Teladoc Health Q2 earnings show growth

Teladoc Health elevated key guidance following revenue gains in the second quarter, the virtual care company announced Tuesday.

Revenue rose 10% to $652.4 million as integrated care membership grew 7% during the second quarter, Teladoc reported. Although the company recorded a $65.2 million net loss, or 40 cents per share, Teladoc advised investors that it had raised its low-end revenue and adjusted earnings before interest, taxes, depreciation and amortization guidance for the year.

As a result, Teladoc raised its low-end adjusted EBITDA guidance from $275 million to $300 million for the year, while the high end remained the same. The company reported a $69.2 million net loss, or 42 cents per share, for the first quarter.

“Our results this quarter, and really for the first half, give us confidence to raise our expectations both for top line and bottom line,” Teladoc CEO Jason Gorevic said in an interview Tuesday.

Gorevic said the company is balancing growth with strides toward profitability. Teladoc also raised its free cashflow expectations from $100 million to $150 million.

The second-quarter financial results, especially the increase in integrated care members, are good for Teladoc’s short-term outlook, said Scott Schoenhaus, a managing director of healthcare information technology equity research at KeyBanc Capital Markets.

“The pathway to reaching their full-year guidance is probably less challenged than it was,” Schoenhaus said. “They’ve now provided a nice buffer.”

While growth was consistent across Teladoc’s business lines, stable customer acquisition costs and resilient consumer demand pushed BetterHelp membership up 17% to 476,000 during the second quarter, in line with company expectations.

Teladoc intends to explore potential areas for growth in unserved clinical areas, Gorevic said. “We’ll continue to expand the scope of our clinical offering,” and the company is optimistic about the potential for large employers to spend more on virtual care over the next three years, he said.

The company has nearly $1 billion on its balance sheet, Teladoc Chief Financial Officer Mala Murthy said in an interview. “We have plenty of dry powder for us to find attractive growth opportunities,” she said.

Teladoc plans to execute its entry into the weight loss drug market during the third quarter and to focus on business-to-business customers, Gorevic said.

During a call with investors Tuesday, the company also highlighted its efforts to integrate artificial intelligence into its products, such as through its expanded partnership with Microsoft, which will enable Teladoc to incorporate Nuance’s voice-enabled generative artificial intelligence tool to help providers with documentation.

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