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Teladoc Health Reports Second-Quarter 2022 Results

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Teladoc Health, Inc.
Teladoc Health, Inc.
  • Second quarter revenue grows 18% year-over-year to $592.4 million.

  • Net loss per share of $19.22, primarily driven by non-cash goodwill impairment charge of $3.0 billion, or $18.78 per share.

  • Primary360 adds multiple new clients, and new capabilities, as early momentum continues

PURCHASE, NY, July 27, 2022 (GLOBE NEWSWIRE) -- Teladoc Health, Inc. (NYSE: TDOC), the global leader in whole-person virtual care, today reported financial results for the second quarter ended June 30, 2022.

“Teladoc Health delivered solid second quarter results with significant progress against our whole person care strategy, including growing momentum in Primary360”, said Jason Gorevic, chief executive officer of Teladoc Health.

“While we continue to see increased uncertainty in the macroeconomic backdrop, we remain confident in our ability to execute against our strategy to deliver a unified care experience that we believe only Teladoc Health has the breadth and scale to achieve.”

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Key Financial Data

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

($ thousands, unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Quarter Ended

 

 

Year over Year

 

Six Months Ended 

 

 

Year over Year

 

 

June 30,

 

 

Change

 

June 30,

 

 

Change

 

 

 

2022

 

 

 

2021

 

 

 

 

 

 

2022

 

 

 

2021

 

 

 

 

Revenue

 

$

592,379

 

 

$

503,139

 

 

 

18

 

%

 

$

1,157,729

 

 

$

956,814

 

 

 

21

 

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Loss

 

$

(3,101,461

)

 

$

(133,819

)

 

 

N/M

 

 

 

$

(9,775,984

)

 

$

(333,468

)

 

 

N/M

 

 

Net Loss per share, basic and diluted

 

$

(19.22

)

 

$

(0.86

)

 

 

N/M

 

 

 

$

(60.72

)

 

$

(2.16

)

 

 

N/M

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA*

 

$

46,711

 

 

$

66,784

 

 

 

(30

)

%

 

$

101,208

 

 

$

123,388

 

 

 

(18

)

%

* A reconciliation of each non-GAAP measure to the most comparable measure under GAAP has been provided in this press release in the accompanying tables. An explanation of these Non-GAAP measures is also included below under the heading “Non-GAAP Financial Measures.”
nm – Not meaningful

Second Quarter 2022

Revenue increased 18% to $592.4 million from $503.1 million in the second quarter of 2021. Access fees revenue grew 20% to $518.7 million and visit fee revenue grew 7% to $66.7 million. U.S. Revenues grew 18% to $521.4 million and International revenues grew 13% to $71.0 million.

Non-cash goodwill impairment charge of $3.0 billion was recorded in the second quarter of 2022. The non-cash charge had no impact on the provision for income taxes.

Net loss totaled $3,101.5 million, or ($19.22) per share, for the second quarter of 2022, compared to $133.8 million, or ($0.86) per share, for the second quarter of 2021. Results for the second quarter of 2022 primarily included a non-cash goodwill impairment charge of $3,030.0 million, or ($18.78) per share, as well as stock-based compensation expense of $51.0 million, or ($0.32) per share, and amortization of acquired intangibles of $49.1 million, or ($0.30) per share.

Results for the second quarter of 2021 included stock-based compensation expense of $83.0 million, or ($0.53) per share, amortization of acquired intangibles of $46.1 million, or ($0.30) per share, loss on extinguishment of debt $31.4 million, or ($0.20) per share, and non-cash income taxes charges of $3.2 million, or ($0.02) per share.

Adjusted EBITDA* decreased 30% to $46.7 million, compared to $66.8 million for the second quarter of 2021.

GAAP gross margin, which includes depreciation and amortization, was 68.2 percent for the second quarter of 2022, compared to 67.9 percent for the second quarter of 2021.

Adjusted gross margin* was 69.2 percent for the second quarter of 2022, compared to 68.1 percent for the second quarter of 2021.

Average revenue per U.S. paid member increased to $2.60 in the second quarter of 2022, from $2.31 in the second quarter of 2021.

Six Months Ended June 30, 2022

Revenue increased 21% to $1,157.7 million from $956.8 million in the first half of 2021. Access fees revenue grew 24% to $1,010.1 million, and visit fee revenue grew 10% to $134.7 million. U.S. Revenues grew 21% to $1,012.6 million, and International revenues grew 20% to $145.1 million for the first half of 2022.

Non-cash goodwill impairment charges of $9.6 billion were recorded in the first half of 2022. The non-cash charges had no impact on the provision for income taxes.

Net loss totaled $9,776.0 million, or ($60.72) per share, for the first half of 2022, compared to $333.5 million, or ($2.16) per share, for the first half of 2021. Results for the first half of 2022 primarily included non-cash goodwill impairment charges of $9,630.0 million, or ($59.81) per share, as well as stock-based compensation expense of $111.4 million, or ($0.69) per share, and amortization of acquired intangibles of $98.5 million, or ($0.61) per share.

Results for the first half of 2021 included stock-based compensation expense of $169.3 million, or ($1.10) per share, amortization of acquired intangibles of $90.9 million, or ($0.59) per share, loss on extinguishment of debt $42.9 million, or ($0.28) per share, and non-cash income taxes charges of $90.2 million, or ($0.59) per share.

Adjusted EBITDA* decreased 18% to $101.2 million compared to $123.4 million for the first half of 2021.

GAAP gross margin, which includes depreciation and amortization, was 67.1 percent for the first half of 2022, compared to 67.4 percent for the first half of 2021.

Adjusted gross margin* was flat at 68.1 percent for the first half of 2022 and 2021.

Average revenue per U.S. paid member increased to $2.56 in the first half of 2022, from $2.20 in the first half of 2021.

Financial Outlook

The company is maintaining its previously issued revenue and adjusted EBITDA outlook for the fiscal year ending December 31, 2022. However, based on current trends in the market, management now expects results to be toward the lower end of those ranges.

Teladoc Health provides an outlook based on current market conditions and expectations and what we know today. In addition, given the uncertainty of the expected path of the COVID-19 pandemic as well as the broader economic impact, this is an evolving situation and circumstances may change. Based on what we know today, we believe our outlook ranges provide a reasonable baseline for 2022 financial performance.

For the third quarter of 2022, we expect:

 

 

 

3Q 2022 Outlook Range

Revenue

$600 - $620 million

EBITDA

($46) - ($29) million

Adjusted EBITDA

$35 - $45 million

Net loss per share

($0.85) - ($0.60)

Total U.S. Paid Membership

55.5 - 56.5 million

Visit Fee Only Access

~24 million

Total Visits

4.8 - 5.0 million

For the full year 2022, we expect:

 

 

 

Full Year 2022 Outlook Range

Revenue

$2,400 - $2,500 million

EBITDA

($41) - $8 million

Adjusted EBITDA

$240 - $265 million

Net loss per share

($62.00) - ($61.00)

Total U.S. Paid Membership

55.0 - 56.5 million

Visit Fee Only Access

~24 million

Total Visits

18.8 - 19.3 million

Earnings Conference Call

The second quarter 2022 earnings conference call and webcast will be held Wednesday, July 27, 2022 at 4:30 p.m. E.T. The conference call can be accessed by dialing 1-844-200-6205 for U.S. participants, or 1-929-526-1599 for international participants, and referencing Conference ID Number: 303657; 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 #1 among direct-to-consumer telehealth providers in the J.D. Power 2021 U.S. Telehealth Satisfaction Study, 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 financial or operating results, future numbers of members or clients, future numbers of visits, 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 in valuations or useful lives of our assets; (vi) changes to our abilities to recruit and retain qualified providers into our network; (vii) the impact of impairment losses; (viii) risks relating to impairment losses, including with respect to goodwill; and (ix) 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.

Revenues and Summary Operating Metrics

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue
($ thousands, except Average U.S.

 

Quarter Ended

 

Year over Year

 

Six Months Ended 

 

Year over Year

Revenue Per Member)

 

June 30,

 

Change

 

June 30,

 

Change

 

 

2022

 

2021

 

 

 

2022

 

2021

 

 

Access Fees Revenue

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S.

 

$

450,426

 

$

371,591

 

21

 

%

 

$

871,572

 

$

699,144

 

25

 

%

International

 

 

68,304

 

 

59,474

 

15

 

%

 

 

138,495

 

 

114,027

 

21

 

%

Total

 

 

518,730

 

 

431,065

 

20

 

%

 

 

1,010,067

 

 

813,171

 

24

 

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Visit Fee Revenue

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S.

 

 

64,240

 

 

59,196

 

9

 

%

 

 

128,713

 

 

116,324

 

11

 

%

International

 

 

2,493

 

 

3,058

 

(18

)

%

 

 

5,948

 

 

6,441

 

(8

)

%

Total

 

 

66,733

 

 

62,254

 

7

 

%

 

 

134,661

 

 

122,765

 

10

 

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S.

 

 

6,720

 

 

9,363

 

(28

)

%

 

 

12,301

 

 

20,034

 

(39

)

%

International

 

 

196

 

 

457

 

(57

)

%

 

 

700

 

 

844

 

(17

)

%

Total

 

 

6,916

 

 

9,820

 

(30

)

%

 

 

13,001

 

 

20,878

 

(38

)

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Revenue

 

$

592,379

 

$

503,139

 

18

 

%

 

$

1,157,729

 

$

956,814

 

21

 

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. Revenue

 

$

521,386

 

$

440,150

 

18

 

%

 

$

1,012,586

 

$

835,502

 

21

 

%

International Revenue

 

 

70,993

 

 

62,989

 

13

 

%

 

 

145,143

 

 

121,312

 

20

 

%

Total Revenue

 

$

592,379

 

$

503,139

 

18

 

%

 

$

1,157,729

 

$

956,814

 

21

 

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average U.S. Revenue Per Member (1)

 

$

2.60

 

$

2.31

 

13

 

%

 

$

2.56

 

$

2.20

 

16

 

%


 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Visits

 

Quarter Ended

 

Year over Year

 

Six Months Ended 

 

Year over Year

(thousands)

 

June 30,

 

Change

 

June 30,

 

Change

 

 

 

2022

 

 

 

2021

 

 

 

 

 

2022

 

 

 

2021

 

 

 

U.S. Visits

 

 

3,604

 

 

 

2,723

 

 

32

%

 

 

7,016

 

 

 

5,184

 

 

35

%

International Visits

 

 

1,055

 

 

 

929

 

 

14

%

 

 

2,153

 

 

 

1,810

 

 

19

%

Total Visits

 

 

4,659

 

 

 

3,652

 

 

28

%

 

 

9,169

 

 

 

6,994

 

 

31

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Utilization (2)

 

 

24.0

%

 

 

19.1

%

 

492

pt

 

 

23.7

%

 

 

18.3

%

 

542

pt

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Platform-Enabled Sessions (3)

 

 

1,040

 

 

 

1,017

 

 

2

%

 

 

2,215

 

 

 

2,109

 

 

5

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Visits & Sessions Provided & Enabled

 

 

5,699

 

 

 

4,669

 

 

22

%

 

 

11,384

 

 

 

9,103

 

 

25

%


 

 

 

 

 

 

 

 

 

Membership and Visit Fee Only Access

 

Quarter Ended

 

Year over Year

 

(millions)

 

June 30,

 

Change

 

 

 

2022

 

2021

 

 

 

U.S. Paid Membership

 

56.6

 

52.0

 

9

%

 

 

 

 

 

 

 

 

 

 

U.S. Visit Fee Only Access

 

24.0

 

22.0

 

9

%

 

 

 

 

 

 

 

 

 

 

Unique Chronic Care Members (4)

 

0.798

 

0.709

 

13

%

 

 

 

(1) Average U.S. Revenue Per Member measures the average amount of access revenue that the Company generates from a U.S. paid member for a particular period. It is calculated by dividing the U.S. access revenue generated from the Company’s U.S. paid members, excluding certain non-member based access fees, by the total average number of U.S. paid members during the applicable period.

(2) Utilization measures the ratio of visits to total U.S. paid members. It is calculated by dividing visits during a particular period (excluding visit fee only visits) by U.S. paid members in the applicable period and annualizing the result.

(3) 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.

(4) Unique Chronic Care Members represent the number of unique individuals enrolled in our suite of chronic care programs at the end of a given period.


TELADOC HEALTH, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except share and per share data, unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

Quarter Ended June 30,

 

Six Months Ended June 30,

 

 

2022

 

    

 

2021

 

    

 

2022

 

    

 

2021

 

Revenue

$

592,379

 

 

$

503,139

 

 

$

1,157,729

 

 

$

956,814

 

Expenses:

 

 

 

 

 

 

 

 

 

 

 

Cost of revenue (exclusive of depreciation and amortization,
which is shown separately below)

 

182,470

 

 

 

160,273

 

 

 

369,495

 

 

 

306,232

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

Advertising and marketing

 

164,574

 

 

 

103,221

 

 

 

298,174

 

 

 

192,660

 

Sales

 

57,930

 

 

 

63,856

 

 

 

116,259

 

 

 

128,649

 

Technology and development

 

80,826

 

 

 

80,759

 

 

 

168,238

 

 

 

158,767

 

General and administrative

 

110,868

 

 

 

111,216

 

 

 

215,791

 

 

 

216,388

 

Acquisition, integration, and transformation costs

 

2,892

 

 

 

11,421

 

 

 

7,399

 

 

 

17,744

 

Depreciation and amortization

 

59,371

 

 

 

51,341

 

 

 

118,304

 

 

 

100,000

 

Goodwill impairment

 

3,030,000

 

 

 

0

 

 

 

9,630,000

 

 

 

0

 

Total expenses

 

3,688,931

 

 

 

582,087

 

 

 

10,923,660

 

 

 

1,120,440

 

Loss from operations

 

(3,096,552

)

 

 

(78,948

)

 

 

(9,765,931

)

 

 

(163,626

)

Loss on extinguishment of debt

 

(0

)

 

 

31,419

 

 

 

(0

)

 

 

42,878

 

Other expense (income), net

 

1,760

 

 

 

(217

)

 

 

1,036

 

 

 

(5,869

)

Interest expense, net

 

4,337

 

 

 

20,473

 

 

 

9,817

 

 

 

42,598

 

Net loss before provision for income taxes

 

(3,102,649

)

 

 

(130,623

)

 

 

(9,776,784

)

 

 

(243,233

)

Provision for income taxes

 

(1,188

)

 

 

3,196

 

 

 

(800

)

 

 

90,235

 

Net loss

$

(3,101,461

)

 

$

(133,819

)

 

$

(9,775,984

)

 

$

(333,468

)

 

 

 

 

 

 

 

 

 

 

 

 

Net loss per share, basic and diluted

$

(19.22

)

 

$

(0.86

)

 

$

(60.72

)

 

$

(2.16

)

 

 

 

 

 

 

 

 

 

 

 

 

Weighted-average shares used to compute basic
and diluted net loss per share

 

161,377,695

 

 

 

156,055,090

 

 

 

161,002,075

 

 

 

154,187,739

 

Stock-based Compensation Summary

Compensation costs for stock-based awards were classified as follows (in thousands):

 

 

 

 

 

 

 

 

 

 

 

 

 

Quarter Ended

 

Six Months Ended 

 

June 30,

 

June 30,

 

2022

 

2021

 

2022

 

2021

Cost of revenue (exclusive of depreciation and amortization,
which is shown separately)

$

2,123

 

$

1,786

 

$

4,319

 

$

4,148

Advertising and marketing

 

3,198

 

 

4,815

 

 

6,909

 

 

9,897

Sales

 

10,709

 

 

18,953

 

 

22,781

 

 

40,120

Technology and development

 

15,785

 

 

27,699

 

 

33,872

 

 

54,425

General and administrative

 

19,185

 

 

29,717

 

 

43,555

 

 

60,680

Total stock-based compensation expense (1)

$

51,000

 

$

82,970

 

$

111,436

 

$

169,270

(1) Excluding the amount capitalized related to internal software development projects.


TELADOC HEALTH, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands, unaudited)

 

 

 

 

 

 

 

Six Months Ended June 30,

 

 

2022

 

 

 

2021

 

Operating activities:

 

 

 

 

 

Net loss

$

(9,775,984

)

 

$

(333,468

)

Adjustments to reconcile net loss to net cash provided by operating activities:

 

 

 

 

 

Goodwill impairment

 

9,630,000

 

 

 

0

 

Depreciation and amortization

 

118,304

 

 

 

100,000

 

Depreciation of rental equipment

 

1,486

 

 

 

1,663

 

Amortization of right-of-use assets

 

6,540

 

 

 

5,858

 

Provision for doubtful accounts

 

5,857

 

 

 

7,534

 

Stock-based compensation

 

111,436

 

 

 

169,270

 

Deferred income taxes

 

(2,528

)

 

 

83,823

 

Accretion of interest

 

1,659

 

 

 

32,566

 

Loss on extinguishment of debt

 

0

 

 

 

39,782

 

Gain on sale of investment

 

0

 

 

 

(5,901

)

Other, net

 

0

 

 

 

38

 

Changes in operating assets and liabilities:

 

 

 

 

 

Accounts receivable

 

(43,948

)

 

 

(16,573

)

Prepaid expenses and other current assets

 

(20,195

)

 

 

(26,758

)

Inventory

 

11,974

 

 

 

(2,234

)

Other assets

 

(17,453

)

 

 

1,919

 

Accounts payable

 

47,417

 

 

 

(4,741

)

Accrued expenses and other current liabilities

 

20,712

 

 

 

5,380

 

Accrued compensation

 

(38,328

)

 

 

(35,606

)

Deferred revenue

 

10,823

 

 

 

17,205

 

Operating lease liabilities

 

(7,266

)

 

 

(5,833

)

Other liabilities

 

216

 

 

 

267

 

Net cash provided by operating activities

 

60,722

 

 

 

34,191

 

Investing activities:

 

 

 

 

 

Capital expenditures

 

(6,455

)

 

 

(4,405

)

Capitalized software

 

(69,213

)

 

 

(21,508

)

Proceeds from marketable securities

 

0

 

 

 

50,000

 

Proceeds from the sale of investment

 

0

 

 

 

10,901

 

Acquisitions of business, net of cash acquired

 

(0

)

 

 

(56,336

)

Other, net

 

3,264

 

 

 

3,150

 

Net cash used in investing activities

 

(72,404

)

 

 

(18,198

)

Financing activities:

 

 

 

 

 

Net proceeds from the exercise of stock options

 

4,980

 

 

 

17,781

 

Repurchase of 2022 Notes

 

0

 

 

 

(137

)

Proceeds from advances from financing companies

 

5,113

 

 

 

7,924

 

Payment against advances from financing companies

 

(7,789

)

 

 

(8,122

)

Proceeds from employee stock purchase plan

 

1,972

 

 

 

11,031

 

Cash received for withholding taxes on stock-based compensation, net

 

54

 

 

 

5,159

 

Other, net

 

(2,848

)

 

 

(98

)

Net cash provided by financing activities

 

1,482

 

 

 

33,538

 

Net decrease in cash and cash equivalents

 

(10,200

)

 

 

49,531

 

Foreign exchange difference

 

(2,119

)

 

 

869

 

Cash and cash equivalents at beginning of the period

 

893,480

 

 

 

733,324

 

Cash and cash equivalents at end of the period

$

881,161

 

 

$

783,724

 

 

 

 

 

 

 


TELADOC HEALTH, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share data, unaudited)

 

 

 

 

 

 

 

June 30,

 

December 31,

 

 

2022

 

    

 

2021

 

Assets

 

 

 

 

 

Current assets:

 

 

 

 

 

Cash and cash equivalents

$

881,161

 

 

$

893,480

 

Short-term investments

 

2,539

 

 

 

2,537

 

Accounts receivable, net of provision of $15,095 and $12,384, respectively

 

205,434

 

 

 

168,956

 

Inventories

 

60,260

 

 

 

73,079

 

Prepaid expenses and other current assets

 

107,875

 

 

 

87,387

 

Total current assets

 

1,257,269

 

 

 

1,225,439

 

Property and equipment, net

 

27,403

 

 

 

27,234

 

Goodwill

 

4,858,196

 

 

 

14,504,174

 

Intangible assets, net

 

1,872,172

 

 

 

1,910,278

 

Operating lease - right-of-use assets

 

49,795

 

 

 

46,780

 

Other assets

 

37,940

 

 

 

20,703

 

Total assets

$

8,102,775

 

 

$

17,734,608

 

Liabilities and stockholders’ equity

 

 

 

 

 

Current liabilities:

 

 

 

 

 

Accounts payable

$

94,371

 

 

$

47,257

 

Accrued expenses and other current liabilities

 

127,187

 

 

 

102,933

 

Accrued compensation

 

51,594

 

 

 

91,941

 

Deferred revenue-current

 

86,254

 

 

 

75,569

 

Advances from financing companies

 

12,073

 

 

 

13,313

 

Total current liabilities

 

371,479

 

 

 

331,013

 

Other liabilities

 

1,609

 

 

 

1,492

 

Operating lease liabilities, net of current portion

 

44,274

 

 

 

41,773

 

Deferred revenue, net of current portion

 

3,373

 

 

 

3,834

 

Advances from financing companies, net of current portion

 

7,855

 

 

 

9,291

 

Deferred taxes, net

 

55,926

 

 

 

75,777

 

Convertible senior notes, net

 

1,533,609

 

 

 

1,225,671

 

Commitments and contingencies

 

 

 

 

 

Stockholders’ equity:

 

 

 

 

 

Common stock, $0.001 par value; 300,000,000 shares authorized; 161,892,008 shares and 160,469,325 shares issued and outstanding as of June 30, 2022 and December 31, 2021, respectively

 

162

 

 

 

160

 

Additional paid-in capital

 

17,239,092

 

 

 

17,473,336

 

Accumulated deficit

 

(11,124,740

)

 

 

(1,421,454

)

Accumulated other comprehensive loss

 

(29,864

)

 

 

(6,285

)

Total stockholders’ equity

 

6,084,650

 

 

 

16,045,757

 

Total liabilities and stockholders’ equity

$

8,102,775

 

 

$

17,734,608

 

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 and financial and business trends 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.

EBITDA consists of net loss before interest; other expense (income), net, including foreign exchange gain or loss; provision for income taxes; depreciation and amortization; goodwill impairment; and loss on extinguishment of debt. Adjusted EBITDA consists of net loss before interest; other expense (income), net, including foreign exchange gain or loss; provision for income taxes; depreciation and amortization; goodwill impairment; loss on extinguishment of debt; stock-based compensation; and acquisition, integration, and transformation costs.

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 provision for income taxes, net loss, net loss per share or any other performance measures derived in accordance with GAAP.

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 goodwill impairment;

  • EBITDA and adjusted EBITDA do not reflect the interest expense on our debt;

  • EBITDA and adjusted EBITDA eliminate the impact of the provision for income taxes on our results of operations;

  • EBITDA and adjusted EBITDA do not reflect the loss on extinguishment of debt;

  • EBITDA and adjusted EBITDA do not reflect other expense (income), net;

  • adjusted EBITDA does not reflect the significant acquisition, integration, and transformation costs. Acquisition, integration and transformation costs include investment banking, financing, legal, accounting, consultancy, integration, fair value changes related to contingent consideration and certain other transaction costs related to mergers and acquisitions. It also includes costs related to certain business transformation initiatives focused on integrating and optimizing various operations and systems, including upgrading our customer relationship management (CRM) and enterprise resource planning (ERP) systems. These transformation cost adjustments made to our results do not represent normal, recurring, operating expenses necessary to operate the business but rather, incremental costs incurred in connection with our acquisition and integration activities;

  • 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 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.

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,

 

 

    

 

2022

 

    

 

2021

 

    

 

2022

 

    

 

2021

 

    

Revenue

 

$

592,379

 

 

$

503,139

 

 

$

1,157,729

 

 

$

956,814

 

 

Cost of revenue (exclusive of depreciation and amortization, which is shown separately below)

 

 

(182,470

)

 

 

(160,273

)

 

 

(369,495

)

 

 

(306,232

)

 

Depreciation and amortization of intangible assets

 

 

(6,167

)

 

 

(1,240

)

 

 

(11,286

)

 

 

(5,354

)

 

Gross Profit

 

 

403,742

 

 

 

341,626

 

 

 

776,948

 

 

 

645,228

 

 

Depreciation and amortization of intangible assets

 

 

6,167

 

 

 

1,240

 

 

 

11,286

 

 

 

5,354

 

 

Adjusted gross profit

 

$

409,909

 

 

$

342,866

 

 

$

788,234

 

 

$

650,582

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross margin

 

 

68.2

 

%

 

67.9

 

%

 

67.1

 

%

 

67.4

 

%

Adjusted gross margin

 

 

69.2

 

%

 

68.1

 

%

 

68.1

 

%

 

68.0

 

%


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, except for outlook data, unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Quarter Ended

 

Six Months Ended 

 

Outlook in millions (1)

 

June 30,

 

June 30,

 

Third Quarter

 

Full Year

 

 

2022

 

  

 

2021

 

  

 

2022

 

  

 

2021

 

  

2022

  

2022

Net loss

$

(3,101,461

)

 

$

(133,819

)

 

$

(9,775,984

)

 

$

(333,468

)

 

$

(138) - ($96)

 

$

(9,967) - ($9,866)

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Goodwill impairment

 

3,030,000

 

 

 

0

 

 

 

9,630,000

 

 

 

 

 

 

 

 

 

 

Loss on extinguishment of debt

 

(0

)

 

 

31,419

 

 

 

(0

)

 

 

42,878

 

 

 

 

 

 

 

Other expense (income), net

 

1,760

 

 

 

(217

)

 

 

1,036

 

 

 

(5,869

)

 

 

 

 

 

 

Interest expense, net

 

4,337

 

 

 

20,473

 

 

 

9,817

 

 

 

42,598

 

 

 

 

 

 

 

Provision for income taxes

 

(1,188

)

 

 

3,196

 

 

 

(800

)

 

 

90,235

 

 

 

 

 

 

 

Depreciation and amortization

 

59,371

 

 

 

51,341

 

 

 

118,304

 

 

 

100,000

 

 

 

 

 

 

 

Total Adjustments

 

3,094,280

 

 

 

106,212

 

 

 

9,758,357

 

 

 

269,842

 

 

 

92 - 67

 

 

9,926 - 9,874

EBITDA

 

(7,181

)

 

 

(27,607

)

 

 

(17,627

)

 

 

(63,626

)

 

 

(46) - (29)

 

 

(41) - 8

Adjustments:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stock-based compensation

 

51,000

 

 

 

82,970

 

 

 

111,436

 

 

 

169,270

 

 

 

 

 

 

 

Acquisition, integration, and transformation costs

 

2,892

 

 

 

11,421

 

 

 

7,399

 

 

 

17,744

 

 

 

 

 

 

 

Total Adjustments

 

53,892

 

 

 

94,391

 

 

 

118,835

 

 

 

187,014

 

 

 

81 - 74

 

 

281 - 257

Adjusted EBITDA

$

46,711

 

 

$

66,784

 

 

$

101,208

 

 

$

123,388

 

 

$

35 - $45

 

$

240 - $265

(1) We have not provided a full line-item reconciliation for net loss to EBITDA or adjusted EBITDA outlook because we do not provide outlook on the individual reconciling items between net loss, EBITDA, and adjusted EBITDA. This is due to the uncertainty as to timing, and the potential variability, of the individual reconciling items such as goodwill impairment, stock-based compensation and the related tax impact, provision for income taxes and acquisition, integration, and transformation costs, the effect of which may be significant. Accordingly, a full line-item reconciliation of the GAAP measure to the corresponding non-GAAP financial measure outlook is not available without unreasonable effort.

Investors:
Patrick Feeley
914-265-7925
IR@teladochealth.com

Media:
Chris Stenrud
860-491-8821
pr@teladochealth.com