TDOC - Earnings call transcript Q4 2017

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Operator

Welcome to Teladoc's Fourth Quarter 2017 Earnings Conference Call and Webcast. [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, operator, and good afternoon, everyone. discussing you quarter today. to XXXX full forward with results look our and fourth year We

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

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

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

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

Jason Gorevic

expectations $X.X the of this year, joining quarter quarters $XX of nicely, fourth two Adam, Teladoc's everyone paid XXXX year board. of full quarter absolute $X Thanks, into up an We in on for fourth ended increased last year. Total In U.S. the a compared our across in XXXX. finally, XXX,XXX of nearly Adjusted the basis. performance members, revenue us EBITDA continued the on an a our million carried metrics and we key afternoon. visit ago. first to XXX% XX% the X.X of through and the over to thank year first exceeding million XX% XXXX and our you all strong to months And of call with million a of XX.X bringing has visits organic the three on conducted number quarter, compared million basis positive the to up million. was loss

with capabilities to tracker digital to the through capitalize they on data Marrying has Teladoc February. our and started fourth the I leveraged drive increasing quarter Our a member flu exceeded mid-December her continue the analytics targeted, as X% the digital was and surround-sound direct was work awareness. expanded predictive to driven advance for strong campaign engine, engagement a which is on result at in team expectations Verstraete X.X% visit notable utilization, front. believe There volume the flu engagement this in that strategy continued season Stephany made our member in we as from compared by they the our lift quarter to as full marketing real-time of year. marketing team moment-of-need progress the annualized came our the demand and fourth very from able

of all flu the this a in you sure I'm As severe most are season epidemic has been decade. aware,

felt where impact initial the on West it the intense. been Coast, was even to shifted the While impact Coast, East more the has

in X over flu-related we conducted in During peak X,XXX X illnesses. per to visits January, due visits days day, with

when Teladoc's I'm system care overloaded. the fill of delivery of periods these and system is in role increased step proud ability very the During traditional up critical demand, a health to

of has across said spread a by continuum. emergency available XX/X/XXX, circumstance office people Teladoc Utilizing and the disease avoiding doctor's this room. As to not influx an our exposure like scalable only is or Moreover, flu. limits has for significant platform highly it the quick, handle solution visits care virus the Teladoc we convenient a the near-perfect have in infectious before, in to a capacity also other health but of the

health the aid While to were members value of believe and to of people our school their will rooms, look out relief offer, thousands and emergency provides of physicians convenience delivering once network for high-quality need. of Teladoc and of in I meet care of coming hundreds to departments more to that districts for advising Teladoc's Teladoc state stay we of our of closing the want health they were people. members We dedicated care their needs. time to experience thank

came year. routine. our new members our traditional visits care users had Teladoc's the visitors in integrate their a more of in services likely into time, calendar us again the use are they this quarter, who new individuals not of Teladoc or those completed as for likely previously same first from utilized us to for flu Teladoc's XX% visit, over first-time registrations fact, health specifically Once office season use January In in using The this services. forward time benefit us first going those in lieu increase the will

positive The to certain to favorable Teladoc clearer after very incorporate and provisions Medicare for also telehealth care, expanded Act and patients Teladoc. plans Plan we've rulemaking, the other Medicare includes including the with year. greater dialysis annual a offerings Medicare the the January supplemental providing law positive into with in is to care Budget required reimbursements Bipartisan telehealth, will Act XX reimbursement cost the Advantage the will on permitted coming become signed Earlier XXXX, to but in of accountable exact people bids out include of The remote organizations HHS their sponsors XXXX, President flexibility Budget very expanding beginning step it important offer Advantage of telehealth access be season, CMS monitoring that for developments remote and million stroke. Medicare impact over services virtual diagnosis benefits of the currently X, telehealth their important of Washington. the enrolled for contains into to plans. plan Beyond expanding also flu provision which of for seen this an month,

Before year. to this talk what to I to Mark, over anticipate call turn I a the about want bit

focused through on move to a maintain in we our remain us market-leading XXXX, of initiatives position help As designed the industry. number we

to First, we Best the integration complete of Doctors. plan

of and we management many administrative successfully and combined year-end, As our organizations functions. sales client had

reported in clients. integrated our we As out common app mobile rolled January, all has been to

teams their from international global aligned We through growth the U.S. so the next-generation portfolio organization product incredibly selling commercial taken on they on be that both and the entire effort and in palpable, user will right front the a was summit, guided enthusiasm integrate we end are an back just international care been was gets where has segment, for Peter clinical by in proposition. the and need. season. excited market and and now as well working the them to our which The more members prepared about go successfully to us value market assesses experience cross-trained markets. and the of positions domestically I've to quickly never to quickly got with growth, teams It service entire unique intuitively needs for Herculean intelligent prospects McClennen's our We these our

last delivery expertise virtual enterprise-wide These strategies. our combined the since integral plans solution doubled plans begin just estimate productive focused We And million sales capitalize our priorities comprehensive look to clients. a member discussions to have launched health their and Teladoc expand been engagement broad our we significant number we the by care already of to opportunity We've scope care is has existing acquisition Second, third, user innovate explore part cross-selling excess cross-selling integrated fingertips. clinical solution, strategies. the array customers as on struck team inform have we in us a With of scalable to products that of large default engaging of using virtual of cross-selling become summer. the the health our a as the at care of the opportunity with and continually number and necessary capabilities, closed plan and on $XXX helped technology I've offering. experience, realize by choice dedicated data-driven our health to

can you to momentum year. the developments in call the over swiftly turn at our hope has us that, and With the the forward throughout results financial I Teladoc I XXXX look review we the on to Mark As into XXXX, I'll exciting to update to quarter. see, you experienced carried continuing from

Mark Hirschhorn

with our everyone. and preview another for our year strong results we Consistent that good Teladoc. provided quarter fourth during the January, afternoon, Jason, of out of Thanks, year-end first week very rounded the

and the results and financial evening's the visibility quarter our and call, for first quarter run around early this our XXXX. full thoughts discuss year through I'll During

increase. the P&L million. the in top That's the to and revenue starting fourth $XX.X was quarter year-over-year with line, XXX% Turning

On in Doctors. million the XX% As growth million, $XX.X increased first XXX% experienced including Fourth XXXX. subscription Doctors. subscription a over same quarter, a of in coming the our Revenue over XX% quarter at an same revenue $XX.X fees basis, in contributions Best reminder, from the revenue in organic grew quarterly quarter access from quarter XXXX. period the Best fourth fees access full organic represents period from from this

Going XX% fees out subscription total one the level million between of fees U.S. deeper, when the $XX we million. U.S. break and for remaining generated access or the international $XX.X accounted and international,

of international accounted of and the the revenue XX% total inclusion revenue With Best for our subscription for U.S. Doctors, results, quarter.

States, an XX.X had XX% increase XX, the December million we of in XXXX, year-over-year. of As members United paid

not we've refined year-end, definition to including membership. QX members Employee paid Aetna's Blue visit XXXX Shield individuals just or fee members Blue our XXXX, individuals or access associated U.S. of definition, refined Cross insured we the paid from to a U.S. fee totals By only have PMPM our will end million with subsequent of As services, our expect to this to only PEPM that the and reminder, access. program include are fully approximately membership the Better X those population. visit with include Under

our cross-sell XXXX. In million fee our to the and expect of around will increase services multiple Additionally, there quarter second the of the go quarter live subscription to that $X.XX upsell third quarter per Consistent the employee fourth that in TRICARE clients, average continue messaging month, compared year-over-year. PEPM, to X the strategy and another average beginning fees April. only quarter, XXXX was at to are per $X.XX $X.XX we our in our will members from of or access fourth with visit

PMPM quarters subscriptions contributed average health increased opinions influences year-over-year and as revenues our mix our growth to Additionally, and second the behavioral in from our expert improvement. product back-to-back

year. by is services, utilization, divided general total the for QX which with X.X% in access of XX visits a rate to quarter, medical annualized quarter, membership to prior basis calculate XX% we medical completed increase is general increase in an reminder utilization Teladoc the in of we the completed from XXXX. an as XXX,XXX visits during visits Teladoc's XXX,XXX over represents fourth paid an point fourth our This U.S. Moving the which members those

from revenue For increase comprised we to representing calendar came the increase clients. the XX% million revenue XXX,XXX our in fourth full XXXX down to an completed XXXX. year, visit further, be year-over-year $XX.X visits, $X.X can general That's opinions generated XXXX. U.S. of XX% level visits completed health in revenue visits is The visits, million X,XXX,XXX primarily from second of a a remaining Drilling the specialty These plan fee attributed medical quarter. XX% of fourth $XX.X quarter increase. in the we expert over million provided a from which visits,

to the come. see superior opportunities in current we rate, our market and addressable years space single-digit the Given growth penetration for large

will SG&A compared than offset margins continue believe mix. margin revenue our XX.X% us greater to our should driven pressure year. last more growth to by gross We Gross of scale operating product as any to benefit XX.X% that leverage changing enable from

full approximately both were for consistent at margins and gross year Our XX% XXXX. XXXX

gross on we As and as mix consistent margins our revenue quarter last was trend our the with this moderate our mentioned expectations. call, shifts, will

quarter in efficiencies to additional continue in predictable the we sensitive the generate dynamic will can scale visit million. a This XXXX. profiles. margins, figure $XX.X shifts from operating with fourth are impact increase XXXX's $XX at of million. noncash less principally or operating $XX.X XX% such Total came operating very occur as gross to the the as impact the behavior from represents stock expenses, our our members' We $XX.X quarter of integration QX have and depreciation revenue QX million with charges, compensation, are costs, in impact margin XX% expenses million on comfortable in and we and to a increase were that XXXX Eliminating amortization, greater margins

of positive quarter goals operating year adjusted we positive That's EBITDA in the expenses For since the line a compared of release full were net the fourth million noncash that compared loss net EBITDA GAAP two IPO, million achieved today. of of last our the million of on to XXXX. in page EBITDA issued in loss The our the in $XX.X is were to fourth The and year. items or $XXX final to stated $XXX.X million Net an earlier $XX.X quarter provided $X quarter, was full reconciliation loss million XXXX, with loss to XXXX. $X.X adjusted XX%. in increase in increase coming compared In $XX.X million contributed million the at the press the significant reconciling to charges.

stock The first million related charge to loan termination for our early was in and million costs charges. additional $XX.X of term a unamortized origination $XX.X the an senior debt compensation

$XX.X these to one-off cost million, contributed Additionally, compares of loss the $X.X the million and favorably QX in million loss the Without net to which net increase XXXX. depreciation net and million improved in loss. charges, $XX.X amortization to of interest $X.X

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

XXXX, of of total in that debt Our as five December $XXX X% solely convertible the mature million consists XX, years. notes

debt the component equity Our of $XXX GAAP the financial million of appears presentation approximately our as in net as consolidated is statements. it of security this

to for our I want year, full cadences. first on provide outlook the and of to the quarterly quarter Before some some turn the commentary I

fourth First, the quarters. a to is contributor and meaningful flu our season first

fact have XX%. lift in We the and to a our discussed X% flu previously by season QX can QX visits that strong

the from As calendar step-down typically visits to a quarter result, sequential first quarter. experience second we a in the

adjusted dip the of down due our new contracts. will first expect quarter the activation new negative onboarding we discussed, of EBITDA of to costs have the we as in members Second, to and material several

the EBITDA As will adjusted XXXX. we positive exit remainder remain QX, for we that of believe

This and $XX in $XX EBITDA EBITDA our first our Third, an revenues to expectations months performance. of million traditional $XX past, membership XXX,XXX round exposure loss expected less payment we provide our our million and outlook visits. contract provide gates With $X.XX a our fee the visits as I members we've shares average loss from members is between targets for structures XXXX has year million out year. note in of to this the mentioned $XX from in only outstanding us we want good that, that million shared to according total the of the of the exceeded approximately group these XX million with range visit to loss to XX.X our million, and currently are million, adjusted and would I loss which new and total per $X.X towards our to visits. of increasing visits slightly that work right can quarter well and confidence like for Net into first progress on increases weighted to XXX,XXX structures visibility the based between a share million million, meeting savings of two between $X.XX. expect total of an loss between $X.X XX.X U.S. paid

million XQ XXXX, revenues 'XX. was loss a and positive million X million, XX ongoing an achieved members million, between we XX successes and of I entire X.X a evening. them between of million open million of on EBITDA share total very all $XX $XXX number individuals, important all as based weighted XX by we with us team, available IPO this of Operator? paid to and outstanding the and membership million, $X for to of for $XX their on is visit to loss questions. you expect thank to only range $X.XX. Thank Teladoc million effort XX.X EBITDA for U.S. operating loss pleased the work shares and want an between year. We'll and outstanding a I'm goal For fee loss from of total our $X.XX quarter This call between Net executed to million the this full and visits. now us joining of $XX approximately adjusted to per positive total access expected visits million million $XXX million year approximately EBITDA average

Operator

[Operator Instructions].

Our first from from question Lisa JPMorgan. Gill comes

Lisa Gill

start just as well thus what the really but curious wanted were. hearing the far the the of in only relationship know around I'm utilization first quarter, versus you're Aetna we're I shift to with I very beginning as FEP. just seeing what expectations your parts

Jason Gorevic

Yes. Hi, into And going above our Lisa. very we're -- building accounts' Thanks both are to see accounts year. in the performance. on side continue we for Actually, the with the the fact, performing question. pleased Aetna strong and both FEP on expectations side. that The

out brand-new was relationship, well. started the of that course, a really it and Of gate

a The Cross performing highly Blue the at team is Shield have Association FEP extremely engaged, We Blue well. partnership great there. we're and

Lisa Gill

they value-based? XXXX like there opportunity guess comments think How Are parts, size How selling any we're just to And what then the XXXX. Aetna be, season opportunities? -- look the we at very FEP? think intrigued contract know way model more we opportunities. do they early about large the season? I around some do is? like emerging? my selling I or Or Jason, about Are something second around for question the those is more that's plan is health And would potential the new potential your But me there

Jason Gorevic

But partnerships to stage that, overall point health discussions as were decline what strategy They're be, care it about an finally which to of the as and virtual and much whole a I'll selling say relationship. the simple this the I that about and biggest of telehealth are seize integral discussions their to used sort sort a delivery would more products embracing because I'll is opposed how only at that's the are strategy deep big they strategic opportunity the part a collaborative because having are where our plans certain the thing of discussions really of myself we're of at of are, we're trouble. their population. having vendor-client virtual gets platform because not the get in system. notable solution woven into And about care part how the core targeted

discussions larger of of are So all we've the because basis I terms look that than of sort the board are relationships financial a having nature that, would like, past but seen on those said in uniformly the over they client say the strategic what discussions. in per the opportunities of

Operator

Jamie Stockton from next comes Our from Wells Fargo. question

James Stockton

thinking are off just maybe QX. started strongly season, with like, getting guess things very in I It flu about the visits. seems obviously,

You full think, greater adoption number. into year effect that I telehealth of rest out. don't QX? plays just to we've conservative you what guys that, seen could from didn't, kind be we touch in and be the of interpret of how the revenue trying the wait your of year that follow-on Should kind around you're see think We'll

Jason Gorevic

top into have -- when we we flu created so that the that's first a Over season think said original on little layered We forecast. had that repeat built it, that and the way of Jamie. an the couple were bit on forecast of I did of the we year, did in of the had first-time We users. of our to call, lot appropriate change forecast. into sort our for as the to took but account. result the trend forecast the But year, a and our for not January on expectation stronger we weeks We, first-time a expect not would in we I seen interpret usage we of build users. already, XX% that

James Stockton

think, great. that is are that kind year MA starting Okay. with on, maybe a I be just Anything just they're this telehealth there's going whatever That's for they telehealth like Lisa then was in, XXXX. next Are their about you're having gear rags now, bless or of being reimbursement the waiting specifically very able legislation would early before conversations? to rags out with more diving really year? MA The right that Jason, broad great. around fold that CMS the up it budget plans And plans assuming and come a conversations in little to those feels late either the asking to what then

Jason Gorevic

MA say are how to in is about they're key to to were It's would two that discussions -- delivery a and really their populations. virtual the advance I bigger starting more sea those strategic strategy, where a, their to of even apply a the plans their that part figure from out year try a we going strategy care care of embracing strategy, really as member change health their years management sort ago. of care experience to which

there looks it first what health is view for the what do this enterprise-wide For plans. can the like time, an and of

it's one don't decision sort I a or predicated think on way So the CMS other. of

Operator

question William next from Blair. Our comes Daniels Ryan from

Nicholas Hiller

on a for market? seeing for quarter. is seems bigger Ryan you any This what trend update Hiller in provider in Daniels. give Nick Could you're providers like each the It

there? Just what's your the And the provider like mix environment what's from revenue XXXX? for the market expectation competitive in

Jason Gorevic

be Certainly, market provider we've said naturally extremely biggest fastest-growing. the and the one but continues market a started quarters, is growing so Yes, as later it contributor much -- of past result, the strong in because us, just revenue well. not to segment smaller, for the

We in ratio have of segments best that of we business. the in any have the to our really than continue segment close

and hospital engagement significant and us a would of capability, that a consumer includes a And support the advantage. all our with that so system operations, full-service clinical I competitive need, technology provides say that platform very could

helping is boding discussions that with also are of guess on very it's large the whatever all those capabilities that say us well. I on plans provider would side And side. the for So health our I worth,

very, very market. we're So provider the positive about

of spite haven't, that continues our strategic what revenue I component but market, comes disclosed think, portion our in to a don't of overall it speaking, of its value. from We revenue be, small relatively total

Nicholas Hiller

you've Best helpful. the the reacting that of how your being some landscape, you offering there then broader with competitors that the really Doctors Great. of now early seen to That's you are what and on seen have with some -- the competitive -- that integrated? be successes might you of with just more And have kind Okay. seeing

Jason Gorevic

Best brought competitor offerings be we Yes. the have, acquisition a Best has Doctors who landscape our in discussions of very, see breadth to we their the I'm competitive that because post direct different. the our and prospects near you that which Doctors enabled very don't be has to glad honest, with anywhere

the seen So of we response competitor a from our have breadth replicate not direct services. a to trying

see fact, across us our of we we at competitive more market, think and of advantage. most market of whereas a gives segments breadth what specific competitors becoming is In segment targeted that the entire compete actually as a the the we

As I said, the strength of those going both in both the provider very market and talk the when complementary to prospects. health to plan market we're are in

Operator

next Jaffray. from Our Sean question Wieland from comes Piper

Sean Wieland

So were the some on you into in do that MA what's Budget of but and these ideas a market as market? Medicare particular, the up opened these markets the new early -- strategy have well, others go-to-market tap by markets on Act, to Advantage any in particular,

Jason Gorevic

providing the Yes, an the health actually, MA who relationships we think because plans with advantage for plans to have those starts are government. I and it's and us, expertise that with MA market strong submitting it those the

So we add-on with an service which developed highly new a relationships client working we couple part to case of will and number offer second very years to going plans, advantage AARP be health competitive then a And plans lot for and who an with that's success is of our caregiver having client. within health those plans, valued service, part very, existing land certainly one, a the for so the significant MA the is, that plans health a as already opposed with have we lastly, into population, have ago, which integrating there. our population. a MA of is And

successfully XX months of XX business bit probably position X/X/XXXX XX us that take will advantage able so, winning be or a we to competitive another So provide of ourselves that believe to date. next, little course months launch over with working advantage that more, the in and the that, maybe to to

Sean Wieland

on have on gave what year-over-year have the last at probably completed been XX% it what of visits registrations. year? the would the Do that the new from compare And Great. any in nugget year? you were Or of beginning January us is idea you

Jason Gorevic

year. terms we Yes, last This rest in higher year of the year it didn't It's a it we last in was always little it I was meaningfully. meaningfully this and January, up what say, was than members membership, flu with using. bit would certainly, year, new new give it the of see than with last over But the up year. better year

Operator

question comes from of Jefferies. Sean Our Dodge next

Sean Dodge

staying last guess point quick, you registrations can from do now any So becomes that often something with in really your statistics to the maybe repeat I repeat on about a a data what or come of that us you how came visits user? new us user new January, think have help share users? maybe like proportion

Jason Gorevic

started from behavioral pretty visits dermatology. consistent as X.X it user that's been of like products step to health per It's we think Yes, so X.XX to and year, per up about as consistent. about add X.X pretty slight increase, and we that saw

think how I'd So that's it. about

Sean Dodge

the seeing Have digital-heavy in the Jason, there How a clients predominantly to over material? more then, approach? existing you strategy client far now switched about talked number encouraging are that? are you the And results most still, the through there driving you're that surround-sound Or utilization. are fair print Okay. and base receiving deploying

Jason Gorevic

Yes. although would say are capabilities. I all we certainly -- our more that digital our majority, multimedia, the not clients, of embrace

apply targeted are we in that. However, where we

we sure sort population uniformly of to want optimizing of than make because we're that So segments we and we're results going we're know the individuals about the that to on certain in applying profiles across others, target that the market, spend. certain yield better of careful not get

Operator

comes question next from Our Stephanie Davis from Citi.

Stephanie Davis

early the new trends segment Can of utilization can share you for us only give you visit clients? color with any fee

Mark Hirschhorn

Yes.

end the in we over XX% that great coming visit to January. looking at earlier, XX% and They're them to only By state people utilization at a our about from thousands also in population. the past in as for them. we're they visit into utilization January, what I the -- expectations transitioned some noted were fee group an told noted were every visits. of think that in approximately registrations provided had of FEP the members of exceeding I is We seeing the increase with to Jason our And we this point. country.

utilization set X TRICARE, we're are million X. will with on live go we numbers with X the April -- members from with pretty and both So million perspective, FEP, populations. aggressive we have of And members, their exceeding those it their

Stephanie Davis

to season, trending flu any the Good. some probably when these strong hear. And you agreement to do about just indications of plan? have Good compared given some savings relationships, think there's you have for in new how then we place shared of the early

Mark Hirschhorn

shared good For They or utilization health the seeing revenue significantly growth. primary of quarter plans it similar increasing to over our part health or again, we're clients this components rest of are last savings, year. were plans. that And or a consideration into those trends the primary takes

Operator

question comes Draper next SunTrust. from Our from Sandy

Alexander Draper

people usually I'm as And were could that? so know a have you rolled constraints was just be where that? you if more minutes have promote, the or promote will like lot was wait you and that's on post capacity? questions sense digital want get -- capacity been is and to out, often Instagram been busy ratings, did with to or but follow-up flu to but any this curious maybe asked XX feedback strategy -- as since the to Just able how on if A couple of out, average seven just it's my a tied of I you something how and where Facebook one, that? any it feature and And to season. the the trying busy it's of I and you there if answered, many wherever are, guess, maybe you handle don't is marketing into been, or have Do this as busy, do time get willing curious it how much you it.

Jason Gorevic

commenting Sure, do And had visit facilitate to comment we from we would We a Sandy. when them enable them, of positive like our a course, of we they they've it -- to if them, members, actually it. about ask after social media. in share get help sort

facilitate our employer clients and of and facilitate more employee most-engaged we to powerful, among and population. driver positive that help We also, positive the is employer populations within our their clients engagement to probably that a because I which even that's consistently the help word-of-mouth utilization hear word-of-mouth think

or know that, off have strategy just don't about many part statistic we remembering... how members that. I'm around members but And what the of I do So second do active question, of sorry, the head an top the of the percentage my then

Alexander Draper

you did the capacity, all have The challenges volume? with

Jason Gorevic

up tents we right. that the a so lot try you're and a response to in epidemic. school I saw districts Capacity, to parking demand but hospitals would during uptick were talking handle the say the -- in our closing in when because time slight setting times, Yes, about of were

our seen time. average couple-of-minute so And may response uptick we in have a

dramatically. very Of on was volume adequate we in fact And our time have came look down you last up that January at sure over response the spite basis average this capacity. make that course, fact, of that if our we state-by-state year a in to year-over-year, in look January

Operator

Our next question Canaccord Close Genuity. from comes from Richard

Richard Close

halo respect from that new relationship? you're there. with the update FEP give Can of what seeing any business potential terms from opportunities you question us A to in and effect

Jason Gorevic

Yes, I very, would say very strong.

are was to well seeing proving respond a the FEP the that believe I ground Blues We us. win And value for proposition. very our

implementation implementation, a very, we very the the of complicated account. the organization. We team not have of FEP very a other result FEP strong also And within it, large a accolades but is only with from with see also opportunities in gotten terms which opportunities Blues very, as expansion our

Richard Close

update add in with that can But of expansion terms Okay. of Any incremental into think Optum. in Obviously, client? you TRICARE's I anything terms United?

Jason Gorevic

expand penetration to our continue there. We

take, saw of are we're quarter. or first the performing well. expansion up that they're population extremely members, to We in and X.X We give probably -- million

running We opportunities segments down continue and be to multiple their with products multiple business. of

I our So there. very relationship there feel well as about as good our opportunity

Operator

comes Hooker question KeyBanc. next from from Our Donald

Donald Hooker

you'll cash how and be capital, flow we positive? you 'XX think cash free So working think you into terms look do So flow when as in positive? true and XXXX about do of free CapEx

Mark Hirschhorn

Hey, Don.

$XX think well somewhere year. million the EBITDA for about million CapEx to I to in against likely needs $XX net as capital the this going for working range we're as that spend adjusted of will

we a producing year, about at when that think for neutral will flow. free XXXX should be likely I cash first and look talk our XXXX, we

Donald Hooker

behavioral about driver you driver? that terms there past different the bundling and obviously, guys. big Any other question, can of pricing been then revenues? big do health, around just in with you've revenue pricing How services. and around And provide And a in topic, big, thoughts of second Great. detail a for done trends you in we think perhaps has any terms

Mark Hirschhorn

Sure.

our behavioral United line see somewhere of others the year, our business. with of bundling with doubling doubling behavioral a the Again, have us benefit top bundling So of services. great along close We've had about to some services million of the and that come visibility of We've continuation revenue. we I'd like to who year. $XX these this we primary clients almost finished entertained other some now with revenue. expect Last into

quarter, I by think on a did first XXXX. twofold surpass of we'll -- what in we on easily QX the

behavioral the So line of continue its our will being business. it's like fastest-growing looking run through

Jason Gorevic

la to it's say behavioral an maybe table part sort expects services we're a we the talk of carte more rare much they're in than that as about. plan add-on would who talking I of of bundle become a it, And health interested everybody about. interested that stakes, It's isn't someday overall that client

Operator

Our Company. and next Charles Rhyee from question Cowen from comes

Charles Rhyee

kind questions? us were clients? clients of I is any were how guess any general of versus many about type way to new medicine this existing from Or from give additional as breakdown users flu-related sort such you versus breakdown, health users, back, comment maybe versus between any going can behavioral Jason, new users visits first-time from of new XX% the there visits of

Jason Gorevic

Charles. Sure, Yes.

which head of whether clients new was users So existing I tell what that, my don't But from will they from I off statistic were users have clients. new new top of in total. of the usage to general not among our of percentage behavioral the pattern health, flu as them among was means a the and our population terms that similar rest that or the you from is all pattern medical,

we about in being last time terms our the at So peaked it to a concentration. at That's we flu. peak X visits of was X Xx the same in year days roughly what in said due

of versus of you which didn't do period other can time. is the So reasons them it during differentiate the population, that -- versus similar. for It on flu rest math doesn't the the

Charles Rhyee

Okay.

strategy we thinking much has of side, really how catalyst provider waiting And really Okay. has been extent, That's at -- we helpful. just is provider Act new go think, if if to point in a then in the in back it clients a expectation their some virtual I works some to there now have it certain been general providers? terms with been what that the time? of that elements given care, for now catalyst will discussions there eventually CMS think kind think was would while, And passed. see -- for Maybe your for it would formulate the it that a we we're about and of I Medicare, from a to And right, that covered. get at about I for that really coming or a Chronic potential round this of of for understanding has be

Jason Gorevic

Sure.

been kicking actually Act the just for has Budget clarify, with So while, change the a around Act. came Bipartisan to the although Chronic

done of the they CMS. to were embrace now that -- moving have of be put is them this responsible And where The it's realizing risk I seem that law. providers off their And say put restrictions and already because to been or strategy either great a telehealth means has full -- sort at that put this rulemaking. population. of them would arrangements on it HHS of that sharing for be virtual it long-term and any risk seem risk are or into moving it's on the care to So taking gain of and part all were a or large to which in major restrictions for to were that signed because they to or removes it's -- bed majority advance for to patient corridor a many because the

that -- it don't MA accelerate that in the will dependent was I think I has think reimbursement to opportunity But that. the order traction. to gain on

Charles Rhyee

like and about payers such products. so from the lot a in health thinking more more, area consumer-facing any employers from you as, -- the pharma, care an Right. and kind serious, Not talk of device, I'm other what of of terms tech a health I about devices. telehealth terms devices? this providers, let's on of self-care health apart care capabilities kind companies device sort probably about of consumer into of Can obviously, efforts system medical sort in in constituents end, What the say, you know, care higher into, in put integrating [indiscernible], [indiscernible] don't more of

Jason Gorevic

services. would that say with aligns us our more you'll the device do I as expansion Yes. it see integration clinical of

that all we're we of conditions doing in to not So second is management, we've real the obviously, the The business management services. that chronic fact We down Doctors, of expand place of that those about the we care chronic into but been road, pretty care with longitudinal public more Best do people take longitudinal intend, the only people. the in time, behavioral health. opinion

of lends of sources for key a much managing devices be population. device and the more move over chronic a caring that people integration into the we itself management time through them period as because that more with So help to that can of longer data condition,

So I of with that's integration the see high-impact makes a care think that more to respect we difference where device patients you'll serve. doing the us in

Operator

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

Matthew Hewitt

for I clients all-encompassing? quarter, me, that just XXX,XXX or guess understanding. was so of a the only I'm from clarification starting, fourth visits that was point The in visit

Mark Hirschhorn

all-encompassing. That's No.

Matthew Hewitt

is have that strength given ways then you perspective capitalize are flu a seen, season Okay. on you I'm about that Great. those you the many anything to contemplating that continue you've little talked Meaning, do you've strong that the there sure doing campaign remainder or from return the started to wondering specifically the or could from you those and strength. make that demand come of the patients, And patients bit thinking the a obviously of that and can back year? but captured marketing you over visits are secondly,

Jason Gorevic

absolutely. Yes,

any our engage definitely population. we members than other more course, Of registered with

phone. the service, then, able course, the -- onto our are the of who do the the the of programs. people finding to with the and quarter the messaging because see get engagement register use the who us. beginning to touch of the trend in the we're -- we points us and therefore into somebody to the from e-mail frequent downloaded quarter, they and and people fourth we And We're that most frequently, app continue fact, opted So mobile first have once in they're toward get they've end

app, with downloaded them that be has somebody regular us much to so gives basis. a present And once the on more the ability

virtuous the absolutely, So cycle. for create a us registrations

Operator

Mohan next comes Oppenheimer. from Naidu from Our question

Mohan Naidu

utilization. around question one Jason,

really of a you So for great guys are consumer do more to year quick? you has reception utilization see in basis. double-digit double-digit the annualized utilization full engagement can it, roughly you double where you I can in are number. lot to been to hit point than and double records digits, for the close QX but a that doing you're new work, What so know far. going else in How get inflection

Mark Hirschhorn

around on question. this that X.X% we're clients on digits basis back next in as several the a And in And in Hey, certain her Mo, seeing I Xx and or run-rate it's close feel at At team the establish great of hoping in point even basis this see it's five for second we and you to Stephany that to the always appreciate we uplift last vintage. first will most to utilization utilization. our QX. double still a clients were for you suggested, we a in and of I'm with we're benchmark year Thanks when that of years -- that us ago, they're in tend know year, enjoy year years, new be started, that initiatives that. that -- inning third Mark. that by either we've and We targeted utilization. started the look off, increased if for right have

we're for people However, XX% go utilization, add enjoy back to we a XX%, utilize ways we've come have existing offering, the continues XX%, giving and clients I services a as because know company long got a and and to many every that past, that products we've to us to year. our shared times certain in opportunity

Operator

Steven from Chardan Markets. comes question from Wardell next Capital Our

Steven Wardell

this this call, of can at-risk So contracts just where tell you more us the importance mentioned on you And it's and or you to pricing. risk-based wondering, and with it's I'm pricing size earlier going. about

see for pricing? is big Or part, it And you would same So than contracts small or the it a example, fee be business getting do is of or there and smaller? are you more or kinds future this risk-based do see, only just a contracts bigger that? visit of part staying in your the

Mark Hirschhorn

a of it's would payers. business material I say our large today. part It's principally with

have large payer. Coast West We a

for been utilization the we fee contract. campaigns invest obviously, that member beneficially year of over utilization, that year. a subscription One had access month Coast, fee, both On contract these a generate us these that in new utilization is structure. with higher and And that the compared the continue per we upside they We as participate other somewhat certain where drive to to the in Both higher Aetna's believe additional are prospects contract -- we up similar that per West population different of as the we prior I with that continue bring as both the will to or -- as structures perform. model we existing to parties. well provide clients plan obviously existing we're Aetna significant characteristics looking that upside a unlimited as well for have, somewhat of areas will we by we in than on and understood, therefore think, have in most

Operator

time. further at over We this the I to back the turn call questions presenters. have no

Jason Gorevic

trajectory. for us really excited about We're the earlier, out looked are, been today. coming what all I as of said excited never quarter you where like Thank more And we've joining about XXXX. we our

time end your today, operator, appreciate think, So and we'll I the that, call. with

Operator

This concludes today's conference call.

disconnect. now may You

Teladoc Health (TDOC) 27 Feb 182017 Q4 Earnings call transcript