year (YoY) increase from Q3 2019. Nine-month revenue for 2020 landed at $710.6 million, for a 79% YoY growth.
Total visits for the quarter and nine-month period were 2.8 million and 7.6 million, increases of 206% and 163% YoY, respectively. Total U.S. paid membership in Q3 was 51.5 million (47% YoY growth), while total U.S. visit-fee-only access was 21.8 million (15% YoY growth).
Visit volume from paid membership grew to 2.1 million visits, which translates to a 16.5% annualized utilization rate. This is more than twice the utilization rate of Q3 2019.
Teladoc's net loss was $35.9 for the quarter, higher than anticipated, and a jump over Q3 2019's loss of $20.3 million. Just over $25 million of this was related to the company's pending merger with Livongo and its acquisition of InTouch Health.
ON THE RECORD
“Our strong third-quarter results exceeded expectations, driven by broad-based strength across the business and building on the momentum we saw in the first half of the year,” Gorevic said in a statement. “We are seeing significant market success and consistent growth in member visits throughout all of our commercial channels. With the addition of Livongo later this year, we will be creating a new category of whole person virtual care that will transform how people live healthier lives.”
LOOKING AHEAD
In light of growing revenue and visits, Teladoc bumped up its estimates for the coming quarter and full year.
For the former, the company is expecting total revenue between $294 million and $304 million and total visits between 2.8 million and 3 million. U.S. paid memberships are thought to fall between 50 million and 51 million, with visit-fee-only access between 21 million and 22 million people. After excluding Livongo transaction costs, the company is between $.36 and $0.33 in net losses per share.
Across the entire year, Teladoc sees its total revenue ending between $1.005 billion and $1.015 billion, with total visits somewhere in the range of 10.4 million and 10.6 million. U.S. paid memberships will likely stay between 50 million to 51 million, with visit-fee-only access similarly staying in line with the prior 21 million to 22 million prediction. Net loss per share after excluding Livongo merger costs is expected to be between $1.36 and $1.32.
LOOKING BACK
Teladoc's year has been headlined by a couple of big-ticket acquisitions and massive growth tied to COVID-19 and its resulting interest in virtual care. The first of these purchases was enterprise-telehealth provider InTouch Health for $600 million, which was announced in January and formally closed over the summer.
The second is the pending $18.5 billion merger of Teladoc and data-driven disease-management platform Livongo, a deal will likely yield the digital health industry's first mega-company.
