
Teladoc Health Focuses On Profitability And Misses Revenue Targets
Telehealth leader Teladoc reported revenue growth of 8% year-over-year, totaling $660.2 million in Q3 2023 compared to consensus forecasts of $664.1 million. Notably, revenue from U.S. operations expanded by 7%, reaching $569.3 million, while international revenue grew 17% to reach $90.9 million.
Within the Teladoc Health portfolio, the Integrated Care segment achieved a 9% increase in revenue, reaching $374.4 million in the third quarter of 2023. The BetterHelp segment, Teladoc’s acquired behavioral health subsidiary, grew 8% to $285.8 million. Management noted that it has taken a more balanced approach to growth focusing on profitability and margins across the business. The company noted strength in its chronic care solutions for major conditions such as diabetes, hypertension, and weight management and noted they are increasingly selling bundled solution sets. Chronic care enrollment increased 13% year-over-year to 1.12 million members. Management noted that some competitors are struggling given cash constraints and weak balance sheets which they see as a favorable long-term trend.
Teladoc Health reported a net loss of $57.1 million, equivalent to ($0.35) per share for the third quarter of 2023 compared to street forecasts of ($0.37) compared to ($0.45) per share last year. Teladoc Health’s adjusted EBITDA grew 73% in Q3 2023, totaling $88.8 million. The Integrated Care segment’s adjusted EBITDA also grew substantially by 62%, reaching $62.8 million. The BetterHelp segment had 133% increase in adjusted EBITDA, totaling $26.0 million for the third quarter of 2023. GAAP gross margin, which includes depreciation and amortization was 68.6% for the third quarter of 2023. Free cash flow in the quarter was $68 million.
Looking ahead, Teladoc Health outlined its financial outlook based on current market conditions and expectations. For the fourth quarter of 2023, the company anticipates revenue in the range of $658 to $683 million. The street had been modeling $686.6 million. Adjusted EBITDA is expected to be in the range of $107 to $117 million, and the net loss per share is projected to be between ($0.33) and ($0.23). The company forecasts that the number of U.S. Integrated Care Members will reach 89 to 90 million.