Teladoc shareholders can’t seem to catch a break, with the company’s second quarter results sending its shares plummeting 20% on the back of a heavy earnings miss and weak guidance for the second half of the year.
The telehealth services provider reported 18% revenue growth to $592.4M for the period, but the headline grabber from the announcement was a $3B impairment charge on its Livongo acquisition that drove a total loss of $3.1B.
Teladoc CEO Jason Gorevic shared some upbeat growth metrics on the conference call with investors, but also called out a number of headwinds that make it difficult to predict near-term performance.
- Chronic care membership came in higher than expected, while member utilization improved year-over-year.
- Teladoc’s BetterHelp virtual therapy business grew revenue by 40%, but continued to be hindered by competitors sacrificing margin to gain market share
- Primary360 has been “a significant bright spot” for commercial momentum, but heightened economic uncertainty is delaying the decision making process in the employer market.
- Teladoc is taking a look at its cost structure to maintain profitability, and will begin marketing bundles of services to expand its revenue sources.
The Takeaway
Although the market didn’t exactly react kindly to the Livongo news, the write down appears to be more of a symptom of wider market trends than the business itself, and Teladoc’s recently launched Chronic Care Complete solution is poised to be a core pillar of its long-term growth strategy. The near-term looks like a different story, as Teladoc now expects its full-year revenue to be at the lower end of its $2.4B to $2.5B guidance.
