TDOC - Earnings call transcript Q1 2018

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Operator

Welcome to Teladoc’s First Quarter 2018 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

good and operator, you, afternoon, everyone. Thank forward with you look to discussing results XXXX quarter first today. our We

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

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

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

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

Jason Gorevic

million and in XXXX Adjusted and the continued organic which to quarter Total on you expectations on a revenue of a visits this XXX,XXX we and ago. to, XXX,XXX U.S. XX% absolute We year the with pro finally, of $X.X our as ended for loss call to thank paid visits XXX% loss all up last a of to XXX,XXX business basis. strong We will a and a everyone, than the XX% year. forecasts metrics more historically $XX.X the the on beat our exceeded and success granular very with given. came quarter, conducted up an compared into financial on dive total quarter from million in joining will the and key Mark was $XX.X And operating million we Adam, compares and U.S. $X.X year to data basis metrics. of for million, members for our quarter, an saw members, compared provide paid EBITDA Thanks, last our we afternoon. across have start another basis. forma us deeper

providing will see membership by information our which to With and to we of and the our business. that I’m in us, contributing months model our leverage better the pleased is volume, to success transparency clearly our our detailed more increased financial operational across on several we behind visit performance. hope As improved allow XXXX you track

we forecasted achieve report come leverage it quite to while, to fruition long-term this track to pleased a see happy we’re While on for to targets. that we and financial our are

that of leverage. increased expense things trend of one XXXX this and in we’re the XX% operating to this of and top this The single largest is materially from revenue quarter than our expect the we growth. every To isn’t to only the During example our of G&A, percentage side XX% first quarter, line financial proof a quarter, our operating of best the declining lines of is seeing clear, this be as continue. place our which cash-based is less expense

our season, and handle volume visits several times XXXX can today. actually SLAs provide some meeting moment. day is intensity the of as a we’re But performance our give For the some current like we utilization example, trends evident surpassing about significantly will see Mark more per of detail This commentary X,XXX metrics on to we positive in this spite peak performed infrastructure in seeing. season. first, that our over flu during our I’d

the First, is projections is the we’re strong line results our right with off populations. with The very fully trending program Aetna and pleased in in to FEP only early our visit a start. insured population fee

Second, flu in flu in although January the moderated and it February, was quickly intense an March. season

our continued pace. a However, utilization strong at

the Third simply, of way, our adding to engagement of platform. greater and increases XX clearly expand number that the more engagement get population. Both by perhaps U.S. globally. a an the analysis This average months more Said we with our care the as the of both services, both clinical that the with and visits number products. most exciting, products we’ve virtual user Stated greater value well of recently completed comprehensive continue depth serving data demonstrates of of population, per and population. the scope by and in bodes of thousand offering, more we per very the another users breadth

track on on the is we proceeding to the doctors, of continue During which integration we anticipated. best progress quarter, make and as great also

are Furthermore, the we’ve this that that success. experience front-end clients. later deep the to user employs technology seamlessly advanced our very signs together year. of organizations commercial it to of integrated guide member solution, in the market on have cross-selling development consumer is We appropriate showing This gotten the largest well and to of fully track as tremendous for interface are which in most has quickly our guided previewed and intelligent and and working teams Teladoc are reception some the

services the of client closed sale year. recently to per nearly we worth existing fact, Management our an $X million plan health Case Complex In

and and established U.S. in Canada ability in relatively those easily existing those solution relationships more additional and leverage closely our product relationships reflect We’re our feel to our commit seeing to our as deep sizable portfolio we expand markets, we look interest in general both into offerings. expand our confident expertise markets. to to offering medical inorganically With expect those service organically resources, to in customers, and from our Europe and

update the market. be Mark, in seeing to opportunities turn continues Teladoc here massive call more for U.S. opportunity over There I the you to exciting the a a Before we’re I in few want to on

our among care engagement plan benefit made this this Further, of where to with a prospects scale, Teladoc as comprehensive I good opportunities last by are Teladoc. we large I and opportunity is the all the PDMs about increasing in call, payers, healthcare at for only uniquely large-scale strong the platform providers, segments season. other feel We virtual market, As proposition nothing, very We’ve is and players. and and value positioned presenting mentioned but across multiple see from velocity, health consolidation our the scope. good very progress in and stage on on the clients quarterly selling is

ever the that a the review of virtual Mark driving pace call of I healthcare the Teladoc’s has engagement turn Finally, accelerating financial fundamental the care our continued to a quarter. platform strongly component virtual With adoption point realization given care, more that, passed believe over the for that results than I’ll the inevitability solutions. of delivers as landscape. success of a comprehensive and to clinical multitude in of from

Mark Hirschhorn

Board. strong Thanks, Jason, I’m this with and pleased sentiment, good to across a afternoon, results everyone. our very To start the echo quarter and XXXX, Jason’s represented

expectations financial During for this the results from our run I’ll afternoon’s discuss XXXX. and the of through and the remainder call, second quarter quarter

revenue year-over-year XXXX. coming the $XX.X starting the top basis, the from was in the increase. a increased our revenue year an quarterly XX% Fees at $XX.X quarter Subscription P&L same the million grew organic in first to ago. a line, million, On $XX.X period Access XXX% first to and quarter over Turning XXX% in Revenue with in million, compared

XX% Access XX% break accounted we of subscription when million, out In or Subscription total first and deeper, revenue. the bit the accounted fees revenue $XX.X a international U.S. generated Looking Teladoc’s access between fees for the and quarter, international, remaining of total the Fee for $XX million. U.S.

a $XX.X ago, we As to million million the of increase paid U.S. had XX% when Aetna an members XXXX, after had for in and of members Amerigroup we million compared year-over-year, March That’s adjusting lives. XX, $XX.X $X.X year the

fee that refined or we’ve totals had the definition, Employee U.S. fee include visit paid Program million include Blue U.S. a the only only reminder, associated fee first not of members Aetna’s Blue membership end live Federal paid fully membership. or quarter, quarter, we individuals to we And TRICARE will with only visit from At just $X April. services, a As definition our population. Shield to members the and are this going our under approximately Cross access. those anticipated including Last insured mentioned refined million access additional members individuals of PMPM visit PEPM with we that X.X an in

compared late third has a launched small and this of go this have we forma $X, In to our it quarter, quarter XXXX or program or quarter or for been per in and slightly of the per we early to quarter in part first employee bulk basis. was the second average of quarter. service, fourth $X.XX on $X.XX the first $X.XX PEPM, the expect While a delayed pro the month, XXXX, live the in of

on which is divided Moving U.S. calculate total as Teladoc we reminder, a membership. by utilization, visits paid to

the U.S. This access XX% fee in paid paid increase total first XXXX. increase We from period quarter, a services, a membership during of of represents visits only quarter, into medical point segment XXX,XXX members visits to the with year. the of completed is same quarter which general first completed For our in membership annualized rate totaled the individuals. those visits visits we U.S. XXX,XXX utilization Visits last from access basis we XX.X% visit an from XXX total XXX,XXX over over an visits the visits. and

US while delivered the XXX,XXX contracts. visits XXX,XXX one were deeper visits the Going XX% included or in these visits of paid these remaining of visits, paid, under level our XXX,XXX membership visits, were

$XX.X Gross million just This the of individuals completed for revenue representing to uptake the meet paid from quarter to The compared margins remaining our XX% to in targets with compared Drilling our and visit visits, margins medical other $XX.X revenue, further, as comprised we shift moderating primarily The for for year. revenue, non-cash last our $XX.X FEP amortization, these in were increase were attributed were in QX from down at our live and million, revenue expert $XX.X U.S. an continues increase. full-year specialty the the of XXXX trend services. fee operating population. first of or for of slightly QX visits on XXX% be revenue XX% million, is a QX I initial In came million and general visit Total level to visits quarter our feel anticipate Eliminating only XX.X% principally expenses, fee or generated the XXXX. quarter, first $X.X about this XXXX. the XX% $XX.X in $XX.X charges, very the good compensation, from the of revenue members integration-related in in also We impact such quarter ability evolve. XX% addition a mix noted, access. the of which medical the representing visits, depreciation first membership came operating a stock lower to costs XX,XXX figure XXXX million. we platform increase less expenses to million of million, of that X.X% can visits as gross is year-over-year quarter XXX,XXX

that outlook As leverage newly anticipated and to we we positive XXXX. of quarter of was were EBITDA loss loss a loss in of and towards adjusted Net the since operating our last scale. in in confident terms Coming million clients. Jason fourth noted, a continue company year. compared of of as quarter guided we positive million onboarding an better are $X.X quarter EBITDA $XX.X $X.X onboarded XXXX, successfully the first to for initially adjusted our quarter as million, in QX to first engaging mature million busiest we remain remainder and $XX.X expected. a We the EBITDA the We see of quarter, the the off starting These the to marketing first the than in of with from had quarter compared ended XXXX. throughout in the of we adjusted loss loss represents quarter members results

charge for office million This abandonment space. loss of redundant includes quarter’s the net $X.X a

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

total that as first the the Our solely debt of at of quarter XXXX. notes consists the the of end $XXX X% convertible of mature end million,

remediated $X.X of of of presented in that as presentation consolidated it our as weakness net of GAAP company want security the component and million debt total Also, I between to between visits loss loss equity of statements. between Our is U.S. financial this and approximately $XXX million and the $X.X material on loss note our of the this which the February. appears XXXX second million $X in shares adjusted we million in per approximately between EBITDA continue throughout total was outlook would a that from a to of total intend to is members, strengthening We outstanding visits, year. million $XX.X XXX,XXX and million the $X quarter revenue for and million our million focus XX.X currently to based With expect per share million, noted weighted provide $XX our loss $X.XX $X.XX XX to range membership EBITDA and XX-K past expected like control on share. $XX that, a to paid net filed I average XXX,XXX to million, this environment

membership million between visit XX paid $XX visits $XXX approximately million million $XXX total per For million and full-year between of XXXX, XX visits additional of individuals. to $XX positive weighted and available between net only and million million approximately adjusted $X expectations million joining million our revenue fee between started is $X.XX previous total throughout to the and and million, to we $XX.X per million, EBITDA affirm on X.X $X.XX and loss year. loss call we ongoing to a every average $XX our of expected thank access share members, this U.S. open Operator? to loss Total for entire the based XX and questions. progress million all, XXXX, loss to shares the X million you EBITDA want do the outstanding share. pleased update to with I’m now forward team also a work range effort the We’ll day. on evening. look from organization very for continuing they Thank and of Teladoc you, I their for I and single this to outstanding how four us

Operator

Lisa Please [Operator Our question Instructions] of go JPMorgan. ahead. the line first comes Gill from of

open. Your line is

Lisa Gill

around virtual much very platform. me the Jason, care start and with Thank just comments you afternoon. let good your

season? really best it’s at resonating have how I differentiates this the You I marketplace. think, it selling year the doctors last in in point selling Teladoc understand to want didn’t this season.

hearing around the from that here then are And crystallize the vertical Teladoc comments the we if your question in or early just are my one, And what you Maybe this really integration within you you season? second just healthcare? us opportunities what integration. see see selling vertical could for in sitting part cross-sell So two, was perspective? the as how see you the incremental

Jason Gorevic

of couple on a care Yes, the Lisa. Thanks, virtual Sure. things platform.

opposed market. bring have around strategy only we senior solutions and more is clients differentiated we’re larger to it’s be segment, care with Plan the truly especially the solution in there and much are a seeing in it strategic are Health the we enterprise-wide is really, more changing discussions much of opportunities. the comprehensive plenty We’re in an platform. that to where level more as But virtual can market who point point discussions having that our and That and ones holistic, the prospects true much this

second and see, traction relationship also Teladoc into just opinion previously complex a client expert addressing second clients, engage really and in top to the bricks-and-clicks you where great the We’ve provide respect a of component, health virtual provider. there. you on their for specialist of discussions, Aetna, as expert expect pyramid close. we we for can clients a and seeing bring had can as employer cases, opportunities of of services I a are delivered right our to assist we’re been services the more our we had the healthcare care and services of interaction what already and of that us basis, both we ours. And and interact great setting the of my we you more a in are continuum how in in-person to the in opportunity plan both especially virtual them. With CVS our a available prepared there, mentioned advanced be a for we’ve them consumer vertical that a case, to about us Teladoc with retail cross-sell that’s sort Telehealth had more in we’re with resources part but the basis seamlessly, our direct also had many see and discussions remarks, who as know, the first the population opportunity that the integration bringing can good a a have course, Of and to that’s seamless environment with virtual other opinion of onsite in towards mentioned, the

So a well that benefit really Teladoc way can and for is design, as way see to environment that But being that we includes care benefit help health that more really a fluid about you delivered. us. we think that the plays the experience in that a becoming change

Lisa Gill

the quantify as That’s anyway as discussion season. I far size on wondering Is going helpful. know anything just as or to far and you for back a evolving. that there telemedicine think opportunity? number I’m we’re the to just, there about selling Mark to number goes, the as as because can on as platform incremental anything far you the is having you’re new discussions to side add analysts? and lives But is

Jason Gorevic

it magnitude too Yes, as so say to space. active What opportunities extremely as is, was least, the the of more it’s comparing in ones pipeline. that about probably described, especially I sort I active, would of many at big the plan say will the tell last such so I soon health year than

do in and continue have provider done well that very side extremely We the well to on market.

where I better now are year. than say, I about I we would did last So feel

from Although into your a I’ll plug number model. you giving to can you refrain –

Lisa Gill

congratulation But the number. the quarter. I’ll Okay. asking on keep for

Jason Gorevic

Thanks, Lisa.

Operator

Blair. line of Daniels comes Ryan Your of next Please from ahead. William the go question the

open. is line Your

Ryan Daniels

the guys, one taking for you. for Jason, Thanks, question. Yes.

indicating marketing products, more you more with months of have number to to intend see your you two, or services. XX of any if expand data utilization You you for prepared an impact sales that how solutions? and more multiple you that purposes magnitude it curious clients comments, about purposes And has add as talk number about how one, that workforce engaged of mentioned in leverage can a I’m penetration? big

Jason Gorevic

of the is healthcare Ryan that the to much a say, entire the of a testament Thanks, it sort solution along would across value comprehensive delivers I healthcare spectrum. or value Yes. very

is, the And conditions. basis, terms and on So of acute to that way well of increases that more with we engagement the breadth mix, episodic we ranging into product a see from frequency in the add the all us. each chronic who we what additional engages complex as serve and as with population of visit the

see you on So it’s to get dimensions. that pretty those both of unique growth

You expect other, sort to see to both valuable of really the one is or us.

So of information we front to we’re that, of put in use how in that want to clients. going terms our

bunch a they we’re So a think, that product opposed single the multi-functional guidance point solutions seen as value giving And that. With the with can again, is to of on disjointed qualitative deliver additional to going reinforce they that of get the I a in magnitude, I we at see each may the solution benefit go to market. that population. would to of hold sort into respect

it additional build So with to continues product. each

Ryan Daniels

opposed the on, TRICARE, quarter And towards April you color. to back X end then your didn’t helpful little a QX guidance. the that’s of early it’s bit Okay, the the pushed obviously, full getting regards launches, to that kind of impact indicated in as

[ph] any QX one, in revenue CFO modest But being that two, for have delayed? then modestly can number must why is And that. confirm you that? discussion you soon So

Jason Gorevic

Yes.

for we the prepared So launch. were

got accolades their we as measured partners, more plan. to just process. well our a slightly The implementation took on the readiness, from government as roll our out In fact, approach

more component the than take advice They opposed care they new out to rolling So wanted new rather part to global virtual a nurse line. And the big just is a step-by-step rolled of to replacement out the bang approach previous a components. services. really as

answer with know methodical to expectations you do but to more respect service. your the revenue a question we’ve rolling just to approach simply players the to maybe a if – the revenue. or VA talk to other has on mind, out heard you out I to nothing nothing in has that that’s don’t It’s want didn’t with this respect with the it market. from ask, So impact Mark, to

Mark Hirschhorn

us, of trending of from their Ryan, we a take we quarter, with guaranteed we of live generated numbers. so date revenue to they do a be as amount us. little came we’re hit a our had so commenced strong TRICARE But ahead from go off with a the bit expected contract

gets the that shortfall there’s from month contract. in that Obviously, each projected So delayed. a revenue

Ryan Daniels

Okay.

one give quick hop PMPM second missed you I’ll that. a on off. fee? and a may I have one I So Did late? got

Mark Hirschhorn

on don’t have was pro of the not. We I QX QX a XXXX it to for remarks. prepared believe forma in XXXX, But $X.XX would we $X.XX. compared did did for been $X, of basis QX and

Ryan Daniels

Great. on start Thanks, strong guys. Very Congrats the year. to helpful. the

Jason Gorevic

Thanks, Ryan.

Operator

line Rhyee of Your next question Charles Cowen. the comes of from Please ahead. go

Your open. line is

Charles Rhyee

thanks Hey, fee the Hey, quick visits. for the question only visit Yes. about question.

X% I at than if Aetna like of about about XX,XXX, better maybe sounds in Currently utilization. of utilization, you’re to way number, sounds So terms think old in was the that a it? where that’s sort the model the is like it annualize that looking

Jason Gorevic

would just in got those over have members. live been access really million lives, to been, February. little You’re had it only would that visit million $X fully add And FEP a because numbers yes, you’ve have a Aetna excluding those been the excellent from to FEP But the $X.X perspective went Charles, fee members. that insured for

remain think April, and I in fully generated with Aetna this were that or population. of March to XXXX we the on now above spoken again, would neutral insured. most figures or to people it’s revenues from We’ve know we’re see at the expectations throughout what to slightly regard the So trending you levels are expect the month

Charles Rhyee

backs versus of Is can talk per buyback right, it fee a visit you into of looking between the $XX. you So out – it revenue, did the kind the into kind that at XX,XXX, break visit I the think, was of then when sort about Atena FEP Q, something about pricing? point million of breakdown only was I three

Jason Gorevic

Sure. We decided…

Charles Rhyee

Speakers] [Multiple right? $XXX,

Jason Gorevic

That’s correct.

So the for FEP $XX Atena and about $XXX those for in area of visits visits.

where likely waiting So it you out. for the out first determine come came do where and that’s But quarter. could you the

Charles Rhyee

last One housekeeping. Okay.

– do an in the Our year, stock have guidance? that’s you in comp embedded estimate for the the guidance

Jason Gorevic

We do stock comp.

around $XX I – we million. think about I we think, gave provided, XX that

Charles Rhyee

okay? For this year,

Jason Gorevic

Correct.

Charles Rhyee

All Thanks, Perfect. guys. Congrats right. quarter. the on

Jason Gorevic

Thank you.

Mark Hirschhorn

Thank you, Charles.

Operator

Your question Piper go the Wieland from Jaffray. next comes Please ahead. Sean line of of

Your open. line is

Sean Wieland

Thanks the and for on the all thanks the for – transparency numbers.

some Charles’ just So to question. follow-up

– So what kind to or of you the the drive know are what share accelerate I are in drive there? to but strategies that Can specifically they’re you’re the and the utilization anything visit growth tracking levers to that that utilization us line, with employing you’re contracts. visits? only for to drive doing those fee

Jason Gorevic

and we’ve Atena’s of communications direction seen efforts team actually with team from both to so as positive our of deployed in their drive more the group, that dramatically team a work Aetna member with sound deploy awareness collaborative improved efforts the Stephanie’s and strategies Yes, engagement. talented well sort the We And delivers. regarding surround executive much we’ve to at movement set own to the Atena. as very capability

they So B, provide services of work provide with to very basis, their a quite a of And services on a us FEP with A, to additional the then we’re practices population. where pay to doing potentially FEP very, side, that’s and retained on those provide been engagement team, bit consumer them best for with both them the positive. sort

expectations both where those. movement And first pleased quarter seeing I have the So of on high and of good very – out for pretty with the turned I have very, remainder we’re the year. I’m

Sean Wieland

to you only? us utilization visit what’s fee that share So insight into relative guidance your into any with factored can of

Jason Gorevic

for for XXXX – The remain below will expectation visit fee only XXXX X%. utilization

Sean Wieland

Per quarter.

Jason Gorevic

the For year.

Sean Wieland

wasn’t I’m just sorry annualized? X% it Okay.

Jason Gorevic

it ended No, the X.X wasn’t. looking the When the lives. that figures lives quarter in the we throughout million quarter, you’re with came at for

the lives of the We have expect to XX end by year. million

So see utilization on you X% should number. to expect that approximately annualized

Sean Wieland

Okay. Super. much. so Thanks

Jason Gorevic

Sure.

Operator

of ahead. of Jefferies. Dodge the comes Your go next question Sean from Please line

open. is line Your

Sean Dodge

thanks. Yes,

updated And implemented maybe staying XX in sound specifically seeing on client? utilization so six the more or moment the have a you’re guys maybe data you’ve Do for with after utilization lift roll and you any out. on months surround

Jason Gorevic

Yes, objective and year first investor what up utilization. our some of generally see you as that, year we not expect from a is utilization have gets this would ultimately, presentations shown think of the first to strong. I But in sort we

in where about the up employer XX we range, population start XX usually X% X% So into for for it year then two to the an at up range year steps around three. and

So over the we benefit that see time. of

Now population of that about nimble capabilities. that, is first what seeing engaging we’re also we’re more gate because increasing, becoming is the out year our the with surround sound

So an with where to that’s last is that we’re year year the in improvement population over the been first us. really a benefit seeing

Sean Dodge

Got it.

used us last few the change quarters? many two progress couple how best sold you like benefits Okay, then the fingertips services thanks. or And in on doctors something been Maybe of the of over that’s over Do and quarters? you times per cross now. Jason, come or How give the trended behavioral you’ve last client. in sense health clients of to average your a cross-selling making have have anything cross-selling up a couple all of

Jason Gorevic

the services given of the say about products full haven’t the We penetration book. multiple any we value continuum in to of progress numbers our that, speed up that I specific offer. into our clients would bringing we’re good of making on

the enrollment just in new they’re The always of the and on coming a a through cross-sell implementation even quarter benefits. basis, terms and out introduction new first open of quarter slower of period getting services engaging because for clients is

of So we over would expect to the see the course that increase continue year. velocity in to

Sean Dodge

again. you, Thank right. All

Jason Gorevic

Yes.

Operator

comes Your Please from go line Fargo. of ahead. of Wells question the next Stockton Jamie

open. is line Your

James Stockton

maybe calculation numerator, the and you’re aside dollar assume is PMPM in the for Thanks seems that Thanks. that that taking one, the including first not questions. my that it there, the quoting, in guess, international the Mark, right? you’re I I like setting

Mark Hirschhorn

correct. only membership, U.S. paid It’s That’s Jamie.

James Stockton

Speakers]… Okay. the or far or doctors you it international best But as is kind are number in the the denominator member including is [Multiple international is as of – business – the concerned,

Mark Hirschhorn

Speakers] [Multiple visit. now right Yes,

James Stockton

right. All Okay.

Mark Hirschhorn

Yes, included that there’s no calculation. members international in figures or

James Stockton

my metrics to about, I assume on Can amount to maybe just nice the you in that marketing talk leading whatnot. seeing a seeing to news spend talk drive having Okay, drive spend leverage had put requesting engagement people And to you below is line. money seems in any some are that have to expected. it referenced and over that you’re came are what you really you lot that’s levels that I without in engagement having then that you question able app. some seems great. better think, advertising about it, visits the feeds what fair you’re call people’s kind like a without that’s line? we or more of actually Can leverage the two, last around good other you’ve seeing of around you’re ads might on like because It

Mark Hirschhorn

I we’ve think, format quarters, bit Teledoc, print of also We us pace. three web actually the and customer that to trend occurred which preserve away from that entering projected slow the and from That shifted well, that faster acquisition years. the past and a margin, as digital of that at been and faster the because trend the the some center price our down a through had be we’ve the the kept costs through we’ve helped XX% a – of steady for material. over would experiencing through means traditional there the app was call away

having is that those other or were the believe going this some clients only CPI. the concentrate we’ve on fact the through to that opportunity we greater cross-selling was One service we clients where to utilization medical likely That’s deploy to from increased up two-prongs. and either really one introducing services doctors. of and available dollars. additional bringing We’ll really them from year services areas the and traditionally some benefited continue clients in to side we’re we’ve to Teladoc a So the want and see the our where best we expert other got opinions end

Jason Gorevic

has registration that, member seen year, add would with the we’ve rates course over I Jamie, And a of once which last in the registered us. our improvement

availability of them drive We’re significantly expensive able to and use to means less utilization. remind our

to benefit that. a is So there

James Stockton

a the know relevant or lot of runway don’t the may XX% would or still like there crossed you do Is what penetration be you’ve really be? I most there feel

Mark Hirschhorn

still the respect ton driving registration. is there with runway No, innings, early we in a are very to very, of

James Stockton

thank you. Okay,

Jason Gorevic

Thanks Jamie.

Operator

Please Your next Citi. ahead, your of open. line the is Demko question of Stephanie from line comes go

Stephanie Demko

Hey guys, the for you quarter. questions on my taking congrats and thank

Jason Gorevic

Thank you, Stephanie.

Stephanie Demko

update thoughts you up the Chief adding strategy refreshing the in us planning the maybe Could an role? any and give on on Officer if sales you and how role, product recent are specifically turnover you Revenue

Jason Gorevic

McClanahan be it him Doctors President, fortunate Officer a we team. to on and – – and a moved to was When Peter of role we to we the really business. the able so in, great would were been happy of a are executive it leadership retain to made into have we And acquisition oversees we of Peter commercial the the Chief entire President, Revenue honest, to as the duplicative have Peter part the member Best bring really of very be

two executives the putting for of position. function a simply one was organizations it two and so having together And

Stephanie Demko

and season? item saw one flu uptick for me. you the quantify Okay, Could utilization from you understand the housekeeping

Jason Gorevic

didn’t April the XX% somewhere to saw Flu on towards January likely February. to incremental ended the that’s existing been see of a basically our we – a we – X% range for in our projected of year. upwards in $X as we in projected coming February, comfortable increase and strength between utilization has uplift million with why end March. as this result and any in of Stephanie, the feel

Stephanie Demko

you thank helpful, Very guys.

Jason Gorevic

Thank you.

Operator

from of comes Please go Sandy question open. the line your next Your of ahead, is SunTrust. line Draper

Sandy Draper

I your get of a for Thanks. Best performed how do it’s you I’m longer it to was and quarter on lower Best there term that thought. on one anything, tougher. is little it maybe Best up turn play view and might to doctor were Doctors bit up the tougher also Mark, Thanks year-over-year, one do you a Actually year. good well and going much start sense than and was generally light, a it’s solid expectations just grower as over to bringing your tiny congratulations things so cycle Doctors and double-digit I all to the a trying bit going on would in, maybe Doctors it the X% echo revenue had be year?

Mark Hirschhorn

XX% at beginning rate We the thanks certainly the Doctors hopefully Best set Doctors, in upwards we to by to fourth see would that run Sandy. Yes, know and expectations XX%. I do Best quarter growth generate

The than think strange, into to first will run to have this a I subsequent of still bring attrition business QX with think transaction, the small or in a I a that some end a into that projected, the the to of clients business Best business XX% of also we prior at exceeds are great. less still so were bit if excess saw end subsequent in grow were We and think where they growth year far very XXXX XXXX, and quarter disposed comparisons comfortable return we we’ll with to had they because today. steadier and year there XX% that base that, that Doctors I didn’t the back we’ll

Sandy Draper

it. Okay great. Really helpful commentary, appreciate I

Operator

line go of open. question Donald Hooker your comes Please line the next ahead, Your from of KeyBanc. is

Donald Hooker

afternoon. good Okay,

and capital thinking is flow you cash with rest there, guys, first the that of of – the the year? for about capital of don’t working this to a cash sort the respect now thinking of items for questions anything about year about just there Doctors full I but to free about or moved detailed kind typically been in do working couple lot already, of working around the free around, guess on more there question our – quarter, of great of remaining a of maybe think Best course One for have of think I sort asked flow, quarters you capital of but how were that, but think

Mark Hirschhorn

Mark. it’s Sure, Don,

range told with of quarter. the we with $XXX million. year think cash. the we’ll million as $XXX started a cash likely an year million past of would everybody Working capital in of burnt excess somewhere excess in $XX in noted million $X the an I this in million cash, I end to requirements between we’ve $XX We

also we’ve think next I free to told going for people two we are be cash that positive, we aim over to would years. for the that look

We expect us needs noted quarter-to-quarter be $X capital requirements or yet, from to – haven’t cash would committed pretty neutral as a we light I us working in certain million. I’d requiring either but a have just and to you see timeframe

Donald Hooker

system hospital for these days obviously they and experiences Got you know terms pricing? high and you area but to you gone any in growth I and how of guys. regards What that’s contract business, health early, with a are have if typical renewal had it’s terms the

Mark Hirschhorn

two are most multiyear We’ve between contracts years. of got five and – contracts, our

could contracts fact don’t had up those the of contracts the on $XXX,XXX there the that that business. others is a to up I XXXX size and So to-date, in come think based and we’ve those are I range, some be $XX,XXX believe renewal will beyond, and of

Donald Hooker

I in that I’ll the see figured behavioral health then that and Okay can now disclose and revenues, the floor? you

Mark Hirschhorn

know Yes, behavioral health excess continues dramatically, this to grow of set for expectations $XX million I for we’ve year. an

million, We to runway there. are there a they the highlighting and plenty run exceeding of rate on that fact exceed still our so expectation $XX are is

Donald Hooker

you. Thank

Mark Hirschhorn

are welcome. You

Operator

Close your the of from line Cannacord comes open. Richard line of Please question go ahead, next Your Genuity. is

Richard Close

welcome and you believe possibly your looking any a resources do mentioned was wondering side? thank you of about guys Avizia – remarks, committing you’re inorganically, so, dive the the and the American and announced could whether Health on hospital you if suggesting Great, have we hospital need Jason, InTouch And on deeper internationally in I organically and perspective to yesterday for there the two the you. U.S. something on were for then are you the into talked I’d Well you REACH I mergers platform? outside some and space that

Jason Gorevic

that opportunity respect Sure, continuing buy and to to or we footprint build, with consistently really markets to product that portfolio, expand partner yes, continuing well investments to pretty the the as we’ve what investment is we with and either so in of markets. said sort as M&A respect served overall, our look expand for attractive

players could operating include in to everything us all from the markets capabilities not new that as clinical So strong. new existing services, bring way product where are we’re that who

that follow approach I we that our strategy. pretty respect with we’ve continued to that think been consistent So about and to

for the Avizia, On the mergers, we business respect The with but hospital-based familiar is into we aligned run competitive strategic situations. announced have we our of centered around in really two majority which hardware, almost company, with are isn’t focus. their really never recently very them

material has to opposite. with don’t then we that of the on think respect a impact InTouch, competitive sort it particularly So, And the landscape.

time business of trying company move by to REACH more is substantial in which a market a REACH, product. for We’re not while business a orientation we really see really never has a been software been surprised from to and some software a acquired working hardware-based situations. the small Again its that is find competitive to announcement, that’s for for another InTouch

different So, and operate InTouch. space we pretty what than in

impact with expand offering not the we is which to of can really Rich? continue orientation. don’t we we think health look competitive particular our either the at hospital Obviously to focused, stay the that So going monitor always landscape our we’re the where and value Platform-as-a-Service continue how them of to in that and has a success hardware market. on system Is helpful,

Richard Close

– the and anything on a was see had clinic in to for CVS, website, I launch was looking I give their was you looking I update at you on Yes, a there mini for terms CVS is I no us relationship the also there an that guys? and question expected there can if of telehealth, with guess

Jason Gorevic

with allowed a so products. active date, in of not we Yes, launch I’m to are the give development CVS

really the for very, I that very prospects with We’re CVS product, working excited about team. the am collaboratively

acquisition with look make to some as strong, opportunity So they very see earlier, of of Aetna. the I only is to there relationship said respect and future the I their is the vision as

Richard Close

Okay, thank you.

Operator

line the is open. from your comes Please Naidu Mohan question go of ahead, of Oppenheimer. line next You

Mohan Naidu

Thanks for my taking questions.

I QX. Just around the had one visits question in

repeat just before you. Thank also back new see guys? the as And flu? of guys from who to in you number who did you have want for of follow-up, and on coming the trying flu, tried see for new you Teladoc the a because did guys I strength guys versus used has visits but Teladoc who tried just you terms members been understand great from use members those visits, flu a members So of in flu,

Jason Gorevic

the before, were Yes, a We for season a years, for good soon at users. back conditions. step said the on used of that’s for that repeat when we true other last was prior our who wasn’t It’s said year too usage, different new trend for that up thanks that was XX% the during users about Mo. the us quarter. call it for flu full members That it tell slight to looked about than from our flu but and

out to over that we course year. play the would expect So of the

Mohan Naidu

you thank had. very Alright, all I much that’s Jason,

Jason Gorevic

Mo. thanks Okay,

Operator

Your go line is next Hewitt Matt Please your Craig-Hallum from of the open. Capital. ahead, comes line question of

Matt Hewitt

my are expand guess landscape you. a to seeing be from others are entering anything seen of dynamics and items, one from couple you’ve standpoint of has most landscape maybe the competitive the competitive I that new you few importantly addressed news may that your there the new some just seen on obviously questions some been you just answered, or more a than given recent last opportunities afternoon, maybe been over have up farther Good you’ve the deregulation had years, creep but more where or opportunities you Thank before? that

Jason Gorevic

the I the big there, American landscape in the market. expansion on to Conference prospects the in bullish and change more ATA, become holistic of care fact we feel Telemedicine Sure think that look at is a the contrast of even now our multitude going that company virtual and much the Look, Association We see right for the platform to in solution. the landscape Matt. competitive about solutions still the more we as point is in are

of get we to check at large strategy really scan the thing landscape. a sort an it good like that as show our a always was of it’s So affirmation a competitive and

Matt Hewitt

you. thank Great,

Jason Gorevic

thanks. Sure,

Operator

Baird. Robert comes question the W ahead, open. from of line line is Your Matthew go Gillmor next your Please of

Matthew Gillmor

had? be on know sense some visit discussion more discussions in is there was curious or this if here waiting that just success and model additional on it’s Hey will Advantage have had fees published, a question plans given are guess terms but that to but be with you last as an had better towards you’ve couple going I well. Medicare update months only I and regulation constructed we on for to been PMPM one left if MA the I get and hoping how call, you’ve of

Jason Gorevic

by Yes, talking of a a a of lot at in panel just plans care so other number sat on conference I about there’s for with who fact a going on, connecting health seniors the discussion about the be MA of published are movement HHS. engaged until in don’t the serve regs are terms discussion to think thinking there’ll behavior how I population. and material buying any in

And be so to we’re virtual a in fortunate insight watching the and to we’re waiting situation delivery provide the market. data more as ready on and and in than of requested, if are anybody where input else care we have

good where wait go, feel we of about a little CMS the it’s So we’re likely published a bit see. to by but in and until are regs

Matthew Gillmor

Jason. thanks it, Got

Jason Gorevic

absolutely. Yes,

Operator

go your line question Deutsche next the Your of ahead, Bank. Please is Glen open. Santangelo line of from comes

Glen Santangelo

follow-up Yes, taking on of but to the thanks maybe you want to like I season, we be about different kind be, just trend the expect? respect may on little selling models, where maybe of made comments the and contracts just you’re of it a as kind the they you with we as XXXX or conversations visit to those for of elaborate fee want only into less you sounded more could sort question. expecting types can bit should Jason, you’re sign of related head you tone to what the different example, for changes or my

Jason Gorevic

be seeing opportunities bear in our and health seeing the the to lot the us now different pricing. The that it’s our big scope of financial meet the is of fee especially align to true that with to opportunity our for that very I structure, where us have it’s the discussions, which get experience in of we’re incentives perfectly of size respect sort all and we’re about with opportunities the all season. Yes, be honest, client the where tend that types for clients, enables bring that’s over products and I good bites. of excited respect mostly seeing, news we and to to data a selling about space we I’m I of our hurdles with the plan feel are to think volume they all board. we’re like to And so multiple then

Glen Santangelo

Okay thank you.

Jason Gorevic

absolutely. Yes,

Operator

from go your Please next Wardell Chardan line Steven is open. ahead, comes of line Your question the Markets. Capital of

Steven Wardell

the on congrats guys, Hey quarter.

Jason Gorevic

Steve. Thanks

Steven Wardell

So you can how would and What you little more how countries would cited your differ there? internationally? a contracts approaches international, – about and you say us tell some progress contract are would top go-to-market

Jason Gorevic

in and New strongest we’re U.K. Zealand. the So, Canada, and Australia internationally

strategy strength where into organizations historically and successful, been Netherlands so like large has product we’ve with on very somewhat is behavioral partnership pockets insurance Canada other in some have health financial in pockets the have and services but markets of we’ve expert’s In that The focused second and and with go-to-market companies specialty fruit really for example. been portfolio, those borne done us. We really innovation it’s pharma for really more limited opinion. we

So, up ranging markets in we expert’s opinion. to in we’re to have second medical portfolio from is which the excited about way U.S., expanding the what continuum general hearing from is we are all services of the clients interested those closely what our more the product all in match full

a portfolio. product So we that at actively we how how fulsome looking more are deliver we and approach

Steven Wardell

you. thank Great,

Operator

is Our open. last your ahead, Richard line question Cannacord of comes Genuity. the from line of Close Please go

Richard Close

process is I’m walk the of believe the curious, in the I as not quarter you ahead us guidance? through expectation, first the well. the just Great, Can annual consensus of second of thanks and for outperformed quarter maybe for follow-up. raising guidance Mark, our the you

Mark Hirschhorn

quarter. Sure, we the just finished

of again feel in We so out assess month at to the to after seven, speak you six We’ll months the comfortable so you April. we’ve closed we’ve well. August towards look also, we much we to raise let now, as months, range. first six opportunity increase need opportunity haven’t we’re even that there know we’ll if had more the to July potentially got if with a when the know and when range nice we’ll we’ll heading you that’s the end But results the higher let

obviously if we’ve looking what’s as got and it’s see in it’s know, to common us much you raise in going QX, significant into like a the QX we’ll strong but movement come to visibility together QX, As attempt not to August. for

Richard Close

thank Okay, you.

Mark Hirschhorn

Sure.

Operator

This concludes you today’s conference disconnect. call, may now

Teladoc Health (TDOC) 2 May 182018 Q1 Earnings call transcript