TDOC - Earnings call transcript Q3 2017

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Operator

Welcome to Teladoc's Third Quarter 2017 Earnings Conference Call and Webcast. At this time, all participants have been placed in a listen-only mode, and the floor will be opened for your questions following management's prepared remarks. [Operator Instructions] It is now my pleasure to turn the floor over to Adam Vandervoort, Chief Legal Officer, you may begin.

Adam Vandervoort

Thank you, and good afternoon to everyone. We look forward to discussing our third quarter 2017 results with you today.

conference Officer; Jason Chief and and Financial Teladoc's and our Operating for Chief Executive Chief Mark Officer. me call Gorevic, are President Officer Joining Hirschhorn, our announcing we our filed report on a closed, results quarterly market XX-Q. the quarter XXXX after press Today, release our Form third and issued on report section Investor of teladoc.com. release and the The are available Relations

statements call Litigation As provisions of Harbor be a the Reform of within meaning of Act Safe the reminder, this Teledoc itself of intends those made XXXX. forward-looking actual statements could to by subject statements results other forward-looking Certain are statements. or Private will Teledoc's to expressed and factors Securities during that law. avail forward-looking cause from These risks, the uncertainties materially implied to the defer that

on will risks our we measures, certain call with which please refer information our performance. the We'll by additional followed also important believe call remarks are Teledoc, the Q&A. start to SEC. facing Today's contain brief today's in with evaluating filings financial For non-GAAP prepared

over details the For of GAAP Jason. and now comparable measures measures, teladoc.com. press the most posted the reconciliation I turn call these to on please a release refer two, on the to more

Jason Gorevic

high on everyone approximately momentum key lives all loss last the visits we're same closed or from impact across or or representing recording Once of members growth or million on EBITDA seeing this in quarter member call XXX%, increasing visit after of our our our revenue the metrics XX.X over and membership the a an and basis of the growth adjusted business. XX% of XX% the by over prior loss again of of Thanks, improvement growth today. with of met results resulting the increase thank you adoption volume our $XX rates the I'm year, reported of another we utilization X.X% rate total expectations approximately engagement $XXX,XXX, XX strategies. nearly million Adam. finally period XXX,XXX And quarterly or of exceeded year-over-year from paid a to for us year market Teladoc $X.X joining the afternoon. annualized of point approximately million reflecting strong very pleased our

well core quarter. Teladoc Our business the performed in

the health market As we business. achieve in of our continued expected in utilization, levels behavioral the strong success penetrating growth and provider

growth For of you organic corporate But rate. Best reporting July be share a the our Doctors. we will In And in growth an the Best are as are we our or going third efforts which organic rate year, and on connection schedule. XXXX, successful XXXX wide rate single XX executing third in a our remainder the to excluding this acquired efforts with in standalone a with Best performed growth was starting integration very of XX%. on integration ahead reminder progressing on we of basis. well Doctors quarter Doctors, quarter,

member app the are having Doctors clients. and for on We an Best business portal recently impact have launched new a mobile and already

the cross promising clearly This offering. commitment the taking realizing combined the organization care company successful vision have our comprehensive launched as signs solutions. we clients integrated take is features of This the both our both substantial instantly and employees customers have moment platform is early Doctors seeing want of and a the and the recognize in to step a who paying We a to to the Teladoc across are an the of who initial to work joint extremely arms locked recognize is positive execute products. feedback and forward Best of purchased we're of The virtual I from they a reality. dividends. integration notice. selling clients receiving have selling and the those We're vision HealthiestYou make value app into combined on Best mobile Doctors have products integrated with for

over we million products XX of just In members already representing Doctors fact, since or million Teladoc acquisition. days sold have in X dollars closed cross and annual or revenue jointly several the the accounts to sold first we Best

Peter expert globally, will operations commercial been Peter and strategy segments. effective very into in Best As you account President have realizing and joining markets tenured our the assume management, looking and at all to organization, of the companies, of Doctors deep CEO its the A for in we'll for or Peter many other announce McClennen global management taking opinion of integrating of both defining and product second to to instrumental step regard delivery healthcare Best next more Day as spectrum the has to former commitment I the Inc. of executive sharing appointment one to XX of to-date. virtual and in Teladoc with efforts President us in our full responsibility of healthcare system including position multiple COO the becoming with integration development, our We're members healthcare where for Doctors Doctors incredibly of day. growing Investor Teladoc team our Teladoc market all Best newly part to pleased Best needs position shaping leading care of our experience and and vision the formational member been am Doctors forward sales, on a November created spanning teams market Peter the CEO, in IT client has

season Before Mark digs our provide I an so the want to far. into numbers, selling on update

plans. hundreds of saw of United, of new out both and we quarter, representing health growing third relationships in of Aetna our of these members populations large new the thousands continued both with expansion in First,

large XX we to season Second, see several for alone. summit additional many over Moreover, discussion sales System new where the how We new XXXX month, client Mercy, in And have and can and Iowa, collaborative Health in health about including selling segment. we third our our services segment. looking later our our provider anticipate systems in recently to XXX continued new activity that in pipeline. sales we strong I'm added serve prior forward this in hospitals having and with Orlando full now quarter employer first bring in is to finally, we years. favorably plan business comparing swing a products to hosting closed provider

opportunities pleased both the I've was this well the with to win of unique As previously, selling Greenfield as fall competitor. on that mentioned our say we And details number of that were these that opportunities these closed season accounts both large wins at was with accounts more pursuing, Day to new respect XX. into I'm previously as on that I business to a categories. have we November Investor being able provide to successfully large including anticipate

truly market offer large is can provider focused on health bring its the This virtual to the how best platform. strong who with help the Our our and a number plan Teladoc credibly in discussions firing a true business care for by health exemplified members. extremely C-Suite working all today, virtual can plans in only of tailwind favor. strategic the on at broad Teladoc cylinders a is positioned as well is comprehensive system life

results And what about the and the over these turn nature the Mark company. quarter. with call to I'm the has that from excited tenor extremely store to in our I'll XXXX of Given discussions, financial for review

Mark Hirschhorn

good everyone. Thanks afternoon and Jason

to growth are within strong multiple growth. fortunate we Jason continue business to see the channels that revenue that As there high are generate mentioned,

with that small In Doctors into now with accounts and months commence our long-term first to every growth business significant seeing and our three-and-a-half model will integrated successes, launch great rollout objectives. of week Best the the large addition will We're us that to channels enable our merger will the recent experience service businesses our behavioral delivery remain and are aspect track we December. of during Nearly support on of midsize company demand. the change

believe of our communicated P&L an position during will starting to growth As revenue integration Best investment the that the our compared to increased year Onto approximate efforts ago. in quarter months, XX.X us increase corporate with the topline. ultimately third goals. was several revenue That's XXX% and million. and Total past Doctors' a we've the accelerate will we

reminder, Best a months' XX, two-and-a-half our year-over-year. reviewing an include basis, XX% organic As acquisition closed so the we of On by July Doctors Best results. on increased today the Doctors' revenue worth I'm results

XX.X Best and million Doctors. Our from increased $XX XXX% fee remaining access On total basis, to million subscription the US generated of the compared out for revenue of US million. fee XX.X Breaking a accounted million an XX% subscription included and fees approximately year-over-year. access organic international, the between $X.X grew and year international ago revenue subscription

Blue XXXX. the not employee that US revenue US in million the formally and Aetna's state expected now this or of this of by are continuing Blue a not will we change Best coverage for of inclusion to Shield which into revenues to X.X the quarter this and as definition fully XX% the flat the are paid population In This from and amount exclude members for included With material excludes associated program XX.X has federal Doctors fee that carry for insured international accounted I PEPM members state results, membership paid with they Amerigroup. total Amerigroup our is XXXX, since States. membership. a quarter. United PMPM. We just want ended subscription million to with Teladoc members from the members paid include also Cross or mention we a contract, historically is refining will quarter, of paid PMPM US

reporting. Best lives We also our international from Doctors' exclude

for service Our to as offerings. our from because set purchase of business service our consumer services core market consumers respective a international a business US different provide international to our complement differentiating is their distinctly clients their

our these into more will better the appropriately success. international global your approach We out operations track business our break and you reflects this we and continue visibility enhances and hopefully ability fundamentals results believe to of our to affords

was employee to PEPM and per month per ago. average or year $X.XX $X.XX quarter Our last a compared $X.XX

for effects from equal areas. Excluding third XX% the PEPM our increase $X.XX nearly This Doctors a from been would achieved than quarter. greater from the contribution was three Best have

revenue First, increases. our behavioral price

services, the the the lives. in included visits the excluded model. market we shift core product mix principally business Second, small with Amerigroup And last, in Teladoc

Now visits basis over last quarter utilization, services. utilization annualized to those utilization total rate year. membership our we general over general X.X%, access increase XXX,XXX the members as have medical me XX increase divided point paid last let period US XX% of on that an This for represents completed move year. calculate to the in an same Teladoc visits by Teladoc medical

plan several our visits QX in were of from XX%. the $XX costs Doctors' the compared throughout of driven The with approximate of $XXX,XXX year. accounted second quarter fully we positive were visits Consistent loss quarter. Doctors of for accounted margin close a $XX.X consistent often QX as with a Best loss utilization $X.X very of These distinction expenses our last represented million EBITDA same years. as the year remaining of slightly in integration a prior $X.X acquisition to loss revenue, for as and Gross Best the fourth the As of XX.X% XXXX. the the provided million quarter compared increase operating a $XX.X QX loss million a was revenue Total generate $XX an to increase $X.X visits QX our product loss represents this this $X.XX business to increase year-over-year Sequentially, principally quarter quarter. which visit million clients opinions we operating compared we in million margin over to change utilization of operating medical was compared visits. XXXX. which EBITDA the of of increase Doctors' primarily with of noted, composed year adjusted period discussed, of achieving ago was is continued share year this of for revenue XX% last shifted. our expenses. to paid a as next lower the lowest to shares from coming long-term our total in related XX% fee of moderated improve, million X.X of period a in adjusted the mix margins the Adjusted and with million to Net the million X.X expert have by visits for just in with at specialty Best and accounted expenses core third view million for quarter comments, third of loss breakeven expect Consistent to $XX.X this Teladoc and a a $X.XX achieve Other how the General of of to our quarter's is of million in I have last revenue medical being in general net year. XX% ago. year. EBITDA same to XX.X% quarter per mix health profile the would and revenue. impact the the expected compared slightly This Net period XX% our

with reflecting an X.X in Doctor's million be XX Best increase of connection offering While due to July in million of the was follow-on decrease similar, outstanding, loss the common average in to the our compared acquisition. shares weighted million million in year issued changes the to share last our January in XX.X net period this to includes XX.X our the period loss comparable same quarter's in was increased addition of per shares which million this approximately from approximately which shares shares, in shares to issuance year shares X.X

quarter Turning to and investments. in million over cash we with the our $XXX ended balance short-term sheet,

of debt at approximately million. end the total XXX quarter was the Our

expect million, Now, the of a million million a the $XX increase million no and average guidance. on approximately million. XX.X membership previously net I change provided full-year between paid of $X Total range. XX now estimate the Total weighted $XXX prior quarter to of million. million. X.XX membership to per from We've outstanding of from estimate a our of a share An million $XX for adjusted is an expected $XX of XQ $XX for to million, and $X.XX. recent expected would between the visits and loss this EBITDA loss XXX,XXX on reflecting $X.XX between between $X previous average and change total $X.XX, $X.XX from previous from to and outlook XX from estimate $XXX between of of of million million million visits EBITDA $XXX year. million, revenue visits. now member and to guidance. XX.X most million a of change updated previous of loss total our revenue loss a loss between is loss and to XXX,XXX between adjusted And million total of to per million. $XX loss a expect of change $XX to from the X.X million, $X And to outstanding a a we loss a our like provide low XXXX EBITDA million, shares $XXX XXX,XXX revenue share. QX loss to from based outlook fourth And weighted adjusted range a million from previous $X.XX Total loss and shares XX.X change $XX $X.XX $XX the million. loss loss which XX.X from end also million million members. net members the million between estimate based the to Total between range the is $XX a $X of $XX We EBITDA of per share range million to EBITDA positive million between XXXX approximately

today. our track to achieving our that ago goal our we As on stated helped we to XXXX. get incredibly quarter positive of the us fourth with indicates, EBITDA two IPO on tremendous in we Roadshow are meet the of to years adjusted over are where have I'm organization entire of pleased the efforts guidance

Day Operator? want initiatives let's details. the call on be XXXX several in have products, we November that With to website, we our strategy we the just open inaugural relevant will our visit the where feature for of Please I to New Finally, intend all included commercial in colleagues hosting presentation XX, remind year. our questions. of City clients to where and that and our everyone of Investor York

Operator

Lisa [Operator first Instructions] Gill question Your J.P. comes from from Morgan.

Your line is open.

Lisa Gill

contract Mark, walk you us Aetna maybe how or can just through Jason new the works.

obviously but PMPM, remember shared moving from savings to if there's component So some it. away correctly I

into or Jason works. other different So, starting you how that FEP. to And see that health are interested then as if in going big really secondly, understand think been relationship a and first player unique like do season, to a through you this you've going the are plans XXXX help to is type us you and selling where Aetna can

Jason Gorevic

Lisa. thanks Yeah,

me contract. start the So with let Aetna

First about contract the change their that the want is I only you business membership, half to of fully we Aetna just that for remind to which is insured the them. with have

have we With few same. the about the we insured about and population stays fully one the a take goals The members process. million the the self-insured renewal So insured, revised give million fully that's X.X population or respect are we'd in contract that Aetna, extended the to with and from the terms. X

was the agreement. extend first to Our obviously goal

goal for and And behavioral that align we and sure utilization. additional services dermatology was did quite we health products as And have incentive frankly and to needs was Second ourselves and the interests, make into to the roll population. with out us that third out provide ample we that Aetna's with expand rolled now population. to that

And share does so addition structure paying us in the to new fee. a visit the savings Aetna have of

contract per total that a times ends higher in being was on means as basis, it So Aetna we significantly visit previously, revenue upside the utilization. up almost which we more our have drive what four

our that aligned We're time turned that very increases and with and how opportunity So interest. significantly interest we're Aetna's pleased with we out aligns our with think them. really over revenue that

Lisa Gill

can that the Just to shared talk understand savings. about we

kind what when and the to at XXX about looking the some how the of Teladoc that So this us emergency savings. savings the of of and is you're in okay, is had and understand shared just shared component thinking it, work. room they're XX is going so trying that XXX, share population used cost previously to mechanics I'm we're

Jason Gorevic

Aetna, what pay per on per exactly, to agreed for medical that's a analysis agreed economics total much And their how We Aetna. we visit on group. so the generated we with visit the an would per went on in visit that's addition Yeah with basis. us through Aetna savings then fee

So or savings end we're the end basis. on and it's per amount, go have the what a of year, back recalculate to we at from Aetna getting exactly what a don't relationship we of visit know was the measured the fixed the

getting the per I we're $XX from so savings times total as it we're And we're visit the is was per part when payment includes the of getting per or visit four what savings that the That previously. plus getting almost we're payment revenue say visit benefit Aetna. plan per getting

Lisa Gill

as outside selling, relationship this then, with And here that of Aetna far any member new year's as as month are paid well you member as business away from the relationship, FEP seeing the side. interested in moving of risk per per type others this are full the on

Jason Gorevic

So is very what is segment specific. our that pricing we're much seeing

accounts our model. the that of PEPM all and So coming business employer fee entire employer PEPM the included with still are a new on space is PEPM plus per on higher on are book basis visit visits in or

the fixed on fee. visit coming health are our plus PMPM plans sort per vast in traditional majority Our of

more West Blue did we starting our lower Cross that We drive as contracts Blue fees. basis visit minority the to higher result a PMPM still increases the increased PMPM although our successfully plus on And significantly do utilization. frequent PMPM are we start as increased We Coast a a do Shield a plan, total as fee with utilization. large to and of a where per situations small

we Day. give that few those upside. some And more us because to think engaging arrangements looks membership we're and population. where incentives cases see And to insight we that good more population gives have large season aligns at the like like about we we and opportunities are do more then on than very the to selling this of happy the themselves our or we as that cooperation feel and again creative a lend it give revenue, as predictability as meet our starting happy we're FEP we're in I XX we'll to few long but good month talk where on into those information Investor And plan and can more the into the so get later there from hurdle some think good that. Aetna insight rates like November our us do what And

Lisa Gill

the Are could we that forward to and just that there would about via we'll we I okay, Best the think, care pieces to way Doctors and able whether verticals what or that you any today I'm you you've it's grow virtual been I add platform you talking acquisition And we Day think you're think ask be, need HealthiestYou, have about organically. the this looking question. do one via or behavioral health. Investor other if primarily other acquisitions Jason, do to need and dermatology, think

Jason Gorevic

and there. sort potentially programs start Best anything further do does out focused Right bring relative out with the very and or that integration conditions. Doctors clinical way look or that through the catastrophic episodic Number care in capabilities for where now that execute from in this market would differentiated add through else it to that on bring successful ranges platform point and a sense through at in-house we're either that's two on we to on complex we'll the the execute that all partnership urgent Once of we and that's And intuitive integration And will successful to an makes that the for of completely acquisitions. at that companies. us up number consumer. But rolling we integrated to future be to through development, of market once the one the single out front end more additional market.

Operator

next Your Jaffray, comes from Wieland is Piper question open. Sean line your from

Sean Wieland

conversation on that said then how on the of existing customer. - how going. Can little than an that math unpack a million Best do does the uplift that Doctors when to specifically the cross-sell into And revenue is you've you what's members. that maybe the customer, question Best some on accounts math you on more a sold worth My you is Doctors, bit

Jason Gorevic

done we're three then cases a market can but color a joint-sell different through the is time both that go and things sort HealthiestYou. And for opinion into more second of Mark would are we've is is the had the math Best We've selling into Teladoc large that first a for number market I'll employer alongside hoped displacing it small the the for. on plans on existing in well discussions were our opinion nice account where into employer So Doctors end in clients. selling to employer we then of the all little ASO basis. through as The we their we're as health competitors or done Best buying with either who have self-insured a sold One that the through we've that of unit service. And seeing of them services second actively large Doctors and their sort go put integrated client accounts, the clients. on in cross-sell Teladoc thing adding the channel

to then clients. side either some successful Doctors other third one in Doctors, On in you a And we're the being we're into app, market didn't product Teladoc successes of joint to have common buy selling up the or either front consumer. and processes brought for the in side by integrated an so to significant have I have And selling both but side. as the Teladoc clients areas there's we products we've Best said one signed Best a now end running both or is

Mark Hirschhorn

respective for couple pricing John on clients to that of And a we're add those that from through medium based dollars, the seeing would small size channel, sold are many business the and just dollars channels. I up

thousands well we've core into either small Best Teladoc and closer Doctors are combined medium couple services. active been And and hundred with services day to actively basis plans to sized to introducing with and HealthiestYou on service selling day So we've on of of accounts service been added health greater XX,XXX of a as in members. core Doctors employees the a service the or with quoting Best hundreds businesses to as employees that a the

Sean Wieland

Doctors was that you what a contracts. I'm a my Teladoc, lift So I give existing I'm me is let's add at, of I to to to what customer get trying is for Can terms Teladoc if and Best employer my sense you? say

Jason Gorevic

You Best of per range can lives, traditional Doctors think the approximately per client be additional somewhere the services. let's And employee of say Teladoc X,XXX uplift $X.XX would $X likely the range they with in paying with at a month. from the

Sean Wieland

How Telehealth getting lot this, problem guys on if wondering around that have picture or that. opioid you bigger that question of commentary a time about opportunity. a we a have, air strategy was you have any that is in I that

Jason Gorevic

more certainly CMS. Telehealth think support well from I a very happening picture that perspective, pleased big Washington. in see Congress So to both and as getting recognition at in see We as

issue crisis, for and So one. bodes is complex a very role obviously future and a very I our opioid the well overall in system. significant think that it's that for Telehealth's the health care With this to respect

are complexities looking are in environment. some possibilities a remote at that condition and program. relative currently have of a don't There to we We doing treatment there, that the

focused roll certainly we'll significant we're out for following take sure announcement then me get an to if continues see big this that. of no we that we opportunity something market to But program So on a here as attention make on and advantage into that.

Operator

question comes Jamie Your from from next Stockton Fargo. Wells

Your line is open.

Jamie Stockton

guess I in it of like that. and thought quarter, XX. be Best any revenue it like XX there color is that during going million on maybe, guys are sounds I the Doctors to the closer kind Is Mark, right, to you came

that and contribution plays what on new your thoughts revenue how into any in know QX You guidance is. the

Jason Gorevic

finished weeks a in third deliberate for mid quarter million, July. two what Jamie, XX the expectation the quarter. we closed short was in so by was we Recall up for transaction that XX.X that on million is appropriate the the as

upon valuation used both we they're transaction We're and and we to that what bottom expected with tracking was our their their And above board. projections. dependent line. the pleased we had underlying So obviously topline presented trending extremely when this their especially

the rate with So next line. bottom got contribution some some a and good run got on - we've expectations into year even coming we've QX that's why better

Jamie Stockton

the drove is there on. The business saw decent core even there guess it, going something the with growth rate. more is acceleration in business seems else a or question I sequentially is better health we this what like organic traction

Jason Gorevic

Yes, contributing the did have million contribution was we I'd in you're a, There right great two suggest behavioral is quarter entity annually. growth now organic over of excess XX% $XX areas, equal health quarter.

they was XXXX. going achieve that in XX% grow $XX into last potentially are about at recall growth XX% of likely million year excess rate numbers again the and going You to will likely

we was Additionally, of we PEPM that did had at nickel. year rates, obviously in at beginning have sort good slightly volume the the higher that coming of

about think growth you the if in eliminating was it quarters, at Amerigroup $X.XX, of were we look quarters $X.XX. PEPM QX 'XX spoke QX was of the and a lives, that at store we of $X.XX 'XX but impact exceeded basis, this all with the same what on it of over of year, If you

that components. growth that two organic So - organic those really growth came from XX%

Operator

next from SunTrust. comes question Your from Sandy Draper

Sandy Draper

First, just a quick housekeeping item.

On core make international? international you there correct? of gave, I've got all Teladoc to any Doctors, right? is Best I Is the sure just figures that that is that's from Mark, want that

Mark Hirschhorn

such as all is all companies. correct, from insurance financial Best No, Doctors' MLC, Great-West, and are That Sun Life, you're services extremely RBC, clients Sandy. large these revenue

Sandy Draper

can that then of now out down people contract, side fully Aetna, they services. and Teladoc guys Aetna the And with is I that can fully or is that everybody insured, you in insured it - the that Aetna the understand not on - make on elect take all or to sure up bidding following someone's their with are to automatically

Jason Gorevic

fully segment insured We or segment market in by roll out market the by business.

out. So they're bidding it not

their have of segments their are of each decision who markets But out. you roll and leaders it about telehealth to when for provider one make We the choice. market

then Teladoc to again were their mentioned additional in course So access out that roll was prepared the out remarks, service the that or package. the new several a of at did will That to overall roll we student as other markets have population, our to benefits as service or the looking population a expansion population being provided of of the I to to over quarter. an part of

Sandy Draper

finding more can't challenges building are finding see guys momentum as in terms for if doctors question, any in you final us you and whole given of just to And the continue you've remember telehealth we I a and of keep on are that the line that to in network think to just the do number needs trying type you to of growth guys are order growth doing? about top doctors Teladoc certified what supporting recent market,

Jason Gorevic

It's question. a good

given bringing that we haven't metric can We're probably couple challenge having We a not one a in providing of look November It's XX. quarters. on doctors with at probably however on. a

and we today - credential flu we on hundred season. I leads into fact, phone with are efforts with cold season In person the the into now who physicians just network recruiting our the as the of and was couple the ramping busier

us. significant that see as we for a factor constraining don't So

We into season. as increases continue to as strong times we have cold strong volume head capacity and and flu response

Operator

next Your Close from Canaccord question comes Genuity. from Richard

open. Your line is

Richard Close

the I that. industry I obviously the Guys, volumes shift XXX,XXX Obviously, I quarter. telemedicine, gives a of, bit was pressure in guess, but little - the respect for a there's target fourth the to know maintain wondering and I with I respect comfort if there's you you telemedicine, XXX,XXX you towards us year. across rampant guidance the guess confidence been for what with the to to visit could understand give

Mark Hirschhorn

It's Mark.

to likely highest earlier have we've communicated visits, out we a we visibility visits our So had year the days in to that, providing and XX on virtual excess completed where ten within this flu there lifted range. have over years figures of earlier into and fruition. those visits membership but past in achieve where based that reassessed have of to we and number X.X we're in today tracking we're our are come saw that is extent targets would million are the Monday these and years comfortable numbers today, - should we of date, of one seen increase that today type - and We that that we comfortable to based with should the much our

Jason Gorevic

comfortable those get campaign, thing drive that are communications from effort will yields I'd and add to the multi-channel Richard, we've results the fall strong which very the and guess early around and that and utilization projected. the is in midst done we've is order we to efforts the that we're results drive a modeling so I the of that in that are our now awareness we communications other

Richard Close

and little can forward? of view respect a earlier going in opportunities some about there, you commentary how you Aetna to where with the United mentioned bit individuals had where United, talk add You continuing to with the you you today started are and

Jason Gorevic

how some in populations, roll as did Sure. in well it programs to the the out pleased as government We're to them We for relationship sector. continues new both commercial very and evolve. that with

about for can populations discussions some are look XXXX additional We we and bear products how also them with them. about into some we and as to additional services in bring

over for good now So very it, feel of family about members well products expectations markets. United we XXXX. And we're have and the million high from X we

Richard Close

And final Mark. question is housekeeping,

about all just I out. wanted the membership but on little Amerigroup clear guess, the that, everyone's just be In base, terms you, talking takes a raised over you coming end you the I that? so Can go to bit with bottom mentioned, of clear, that and again, on puts

Mark Hirschhorn

contract we is excluded membership members but with XX low. number pay of X.X utilization Richard, had years. under many state. in That probably hasn't that are fee for that years, around us they that a contract continues, Sure. million much their a Amerigroup us Their has changed about per flat extremely many, states and

any - other utilization. Amerigroup them not program generate have to initiate additional to with We internal or with opportunities programs any any had

population. rest and by And in doesn't force. dilutive that numbers, feel the we stays utilization a including give of clear those the over picture So again contract that as somewhat it's increasing the to

financial those insignificant an beyond we'll to in it's contract, 'XX service members continue While and

Richard Close

your pulled members? guidance those you saying members you're out So on of new

Mark Hirschhorn

That's correct.

Richard Close

Okay.

previous it? have membership So at you you would on looked your based raised way the

Mark Hirschhorn

we If between still in was a and flat. that from lives, and both essentially Sure. contribution, Amerigroup had increase have two Best sequentially, membership excluded the but not taken three US on paid membership net and we'd quarters the Doctors

other six land we that in in lives since, barely add middle expected month the be to the of As period. than they health planned year lives if

Operator

Ryan Daniels comes question next William from Your Blair. from

Ryan Daniels

curious to long Jason, markedly the the there. agreement. value a have on new you term relationship follow-up with incentives Aetna you increase for the of I'm

actively to from more more effectively, If commitment like contact them to you email to enable market more addresses going the gotten membership things you've base also forward. or ability it

Jason Gorevic

Yeah. It's is great yes. question answer a the and

more of our to part enables agreeing As our gotten of to target population the to out significantly new get have we greater communications data effectively us yield efforts. more that and that access structure,

a the part feel about place we us the of puts contract. a and the realize ability to where upside agreement that was that utilization confident in higher So drive and of

Ryan Daniels

that but full this think of based then the out maybe as current dilutive drive or the should a about and step Aetna think how the the throughout as quarter versus first And run contract change on then see neutral the cadence of might revenue, function box there or the accretive utilization should and it how you coming just utilization, terms in 'XX rate 'XX revenue we about for and for year. we year to

Mark Hirschhorn

follow increase It frankly, QX to XX than quarter neutral revenues and the quarter be the end that see an seasons, we'll one expect of stronger what a greater. and in significantly will we'll and traditionally heavier see would and result in lumpy should our we or QX either from to a expect of see We be in run it going 'XX quarter-over-quarter and might to X Mark. XX QX And revenue quarter hopefully four. it's strong likely slightly saw rate fact we and quite it's drop to XXXX. Ryan, as in be be

Ryan Daniels

into mentioned then the trending off, is year favorably for how ago. how season just you the curious And I'm hop it's far visibility guidance, of not Thanks. visibility differently are XXXX the in but today the last contrast level I'll versus just on and years? asked maybe selling asking or you left that season, that high membership, your question how XXXX months along only does past with two

Jason Gorevic

in at we last visibility fact business where season into of Ryan, figure We're We than looking the at and good efforts, reflects the so through is. and higher HealthiestYou our small the channel. over our which week or employer market the in come is focused but Yeah. also were feel mid-size year. reseller this about seeing slightly we just we're were at we last mostly of some strength XXXX that selling a XX% time our on product, of still lot and revenue, that about pretty

pleased selling how So again we with the about very, very is XX% shaping about feel and good that season very at we're visibility, up.

Operator

from Mohan question Naidu next comes from Oppenheimer. Your

Mohan Naidu

on Aetna recent more one Jason, contract.

anything members the X% you have also Now integral from direct utilization and you prohibit in members, can targets to there that campaigns, of there grow. utilization current to access can rate these that you how you share is about run getting the that unique can expect are book

Jason Gorevic

to West XX%. we 'XX that in by we I we for I feel own incentive a drive utilization increase similar over what 'XX a the the ability mentioned targets exactly say but sixteen not our who plan earlier are. do our about data, So internal same won't able have But additional rate. Coast to us Blue put structure to utilization we've share increase higher I place, utilization the will that with good been about and

said do Having less them and employers. and feel even better. than get we to people to replicate about that, than good to a always X%. to reach set around in harder their employer because our that plans expectations population a wouldn't they are maybe an health it It's to little So engage motivated fully tuned is population ability I are insured their

us population, I do want substantially. And increasing that to the so, that utilization on get going want X% to - good don't we're to but I your to feel very expectations I about set

Mohan Naidu

for Best Jamie from Doctors? Mark. QX, questions, wanted to some numbers Are you $XX asked of still $XX I couple to clarity. just A you million million this, QX but I think On expecting get

Mark Hirschhorn

did jump Mo, a Yeah. reduced we million so expect should weeks bit for We and approximately number, the more didn't XX you break third the out the but for quarter, volume. clearly the additional see exact to from two little greater impact the quarter,

Mohan Naidu

And there Doctors, right? Best no is in seasonality

Mark Hirschhorn

but aligned in the that's new beyond as There when flu obviously commencing experience is correct. cold what seasonality little that nothing QX, result that, a and seasonality contracts there's we we of to compared heavier seasons. to comes see traditional Teladoc, about There's

Mohan Naidu

to 'XX, now right net members a us out back you you members? membership the going going non-paying XX.X one, the exclude change to million how last into that's all One the and can if of number provide

Mark Hirschhorn

in is Well paying that everybody XX.X. today

obviously go million different about insured construct think entities transition adding the only be those savings those cost the X should not and that millions members calculation FTP into fully can That's savings we'll of will the members share now. from two in membership. will the then medical I our You to identify of or XXXX that that Aetna for of

Operator

Matt Hewitt Your comes from from Craig-Hallum Capital. question next

Matt Hewitt

a me. for Just couple

if with contract with the up, and going change apologize this, given but structured, who missed the for intend to education relationship the I bill footing is of group be that that drive First to the utilization and do in I how FEP how the is that you employees?

Jason Gorevic

Matt, So, that's new a contract.

that relationship perform in an communications change. January a the the not such employ of So and fee those a responsible for they us that services The pay Association, us Blue incremental to them. FEP Cross relationship unless start Shield 'XX. really It's will structure for organization, that novo it's through is of Blue de is

And it's promote populations member we're like basis then, base there services welcome XX engagement to the by them that. and contract consultative option contract order that to do with the cost to of lower on as FEP service. a those kits have who footing basis the opportunity a they us. communications that plants of help of strategies in serve has the as not from more We because is significantly a and purchasing work course the well things bill us, for organization So, or the or the

business, selection of on Blue won at us, with been more when fee traditional result benefit all it contracts contract, we FEP us just The already those to And gives closed is it's won and FEP and previously of not that we've plus visit say but piggybacked as plants structure. foothold in member that say, who our of I process XX business working Teladoc. those have plans of the a the with other PEPM a were RFP

Matt Hewitt

wondering One bidding of your costumer and to desire more becoming that creative maybe competitive are or to on it markets by you driven in due early pressures? is some mentioned the a guys bit the if that's you processes or more little by I'm being question, expand

Jason Gorevic

we our be that and their to getting to it's goals. certainly I we're clients very Yeah. what more is those think, the market levers align in and goals, selling understanding not upside be now how something business, little and differentiating with to bit honest, a Matt, the the in of sophisticated terms competitive a can off in to we've more It a else. a of very interests risk that ourselves more us gives of deliver growth anybody way maybe good really meets done client, able us about as reaction we've, of of ourselves heard in and the environment our from job response different understanding something in takes our from clients,

using the channels So felt analyses are and digital yeah, more comfortable we of and three I utilization ago, have to markets as that efficient do two we more the today. much we years our because have sophisticated think our and data drive didn't much wouldn't ability into or and targeted as performance effective

align that give ability And feel to everybody's more our that better sophisticated gets predict so and comfortable as we gets business upside. things sophisticated, utilization and our more us doing interests

Operator

Baird. Your from next from question Robert Matthew Gillmor comes

Matthew Gillmor

Just one me. more for

there mentioned strong. segment, very provider growth been the you the that has had On

focused demand So market of health see leveraging evolving? provide markets what coverage? get patients specialist, outreach standpoint you're that an both you or product Are seeing in in their their in focused a just systems more more from and wanted to on and to better networks how to on outside update terms

Jason Gorevic

very they're for priorities set more markets, With are use a a markets In the consistent set. our our diverse. much diverse It's systems, of it's employer Yeah. much really cases and narrower health they and hospital health and systems. plan

delivery of patient and some systems. referrals risk populations risk increased leakage financial Some looking looking are of efficient and outside therefore at for they of less for patient strategies, populations of them more driving them their are and take acquisition and the management care as

at them up Some to focused specialty telehealth care. systems We do very the have their them for follow and are of avoidance within and some an of as readmission more then consultations using do own on using of platform cost them course their therefore population their look of are and own healthcare population, employer expensive us looking does. they an many employee at like

at diverse that single a segment good our solution a to pretty their use case, set and understanding the you So needs. very, to organization is of the I I tailor it's and and client sales very needs in can't a give helping priorities think because

Operator

from question Wardell Your comes from next Steven Chardan.

Steven Wardell

give members engagement members you it how way to So select way a relatedly, you to that drive with employer that compared with do you health system would. plan drive typical employers? plans access do And the health the as

Jason Gorevic

to from plan. different not health It's health plan uniform. They're

the then times, plan. Our versus health although, efforts are we employers, in frequently with the the similar for we're can the health many with plans doing do more employer concert

and on health health among on do very So, able are in their channels plan's plan our targeting to digital we obviously environment of plan that's they health effective employee EOBs that helping plan in all to done an health the are among employee, digital word things to a things their we those are information much more channels their facilitate benefits customers. like peer, easily use to are membership, or overall in mouth employer into of than incorporated environment, through referrals but whether site, and our course on communications be site, we various of being things and other members can

Steven Wardell

And managed fully and self-insured insured? is seek a the case business yet of generally to you not that care organization still around it do contracts book

Jason Gorevic

target both We No. those of populations.

about the XX% work like insured just talked across country Aetna self-insured membership, with I So, And fully membership. That's we about that. XX% earlier. plans

Operator

from question Keybanc Capital Your next comes Rohan Abrol Markets. from

Rohan Abrol

the respect from believe given had XQ, of in a just couple ones quick some me. Jason, breakdown. to I landline kind you versus mobile of breakdown with app/website

numbers, you respectively. think updates XX/XX I or not? had Any gradual a of those

Jason Gorevic

offline to but channels, online additional the a pretty to quarter. Pretty similar the results results. digital similar point form Maybe in to swing quarter third second

Rohan Abrol

it commented then I as better had health I of roughly that was And subscribers, on think XQ. Any you update existing XXXXX also believe to number?

Mark Hirschhorn

No, the it's same today. about

Rohan Abrol

could the more a whatever for it more potential And Teladoc foretell guess like. any look monitoring thematically, mini that up, strategy Aetna finally tie vision I as wise, perhaps what of CVS clinic within services kind or to given may

Mark Hirschhorn

CVS feel be very positive are if both Aetna about there talking good obviously have about I come us. relationships CVS we that to and for We so good and with very would our that relationship actively to to only with pass, it that and think expanding position and were

Operator

Your question Steven comes Cantor Halper Fitzgerald. from from next

Steven Halper

have actually two questions. I

the relating Federal Aetna from another fully the So to the Amerigroup, there exclude it and as to earning when not, reflect contracts? item you're to as insured be membership employees that going revenue book where plan is those revenue If is go? well the you to going

Mark Hirschhorn

contracts visit revenue. revenue to The Steve Yeah. go those in will from

Steven Halper

on Even savings the arrangements? shared

Mark Hirschhorn

on visits. completed only are those on Principally savings, based the shared because

Steven Halper

other fourth a question visibility in the or down you full to would you gotten look the point when quarter then Or at months you just high-end go? have And guidance, Okay. you you obviously didn't to What that just two range coming with is higher the bit. and the this have suggested really it that you tighten year materialize it's is the - might because bring with and? good that have at

Mark Hirschhorn

growth feeling to we've because the actually it mind, achieved down reality one I've insignificant again our of is, change comfortable. $X these built since again month Steve still November an maybe the we nearly million set that's the where year only by It's at to we're bringing I've got and with year. enhanced organic visibility Well, XX% for go, in beginning the numbers already and

Operator

comes from Cowen. [indiscernible] question next Your from

Charles Rhyee

it's Charles for Actually Samantha.

drugs clarification quick If not you that mistaken, correct? the Just can't telehealth. first Is class through a - around question the prescribed get opioids. X around I'm

Jason Gorevic

prescribe We permit any drugs. don't don't scheduled or our Yeah. to physicians prescribe we

what are to telehealth, referring opioid conditions So complexities of when I treatment the I that's some oriented said or addiction, to. relative there was to specific that

Charles Rhyee

the with a a maybe a recall or just sort terms like, still CVS. from guys you did, an putting just question maybe kind you phase, trying update is contractually curious. current of the quick we've have CVS guys is to relationship on us release official you there, in you what pilots, Can remind prior Second, looking of or have just question that CVS? I there an relationship pilot get of in continuous that on been

Jason Gorevic

contractual pilot. the have started relationship we a Well, that with

I We exploring traditional base. also served would their we're, employee their service relationship. employees of our say, expansion Teladoc with our for And actively

Charles Rhyee

to of of years. XXXX event? as to about we big pickups your know then get looks a I of if if the Jason, or as And around sort look membership of lastly we part P&L as digits, I utilization should up event goes and ramp start can where think couple a in think two. a the customers maturing like year get into sort past, - the future, - if commercial remember I your should you three. is but in kind about take that were kind Should on guys the more little think it's of and we kind several clients, think or last to I look years, the sort we year jump in And year a going XXXX that And three the last I older back modeling some of XXXX low steeper growth utilization that of and - have about over and we is utilizations of think then to of that a at mid-single talked that kind of typical it in earlier, it of a we're

Jason Gorevic

Yeah.

the we of of that see no do it's the book dampened as say, see membership So there benefit is the across increases business. we by that, but question that you

millions utilization so year in lower lives of one many bring therefore levels. have And we and that on

matures, you'll that see As the more. book

that in 'XX. 'XX start a and more in you'll of bit think lot little to it I a see of

inflection. on If look certainly effect a we many it's this dampening - at significant added, that's members how you that year,

Charles Rhyee

I me, positive out sort of And lot to give for can news a last and on looks Medicare of question guess this Washington. business, It like your here. provider coming move is us you of on beginning particularly the obviously thoughts

handicapped the and you obviously segment You would coming, to limited MedPAC decisions of reimbursement has let's growth employer in Medicare have would the in much say, expected you expect the segment how that versus, change. lack provider

Jason Gorevic

provider the say I to from chronic and would MA in probably be the because really. telehealth the I season be likely in reluctant impact will part much of percentage has XXXX a health think the approximate act we look gaining as the 'XX for of or that how as 'XX put bidding there enables that a impact that plans to XXXX I that's that their the give in or segment. language And dampened that's for traction try to through plans to growth at 'XX. you Congress seems bids

out put more and control thing be say So of future. binary is it's projections. any that to I'd do I out forecasts there into guess it in that's not the really our other that stuff think we will hard positive, our but of and try the I

Operator

Teladoc's There you are call earnings quarter no joining Thank further questions. conference for and third webcast.

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Teladoc Health (TDOC) 1 Nov 172017 Q3 Earnings call transcript