Teladoc Health, Inc. (NYSE: TDOC), the global leader in
whole-person virtual care, today reported strong financial results
for the fourth quarter and full year ended December 31, 2020.
“As virtual care shifted to become a consumer expectation in
2020, Teladoc Health not only met the rapidly growing demand, but
we transformed our company to define a new category of whole-person
virtual care,” said Jason Gorevic, chief executive officer of
Teladoc Health. “By accelerating our mission to transform the
health care experience, we exceeded our fourth-quarter and
full-year 2020 expectations and see strong momentum across our
global business in 2021 as the market embraces the breadth and
depth of our unique capabilities.”
Financial Highlights for the Fourth Quarter and Full
Year Ended December 31, 2020
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Revenue |
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($ thousands, unaudited) |
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Quarter Ended |
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Year over Year |
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Year Ended |
Year over Year |
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December 31, |
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Growth |
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December 31, |
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Growth |
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2020 |
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2019 |
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2020 |
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2019 |
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Access Fees
Revenue |
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U.S. |
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$ |
282,826 |
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$ |
98,052 |
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188 |
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% |
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$ |
737,408 |
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$ |
356,656 |
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107 |
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% |
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International |
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33,131 |
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28,924 |
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15 |
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% |
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|
124,392 |
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106,640 |
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17 |
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% |
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Total |
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315,957 |
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126,976 |
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149 |
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% |
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861,800 |
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463,296 |
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86 |
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% |
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Visit Fee
Revenue |
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U.S. |
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53,149 |
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29,222 |
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82 |
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% |
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206,093 |
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88,669 |
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132 |
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% |
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International |
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113 |
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291 |
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(61 |
) |
% |
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818 |
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1,342 |
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(39 |
) |
% |
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Total |
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53,262 |
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29,513 |
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80 |
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% |
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206,911 |
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90,011 |
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130 |
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% |
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Other |
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U.S. |
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13,589 |
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0 |
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N/M |
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23,888 |
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0 |
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N/M |
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International |
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513 |
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0 |
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N/M |
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1,363 |
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0 |
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N/M |
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Total |
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14,102 |
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0 |
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N/M |
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25,251 |
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0 |
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N/M |
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Total Revenue |
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$ |
383,321 |
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$ |
156,489 |
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145 |
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% |
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$ |
1,093,962 |
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$ |
553,307 |
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98 |
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% |
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N/M – Not meaningful
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Membership and Visit
Fee Only Access |
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(millions) |
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December 31, |
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Growth |
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2020 |
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2019 |
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U.S. Paid Membership |
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51.8 |
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36.7 |
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41 |
% |
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U.S. Visit Fee Only
Access |
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21.3 |
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19.3 |
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10 |
% |
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Chronic Care Enrollment |
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0.6 |
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— |
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N/M |
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Visits |
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(thousands) |
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Quarter Ended |
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Year over Year |
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Year Ended |
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Year over Year |
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December 31, |
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Growth |
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December 31, |
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Growth |
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2020 |
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2019 |
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2020 |
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2019 |
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U.S. Visits |
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2,515 |
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|
975 |
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|
158 |
% |
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8,820 |
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3,104 |
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184 |
% |
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International Visits |
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440 |
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264 |
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|
67 |
% |
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|
1,771 |
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1,034 |
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71 |
% |
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Total Visits |
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2,955 |
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1,239 |
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|
139 |
% |
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10,591 |
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4,138 |
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|
156 |
% |
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Utilization |
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17.7 |
% |
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9.5 |
% |
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826 |
pt |
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16.0 |
% |
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9.3 |
% |
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664 |
pt |
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Platform-Enabled
Sessions* |
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1,089 |
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— |
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N/M |
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2,076 |
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— |
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N/M |
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Total Visits & Sessions
Provided & Enabled |
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4,044 |
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1,239 |
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226 |
% |
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12,667 |
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4,138 |
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|
206 |
% |
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* Platform-Enabled Session is a unique instance in which our
licensed software platform has facilitated a virtual voice or video
encounter between a care provider and our client’s patient, or
between care providers. We believe platform-enabled sessions are an
indicator of the value our clients derive from the platform they
license from us in order to facilitate virtual care.
- Net loss was $(394.0) million for the fourth
quarter 2020 compared to $(19.0) million for the fourth quarter
2019. Net loss was $(485.1) million for the full year 2020 compared
to $(98.9) million for the full year 2019. The fourth quarter and
full year 2020 includes $57.6 million and $88.2 million,
respectively, of acquisition and integration related costs as well
as $331.7 million of accelerated stock-based awards expense related
to the merger with Livongo. Net loss for the fourth quarter and
full year 2020 also includes $54.7 million of stock-based
compensation related to Livongo stock awards that continue to vest
after the merger. Net loss also includes an income tax benefit of
$85.5 million for the fourth quarter 2020 and $90.9 million for the
full year 2020.
- Net loss per basic and diluted share was
$(3.07) for the fourth quarter 2020 compared to $(0.26) for the
fourth quarter 2019. Net loss per basic and diluted share was
$(5.36) for the full year 2020 compared to $(1.38) for the full
year 2019. The fourth quarter and full year 2020 includes $0.45 and
$0.97 per share, respectively, of acquisition and integration
related costs as well as $2.59 and $3.66 per share, respectively,
of accelerated stock-based awards expense related to the merger
with Livongo. Net loss per basic and diluted share for the fourth
quarter and full year 2020 also includes $0.43 and $0.60 per share,
respectively, of stock-based compensation related to Livongo stock
awards that continue to vest after the merger. Net loss per basic
and diluted share for the fourth quarter and full year 2020 also
includes an income tax benefit of $0.67 and $1.00 per share,
respectively.
- GAAP Gross margin, which includes depreciation
and amortization, was 67.2 percent for the fourth quarter 2020 and
63.8 percent for the fourth quarter 2019. GAAP Gross margin which
includes depreciation and amortization, was 63.1 percent for the
full year 2020 and 65.8 percent for the full year 2019.
- Adjusted Gross margin was 67.9 percent for the
fourth quarter 2020 compared to 64.6 percent for the fourth quarter
2019. Adjusted Gross margin was 64.3 percent for the full year 2020
compared to 66.7 percent for the full year 2019.
- EBITDA was a loss of $(421.5) million for the
fourth quarter 2020 compared to a loss of $(5.7) million for the
fourth quarter 2019. EBITDA for the fourth quarter 2020 includes
$57.6 million of acquisition and integration related costs as well
as $331.7 million of accelerated stock-based awards expense related
to the merger with Livongo. EBITDA was a loss of $(436.9) million
for the full year 2020 compared to a loss of $(41.5) million for
the full year 2019. EBITDA for the full year 2020 includes $88.2
million of acquisition and integration related costs as well as
$331.7 million of accelerated stock-based awards expense related to
the merger with Livongo. EBITDA for the fourth quarter and full
year 2020 also includes $54.7 million of stock-based compensation
related to Livongo stock awards that continue to vest after the
merger.
- Adjusted EBITDA was $50.4 million for the
fourth quarter 2020 compared to $15.2 million for the fourth
quarter 2019. Adjusted EBITDA was $126.8 million for the full year
2020 compared to $31.8 million for the full year 2019. Adjusted
EBITDA was higher by $5.4 million in the fourth quarter and full
year 2020, primarily related to lower expenses on Livongo devices
as a result of the merger.
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 OutlookTeladoc Health provides
guidance based on current market conditions and expectations. Given
the uncertainty of the expected path of the COVID-19 pandemic as
well as the broader economic impact, our updated guidance is based
on what we know today. As this is an evolving situation,
circumstances are likely to change, but we believe our guidance
ranges provide a reasonable baseline for 2021 financial
performance.
For the first-quarter 2021, we expect:
- Total revenue to be in the range of $445 million to $455
million.
- EBITDA to be in the range of $(46) million to $(43)
million.
- Adjusted EBITDA to be in the range of $45 million to $48
million, including an estimated $7 million in lower expenses
primarily related to Livongo devices as a result of the
merger.
- Total U.S. paid membership to be in the range of 51 million to
52 million members and visit fee only access to be available to 22
to 23 million individuals, including 2 to 3 million individuals on
a temporary basis.
- Total visits to be between 2.9 million and 3.1 million.
For the full-year 2021, we expect:
- Total revenue to be in the range of $1.95 billion to $2.0
billion.
- EBITDA to be in the range of $(110) million to $(90)
million.
- Adjusted EBITDA to be in the range of $255 million to $275
million, including an estimated $20 million in lower expenses
primarily related to Livongo devices as a result of the
merger.
- Total U.S. paid membership to be in the range of 52 million to
54 million members and visit fee only access to be available to 22
to 23 million individuals, including 2 to 3 million individuals on
a temporary basis.
- Total visits to be between 12 million to 13 million.
Quarterly Conference Call
The fourth quarter and full year 2020 earnings conference call
and webcast will be held Wednesday, February 24, 2021 at 4:30 p.m.
E.T. The conference call can be accessed by dialing 1-833-968-2101
for U.S. participants, or 1-236-714-2089 for international
participants, and referencing Conference ID Number: 1127504; 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, and will
remain available for approximately 90 days.
About Teladoc Health
Teladoc Health empowers all people everywhere to live their
healthiest lives by transforming the healthcare experience. As the
world leader in whole-person virtual care, Teladoc Health uses
proprietary health signals and personalized interactions to drive
better health outcomes across the full continuum of care, at every
stage in a person’s health journey. Ranked best in KLAS for Virtual
Care Platforms in 2020, Teladoc Health leverages more than a decade
of expertise and data-driven insights to meet the growing virtual
care needs of consumers and healthcare professionals. 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 condition.
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; and (vi) the impact of the COVID-19 pandemic on
our operations, demand for our services and general economic
conditions, as well as orders, directives and legislative action by
local, state, federal and foreign governments in response to the
spread of COVID-19. 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)
|
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|
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|
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|
December 31, |
|
December 31, |
|
|
2020 |
|
|
2019 |
|
|
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Assets |
|
|
|
|
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|
Current assets: |
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
733,324 |
|
|
$ |
514,353 |
|
Short-term investments |
|
|
53,245 |
|
|
|
2,711 |
|
Accounts receivable, net of allowance of $6,412 and $3,787,
respectively |
|
|
169,281 |
|
|
|
56,948 |
|
Inventories |
|
|
56,498 |
|
|
|
0 |
|
Prepaid expenses and other current assets |
|
|
47,259 |
|
|
|
13,990 |
|
Total current assets |
|
|
1,059,607 |
|
|
|
588,002 |
|
Property and equipment, net |
|
|
28,551 |
|
|
|
10,296 |
|
Goodwill |
|
|
14,581,255 |
|
|
|
746,079 |
|
Intangible assets, net |
|
|
2,020,864 |
|
|
|
225,453 |
|
Operating lease - right-of-use assets |
|
|
46,647 |
|
|
|
26,452 |
|
Other assets |
|
|
18,357 |
|
|
|
6,545 |
|
Total assets |
|
$ |
17,755,281 |
|
|
$ |
1,602,827 |
|
Liabilities and stockholders’
equity |
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
Accounts payable |
|
$ |
46,030 |
|
|
$ |
9,075 |
|
Accrued expenses and other current liabilities |
|
|
83,657 |
|
|
|
34,440 |
|
Accrued compensation |
|
|
94,593 |
|
|
|
34,201 |
|
Deferred revenue-current |
|
|
52,356 |
|
|
|
12,465 |
|
Advances from financing companies |
|
|
13,453 |
|
|
|
0 |
|
Current portion of long-term debt |
|
|
42,560 |
|
|
|
0 |
|
Total current liabilities |
|
|
332,649 |
|
|
|
90,181 |
|
Other liabilities |
|
|
1,616 |
|
|
|
9,239 |
|
Operating lease liabilities, net of current portion |
|
|
43,142 |
|
|
|
24,994 |
|
Deferred revenue, net of current portion |
|
|
2,449 |
|
|
|
2,300 |
|
Advances from financing companies, net of current portion |
|
|
9,926 |
|
|
|
0 |
|
Deferred taxes |
|
|
102,103 |
|
|
|
21,678 |
|
Convertible senior notes, net |
|
|
1,379,592 |
|
|
|
440,410 |
|
Commitments and
contingencies |
|
|
|
|
|
|
Stockholders’ equity: |
|
|
|
|
|
|
Common stock, $0.001 par value; 300,000,000 shares and 150,000,000
shares authorized as of December 31, 2020 and December 31, 2019,
respectively; 150,281,099 shares and 72,761,941 shares issued and
outstanding as of December 31, 2020 and December 31, 2019,
respectively |
|
|
150 |
|
|
|
73 |
|
Additional paid-in capital |
|
|
16,857,797 |
|
|
|
1,538,716 |
|
Accumulated deficit |
|
|
(992,661 |
) |
|
|
(507,525 |
) |
Accumulated other comprehensive loss |
|
|
18,518 |
|
|
|
(17,239 |
) |
Total stockholders’ equity |
|
|
15,883,804 |
|
|
|
1,014,025 |
|
Total liabilities and stockholders’ equity |
|
$ |
17,755,281 |
|
|
$ |
1,602,827 |
|
CONSOLIDATED STATEMENTS OF
OPERATIONS(In thousands, except share and per
share data, unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended December 31, |
|
Year Ended December 31, |
|
|
2020 |
|
|
2019 |
|
|
2020 |
|
|
2019 |
|
Revenue |
|
$ |
383,321 |
|
|
$ |
156,489 |
|
|
$ |
1,093,962 |
|
|
$ |
553,307 |
|
Expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
Cost of revenue (exclusive of depreciation and amortization, which
is shown separately below) |
|
|
122,942 |
|
|
|
55,355 |
|
|
|
390,829 |
|
|
|
184,465 |
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
Advertising and marketing |
|
|
93,751 |
|
|
|
25,356 |
|
|
|
226,146 |
|
|
|
109,697 |
|
Sales |
|
|
93,942 |
|
|
|
16,751 |
|
|
|
154,052 |
|
|
|
64,915 |
|
Technology and development |
|
|
92,697 |
|
|
|
16,246 |
|
|
|
164,941 |
|
|
|
64,644 |
|
Legal and regulatory |
|
|
2,610 |
|
|
|
1,523 |
|
|
|
8,876 |
|
|
|
6,762 |
|
Acquisition and integration related costs |
|
|
57,550 |
|
|
|
2,477 |
|
|
|
88,236 |
|
|
|
6,620 |
|
General and administrative |
|
|
341,375 |
|
|
|
44,482 |
|
|
|
497,808 |
|
|
|
157,694 |
|
Depreciation and amortization |
|
|
36,960 |
|
|
|
9,887 |
|
|
|
69,495 |
|
|
|
38,952 |
|
Total expenses |
|
|
841,827 |
|
|
|
172,077 |
|
|
|
1,600,383 |
|
|
|
633,749 |
|
Loss from operations |
|
|
(458,506 |
) |
|
|
(15,588 |
) |
|
|
(506,421 |
) |
|
|
(80,442 |
) |
Loss on extinguishment of
debt |
|
|
99 |
|
|
|
0 |
|
|
|
9,077 |
|
|
|
0 |
|
Interest expense, net |
|
|
20,819 |
|
|
|
7,581 |
|
|
|
60,495 |
|
|
|
29,013 |
|
Net loss before taxes |
|
|
(479,424 |
) |
|
|
(23,169 |
) |
|
|
(575,993 |
) |
|
|
(109,455 |
) |
Income tax benefit |
|
|
(85,457 |
) |
|
|
(4,125 |
) |
|
|
(90,857 |
) |
|
|
(10,591 |
) |
Net loss |
|
$ |
(393,967 |
) |
|
$ |
(19,044 |
) |
|
$ |
(485,136 |
) |
|
$ |
(98,864 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss per share, basic and
diluted |
|
$ |
(3.07 |
) |
|
$ |
(0.26 |
) |
|
$ |
(5.36 |
) |
|
$ |
(1.38 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average shares used
to compute basic and diluted net loss per share |
|
|
128,298,005 |
|
|
|
72,564,855 |
|
|
|
90,509,229 |
|
|
|
71,844,535 |
|
CONSOLIDATED STATEMENTS OF CASH
FLOWS(In thousands, unaudited)
|
|
|
|
|
|
|
|
|
Year Ended December 31, |
|
|
2020 |
|
|
2019 |
|
Cash flows (used in) provided
by operating activities: |
|
|
|
|
|
|
Net loss |
|
$ |
(485,136 |
) |
|
$ |
(98,864 |
) |
Adjustments to reconcile net
loss to net cash (used in) provided by operating activities: |
|
|
|
|
|
|
Depreciation and amortization |
|
|
69,495 |
|
|
|
38,952 |
|
Depreciation of rental equipment |
|
|
1,697 |
|
|
|
0 |
|
Amortization of right-of-use assets |
|
|
6,895 |
|
|
|
6,000 |
|
Allowance for doubtful accounts |
|
|
5,284 |
|
|
|
2,665 |
|
Stock-based compensation |
|
|
475,531 |
|
|
|
66,702 |
|
Deferred income taxes |
|
|
(90,158 |
) |
|
|
(10,868 |
) |
Accretion of interest |
|
|
45,296 |
|
|
|
25,438 |
|
Loss on extinguishment of debt |
|
|
9,077 |
|
|
|
0 |
|
Change in fair value of contingent consideration |
|
|
(1,009 |
) |
|
|
1,248 |
|
Changes in operating assets
and liabilities: |
|
|
|
|
|
|
Accounts receivable |
|
|
(21,091 |
) |
|
|
(15,884 |
) |
Prepaid expenses and other current assets |
|
|
(12,565 |
) |
|
|
(2,685 |
) |
Inventory |
|
|
(24,732 |
) |
|
|
0 |
|
Other assets |
|
|
(8,135 |
) |
|
|
(105 |
) |
Accounts payable |
|
|
(87,995 |
) |
|
|
905 |
|
Accrued expenses and other current liabilities |
|
|
20,125 |
|
|
|
10,026 |
|
Accrued compensation |
|
|
34,819 |
|
|
|
4,546 |
|
Deferred Revenue |
|
|
17,751 |
|
|
|
4,815 |
|
Operating lease liabilities |
|
|
(6,300 |
) |
|
|
(2,417 |
) |
Other liabilities |
|
|
(2,360 |
) |
|
|
(605 |
) |
Net cash (used in) provided by
operating activities |
|
|
(53,511 |
) |
|
|
29,869 |
|
Cash flows (used in) provided
by investing activities: |
|
|
|
|
|
|
Capital expenditures |
|
|
(4,024 |
) |
|
|
(3,510 |
) |
Capitalized software development costs |
|
|
(22,018 |
) |
|
|
(7,390 |
) |
Proceeds from marketable securities |
|
|
2,496 |
|
|
|
52,100 |
|
Investment in securities |
|
|
0 |
|
|
|
(5,000 |
) |
Acquisitions of business, net of cash acquired |
|
|
(567,429 |
) |
|
|
(11,187 |
) |
Net cash (used in) provided by
investing activities |
|
|
(590,975 |
) |
|
|
25,013 |
|
Cash flows provided by
financing activities: |
|
|
|
|
|
|
Net proceeds from the exercise of stock options |
|
|
54,314 |
|
|
|
33,283 |
|
Proceeds from issuance of 2027 Notes |
|
|
1,000,000 |
|
|
|
0 |
|
Payment of issuance costs of 2027 Notes |
|
|
(24,070 |
) |
|
|
0 |
|
Repurchase of 2022 Notes |
|
|
(228,153 |
) |
|
|
0 |
|
Proceeds from the sale of capped call related to the Livongo
Notes |
|
|
91,659 |
|
|
|
0 |
|
Proceeds from advances from financing companies |
|
|
6,002 |
|
|
|
0 |
|
Payment from customers against advances from financing
companies |
|
|
(8,635 |
) |
|
|
0 |
|
Payment of assumed indebtedness |
|
|
(10,000 |
) |
|
|
0 |
|
Proceeds from employee stock purchase plan |
|
|
4,722 |
|
|
|
3,380 |
|
Cash paid for withholding taxes on stock-based compensation,
net |
|
|
(26,703 |
) |
|
|
(1,569 |
) |
Net cash provided by financing
activities |
|
|
859,136 |
|
|
|
35,094 |
|
Net increase in cash and cash
equivalents |
|
|
214,650 |
|
|
|
89,976 |
|
Foreign exchange
difference |
|
|
4,321 |
|
|
|
388 |
|
Cash and cash equivalents at
beginning of the period |
|
|
514,353 |
|
|
|
423,989 |
|
Cash and cash equivalents at
end of the period |
|
$ |
733,324 |
|
|
$ |
514,353 |
|
|
|
|
|
|
|
|
Income taxes paid |
|
$ |
1,324 |
|
|
$ |
1,310 |
|
|
|
|
|
|
|
|
Interest paid |
|
$ |
14,890 |
|
|
$ |
12,224 |
|
Non-GAAP Financial Measures:
To supplement our financial information presented in accordance
with GAAP, we use adjusted gross profit, adjusted gross margin,
EBITDA and adjusted EBITDA, which are non-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.
Adjusted gross profit is our total revenue minus our total cost
of revenue (exclusive of depreciation and amortization, which is
shown separately) and adjusted gross margin is adjusted gross
profit as a percentage of our total revenue. We believe that these
measures provide 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, foreign exchange
gain or loss, taxes, depreciation, amortization and loss on
extinguishment of debt. 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. For presentation purposes,
foreign exchange gain or loss is included in interest expense, net
in our consolidated statement of operations.
Adjusted EBITDA consists of net loss before interest, foreign
exchange gain or loss, taxes, depreciation, amortization,
stock-based compensation, loss on extinguishment of debt 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 adjusted gross profit, adjusted gross
margin, EBITDA and adjusted EBITDA may vary from that of others in
our industry. None of adjusted gross profit, adjusted gross margin,
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 GAAP as measures of
performance.
Adjusted gross profit, adjusted gross margin, EBITDA and
adjusted EBITDA have important limitations as analytical tools and
you should not consider them in isolation or as a substitute for
analysis of our results as reported under GAAP. Some of these
limitations are:
- Adjusted 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;
- Adjusted 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;
- EBITDA and Adjusted EBITDA do not
reflect the loss on extinguishment of debt;
- 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 adjusted gross profit, adjusted gross margin, EBITDA and
adjusted EBITDA differently than we do, limiting the usefulness of
adjusted these measures 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 adjusted gross profit, adjusted
gross margin, EBITDA and adjusted EBITDA do not reflect any
expenditures for such replacements.
We compensate for these limitations by using adjusted gross
profit, adjusted gross margin, EBITDA and adjusted EBITDA along
with other comparative tools, together with GAAP measurements, to
assist in the evaluation of operating performance. Such 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 adjusted gross profit,
adjusted 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.
We have not reconciled EBITDA or adjusted EBITDA guidance to
GAAP net income (loss) because we do not provide guidance on GAAP
net income (loss) or the reconciling items between EBITDA and
adjusted EBITDA and GAAP net income (loss) as a result of the
uncertainty regarding, and the potential variability of, certain of
these items, the effect of which may be significant. Accordingly, a
reconciliation of the non-GAAP financial measure guidance to the
corresponding GAAP measure is not available without unreasonable
effort.
The following is a reconciliation of gross profit and gross
margin, the most directly comparable GAAP financial measures, to
adjusted gross profit and adjusted gross margin, respectively:
Reconciliation of GAAP Gross Profit to
Adjusted Gross Profit and Adjusted Gross Margin(In
thousands, unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended |
|
Year Ended |
|
|
|
December 31, |
|
December 31, |
|
|
|
2020 |
|
|
2019 |
|
|
2020 |
|
|
2019 |
|
|
Revenue |
|
$ |
383,321 |
|
|
$ |
156,489 |
|
|
$ |
1,093,962 |
|
|
$ |
553,307 |
|
|
Cost of revenue (exclusive of
depreciation and amortization, which is shown separately
below) |
|
|
(122,942 |
) |
|
|
(55,355 |
) |
|
|
(390,829 |
) |
|
|
(184,465 |
) |
|
Depreciation and amortization
of intangible assets |
|
|
(2,846 |
) |
|
|
(1,301 |
) |
|
|
(12,394 |
) |
|
|
(4,580 |
) |
|
Gross Profit |
|
|
257,533 |
|
|
|
99,833 |
|
|
|
690,739 |
|
|
|
364,262 |
|
|
Depreciation and amortization
of intangible assets |
|
|
2,846 |
|
|
|
1,301 |
|
|
|
12,394 |
|
|
|
4,580 |
|
|
Adjusted gross profit |
|
$ |
260,379 |
|
|
$ |
101,134 |
|
|
$ |
703,133 |
|
|
$ |
368,842 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross margin |
|
|
67.2 |
|
% |
|
63.8 |
|
% |
|
63.1 |
|
% |
|
65.8 |
|
% |
Adjusted gross margin |
|
|
67.9 |
|
% |
|
64.6 |
|
% |
|
64.3 |
|
% |
|
66.7 |
|
% |
The following is a reconciliation of Net Loss, the most directly
comparable GAAP financial measure, to EBITDA and Adjusted
EBITDA:
Reconciliation of GAAP Net Loss to EBITDA
and Adjusted EBITDA(In thousands,
unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended |
|
Year Ended |
|
|
|
December 31, |
|
December 31, |
|
|
|
2020 |
|
|
2019 |
|
|
2020 |
|
|
2019 |
|
|
Net loss |
|
$ |
(393,967 |
) |
|
$ |
(19,044 |
) |
|
$ |
(485,136 |
) |
|
$ |
(98,864 |
) |
|
Add: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss on extinguishment of
debt |
|
|
99 |
|
|
|
0 |
|
|
|
9,077 |
|
|
|
0 |
|
|
Interest expense, net |
|
|
20,819 |
|
|
|
7,581 |
|
|
|
60,495 |
|
|
|
29,013 |
|
|
Income tax benefit |
|
|
(85,457 |
) |
|
|
(4,125 |
) |
|
|
(90,857 |
) |
|
|
(10,591 |
) |
|
Depreciation expense |
|
|
1,783 |
|
|
|
682 |
|
|
|
4,766 |
|
|
|
3,382 |
|
|
Amortization expense |
|
|
35,177 |
|
|
|
9,205 |
|
|
|
64,729 |
|
|
|
35,570 |
|
|
EBITDA |
|
|
(421,546 |
) |
|
|
(5,701 |
) |
|
|
(436,926 |
) |
|
|
(41,490 |
) |
|
Stock-based compensation |
|
|
414,380 |
|
|
|
18,457 |
|
|
|
475,531 |
|
|
|
66,702 |
|
|
Acquisition and integration
related costs |
|
|
57,550 |
|
|
|
2,477 |
|
|
|
88,236 |
|
|
|
6,620 |
|
|
Adjusted EBITDA |
|
$ |
50,384 |
|
|
$ |
15,233 |
|
|
$ |
126,841 |
|
|
$ |
31,832 |
|
|
Investors:Patrick
Feeley914-265-7925pfeeley@teladochealth.com
Media:Chris
Stenrud860-491-8821pr@teladochealth.com
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