Teladoc Health, Inc. (NYSE: TDOC) has firmly established itself as the global leader in whole person virtual care, forging a new healthcare experience with better convenience, outcomes, and value. The company's mission is to empower all people everywhere to live their healthiest lives by transforming the healthcare experience.

Teladoc Health was incorporated in the State of Texas in June 2002 and changed its state of incorporation to the State of Delaware in October 2008. Effective August 10, 2018, Teladoc, Inc. changed its corporate name to Teladoc Health, Inc. The company's principal executive office is located in Purchase, New York.

Business Overview

Teladoc Health operates in two reportable segments: Teladoc Health Integrated Care and BetterHelp. The Integrated Care segment includes a suite of global virtual medical services including general medical, expert medical services, specialty medical, chronic condition management, mental health, and enabling technologies and enterprise telehealth solutions for hospitals and health systems. The BetterHelp segment includes virtual therapy and other wellness services provided on a global basis which are predominantly marketed and sold on a direct-to-consumer basis.

In the Integrated Care segment, Teladoc Health has seen continued strong interest in its whole-person care suite of products. First quarter Integrated Care revenue grew 7.8% year-over-year to $377 million, benefiting from high single-digit growth in the Chronic Care book of business, as well as strong visit revenues driven by increased infectious disease activity and an 8% increase in membership year-over-year. Chronic Care enrollment remained strong, up 9% year-over-year in the first quarter.

The BetterHelp segment, however, has faced some challenges in recent quarters. First quarter BetterHelp segment revenue decreased 4% year-over-year to $269 million, driven by an 11% decrease in paying users. The company has brought in new leadership for BetterHelp and is seeing improvements in retention and in the international business, which are helping offset some of the impact from higher customer acquisition costs in the U.S.

Financials

For the full year 2023, Teladoc Health reported annual revenue of $2,602,415,000, annual net income of -$220,368,000, annual operating cash flow of $350,021,000, and annual free cash flow of $193,673,000.

In the first quarter of 2024, the company reported consolidated revenue of $646,131,000, a 3% increase from the prior year period. Adjusted EBITDA for the quarter was $63,140,000, representing a margin of 9.8% and a 20% year-over-year increase.

The Integrated Care segment generated $377,111,000 in revenue in the first quarter, an 8% increase from the prior year. Adjusted EBITDA for the Integrated Care segment was $47,674,000, representing a margin of 12.6% and a 36% year-over-year increase. The BetterHelp segment reported revenue of $269,020,000, a 4% decrease from the prior year, with adjusted EBITDA of $15,466,000 and a margin of 5.7%.

Outlook

For the full year 2024, Teladoc Health expects consolidated revenue to be in the range of $2.635 billion to $2.735 billion, representing growth of 1% to 5%. The company expects consolidated adjusted EBITDA of $350 million to $390 million, representing growth of 7% to 19% on a year-over-year basis. Free cash flow is expected to be $210 million to $240 million.

In the Integrated Care segment, the company expects revenue growth in the low to mid-single digits for the full year, with higher revenues in the second half versus the first half due primarily to the enrollment ramp in Chronic Care and a growing contribution from the nearly 6 million new Integrated Care members added since the second quarter of last year. Adjusted EBITDA margins are expected to expand by 150 to 250 basis points for the full year.

For the BetterHelp segment, the company expects flat to low single-digit revenue growth for the full year, with growth accelerating in the second half of the year. Adjusted EBITDA margins are expected to be flat, plus or minus 50 basis points, for the full year.

Liquidity

Teladoc Health ended the first quarter of 2024 with $1.1 billion in cash and cash equivalents on its balance sheet, providing significant financial flexibility and capacity to invest in the business. The company has three series of convertible senior notes outstanding, with a total net carrying amount of $1,539,546,000 as of March 31, 2024.

Geographic Breakdown

Teladoc Health generates the majority of its revenue from the United States, which accounted for $547,600,000, or 85%, of total revenue in the first quarter of 2024. International revenue was $98,531,000, or 15% of total revenue.

Risks and Challenges

Teladoc Health faces several risks and challenges, including competition from other telehealth providers, regulatory changes, and the ability to effectively integrate and scale its various business segments. The company's BetterHelp segment has faced headwinds in recent quarters, and the company is working to address these challenges through new leadership and strategic initiatives.

Conclusion

Teladoc Health has solidified its position as the global leader in whole person virtual care, with a strong performance in its Integrated Care segment and a plan to address the challenges in its BetterHelp segment. The company's financial strength, with over $1 billion in cash and cash equivalents, provides it with the resources to continue investing in innovation and growth. While the company faces some risks and challenges, its focus on execution and its long-term growth strategy position it well for the future.