Teladoc Health just released its second quarter earnings, and the results were somewhere between a return-to-form and an absolute home run.
Here’s Teladoc’s Q2 by the numbers:
- Revenue jumped 10% year-over-year to $652M
- Net loss shrank to $65M from $69M in Q1 (last Q2 saw a $3B Livongo writedown)
- Integrated Care revenue up 5% YoY to $360M
- BetterHelp revenue up 18% YoY to $292M
- Full-year revenue guidance raised to $2.6B-$2.67B, up $25M at the low end
Those figures helped push Teladoc’s stock up over 25% on Wednesday, with the narrowing loss and improved guidance both welcomed by investors. The conference call didn’t hurt either, and the four main themes that Teladoc drove home in the analyst Q&A were:
- BetterHelp customer acquisition costs are stabilizing after being a pain point over the last year. CEO Jason Gorevic said that consumer demand “has proven resilient through the first half of the year, even with the financial pressures that many households are facing.” BetterHelp now has 476k users, up 17% YoY.
- The Integrated Care segment saw growth across all chronic condition management programs. Digital diabetes prevention got a special callout, and over a third of Teladoc’s chronic care members are now enrolled in multiple programs. Total chronic care program enrollment was 1.07M at the end of Q2 (up 7% YoY), and CFO Mala Murthy said the 45k new enrollees drove the Q2 revenue increase.
- GLP-1 drug costs landed a major spotlight, with Teladoc’s employer clients clearly scrambling for ways to keep them contained. Teladoc is launching a new weight management program in Q3, giving patients access to GLP-1 drugs and personalized care plans developed with a physician to help manage outcomes and costs.
- AI, AI, AI. It wouldn’t be a 2023 earnings call if they skipped it. Teladoc apparently uses over 60 AI models in its products, ranging from member engagement to its virtual care queuing system. Leadership also drummed up hype for the Microsoft partnership expansion, which will integrate Azure OpenAI and Nuance DAX into the Solo platform.
The Takeaway
All-in-all, Teladoc delivered a great second quarter, with every segment contributing to the revenue gains and proving that expanding within existing clients is a solid growth strategy. If there was something to harp on, it was the $200M worth of stock-based compensation that Teladoc is handing out this year, a pretty mind blowing total that’s a primary contributor to the company’s net loss.
