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Teladoc Health Reports Second-Quarter 2021 Results, Raises Full-Year Revenue Guidance

July 27, 2021 4:05 PM

PURCHASE, NY, July 27, 2021 (GLOBE NEWSWIRE) --  Teladoc Health, Inc. (NYSE: TDOC), the global leader in whole-person virtual care, today reported financial results for the quarter ended June 30, 2021.

“Teladoc Health delivered a strong second quarter, marked by exciting new client wins, product launches, and tremendous progress on our quest to be the category-defining provider of whole person virtual care,” said Jason Gorevic, chief executive officer of Teladoc Health. “We have solid momentum heading into the second half as the market embraces the unified care experience that only Teladoc Health has the breadth and scale to achieve.”

Financial Results for the Second Quarter and Six Months Ended June 30, 2021
Revenue
($ thousands, unaudited)
Quarter Ended Year over Year Six Months Ended Year over Year
June 30, Growth June 30, Growth
2021 2020 2021 2020
Access Fees Revenue
U.S.$396,622 $152,021 161 % $747,490 $259,960 188 %
International 37,422 30,150 24 % 74,710 59,264 26 %
Total 434,044 182,171 138 % 822,200 319,224 158 %
Visit Fee Revenue
U.S. 59,196 58,512 1 % 113,536 101,996 11 %
International 130 347 (63)% 252 609 (59)%
Total 59,326 58,859 1 % 113,788 102,605 11 %
Other
U.S. 9,363 0 n/m 20,034 0 n/m
International 406 0 n/m 792 0 n/m
Total 9,769 0 n/m 20,826 0 n/m
Total Revenue$503,139 $241,030 109 % $956,814 $421,829 127 %
n/m – Not meaningful

Membership and Visit Fee Only Access
(millions)
Quarter Ended
June 30, Growth
2021 2020
U.S. Paid Membership52.0 51.5 1%
U.S. Visit Fee Only Access22.0 21.8 1%
Chronic Care Enrollment0.715 - n/m

Visits
(thousands)
Quarter Ended Year over Year Six Months Ended Year over Year
June 30, Growth June 30, Growth
2021 2020 2021 2020
U.S. Visits 3,037 2,302 32% 5,760 3,916 47%
International Visits 477 453 5% 944 885 7%
Total Visits 3,514 2,755 28% 6,704 4,801 40%
Utilization 21.5% 16.0% 550pt 20.5% 14.7% 588pt
Platform-Enabled Sessions* 1,017 - n/m 2,109 - n/m
Total Visits & Sessions Provided & Enabled 4,531 2,755 64% 8,813 4,801 84%

* Platform-Enabled Sessions are 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.

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 third-quarter 2021, we expect:

For the full-year 2021, we expect:

Quarterly Conference Call

The second quarter 2021 earnings conference call and webcast will be held Tuesday, July 27, 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: 9335098; 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; (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)

June 30, December 31,
2021 2020
Assets
Current assets:
Cash and cash equivalents$783,724 $733,324
Short-term investments 2,538 53,245
Accounts receivable, net of allowance of $10,952 and $6,412, respectively 179,436 169,281
Inventories 56,990 56,498
Prepaid expenses and other current assets 82,149 47,259
Total current assets 1,104,837 1,059,607
Property and equipment, net 28,184 28,551
Goodwill 14,454,712 14,581,255
Intangible assets, net 1,963,172 2,020,864
Operating lease - right-of-use assets 41,880 46,647
Other assets 18,334 18,357
Total assets$17,611,119 $17,755,281
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable$42,077 $46,030
Accrued expenses and other current liabilities 91,609 83,657
Accrued compensation 59,629 94,593
Deferred revenue-current 69,293 52,356
Advances from financing companies 13,619 13,453
Current portion of long-term debt 0 42,560
Total current liabilities 276,227 332,649
Other liabilities 1,346 1,616
Operating lease liabilities, net of current portion 36,493 43,142
Deferred revenue, net of current portion 3,501 2,449
Advances from financing companies, net of current portion 9,561 9,926
Deferred taxes 81,882 102,103
Convertible senior notes, net 1,201,039 1,379,592
Commitments and contingencies
Stockholders’ equity:
Common stock, $0.001 par value; 300,000,000 shares authorized as of June 30, 2021 and December 31, 2020; 159,462,979 shares and 150,281,099 shares issued and outstanding as of June 30, 2021 and December 31, 2020, respectively 159 150
Additional paid-in capital 17,314,749 16,857,797
Accumulated deficit (1,326,129) (992,661)
Accumulated other comprehensive gain 12,291 18,518
Total stockholders’ equity 16,001,070 15,883,804
Total liabilities and stockholders’ equity$17,611,119 $17,755,281

CONSOLIDATED STATEMENTS OF OPERATIONS(In thousands, except share and per share data, unaudited)

Quarter Ended June 30, Six Months Ended June 30,
2021 2020 2021 2020
Revenue$503,139 $241,030 $956,814 $421,829
Expenses:
Cost of revenue (exclusive of depreciation and amortization, which is shown separately below) 160,273 90,780 306,232 163,162
Operating expenses:
Advertising and marketing 103,221 47,578 192,660 80,093
Sales 63,856 18,687 128,649 36,627
Technology and development 80,759 23,029 158,767 42,286
Acquisition, integration and transformation costs 11,421 1,627 17,744 5,291
General and administrative 111,216 56,615 216,388 102,957
Depreciation and amortization 51,341 9,893 100,000 19,603
Total expenses 582,087 248,209 1,120,440 450,019
Loss from operations (78,948) (7,179) (163,626) (28,190)
Loss on extinguishment of debt 31,419 7,751 42,878 7,751
Other (income) expense, net (217) (111) (5,869) 574
Interest expense, net 20,473 13,262 42,598 21,880
Net loss before taxes (130,623) (28,081) (243,233) (58,395)
Income tax expense (benefit) 3,196 (2,399) 90,235 (3,110)
Net loss$(133,819) $(25,682) $(333,468) $(55,285)
Net loss per share, basic and diluted$(0.86) $(0.34) $(2.16) $(0.74)
Weighted-average shares used to compute basic and diluted net loss per share 156,055,090 76,512,870 154,187,739 74,919,194

CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands, unaudited)

Six Months Ended June 30,
2021 2020
Cash flows provided by operating activities:
Net loss$(333,468) $(55,285)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization 100,000 19,603
Amortization of right-of-use assets and depreciation of rental equipment 7,521 3,052
Allowance for doubtful accounts 7,534 2,290
Stock-based compensation 169,270 40,243
Deferred income taxes 83,823 (3,457)
Accretion of interest 32,566 16,576
Loss on extinguishment of debt 39,782 7,751
Gain on sale of investment (5,901) 0
Change in fair value of contingent consideration 38 214
Changes in operating assets and liabilities:
Accounts receivable (16,573) (24,773)
Prepaid expenses and other current assets (26,758) 1,595
Inventory (2,234) 0
Other assets 1,919 36
Accounts payable (4,741) 1,844
Accrued expenses and other current liabilities 5,380 37,555
Accrued compensation (35,606) (1,818)
Deferred revenue 17,205 (12,347)
Operating lease liabilities (5,833) (2,788)
Other liabilities 267 (1,061)
Net cash provided by operating activities 34,191 29,230
Cash flows used in investing activities:
Capital expenditures (4,405) (1,641)
Capitalized software development costs (21,508) (6,449)
Proceeds from marketable securities 50,000 0
Proceeds from the sale of investment 10,901 —
Acquisitions of business, net of cash acquired (56,336) (13,500)
Other, net 3,150 0
Net cash used in investing activities (18,198) (21,590)
Cash flows provided by financing activities:
Net proceeds from the exercise of stock options 17,781 33,513
Proceeds from issuance of 2027 Notes 0 1,000,000
Payment of issuance costs of 2027 Notes 0 (24,070)
Repurchase of 2022 Notes (137) (228,130)
Proceeds from advances from financing companies 7,924 0
Payment from customers against advances from financing companies (8,122) 0
Proceeds from employee stock purchase plan 11,031 2,473
Cash received for withholding taxes on stock-based compensation, net 5,159 4,492
Other, net (98) 0
Net cash provided by financing activities 33,538 788,278
Net increase in cash and cash equivalents 49,531 795,918
Foreign exchange difference 869 (1,428)
Cash and cash equivalents at beginning of the period 733,324 514,353
Cash and cash equivalents at end of the period$783,724 $1,308,843
Income taxes paid$52 $59
Interest paid$7,972 $5,609

Stock-based Compensation Summary

Total compensation costs for stock-based awards were recorded as follows (in thousands):

Quarter Ended Six Months Ended
June 30, June 30,
2021 2020 2021 2020
Cost of revenue (exclusive of depreciation and amortization, which is shown separately)$1,786 $0 $4,148 $0
Advertising and marketing 4,815 1,544 9,897 2,803
Sales 18,953 3,271 40,120 6,190
Technology and development 27,699 2,559 54,425 4,663
General and administrative 29,717 14,554 60,680 26,587
Total stock-based compensation expense (1)$82,970 $21,928 $169,270 $40,243

(1) Excluding the amount capitalized related to internal software development projects.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; other (income) expense, net, including foreign exchange gain or loss; taxes; depreciation and amortization; and loss on extinguishment of debt. Adjusted EBITDA consists of net loss before interest; other (income) expense, net, including foreign exchange gain or loss; taxes; depreciation and amortization; loss on extinguishment of debt; stock-based compensation; and acquisition, integration and transformation costs. We believe that making such adjustments 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 terms 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, net 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:

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 the individual reconciling items between EBITDA and adjusted EBITDA and GAAP net income (loss). This is due to the uncertainty as to timing, and the potential variability, of the individual reconciling items such as the tax impact of share-based compensation, 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 Six Months Ended
June 30, June 30,
2021 2020 2021 2020
Revenue$503,139 $241,030 $956,814 $421,829
Cost of revenue (exclusive of depreciation and amortization, which is shown separately below) (160,273) (90,780) (306,232) (163,162)
Depreciation and amortization of intangible assets (1,240) (1,538) (5,354) (3,026)
Gross Profit 341,626 148,712 645,228 255,640
Depreciation and amortization of intangible assets 1,240 1,538 5,354 3,026
Adjusted gross profit$342,866 $150,250 $650,582 $258,667
Gross margin 67.9 % 61.7 % 67.4 % 60.6 %
Adjusted gross margin 68.1 % 62.3 % 68.0 % 61.3 %

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 Six Months Ended
June 30, June 30,
2021 2020 2021 2020
Net loss$(133,819) $(25,682) $(333,468) $(55,285)
Add:
Loss on extinguishment of debt 31,419 7,751 42,878 7,751
Other (income) expense, net (217) (111) (5,869) 574
Interest expense, net 20,473 13,262 42,598 21,880
Income tax expense (benefit) 3,196 (2,399) 90,235 (3,110)
Depreciation and amortization 51,341 9,893 100,000 19,603
EBITDA (27,607) 2,714 (63,626) (8,587)
Stock-based compensation 82,970 21,928 169,270 40,243
Acquisition, integration and transformation costs 11,421 1,627 17,744 5,291
Adjusted EBITDA$66,784 $26,269 $123,388 $36,947

Investors:Patrick Feeley914-265-7925[email protected]

Media:Chris Stenrud860-491-8821[email protected]

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Source: Teladoc Health, Inc.

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