Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Feb. 22, 2023 | Jun. 30, 2022 | |
Document and Entity Information | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Document Period End Date | Dec. 31, 2022 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity File Number | 001-37477 | ||
Entity Registrant Name | TELADOC HEALTH, INC. | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 04-3705970 | ||
Entity Address, Address Line One | 2 Manhattanville Road | ||
Entity Address, Address Line Two | Suite 203 | ||
Entity Address, City or Town | Purchase | ||
Entity Address, State or Province | NY | ||
Entity Address, Postal Zip Code | 10577 | ||
City Area Code | 203 | ||
Local Phone Number | 635-2002 | ||
Title of 12(b) Security | Common Stock, par value $0.001 per share | ||
Trading Symbol | TDOC | ||
Security Exchange Name | NYSE | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
ICFR Auditor Attestation Flag | true | ||
Entity Voluntary Filers | No | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Common Stock, Shares Outstanding | 162,617,192 | ||
Entity Public Float | $ 5,334,035,010 | ||
Auditor Name | Ernst & Young LLP | ||
Auditor Firm ID | 42 | ||
Auditor Location | New York, New York | ||
Entity Central Index Key | 0001477449 | ||
Document Fiscal Year Focus | 2022 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Current assets: | ||
Cash and cash equivalents | $ 918,182 | $ 893,480 |
Short-term investments | 0 | 2,537 |
Accounts receivable, net of allowance of $14,800 and $12,384, respectively | 210,554 | 168,956 |
Inventories | 56,342 | 73,079 |
Prepaid expenses and other current assets | 130,310 | 87,387 |
Total current assets | 1,315,388 | 1,225,439 |
Property and equipment, net | 29,641 | 27,234 |
Goodwill | 1,073,190 | 14,504,174 |
Intangible assets, net | 1,836,765 | 1,910,278 |
Operating lease - right-of-use assets | 41,831 | 46,780 |
Other assets | 48,540 | 20,703 |
Total assets | 4,345,355 | 17,734,608 |
Current liabilities: | ||
Accounts payable | 47,690 | 47,257 |
Accrued expenses and other current liabilities | 168,693 | 102,933 |
Accrued compensation | 81,554 | 91,941 |
Deferred revenue-current | 90,457 | 75,569 |
Advances from financing companies | 11,375 | 13,313 |
Total current liabilities | 399,769 | 331,013 |
Other liabilities | 1,618 | 1,492 |
Operating lease liabilities, net of current portion | 38,042 | 41,773 |
Deferred revenue, net of current portion | 3,872 | 3,834 |
Advances from financing companies, net of current portion | 8,082 | 9,291 |
Deferred taxes, net | 50,939 | 75,777 |
Convertible senior notes, net | 1,535,288 | 1,225,671 |
Commitments and contingencies (Note 13) | ||
Stockholders' equity: | ||
Common stock, $0.001 par value; 300,000,000 shares authorized; 162,840,360 shares and 160,469,325 shares issued and outstanding as of December 31, 2022 and December 31, 2021, respectively | 163 | 160 |
Additional paid-in capital | 17,358,645 | 17,473,336 |
Accumulated deficit | (15,008,287) | (1,421,454) |
Accumulated other comprehensive loss | (42,776) | (6,285) |
Total stockholders' equity | 2,307,745 | 16,045,757 |
Total liabilities and stockholders' equity | $ 4,345,355 | $ 17,734,608 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Consolidated Balance Sheets | ||
Allowance for accounts receivable | $ 14,800 | $ 12,384 |
Common stock par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 300,000,000 | 300,000,000 |
Common stock, shares issued | 162,840,360 | 160,469,325 |
Common stock, shares outstanding | 162,840,360 | 160,469,325 |
Consolidated Statements of Oper
Consolidated Statements of Operations and Other Comprehensive Loss - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Consolidated Statements of Operations and Other Comprehensive Loss | |||
Revenue | $ 2,406,840 | $ 2,032,707 | $ 1,093,962 |
Expenses: | |||
Cost of revenue (exclusive of depreciation and amortization, which is shown separately below) | 743,987 | 650,258 | 390,829 |
Operating expenses: | |||
Advertising and marketing | 623,536 | 416,726 | 226,146 |
Sales | 227,172 | 250,581 | 154,052 |
Technology and development | 333,629 | 311,884 | 164,941 |
General and administrative | 449,855 | 438,007 | 506,684 |
Acquisition, integration, and transformation costs | 15,620 | 26,643 | 88,236 |
Restructuring costs | 7,416 | 0 | 0 |
Depreciation and amortization | 256,027 | 204,239 | 69,495 |
Goodwill impairment | 13,402,812 | 0 | 0 |
Total expenses | 16,060,054 | 2,298,338 | 1,600,383 |
Loss from operations | (13,653,214) | (265,631) | (506,421) |
Loss on extinguishment of debt | 0 | 43,748 | 9,077 |
Other expense (income), net | 859 | (5,088) | 545 |
Interest expense, net | 9,270 | 80,365 | 59,950 |
Loss before provision for income taxes | (13,663,343) | (384,656) | (575,993) |
Provision for income taxes | (3,812) | 44,137 | (90,857) |
Net loss | (13,659,531) | (428,793) | (485,136) |
Other comprehensive income (loss), net of tax: | |||
Currency translation adjustment and other | (36,491) | (24,803) | 35,757 |
Comprehensive loss | $ (13,696,022) | $ (453,596) | $ (449,379) |
Net loss per share, basic (in dollars per share) | $ (84.60) | $ (2.73) | $ (5.36) |
Net loss per share, diluted (in dollars per share) | $ (84.60) | $ (2.73) | $ (5.36) |
Weighted-average shares used to compute basic net loss per share | 161,457,123 | 156,939,349 | 90,509,229 |
Weighted-average shares used to compute diluted net loss per share | 161,457,123 | 156,939,349 | 90,509,229 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity - USD ($) | Common Stock 2022 Notes | Common Stock 2025 Notes | Common Stock 2027 Notes | Common Stock Cumulative effect adjustment due to adoption of ASU 2020-06 | Common Stock | Additional Paid-In Capital 2022 Notes | Additional Paid-In Capital 2025 Notes | Additional Paid-In Capital 2027 Notes | Additional Paid-In Capital Cumulative effect adjustment due to adoption of ASU 2020-06 | Additional Paid-In Capital | Accumulated Deficit 2022 Notes | Accumulated Deficit 2025 Notes | Accumulated Deficit 2027 Notes | Accumulated Deficit Cumulative effect adjustment due to adoption of ASU 2020-06 | Accumulated Deficit | Accumulated Other Comprehensive Loss 2022 Notes | Accumulated Other Comprehensive Loss 2025 Notes | Accumulated Other Comprehensive Loss 2027 Notes | Accumulated Other Comprehensive Loss Cumulative effect adjustment due to adoption of ASU 2020-06 | Accumulated Other Comprehensive Loss | 2022 Notes | 2025 Notes | 2027 Notes | Cumulative effect adjustment due to adoption of ASU 2020-06 | Total |
Balance as of beginning of the period at Dec. 31, 2019 | $ 73,000 | $ 1,538,716,000 | $ (507,525,000) | $ (17,239,000) | $ 1,014,025,000 | ||||||||||||||||||||
Balance as of beginning of the period (in shares) at Dec. 31, 2019 | 72,761,941 | ||||||||||||||||||||||||
Stockholders' Equity (Deficit) | |||||||||||||||||||||||||
Exercise of stock options | $ 6,000 | 54,308,000 | 0 | 0 | 54,314,000 | ||||||||||||||||||||
Exercise of stock options (in shares) | 6,104,721 | ||||||||||||||||||||||||
Issuance of common stock upon vesting of restricted stock units | $ 2,000 | (23,707,000) | 0 | 0 | (23,705,000) | ||||||||||||||||||||
Issuance of common stock upon vesting of restricted stock units (in shares) | 2,150,523 | ||||||||||||||||||||||||
Issuance of stock under employee stock purchase plan | $ 0 | 4,722,000 | 0 | 0 | 4,722,000 | ||||||||||||||||||||
Issuance of stock under employee stock purchase plan (in shares) | 49,781 | ||||||||||||||||||||||||
Issuance of common stock for Notes | $ 4,000 | $ 0 | $ 694,127,000 | $ 40,741,000 | $ 0 | $ 0 | $ 0 | $ 0 | $ 694,131,000 | $ 40,741,000 | |||||||||||||||
Issuance of common stock for Notes (in shares) | 3,951,781 | 202,217 | |||||||||||||||||||||||
Sale of capped call related to the Livongo Notes | $ 0 | 91,659,000 | 0 | 0 | 91,659,000 | ||||||||||||||||||||
Livongo Notes guaranteed by the Company | 0 | 555,448,000 | 0 | 0 | 555,448,000 | ||||||||||||||||||||
Equity portion of extinguishment of Notes | $ 0 | $ 0 | (715,263,000) | (31,615,000) | 0 | 0 | 0 | 0 | (715,263,000) | (31,615,000) | |||||||||||||||
Equity component of Notes, net of issuance costs | $ 0 | $ 285,601,000 | $ 0 | $ 0 | $ 285,601,000 | ||||||||||||||||||||
Issuance of stock in acquisition | $ 65,000 | 13,884,856,000 | 0 | 0 | 13,884,921,000 | ||||||||||||||||||||
Issuance of stock in acquisition (in shares) | 65,060,135 | ||||||||||||||||||||||||
Stock-based compensation | $ 0 | 478,204,000 | 0 | 0 | 478,204,000 | ||||||||||||||||||||
Other comprehensive income (loss), net of tax | 0 | 0 | 0 | 35,757,000 | 35,757,000 | ||||||||||||||||||||
Net loss | 0 | 0 | (485,136,000) | 0 | (485,136,000) | ||||||||||||||||||||
Balance as of end of the period at Dec. 31, 2020 | $ 150,000 | 16,857,797,000 | (992,661,000) | 18,518,000 | 15,883,804,000 | ||||||||||||||||||||
Balance as of end of the period (in shares) at Dec. 31, 2020 | 150,281,099 | ||||||||||||||||||||||||
Stockholders' Equity (Deficit) | |||||||||||||||||||||||||
Exercise of stock options | $ 2,000 | 25,779,000 | 0 | 0 | 25,781,000 | ||||||||||||||||||||
Exercise of stock options (in shares) | 2,340,025 | ||||||||||||||||||||||||
Issuance of common stock upon vesting of restricted stock units | $ 2,000 | (2,000) | 0 | 0 | 0 | ||||||||||||||||||||
Issuance of common stock upon vesting of restricted stock units (in shares) | 1,687,557 | ||||||||||||||||||||||||
Issuance of stock under employee stock purchase plan | $ 0 | 15,331,000 | 0 | 0 | 15,331,000 | ||||||||||||||||||||
Issuance of stock under employee stock purchase plan (in shares) | 122,059 | ||||||||||||||||||||||||
Issuance of common stock for Notes | $ 1,000 | $ 5,000 | 270,111,000 | 920,886,000 | 0 | 0 | 0 | 0 | 270,112,000 | 920,891,000 | |||||||||||||||
Issuance of common stock for Notes (in shares) | 1,058,373 | 5,185,491 | |||||||||||||||||||||||
Recovery of excess common stock issued for acquisition | $ 0 | (40,329,000) | 0 | 0 | (40,329,000) | ||||||||||||||||||||
Recovery of excess common stock issued for acquisition (in shares) | (205,279) | ||||||||||||||||||||||||
Equity portion of extinguishment of Notes | $ 0 | $ 0 | $ (223,929,000) | (668,069,000) | $ 0 | 0 | $ 0 | 0 | $ (223,929,000) | (668,069,000) | |||||||||||||||
Stock-based compensation | $ 0 | 315,761,000 | 0 | 0 | 315,761,000 | ||||||||||||||||||||
Other comprehensive income (loss), net of tax | 0 | 0 | 0 | (24,803,000) | (24,803,000) | ||||||||||||||||||||
Net loss | 0 | 0 | (428,793,000) | 0 | (428,793,000) | ||||||||||||||||||||
Balance as of end of the period at Dec. 31, 2021 | $ 0 | $ 160,000 | $ (363,731,000) | 17,473,336,000 | $ 72,698,000 | (1,421,454,000) | $ 0 | (6,285,000) | $ (291,033,000) | 16,045,757,000 | |||||||||||||||
Balance as of end of the period (in shares) at Dec. 31, 2021 | 0 | 160,469,325 | |||||||||||||||||||||||
Stockholders' Equity (Deficit) | |||||||||||||||||||||||||
Exercise of stock options | $ 1,000 | 5,883,000 | 0 | 0 | 5,884,000 | ||||||||||||||||||||
Exercise of stock options (in shares) | 591,213 | ||||||||||||||||||||||||
Issuance of common stock upon vesting of restricted stock units | $ 2,000 | (2,000) | 0 | 0 | 0 | ||||||||||||||||||||
Issuance of common stock upon vesting of restricted stock units (in shares) | 1,508,570 | ||||||||||||||||||||||||
Issuance of stock under employee stock purchase plan | $ 0 | 7,064,000 | 0 | 0 | 7,064,000 | ||||||||||||||||||||
Issuance of stock under employee stock purchase plan (in shares) | 271,159 | ||||||||||||||||||||||||
Issuance of common stock for Notes | $ 0 | 7,000 | 0 | 0 | 7,000 | ||||||||||||||||||||
Issuance of common stock for Notes (in shares) | 93 | ||||||||||||||||||||||||
Equity portion of extinguishment of Notes | $ 0 | $ (2,000) | $ 0 | $ 0 | $ (2,000) | ||||||||||||||||||||
Stock-based compensation | $ 0 | 236,090,000 | 0 | 0 | 236,090,000 | ||||||||||||||||||||
Other comprehensive income (loss), net of tax | 0 | 0 | 0 | (36,491,000) | (36,491,000) | ||||||||||||||||||||
Net loss | 0 | 0 | (13,659,531,000) | 0 | (13,659,531,000) | ||||||||||||||||||||
Balance as of end of the period at Dec. 31, 2022 | $ 163,000 | $ 17,358,645,000 | $ (15,008,287,000) | $ (42,776,000) | $ 2,307,745,000 | ||||||||||||||||||||
Balance as of end of the period (in shares) at Dec. 31, 2022 | 162,840,360 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Cash flows from operating activities: | |||
Net loss | $ (13,659,531) | $ (428,793) | $ (485,136) |
Adjustments to reconcile net loss to net cash flows from operating activities: | |||
Goodwill impairment | 13,402,812 | 0 | 0 |
Depreciation and amortization | 256,027 | 204,239 | 69,495 |
Depreciation of rental equipment | 2,859 | 3,333 | 1,697 |
Amortization of right-of-use assets | 11,757 | 12,049 | 6,895 |
Provision for allowances | 15,398 | 16,941 | 5,284 |
Stock-based compensation | 217,852 | 302,586 | 475,531 |
Deferred income taxes | (7,840) | 41,800 | (90,158) |
Accretion of interest | 3,345 | 61,253 | 45,296 |
Loss on extinguishment of debt | 0 | 40,652 | 9,077 |
Gain on sale of investment | 0 | (5,901) | 0 |
Other, net | 7,584 | (3,845) | (1,009) |
Changes in operating assets and liabilities: | |||
Accounts receivable | (61,641) | (17,510) | (21,091) |
Prepaid expenses and other current assets | (41,081) | (31,090) | (12,565) |
Inventory | 14,800 | (19,494) | (24,732) |
Other assets | (27,767) | (3,547) | (8,135) |
Accounts payable | 1,876 | 1,188 | (87,995) |
Accrued expenses and other current liabilities | 61,217 | 18,175 | 20,125 |
Accrued compensation | (12,290) | (4,675) | 34,819 |
Deferred revenue | 15,240 | 20,554 | 17,751 |
Operating lease liabilities | (11,525) | (16,532) | (6,300) |
Other liabilities | 200 | 2,607 | (2,360) |
Net cash provided by (used in) operating activities | 189,292 | 193,990 | (53,511) |
Cash flows from investing activities: | |||
Capital expenditures | (16,480) | (8,534) | (4,024) |
Capitalized software | (156,284) | (55,400) | (22,018) |
Proceeds from marketable securities | 2,507 | 50,000 | 2,496 |
Proceeds from the sale of investment | 0 | 10,901 | 0 |
Acquisitions of businesses, net of cash acquired | 0 | (78,663) | (567,429) |
Other, net | 2,514 | 8,715 | 0 |
Net cash used in investing activities | (167,743) | (72,981) | (590,975) |
Cash flows from financing activities: | |||
Net proceeds from the exercise of stock options | 5,884 | 25,781 | 54,314 |
Proceeds from the sale of capped call related to the Livongo Notes | 0 | 0 | 91,659 |
Proceeds from advances from financing companies | 11,873 | 15,275 | 6,002 |
Payment against advances from financing companies | (15,020) | (16,050) | (8,635) |
Payment of assumed indebtedness | 0 | 0 | (10,000) |
Proceeds from employee stock purchase plan | 6,501 | 16,810 | 4,722 |
Cash received for withholding taxes on stock-based compensation, net | 124 | 3,422 | (26,703) |
Other, net | (2,865) | (4,152) | 0 |
Net cash provided by financing activities | 6,497 | 40,947 | 859,136 |
Net increase in cash and cash equivalents | 28,046 | 161,956 | 214,650 |
Foreign exchange difference | (3,344) | (1,800) | 4,321 |
Cash and cash equivalents at beginning of the period | 893,480 | 733,324 | 514,353 |
Cash and cash equivalents at end of the period | 918,182 | 893,480 | 733,324 |
Income taxes paid | 2,512 | 3,974 | 1,324 |
Interest paid | 17,361 | 18,837 | 14,890 |
2022 Notes | |||
Cash flows from financing activities: | |||
Repurchase of Notes | 0 | (139) | (228,153) |
2027 Notes | |||
Cash flows from financing activities: | |||
Proceeds from issuance of Notes | 0 | 0 | 1,000,000 |
Payment of issuance costs of Notes | $ 0 | $ 0 | $ (24,070) |
Organization and Description of
Organization and Description of Business | 12 Months Ended |
Dec. 31, 2022 | |
Organization and Description of Business | |
Organization and Description of Business | Note 1. Organization and Description of Business Teladoc, Inc. 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. Unless the context otherwise requires, Teladoc Health, Inc., together with its subsidiaries, is referred to herein as “Teladoc Health” or the “Company”. The Company’s principal executive office is located in Purchase, New York. Teladoc Health is the global leader in whole person virtual care focused on forging a new healthcare experience with better convenience, outcomes and value around the world. On October 30, 2020, the Company completed the merger with Livongo Health, Inc. (“Livongo”), a transformational opportunity to improve the delivery, access and experience of chronic healthcare for individuals around the world. On July 1, 2020, the Company completed the acquisition of InTouch Technologies, Inc. (“InTouch”), a leading provider of enterprise telehealth solutions for hospitals and health systems. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2022 | |
Summary of Significant Accounting Policies | |
Summary of Significant Accounting Policies | Note 2. Summary of Significant Accounting Policies Basis of Presentation and Principles of Consolidation These consolidated financial statements have been prepared in accordance with the United States (“U.S.”) generally accepted accounting principles (“GAAP”). The consolidated financial statements include the results of Teladoc Health, as well as three professional associations and twelve professional corporations (collectively, the “THMG Association”). Teladoc Health Medical Group, P.A., formerly Teladoc Physicians, P.A. (“THMG”) is party to a Services Agreement by and among it and the professional associations and professional corporations pursuant to which each professional association and professional corporation provides services to THMG. Each professional association and professional corporation is established pursuant to the requirements of its respective domestic jurisdiction governing the corporate practice of medicine. The Company holds a variable interest in the THMG Association, which contracts with physicians and other health professionals in order to provide services to Teladoc Health. The THMG Association is considered a variable interest entity (“VIE”) since it does not have sufficient equity to finance its activities without additional subordinated financial support. An enterprise having a controlling financial interest in a VIE must consolidate the VIE if it has both power and benefits—that is, it has (1) the power to direct the activities of a VIE that most significantly impact the VIE’s economic performance (power) and (2) the obligation to absorb losses of the VIE that potentially could be significant to the VIE or the right to receive benefits from the VIE that potentially could be significant to the VIE (benefits). The Company has the power and rights to control all activities of the THMG Association and funds and absorbs all losses of the VIE and appropriately consolidates the THMG Association. Total revenue and net income (loss) for the VIE were $244.5 million and ($1.0) million, $230.2 million and ($1.6) million and $203.9 million and $2.1 million for the years ended December 31, 2022, 2021 and 2020, respectively. The VIE’s total assets, all of which were current, were $106.7 million and $58.5 million at December 31, 2022 and 2021, respectively. The VIE’s total liabilities, all of which were current, were $143.8 million and $94.6 million at December 31, 2022 and 2021, respectively. The VIE’s total stockholders’ deficit was $37.1 million and $36.1 million at December 31, 2022 and 2021, respectively. All intercompany transactions and balances have been eliminated. Business Combinations The Company accounts for its business combinations using the acquisition method of accounting. The purchase price is attributed to the fair value of the assets acquired and liabilities assumed. Transaction costs directly attributable to the acquisition are expensed as incurred. Identifiable assets and liabilities acquired or assumed are measured separately at their fair values as of the acquisition date. The excess of the purchase price of acquisition over the fair value of the identifiable net assets of the acquiree is recorded as goodwill. The results of businesses acquired in a business combination are included in the Company’s consolidated financial statements from the date of acquisition. When the Company issues stock-based or cash awards to an acquired company’s stockholders, the Company evaluates whether the awards are consideration or compensation for post-acquisition services. The evaluation includes, among other things, whether the vesting of the awards is contingent on the continued employment of the acquired company’s stockholders beyond the acquisition date. If continued employment is required for vesting, the awards are treated as compensation for post-acquisition services and recognized as expense over the requisite service period. Determining the fair value of assets acquired and liabilities assumed requires management to use significant judgment and estimates, including the selection of valuation methodologies, estimates of future revenue and cash flows, discount rates and selection of comparable companies. The estimates and assumptions used to determine the fair values and useful lives of identified intangible assets could change due to numerous factors, including market conditions, technological developments, economic conditions, and competition. In connection with determination of fair values, the Company may engage a third-party valuation specialist to assist with the valuation of intangible and certain tangible assets acquired and certain obligations assumed. Acquisition-related transaction costs incurred by the Company are not included as a component of consideration transferred but are accounted for as an operating expense in the period in which the costs are incurred. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. The Company bases its estimates on historical experience, current business and economic factors, and various other assumptions that the Company believes are necessary to form a basis for making judgments about the carrying values of assets and liabilities, the recorded amounts of revenue and expenses, and the disclosure of contingent assets and liabilities. The Company is subject to uncertainties such as the impact of future events, economic and political factors, and changes in the Company’s business environment; therefore, actual results could differ from these estimates. Accordingly, the accounting estimates used in the preparation of the Company’s consolidated financial statements will change as new events occur, as more experience is acquired, as additional information is obtained and as the Company’s operating environment evolves. The Company believes that estimates used in the preparation of these consolidated financial statements are reasonable; however, actual results could differ materially from these estimates. Changes in estimates are made when circumstances warrant. Such changes in estimates and refinements in estimation methodologies are reflected in the Consolidated Statement of Operations; if material, the effects of changes in estimates are disclosed in the Notes to Consolidated Financial Statements. Significant estimates and assumptions by management affect areas including the value and useful life of long-lived assets (including intangible assets), the value of goodwill, the capitalization and amortization of software development costs, deferred device and contract costs, allowances for sales and for doubtful accounts, and the accounting for business combinations. Other significant areas include revenue recognition (including performance guarantees), the accounting for income taxes, contingencies, litigation and related legal accruals, and the accounting for stock-based compensation awards. Segment Information Prior to October 1, 2022, the Company operated as a single segment reflecting its integrated virtual care system for delivering, enabling, and empowering whole person health. Effective October 1, 2022, the Company adopted a new organizational and reporting structure based on two reportable segments, which are the same as its reporting units: Teladoc Health Integrated Care (“Integrated Care”) and BetterHelp. This new structure reflects how management now allocates resources and assesses performance. See Note 20. “Segments” for further information. Fair Value Measurements The carrying value of the Company’s financial instruments, including cash equivalents, short-term investments, accounts receivable, accounts payable, accrued liabilities and accrued compensation, approximates fair value due to their short-term nature. The Company measures its financial assets and liabilities at fair value at each reporting period using a fair value hierarchy that requires it to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. Revenue Recognition The Company follows the revenue accounting requirements of Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (Topic 606) (“Accounting Standards Codification (“ASC”) 606”). ASC 606 establishes a principle for recognizing revenue upon the transfer of promised goods or services to customers, in an amount that reflects the expected consideration received in exchange for those goods or services. The core principle of ASC 606 is to recognize revenue to depict the transfer of promised goods or services to the Company’s customers, which primarily consist of employers, health plans, hospitals and health systems, insurance, and financial services companies (collectively “Clients”) as well as individual members, in an amount that reflects the consideration the entity expects to be entitled in exchange for those goods or services. This principle is achieved through applying the following five-step approach: • • • • • Integrated Care Segment As it relates to the Company’s Integrated Care segment, the Company primarily generates virtual healthcare service revenue from contracts with Clients who purchase access to the Company’s professional provider network or medical experts for their employees, dependents and other beneficiaries. The Company’s Client contracts include a per-member-per-month (“PMPM”) access fee as well as certain contracts that also include additional revenue on a per-virtual healthcare visit basis for general medical, or other specialty visits or expert medical service on a per case basis. The Company also has certain contracts that generate revenue based solely on a per healthcare visit basis for general medical and other specialty visits. Revenues are also generated from contracts with Clients in hospital and health systems for the Company’s chronic care management solutions. Substantially all of this revenue is derived from monthly access fees that are recognized as services are rendered and earned under subscription agreements with Clients that are based on a per-participant-per-month model, using the number of active enrolled members each month for the minimum enrollment period. These solutions integrate devices, supplies, access to the Company’s web-based platform, and clinical and data services to provide an overall health management solution. The promises to transfer these goods and services are not separately identifiable and is considered a single continuous service comprised of a series of distinct services that are substantially the same and have the same pattern of transfer (i.e., distinct days of service). These services are consumed as they are received, and the Company recognizes revenue each month using the variable consideration allocation exception since the nature of the obligations and the variability of the payment being based on the number of active members are aligned. Revenue is also generated from contracts with Clients for the sale and rental of equipment consisting of virtual healthcare devices which allow physicians to access the Company’s hosted virtual healthcare platform. These contracts also include multiple performance obligations, and the Company determines the standalone selling prices based on overall pricing objectives. In some arrangements, the Company’s devices are rented to certain qualified Clients that qualify as either sales-type lease or operating lease arrangements and are subject to lease accounting guidance. The Company records access fees from Clients accessing its professional provider network or hosted virtual healthcare platform or chronic care management platforms, visit fee revenue for general medical, expert medical service and other specialty visits as well as other revenue primarily associated with virtual healthcare device equipment included with its hosted virtual healthcare platform. Visit and other revenues are reported as “Other” revenue in the Company’s consolidated financial statements. The Company’s Client agreements generally have a term of one three For contracts where revenue is generated on a per healthcare visit basis, revenues are recognized when the visits are completed as the Company has delivered on its stand ready obligation to provide access. For other revenue, which primarily includes virtual healthcare devices, the Company’s performance obligation is satisfied when the equipment is provided to the Client and revenue is recognized at a point in time upon shipment. The Company generally bills for the virtual healthcare services on a monthly basis, in advance or in arrears depending on the service, with payment terms generally being 30 days . There are not significant differences between the timing of revenue recognition and billing. Consequently, the Company has determined that Client contracts do not include a financing component. Revenue is recognized in an amount that reflects the consideration that is expected in exchange for the service and for certain contracts include a variable transaction price as the number of members may vary from period to period. Based on historical experience, the Company estimates this amount. The Company’s contracts do not generally contain refund provisions for fees earned related to services performed. Additionally, certain of the Company’s contracts include Client performance guarantees and pricing adjustments that are based upon minimum member utilization and guarantees by the Company for specific service level performance, member satisfaction scores, cost savings guarantees, and health outcome guarantees. Performance guarantees are estimated at each reporting period based on the Company’s historical performance of the underlying criteria or the customer’s specific performance as of that reporting date. Any estimated adjustments to the contract price for achieving or not achieving the performance guarantee are recognized as an adjustment to revenue in the period. For the years ended December 31, 2022, 2021, and 2020, revenue recognized from performance obligations related to prior periods for the changes in transaction price or Client performance guarantees was $4.4 million, $5.6 million, and $1.9 million, respectively. The Company has elected the optional exemption to not disclose the remaining performance obligations of its contracts since the majority of its contracts have a duration of one year or less and the variable consideration expected to be received over the duration of the contract is allocated entirely to the wholly unsatisfied performance obligations. For additional revenue, deferred revenue, deferred costs, and disclosures, refer to Note 3. “Revenue, Deferred Revenue, and Deferred Costs and Other.” BetterHelp Segment As it relates to the BetterHelp segment, users can purchase mental health services for an access fee, generally on a monthly basis. For other wellness services, users can purchase access to their consumer application for a subscription fee, generally for a period of one year. BetterHelp also provides mental health services to employers as part of employee assistance programs, with revenues recorded based on completion of visit. The BetterHelp service provides for member refunds. Based on historical experience, the Company estimates the expected amount of refunds to be issued which are recorded as a reduction of revenue. The Company issued refunds of approximately $79.2 million, $67.0 million, and $33.5 million for the years ended December 31, 2022, 2021, and 2020, respectively. Deferred Revenue Deferred revenue represents billed, but unrecognized revenue, and is comprised of fees received in advance of the delivery or completion of the services and amounts received in instances when revenue recognition criteria have not been met. Deferred revenue associated with upfront payments for a device is amortized ratably over the expected member enrollment period. Deferred revenue that will be recognized during the succeeding twelve-month period is recorded as current deferred revenue and the remaining portion is recorded as noncurrent deferred revenue. Deferred Costs and Other Deferred costs and other consist of deferred device costs and deferred contract costs. Deferred device costs consist of cost of inventory incurred in connection with delivery of services that are deferred and amortized over the shorter of the expected member enrollment period or the expected device life and recorded as cost of revenue. Deferred contract costs represent the incremental costs of obtaining a contract with a Client if the Company expects to recover such costs. The primary example of the Company’s costs to obtain a contract include incremental sales commissions to obtain contracts paid to its sales organization. A portion of these incremental costs to obtain Client contracts are deferred and then amortized on a straight-line basis over the period of benefit, which has been determined to be four years. The amounts subject to the services period are amortized in sales expense in the consolidated statement of operations. Deferred costs and other that are to be amortized within twelve months are recorded to deferred costs and other, current and the remainder is recorded to deferred costs and other, noncurrent on the Company’s consolidated balance sheets. Cost of Revenue (exclusive of depreciation and amortization, which is shown separately) Cost of revenue (exclusive of depreciation and amortization, which is shown separately) primarily consists of fees paid to the physicians and other health professionals; product costs; costs incurred in connection with the Company’s provider network operations and data center activities, which include employee-related expenses (including salaries and benefits, incentive compensation, and stock-based compensation) costs related to Client support; provider network operations center activities; medical records; magnetic resonance imaging; medical lab tests; translation; postage and medical malpractice insurance, and deferred device costs. Technology and Development Technology and development expenses include the costs of operating the Company’s on-demand technology infrastructure that are not directly related to changes in revenue or volume of visits, including certain licensed applications, information technology infrastructure, security, and compliance. The technology and development line item also contains amounts charged to expense for research and development, which include costs of new product development, costs to add new features or improve reliability or scalability of existing applications, and other software development and engineering costs to the extent that they are not capitalized. The research and development expenses may enable future revenue growth but are not directly related to current revenues. Technology and development expenses include personnel and related expenses (including salaries and benefits, incentive compensation, and stock-based compensation) for software engineering, information technology infrastructure, security and compliance, product development, and support for the Company’s efforts to add new features and ensure the reliability and scalability of its existing solutions. Technology and development expenses also include outsourced software engineering services, the costs of operating the Company’s on-demand technology infrastructure (whereas costs directly associated with changes in revenue are presented separately in cost of revenues), certain licensed applications, and stock-based compensation for its technology and development employees. The Company’s technology and development expenses exclude certain allocations of occupancy expense, capitalized software development costs, and depreciation and amortization. Research and Development Costs For the years ended December 31, 2022, 2021 and 2020, research and development of $106.9 million, $99.5 million, and $110.8 million, respectively, was recognized in the Company’s consolidated statements of operations in technology and development. Cash and Cash Equivalents Cash and cash equivalents consist of highly liquid investments with original maturities of three months or less from the date of purchase of $918.2 million at December 31, 2022. The Company’s cash and cash equivalents primarily consist of investments in money market funds. Cash and cash equivalents are stated at fair value. Accounts Receivable and Allowance for Doubtful Accounts Accounts receivable are recorded at the invoiced amount, net of allowances for doubtful accounts. The allowance for doubtful accounts reflects the Company’s best estimate of expected losses inherent in the accounts receivable balance. The Company determines the allowance based on historical experience, specific account information, and other currently available evidence. Accounts receivable deemed uncollectable are charged against the allowance for doubtful accounts when identified. Inventories Inventories consist of purchased components for assembling welcome kits, refill kits, and replacement components for the Company’s chronic care management solutions, and virtual health devices manufactured for sale or lease as part of the Company’s hosted virtual healthcare platform solution. Inventories are stated at the lower of cost and net realizable value. The cost of inventories is determined on a first-in, first-out (“FIFO”) basis or on a weighted average cost basis which approximates the FIFO basis. Inventory costs include direct materials, direct labor and contracting costs, certain indirect labor and manufacturing overhead, and inbound shipping charges. Inventories are assessed on a periodic basis for potentially obsolete and slow-moving inventory with write-downs being recorded when identified. Write-downs are measured as the difference between cost of the inventory and net realizable value based upon assumptions about future demand and obsolescence, and charged to cost of revenue (exclusive of depreciation and amortization shown separately) in the accompanying consolidated statement of operations. At the point of the loss recognition, a new lower cost basis for that inventory is established, and subsequent changes in facts and circumstances do not result in the restoration or increase in that newly established cost basis. Property and Equipment Property and equipment are stated at cost less accumulated depreciation. Depreciation is recorded using the straight-line method over the estimated useful lives of the respective asset as follows: Computer equipment 3 years Furniture and equipment 5 years Leasehold improvements Shorter of the lease term or the estimated useful lives of the improvements Rental equipment 4.3 years Operating Leases The Company adopted the new leases standard set forth under ASC Topic 842, “Leases,” or ASC Topic 842, as of January 1, 2019, Leases of Hosted Virtual Healthcare Platform The Company rents its hosted virtual healthcare platform for certain Clients under arrangements that qualify primarily as operating lease arrangements. The contracts include equipment consisting of virtual health devices which allow physicians access to the platform and there are multiple performance obligations where the Company determines the standalone selling prices based on overall selling prices and pricing objectives. In determining whether a transaction should be classified as a sales-type or operating lease, the Company considers whether: (1) ownership of the virtual healthcare device transfers to the lessee by the end of the term of the lease, (2) the lease grants the lessee an option to purchase the virtual healthcare device that the lessee is reasonably certain to exercise, (3) the lease term is for the major part of the remaining useful life of the virtual healthcare device, (4) the present value of the sum of the lease payments equals or exceeds substantially all of the fair value of the virtual healthcare device, and (5) it is expected that there will be no alternative use for the virtual healthcare device at the end of the lease term. The Company generally recognizes revenue for virtual healthcare devices in sales-type leases at a point in time upon shipment by the Client provided all other revenue recognition criteria have been met and these leases are not material. For operating lease arrangements, revenue for the virtual healthcare device is recognized over the lease term and generally on a straight-line basis. For both sales-type and operating lease arrangement, revenue associated with virtual healthcare platform access is recognized over the lease term on a straight-line basis. Rental Equipment Equipment is assigned to the rental pool upon the execution of a sales leasing arrangement. Rental equipment assets are generally stated at cost, less accumulated depreciation and reflected in property and equipment, net. Depreciation of rental equipment is provided on a straight-line basis, over the estimated useful lives of the respective assets, which is generally 4.3 years and is charged to cost of revenues. Maintenance and repairs are charged to expense as incurred while improvements are capitalized. When assets are retired or otherwise disposed of, the cost and accumulated depreciation are removed from the accounts, and any resulting gain or loss is reflected in the consolidated statement of operations in the period realized. Capitalized Software Development Costs Capitalized software development costs are included in intangible assets and are amortized on a straight-line basis over three Goodwill Goodwill represents the excess of the total purchase consideration over the fair value of the identifiable assets acquired and liabilities assumed in a business combination. Goodwill is not amortized but is tested for impairment at the reporting unit level annually on October 1 or more frequently if events or changes in circumstances indicate that it is more likely than not to be impaired. As of December 31, 2022, the Company operates as two reporting units under the guidance in ASC 350, “Intangibles- Goodwill and Other,” the Teladoc Health Integrated Care reporting unit and the BetterHelp reporting unit. When testing goodwill for impairment, the Company has the option of first performing a qualitative assessment to determine whether it is more likely than not that the fair value of its total company reporting unit is less than its carrying amount. If the Company elects to bypass the qualitative assessment, or if a qualitative assessment indicates it is more likely than not that carrying value exceeds its fair value, the Company performs a quantitative goodwill impairment test. Under the quantitative goodwill impairment test, if the Company’s reporting unit’s carrying amount exceeds its fair value, the Company will record an impairment charge based on that difference. To determine reporting unit fair value as part of the quantitative test, the Company uses a weighting of fair values derived from the income approach and the market approach. Under the income approach, the Company projects its future cash flows and discount these cash flows to reflect their relative risk. The cash flows used are consistent with those the Company uses in its internal planning, which reflects actual business trends experienced and its long-term business strategy. As such, key estimates and factors used in this method include, but are not limited to, revenue, margin and operating expense growth rates; as well as a discount rate and a terminal growth rate. Under the market approach, the Company uses the guideline company method to develop valuation multiples and compare the Company’s reporting unit to similar publicly traded companies. In order to further validate the reasonableness of fair value as determined by the income and market approaches described above, a reconciliation to market capitalization is then performed by estimating a reasonable control premium and other market factors. Future changes in the judgments, assumptions and estimates that are used in the impairment testing for goodwill could result in significantly different estimates of fair value. Other Intangible Assets Other intangible assets include client relationships, acquired technology, and trademarks resulting from business acquisitions as well as capitalized software development costs. The Company amortizes these definite-lived intangible assets over their estimated useful lives and review the estimated useful lives on a quarterly basis to determine if the period of economic benefit has changed. Customer relationships are amortized over a period of two to 20 years in relation to expected future cash flows. Technology is amortized over four three Through December 31, 2021, trademarks were amortized over three Definite-lived intangible assets are re-evaluated whenever events or changes in circumstances indicate that their estimated useful lives may require revision and/or carrying value of the related asset group may not be recoverable by its projected undiscounted cash flows. If the carrying value of the asset group is determined to be unrecoverable, an impairment charge would be recognized in an amount equal to the amount by which the carrying value of the asset group exceeds its fair value. Convertible Senior Notes Following the adoption on January 1, 2022 of the Financial Accounting Standards Board (“FASB”) Accounting Standards Update 2020-06, "Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity,” the Convertible Senior Notes (the “Notes”) and the Livongo Notes that the Company agreed to guarantee (the “Livongo Notes”) are fully accounted for and carried as liabilities, net of debt discounts on the Company’s Balance Sheets. Refer to Recently Issued Accounting Pronouncements. Stock-Based Compensation Stock-based compensation for stock options and restricted stock units (“RSUs”) granted is measured based on the grant-date fair value of the awards and recognized on a straight-line basis over the period during which the employee is required to perform services in exchange for the award (generally the vesting period of the award). The Company estimates the fair value of employee stock options using the Black-Scholes option-pricing model, except as noted. Stock-based compensation for performance stock units (“PSUs”) granted is measured based on the grant-date fair value of the awards and recognized on an accelerated tranche by tranche basis over the period during which the employee is required to perform services in exchange for the award (generally the vesting period of the award). The ultimate number of PSUs that are issued to an employee is the result of the actual performance of the Company at the end of the performance period compared to the performance targets and generally range from 0% to 200% of the initial grant. For stock-based compensation assumed in the Livongo merger, the Monte Carlo valuation model was the most suitable for valuation of options for the replaced and replacement awards from the merger. The Company recognizes forfeitures of share-based awards as they occur. The Company’s Employee Stock Purchase Plan (“ESPP”) permits eligible employees to purchase common stock at a discount through payroll deductions during defined offering periods. Under the ESPP, the Company may specify offerings with durations of not more than 27 months and may specify shorter purchase periods within each offering. Each offering will have one or more purchase dates on which shares of its common stock will be purchased for employees participating in the offering. An offering may be terminated under certain circumstances. The price at which the stock is purchased is equal to the lower of 85% of the fair market value of the common stock at the beginning of an offering period or on the date of purchase. Advances from Financing Companies The Company utilizes a third-party financing company to provide certain Clients with a rental option. Under these arrangements, the Company receives payment upfront from the financing companies and the financing companies collect the Client rental payments over the life of the rental agreement on a nonrecourse basis. The principal portion of these upfront payments ar |
Revenue, Deferred Revenue, and
Revenue, Deferred Revenue, and Deferred Costs and Other | 12 Months Ended |
Dec. 31, 2022 | |
Revenue, Deferred Revenue, and Deferred Costs and Other | |
Revenue, Deferred Revenue, and Deferred Costs and Other | Note 3. Revenue, Deferred Revenue, and Deferred Costs and Other The Company generates access fees from Clients, as well as individual paying users, accessing its professional provider network, hosted virtual healthcare platform, and chronic care management platforms. Visit fee revenue is generated for general medical, expert medical service, and other specialty visits and is reported as a component of other revenue in the financial statements. Revenue associated with virtual healthcare device equipment sales included with the Company’s hosted virtual healthcare platform is also reported in other revenue. Access revenue accounted for approximately 87%, 86%, and 78% of the Company’s total revenue for the years ended December 31, 2022, 2021, and 2020, respectively. The following table presents the Company’s revenues disaggregated by revenue source (in thousands): Year Ended December 31, 2022 2021 2020 Revenue by Type Access fees $ 2,103,814 $ 1,740,170 $ 847,255 Other 303,026 292,537 246,707 Total Revenue $ 2,406,840 $ 2,032,707 $ 1,093,962 Revenue by Geography U.S. Revenue $ 2,101,015 $ 1,774,024 $ 913,720 International Revenue 305,825 258,683 180,242 Total Revenue $ 2,406,840 $ 2,032,707 $ 1,093,962 Deferred Revenue For certain services, payment is required for future periods before the service is delivered to the member. The Company records deferred revenue when cash payments are received in advance of the Company’s performance obligation to provide services. Deferred revenue, current plus long-term, was $94.3 million at December 31, 2022 and $79.4 million at December 31, 2021. The net increase of $14.9 million and $24.6 million in the deferred revenue balance for the years ended December 31, 2022 and 2021, respectively, was primarily driven by increased cash payments received in advance of satisfying performance obligations primarily related to the services of the BetterHelp segment, and to a lesser extent, the Teladoc Health Integrated Care segment, offset by revenue recognized that was included in the deferred revenue balance at the beginning of the period. The Company anticipates that it will satisfy most of its performance obligation associated with the deferred revenue within the prospective fiscal year. Revenue recognized during the years ended December 31, 2022 and 2021 that was included in deferred revenue at the beginning of the periods was $73.7 million and $51.0 million, respectively. The Company expects to recognize $90.1 million and $4.2 million of revenue in 2023 2024 Deferred Device and Contract Costs Deferred device and contract costs are classified as a component of prepaid expenses and other current assets or other assets, depending on term, and consisted of the following (in thousands): As of December 31, As of December 31, 2022 2021 Deferred device and contract costs, current $ 29,956 $ 22,304 Deferred device and contract costs, noncurrent 8,404 6,249 Total deferred device and contract costs $ 38,360 $ 28,553 Deferred device and contract costs were as follows (in thousands): Deferred Device and Contract Costs Beginning balance as of December 31, 2021 $ 28,553 Additions 51,201 Cost of revenue recognized (41,394) Ending balance as of December 31, 2022 $ 38,360 |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2022 | |
Fair Value Measurements | |
Fair Value Measurements | Note 4. Fair Value Measurements The carrying value of the Company’s cash equivalents, short-term investments, accounts receivable, accounts payable, and accrued liabilities approximates fair value due to their short-term nature. The Company measures its financial assets and liabilities at fair value at each reporting period using a fair value hierarchy that requires it to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. A financial instrument’s classification within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. Three levels of inputs may be used to measure fair value: Level 1—Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets. Level 2—Include other inputs that are directly or indirectly observable in the marketplace. Level 3—Unobservable inputs that are supported by little or no market activity. The Company measures its cash equivalents at fair value on a recurring basis. The Company classifies its cash equivalents within Level 1 because they are valued using observable inputs that reflect quoted prices for identical assets in active markets and quoted prices directly in active markets. The Company’s short-term investments held as of December 31, 2021 consisted primarily of certificates of deposit held at financial institutions. The amortized cost of these investments, which are classified as Level 2, approximated their fair value. The following tables present information about the Company’s assets and liabilities that are measured at fair value on a recurring basis using the above input categories (in thousands): December 31, 2022 Level 1 Level 2 Total Cash and cash equivalents $ 918,182 $ 0 $ 918,182 December 31, 2021 Level 1 Level 2 Total Cash and cash equivalents $ 893,480 $ 0 $ 893,480 Short-term investments $ 0 $ 2,537 $ 2,537 There were no transfers between fair value measurement levels during the years ended December 31, 2022 or 2021. |
Inventories
Inventories | 12 Months Ended |
Dec. 31, 2022 | |
Inventories | |
Inventories | Note 5. Inventories Inventories consisted of the following (in thousands): As of December 31, As of December 31, 2022 2021 Raw materials and purchased parts $ 30,126 $ 28,540 Work in process 433 597 Finished goods 31,977 49,146 Inventory reserve (6,194) (5,204) Total inventories $ 56,342 $ 73,079 |
Prepaid Expenses and Other Curr
Prepaid Expenses and Other Current Assets | 12 Months Ended |
Dec. 31, 2022 | |
Prepaid Expenses and Other Current Assets | |
Prepaid Expenses and Other Current Assets | Note 6. Prepaid Expenses and Other Current Assets As of December 31, As of December 31, 2022 2021 Prepaid expenses $ 63,159 $ 38,255 Deferred device and contract costs, current 29,956 22,304 Other receivables 25,091 21,168 Other current assets 12,104 5,660 Total prepaid expenses and other current assets $ 130,310 $ 87,387 |
Goodwill
Goodwill | 12 Months Ended |
Dec. 31, 2022 | |
Goodwill | |
Goodwill | Note 7. Goodwill Goodwill consisted of the following (in thousands): Teladoc Health Integrated Care BetterHelp Total Balance as of December 31, 2020 $ 0 $ 0 $ 14,581,255 Additions associated with acquisitions 0 0 64,269 Purchase consideration adjustments net of deferred tax impacts 0 0 (55,801) Deferred tax adjustments 0 0 (66,505) Currency translation adjustment 0 0 (19,044) Balance as of December 31, 2021 0 0 14,504,174 Impairment 0 0 (12,270,000) Currency translation adjustment 0 0 (28,172) Reassignment to reporting units at October 1, 2022 1,132,812 1,073,190 2,206,002 Impairment (1,132,812) 0 (1,132,812) Currency translation adjustment 0 0 0 Balance as of December 31, 2022 $ 0 $ 1,073,190 $ 1,073,190 The Company experienced triggering events in 2022 due to sustained decreases in the Company’s share price, prompting impairment assessments of goodwill and long-lived assets including definite-lived intangibles as of March 31, 2022 and again as of June 30, 2022. Both impairment assessments in 2022 reflected a 75%/25% allocation between the income and market approaches. The Company believes the 75% weighting to the income approach continues to be appropriate as it more directly reflects the Company’s future growth and profitability expectations. The table below indicates changes in the most significant inputs to the Company’s impairment analysis on each testing date related to those triggering events and the annual impairment test. Testing Dates Reporting Unit Discount Rate Peer Group Revenue Multiples (Current Year/Subsequent Year) Excess of Reporting Unit Fair Value over Carrying Value March 31, 2022 Consolidated 12.0% 3.5x/3.0x None June 30, 2022 Consolidated 16.0% 2.0x/1.8x None October 1, 2022 Consolidated, Pre-reassignment 12.5% 1.65x/1.5x None, Pre-reassignment October 1, 2022 Teladoc Health Integrated Care 12.0% 1.2x/1.0x No remaining goodwill October 1, 2022 BetterHelp 13.5% 1.6x/1.3x Significant amount In March 2022, the Company updated the projected long-range cash flows used in the impairment assessment, including revenues, margin, and capital expenditures to reflect current conditions. Other changes in valuation assumptions included increases in interest rates and market volatility, resulting in a higher discount rate, and selection of lower revenue multiples based upon an assessment of a relevant peer group. As a result of this review, the Company did not identify an impairment to its definite-lived intangible assets or other long-lived assets, but the Company recorded a $6.6 billion non-deductible goodwill impairment charge (or $40.88 per basic and diluted share) in the quarter ended March 31, 2022. The non-cash charge had no impact on the provision for income taxes. As of June 30, 2022, the Company updated valuation assumptions. The discount rate was increased for a company risk premium to reflect the current perception of risks of achieving projected cash flows and, to a lesser extent, to reflect further increases in interest rates and market volatility. Additionally, revenue market multiples were lowered based upon an updated analysis of a consistent peer group. The assessment did not result in an impairment of definite-lived intangible assets or other long-lived assets but resulted in an additional $3.0 billion non-deductible goodwill impairment charge (or $18.77 per basic and diluted share). The non-cash charge had no impact on the provision for income taxes. On October 1, 2022, the Company reorganized its reporting structure to include two reportable segments, Integrated Care and BetterHelp, which also represent reporting units for purposes of assessing goodwill. The Company performed its annual impairment test consistent with the rules set forth under ASC 350, “Intangibles—Goodwill and Other,” performing an initial test on its then-existing reporting unit. The impairment test utilized the Company’s latest estimates of projected the asset groups identified for the purposes of testing the recoverability of each reporting unit’s definite-lived intangibles and other long-lived assets, which was passed by a significant margin. Lastly, a For the twelve months ended December 31, 2022, a $13.4 billion non-deductible goodwill impairment charge (or $83.01 per basic and diluted share) was recognized. There were no impairment charges recorded for goodwill or definite-lived intangible assets for the years ended December 31, 2021 or 2020 |
Property and Equipment, Net
Property and Equipment, Net | 12 Months Ended |
Dec. 31, 2022 | |
Property and Equipment, Net | |
Property and Equipment, Net | Note 8. Property and Equipment, Net Property and equipment, net, consisted of the following (in thousands): As of December 31, 2022 2021 Computer equipment $ 29,322 $ 28,330 Furniture and equipment 14,861 7,104 Leasehold improvement 13,298 12,983 Rental Equipment 12,679 11,018 Construction in progress 7,193 1,929 Total 77,353 61,364 Accumulated depreciation (47,712) (34,130) Property and equipment, net $ 29,641 $ 27,234 Depreciation expense for the years ended December 31, 2022, 2021 and 2020 was $11.4 million, $8.9 million, and $4.8 million, respectively. |
Intangible Assets, Net and Cert
Intangible Assets, Net and Certain Cloud Computing Costs | 12 Months Ended |
Dec. 31, 2022 | |
Intangible Assets, Net and Certain Cloud Computing Costs | |
Intangible Assets, Net and Certain Cloud Computing Costs | Note 9. Intangible Assets, Net and Certain Cloud Computing Costs Intangible assets, net consisted of the following (in thousands): Weighted Average Remaining Useful Accumulated Net Carrying Useful Life Life Gross Value Amortization Value (Years) December 31, 2022 Client relationships 2 to 20 years $ 1,458,384 $ (291,993) $ 1,166,391 13.5 Trademarks 2 to 15 years 325,171 (98,303) 226,868 7.0 Software 3 to 5 years 294,629 (78,373) 216,256 2.7 Technology 4 to 7 years 343,067 (115,817) 227,250 4.7 Intangible assets, net $ 2,421,251 $ (584,486) $ 1,836,765 10.4 December 31, 2021 Client relationships 2 to 20 years $ 1,465,926 $ (199,866) $ 1,266,060 14.5 Trademarks 3 to 15 years 326,392 (45,555) 280,837 9.5 Software 3 to 5 years 126,188 (40,767) 85,421 2.7 Technology 5 to 7 years 343,262 (65,302) 277,960 5.6 Intangible assets, net $ 2,261,768 $ (351,490) $ 1,910,278 12.0 Refer to Note 7. “Goodwill,” for the results of impairment testing of the Company’s intangible assets including goodwill. Amortization expense for intangible assets net of foreign currency remeasurement for intangible assets was $244.6 million, $195.3 million, and $64.7 million for the years ended December 31, 2022, 2021, and 2020, respectively. Included in the total amortization expense was amortization for capitalized software development cost of $46.1 million, $15.0 million, and $7.5 million for the years ended December 31, 2022, 2021, and 2020, respectively. In the year ended December 31, 2022, the Company recognized impairments of the full value associated with certain international product programs Periodic amortization that will be charged to expense over the remaining life of the intangible assets as of December 31, 2022 was as follows (in thousands): Years Ending December 31, 2023 $ 287,347 2024 254,686 2025 233,656 2026 173,698 2027 and thereafter 887,378 $ 1,836,765 In January 2022, the Company embarked upon a two-year migration strategy that integrates and moves selected consumer brands under Teladoc Health, which will serve as the primary business-to-business-to-consumer brand that meets all consumer healthcare needs. The evolution of brand names resulted in the weighted average life of the trademarks decreasing from 9.5 years to 7.5 years as of January 1, 2022, and an acceleration of amortization expense being expensed over 2022 and 2023. This change resulted in additional amortization expense of $23.2 million (or $0.14 per basic and diluted share) for the year ended December 31, 2022. Refer to Note 7. “Goodwill” for the results of impairment testing of the Company’s intangible assets, including goodwill. Net cloud computing costs are recorded in other assets within the balance sheets. As of December 31, 2022 and 2021, those costs were $25.4 million and $2.6 million, respectively. The associated expense for cloud computing costs, which are recorded in general and administration expense, was $1.9 million and $0.1 million for the years ended December 31, 2022 and 2021, respectively. |
Accrued Expenses and Other Curr
Accrued Expenses and Other Current Liabilities | 12 Months Ended |
Dec. 31, 2022 | |
Accrued Expenses and Other Current Liabilities | |
Accrued Expenses and Other Current Liabilities | Note 10. Accrued Expenses and Other Current Liabilities Accrued expenses and other current liabilities consisted of the following (in thousands): As of December 31, As of December 31, 2022 2021 Professional fees $ 10,152 $ 7,124 Consulting fees/provider fees 16,407 19,010 Client performance guarantees 4,145 3,034 Interest payable 1,480 1,480 Income tax payable 3,817 3,098 Insurance 5,981 3,884 Marketing 35,055 2,958 Operating lease liabilities – current 13,592 12,687 Franchise and sales taxes 10,183 9,965 Device replacement cost 349 6,263 Accrued rebates 14,542 4,619 Staff augmentation 3,391 1,858 Other 49,599 26,953 Total $ 168,693 $ 102,933 |
Convertible Senior Notes
Convertible Senior Notes | 12 Months Ended |
Dec. 31, 2022 | |
Convertible Senior Notes | |
Convertible Senior Notes | Note 11. Convertible Senior Notes Outstanding Convertible Senior Notes As of December 31, 2022, the Company had three series of convertible senior notes outstanding. The issuances of such notes originally consisted of (i) $1.0 billion aggregate principal amount of 1.25% convertible senior notes due 2027 (the “2027 Notes”), issued on May 19, 2020 for net proceeds to the Company of $975.9 million after deducting offering costs of approximately $24.1 million, (ii) $287.5 million aggregate principal amount of 1.375% convertible senior notes due 2025 (the “2025 Notes”), issued on May 8, 2018 for net proceeds to the Company of $279.1 million after deducting offering costs of approximately $8.4 million, and (iii) $550.0 million aggregate principal amount of 0.875% convertible senior notes due 2025 that were issued by Livongo on June 4, 2020 for which the Company had agreed to guarantee Livongo’s obligations (the “Livongo Notes” and together with the 2027 Notes, the 2025 Notes and the 2022 Notes (as defined below), the “Notes”). On June 27, 2017, the Company issued, at par value, $275.0 million aggregate principal amount of 3% convertible senior notes due 2022 (the “2022 Notes”), which were redeemed during the quarter ended March 31, 2021 as described below. On January 1, 2023, the Company agreed to assume all of Livongo’s rights and obligations under the Livongo Notes and the applicable indenture, and Livongo was released from such obligations. The following table presents certain terms of the Notes that were outstanding as of December 31, 2022: 2027 Notes 2025 Notes Livongo Notes Principal Amount Outstanding as of December 31, 2022 (in millions) $ 1,000.0 $ 0.7 $ 550.0 Interest Rate Per Year 1.25 % 1.375 % 0.875 % Fair Value as of December 31, 2022 (in millions) (1) $ 768.2 $ 0.3 $ 480.6 Fair Value as of December 31, 2021 (in millions) (1) $ 940.0 $ 1.3 $ 605.0 Maturity Date June 1, 2027 May 15, 2025 June 1, 2025 Optional Redemption Date June 5, 2024 May 22, 2022 June 5, 2023 Conversion Date December 1, 2026 November 15, 2024 March 1, 2025 Conversion Rate Per $1,000 Principal Amount as of December 31, 2022 4.1258 18.6621 13.94 Remaining Contractual Life as of December 31, 2022 4.4 years 2.4 years 2.4 years (1) The Notes are classified as Level 2 within the fair value hierarchy, as defined in Note 4. “Fair Value Measurements.” All of the Notes are unsecured obligations of the Company and rank senior in right of payment to the Company’s indebtedness that is expressly subordinated in right of payment to such Notes; equal in right of payment to the Company’s liabilities that are not so subordinated; effectively junior in right of payment to any of the Company’s secured indebtedness to the extent of the value of the assets securing such indebtedness; and structurally junior to all indebtedness and other liabilities incurred by the Company’s subsidiaries. Holders may convert all or any portion of their Notes in integral multiples of $1,000 principal amount, at their option, at any time prior to the close of business on the business day immediately preceding the applicable conversion date only under the following circumstances: ● during any quarter (and only during such quarter), if the last reported sale price of the shares of Company’s common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on the last trading day of the immediately preceding quarter is greater than or equal to 130% of the conversion price for the applicable Notes on each applicable trading day; ● during the 5 business day period after any 10 consecutive trading day period (or 5 consecutive trading day period in the case of the Livongo Notes) in which the trading price was less than 98% of the product of the last reported sale price of Company’s common stock and the conversion rate for the applicable Notes on each such trading day; ● upon the occurrence of specified corporate events described under the applicable indenture; or ● if the Company calls the applicable Notes for redemption, at any time until the close of business on the second business day immediately preceding the redemption date. On or after the applicable conversion date, until the close of business on the second scheduled trading day immediately preceding the maturity date, holders may convert all or any portion of such Notes, regardless of the foregoing circumstances. The 2027 Notes and the 2025 Notes are convertible into shares of the Company’s common stock at the applicable conversion rate shown in the table above. Upon conversion, the Company will pay or deliver, as the case may be, cash, shares of the Company’s common stock or a combination thereof, at the Company’s election. If the Company elects to satisfy the conversion obligation solely in cash or through payment and delivery, as the case may be, of a combination of cash and shares of the Company’s common stock, the amount of cash and shares of the Company’s common stock due upon conversion will be based on a daily conversion value calculated on a proportionate basis for each trading day in a 25 consecutive trading day observation period. The Livongo Notes are convertible at the applicable conversion rate shown in the table above into “units of reference property,” each of which is comprised of 0.592 of a share of the Company’s common stock and $4.24 in cash, without interest. Upon conversion, the Company will pay or deliver, as the case may be, cash, units of reference property, or a combination thereof, at the Company’s election. If the Company elects to satisfy the conversion obligation solely in cash or through payment and delivery, as the case may be, of a combination of cash and units of reference property, the amount of cash and units of reference property, if any, due upon conversion will be based on a daily conversion value calculated on a proportionate basis for each trading day in a 40 consecutive trading day observation period. For each Note series, the Company may redeem for cash all or part of the Notes, at its option, on or after the applicable optional redemption date shown in the table above (and prior to the 41st scheduled trading day immediately preceding the maturity date in the case of the Livongo Notes) if the last reported sale price of its common stock exceeds 130% of the conversion price then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading days ending on, and including, the trading day immediately preceding the date on which the Company provides notice of the redemption. The redemption price will be the principal amount of the Notes to be redeemed, plus accrued and unpaid interest, if any. In addition, calling any 2027 Note or 2025 Note for redemption on or after the applicable optional redemption date will constitute a make-whole fundamental change with respect to that Note, in which case the conversion rate applicable to the conversion of that Note, if it is converted in connection with the redemption, will be increased in certain circumstances as described in the applicable indenture. If the Company undergoes a fundamental change (as defined in the applicable indenture) at any time prior to the maturity date of the Livongo Notes, holders will have the right, at their option, to require the Company to repurchase for cash all or any portion of their Livongo Notes at a fundamental change repurchase price equal to 100% of the principal amount of the Livongo Notes to be repurchased, plus accrued and unpaid interest to, but excluding, the fundamental change repurchase date. Following the adoption of ASU 2020-06 on January 1, 2022 as described in Note 2. “Summary of Significant Accounting Policies,” the Company accounts for each Note series at amortized cost within the liability section of its consolidated balance sheets. The Company has reserved an aggregate of 8.7 million shares of common stock for the Notes. The net carrying values of the Notes consisted of the following (in thousands): As of December 31, As of December 31, 2027 Notes 2022 2021 Principal $ 1,000,000 $ 1,000,000 Less: Debt discount, net (1) (15,430) (250,846) Net carrying amount 984,570 749,154 2025 Notes Principal 725 730 Less: Debt discount, net (1) (7) (166) Net carrying amount 718 564 Livongo Notes Principal 550,000 550,000 Less: Debt discount, net (1) 0 (74,047) Net carrying amount 550,000 475,953 Total net carrying amount $ 1,535,288 $ 1,225,671 (1) Included in the accompanying consolidated balance sheet within convertible senior notes and amortized to interest expense over the expected life of the Notes using the effective interest rate method. See Note 2. “Summary of Significant Accounting Policies.” The Company estimates the fair value of its Notes utilizing market quotations for debt that have quoted prices in active markets. Since the Notes do not trade on a daily basis in an active market, the fair value estimates are based on market observable inputs based on borrowing rates currently available for debt with similar terms and average maturities. The following table sets forth total interest expense recognized related to the Notes (in thousands): Year Ended December 31, 2027 Notes 2022 2021 2020 Contractual interest expense $ 12,500 $ 12,500 $ 7,743 Amortization of debt discount 3,342 37,070 21,756 Total $ 15,842 $ 49,570 $ 29,499 Effective interest rate 1.6 % 3.4 % 3.4 % Year Ended December 31, 2025 Notes 2022 2021 2020 Contractual interest expense $ 10 $ 1,082 $ 3,900 Amortization of debt discount 3 4,558 12,532 Total $ 13 $ 5,640 $ 16,432 Effective interest rate 1.8 % 4.7 % 7.9 % Year Ended December 31, Livongo Notes 2022 2021 2020 Contractual interest expense $ 4,813 $ 4,813 $ 829 Amortization of debt discount 0 19,310 3,226 Total $ 4,813 $ 24,123 $ 4,055 Effective interest rate 0.9 % 5.2 % 5.2 % Exchanges and Conversions of Convertible Senior Notes Due 2025 Redemption and Conversions of Convertible Senior Notes Due 2022 In March 2021, the Company completed a redemption of all of the then outstanding 2022 Notes in exchange for approximately $0.1 million in cash (including accrued and unpaid interest). Prior to that redemption, certain holders of the 2022 Notes converted their 2022 Notes in exchange for 1.1 million shares of the Company’s common stock during the year ended December 31, 2021. As a result of the redemption and conversions, the Company recorded a charge associated with the loss on extinguishment of debt of $3.4 million during the year ended December 31, 2021. |
Advances from Financing Compani
Advances from Financing Companies | 12 Months Ended |
Dec. 31, 2022 | |
Advances from Financing Companies | |
Advances from Financing Companies | Note 12. Advances from Financing Companies As of December 31, 2022 2023 $ 11,375 2024 6,106 2025 1,976 Total $ 19,457 |
Leases
Leases | 12 Months Ended |
Dec. 31, 2022 | |
Leases. | |
Leases | Note 13. Leases Operating Leases The Company has operating leases for facilities, hosting co-location facilities, and certain equipment under non-cancelable leases in the U.S. and various international locations. The leases have remaining lease terms of less than one one Year Ended December 31, Lease cost 2022 2021 Operating lease cost $ 18,473 $ 14,087 Short-term lease cost 162 1,087 Total lease cost $ 18,635 $ 15,174 In determining the present value of the lease payments, the Company has elected to utilize its incremental borrowing rate based on the original lease term and not the remaining lease term. Supplemental information related to operating leases was as follows (dollars in thousands): Year Ended December 31, Consolidated Statements of Cash Flows 2022 2021 Cash payment for operating cash flows used for operating leases $ 16,854 $ 14,531 Operating lease liabilities arising from obtaining right-of-use assets $ 3,748 $ 11,598 Other Information Weighted-average remaining lease term 5.55 5.71 Weighted-average discount rate 6.08% 5.88% The Company leases office space under non-cancelable operating leases in the U.S. and various international locations. The future minimum lease payments under non-cancelable operating leases were as follows (in thousands): As of December 31, Operating Leases: 2022 2023 $ 15,746 2024 11,078 2025 8,519 2026 7,607 2027 5,340 2028 and thereafter 12,887 Total future minimum payments 61,177 Less: imputed interest (9,543) Present value of lease liabilities $ 51,634 Accrued expenses and other current liabilities $ 13,592 Operating lease liabilities, net of current portion $ 38,042 two |
Restructuring
Restructuring | 12 Months Ended |
Dec. 31, 2022 | |
Restructuring | |
Restructuring | Note 14. Restructuring Restructuring Plan Severance Lease Termination Total Accrued Balance, January 1, 2022 $ 0 $ 0 $ 0 Initial costs 1,359 3,815 5,174 Cash payments (563) (568) (1,131) Accrued Balance, December 31, 2022 $ 796 $ 3,247 $ 4,043 |
Common Stock and Stockholders'
Common Stock and Stockholders' Equity | 12 Months Ended |
Dec. 31, 2022 | |
Common Stock and Stockholders'Equity | |
Common Stock and Stockholders' Equity | Note 15. Common Stock and Stockholders’ Equity Stock Plans The Company’s 2015 Incentive Award Plan, 2017 Employment Inducement Incentive Award Plan and Livongo Acquisition Incentive Award Plan (collectively, the “Plans”) provide for the issuance of incentive and non-statutory options and other equity-based awards to its employees and non-employee service providers. The Company had 13,606,908 shares available for grant at December 31, 2022. In connection with the closing of the Livongo merger, the Company assumed the Livongo Health, Inc. 2019 Equity Incentive Plan, the Livongo Health, Inc. Amended and Restated 2014 Stock Incentive Plan, and the Livongo Health, Inc. Amended and Restated 2008 Stock Incentive Plan (collectively, the “Assumed Plans”). At the effective time of the Livongo merger on October 30, 2020, each outstanding Livongo equity award issued under the Assumed Plans was converted into a corresponding award with respect to the Company’s common stock, with the number of shares underlying such award adjusted based on the “Equity Award Adjustment Ratio” (as defined below) and remained outstanding in accordance with the terms that were applicable to such award prior to the Livongo merger. The exercise price of each outstanding Livongo stock option was also adjusted based on the Equity Award Adjustment Ratio. The “Equity Award Adjustment Ratio” means the quotient determined by dividing (i) the volume weighted average closing price of Livongo common stock on the four four All stock-based awards to employees are measured based on the grant-date fair value, or replacement grant date fair value in relation to the Livongo transaction, and are generally recognized on a straight-line basis in the Company’s consolidated statement of operations over the period during which the employee is required to perform services in exchange for the award (generally requiring a four-year vesting period for each stock option and a three-year vesting period for each RSU). Stock Options Options issued under the Plans are exercisable for periods not to exceed 10 years, and vest and contain such other terms and conditions as specified in the applicable award document. Options to buy common stock are issued under the Plans, with exercise prices equal to the closing price of shares of the Company’s common stock on the New York Stock Exchange on the date of award. Stock option activity under the Plans was as follows (in thousands, except share, per share amounts, and years): Weighted- Weighted- Average Number of Average Remaining Aggregate Shares Exercise Contractual Intrinsic Outstanding Price Life in Years Value Balance at December 31, 2021 3,426,978 $ 22.88 5.32 $ 242,569 Stock option grants 1,530,665 $ 33.72 N/A Stock options exercised (591,213) $ 9.95 N/A $ (24,005) Stock options forfeited (122,496) $ 51.01 N/A Balance at December 31, 2022 4,243,934 $ 27.79 6.10 $ 19,541 Vested or expected to vest at December 31, 2022 4,243,934 $ 27.79 6.10 $ 19,541 Exercisable at December 31, 2022 2,733,507 $ 22.61 4.28 $ 19,541 The total grant-date fair value of stock options granted during the years ended December 31, 2022, 2021 and 2020 was $26.8 million, $7.4 million, and $1,298.0 million, respectively. The Company estimates the fair value of stock options granted using the Black-Scholes option-pricing model. The assumptions used in the Black-Scholes option-pricing model are determined as follows: Volatility. The expected volatility was derived from the historical stock volatilities of the Company’s stock volatility over a period equivalent to the expected term of the stock option grants. Expected Term. The expected term represents the period that the stock-based awards are expected to be outstanding. When establishing the expected term assumption, the Company utilizes historical data. Risk-Free Interest Rate. The risk-free interest rate is based on U.S. Treasury zero-coupon issues with terms similar to the expected term on the options. Dividend Yield. The Company has never declared or paid any cash dividends and does not plan to pay cash dividends in the foreseeable future, and therefore, it used an expected dividend yield of The fair value of each option grant was estimated on the date of grant using the Black-Scholes option-pricing model with the following assumptions and fair value per share: Year Ended December 31, 2022 2021 2020 Volatility 56.7% - 68.7% 56.1% - 58.1% 46.1% - 56.6% Expected term (in years) 4.1 4.1 4.1 Risk-free interest rate 1.13% - 4.36% 0.31% - 1.02% 0.22%-1.64% Dividend yield 0 0 0 Weighted-average fair value of underlying stock options $ 17.48 $ 67.37 $ 48.74 The Company determined that a Monte Carlo valuation model is most suitable for valuation of options for the replaced and replacement awards from the Livongo merger, for the following reasons: • • For the years ended December 31, 2022, 2021 and 2020, the Company recorded compensation expense related to stock options granted of $20.3 million, $93.0 million, and $134.9 million, respectively. As of December 31, 2022, the Company had $23.7 million in unrecognized compensation cost related to non-vested stock options, which is expected to be recognized over a weighted average period of approximately 2.6 years. Restricted Stock Units The fair value of RSUs is determined on the date of grant. The Company records compensation expense in the consolidated statement of operations on a straight-line basis over the vesting period for RSUs. The vesting period for employees and members of the Board of Directors ranges from one RSU activity under the Plans was as follows: Weighted-Average Grant Date RSUs Fair Value Per RSU Balance at December 31, 2021 2,133,501 $ 168.43 Granted 6,724,893 $ 47.91 Vested and issued (1,309,504) $ 122.56 Forfeited (1,067,221) $ 102.71 Balance at December 31, 2022 6,481,669 $ 63.63 Vested and unissued at December 31, 2022 23,889 $ 92.12 Non-vested at December 31, 2022 6,457,780 $ 63.52 The total grant-date fair value of RSUs granted during the years ended December 31, 2022, 2021 and 2020 was $322.2 million, $144.2 million and $801.0 million, respectively. For the years ended December 31, 2022, 2021 and 2020, the Company recorded stock-based compensation expense related to RSUs of $179.4 million, $182.4 million, and $314.1 million, respectively. As of December 31, 2022, the Company had $309.9 million in unrecognized compensation cost related to non-vested RSUs, which is expected to be recognized over a weighted-average period of approximately 2.0 years. Performance Stock Units Stock-based compensation costs associated with the Company’s PSUs are initially determined using the fair market value of the Company's common stock on the date the awards are granted (service inception date). The vesting of these PSUs is subject to certain performance conditions and a service requirement ranging from one to three years . Stock-based compensation costs associated with these PSUs are reassessed each reporting period based upon the estimated performance attainment on the reporting date until the performance conditions are met. The ultimate number of PSUs that are issued to an employee is the result of the actual performance of the Company at the end of the performance period compared to the performance targets and generally range from 0% to 200% of the initial grant. Stock compensation expense for PSUs is recognized on an accelerated tranche by tranche basis for performance-based awards . PSU activity under the Plans was as follows: Weighted-Average Grant Date Shares Fair Value Per PSU Balance at December 31, 2021 356,249 $ 140.01 Granted 511,107 $ 70.32 Vested and issued (199,066) $ 109.37 Forfeited (38,618) $ 85.78 Balance at December 31, 2022 629,672 $ 99.07 Vested and unissued at December 31, 2022 0 $ 0.00 Non-vested at December 31, 2022 629,672 $ 99.07 The total grant-date fair value of PSUs granted during the years ended December 31, 2022, 2021 and 2020 was $35.9 million, $70.4 million, and $25.0 million, respectively. For the years ended December 31, 2022, 2021 and 2020, the Company recorded stock-based compensation expense related to PSUs of $15.1 million, $22.0 million, and $24.0 million, respectively. As of December 31, 2022, the Company had $6.3 million in unrecognized compensation cost related to non-vested PSUs, which is expected to be recognized over a weighted-average period of approximately 1.2 years. Employee Stock Purchase Plan In July 2015, the Company adopted the 2015 ESPP in connection with its initial public offering. Through December 31, 2022, a total of 1,019,726 shares of common stock have been reserved for issuance under this plan as of December 31, 2022. The Company’s ESPP permits eligible employees to purchase common stock at a discount through payroll deductions during defined offering periods. Under the ESPP, the Company may specify offerings with durations of not more than 27 months, and may specify shorter purchase periods within each offering. Each offering will have one or more purchase dates on which shares of its common stock will be purchased for employees participating in the offering. An offering may be terminated under certain circumstances. The price at which the stock is purchased is equal to the lower of 85% of the fair market value of the common stock at the beginning of an offering period or on the date of purchase. During 2022 and 2021, the Company issued 271,159 shares and 122,059 shares, respectively, under the ESPP. As of December 31, 2022, 299,472 shares remained available for issuance. For the years ended December 31, 2022, 2021 and 2020, the Company recorded stock-based compensation expense related to the ESPP of $3.0 million, $5.2 million, and $2.8 million, respectively. As of December 31, 2022, the Company had $2.2 million in unrecognized compensation cost related to the ESPP, which is expected to be recognized over a weighted-average period of approximately 0.4 years. Total compensation costs for stock-based awards were as follows (in thousands): Year Ended December 31, 2022 2021 2020 Cost of revenue (exclusive of depreciation and amortization, which is shown separately) $ 6,468 $ 8,280 $ 2,700 Advertising and marketing 14,083 18,952 26,995 Sales 43,183 71,475 65,730 Technology and development 64,577 95,561 60,556 General and administrative 89,541 108,318 319,550 Total stock-based compensation expense (1) $ 217,852 $ 302,586 $ 475,531 (1) Excluding the amount capitalized related to internal software development projects. ( |
Provision for Income Taxes
Provision for Income Taxes | 12 Months Ended |
Dec. 31, 2022 | |
Provision for Income Taxes | |
Provision for Income Taxes | Note 16. Provision for Income Taxes For financial reporting purposes, loss before income taxes for the years ended December 31, 2022, 2021 and 2020 included the following components (in thousands): Year Ended December 31, 2022 2021 2020 Domestic $ (13,303,130) $ (365,762) $ (566,266) International (360,213) (18,894) (9,727) Total $ (13,663,343) $ (384,656) $ (575,993) The provision for income taxes was comprised of the following components (in thousands): Year Ended December 31, 2022 2021 2020 Current federal $ 0 $ 0 $ (1,954) Current state 3,007 567 27 Current foreign 1,021 2,595 1,605 Total current 4,028 3,162 (322) Deferred federal 770 49,008 (60,008) Deferred state (5,643) (6,276) (26,775) Deferred foreign (2,967) (1,757) (3,752) Total deferred (7,840) 40,975 (90,535) Provision for income taxes $ (3,812) $ 44,137 $ (90,857) The provision for income taxes differs from the amount computed by applying the statutory federal income tax rate to income before provision for income taxes. The sources and tax effects of the differences are as follows: Year Ended December 31, 2022 2021 2020 Tax at federal statutory rate 21.0 % 21.0 % 21.0 % Goodwill impairment (24.7) 0.0 0.0 State and local tax 4.2 7.7 2.3 Acquisition expenses 0.0 2.0 (2.2) Stock compensation (0.3) 6.7 (1.1) Non-deductible expenses 0.0 (0.5) (0.1) Foreign rate differential 0.0 0.2 0.3 Change in valuation allowance (0.1) (46.9) (5.4) Other (0.1) (1.7) 1.0 Effective tax rate 0.0 % (11.5) % 15.8 % As of December 31, 2022 2021 Deferred tax assets: Net operating loss carryforwards $ 658,409 $ 687,679 Accrued expenses and compensation 4,933 5,413 Stock-based compensation 52,854 63,641 Foreign tax credits and alternative minimum tax credits 3,448 4,814 Research and development credits 0 1,320 Depreciation of property and equipment 19 56 Interest expense carryforward 2,677 11,528 Operating lease assets 11,012 13,575 Deferred revenue 7,422 7,946 Capitalized R&D 21,987 0 Other 8,590 7,032 Deferred tax assets 771,351 803,004 Valuation allowance (415,751) (335,810) Net deferred tax assets 355,600 467,194 Deferred tax liabilities: Debt related 0 (73,378) Operating lease liabilities (8,701) (11,842) Depreciation of property and equipment (551) (3,427) Intangible assets (396,408) (452,049) Other (1) (879) (2,275) Deferred tax liabilities (406,539) (542,971) Net deferred tax liabilities $ (50,939) $ (75,777) (1) The Company has updated the presentation of the deferred tax liability item of “Debt related” to combine with “Other,” as it is now an immaterial amount in 2022. As of December 31, 2022, the Company had approximately $2,640.9 million of federal net operating loss (“NOL”) carryforwards, $1,536.3 million of state NOL carryforwards, and $64.9 million of foreign NOL carryforwards. The federal NOL carryforwards created starting in the year ended December 31, 2018 of $2,223.7 million will carry forward indefinitely, while the remaining federal NOL carryforwards of $417.2 million will begin to expire in 2034. A portion of the state and foreign NOL carryforwards will expire in 2023 and continue to expire in future years. As of December 31, 2022, the Company had approximately $3.4 million of foreign tax credits, a portion of which will expire in 2023 and the remaining will expire in future years. As of December 31, 2022 As of December 31, 2022, the Company had a valuation allowance of approximately $415.8 million against a portion of the U.S. and certain foreign deferred tax assets, for which realization cannot be considered more likely than not at this time. The valuation allowance increased by $79.9 million from December 31, 2021, of which, approximately $61.8 million is related to convertible debt following the adoption of ASU 2020-06, which was recorded against additional paid-in capital. The remaining incremental $18.1 million relates to current taxes, primarily from the current year operational loss. The following table presents a reconciliation of the beginning and ending amount of the gross unrecognized tax benefits for the years ended December 31, 2022, 2021 and 2020 (in thousands): Year Ended December 31, 2022 2021 2020 Balance at beginning of the period $ 110,848 $ 21,362 $ 2,912 Unrecognized tax benefits assumed in a business combination 0 59,110 15,850 Additions based on prior year tax positions 12,151 43,399 0 Additions based on current year tax positions 20,799 1,490 4,990 Statute of limitations expirations 0 0 (2,390) Release 0 (14,513) 0 Balance at end of the period $ 143,798 $ 110,848 $ 21,362 The amount of unrecognized tax benefits as of December 31, 2022 that, if recognized, would reduce tax expense was approximately $143.8 million. The Company does not anticipate any of its unrecognized tax benefits to be settled within the next 12 months. The Company files tax returns as prescribed by the tax laws of the jurisdictions in which it operates. In the normal course of business, the Company is subject to examination by federal and state jurisdictions in the U.S. and other countries, where applicable. The Company is open under the U.S. federal statute from 2018 to the present, although earlier years may be examined to the extent that loss carryforwards are used in open audit periods. The Company is currently under audit in a single foreign tax jurisdiction. There are no tax matters under discussion with taxing authorities that are expected to have a material effect on the Company's consolidated financial statements. The Company further believes that it has made adequate provision for all income tax uncertainties. The Company’s consolidated financial statements provide for any related tax liability on amounts that may be repatriated, aside from undistributed earnings of $6.1 million for certain of the Company’s foreign subsidiaries that are intended to be indefinitely reinvested in operations outside the U.S. as of December 31, 2022. The amount of any unrecognized deferred tax liability on these undistributed earnings would be immaterial. |
Net Loss per Share
Net Loss per Share | 12 Months Ended |
Dec. 31, 2022 | |
Net Loss per Share | |
Net Loss per Share | Note 17. Net Loss per Share Basic net loss per share is computed by dividing the net loss by the weighted-average number of shares of common stock of the Company outstanding during the period. Diluted net loss per share is computed by giving effect to all potential shares of common stock of the Company, including outstanding stock options and convertible notes, to the extent dilutive. Basic and diluted net loss per share was the same for each period presented as the inclusion of all potential shares of common stock of the Company outstanding would have been anti-dilutive. As of December 31, 2022, the Company had 4.2 million outstanding stock options, 6.5 million outstanding RSUs, 0.6 million outstanding PSUs, and 0.3 million issuable shares of common stock associated with the ESPP. The following table presents the calculation of basic and diluted net loss per share for the Company’s common stock (in thousands, except shares and per share data): Year Ended December 31, 2022 2021 2020 Net loss $ (13,659,531) $ (428,793) $ (485,136) Weighted-average shares used to compute basic and diluted net loss per share 161,457,123 156,939,349 90,509,229 Net loss per share, basic and diluted $ (84.60) $ (2.73) $ (5.36) |
401(k) Plan
401(k) Plan | 12 Months Ended |
Dec. 31, 2022 | |
401(k) Plan | |
401(k) Plan | Note 18. 401(k) Plan The Company has established a 401(k) plan that qualifies as a deferred compensation arrangement under Internal Revenue Code Section 401. All U.S. employees over the age of 21 are eligible to participate in the plan. The Company contributes 100% of eligible employee’s elective deferral up to 4% of $0.3 million of eligible earnings. The Company made matching contributions to participants’ accounts totaling $12.1 million, $11.3 million, and $4.9 million during the years ended December 31, 2022, 2021 and 2020, respectively. |
Legal Matters
Legal Matters | 12 Months Ended |
Dec. 31, 2022 | |
Legal Matters | |
Legal Matters | Note 19. Legal Matters From time to time, Teladoc Health is involved in various litigation matters arising in the normal course of business, including the matters described below. The Company consults with legal counsel on those issues related to litigation and seeks input from other experts and advisors with respect to such matters. Estimating the probable losses or a range of probable losses resulting from litigation, government actions and other legal proceedings is inherently difficult and requires an extensive degree of judgment, particularly where the matters involve indeterminate claims for monetary damages, may involve discretionary amounts, present novel legal theories, are in the early stages of the proceedings, or are subject to appeal. Whether any losses, damages, or remedies ultimately resulting from such matters could reasonably have a material effect on the Company’s business, financial condition, results of operations, or cash flows will depend on a number of variables, including, for example, the timing and amount of such losses or damages (if any) and the structure and type of any such remedies. As of the date of these financial statements, Teladoc Health’s management does not expect any litigation matter to have a material adverse impact on its business, financial condition, results of operations, or cash flows. On May 14, 2018, a purported class action complaint (Thomas v. Best Doctors, Inc.) was filed in the U.S. District Court for the District of Massachusetts against the Company’s wholly owned subsidiary, Best Doctors, Inc. The complaint alleges that on or about May 16, 2017, Best Doctors violated the U.S. Telephone Consumer Protection Act (the “TCPA”) by sending unsolicited facsimiles to plaintiff and certain other recipients without the recipients’ prior express invitation or permission. The lawsuit seeks statutory damages for each violation, subject to trebling under the TCPA, and injunctive relief. On May 27, 2022, the Court entered an order preliminarily approving the terms of a tentative settlement reached by the parties and conditionally certified the settlement class. On October 27, 2022, the Court entered an order granting final approval of the settlement. On August 27, 2021, a purported securities class action complaint (City of Hialeah Employees’ Retirement System v. Teladoc Health, Inc., et.al.) was filed in the Circuit Court of Cook County, Illinois against the Company and certain of the Company’s current and former officers and directors. The complaint was brought on behalf of a purported class consisting of all persons who acquired shares of Teladoc Health common stock issued in the Livongo merger. The complaint asserted violations of Sections 11, 12(a)(2) and 15 of the Securities Act based on allegedly false or misleading statements and omissions with respect to the registration statement and prospectus filed in connection with the Livongo merger. The complaint sought certification as a class action, unspecified compensatory damages plus interest and attorneys’ fees, rescission or a rescissory measure of damages and equitable or other relief. On January 18, 2022, the case was voluntarily dismissed without prejudice in the Circuit Court of Cook County, Illinois and on January 26, 2022, was refiled in the Supreme Court of the State of New York. The refiled case includes substantially the same allegations. The Company believes that these claims are without merit, and the Company and its named current and former officers and directors intend to defend the lawsuit vigorously, including through the filing of a motion to dismiss the complaint on April 8, 2022. On June 6, 2022, a purported securities class action complaint (Schneider v. Teladoc Health, Inc., et. al.) was filed in the U.S. District Court for the Southern District of New York against the Company and certain of the Company’s officers. The complaint was brought on behalf of a purported class consisting of all persons or entities who purchased or otherwise acquired shares of the Company’s common stock during the period October 28, 2021 through April 27, 2022. The complaint asserted violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder based on allegedly false or misleading statements and omissions with respect to, among other things, the Company’s business, operations, and prospects. The complaint seeks certification as a class action and unspecified compensatory damages plus interest and attorneys’ fees. On August 2, 2022, a duplicative purported securities class action complaint (De Schutter v. Teladoc Health, Inc., et.al.) was filed in the U.S. District Court for the Eastern District of New York. The claims and parties in De Schutter were substantially similar to those in Schneider. The De Schutter case was transferred on consent to the Southern District court, and the Schneider and De Schutter actions have now been consolidated under the caption In re Teladoc Health, Inc. Securities Litigation. On August 23, 2022, the court appointed Leadersel Innotech ESG as lead plaintiff pursuant to the Private Securities Litigation Reform Act of 1995. The lead plaintiff filed an amended complaint on September 30, 2022, on behalf of a purported class consisting of all persons or entities who purchased or otherwise acquired shares of the Company’s common stock during the period February 24, 2021 to July 27, 2022, and filed a second amended complaint on December 6, 2022, on behalf of a purported class consisting of all persons or entities who purchased or otherwise acquired shares of the Company’s common stock during the period February 11, 2021 to July 27, 2022. The Company believes that these claims are without merit, and the Company and its named officers intend to defend the lawsuit vigorously, including through the filing of a motion to dismiss the complaint on January 20, 2023. On August 9, 2022, a verified shareholder derivative complaint (Vaughn v. Teladoc Health, Inc., et.al.) was filed in the U.S. District Court for the Southern District of New York against the Company as a nominal defendant and certain of the Company’s officers and directors. The complaint asserts violations of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder, breach of fiduciary duty, aiding and abetting breach of fiduciary duty, unjust enrichment, and waste of corporate assets in connection with factual assertions similar to those in the purported securities class action complaints described above. The complaint seeks damages to the Company allegedly sustained as a result of the acts and omissions of the named officers and directors and seeks an order directing the Company to reform and improve the Company’s corporate governance. On September 6, 2022, a duplicative verified stockholder derivative complaint (Hendry v. Teladoc Health, Inc., et. al) was filed in the U.S. District Court for the Southern District of New York. The claims and parties in Hendry were substantially similar to those in Vaughn. The Vaughn and Hendry actions have now been consolidated under the caption In re Teladoc Stockholder Derivative Litigation, and a consolidated complaint was filed on November 29, 2022. The consolidated complaint also asserts violations of Section 14(a) of the Securities Exchange Act of 1934. The parties subsequently stipulated to transfer the action to the U.S. District Court for the District of Delaware, and on December 22, 2022 the parties agreed, and the Court ordered, to stay all proceedings until final resolution, including exhaustion of appeals, of the motion to dismiss filed in the purported securities class action complaint described above. On July 30, 2020, the Company received a Civil Investigative Demand from the Federal Trade Commission (“FTC”) as part of its non-public investigation to determine whether the Company, through its BetterHelp business, engaged in unfair business practices in violation of the Federal Trade Commission Act (the “FTC Investigation”). The Company subsequently entered into settlement negotiations with the FTC in an effort to resolve all claims and allegations arising out of or relating to the FTC Investigation. During 2022, the Company determined that a loss stemming from the FTC Investigation in the amount of $7.8 million is probable. An accrual of such amount is included in accrued expenses and other current liabilities in the accompanying consolidated balance sheets and in general and administrative expenses in the Company’s consolidated statements of operations and other comprehensive loss. The matter remains unresolved, and there can be no assurance as to the timing or the terms of any final outcome. |
Segments
Segments | 12 Months Ended |
Dec. 31, 2022 | |
Segments | |
Segments | Note 20. Segments ASC Subtopic 280-10, “Segment Reporting,” establishes standards for reporting information about operating segments. Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker (“CODM”), in deciding how to allocate resources and assess performance. The Company’s Chief Executive Officer is the CODM and is responsible for reviewing financial information presented on a segment basis for purposes of making operating decisions and assessing financial performance. The CODM measures and evaluates segments based on segment operating revenues together with Adjusted EBITDA. The Company excludes the following items from segment Adjusted EBITDA: provision for income taxes; other expense (income), net; interest expense, net; depreciation and amortization; goodwill impairment; loss on extinguishment of debt; stock-based compensation; restructuring costs; and acquisition, integration and transformation charges. Although these amounts are excluded from segment Adjusted EBITDA, they are included in reported consolidated net loss and are included in the reconciliation that follows. The Company’s computation of segment Adjusted EBITDA may not be comparable to other similarly titled metrics computed by other companies because all companies do not calculate segment Adjusted EBITDA in the same fashion. Operating revenues and expenses directly associated with each segment are included in determining its operating results. Other expenses that are not directly attributable to a particular segment are based upon allocation methodologies, including the following: revenue, headcount, time and other relevant usage measures, and/or a combination of such. The Company has 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 mental health and other wellness services provided on a global basis which are predominantly marketed and sold on a direct-to-consumer basis. The CODM does not review any information regarding total assets on a segment basis. The Integrated Care segment accounted for more than 85% of the Company's total capital expenditures for each of the years ended December 31, 2022, 2021, and 2020. Segments do not record intersegment revenues, and, accordingly, there is none to be reported. The accounting policies for segment reporting are the same as for the Company as a whole. The following table presents revenues by segment (in thousands): Year Ended December 31, 2022 2021 2020 Teladoc Health Integrated Care $ 1,373,900 $ 1,300,878 $ 744,309 BetterHelp 1,019,646 721,238 345,105 Other (1) 13,294 10,591 4,548 Total Consolidated Revenue $ 2,406,840 $ 2,032,707 $ 1,093,962 The following table presents Adjusted EBITDA by segment (in thousands): Year Ended December 31, 2022 2021 2020 Teladoc Health Integrated Care $ 135,153 $ 144,021 $ 65,836 BetterHelp 114,116 121,702 65,545 Other (1) (2,756) 2,114 (4,540) Total Consolidated Adjusted EBITDA $ 246,513 $ 267,837 $ 126,841 (1) Other reflects certain revenues and expenses not related to ongoing segment operations. The following table presents a reconciliation of segment Adjusted EBITDA to consolidated GAAP income before income taxes (in thousands): Year Ended December 31, 2022 2021 2020 Teladoc Health Integrated Care $ 135,153 $ 144,021 $ 65,836 BetterHelp 114,116 121,702 65,545 Other (2,756) 2,114 (4,540) Total consolidated Adjusted EBITDA 246,513 267,837 126,841 Adjustments to reconcile to GAAP net loss: Goodwill impairment (13,402,812) 0 0 Loss on extinguishment of debt 0 (43,748) (9,077) Other expense (income), net (859) 5,088 (545) Interest expense, net (9,270) (80,365) (59,950) Depreciation and amortization (256,027) (204,239) (69,495) Stock-based compensation (217,852) (302,586) (475,531) Acquisition, integration, and transformation costs (15,620) (26,643) (88,236) Restructuring costs (7,416) 0 0 Loss before provision for income taxes (13,663,343) (384,656) (575,993) Provision for income taxes 3,812 (44,137) 90,857 Net loss $ (13,659,531) $ (428,793) $ (485,136) Geographic data for long-lived assets (representing property, plant and equipment) were as follows (in thousands): As of December 31, 2022 2021 United States $ 25,935 $ 25,123 Other 3,706 2,111 Total long-lived assets $ 29,641 $ 27,234 |
Schedule II - Valuation and Qua
Schedule II - Valuation and Qualifying Accounts | 12 Months Ended |
Dec. 31, 2022 | |
Schedule II - Valuation and Qualifying Accounts | |
Schedule II - Valuation and Qualifying Accounts | Allowance for Doubtful Accounts Receivable (in thousands): Balance at Balance at Beginning End of Period Provision Write-offs Other of Period Fiscal Year Ended December 31, 2022 $ 12,384 $ 15,398 $ (13,872) $ 890 $ 14,800 Fiscal Year Ended December 31, 2021 $ 6,412 $ 16,941 $ (11,526) $ 557 $ 12,384 Fiscal Year Ended December 31, 2020 $ 3,787 $ 5,284 $ (2,787) $ 128 $ 6,412 Income Taxes Valuation Allowance (in thousands): Balance at Balance at Beginning End of Period Provision Write-offs Other of Period Fiscal Year Ended December 31, 2022 $ 335,809 $ 18,966 $ 0 $ 60,974 $ 415,749 Fiscal Year Ended December 31, 2021 $ 107,984 $ 179,364 $ 0 $ 48,461 $ 335,809 Fiscal Year Ended December 31, 2020 $ 121,186 $ 2,146 $ 0 $ (15,348) $ 107,984 |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2022 | |
Summary of Significant Accounting Policies | |
Basis of Presentation and Principles of Consolidation | Basis of Presentation and Principles of Consolidation These consolidated financial statements have been prepared in accordance with the United States (“U.S.”) generally accepted accounting principles (“GAAP”). The consolidated financial statements include the results of Teladoc Health, as well as three professional associations and twelve professional corporations (collectively, the “THMG Association”). Teladoc Health Medical Group, P.A., formerly Teladoc Physicians, P.A. (“THMG”) is party to a Services Agreement by and among it and the professional associations and professional corporations pursuant to which each professional association and professional corporation provides services to THMG. Each professional association and professional corporation is established pursuant to the requirements of its respective domestic jurisdiction governing the corporate practice of medicine. The Company holds a variable interest in the THMG Association, which contracts with physicians and other health professionals in order to provide services to Teladoc Health. The THMG Association is considered a variable interest entity (“VIE”) since it does not have sufficient equity to finance its activities without additional subordinated financial support. An enterprise having a controlling financial interest in a VIE must consolidate the VIE if it has both power and benefits—that is, it has (1) the power to direct the activities of a VIE that most significantly impact the VIE’s economic performance (power) and (2) the obligation to absorb losses of the VIE that potentially could be significant to the VIE or the right to receive benefits from the VIE that potentially could be significant to the VIE (benefits). The Company has the power and rights to control all activities of the THMG Association and funds and absorbs all losses of the VIE and appropriately consolidates the THMG Association. Total revenue and net income (loss) for the VIE were $244.5 million and ($1.0) million, $230.2 million and ($1.6) million and $203.9 million and $2.1 million for the years ended December 31, 2022, 2021 and 2020, respectively. The VIE’s total assets, all of which were current, were $106.7 million and $58.5 million at December 31, 2022 and 2021, respectively. The VIE’s total liabilities, all of which were current, were $143.8 million and $94.6 million at December 31, 2022 and 2021, respectively. The VIE’s total stockholders’ deficit was $37.1 million and $36.1 million at December 31, 2022 and 2021, respectively. All intercompany transactions and balances have been eliminated. |
Business Combinations | Business Combinations The Company accounts for its business combinations using the acquisition method of accounting. The purchase price is attributed to the fair value of the assets acquired and liabilities assumed. Transaction costs directly attributable to the acquisition are expensed as incurred. Identifiable assets and liabilities acquired or assumed are measured separately at their fair values as of the acquisition date. The excess of the purchase price of acquisition over the fair value of the identifiable net assets of the acquiree is recorded as goodwill. The results of businesses acquired in a business combination are included in the Company’s consolidated financial statements from the date of acquisition. When the Company issues stock-based or cash awards to an acquired company’s stockholders, the Company evaluates whether the awards are consideration or compensation for post-acquisition services. The evaluation includes, among other things, whether the vesting of the awards is contingent on the continued employment of the acquired company’s stockholders beyond the acquisition date. If continued employment is required for vesting, the awards are treated as compensation for post-acquisition services and recognized as expense over the requisite service period. Determining the fair value of assets acquired and liabilities assumed requires management to use significant judgment and estimates, including the selection of valuation methodologies, estimates of future revenue and cash flows, discount rates and selection of comparable companies. The estimates and assumptions used to determine the fair values and useful lives of identified intangible assets could change due to numerous factors, including market conditions, technological developments, economic conditions, and competition. In connection with determination of fair values, the Company may engage a third-party valuation specialist to assist with the valuation of intangible and certain tangible assets acquired and certain obligations assumed. Acquisition-related transaction costs incurred by the Company are not included as a component of consideration transferred but are accounted for as an operating expense in the period in which the costs are incurred. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. The Company bases its estimates on historical experience, current business and economic factors, and various other assumptions that the Company believes are necessary to form a basis for making judgments about the carrying values of assets and liabilities, the recorded amounts of revenue and expenses, and the disclosure of contingent assets and liabilities. The Company is subject to uncertainties such as the impact of future events, economic and political factors, and changes in the Company’s business environment; therefore, actual results could differ from these estimates. Accordingly, the accounting estimates used in the preparation of the Company’s consolidated financial statements will change as new events occur, as more experience is acquired, as additional information is obtained and as the Company’s operating environment evolves. The Company believes that estimates used in the preparation of these consolidated financial statements are reasonable; however, actual results could differ materially from these estimates. Changes in estimates are made when circumstances warrant. Such changes in estimates and refinements in estimation methodologies are reflected in the Consolidated Statement of Operations; if material, the effects of changes in estimates are disclosed in the Notes to Consolidated Financial Statements. Significant estimates and assumptions by management affect areas including the value and useful life of long-lived assets (including intangible assets), the value of goodwill, the capitalization and amortization of software development costs, deferred device and contract costs, allowances for sales and for doubtful accounts, and the accounting for business combinations. Other significant areas include revenue recognition (including performance guarantees), the accounting for income taxes, contingencies, litigation and related legal accruals, and the accounting for stock-based compensation awards. |
Segment Information | Segment Information Prior to October 1, 2022, the Company operated as a single segment reflecting its integrated virtual care system for delivering, enabling, and empowering whole person health. Effective October 1, 2022, the Company adopted a new organizational and reporting structure based on two reportable segments, which are the same as its reporting units: Teladoc Health Integrated Care (“Integrated Care”) and BetterHelp. This new structure reflects how management now allocates resources and assesses performance. See Note 20. “Segments” for further information. |
Fair Value Measurements | Fair Value Measurements The carrying value of the Company’s financial instruments, including cash equivalents, short-term investments, accounts receivable, accounts payable, accrued liabilities and accrued compensation, approximates fair value due to their short-term nature. The Company measures its financial assets and liabilities at fair value at each reporting period using a fair value hierarchy that requires it to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. |
Revenue Recognition | Revenue Recognition The Company follows the revenue accounting requirements of Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (Topic 606) (“Accounting Standards Codification (“ASC”) 606”). ASC 606 establishes a principle for recognizing revenue upon the transfer of promised goods or services to customers, in an amount that reflects the expected consideration received in exchange for those goods or services. The core principle of ASC 606 is to recognize revenue to depict the transfer of promised goods or services to the Company’s customers, which primarily consist of employers, health plans, hospitals and health systems, insurance, and financial services companies (collectively “Clients”) as well as individual members, in an amount that reflects the consideration the entity expects to be entitled in exchange for those goods or services. This principle is achieved through applying the following five-step approach: • • • • • Integrated Care Segment As it relates to the Company’s Integrated Care segment, the Company primarily generates virtual healthcare service revenue from contracts with Clients who purchase access to the Company’s professional provider network or medical experts for their employees, dependents and other beneficiaries. The Company’s Client contracts include a per-member-per-month (“PMPM”) access fee as well as certain contracts that also include additional revenue on a per-virtual healthcare visit basis for general medical, or other specialty visits or expert medical service on a per case basis. The Company also has certain contracts that generate revenue based solely on a per healthcare visit basis for general medical and other specialty visits. Revenues are also generated from contracts with Clients in hospital and health systems for the Company’s chronic care management solutions. Substantially all of this revenue is derived from monthly access fees that are recognized as services are rendered and earned under subscription agreements with Clients that are based on a per-participant-per-month model, using the number of active enrolled members each month for the minimum enrollment period. These solutions integrate devices, supplies, access to the Company’s web-based platform, and clinical and data services to provide an overall health management solution. The promises to transfer these goods and services are not separately identifiable and is considered a single continuous service comprised of a series of distinct services that are substantially the same and have the same pattern of transfer (i.e., distinct days of service). These services are consumed as they are received, and the Company recognizes revenue each month using the variable consideration allocation exception since the nature of the obligations and the variability of the payment being based on the number of active members are aligned. Revenue is also generated from contracts with Clients for the sale and rental of equipment consisting of virtual healthcare devices which allow physicians to access the Company’s hosted virtual healthcare platform. These contracts also include multiple performance obligations, and the Company determines the standalone selling prices based on overall pricing objectives. In some arrangements, the Company’s devices are rented to certain qualified Clients that qualify as either sales-type lease or operating lease arrangements and are subject to lease accounting guidance. The Company records access fees from Clients accessing its professional provider network or hosted virtual healthcare platform or chronic care management platforms, visit fee revenue for general medical, expert medical service and other specialty visits as well as other revenue primarily associated with virtual healthcare device equipment included with its hosted virtual healthcare platform. Visit and other revenues are reported as “Other” revenue in the Company’s consolidated financial statements. The Company’s Client agreements generally have a term of one three For contracts where revenue is generated on a per healthcare visit basis, revenues are recognized when the visits are completed as the Company has delivered on its stand ready obligation to provide access. For other revenue, which primarily includes virtual healthcare devices, the Company’s performance obligation is satisfied when the equipment is provided to the Client and revenue is recognized at a point in time upon shipment. The Company generally bills for the virtual healthcare services on a monthly basis, in advance or in arrears depending on the service, with payment terms generally being 30 days . There are not significant differences between the timing of revenue recognition and billing. Consequently, the Company has determined that Client contracts do not include a financing component. Revenue is recognized in an amount that reflects the consideration that is expected in exchange for the service and for certain contracts include a variable transaction price as the number of members may vary from period to period. Based on historical experience, the Company estimates this amount. The Company’s contracts do not generally contain refund provisions for fees earned related to services performed. Additionally, certain of the Company’s contracts include Client performance guarantees and pricing adjustments that are based upon minimum member utilization and guarantees by the Company for specific service level performance, member satisfaction scores, cost savings guarantees, and health outcome guarantees. Performance guarantees are estimated at each reporting period based on the Company’s historical performance of the underlying criteria or the customer’s specific performance as of that reporting date. Any estimated adjustments to the contract price for achieving or not achieving the performance guarantee are recognized as an adjustment to revenue in the period. For the years ended December 31, 2022, 2021, and 2020, revenue recognized from performance obligations related to prior periods for the changes in transaction price or Client performance guarantees was $4.4 million, $5.6 million, and $1.9 million, respectively. The Company has elected the optional exemption to not disclose the remaining performance obligations of its contracts since the majority of its contracts have a duration of one year or less and the variable consideration expected to be received over the duration of the contract is allocated entirely to the wholly unsatisfied performance obligations. For additional revenue, deferred revenue, deferred costs, and disclosures, refer to Note 3. “Revenue, Deferred Revenue, and Deferred Costs and Other.” BetterHelp Segment As it relates to the BetterHelp segment, users can purchase mental health services for an access fee, generally on a monthly basis. For other wellness services, users can purchase access to their consumer application for a subscription fee, generally for a period of one year. BetterHelp also provides mental health services to employers as part of employee assistance programs, with revenues recorded based on completion of visit. The BetterHelp service provides for member refunds. Based on historical experience, the Company estimates the expected amount of refunds to be issued which are recorded as a reduction of revenue. The Company issued refunds of approximately $79.2 million, $67.0 million, and $33.5 million for the years ended December 31, 2022, 2021, and 2020, respectively. |
Deferred Revenue | Deferred Revenue Deferred revenue represents billed, but unrecognized revenue, and is comprised of fees received in advance of the delivery or completion of the services and amounts received in instances when revenue recognition criteria have not been met. Deferred revenue associated with upfront payments for a device is amortized ratably over the expected member enrollment period. Deferred revenue that will be recognized during the succeeding twelve-month period is recorded as current deferred revenue and the remaining portion is recorded as noncurrent deferred revenue. |
Deferred Costs and Other | Deferred Costs and Other Deferred costs and other consist of deferred device costs and deferred contract costs. Deferred device costs consist of cost of inventory incurred in connection with delivery of services that are deferred and amortized over the shorter of the expected member enrollment period or the expected device life and recorded as cost of revenue. Deferred contract costs represent the incremental costs of obtaining a contract with a Client if the Company expects to recover such costs. The primary example of the Company’s costs to obtain a contract include incremental sales commissions to obtain contracts paid to its sales organization. A portion of these incremental costs to obtain Client contracts are deferred and then amortized on a straight-line basis over the period of benefit, which has been determined to be four years. The amounts subject to the services period are amortized in sales expense in the consolidated statement of operations. Deferred costs and other that are to be amortized within twelve months are recorded to deferred costs and other, current and the remainder is recorded to deferred costs and other, noncurrent on the Company’s consolidated balance sheets. |
Cost of Revenue (exclusive of depreciation and amortization, which is shown separately) | Cost of Revenue (exclusive of depreciation and amortization, which is shown separately) Cost of revenue (exclusive of depreciation and amortization, which is shown separately) primarily consists of fees paid to the physicians and other health professionals; product costs; costs incurred in connection with the Company’s provider network operations and data center activities, which include employee-related expenses (including salaries and benefits, incentive compensation, and stock-based compensation) costs related to Client support; provider network operations center activities; medical records; magnetic resonance imaging; medical lab tests; translation; postage and medical malpractice insurance, and deferred device costs. |
Technology and Development | Technology and Development Technology and development expenses include the costs of operating the Company’s on-demand technology infrastructure that are not directly related to changes in revenue or volume of visits, including certain licensed applications, information technology infrastructure, security, and compliance. The technology and development line item also contains amounts charged to expense for research and development, which include costs of new product development, costs to add new features or improve reliability or scalability of existing applications, and other software development and engineering costs to the extent that they are not capitalized. The research and development expenses may enable future revenue growth but are not directly related to current revenues. Technology and development expenses include personnel and related expenses (including salaries and benefits, incentive compensation, and stock-based compensation) for software engineering, information technology infrastructure, security and compliance, product development, and support for the Company’s efforts to add new features and ensure the reliability and scalability of its existing solutions. Technology and development expenses also include outsourced software engineering services, the costs of operating the Company’s on-demand technology infrastructure (whereas costs directly associated with changes in revenue are presented separately in cost of revenues), certain licensed applications, and stock-based compensation for its technology and development employees. The Company’s technology and development expenses exclude certain allocations of occupancy expense, capitalized software development costs, and depreciation and amortization. |
Research and Development Costs | Research and Development Costs For the years ended December 31, 2022, 2021 and 2020, research and development of $106.9 million, $99.5 million, and $110.8 million, respectively, was recognized in the Company’s consolidated statements of operations in technology and development. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents consist of highly liquid investments with original maturities of three months or less from the date of purchase of $918.2 million at December 31, 2022. The Company’s cash and cash equivalents primarily consist of investments in money market funds. Cash and cash equivalents are stated at fair value. |
Accounts Receivable and Allowance for Doubtful Accounts | Accounts Receivable and Allowance for Doubtful Accounts Accounts receivable are recorded at the invoiced amount, net of allowances for doubtful accounts. The allowance for doubtful accounts reflects the Company’s best estimate of expected losses inherent in the accounts receivable balance. The Company determines the allowance based on historical experience, specific account information, and other currently available evidence. Accounts receivable deemed uncollectable are charged against the allowance for doubtful accounts when identified. |
Inventories | Inventories Inventories consist of purchased components for assembling welcome kits, refill kits, and replacement components for the Company’s chronic care management solutions, and virtual health devices manufactured for sale or lease as part of the Company’s hosted virtual healthcare platform solution. Inventories are stated at the lower of cost and net realizable value. The cost of inventories is determined on a first-in, first-out (“FIFO”) basis or on a weighted average cost basis which approximates the FIFO basis. Inventory costs include direct materials, direct labor and contracting costs, certain indirect labor and manufacturing overhead, and inbound shipping charges. Inventories are assessed on a periodic basis for potentially obsolete and slow-moving inventory with write-downs being recorded when identified. Write-downs are measured as the difference between cost of the inventory and net realizable value based upon assumptions about future demand and obsolescence, and charged to cost of revenue (exclusive of depreciation and amortization shown separately) in the accompanying consolidated statement of operations. At the point of the loss recognition, a new lower cost basis for that inventory is established, and subsequent changes in facts and circumstances do not result in the restoration or increase in that newly established cost basis. |
Property and Equipment | Property and Equipment Property and equipment are stated at cost less accumulated depreciation. Depreciation is recorded using the straight-line method over the estimated useful lives of the respective asset as follows: Computer equipment 3 years Furniture and equipment 5 years Leasehold improvements Shorter of the lease term or the estimated useful lives of the improvements Rental equipment 4.3 years |
Operating Leases | Operating Leases The Company adopted the new leases standard set forth under ASC Topic 842, “Leases,” or ASC Topic 842, as of January 1, 2019, |
Leases of Hosted Virtual Healthcare Platform | Leases of Hosted Virtual Healthcare Platform The Company rents its hosted virtual healthcare platform for certain Clients under arrangements that qualify primarily as operating lease arrangements. The contracts include equipment consisting of virtual health devices which allow physicians access to the platform and there are multiple performance obligations where the Company determines the standalone selling prices based on overall selling prices and pricing objectives. In determining whether a transaction should be classified as a sales-type or operating lease, the Company considers whether: (1) ownership of the virtual healthcare device transfers to the lessee by the end of the term of the lease, (2) the lease grants the lessee an option to purchase the virtual healthcare device that the lessee is reasonably certain to exercise, (3) the lease term is for the major part of the remaining useful life of the virtual healthcare device, (4) the present value of the sum of the lease payments equals or exceeds substantially all of the fair value of the virtual healthcare device, and (5) it is expected that there will be no alternative use for the virtual healthcare device at the end of the lease term. The Company generally recognizes revenue for virtual healthcare devices in sales-type leases at a point in time upon shipment by the Client provided all other revenue recognition criteria have been met and these leases are not material. For operating lease arrangements, revenue for the virtual healthcare device is recognized over the lease term and generally on a straight-line basis. For both sales-type and operating lease arrangement, revenue associated with virtual healthcare platform access is recognized over the lease term on a straight-line basis. |
Rental Equipment | Rental Equipment Equipment is assigned to the rental pool upon the execution of a sales leasing arrangement. Rental equipment assets are generally stated at cost, less accumulated depreciation and reflected in property and equipment, net. Depreciation of rental equipment is provided on a straight-line basis, over the estimated useful lives of the respective assets, which is generally 4.3 years and is charged to cost of revenues. Maintenance and repairs are charged to expense as incurred while improvements are capitalized. When assets are retired or otherwise disposed of, the cost and accumulated depreciation are removed from the accounts, and any resulting gain or loss is reflected in the consolidated statement of operations in the period realized. |
Capitalized Software Development Costs | Capitalized Software Development Costs Capitalized software development costs are included in intangible assets and are amortized on a straight-line basis over three |
Goodwill | Goodwill Goodwill represents the excess of the total purchase consideration over the fair value of the identifiable assets acquired and liabilities assumed in a business combination. Goodwill is not amortized but is tested for impairment at the reporting unit level annually on October 1 or more frequently if events or changes in circumstances indicate that it is more likely than not to be impaired. As of December 31, 2022, the Company operates as two reporting units under the guidance in ASC 350, “Intangibles- Goodwill and Other,” the Teladoc Health Integrated Care reporting unit and the BetterHelp reporting unit. When testing goodwill for impairment, the Company has the option of first performing a qualitative assessment to determine whether it is more likely than not that the fair value of its total company reporting unit is less than its carrying amount. If the Company elects to bypass the qualitative assessment, or if a qualitative assessment indicates it is more likely than not that carrying value exceeds its fair value, the Company performs a quantitative goodwill impairment test. Under the quantitative goodwill impairment test, if the Company’s reporting unit’s carrying amount exceeds its fair value, the Company will record an impairment charge based on that difference. To determine reporting unit fair value as part of the quantitative test, the Company uses a weighting of fair values derived from the income approach and the market approach. Under the income approach, the Company projects its future cash flows and discount these cash flows to reflect their relative risk. The cash flows used are consistent with those the Company uses in its internal planning, which reflects actual business trends experienced and its long-term business strategy. As such, key estimates and factors used in this method include, but are not limited to, revenue, margin and operating expense growth rates; as well as a discount rate and a terminal growth rate. Under the market approach, the Company uses the guideline company method to develop valuation multiples and compare the Company’s reporting unit to similar publicly traded companies. In order to further validate the reasonableness of fair value as determined by the income and market approaches described above, a reconciliation to market capitalization is then performed by estimating a reasonable control premium and other market factors. Future changes in the judgments, assumptions and estimates that are used in the impairment testing for goodwill could result in significantly different estimates of fair value. |
Other Intangible Assets | Other Intangible Assets Other intangible assets include client relationships, acquired technology, and trademarks resulting from business acquisitions as well as capitalized software development costs. The Company amortizes these definite-lived intangible assets over their estimated useful lives and review the estimated useful lives on a quarterly basis to determine if the period of economic benefit has changed. Customer relationships are amortized over a period of two to 20 years in relation to expected future cash flows. Technology is amortized over four three Through December 31, 2021, trademarks were amortized over three Definite-lived intangible assets are re-evaluated whenever events or changes in circumstances indicate that their estimated useful lives may require revision and/or carrying value of the related asset group may not be recoverable by its projected undiscounted cash flows. If the carrying value of the asset group is determined to be unrecoverable, an impairment charge would be recognized in an amount equal to the amount by which the carrying value of the asset group exceeds its fair value. |
Convertible Senior Notes | Convertible Senior Notes Following the adoption on January 1, 2022 of the Financial Accounting Standards Board (“FASB”) Accounting Standards Update 2020-06, "Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity,” the Convertible Senior Notes (the “Notes”) and the Livongo Notes that the Company agreed to guarantee (the “Livongo Notes”) are fully accounted for and carried as liabilities, net of debt discounts on the Company’s Balance Sheets. Refer to Recently Issued Accounting Pronouncements. |
Stock-Based Compensation | Stock-Based Compensation Stock-based compensation for stock options and restricted stock units (“RSUs”) granted is measured based on the grant-date fair value of the awards and recognized on a straight-line basis over the period during which the employee is required to perform services in exchange for the award (generally the vesting period of the award). The Company estimates the fair value of employee stock options using the Black-Scholes option-pricing model, except as noted. Stock-based compensation for performance stock units (“PSUs”) granted is measured based on the grant-date fair value of the awards and recognized on an accelerated tranche by tranche basis over the period during which the employee is required to perform services in exchange for the award (generally the vesting period of the award). The ultimate number of PSUs that are issued to an employee is the result of the actual performance of the Company at the end of the performance period compared to the performance targets and generally range from 0% to 200% of the initial grant. For stock-based compensation assumed in the Livongo merger, the Monte Carlo valuation model was the most suitable for valuation of options for the replaced and replacement awards from the merger. The Company recognizes forfeitures of share-based awards as they occur. The Company’s Employee Stock Purchase Plan (“ESPP”) permits eligible employees to purchase common stock at a discount through payroll deductions during defined offering periods. Under the ESPP, the Company may specify offerings with durations of not more than 27 months and may specify shorter purchase periods within each offering. Each offering will have one or more purchase dates on which shares of its common stock will be purchased for employees participating in the offering. An offering may be terminated under certain circumstances. The price at which the stock is purchased is equal to the lower of 85% of the fair market value of the common stock at the beginning of an offering period or on the date of purchase. |
Advances From Financing Companies | Advances from Financing Companies The Company utilizes a third-party financing company to provide certain Clients with a rental option. Under these arrangements, the Company receives payment upfront from the financing companies and the financing companies collect the Client rental payments over the life of the rental agreement on a nonrecourse basis. The principal portion of these upfront payments are reported as advances from financing companies in the accompanying consolidated balance sheet. The Company indemnifies the financing companies for any loss or expenses resulting from its failure to provide the ongoing necessary system services and support to the Client. |
Provision for Income Taxes | Provision for Income Taxes The Company’s provision for income taxes, deferred tax assets and liabilities, and liabilities for unrecognized tax benefits reflect management's best assessment of estimated current and future taxes to be paid. The objectives for accounting for income taxes, as prescribed by the relevant accounting guidance, are to recognize the amount of taxes payable or refundable for the current year and deferred tax assets and liabilities for future tax consequences of events that have been recognized in the financial statements. Deferred income taxes reflect the tax effect of temporary differences between asset and liability amounts that are recognized for financial reporting purposes and the amounts that are recognized for income tax purposes. These deferred taxes are measured by applying currently enacted tax laws. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. The Company recognizes the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by taxing authorities, including resolution of any related appeals or litigation processes, based on the technical merits of the position. The assumptions about future tax consequences require significant judgment and variations in the actual outcome of these consequences could materially impact the Company’s results of operations. The Company recognizes tax liabilities based on estimates of whether additional taxes and interest will be due. The Company adjusts these liabilities when its judgment changes as a result of the evaluation of new information not previously available. Because of the complexity of some of these uncertainties, the ultimate resolution may result in a payment that is materially different from the Company’s current estimate of the tax liabilities. Interest and penalties, if any, related to accrued liabilities for potential tax assessments are included in income tax expense. Valuation allowances are recorded to reduce deferred tax assets when it is more likely than not that a tax benefit will not be realized. Determination of valuation allowances recorded against deferred tax assets requires significant judgment and use of assumptions, including past operating results, estimates of future taxable income and the feasibility of tax planning strategies. To the extent that new information becomes available which causes the Company to change its judgment regarding the adequacy of existing valuation allowances, such changes to tax liabilities will impact income tax expense in the period in which such determination is made. The Company’s policy is to include interest and penalties related to unrecognized tax benefits as a component of tax expense. |
Comprehensive Loss | Comprehensive Loss Comprehensive loss consists of net loss and unrealized gains or losses on short-term investments and currency translation gains or losses. Unrealized gains or losses on short-term investments are net of any reclassification adjustments for realized gains and losses included in the consolidated statements of operations. |
Net Loss Per Share | Net Loss Per Share Basic net loss per share is computed by dividing the net loss by the weighted-average number of shares of common stock of the Company outstanding during the period. Diluted net loss per share is computed by giving effect to all potential shares of common stock, including outstanding stock options and convertible notes, to the extent dilutive. Basic and diluted net loss per share was the same for each period presented as the inclusion of all potential shares of common stock outstanding would have been anti-dilutive. |
Third-party Advertising and Marketing Expenses | Third-party Advertising and Marketing Expenses Third-party advertising and marketing expenses are expensed as incurred and predominately relate to the BetterHelp segment, and to a lesser extent, communications and campaigns to the Integrated Care segment’s Clients and members. For the years ended December 31, 2022, 2021, and 2020, advertising expenses were $503.9 million, $297.0 million, and $165.0 million, respectively. |
Concentrations of Risk | Concentrations of Risk The Company’s financial instruments that are exposed to concentrations of credit risk consist primarily of cash and cash equivalents and accounts receivable. Although the Company deposits its cash with multiple financial institutions in the U.S. and in foreign countries, its deposits, at times, may exceed federally insured limits. The Company’s short-term investments are comprised of a portfolio of diverse high credit rating instruments with maturity durations of one year or less. No Client represented over 10% of revenues for the years ended December 31, 2022, 2021, or 2020. No Client represented over 10% of accounts receivable at December 31, 2022 or 2021. Revenue from Clients located in the U.S. for the years ended December 31, 2022, 2021, and 2020 was $2,101.0 million, $1,774.0 million and $913.7 million, respectively. Revenue from Clients located outside the U.S. for the years ended December 31, 2022, 2021 and 2020 was $305.8 million, $258.7 million, and $180.2 million, respectively. |
Seasonality | Seasonality The Company’s business has historically been subject to seasonality. In the Company’s Integrated Care segment, as a result of many Clients’ introduction of new services at the start of each year, a concentration of the Company’s new Client contracts has an effective date of January 1. Therefore, while membership increases, utilization and enrollment rates are dampened until service delivery ramps up over the course of the year. As a result of seasonal cold and flu trends, the Company historically has experienced its highest level of visit and other fees revenue during the first and fourth quarters of each year. Due to the higher cost of customer acquisition during the end of year holiday season, the Company’s BetterHelp segment has historically reduced marketing activity during the fourth quarter. As a result of this dynamic the Company has typically experienced fewer new member additions and the strongest operating income performance in the fourth quarter. Conversely, as marketing activity typically resumes at the start of the year the Company typically experiences the weakest operating income performance during the first quarter as new customer acquisition and revenue growth lags marketing spend. During the COVID-19 pandemic in 2021 and 2020, the Company did not experience the typical seasonality associated with cold and flu outbreaks, nor did the Company experience the typical seasonality associated with the BetterHelp business. |
Reclassifications | Reclassifications Certain prior year amounts have been reclassified to conform to the current year presentation. |
Recently Adopted and Issued Accounting Standards | Recently Adopted Accounting Standards In August 2020, the FASB issued Accounting Standards Update (“ASU”) 2020-06, "Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity.” ASU 2020-06 simplifies the accounting for convertible instruments by eliminating the conversion option separation model for convertible debt that can be settled in cash and by eliminating the measurement model for beneficial conversion features. Convertible instruments that continue to be subject to separation models are (1) those with conversion options that are required to be accounted for as bifurcated derivatives and (2) convertible debt instruments issued with substantial premiums for which the premiums are recorded as paid-in capital. This ASU also requires entities to use the if-converted method for all convertible instruments in the diluted earnings per share calculation and include the effect of share settlement for instruments that may be settled in cash or shares, except for certain liability-classified share-based payment awards. The Company adopted ASU 2020-06 as of January 1, 2022, under the modified retrospective transition method, and, accordingly, its prior period financial statements were not restated. Upon adoption of ASU 2020-06, the conversion feature of the Company’s convertible senior notes is no longer reported as a component of equity. Instead, the previously-separated equity component is now combined with the liability component, thereby eliminating the amortization of the debt discount arising from the conversion option separation model. As such, the Company recognized a reduction of approximately $58 million in non-cash interest recorded on its convertible senior notes for the year ended December 31, 2022, as compared to the year ended December 31, 2021. To reflect the adoption of ASU 2020-06, the Company recorded an increase to convertible senior notes of $306.3 million and decreases to additional paid-in capital, accumulated deficit and net deferred tax liabilities of $363.7 million, $72.7 million and $15.3 million, respectively, as of January 1, 2022. Recently Issued Accounting Standards In June 2022, the FASB issued ASU 2022-03, “Fair Value Measurement (Topic 820)—Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions” to clarify that an equity security subject to a contractual sale restriction does not take that restriction into consideration when measuring its fair value and to require specific disclosures related to such an equity security. ASU 2022-03 is effective for annual reporting periods, including interim periods, beginning after December 15, 2023, with early adoption permitted. The provisions of ASU 2022-03 are to be applied prospectively with any adjustments made to earnings on the date of adoption. The adoption of ASU 2022-03 is not expected to have a material impact on the Company’s financial statements. In September 2022, the FASB issued ASU 2022-04, “Liabilities – Supplier Finance Programs (Subtopic 405-50) – Disclosure of Supplier Finance Program Obligations,” to provide guidance on disclosure requirements for supplier finance programs and improve information transparency by requiring the disclosure of key terms of the program, amounts outstanding that remain unpaid, a description of where those amounts are presented in the balance sheet, and a roll forward of any outstanding obligations. ASU 2022-04 is effective for annual reporting periods, including interim periods therein, beginning after December 15, 2022, except for the amendment on roll forward information, which is effective for fiscal years beginning after December 15, 2023. Early adoption is permitted. The Company is currently evaluating what the impact of adopting ASU 2022-04 may have on its financial statements. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Summary of Significant Accounting Policies | |
Summary of useful life of property and equipment | Computer equipment 3 years Furniture and equipment 5 years Leasehold improvements Shorter of the lease term or the estimated useful lives of the improvements Rental equipment 4.3 years |
Revenue, Deferred Revenue, an_2
Revenue, Deferred Revenue, and Deferred Costs and Other (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Revenue, Deferred Revenue, and Deferred Costs and Other | |
Schedule of disaggregation of revenue | The following table presents the Company’s revenues disaggregated by revenue source (in thousands): Year Ended December 31, 2022 2021 2020 Revenue by Type Access fees $ 2,103,814 $ 1,740,170 $ 847,255 Other 303,026 292,537 246,707 Total Revenue $ 2,406,840 $ 2,032,707 $ 1,093,962 Revenue by Geography U.S. Revenue $ 2,101,015 $ 1,774,024 $ 913,720 International Revenue 305,825 258,683 180,242 Total Revenue $ 2,406,840 $ 2,032,707 $ 1,093,962 |
Schedule of deferred device and contract costs | Deferred device and contract costs are classified as a component of prepaid expenses and other current assets or other assets, depending on term, and consisted of the following (in thousands): As of December 31, As of December 31, 2022 2021 Deferred device and contract costs, current $ 29,956 $ 22,304 Deferred device and contract costs, noncurrent 8,404 6,249 Total deferred device and contract costs $ 38,360 $ 28,553 Deferred device and contract costs were as follows (in thousands): Deferred Device and Contract Costs Beginning balance as of December 31, 2021 $ 28,553 Additions 51,201 Cost of revenue recognized (41,394) Ending balance as of December 31, 2022 $ 38,360 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Fair Value Measurements | |
Schedule assets and liabilities measured at fair value on a recurring basis | The following tables present information about the Company’s assets and liabilities that are measured at fair value on a recurring basis using the above input categories (in thousands): December 31, 2022 Level 1 Level 2 Total Cash and cash equivalents $ 918,182 $ 0 $ 918,182 December 31, 2021 Level 1 Level 2 Total Cash and cash equivalents $ 893,480 $ 0 $ 893,480 Short-term investments $ 0 $ 2,537 $ 2,537 |
Inventories (Tables)
Inventories (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Inventories | |
Schedule of inventories | Inventories consisted of the following (in thousands): As of December 31, As of December 31, 2022 2021 Raw materials and purchased parts $ 30,126 $ 28,540 Work in process 433 597 Finished goods 31,977 49,146 Inventory reserve (6,194) (5,204) Total inventories $ 56,342 $ 73,079 |
Prepaid Expenses and Other Cu_2
Prepaid Expenses and Other Current Assets (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Prepaid Expenses and Other Current Assets | |
Schedule Of Prepaid Expenses and Other Current Assets | As of December 31, As of December 31, 2022 2021 Prepaid expenses $ 63,159 $ 38,255 Deferred device and contract costs, current 29,956 22,304 Other receivables 25,091 21,168 Other current assets 12,104 5,660 Total prepaid expenses and other current assets $ 130,310 $ 87,387 |
Goodwill (Tables)
Goodwill (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Goodwill | |
Summary of goodwill | Goodwill consisted of the following (in thousands): Teladoc Health Integrated Care BetterHelp Total Balance as of December 31, 2020 $ 0 $ 0 $ 14,581,255 Additions associated with acquisitions 0 0 64,269 Purchase consideration adjustments net of deferred tax impacts 0 0 (55,801) Deferred tax adjustments 0 0 (66,505) Currency translation adjustment 0 0 (19,044) Balance as of December 31, 2021 0 0 14,504,174 Impairment 0 0 (12,270,000) Currency translation adjustment 0 0 (28,172) Reassignment to reporting units at October 1, 2022 1,132,812 1,073,190 2,206,002 Impairment (1,132,812) 0 (1,132,812) Currency translation adjustment 0 0 0 Balance as of December 31, 2022 $ 0 $ 1,073,190 $ 1,073,190 |
Schedule of significant inputs used in goodwill impairment analysis on each testing date | Testing Dates Reporting Unit Discount Rate Peer Group Revenue Multiples (Current Year/Subsequent Year) Excess of Reporting Unit Fair Value over Carrying Value March 31, 2022 Consolidated 12.0% 3.5x/3.0x None June 30, 2022 Consolidated 16.0% 2.0x/1.8x None October 1, 2022 Consolidated, Pre-reassignment 12.5% 1.65x/1.5x None, Pre-reassignment October 1, 2022 Teladoc Health Integrated Care 12.0% 1.2x/1.0x No remaining goodwill October 1, 2022 BetterHelp 13.5% 1.6x/1.3x Significant amount |
Property and Equipment, Net (Ta
Property and Equipment, Net (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Property and Equipment, Net | |
Summary of property and equipment, net | Property and equipment, net, consisted of the following (in thousands): As of December 31, 2022 2021 Computer equipment $ 29,322 $ 28,330 Furniture and equipment 14,861 7,104 Leasehold improvement 13,298 12,983 Rental Equipment 12,679 11,018 Construction in progress 7,193 1,929 Total 77,353 61,364 Accumulated depreciation (47,712) (34,130) Property and equipment, net $ 29,641 $ 27,234 |
Intangible Assets, Net and Ce_2
Intangible Assets, Net and Certain Cloud Computing Costs (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Intangible Assets, Net and Certain Cloud Computing Costs | |
Schedule of finite lived intangible assets | Intangible assets, net consisted of the following (in thousands): Weighted Average Remaining Useful Accumulated Net Carrying Useful Life Life Gross Value Amortization Value (Years) December 31, 2022 Client relationships 2 to 20 years $ 1,458,384 $ (291,993) $ 1,166,391 13.5 Trademarks 2 to 15 years 325,171 (98,303) 226,868 7.0 Software 3 to 5 years 294,629 (78,373) 216,256 2.7 Technology 4 to 7 years 343,067 (115,817) 227,250 4.7 Intangible assets, net $ 2,421,251 $ (584,486) $ 1,836,765 10.4 December 31, 2021 Client relationships 2 to 20 years $ 1,465,926 $ (199,866) $ 1,266,060 14.5 Trademarks 3 to 15 years 326,392 (45,555) 280,837 9.5 Software 3 to 5 years 126,188 (40,767) 85,421 2.7 Technology 5 to 7 years 343,262 (65,302) 277,960 5.6 Intangible assets, net $ 2,261,768 $ (351,490) $ 1,910,278 12.0 |
Schedule of amortization to be charged to expense over the remaining life of the intangible assets | Periodic amortization that will be charged to expense over the remaining life of the intangible assets as of December 31, 2022 was as follows (in thousands): Years Ending December 31, 2023 $ 287,347 2024 254,686 2025 233,656 2026 173,698 2027 and thereafter 887,378 $ 1,836,765 |
Accrued Expenses and Other Cu_2
Accrued Expenses and Other Current Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Accrued Expenses and Other Current Liabilities | |
Schedule of accrued expenses and other current liabilities | Accrued expenses and other current liabilities consisted of the following (in thousands): As of December 31, As of December 31, 2022 2021 Professional fees $ 10,152 $ 7,124 Consulting fees/provider fees 16,407 19,010 Client performance guarantees 4,145 3,034 Interest payable 1,480 1,480 Income tax payable 3,817 3,098 Insurance 5,981 3,884 Marketing 35,055 2,958 Operating lease liabilities – current 13,592 12,687 Franchise and sales taxes 10,183 9,965 Device replacement cost 349 6,263 Accrued rebates 14,542 4,619 Staff augmentation 3,391 1,858 Other 49,599 26,953 Total $ 168,693 $ 102,933 |
Convertible Senior Notes (Table
Convertible Senior Notes (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Convertible Senior Notes | |
Summary of the Notes | The following table presents certain terms of the Notes that were outstanding as of December 31, 2022: 2027 Notes 2025 Notes Livongo Notes Principal Amount Outstanding as of December 31, 2022 (in millions) $ 1,000.0 $ 0.7 $ 550.0 Interest Rate Per Year 1.25 % 1.375 % 0.875 % Fair Value as of December 31, 2022 (in millions) (1) $ 768.2 $ 0.3 $ 480.6 Fair Value as of December 31, 2021 (in millions) (1) $ 940.0 $ 1.3 $ 605.0 Maturity Date June 1, 2027 May 15, 2025 June 1, 2025 Optional Redemption Date June 5, 2024 May 22, 2022 June 5, 2023 Conversion Date December 1, 2026 November 15, 2024 March 1, 2025 Conversion Rate Per $1,000 Principal Amount as of December 31, 2022 4.1258 18.6621 13.94 Remaining Contractual Life as of December 31, 2022 4.4 years 2.4 years 2.4 years (1) The Notes are classified as Level 2 within the fair value hierarchy, as defined in Note 4. “Fair Value Measurements.” |
Schedule of liability components of the Notes | The net carrying values of the Notes consisted of the following (in thousands): As of December 31, As of December 31, 2027 Notes 2022 2021 Principal $ 1,000,000 $ 1,000,000 Less: Debt discount, net (1) (15,430) (250,846) Net carrying amount 984,570 749,154 2025 Notes Principal 725 730 Less: Debt discount, net (1) (7) (166) Net carrying amount 718 564 Livongo Notes Principal 550,000 550,000 Less: Debt discount, net (1) 0 (74,047) Net carrying amount 550,000 475,953 Total net carrying amount $ 1,535,288 $ 1,225,671 (1) Included in the accompanying consolidated balance sheet within convertible senior notes and amortized to interest expense over the expected life of the Notes using the effective interest rate method. See Note 2. “Summary of Significant Accounting Policies.” |
Schedule of total interest expense recognized related to the Notes | The following table sets forth total interest expense recognized related to the Notes (in thousands): Year Ended December 31, 2027 Notes 2022 2021 2020 Contractual interest expense $ 12,500 $ 12,500 $ 7,743 Amortization of debt discount 3,342 37,070 21,756 Total $ 15,842 $ 49,570 $ 29,499 Effective interest rate 1.6 % 3.4 % 3.4 % Year Ended December 31, 2025 Notes 2022 2021 2020 Contractual interest expense $ 10 $ 1,082 $ 3,900 Amortization of debt discount 3 4,558 12,532 Total $ 13 $ 5,640 $ 16,432 Effective interest rate 1.8 % 4.7 % 7.9 % Year Ended December 31, Livongo Notes 2022 2021 2020 Contractual interest expense $ 4,813 $ 4,813 $ 829 Amortization of debt discount 0 19,310 3,226 Total $ 4,813 $ 24,123 $ 4,055 Effective interest rate 0.9 % 5.2 % 5.2 % |
Advances from Financing Compa_2
Advances from Financing Companies (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Advances from Financing Companies | |
Schedule of client lease payments to third party financing companies | As of December 31, 2022 2023 $ 11,375 2024 6,106 2025 1,976 Total $ 19,457 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Leases. | |
Schedule of components of operating lease expense | The components of operating lease expense reflected in the consolidated statements of operations were as follows (in thousands): Year Ended December 31, Lease cost 2022 2021 Operating lease cost $ 18,473 $ 14,087 Short-term lease cost 162 1,087 Total lease cost $ 18,635 $ 15,174 |
Schedule of supplemental information | Supplemental information related to operating leases was as follows (dollars in thousands): Year Ended December 31, Consolidated Statements of Cash Flows 2022 2021 Cash payment for operating cash flows used for operating leases $ 16,854 $ 14,531 Operating lease liabilities arising from obtaining right-of-use assets $ 3,748 $ 11,598 Other Information Weighted-average remaining lease term 5.55 5.71 Weighted-average discount rate 6.08% 5.88% |
Schedule of future minimum lease payments | The future minimum lease payments under non-cancelable operating leases were as follows (in thousands): As of December 31, Operating Leases: 2022 2023 $ 15,746 2024 11,078 2025 8,519 2026 7,607 2027 5,340 2028 and thereafter 12,887 Total future minimum payments 61,177 Less: imputed interest (9,543) Present value of lease liabilities $ 51,634 Accrued expenses and other current liabilities $ 13,592 Operating lease liabilities, net of current portion $ 38,042 |
Restructuring (Tables)
Restructuring (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Restructuring | |
Summary of the accrual and charges incurred with respect to restructuring | Restructuring Plan Severance Lease Termination Total Accrued Balance, January 1, 2022 $ 0 $ 0 $ 0 Initial costs 1,359 3,815 5,174 Cash payments (563) (568) (1,131) Accrued Balance, December 31, 2022 $ 796 $ 3,247 $ 4,043 |
Common Stock and Stockholders_2
Common Stock and Stockholders' Equity (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Common Stock and Stockholders'Equity | |
Summary of stock option activity under the Plan | Stock option activity under the Plans was as follows (in thousands, except share, per share amounts, and years): Weighted- Weighted- Average Number of Average Remaining Aggregate Shares Exercise Contractual Intrinsic Outstanding Price Life in Years Value Balance at December 31, 2021 3,426,978 $ 22.88 5.32 $ 242,569 Stock option grants 1,530,665 $ 33.72 N/A Stock options exercised (591,213) $ 9.95 N/A $ (24,005) Stock options forfeited (122,496) $ 51.01 N/A Balance at December 31, 2022 4,243,934 $ 27.79 6.10 $ 19,541 Vested or expected to vest at December 31, 2022 4,243,934 $ 27.79 6.10 $ 19,541 Exercisable at December 31, 2022 2,733,507 $ 22.61 4.28 $ 19,541 |
Assumptions used for estimate of fair value of options | Year Ended December 31, 2022 2021 2020 Volatility 56.7% - 68.7% 56.1% - 58.1% 46.1% - 56.6% Expected term (in years) 4.1 4.1 4.1 Risk-free interest rate 1.13% - 4.36% 0.31% - 1.02% 0.22%-1.64% Dividend yield 0 0 0 Weighted-average fair value of underlying stock options $ 17.48 $ 67.37 $ 48.74 |
Schedule of activity under the RSUs | RSU activity under the Plans was as follows: Weighted-Average Grant Date RSUs Fair Value Per RSU Balance at December 31, 2021 2,133,501 $ 168.43 Granted 6,724,893 $ 47.91 Vested and issued (1,309,504) $ 122.56 Forfeited (1,067,221) $ 102.71 Balance at December 31, 2022 6,481,669 $ 63.63 Vested and unissued at December 31, 2022 23,889 $ 92.12 Non-vested at December 31, 2022 6,457,780 $ 63.52 |
Schedule of activity under the PSUs | Weighted-Average Grant Date Shares Fair Value Per PSU Balance at December 31, 2021 356,249 $ 140.01 Granted 511,107 $ 70.32 Vested and issued (199,066) $ 109.37 Forfeited (38,618) $ 85.78 Balance at December 31, 2022 629,672 $ 99.07 Vested and unissued at December 31, 2022 0 $ 0.00 Non-vested at December 31, 2022 629,672 $ 99.07 |
Components of operating expense charged for compensation cost expense | Total compensation costs for stock-based awards were as follows (in thousands): Year Ended December 31, 2022 2021 2020 Cost of revenue (exclusive of depreciation and amortization, which is shown separately) $ 6,468 $ 8,280 $ 2,700 Advertising and marketing 14,083 18,952 26,995 Sales 43,183 71,475 65,730 Technology and development 64,577 95,561 60,556 General and administrative 89,541 108,318 319,550 Total stock-based compensation expense (1) $ 217,852 $ 302,586 $ 475,531 |
Provision for Income Taxes (Tab
Provision for Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Provision for Income Taxes | |
Schedule of components of income (loss) from continuing operations before income taxes | For financial reporting purposes, loss before income taxes for the years ended December 31, 2022, 2021 and 2020 included the following components (in thousands): Year Ended December 31, 2022 2021 2020 Domestic $ (13,303,130) $ (365,762) $ (566,266) International (360,213) (18,894) (9,727) Total $ (13,663,343) $ (384,656) $ (575,993) |
Schedule of components of provision (benefit) for income taxes | The provision for income taxes was comprised of the following components (in thousands): Year Ended December 31, 2022 2021 2020 Current federal $ 0 $ 0 $ (1,954) Current state 3,007 567 27 Current foreign 1,021 2,595 1,605 Total current 4,028 3,162 (322) Deferred federal 770 49,008 (60,008) Deferred state (5,643) (6,276) (26,775) Deferred foreign (2,967) (1,757) (3,752) Total deferred (7,840) 40,975 (90,535) Provision for income taxes $ (3,812) $ 44,137 $ (90,857) |
Schedule of reconciliation of the statutory federal income tax rate to the effective income tax rate | The provision for income taxes differs from the amount computed by applying the statutory federal income tax rate to income before provision for income taxes. The sources and tax effects of the differences are as follows: Year Ended December 31, 2022 2021 2020 Tax at federal statutory rate 21.0 % 21.0 % 21.0 % Goodwill impairment (24.7) 0.0 0.0 State and local tax 4.2 7.7 2.3 Acquisition expenses 0.0 2.0 (2.2) Stock compensation (0.3) 6.7 (1.1) Non-deductible expenses 0.0 (0.5) (0.1) Foreign rate differential 0.0 0.2 0.3 Change in valuation allowance (0.1) (46.9) (5.4) Other (0.1) (1.7) 1.0 Effective tax rate 0.0 % (11.5) % 15.8 % |
Schedule of components of deferred tax assets and liabilities | As of December 31, 2022 2021 Deferred tax assets: Net operating loss carryforwards $ 658,409 $ 687,679 Accrued expenses and compensation 4,933 5,413 Stock-based compensation 52,854 63,641 Foreign tax credits and alternative minimum tax credits 3,448 4,814 Research and development credits 0 1,320 Depreciation of property and equipment 19 56 Interest expense carryforward 2,677 11,528 Operating lease assets 11,012 13,575 Deferred revenue 7,422 7,946 Capitalized R&D 21,987 0 Other 8,590 7,032 Deferred tax assets 771,351 803,004 Valuation allowance (415,751) (335,810) Net deferred tax assets 355,600 467,194 Deferred tax liabilities: Debt related 0 (73,378) Operating lease liabilities (8,701) (11,842) Depreciation of property and equipment (551) (3,427) Intangible assets (396,408) (452,049) Other (1) (879) (2,275) Deferred tax liabilities (406,539) (542,971) Net deferred tax liabilities $ (50,939) $ (75,777) (1) The Company has updated the presentation of the deferred tax liability item of “Debt related” to combine with “Other,” as it is now an immaterial amount in 2022. |
Schedule of reconciliation of beginning and ending amount of unrecognized tax benefits | The following table presents a reconciliation of the beginning and ending amount of the gross unrecognized tax benefits for the years ended December 31, 2022, 2021 and 2020 (in thousands): Year Ended December 31, 2022 2021 2020 Balance at beginning of the period $ 110,848 $ 21,362 $ 2,912 Unrecognized tax benefits assumed in a business combination 0 59,110 15,850 Additions based on prior year tax positions 12,151 43,399 0 Additions based on current year tax positions 20,799 1,490 4,990 Statute of limitations expirations 0 0 (2,390) Release 0 (14,513) 0 Balance at end of the period $ 143,798 $ 110,848 $ 21,362 |
Net Loss per Share (Tables)
Net Loss per Share (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Net Loss per Share | |
Schedule of calculation of basic and diluted net loss per share | The following table presents the calculation of basic and diluted net loss per share for the Company’s common stock (in thousands, except shares and per share data): Year Ended December 31, 2022 2021 2020 Net loss $ (13,659,531) $ (428,793) $ (485,136) Weighted-average shares used to compute basic and diluted net loss per share 161,457,123 156,939,349 90,509,229 Net loss per share, basic and diluted $ (84.60) $ (2.73) $ (5.36) |
Segments (Tables)
Segments (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Segments | |
Schedule of segment reporting information | The following table presents revenues by segment (in thousands): Year Ended December 31, 2022 2021 2020 Teladoc Health Integrated Care $ 1,373,900 $ 1,300,878 $ 744,309 BetterHelp 1,019,646 721,238 345,105 Other (1) 13,294 10,591 4,548 Total Consolidated Revenue $ 2,406,840 $ 2,032,707 $ 1,093,962 The following table presents Adjusted EBITDA by segment (in thousands): Year Ended December 31, 2022 2021 2020 Teladoc Health Integrated Care $ 135,153 $ 144,021 $ 65,836 BetterHelp 114,116 121,702 65,545 Other (1) (2,756) 2,114 (4,540) Total Consolidated Adjusted EBITDA $ 246,513 $ 267,837 $ 126,841 (1) Other reflects certain revenues and expenses not related to ongoing segment operations. |
Reconciliation of segment Adjusted EBITDA to consolidated GAAP income before income taxes | The following table presents a reconciliation of segment Adjusted EBITDA to consolidated GAAP income before income taxes (in thousands): Year Ended December 31, 2022 2021 2020 Teladoc Health Integrated Care $ 135,153 $ 144,021 $ 65,836 BetterHelp 114,116 121,702 65,545 Other (2,756) 2,114 (4,540) Total consolidated Adjusted EBITDA 246,513 267,837 126,841 Adjustments to reconcile to GAAP net loss: Goodwill impairment (13,402,812) 0 0 Loss on extinguishment of debt 0 (43,748) (9,077) Other expense (income), net (859) 5,088 (545) Interest expense, net (9,270) (80,365) (59,950) Depreciation and amortization (256,027) (204,239) (69,495) Stock-based compensation (217,852) (302,586) (475,531) Acquisition, integration, and transformation costs (15,620) (26,643) (88,236) Restructuring costs (7,416) 0 0 Loss before provision for income taxes (13,663,343) (384,656) (575,993) Provision for income taxes 3,812 (44,137) 90,857 Net loss $ (13,659,531) $ (428,793) $ (485,136) |
Schedule of geographic data for long-lived assets (representing property, plant and equipment) | Geographic data for long-lived assets (representing property, plant and equipment) were as follows (in thousands): As of December 31, 2022 2021 United States $ 25,935 $ 25,123 Other 3,706 2,111 Total long-lived assets $ 29,641 $ 27,234 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - VIE (Details) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2022 USD ($) item | Dec. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) | Dec. 31, 2019 USD ($) | |
Variable interest entity | ||||
Number of professional associations consolidated as VIEs | item | 3 | |||
Number of professional corporations consolidated as VIEs | item | 12 | |||
Revenue | $ 2,406,840 | $ 2,032,707 | $ 1,093,962 | |
Net income (loss) | (13,659,531) | (428,793) | (485,136) | |
Assets, Current | 1,315,388 | 1,225,439 | ||
Liabilities, Current | 399,769 | 331,013 | ||
(Equity) deficit | (2,307,745) | (16,045,757) | (15,883,804) | $ (1,014,025) |
Primary beneficiary | ||||
Variable interest entity | ||||
Revenue | 244,500 | 230,200 | 203,900 | |
Net income (loss) | (1,000) | (1,600) | $ 2,100 | |
Assets, Current | 106,700 | 58,500 | ||
Liabilities, Current | 143,800 | 94,600 | ||
(Equity) deficit | $ 37,100 | $ 36,100 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Segments and Revenue Recognition (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Revenue Recognition | |||
Contract term | 1 year | ||
Payment terms | 30 days | ||
Contract with Customer Refunds Issued | $ 79.2 | $ 67 | $ 33.5 |
Revenue recognized related to prior periods | $ 4.4 | $ 5.6 | $ 1.9 |
Amortization term of deferred contract cost | 4 years | ||
Minimum | |||
Revenue Recognition | |||
Contract term | 1 year | ||
Maximum | |||
Revenue Recognition | |||
Contract term | 3 years |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Research and Development (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Summary of Significant Accounting Policies | |||
Research and development included in Technology and Development expenses | $ 106.9 | $ 99.5 | $ 110.8 |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies - Cash and Cash Equivalents and Short-Term Investments (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Summary of Significant Accounting Policies | ||
Cash and cash equivalents | $ 918,182 | $ 893,480 |
Summary of Significant Accoun_8
Summary of Significant Accounting Policies - Intangibles (Details) $ in Millions | 12 Months Ended | ||
Jan. 01, 2022 | Dec. 31, 2022 USD ($) item | Dec. 31, 2021 | |
Intangible assets | |||
Number of reporting units | item | 2 | ||
Increase in the amortization expense due to decrease in useful life | $ | $ 23.2 | ||
Client relationships | Minimum | |||
Intangible assets | |||
Useful life | 2 years | 2 years | |
Client relationships | Maximum | |||
Intangible assets | |||
Useful life | 20 years | 20 years | |
Trademarks | |||
Intangible assets | |||
Useful life | 9 years 6 months | ||
Trademarks | Intangible Assets, Amortization Period | |||
Intangible assets | |||
Useful life | 7 years 6 months | ||
Trademarks | Minimum | |||
Intangible assets | |||
Useful life | 2 years | 3 years | |
Trademarks | Maximum | |||
Intangible assets | |||
Useful life | 15 years | 15 years | |
Technology | Minimum | |||
Intangible assets | |||
Useful life | 4 years | 5 years | |
Technology | Maximum | |||
Intangible assets | |||
Useful life | 7 years | 7 years | |
Capitalized software development costs | Minimum | |||
Intangible assets | |||
Useful life | 3 years | 3 years | |
Capitalized software development costs | Maximum | |||
Intangible assets | |||
Useful life | 5 years | 5 years |
Summary of Significant Accoun_9
Summary of Significant Accounting Policies - PPE (Details) | 12 Months Ended |
Dec. 31, 2022 | |
Computer equipment | |
Property and Equipment | |
Useful life | 3 years |
Furniture and equipment | |
Property and Equipment | |
Useful life | 5 years |
Rental Equipment | |
Property and Equipment | |
Useful life | 4 years 3 months 18 days |
Summary of Significant Accou_10
Summary of Significant Accounting Policies - Stock-Based Compensation (Details) | 12 Months Ended |
Dec. 31, 2022 | |
ESPP | |
Common Stock and Stockholders' Equity | |
Maximum offering period | 27 months |
Stock purchase price as a percentage of fair value (as a percent) | 85% |
PSUs | Minimum | |
Common Stock and Stockholders' Equity | |
Actual performance compared to performance conditions percentage | 0% |
PSUs | Maximum | |
Common Stock and Stockholders' Equity | |
Actual performance compared to performance conditions percentage | 200% |
Summary of Significant Accou_11
Summary of Significant Accounting Policies - Income Taxes (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Summary of Significant Accounting Policies | ||||
Unrecognized tax benefits | $ 143,798 | $ 110,848 | $ 21,362 | $ 2,912 |
Valuation allowance | $ 415,751 | $ 335,810 |
Summary of Significant Accou_12
Summary of Significant Accounting Policies - Advertising and Marketing Expenses (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Summary of Significant Accounting Policies | |||
Advertising expense | $ 503.9 | $ 297 | $ 165 |
Summary of Significant Accou_13
Summary of Significant Accounting Policies - Concentration of Risk (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
United States | |||
Revenue Recognition | |||
Revenue | $ 2,101 | $ 1,774 | $ 913.7 |
Other | |||
Revenue Recognition | |||
Revenue | $ 305.8 | $ 258.7 | $ 180.2 |
Summary of Significant Accou_14
Summary of Significant Accounting Policies - Recently Issued Accounting Pronouncements (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Interest expense, net | $ 9,270 | $ 80,365 | $ 59,950 |
Convertible senior notes, net | 1,535,288 | 1,225,671 | |
Additional paid-in capital | (17,358,645) | (17,473,336) | |
Accumulated deficit | 15,008,287 | 1,421,454 | |
Net deferred tax liabilities | (50,939) | $ (75,777) | |
ASU 2020-06 | Cumulative effect adjustment due to adoption of ASU 2020-06 | |||
Interest expense, net | 58,000 | ||
Convertible senior notes, net | 306,300 | ||
Additional paid-in capital | 363,700 | ||
Accumulated deficit | (72,700) | ||
Net deferred tax liabilities | $ 15,300 |
Revenue, Deferred Revenue, an_3
Revenue, Deferred Revenue, and Deferred Costs and Other - Other Disclosures (Details) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Product and Service Concentration Risk | Revenue from Contract with Customer | Access Fees Revenue | |||
Revenue, Deferred Revenue, Deferred Costs and Other | |||
Concentration risk (as a percent) | 87% | 86% | 78% |
Revenue, Deferred Revenue, an_4
Revenue, Deferred Revenue, and Deferred Costs and Other - Disaggregation and Other (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Revenue | |||
Revenue | $ 2,406,840 | $ 2,032,707 | $ 1,093,962 |
Deferred revenue | 94,300 | 79,400 | |
Net increase in deferred revenue | 14,900 | 24,600 | |
Revenue recognized, included in deferred revenue balance at beginning of period | 73,700 | 51,000 | |
United States | |||
Revenue | |||
Revenue | 2,101,015 | 1,774,024 | 913,720 |
Other | |||
Revenue | |||
Revenue | 305,825 | 258,683 | 180,242 |
Access Fees Revenue | |||
Revenue | |||
Revenue | 2,103,814 | 1,740,170 | 847,255 |
Other.. | |||
Revenue | |||
Revenue | $ 303,026 | $ 292,537 | $ 246,707 |
Revenue, Deferred Revenue, an_5
Revenue, Deferred Revenue, and Deferred Costs and Other - Revenue Remaining Performance Obligation (Details) $ in Millions | Dec. 31, 2022 USD ($) |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-01-01 | |
Future Performance Obligations | |
Revenue recognized, performance obligation | $ 90.1 |
Period of performance obligation | 12 months |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-01-01 | |
Future Performance Obligations | |
Revenue recognized, performance obligation | $ 4.2 |
Period of performance obligation | 12 months |
Revenue, Deferred Revenue, an_6
Revenue, Deferred Revenue, and Deferred Costs and Other - Deferred Cost and Other (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Deferred Device and Contract Costs | ||
Deferred device and contract costs, current | $ 29,956 | $ 22,304 |
Deferred device and contract costs, noncurrent | 8,404 | 6,249 |
Total deferred device and contract costs | $ 38,360 | $ 28,553 |
Revenue, Deferred Revenue, an_7
Revenue, Deferred Revenue, and Deferred Costs and Other - Deferred Cost and Other Activity (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2022 USD ($) | |
Change in Deferred Costs And Other | |
Beginning balance | $ 28,553 |
Additions | 51,201 |
Cost of revenue recognized | (41,394) |
Ending Balance | $ 38,360 |
Fair Value Measurements - Recur
Fair Value Measurements - Recurring (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Fair Value | ||
Short-term investments | $ 0 | $ 2,537 |
Transfers between fair value measurement levels, amount | 0 | 0 |
Recurring | ||
Fair Value | ||
Cash and cash equivalents | 918,182 | 893,480 |
Short-term investments | 2,537 | |
Level 1 | Recurring | ||
Fair Value | ||
Cash and cash equivalents | 918,182 | 893,480 |
Short-term investments | 0 | |
Level 2 | Recurring | ||
Fair Value | ||
Cash and cash equivalents | $ 0 | 0 |
Short-term investments | $ 2,537 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Inventories | ||
Raw materials and purchased parts | $ 30,126 | $ 28,540 |
Work in process | 433 | 597 |
Finished goods | 31,977 | 49,146 |
Inventory reserve | (6,194) | (5,204) |
Total inventories | $ 56,342 | $ 73,079 |
Prepaid Expenses and Other Cu_3
Prepaid Expenses and Other Current Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Prepaid Expenses and Other Current Assets | ||
Prepaid expenses | $ 63,159 | $ 38,255 |
Deferred device and contract costs, current | 29,956 | 22,304 |
Other receivables | 25,091 | 21,168 |
Other current assets | 12,104 | 5,660 |
Total prepaid expenses and other current assets | $ 130,310 | $ 87,387 |
Goodwill - Summary of Activity
Goodwill - Summary of Activity (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Dec. 31, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Sep. 30, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Goodwill | |||||||
Beginning balance | $ 14,504,174 | $ 14,504,174 | $ 14,504,174 | $ 14,581,255 | |||
Impairment | $ (1,132,812) | $ (3,000,000) | (6,600,000) | (12,270,000) | (13,402,812) | 0 | $ 0 |
Additions associated with acquisitions | 64,269 | ||||||
Purchase consideration adjustments net of deferred tax impacts | (55,801) | ||||||
Deferred tax adjustments | (66,505) | ||||||
Currency translation adjustment | 0 | (28,172) | (19,044) | ||||
Reassignment to reporting units | 2,206,002 | ||||||
Ending balance | 1,073,190 | 1,073,190 | 14,504,174 | 14,581,255 | |||
Teladoc Health Integrated Care | |||||||
Goodwill | |||||||
Beginning balance | 0 | 0 | 0 | 0 | |||
Impairment | (1,132,812) | 0 | |||||
Additions associated with acquisitions | 0 | ||||||
Purchase consideration adjustments net of deferred tax impacts | 0 | ||||||
Deferred tax adjustments | 0 | ||||||
Currency translation adjustment | 0 | 0 | 0 | ||||
Reassignment to reporting units | 1,132,812 | ||||||
Ending balance | 0 | 0 | 0 | 0 | |||
BetterHelp | |||||||
Goodwill | |||||||
Beginning balance | $ 0 | 0 | 0 | 0 | |||
Impairment | 0 | 0 | |||||
Additions associated with acquisitions | 0 | ||||||
Purchase consideration adjustments net of deferred tax impacts | 0 | ||||||
Deferred tax adjustments | 0 | ||||||
Currency translation adjustment | 0 | $ 0 | 0 | ||||
Reassignment to reporting units | 1,073,190 | ||||||
Ending balance | $ 1,073,190 | $ 1,073,190 | $ 0 | $ 0 |
Goodwill - Impairment Analysis
Goodwill - Impairment Analysis (Details) | 12 Months Ended | |||
Oct. 01, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2022 | |
Discount Rate | ||||
Goodwill Impairment Testing | ||||
Goodwill Measurement Input | 12.5 | 16 | 12 | |
Peer Group Revenue Multiples | Peer Group Revenue Multiples, Current Year | ||||
Goodwill Impairment Testing | ||||
Goodwill Measurement Input | 1.65 | 2 | 3.5 | |
Peer Group Revenue Multiples | Peer Group Revenue Multiples, Subsequent Year | ||||
Goodwill Impairment Testing | ||||
Goodwill Measurement Input | 1.5 | 1.8 | 3 | |
Market Approach | ||||
Goodwill Impairment Testing | ||||
Valuation approach, allocation percentage | 25% | |||
Income Approach | ||||
Goodwill Impairment Testing | ||||
Valuation approach, allocation percentage | 75% | |||
Teladoc Health Integrated Care | Discount Rate | ||||
Goodwill Impairment Testing | ||||
Goodwill Measurement Input | 12 | |||
Teladoc Health Integrated Care | Peer Group Revenue Multiples | Peer Group Revenue Multiples, Current Year | ||||
Goodwill Impairment Testing | ||||
Goodwill Measurement Input | 1.2 | |||
Teladoc Health Integrated Care | Peer Group Revenue Multiples | Peer Group Revenue Multiples, Subsequent Year | ||||
Goodwill Impairment Testing | ||||
Goodwill Measurement Input | 1 | |||
BetterHelp | Discount Rate | ||||
Goodwill Impairment Testing | ||||
Goodwill Measurement Input | 13.5 | |||
BetterHelp | Peer Group Revenue Multiples | Peer Group Revenue Multiples, Current Year | ||||
Goodwill Impairment Testing | ||||
Goodwill Measurement Input | 1.6 | |||
BetterHelp | Peer Group Revenue Multiples | Peer Group Revenue Multiples, Subsequent Year | ||||
Goodwill Impairment Testing | ||||
Goodwill Measurement Input | 1.3 |
Goodwill - Additional Informati
Goodwill - Additional Information (Details) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||||
Oct. 01, 2022 USD ($) segment $ / shares | Dec. 31, 2022 USD ($) | Jun. 30, 2022 USD ($) $ / shares | Mar. 31, 2022 USD ($) $ / shares | Sep. 30, 2022 USD ($) | Dec. 31, 2022 USD ($) segment $ / shares | Dec. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) | |
Goodwill | ||||||||
Goodwill impairment | $ 1,132,812 | $ 3,000,000 | $ 6,600,000 | $ 12,270,000 | $ 13,402,812 | $ 0 | $ 0 | |
Goodwill impairment loss per share | $ / shares | $ 18.77 | $ 40.88 | $ 83.01 | |||||
Number of reportable segments | segment | 2 | 2 | ||||||
Existing Reporting Units | ||||||||
Goodwill | ||||||||
Goodwill impairment | $ 2,600,000 | |||||||
New Reporting Units | ||||||||
Goodwill | ||||||||
Goodwill impairment | 2,200,000 | |||||||
Teladoc Health Integrated Care Reporting Unit | ||||||||
Goodwill | ||||||||
Goodwill impairment | $ 1,100,000 | |||||||
Goodwill impairment loss per share | $ / shares | $ 23.37 | |||||||
Non cash charges on goodwill | $ 3,800,000 |
Property and Equipment, Net (De
Property and Equipment, Net (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Total | $ 77,353 | $ 61,364 | |
Accumulated depreciation | (47,712) | (34,130) | |
Property and equipment, net | 29,641 | 27,234 | |
Depreciation | 11,400 | 8,900 | $ 4,800 |
Computer equipment | |||
Total | 29,322 | 28,330 | |
Furniture and equipment | |||
Total | 14,861 | 7,104 | |
Leasehold improvement | |||
Total | 13,298 | 12,983 | |
Rental Equipment | |||
Total | 12,679 | 11,018 | |
Construction in progress | |||
Total | $ 7,193 | $ 1,929 |
Intangible Assets, Net and Ce_3
Intangible Assets, Net and Certain Cloud Computing Costs - Summary (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||||
Jan. 01, 2022 | Dec. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Intangible assets | |||||
Gross Value | $ 2,261,768 | $ 2,421,251 | $ 2,261,768 | ||
Accumulated Amortization | (351,490) | (584,486) | (351,490) | ||
Net Carrying Value | 1,910,278 | 1,836,765 | 1,910,278 | ||
Amortization expense for intangible assets | 244,600 | 195,300 | $ 64,700 | ||
Capitalized software development cost | $ 46,100 | 15,000 | $ 7,500 | ||
Impairment, Intangible Asset, Finite-Lived, Statement of Income or Comprehensive Income [Extensible Enumeration] | Depreciation, Depletion and Amortization, Nonproduction | ||||
Additional amortization expense related to two-year migration strategy | $ 23,200 | ||||
Additional amortization expense related to two-year migration strategy, per share | $ 0.14 | ||||
Net cloud computing costs | 2,600 | $ 25,400 | 2,600 | ||
Cloud computing expense | $ 1,900 | $ 100 | |||
Weighted Average | |||||
Intangible assets | |||||
Weighted Average Remaining Useful Life | 10 years 4 months 24 days | 12 years | |||
Client relationships | |||||
Intangible assets | |||||
Gross Value | 1,465,926 | $ 1,458,384 | $ 1,465,926 | ||
Accumulated Amortization | (199,866) | (291,993) | (199,866) | ||
Net Carrying Value | 1,266,060 | $ 1,166,391 | $ 1,266,060 | ||
Client relationships | Minimum | |||||
Intangible assets | |||||
Useful life | 2 years | 2 years | |||
Client relationships | Maximum | |||||
Intangible assets | |||||
Useful life | 20 years | 20 years | |||
Client relationships | Weighted Average | |||||
Intangible assets | |||||
Weighted Average Remaining Useful Life | 13 years 6 months | 14 years 6 months | |||
Trademarks | |||||
Intangible assets | |||||
Gross Value | 326,392 | $ 325,171 | $ 326,392 | ||
Accumulated Amortization | (45,555) | (98,303) | (45,555) | ||
Net Carrying Value | $ 280,837 | $ 226,868 | $ 280,837 | ||
Useful life | 9 years 6 months | ||||
Trademarks | Minimum | |||||
Intangible assets | |||||
Useful life | 2 years | 3 years | |||
Trademarks | Maximum | |||||
Intangible assets | |||||
Useful life | 15 years | 15 years | |||
Trademarks | Weighted Average | |||||
Intangible assets | |||||
Weighted Average Remaining Useful Life | 7 years 6 months | 9 years 6 months | 7 years | 9 years 6 months | |
Capitalized software development costs | |||||
Intangible assets | |||||
Gross Value | $ 126,188 | $ 294,629 | $ 126,188 | ||
Accumulated Amortization | (40,767) | (78,373) | (40,767) | ||
Net Carrying Value | 85,421 | $ 216,256 | $ 85,421 | ||
Capitalized software development costs | Minimum | |||||
Intangible assets | |||||
Useful life | 3 years | 3 years | |||
Capitalized software development costs | Maximum | |||||
Intangible assets | |||||
Useful life | 5 years | 5 years | |||
Capitalized software development costs | Weighted Average | |||||
Intangible assets | |||||
Weighted Average Remaining Useful Life | 2 years 8 months 12 days | 2 years 8 months 12 days | |||
Technology | |||||
Intangible assets | |||||
Gross Value | 343,262 | $ 343,067 | $ 343,262 | ||
Accumulated Amortization | (65,302) | (115,817) | (65,302) | ||
Net Carrying Value | $ 277,960 | $ 227,250 | $ 277,960 | ||
Technology | Minimum | |||||
Intangible assets | |||||
Useful life | 4 years | 5 years | |||
Technology | Maximum | |||||
Intangible assets | |||||
Useful life | 7 years | 7 years | |||
Technology | Weighted Average | |||||
Intangible assets | |||||
Weighted Average Remaining Useful Life | 4 years 8 months 12 days | 5 years 7 months 6 days | |||
International Product Program [Member] | |||||
Intangible assets | |||||
Impairment loss | $ 9,900 |
Intangible Assets, Net and Ce_4
Intangible Assets, Net and Certain Cloud Computing Costs - Amortization (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Periodic amortization that will be charged to expense over the remaining life of the intangible assets | ||
2023 | $ 287,347 | |
2024 | 254,686 | |
2025 | 233,656 | |
2026 | 173,698 | |
2027 and thereafter | 887,378 | |
Net Carrying Value | $ 1,836,765 | $ 1,910,278 |
Accrued Expenses and Other Cu_3
Accrued Expenses and Other Current Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Accrued Expenses and Other Current Liabilities | ||
Professional fees | $ 10,152 | $ 7,124 |
Consulting fees/provider fees | 16,407 | 19,010 |
Client performance guarantees | 4,145 | 3,034 |
Interest payable | 1,480 | 1,480 |
Income tax payable | 3,817 | 3,098 |
Insurance | 5,981 | 3,884 |
Marketing | 35,055 | 2,958 |
Operating lease liabilities - current | $ 13,592 | $ 12,687 |
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List] | Total | Total |
Franchise and sales taxes | $ 10,183 | $ 9,965 |
Device replacement cost | 349 | 6,263 |
Accrued rebates | 14,542 | 4,619 |
Staff augmentation | 3,391 | 1,858 |
Other | 49,599 | 26,953 |
Total | $ 168,693 | $ 102,933 |
Convertible Senior Notes - Outs
Convertible Senior Notes - Outstanding Convertible Senior Notes - Issuances (Details) - USD ($) $ in Thousands | 12 Months Ended | ||||||
May 19, 2020 | May 08, 2018 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Jun. 04, 2020 | Jun. 27, 2017 | |
2027 Notes | |||||||
Convertible Senior Notes | |||||||
Face amount | $ 1,000,000 | $ 1,000,000 | $ 1,000,000 | ||||
Interest rate (as a percent) | 1.25% | ||||||
Net proceeds from issuance of Notes | $ 975,900 | ||||||
Offering costs | $ 24,100 | 0 | 0 | $ 24,070 | |||
2025 Notes | |||||||
Convertible Senior Notes | |||||||
Face amount | $ 287,500 | 725 | 730 | ||||
Interest rate (as a percent) | 1.375% | ||||||
Net proceeds from issuance of Notes | $ 279,100 | ||||||
Offering costs | $ 8,400 | ||||||
Livongo Notes | |||||||
Convertible Senior Notes | |||||||
Face amount | $ 550,000 | $ 550,000 | $ 550,000 | ||||
Interest rate (as a percent) | 0.875% | ||||||
2022 Notes | |||||||
Convertible Senior Notes | |||||||
Face amount | $ 275,000 | ||||||
Interest rate (as a percent) | 3% |
Convertible Senior Notes - Cert
Convertible Senior Notes - Certain terms of the Notes (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
2027 Notes | ||
Convertible Senior Notes | ||
Principal Amount Outstanding | $ 1,000,000 | |
Interest Rate Per Year | 1.25% | |
Fair value | $ 768,200 | $ 940,000 |
Share conversion rate Per $1,000 principal amount | 4.1258 | |
Remaining contractual life | 4 years 4 months 24 days | |
2025 Notes | ||
Convertible Senior Notes | ||
Principal Amount Outstanding | $ 700 | |
Interest Rate Per Year | 1.375% | |
Fair value | $ 300 | 1,300 |
Share conversion rate Per $1,000 principal amount | 18.6621 | |
Remaining contractual life | 2 years 4 months 24 days | |
Livongo Notes | ||
Convertible Senior Notes | ||
Principal Amount Outstanding | $ 550,000 | |
Interest Rate Per Year | 0.875% | |
Fair value | $ 480,600 | $ 605,000 |
Share conversion rate Per $1,000 principal amount | 13.94 | |
Remaining contractual life | 2 years 4 months 24 days | |
Notes | ||
Convertible Senior Notes | ||
Principal multiple amount used in the conversion of the debt instrument | $ 1 |
Convertible Senior Notes - Term
Convertible Senior Notes - Terms (Details) $ / shares in Units, $ in Thousands, shares in Millions | 12 Months Ended |
Dec. 31, 2022 USD ($) D $ / shares shares | |
Livongo Notes | |
Convertible Senior Notes | |
Convertible debt, number of consecutive trading days, measurement period | 5 |
Convertible debt, Reference property rate | 0.592 |
Convertible debt, Reference property , conversion price (in dollars per share) | $ / shares | $ 4.24 |
Trading day observation period used to determine the amount of cash and shares, if any, that are due upon conversion | 40 |
Percentage of principal for repurchase price (as percent) | 100 |
Notes | |
Convertible Senior Notes | |
Principal multiple amount used in the conversion of the debt instrument | $ | $ 1 |
Convertible debt, threshold, trading days | 20 |
Convertible debt, threshold, consecutive trading days | 30 |
Minimum percentage of common stock price as a percentage of the conversion price | 130% |
Convertible debt, number of business days, measurement period | 5 |
Convertible debt, number of consecutive trading days, measurement period | 10 |
Trading price expressed as a percentage of the last reported sales price and conversion rate after the specified consecutive trading day period | 98% |
Shares reserved for issuance (in shares) | shares | 8.7 |
2027 Notes, 2025 Notes and the 2022 Notes | |
Convertible Senior Notes | |
Trading day observation period used to determine the amount of cash and shares, if any, that are due upon conversion | 25 |
Convertible Senior Notes - Ou_2
Convertible Senior Notes - Outstanding Convertible Senior Notes - Summary (Details) - USD ($) $ in Thousands | 12 Months Ended | |||||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Jun. 04, 2020 | May 19, 2020 | May 08, 2018 | |
Convertible Senior Notes | ||||||
Net carrying amount | $ 1,535,288 | $ 1,225,671 | ||||
2027 Notes | ||||||
Convertible Senior Notes | ||||||
Principal | 1,000,000 | 1,000,000 | $ 1,000,000 | |||
Less: Debt discount, net | (15,430) | (250,846) | ||||
Net carrying amount | 984,570 | 749,154 | ||||
Interest Expense | ||||||
Contractual interest expense | 12,500 | 12,500 | $ 7,743 | |||
Amortization of debt discount | 3,342 | 37,070 | 21,756 | |||
Total | $ 15,842 | $ 49,570 | $ 29,499 | |||
Effective interest rate of the liability component (as a percent) | 1.60% | 3.40% | 3.40% | |||
2025 Notes | ||||||
Convertible Senior Notes | ||||||
Principal | $ 725 | $ 730 | $ 287,500 | |||
Less: Debt discount, net | (7) | (166) | ||||
Net carrying amount | 718 | 564 | ||||
Interest Expense | ||||||
Contractual interest expense | 10 | 1,082 | $ 3,900 | |||
Amortization of debt discount | 3 | 4,558 | 12,532 | |||
Total | $ 13 | $ 5,640 | $ 16,432 | |||
Effective interest rate of the liability component (as a percent) | 1.80% | 4.70% | 7.90% | |||
Livongo Notes | ||||||
Convertible Senior Notes | ||||||
Principal | $ 550,000 | $ 550,000 | $ 550,000 | |||
Less: Debt discount, net | 0 | (74,047) | ||||
Net carrying amount | 550,000 | 475,953 | ||||
Interest Expense | ||||||
Contractual interest expense | 4,813 | 4,813 | $ 829 | |||
Amortization of debt discount | 0 | 19,310 | 3,226 | |||
Total | $ 4,813 | $ 24,123 | $ 4,055 | |||
Effective interest rate of the liability component (as a percent) | 0.90% | 5.20% | 5.20% |
Convertible Senior Notes - Exch
Convertible Senior Notes - Exchange/Redemption of Convertible Senior Notes Due (Details) - USD ($) $ in Thousands, shares in Millions | 1 Months Ended | 12 Months Ended | ||
Mar. 31, 2021 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Convertible Senior Notes | ||||
Loss on extinguishment of debt | $ 0 | $ 43,748 | $ 9,077 | |
2025 Notes | ||||
Convertible Senior Notes | ||||
Principal amount of debt exchanged for shares of the Company's common stock in private placement transactions | 211,500 | |||
Loss on extinguishment of debt | $ 40,300 | |||
2025 Notes | Private Placement [Member] | ||||
Convertible Senior Notes | ||||
Shares issued for conversion/exchange of debt | 4 | |||
2025 Notes | Debt Conversion Other Than Private Placement [Member] | ||||
Convertible Senior Notes | ||||
Shares issued for conversion/exchange of debt | 1.1 | |||
2022 Notes | ||||
Convertible Senior Notes | ||||
Shares issued for conversion/exchange of debt | 1.1 | |||
Cash exchanged, redemption of convertible notes | $ 100 | |||
Loss on extinguishment of debt | $ 3,400 |
Advances from Financing Compa_3
Advances from Financing Companies (Details) $ in Thousands | Dec. 31, 2022 USD ($) |
2023 | $ 11,375 |
2024 | 6,106 |
2025 | 1,976 |
Total | $ 19,457 |
Minimum | |
Advances from financing companies, interest rate (as a percent) | 3.35% |
Maximum | |
Advances from financing companies, interest rate (as a percent) | 8.50% |
Leases - Other (Details)
Leases - Other (Details) | 12 Months Ended |
Dec. 31, 2022 | |
Leases and Contractual Obligations | |
Options to extend | true |
Minimum | |
Leases and Contractual Obligations | |
Remaining lease terms | 1 year |
Options to extend lease terms | 1 year |
Lessor lease term | 2 years |
Maximum | |
Leases and Contractual Obligations | |
Remaining lease terms | 10 years |
Options to extend lease terms | 5 years |
Lessor lease term | 5 years |
Leases - Lease Cost (Details)
Leases - Lease Cost (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Lease cost | ||
Operating lease cost | $ 18,473 | $ 14,087 |
Short-term Lease, Cost | 162 | 1,087 |
Total lease cost | $ 18,635 | $ 15,174 |
Leases - Supplemental Informati
Leases - Supplemental Information (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Leases | ||
Cash payment for operating cash flows used for operating leases | $ 16,854 | $ 14,531 |
Operating lease liabilities arising from obtaining right-of-use assets | $ 3,748 | $ 11,598 |
Weighted-average remaining lease term | 5 years 6 months 18 days | 5 years 8 months 15 days |
Weighted-average discount rate | 6.08% | 5.88% |
Leases - Future Minimum Lease P
Leases - Future Minimum Lease Payments (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Future minimum lease payments under non cancelable operating leases: | ||
2023 | $ 15,746 | |
2024 | 11,078 | |
2025 | 8,519 | |
2026 | 7,607 | |
2027 | 5,340 | |
2028 and thereafter | 12,887 | |
Total future minimum payments | 61,177 | |
Less: imputed interest | (9,543) | |
Present value of lease liabilities | 51,634 | |
Operating Leases | ||
Operating lease liabilities - current | $ 13,592 | $ 12,687 |
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List] | Accrued Liabilities And Other Liabilities Excluding Accrued Compensation Current | Accrued Liabilities And Other Liabilities Excluding Accrued Compensation Current |
Operating lease liabilities, net of current portion | $ 38,042 | $ 41,773 |
Restructuring (Details)
Restructuring (Details) - USD ($) $ in Thousands | 12 Months Ended | |||||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Jun. 30, 2023 | Mar. 31, 2023 | |
Restructuring | ||||||
Restructuring costs | $ 7,416 | $ 0 | $ 0 | |||
Forecast | ||||||
Restructuring | ||||||
Remaining expected cost | $ 17,000 | |||||
Cash expenditures related to workforce reductions | $ 10,000 | |||||
Lease Termination | Forecast | ||||||
Restructuring | ||||||
Remaining expected cost | $ 8,000 | |||||
Severance | Forecast | ||||||
Restructuring | ||||||
Remaining expected cost | $ 9,000 | |||||
Restructuring Plan [Member] | ||||||
Restructuring Plan, Summary of Accrual and Charges Incurred | ||||||
Balance at beginning of year | 4,043 | 0 | ||||
Initial costs | 5,174 | |||||
Cash payments | (1,131) | |||||
Balance at end of year | 4,043 | 0 | ||||
Restructuring Plan [Member] | Lease Termination | ||||||
Restructuring Plan, Summary of Accrual and Charges Incurred | ||||||
Balance at beginning of year | 3,247 | 0 | ||||
Initial costs | 3,815 | |||||
Cash payments | (568) | |||||
Balance at end of year | 3,247 | 0 | ||||
Restructuring Plan [Member] | Severance | ||||||
Restructuring Plan, Summary of Accrual and Charges Incurred | ||||||
Balance at beginning of year | $ 796 | 0 | ||||
Initial costs | 1,359 | |||||
Cash payments | (563) | |||||
Balance at end of year | $ 796 | $ 0 |
Common Stock and Stockholders_3
Common Stock and Stockholders' Equity - Stock Plan and Stock Options (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |||
Oct. 29, 2020 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Common Stock and Stockholders' Equity | ||||
Trading days | 4 days | |||
Stock options | ||||
Common Stock and Stockholders' Equity | ||||
Vesting period | 4 years | |||
Stock options | Maximum | ||||
Common Stock and Stockholders' Equity | ||||
Exercisable period (in years) | 10 years | |||
Shares available for grant | 13,606,908 | |||
RSUs | ||||
Common Stock and Stockholders' Equity | ||||
Vesting period | 3 years | |||
RSUs | Maximum | ||||
Common Stock and Stockholders' Equity | ||||
Vesting period | 3 years | |||
2015 Incentive Award Plan | ||||
Number of Shares Outstanding | ||||
Balance at beginning of period (in shares) | 3,426,978 | |||
Stock option grants (in shares) | 1,530,665 | |||
Stock options exercised (in shares) | (591,213) | |||
Stock options forfeited (in shares) | (122,496) | |||
Balance at end of period (in shares) | 4,243,934 | 3,426,978 | ||
Vested or expected to vest at end of period (in shares) | 4,243,934 | |||
Exercisable at end of period (in shares) | 2,733,507 | |||
Weighted-Average Exercise Price | ||||
Balance at beginning of period (in dollars per share) | $ 22.88 | |||
Stock option grants (in dollars per share) | 33.72 | |||
Stock options exercised (in dollars per share) | 9.95 | |||
Stock options forfeited (in dollars per share) | 51.01 | |||
Balance at end of period (in dollars per share) | 27.79 | $ 22.88 | ||
Vested or expected to vest at end of period (in dollars per share) | 27.79 | |||
Exercisable at end of period (in dollars per share) | $ 22.61 | |||
Weighted-average remaining contractual life in Years | ||||
Weighted-average remaining contractual life (in years) | 6 years 1 month 6 days | 5 years 3 months 25 days | ||
Vested or expected to vest at end of period (in years) | 6 years 1 month 6 days | |||
Exercisable at end of period (in years) | 4 years 3 months 10 days | |||
Aggregate Intrinsic Value | ||||
Balance at beginning of period | $ 242,569 | |||
Stock options exercised | (24,005) | |||
Balance at end of period | 19,541 | $ 242,569 | ||
Vested or expected to vest at end of period | 19,541 | |||
Exercisable at end of period | 19,541 | |||
Grant-date fair value of stock options granted during the period | $ 26,800 | $ 7,400 | $ 1,298,000 |
Common Stock and Stockholders_4
Common Stock and Stockholders' Equity - Fair Value Assumptions (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Other disclosures | |||
Compensation expense | $ 217,852 | $ 302,586 | $ 475,531 |
Stock options | |||
Fair value assumptions | |||
Volatility, minimum (as a percent) | 56.70% | 56.10% | 46.10% |
Volatility, maximum (as a percent) | 68.70% | 58.10% | 56.60% |
Expected term (in years) | 4 years 1 month 6 days | 4 years 1 month 6 days | 4 years 1 month 6 days |
Risk-free interest rate, minimum | 1.13% | 0.31% | 0.22% |
Risk-free interest rate, maximum | 4.36% | 1.02% | 1.64% |
Dividend yield (as a percent) | 0% | 0% | 0% |
Weighted-average fair value of the underlying stock options | $ 17.48 | $ 67.37 | $ 48.74 |
Other disclosures | |||
Compensation expense | $ 20,300 | $ 93,000 | $ 134,900 |
Unrecognized compensation cost | $ 23,700 | ||
Period over which unrecognized compensation cost is expected to be recognized | 2 years 7 months 6 days |
Common Stock and Stockholders_5
Common Stock and Stockholders' Equity - Restricted Stock Units (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Other disclosures | |||
Stock-based compensation | $ 217,852 | $ 302,586 | $ 475,531 |
RSUs | |||
Common Stock and Stockholders' Equity | |||
Vesting period | 3 years | ||
Shares | |||
Balance at beginning of period (in shares) | 2,133,501 | ||
Granted (in shares) | 6,724,893 | ||
Vested and issued (in shares) | (1,309,504) | ||
Forfeited (in shares) | (1,067,221) | ||
Balance at end of period (in shares) | 6,481,669 | 2,133,501 | |
Vested and unissued (in shares) | 23,889 | ||
Nonvested (in shares) | 6,457,780 | ||
Weighted-Average Grant Date Fair Value Per Share | |||
Outstanding at beginning of period (in dollars per share) | $ 168.43 | ||
Granted | 47.91 | ||
Vested and issued (in dollars per share) | 122.56 | ||
Forfeited (in dollars per share) | 102.71 | ||
Outstanding at end of period (in dollars per share) | 63.63 | $ 168.43 | |
Vested and unissued (in dollars per share) | 92.12 | ||
Non-vested (in dollars per share) | $ 63.52 | ||
Other disclosures | |||
Grant date fair value of RSUs granted | $ 322,200 | $ 144,200 | 801,000 |
Stock-based compensation | 179,400 | $ 182,400 | $ 314,100 |
Unrecognized compensation cost related to non vested awards | $ 309,900 | ||
Period over which unrecognized compensation cost is expected to be recognized | 2 years | ||
Minimum | RSUs | |||
Common Stock and Stockholders' Equity | |||
Vesting period | 1 year | ||
Maximum | RSUs | |||
Common Stock and Stockholders' Equity | |||
Vesting period | 3 years |
Common Stock and Stockholders_6
Common Stock and Stockholders' Equity - Performance Stock Units (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Other disclosures | |||
Stock-based compensation | $ 217,852 | $ 302,586 | $ 475,531 |
PSUs | |||
Shares | |||
Balance at beginning of period (in shares) | 356,249 | ||
Granted (in shares) | 511,107 | ||
Vested and issued (in shares) | (199,066) | ||
Forfeited (in shares) | (38,618) | ||
Balance at end of period (in shares) | 629,672 | 356,249 | |
Vested and unissued (in shares) | 0 | ||
Nonvested (in shares) | 629,672 | ||
Weighted-Average Grant Date Fair Value Per Share | |||
Outstanding at beginning of period (in dollars per share) | $ 140.01 | ||
Granted (in dollars per share) | 70.32 | ||
Vested and issued (in dollars per share) | 109.37 | ||
Forfeited (in dollars per share) | 85.78 | ||
Outstanding at end of period (in dollars per share) | 99.07 | $ 140.01 | |
Vested and unissued (in dollars per share) | 0 | ||
Non-vested (in dollars per share) | $ 99.07 | ||
Other disclosures | |||
Grant date fair value of PSUs granted | $ 35,900 | $ 70,400 | 25,000 |
Stock-based compensation | 15,100 | $ 22,000 | $ 24,000 |
Unrecognized compensation cost related to non vested awards | $ 6,300 | ||
Period over which unrecognized compensation cost is expected to be recognized | 1 year 2 months 12 days | ||
PSUs | Minimum | |||
Common Stock and Stockholders' Equity | |||
Vesting period | 1 year | ||
Actual performance compared to performance conditions percentage | 0% | ||
PSUs | Maximum | |||
Common Stock and Stockholders' Equity | |||
Vesting period | 3 years | ||
Actual performance compared to performance conditions percentage | 200% |
Common Stock and Stockholders_7
Common Stock and Stockholders' Equity - Employee Stock Purchase Plan (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Other Disclosures | |||
Stock-based compensation | $ 217,852 | $ 302,586 | $ 475,531 |
ESPP | |||
Other Disclosures | |||
Shares reserved for issuance under the plan (in shares) | 1,019,726 | ||
Maximum offering period | 27 months | ||
Stock purchase price as a percentage of fair value (as a percent) | 85% | ||
Issuance of stock under employee stock purchase plan (in shares) | 271,159 | 122,059 | |
Remaining shares available for issuance under the plan (in shares) | 299,472 | ||
Stock-based compensation | $ 3,000 | $ 5,200 | $ 2,800 |
Unrecognized compensation cost | $ 2,200 | ||
Period over which unrecognized compensation cost is expected to be recognized | 4 months 24 days |
Common Stock and Stockholders_8
Common Stock and Stockholders' Equity - Compensation Costs (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Compensation costs charged as an expense | |||
Stock-based compensation | $ 217,852 | $ 302,586 | $ 475,531 |
Cost of revenue (exclusive of depreciation and amortization, which is shown separately) | |||
Compensation costs charged as an expense | |||
Stock-based compensation | 6,468 | 8,280 | 2,700 |
Advertising and marketing | |||
Compensation costs charged as an expense | |||
Stock-based compensation | 14,083 | 18,952 | 26,995 |
Sales | |||
Compensation costs charged as an expense | |||
Stock-based compensation | 43,183 | 71,475 | 65,730 |
Technology and development | |||
Compensation costs charged as an expense | |||
Stock-based compensation | 64,577 | 95,561 | 60,556 |
General and administrative expenses | |||
Compensation costs charged as an expense | |||
Stock-based compensation | $ 89,541 | $ 108,318 | $ 319,550 |
Provision for Income Taxes - Co
Provision for Income Taxes - Components (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Components of income (loss) from continuing operations before income taxes | |||
Domestic | $ (13,303,130) | $ (365,762) | $ (566,266) |
International | (360,213) | (18,894) | (9,727) |
Loss before provision for income taxes | (13,663,343) | (384,656) | (575,993) |
Components of provision (benefit) for income taxes | |||
Current federal | 0 | 0 | (1,954) |
Current state | 3,007 | 567 | 27 |
Current foreign | 1,021 | 2,595 | 1,605 |
Total current | 4,028 | 3,162 | (322) |
Deferred federal | 770 | 49,008 | (60,008) |
Deferred state | (5,643) | (6,276) | (26,775) |
Deferred foreign | (2,967) | (1,757) | (3,752) |
Total deferred | (7,840) | 40,975 | (90,535) |
Provision for income taxes | $ (3,812) | $ 44,137 | $ (90,857) |
Provision for Income Taxes - St
Provision for Income Taxes - Statutory Income Tax Rate Reconciliation (Details) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Reconciliations of the statutory federal income tax rate and effective tax rate, Percent | |||
Tax at federal statutory rate (as a percent) | 21% | 21% | 21% |
Goodwill impairment (as a percent) | (24.70%) | (0.00%) | (0.00%) |
State and local tax (as a percent) | 4.20% | 7.70% | 2.30% |
Acquisition expenses (as a percent) | 0% | 2% | (2.20%) |
Stock compensation (as a percent) | (0.30%) | 6.70% | (1.10%) |
Non-deductible expenses (as a percent) | 0% | (0.50%) | (0.10%) |
Foreign rate differential (as a percent) | 0% | 0.20% | 0.30% |
Change in valuation allowance (as a percent) | (0.10%) | (46.90%) | (5.40%) |
Other (as percent) | (0.10%) | (1.70%) | 1% |
Effective tax rate | 0% | (11.50%) | 15.80% |
Provision for Income Taxes - De
Provision for Income Taxes - Deferred Tax Assets, Liabilities and Valuation Allowance (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Deferred tax assets: | ||
Net operating loss carryforwards | $ 658,409 | $ 687,679 |
Accrued expenses and compensation | 4,933 | 5,413 |
Stock-based compensation | 52,854 | 63,641 |
Foreign tax credits and alternative minimum tax credits | 3,448 | 4,814 |
Research and development credits | 0 | 1,320 |
Depreciation of property and equipment | 19 | 56 |
Interest expenses carryforward | 2,677 | 11,528 |
Operating lease assets | 11,012 | 13,575 |
Deferred revenue | 7,422 | 7,946 |
Capitalized R&D | 21,987 | 0 |
Other | 8,590 | 7,032 |
Deferred tax assets | 771,351 | 803,004 |
Valuation allowance | (415,751) | (335,810) |
Net deferred tax assets | 355,600 | 467,194 |
Deferred tax liabilities: | ||
Debt related | 0 | (73,378) |
Operating lease liabilities | (8,701) | (11,842) |
Depreciation of property and equipment | (551) | (3,427) |
Intangible assets | (396,408) | (452,049) |
Other | (879) | (2,275) |
Deferred tax liabilities | (406,539) | (542,971) |
Net deferred tax liabilities | (50,939) | $ (75,777) |
Other disclosures | ||
Increase in valuation allowance | $ 79,900 |
Provision for Income Taxes - Ca
Provision for Income Taxes - Carryforwards (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Provision for Income taxes | ||
Deferred Tax Assets, Valuation Allowance | $ 415,751 | $ 335,810 |
Increase in valuation allowance | 79,900 | |
Remaining incremental valuation allowance after the adoption of ASU 2020-06 | 18,100 | |
Cumulative effect adjustment due to adoption of ASU 2020-06 | ASU 2020-06 | ||
Provision for Income taxes | ||
Increase in valuation allowance | 61,800 | |
Federal | ||
Provision for Income taxes | ||
Net operating loss carryforwards | 2,640,900 | |
Operating loss carryforward, subject to expiration | 417,200 | |
Operating loss carryforward, indefinitely | 2,223,700 | |
Federal | Research and Development. | ||
Provision for Income taxes | ||
Tax credits | 0 | |
State | ||
Provision for Income taxes | ||
Net operating loss carryforwards | 1,536,300 | |
State | Research and Development. | ||
Provision for Income taxes | ||
Tax credits | 0 | |
Foreign | ||
Provision for Income taxes | ||
Net operating loss carryforwards | 64,900 | |
Tax credits | $ 3,400 |
Provision for Income Taxes - Un
Provision for Income Taxes - Unrecognized Tax Benefits (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Unrecognized Tax Benefits | |||
Balance at beginning of period | $ 110,848 | $ 21,362 | $ 2,912 |
Unrecognized tax benefits assumed in a business combination | 0 | 59,110 | 15,850 |
Additions based on Prior Year Tax Positions | 12,151 | 43,399 | 0 |
Additions based on current year tax positions | 20,799 | 1,490 | 4,990 |
Statute of limitations expirations | 0 | 0 | (2,390) |
Release | 0 | (14,513) | 0 |
Balance at end of period | 143,798 | $ 110,848 | $ 21,362 |
Undistributed earnings | $ 6,100 |
Net Loss per Share (Details)
Net Loss per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Basic and diluted net loss per share: | |||
Net loss | $ (13,659,531) | $ (428,793) | $ (485,136) |
Weighted-average shares used to compute basic net loss per share | 161,457,123 | 156,939,349 | 90,509,229 |
Weighted-average shares used to compute diluted net loss per share | 161,457,123 | 156,939,349 | 90,509,229 |
Net loss per share, basic (in dollars per share) | $ (84.60) | $ (2.73) | $ (5.36) |
Net loss per share, diluted (in dollars per share) | $ (84.60) | $ (2.73) | $ (5.36) |
Stock options | |||
Net Loss per Share | |||
Antidilutive securities (in shares) | 4,200,000 | ||
RSUs | |||
Net Loss per Share | |||
Antidilutive securities (in shares) | 6,500,000 | ||
PSUs | |||
Net Loss per Share | |||
Antidilutive securities (in shares) | 600,000 | ||
ESPP | |||
Net Loss per Share | |||
Antidilutive securities (in shares) | 300,000 |
401(k) Plan (Details)
401(k) Plan (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
401(k) Plan | |||
Minimum age of employee eligible to participate in the plan | 21 years | ||
Employer contributions (as a percent) | 100% | ||
Percentage of eligible compensation, matched by the employer | 4% | ||
Employee's elective deferral, maximum contribution | $ 0.3 | ||
Matching contribution made | $ 12.1 | $ 11.3 | $ 4.9 |
Legal Matters (Details)
Legal Matters (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2022 USD ($) | |
Federal Trade Commission | |
Loss Contingencies [Line Items] | |
Loss Contingency Accrual, Provision | $ 7.8 |
Segments - Information (Details
Segments - Information (Details) $ in Thousands | 12 Months Ended | |||
Oct. 01, 2022 segment | Dec. 31, 2022 USD ($) segment | Dec. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) | |
Segments | ||||
Number of Reportable Segments | segment | 2 | 2 | ||
Revenues by segment | ||||
Revenue | $ 2,406,840 | $ 2,032,707 | $ 1,093,962 | |
Adjusted EBITDA by segment | ||||
Adjusted EBITDA | 246,513 | 267,837 | 126,841 | |
Teladoc Health Integrated Care | ||||
Adjusted EBITDA by segment | ||||
Adjusted EBITDA | $ 135,153 | $ 144,021 | $ 65,836 | |
Teladoc Health Integrated Care | Minimum | ||||
Segments | ||||
Percentage of capital expenditures | 85% | 85% | 85% | |
BetterHelp | ||||
Adjusted EBITDA by segment | ||||
Adjusted EBITDA | $ 114,116 | $ 121,702 | $ 65,545 | |
Operating Segments | Teladoc Health Integrated Care | ||||
Revenues by segment | ||||
Revenue | 1,373,900 | 1,300,878 | 744,309 | |
Adjusted EBITDA by segment | ||||
Adjusted EBITDA | 135,153 | 144,021 | 65,836 | |
Operating Segments | BetterHelp | ||||
Revenues by segment | ||||
Revenue | 1,019,646 | 721,238 | 345,105 | |
Adjusted EBITDA by segment | ||||
Adjusted EBITDA | 114,116 | 121,702 | 65,545 | |
Other. | ||||
Revenues by segment | ||||
Revenue | 13,294 | 10,591 | 4,548 | |
Adjusted EBITDA by segment | ||||
Adjusted EBITDA | $ (2,756) | $ 2,114 | $ (4,540) |
Segments - Reconciliation (Deta
Segments - Reconciliation (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Dec. 31, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Sep. 30, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Segments | |||||||
Adjusted EBITDA | $ 246,513 | $ 267,837 | $ 126,841 | ||||
Adjustments to reconcile to GAAP net loss: | |||||||
Goodwill impairment | $ (1,132,812) | $ (3,000,000) | $ (6,600,000) | $ (12,270,000) | (13,402,812) | 0 | 0 |
Loss on extinguishment of debt | 0 | (43,748) | (9,077) | ||||
Other expense (income), net | (859) | 5,088 | (545) | ||||
Interest expense, net | (9,270) | (80,365) | (59,950) | ||||
Depreciation and amortization | (256,027) | (204,239) | (69,495) | ||||
Stock-based compensation | (217,852) | (302,586) | (475,531) | ||||
Acquisition, integration, and transformation costs | (15,620) | (26,643) | (88,236) | ||||
Restructuring costs | (7,416) | 0 | 0 | ||||
Loss before provision for income taxes | (13,663,343) | (384,656) | (575,993) | ||||
Provision for income taxes | 3,812 | (44,137) | 90,857 | ||||
Net loss | (13,659,531) | (428,793) | (485,136) | ||||
Teladoc Health Integrated Care | |||||||
Segments | |||||||
Adjusted EBITDA | 135,153 | 144,021 | 65,836 | ||||
BetterHelp | |||||||
Segments | |||||||
Adjusted EBITDA | 114,116 | 121,702 | 65,545 | ||||
Operating Segments | Teladoc Health Integrated Care | |||||||
Segments | |||||||
Adjusted EBITDA | 135,153 | 144,021 | 65,836 | ||||
Operating Segments | BetterHelp | |||||||
Segments | |||||||
Adjusted EBITDA | 114,116 | 121,702 | 65,545 | ||||
Other. | |||||||
Segments | |||||||
Adjusted EBITDA | $ (2,756) | $ 2,114 | $ (4,540) |
Segments - Long-lived assets (D
Segments - Long-lived assets (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Geographic data for long-lived assets (representing property, plant and equipment) | ||
Total long-lived assets | $ 29,641 | $ 27,234 |
United States | ||
Geographic data for long-lived assets (representing property, plant and equipment) | ||
Total long-lived assets | 25,935 | 25,123 |
Other | ||
Geographic data for long-lived assets (representing property, plant and equipment) | ||
Total long-lived assets | $ 3,706 | $ 2,111 |
Schedule II - Valuation and Q_2
Schedule II - Valuation and Qualifying Accounts (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Allowance for Doubtful Accounts Receivable | |||
Valuation And Qualifying Accounts | |||
Balance at Beginning of Period | $ 12,384 | $ 6,412 | $ 3,787 |
Provisions | 15,398 | 16,941 | 5,284 |
Write-offs | (13,872) | (11,526) | (2,787) |
Other | 890 | 557 | 128 |
Balance at End of Period | 14,800 | 12,384 | 6,412 |
Income Taxes Valuation Allowance | |||
Valuation And Qualifying Accounts | |||
Balance at Beginning of Period | 335,809 | 107,984 | 121,186 |
Provisions | 18,966 | 179,364 | 2,146 |
Write-offs | 0 | 0 | 0 |
Other | 60,974 | 48,461 | (15,348) |
Balance at End of Period | $ 415,749 | $ 335,809 | $ 107,984 |