TDOC - Earnings call transcript Q3 2018

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Welcome to Teladoc's Third Quarter 2018 Earnings Conference Call and Webcast. [Operator Instructions]. It is now my pleasure to turn the floor over to Kelsey Turcotte, Vice President of Investor Relations. Kelsey, you may begin your conference.

Kelsey Turcotte

Thank you, operator, and good afternoon, everyone. President Relations Vice Teladoc. Turcotte, Kelsey of at Investor I'm

of and are afternoon’s our Hirschhorn, Joining XXXX We results Officer third this discussing call forward our Financial Jason to press Investor filing and you. Form filed look teladochealth.com. Today, Operating with Mark a XX-Q. after me Relations on quarter are third our The closed, market announcing the and and available conference our Gorevic, our the in Officer. quarter Officer; section issued Chief release we release XXXX Chief Chief results Executive

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

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

Conference Kelsey. New XXth; Annual Wednesday, And Thanks with Healthcare England these York Arizona that Piper press on the; Conference Global in you Xth. turn over Citi London, posted December I'll inform York, Healthcare release on For November is GAAP on measures would Jaffray Global most to the like Annual and Wednesday, XXXX two, Tuesday, Conference XXth; XXXX Health on the to XXth more the on and details Suisse the it presenting Jefferies comparable November teladochealth.com. Healthcare measures, refer November Scottsdale, in a reconciliation Credit on please of Teladoc XXth; The that in Jason. Tuesday, also The at I to XXth in New Healthcare Conference

Jason Gorevic

Thanks, of by afternoon. market joining all thank Day the strong our us momentum to again Health closed those who continued Kelsey, and the you demand us XX. business for Analyst Teladoc healthy you marked full our today for this another and reported After September and of quarter for across joined on services. And spectrum thanks Investor

insured Some $X.X of the Medical. and for volume XXX,XXX XXX%. plan quarter expectations third on a year representing the Mark key Company. to a will strong the overall shift which EBITDA adjusted on increase. our million to which our was that $X.XX came Gross before the an few of of Strong fully developments last of reflecting XX%, representing Positive like I'd highlights of more the absolute in up on our basis. include million. financial XX% $XXX the XX% after XX% and total quarter of mix visit our paid of membership results, details focus Advance quarter provide lives on revenue growth but for the basis, XX.X approximately average million members an $X.X per exceeded adjusting for member U.S. organic of margin on same from month Aetna's XXXX per up and in acquisition in visits million, out of $X.XX XX% compared period

together. The highly ones. in local with current to two of I'd as in thank of minute Medical, meet five progress a to has months. take diverse which combination we work Advance to two the of their complimentary Teladoc the First, base. companies us gives industry land scale is that the to opportunities of Interest for make client we like been into for well the team companies continue presence clients great new Health hard to the integration is very also needs part a our now and see global high on as bringing sell unmatched the a

selling compelling surround pipeline appreciate all we footprint, I where and transforming services, no talk Health, other existing makes XX how feel and than Global across true that unique is knowledge out is service building help dedication Day, successfully, our Care employers states the channels good sound CVS September, app well relationship cross and delivering high and insurers. has a CVS CVS adding it final scope to discussed global system. targeting To to ROI. part XX/X We in and our driven late quality robust healthcare offering another DC. easy guide through This plus this our for new members launched converting integrated truly doctor a consumer an commitment Clients year’s executing. bring prices it and consumers is the product patients very languages of months of we're quality last for in and app. moving On roll to of where logos displacing at local seamless There and differentiated suite XX healthcare This the more it, passion people large for them Your rates. and expanding in around to front, access with data in the the to season experience where multinational selling now insurance states to is and care we through about high to experience This Care look as who team forward the nicely. strategy, the end, can world Washington inspiring. continue eight of need a with to accounts is MinuteClinics market integral is Health's with month the and through afford. we solution available to the competitors. the We're how when are to mobile pipeline total ahead delivered new and like the our is at into we entering is the at Global Investor reimbursement. they winning direct

able there to part as Health deliver development telehealth. to recognition CMS very regulatory convenience, to offer year. segments was arising across our are cost, it commercial we full suite advantage positive Friday stressed benefits proposals addition, the enrollees. of to of the for also proposed development these is all what proposed the of services Medicare its our their and XX released consistent quality access last rules, bids can proposed value Teladoc telehealth of plan an regarding under CMS rules that current population. a Medicare and would plan from This include health The the million as encouraging the the in welcome views advantage completely offerings, be requirements as XXXX ability all of meaning In with plans

financials, to a a of clinical our the This a access to us. University nationally passion is care review at to recognized-health Before Berkeley, the quality. call I for He mission at professor School healthcare as and to focus is at stands transforming policy on with welcome University a We're for and commitment visiting at Smith Public Mark California have care medicine our and intense to Mark the minute the over our delivery system I'd assuring take the clinical for leader of only testament of to of join but of a like Directors. experience, compliments turn out not currently all. Board Mark physician very Francisco, at San a a and to our pleased expert. a distinguished Health California of professor

quarters As busiest quality we close and QX out care traditionally in my XXXX. to deliver to confidence during emphasize our high I want our ability QX.

to a you As recall, early extremely last may very end start concentrated late and an flu to peak. season its was year's intense due but

and The steady We we've year increase I'm so we've first prepared last very slightly confident feel flu to in in capacity tracking services broad developments scale will including as quality good what experiencing leading we and care our we to well with enter in about at is position delivering call many approach to with a forward of seeing resembles the and this infrastructure of continue are far few look over a and our close strong to the accordingly you turn suite and We upcoming I'll comprehensive season season that XXXX. volume if resonating this And Tailwinds very year the market. year's positive year in since Mark. conferences. to care accomplished increase weeks of clearly of been Washington this that about virtual market that are ahead the last and flu mid-September. the years. to

Mark Hirschhorn

Global our both very where with solution spent is pleased you good quarter, as third well our very a bit and the appetite perspective. our customer afternoon progressing Advance wonderful work I've an Thank colleagues financial nicely with is from of at time operational quite as strong. everyone. for a and Medical integration I'm Jason, Care

market, significant by scale which differentiation continue now is on build to the We global our reinforced our presence. in and

a Global the for we new Care that today Global a with this In offering. formed fact, initiative launch Health This pilot new Insurance plans. basis client successful follows launched AXA

Our access a XXX countries. support over members will in eight geographic hubs help

an key from metrics We XXXX $XX.X $XXX XX% that would from the Now, increase to revenue quarter some Jason was XX% $XX.X generating of fees earlier. the revenue million. year-over-year. financial XX% of on Total third a organic Revenue I like million, share grew to our referenced organic increased quarterly subscription basis, for quarter of million.

accounted is revenue for subscription for $XX.X fees million quarters remaining or total two fees, or XX% XX% the of expected, domestic, the access $XX.X subscription As while from U.S. subscription of as fees accounted international our million.

subscription for quarter, accounted total third revenue. revenue fee the XX% access For of

XX% last fully-insured year XXXX. U.S. paid of out from September of million, XX, totaled As to $X.X XX.X an after compared lives million, increase adjusting members Aetna the

or Employee the individuals with we members membership access. Cross Blue associated reminder, this the PEPM approximately services. with includes population. do Federal only are only a As not paid the our those totals fully-insured definition include under Aetna's million the had X.X that third paid U.S. of definition, visit-fee from fee U.S. Blue Shield quarter, membership. access or just members Program Principally, to PMPM, visit and our At of end And individuals

third average excluding basis of $X.XX, PEPM, or from XXXX third compared $X.XX Our per the Advance quarter Medical. $X.XX for pro to per or when employee impact forma the on was month, in a quarter the

visits. Teladoc That's an from Health completed of year-ago the quarter, the XXX,XXX XXX% increase period. During

international visits can access. visits, In visit-fee visits categorize terms release, of and from paid see only we U.S. membership, in visits as from our you press

XX% an from increase points in of the visits included represents the remaining the on experienced U.S. were delivered those membership annualized totaled utilization, visits XXX,XXX. in utilization Moving XXX our X.X% medical general members to calculate the XX% U.S. Health's contracts. which of U.S. This from X.X% access were utilization we Visits visits basis our to approximately rate quarter, these third services. quarter with while paid, total Teladoc under divided membership XXXX. U.S. as by paid of and rate paid for we for

addition, In which U.S. we And of includes in individuals primarily million we fee general other completed visits as revenue visits health generated increase. expert international visit completed visits, paid visits specialty membership medical as XX,XXX and access. visits. $XX.X finally, This services. medical from a XXX,XXX year-over-year commercial revenue, coming XX% with well comprised only for is behavioral

of on Our XX.X% and with expectations purchase Advance Medical. gross were our plan margins following the

at the were the $XX.X to representing or in While QX quarter charges, as scale of and in evolving resulting less in to of compensation, XX% of million revenue such expenses to third to pricing positive QX integration-related XXXX. addition of XX% XX% revenue of reflect compared and costs in the margin $XX.X margins margin gain as compared the business. of the and the non-cash our in operating gross depreciation quarter's Total our impact $XX.X in and XXXX, principally efficiencies from stock the our came Eliminating million, operating quarter trends in the decreased benefits XXXX continued sustainable XXXX. QX sale, operating $XX.X expenses, of amortization, predictable gross a or million on increase million our

to of a came adjusted year. year quarter quarter $XX.X a EBITDA same EBITDA was in adjusted net loss at the to for Our $X.X a last million Net of $XXX,XXX quarter positive compared third loss loss million compared an $XX.X in ago. for the million the

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

at $XX million, our was quarter convertible outlook X X/X% total consists of the of and XX.X a convertible end million like that I per $X expect between a weighted XX.X our XXXX average $X million; million fourth notes quarter per between of mature loss in at X% visits membership The million the million, notes members; million, $X.XX $XXX.X $XXX $X million million share adjusted two XXX,XXX visits; EBITDA a million; the which net and Our debt of approximately between is the end end XXXX. to million $X.XX would an expected XX.X that, range positive from which at the million; of $XXX of and total to total U.S. we between provide and the and total EBITDA issuances: With shares and currently based $XXX.X revenue XXX,XXX loss on loss this share. of outstanding year to mature to that paid for $XXX of loss

visits; the visits X.X total For an loss million million million loss to XX.X from million; million our EBITDA updated paid average weighted revenue adjusted between individuals; XXXX, million X.X share. and positive of million XX.X million of $XXX and and between million total full to and and share XX.X per million; visit-fee to $XX is is now, on members; a share $XX range $XX loss forecast million; approximately based only $XX EBITDA expected loss membership million a X.X year approximately between access U.S. shares of net $X.XX per per available total $X.XX and to between outstanding $XXX

be we in earnings guidance year our and February. we will XXXX As our full providing announce a XXXX results when reminder,

over and you to into and look up to continues I'm their for seeing set next mission several Operator? joining call the see, I of how can we work of we you We'll you dedication access XXXX. thank people to pleased questions. to all forward Thank and the team want hard the around well, health with the now As business very the the many care perform our open weeks. for look Health transforming Teladoc to as us, world. very

Operator

of the of Jefferies. [Operator Dodge Instructions] Your line comes from first question Sean

open. Your is line

Sean Dodge

more maybe modules. clients Good or, through of key Jason, questions. the base the Day, it of your new of afternoon. your existing either Thanks sounded selling to taking when going for bundling kind back some and services Maybe, was be like of, the new together of one Analyst selling coming focuses out cross on to the working

we're coming this have or with many can how two last signed that anecdotes do year? new any share how you versus maybe of clients us would this Now or some Teladoc metrics out time you have on that bought selling more looked services season,

Jason Gorevic

sales starting more place haven't to put of think into given Sean. while going about any about to there's closed for more year full Hey, for the bit we year Thanks this we have and little products question question. bundle for the that metrics and more say, we're solutions. pipeline of Teladoc clients a We're certainly, a a whether I would gives more start more anecdotally, that. or XXXX, in we no this services. view in as that to at talking something two into have More the enterprise-wide sales I look and

rather larger and integrated their of Investor on lot of a the in plans. single first would suite offering. for so the larger services for but and deeply And say embedded As full more they and fashion that full phases by in prospects, focus employers care three, Analyst products of central are point but plan. about lot engaging Day, planning in that a a starting we the becoming us of the the it's solution, for a bundle, an health that's larger includes a health into is I the talked our is four two, virtual than especially, process that still virtual a clients

Sean Dodge

quarter? then XX we'll you've ruled CVS it's great. said in got how belt when see could sense coverage? us you launch, And can insurance the and on, update give a your when third under visits of on now now, months a out you the any that available And states Okay, contributed rest many in one few that see there, then we the

Jason Gorevic

Yes.

as third push. this was contribution think, marketing very launch, This Day, I So small. no was very, quarter Analyst soft the still done was a at mentioned I a

turn that a bucks, adoption. can loyalty were and quarter a and Let's on experience, before program, of floodgates very by of significant the year, and So ironed to roll marketing. turning their, to first start they their of beginning the to engine on everything CVS so provides strong their look basis sure on sort available, consumer perfect operational year, goal over a marketing is nationwide with a wrinkles drive engagement out early the of is consumer rule prowess, The out, the to extra it very, continue with right? we that make sort is to consumer that engine that course and especially absolutely out, we of their consumer continue the get the to there have

have ramp from, you visit to there great significant Day, in Troy at up of expansion see a to heard and addition starting relationship the We there we services for Analyst as opportunity our as volume.

Sean Dodge

insurance maybe then then quarter? And coverage Okay. now and also sometime early between first

Jason Gorevic

by first modifying payer to CVS contracts I wouldn't XXXX this. look with going payer for quarter. works be on a as their effort, that partners their to include That's early

want I would over sure of So, that. to clear on that I that to expectations happen we're around expect the XXXX. make course

Sean Dodge

Very good. Thank you.

Jason Gorevic

Thanks, Sean. Excellent.

Operator

Your of from Citi. line Demko the Stephanie question next from comes

line Your open. is

Stephanie Demko

for the guys. my and question. solid taking on Hey thank Congrats you quarter,

Just your sales provide could just was any hoping around flow, given you the sizing behavioral news consumer or business? color as of mix channels recent I any business, its of some relative direct

Jason Gorevic

on the the Stephanie, thanks. and question Appreciate Hi, it. opportunity address the and comments quarter your to

opportunity we're need for healthcare. difference I foremost, make that behavioral and us a tremendous would focused in to First of say, on those to

one both Virtual that growth a growing health. don't our lifetime be see our many costs, pleased the as that to been value primary of and those stigma needs. to access has been direct-to-consumer we've As segments of addresses due these required associated positives customer said, issues behavioral a and transparent those address business metrics business, clear been to our to barriers PMPM. I've we're increasing people getting including it the care driver being acquisition times to care of membership able very and very counseling of mental they of a customer I We and fastest our all contributor get effectively a with for about that with and churn.

of business, of business. through metrics the revenue we're answer marketing and And the quarter that September, of seek new exception have months, no cycle, overtime. business as on said mix evolving is will channels. virtual million for X% your really of and in excess described it business marketing $XX still of saying, than I surface product, Better we years, and just a as testament the the the course And think, where constantly And past care we've in look is optimize consistently And DTC channels our that of the to this to for the And YouTube XX diversifying of one to Help care, I the been including question about in of subscribers behavioral recently was last think is improving Better consistently sort we performance our less the course have I you this on to trajectory YouTube of of We're come influencer Help early are All about the the data as this growth marketing innings as was virtual that. still if behavioral And past recently to in generate finally practice. we’ve that, there. that of opportunity batting in those revenue scratching at the quoted we've health of quarter, use year. which is business in the which component. our of our consistently that couple talked fact, is

Stephanie Demko

as helpful. clarification then Those to Could super an follow-up just continuing the a row, as are business. you and unrelated on any be quick you. one ramp stream risk give maybe ramp revenue elongated? update to in us Thank And TRICARE that the

Jason Gorevic

Yes, sure.

the on and optimize where the contractor the sub. prime business As TRICARE you know,

working the put the of the been given of first well government are a but for our associated We on for we timeline launch QX. the very projections, have in implementation Optum things. a expectations final very view for timeline population rollout Optum We're have as the the launch the that and the preparation great of business. rest on that and our of meeting relationship and we're hasn't there The with with conservative revenue, knowing expect our with track requirements team we've government's in together always with that we business, variables in

conservative a have not So out and roll and we Optum withstanding to we feel and that like we've relationships business. approach fully that great expect taken with appropriate

Stephanie Demko

taking you to questions. my Good for Thank Hi. hear.

Jason Gorevic

Thanks Stephanie.

Operator

next question Lisa of from Your line Gill from comes the JPMorgan.

Your line is open.

Lisa Gill

expected? business. and start Thanks Is much, be Is me the with very let it still neutral the anticipation for it to Aetna’s tracking good Jason, afternoon. revenue XXXX? as

Jason Gorevic

when with expected. insured with integrating about their experience. I'm will there revenue a working software visits were importantly fourth quarter, being in entering that will exactly we're a which up we're on in of the I We it's basis be utilization using almost app our year-over-year. and last together, year-over-year. our got is was positive as integration we XX% great course, We've on relationship the and member weekly tracking that XX% that's of deep also And are literally in fact, where only Yes, which and the mobile fact, our into was fully but kit, SDK, terms both there, insured monitor talking technology busiest development fully building, season. mean which our exactly up year,

If segment you the Aetna year-over-year. is that business, look utilization at every up of business

Lisa Gill

new what versus then it is you And XXXX to primarily relationships some the to selling bundling the relationships? and into of market. going offerings clients? around can an you're you the Are deeper colors membership wondering, in question different give also I'm growth, great. seeing seeing Okay, existing around new around just earlier comments including of just just maybe us some season or your

Jason Gorevic

It's a mix of the two.

And existing store than growth the have white certain business white about sort So others. more or same expansion. obviously within the track space customers. segments talk we space it both as of of We

lot white we're about So employer of international to plans, a clients, insurance sort products cross as talk much especially when about direct and obviously selling and plans health more additional health not segments, seeing then there's and space and the thinking you international our our upselling of market new segments, and have across expansion membership. space, customers all services, and across seeing but across our all new we're customers, so membership of we're new the there of within especially additional logos,

Lisa Gill

helpful. Congratulations nice quarter. That’s on a

Jason Gorevic

it, Appreciate you. Thank Lisa.

Operator

Your comes of from Richard Close next question the from Genuity. Cannacord line

is open. line Your

Richard Close

Yes, the the – hybrid two One, than X%, about there, at those depth then that hybrid Better on about are briefly bit in additionally Analyst questions. just, on a on models? the you Help, and mark if Day. youTube what had little Can bigger more – is question the models talked I channels a less maybe talk at talked

Jason Gorevic

The consumer the engagement focused followed are delivery more also the help. health which of and I’ll mentioned, influencer and as expanded Better can sort through channel the I and other is two into, said providing we’ve entertainment are and of Better take drivers always channels. the various hybrid sites, psychological social websites more media models. primary an for content-oriented in But who for strategies. I’ll, take seeking through search marketing So on other into Help We’ve consumer-oriented first and by mark Help, search we’re social access those, are are

and testing a We’re markets. that like in certain digital out things TV

perspective channels. part optimizing various the of sort daily of is and the acquisition So, is that of a and a from fabric customer that a work business, where team’s test learn

Mark Hirschhorn

of We seeing. additional. you over all included. give Also, traditional the member note we’ve X the to are very of the close end new the higher looking on a see to hundreds visit on per just sort few and date. the month at that but executed, them vast per fee. to of, only have I’ll The have of models are a of through if months. member contracts we companies And closed sign Richard. visit been are year thousands contracts to end and fee the weeks We’ve obviously a six services month not per visits. several There majority, have Hey, Most that the with really January the continued thrust of last been plus those the per those that available our another up launch proposals

Richard Close

Okay. you. Thank

Operator

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

line Your open. is

Charles Rhyee

any Yeah. Hey kind Mark, really wanted a from format? that – seeing kind of contract, maybe kind any the ask pure up in you kind to taking guys, of thanks for clients on just question. of the PMPM into quickly of contract that follow visits Are included. push that question where only you to are uptick

Mark Hirschhorn

I in small the wins the client for new would PMPM. that business that growth fastest area of medium-sized Well, suggest model been that higher included has and with visits

Charles Rhyee

that is you’re be? And average that typically? kind PMPM what Okay. out roughly we where is what at of look out to averaging it sort does to currently, come If like one of five range or

Mark Hirschhorn

in multiple average in that changes significant range. It’s on what $X normally entire population. the that over I suggest a dollar you’re plus would

Charles Rhyee

Okay. you’re the was seasonal little giving guess we range, that I that quarter, international in that then want I to break the number XXX fourth the appreciate should U.S.? to visits just have next bit, here. pattern it the midpoint to same us the guidance down And ask a quarter does at international if the the of really for assume as visit and in around to kind I we the question of the And visit XXX. look

Mark Hirschhorn

we’re what assuming. That’s Yes.

So that’s correct.

Charles Rhyee

Okay.

Mark Hirschhorn

be to range of a obviously; season. the significant we’d is they otherwise. is a from fashion This fact would result similar that, first be the fact flu either why such conservative mild But a a suggest trend do very as contribution very in The have we or international. volume strong a in

We’re if year. quarter. or it done looks was last Jason with – month. like to to, the the stronger nice a not It as than first similar we’re was going something noted, month nice of have, Trending a

Charles Rhyee

so is – the raise the say than that dependent it then is we’re fair at So to looking more anything? flu really

Mark Hirschhorn

correct. That’s

Charles Rhyee

because $X.X million Aetna – or talked is you Okay. visit sort at backing to only it, $X sort a or And Aetna the the running of kind math neutral quarter, did visit it then it is kind radius spike it… we’re being right into million. sorry, value for lastly bigger revenue. full right. the that the in bigger on side, is Is has the of million Obviously, of that fee, $X of revenue of fee about by maybe or year fourth here, side We All expecting the we’re looking just my like sort looks here. we’re

Mark Hirschhorn

Yes.

ballpark. right the in You’re

Charles Rhyee

Okay.

Mark Hirschhorn

we were. that would be Yes consistent where with and

Charles Rhyee

perfect. Okay, Thanks lot. a

Mark Hirschhorn

Sure.

Operator

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

is Your open. line

Ryan Daniels

from the the or best you. think benefit for Thanks you revealed two forward? going feedback expectations. from organization to It been negative start, can followup operations Jason, one a kind very sounds is to the is any integrations guys. gotten over curious know any could current organization that I’m to good that like U.S. taking there there And kind then be you’ve that. surprises Medical a customers, either the of but Are number positive initial pushed that customers to practices of brought off you’ve your has way, and the if more question. to good Advance Hey for

Jason Gorevic

working management really, did. well Ryan Yes. been that with really team. fantastic The integration Thanks, advanced has

couple starting Europe. to team team number of just has over clients. especially there in out the with European where to working weeks, our in a for be is I’ll The of on client advance In of right fact, planning I’ll in all over a our see McClennen year, and clients, been November Peter medical material, see discussions next further international there integration, on work efforts. now from

within of the surprise prior our think the biggest, to is Europe advance clients Teladoc Teladoc in I for product appetite acquisition. Especially, sort of clients. the sort the expansion clients, legacy pleasant existing

We’re I of medical ways care the then a And response us was as opportunity through to was seeing around, of processes the we that team didn’t market figure With to which sort obviously is processes to the identify product the things that efficiencies. as best second comparing had out from we global the medical to very, opportunity and outside U.S. bring as launch, best leverage a their was one best that and the that have. product result frankly expert think of very quite also we’re practices. a as as around thing response something an done working generate global two practices, are care seeing the good to well U.S. We Advance services both to clearly acquisition multinationals. well respect strong for have a to breed the

so And course to of of the fruit next think going the quarters. I couple that that’s over bear

Ryan Daniels

up, picked especially talked behavioral business some That’s segments the also momentum how teams pipeline? you. brand-new with Are we’ve for the some seeing et recent of some with up cetera, market great. curious is within And before CMS cetera. I’m in the given, Thank you advantage but provider that the plans, of shaping health about then et medicare

Jason Gorevic

we starting that space We Yes. always from have who very The as care realize the are virtual we are growth a clients, just in encouraging. real the two more value are, us the for sort and good continues hospital are cases that’s have one our really small which of care, a would things virtual clients and at us. interesting the number I click is strong say areas. looking provider committed that of market for benefit it’s probably number those very, off they in really on one, for to Obviously, to number to of grow services percentage base. basis, two see examples And services. use of or expand a

and rate win be very there to continue very a robust strong. to a our We have at theme continues very, pipeline active

Ryan Daniels

Okay, the back great. hop queue. Thanks. in I'll

Jason Gorevic

Thank you.

Operator

line question of next Your from Naidu Mohan Oppenheimer. of comes the

line Your open. is

Mohan Naidu

my still point year-over-year neutralization on from XXX for utilization, you in improvement the you're having baseline? expansion the expectations far, given basis Jason Thanks on can the questions. right comment traction are so on taking

Jason Gorevic

that's think Yes, I right.

I the our at outlook think at improve, as it's talked looking you're but a, analyst on of day continues baseline. of that about, we certainly to but as at basis points, a that good XXX more

Mohan Naidu

change right that Okay. and in TRICARE, implementation ongoing, contract And now, just is correct? clear no just quick schedule of QX, in online to couple one follow be is ups, to write now on there be

Jason Gorevic

That's correct.

Mohan Naidu

question today's heard much that have I call. Okay. the side, inpatient on Last not on in

any Just conditions want on in on what's updates the see there? to and market market going

Jason Gorevic

mean on inpatient what the you Can clarify side? just you

Mohan Naidu

sell, that you market products coming how that is along? The hospital guys

Jason Gorevic

asking more more we Yes, to so use really see additional us. well development are do see some coming can that's us see for technology services employ and clients pipeline and our clients robust is used we for they We technology cases our and being along really that from for the in asking so cases. our

Mohan Naidu

a Jason. Thanks great. lot That's

Jason Gorevic

Mohan. thanks Alright,

Operator

Draper question from from next of SunTrust. Your comes Sandy line the

is line Your open.

Sandy Draper

hear can a that shaky. I about much. you okay. voice very hopefully is apologize me little My Thanks

call Medical I including a forma accept heard little you Doctor, higher. this you bit said If Advance a comment a on be PEPM Mark, would pro think

PEPM had I'm I think adoption Generally or correct, because Medical and I'd higher a is say sounds at across was is that the that typically broader services curious. multiple is that just like Advanced just difference? it the there's were I that understand trying of Thanks. people you buy Just more an then inclusive? say just to obviously in is tending all and if answer all can a it to misheard

Mark Hirschhorn

the an you and correctly, tends of international. it primary in not only Advance their be of less greater U.S. America Medical’s there that appetite revenue Latin component No far adoption, is greater that because but Europe, internationally, just faster product. opportunity alone the to inclusive is Sandy, all than competition to there's Asia, heard a purchase The fact is

Sandy Draper

helpful. That's That's question. only it. Thanks. Got my

Mark Hirschhorn

Sandy. you, Thank

Operator

from Leerink Your Gupte next question Partners. comes the of line from Ana

open. Your line is

Ana Gupte

evening. Hey, thanks. Good

thinking health they of on that own doing from opportunity? plan what likelihood and potential for the from although how for the will what the Medicare are opportunity managed market as you nationals that total as with and be utilization the Advantage your care is we very you their CMS more a rule big they'll on million you And homegrown covering for you up the could about to So that work that and seniors, share follow-up where out with it whether came the systems, get and then maybe well. use well, XXXX, $XX platform, on adoption, are sit networks

Mark Hirschhorn

was just We're relative to the to themselves product Advantage plans Ana. with very Thanks Advantage. Medicare CMS us Medicare pleased our They and really very, like Yes. Medicare into rolling proposed regs full regs markets that portfolio thing is markets. the the we Advantage virtual the that support of it can into cost. and very access, impact have on CMS encouraging quality really strong endorsement other and commercial the that, the coming care of out lend have out from The of care

if has the Advantage couldn't be who with are plans consistently And across well over in the growing in that opportunity, grown to at a over you population. Advantage time members you be that really that there's Medicare the tends Medicare more over years. so look million membership than gone. five better the market number direction that country know, about probably do XX as The last I to XX pleased It's

having the telemedicine systems, sometimes into health with we're which them we're care them of to around to we clients budgets don't tend populations. There in MA too customers for of care, so prospects large discussions systems to in for course be With systems, XXXX active IT hospital with talking a to are about products so starting very of themselves, they clients hospitals solutions. the respect our most also for has MA plans actually solutions. large be to going developing a lot a part a market virtual going their toward and as now we are virtual but populations, homegrown we’re see MA and bias hospital the of we extremely systems a And and existing many few of see number with have many of conversations north XX those their

So MA, strong it's then well. good, This the been get guidelines. we to when of we hospitals has not on know go trend Medicaid the each Medicare but side of service lastly, is good the in course for and for on will is a CMS payment Medicaid that beneficiary to that be hopeful, predict always but these goes generally realize think follows that state can way are the as the this reimbursed fee services. And they of state as the the plans going hard as regs one happen, quite

Medicaid open are we opportunities, the Medicaid and more doors course will which solutions. the to continue to of into manage So, that up hopeful is moving more state

Ana Gupte

are follow Thanks. which then I you would are is well There that, a virtual medicine population can ER manner rather as MA reduced specified see integration visit far just digital adding and around for think health much addition the a on fee, business the yourself up And of savings you approaches that? PMPM? per model articulating be a CMS home quite the and is planning admissions where the in think would model shared typically, And to goes, on more I with than as health visits having like. others used the the lucrative, that's

Mark Hirschhorn

Yes.

discussions preliminary say, So models, just with early respect were I payment to on regs think because too the, starting have to of the published it's course to too little, Friday. just those some we're of really

models always which the I paid we and get think can in of see models for some we're bring. we happy value we'll that variety for

and we some think with integrate then early on certainly the tend we're those as still opportunity pilots a care phase. that bigger we be some more bigger plans. discussions open the as population, home before that to door to integration opens do that, those as also to Medicare will and done are pilot there those always in and be that with said So to go see us do the more opportunity in more devices and toward We've for being remote but valuable I I population. monitoring

Operator

Your of KeyBanc. comes from next question Donald line the from Hooker

Your line open. is

Donald Hooker

a Doctors a When your of for going take what Doctors, of Medical, for level ramp a under this to synergies I’m bit Best Advance your potential little sort afternoon thank as coming Good of belt from a year of now hit together? of it a here. sure three companies years. Advance selling just guess all gets couple together maybe your kind have with when is mean, full these revenue synergies the But like synergized. perspective of I more question kind ramping Great. that do you you you high and little you're bringing year now over feel and you Medical. Best I kind it’s now standpoint? each

Jason Gorevic

together would the about I combined first the overseas we’re season will XXXX and being business mature Teladoc season with for legacy be XXXX thinking selling question. Advance sort one. Medical. first of season selling that be selling season the say, The the It good sort a legacy of be Best it’s will Doctors. selling Best will Yes, bringing Teladoc, the Doctors

maturity. say would one I never So year year has one, that’s

is, you a optimal You’re tends year is optimal needs clients pitches, the to of what their about two more mature optimal of react mix like, one first best. to to two, you first how maturity what year and get meet be looks experience, what never understanding the to the hope sort sort what pricing

So more say one XXXX XXXX selling selling being XXXX being as season mature. about your season U.S. selling mature. for Internationally about think the the being season I think would with as XXXX

Donald Hooker

Okay.

going be selling next XXXX. to this not season selling just season clear, Best but into year for So Doctors,

Jason Gorevic

Correct.

Donald Hooker

Got you. hop question, next then and I’ll then And off. my

opportunities of the You and anyhow. that health relationship developing, your in probably into won’t With they’re answer UnitedHealth, to ask it, it but year? I’m going terms is plan to how respect next within exposure um, going

Jason Gorevic

I’ll of provide with United business. segments about across our multiple their answer. an feel great relationship We

of expansion, top. their multiple providers comparisons but of the providers, having think to And sort again, can their we’re or thing on of only do versus in segments business. point and I is, come care do see best out we I to virtual wherever We the continue continue impact not to see we we growth telehealth that expansion,

and So with progress feel the good making relationship United. I’m optimistic, about the that we’re

Jason Gorevic

Thanks Don.

Operator

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

Your line open. is

Sean Wieland

Hi. you. Thank

requirements button on that providers on in just licensing you you for health. place to just what are the conversation certification So that Can and have network? up better the address

Jason Gorevic

So we we the licensure, the at of state vetting a we licensure at thorough providers. process, look look have

delivery that care. the taken compliant fully all approach the with business, the with we which the clinical quality of our We rights do paramount and are to of that all is we state is

the we comes onto seriously is the who that, Mark bringing we I the Smith of committee have processes board very always which And membership our improving there. assistance clinical quality take same directors. time to of us why You and And our around board. are at a for refining mentioned

I clinical quality. think that’s another good example of on focusing us

Sean Wieland

you on update number I great. think year And you. may today contribution revenue you Advance Medical? have then what Advance And members the missed will us total it. That’s Thank the Medical, On on of be? did

Mark Hirschhorn

Medical, year No, contribution. we provide Advance end members medical provide the update address the of numbers we on events of didn’t any will domestic

Sean Wieland

very right. you much. All Thank

Jason Gorevic

Thanks, Sean.

Operator

Your next question Credit line from Suisse. of the comes from Jailendra Singh

is line open. Your

Jailendra Singh

had ask. I questions Thanks I can a a couple if of lot.

First, because third I I that. of comments drop quarter XX% call the last wonder that in believe clarification have margin in come to about second half, than earnings around on you like nearly – mix your talked gross around margin. business will gross better

a XX% expectation the should from normal assume run improvement as and high rate going and quarter what’s for like margin? we So maybe forward here fourth gross

Mark Hirschhorn

projected margin and a bring should quarter, did QX this volume QX The very flu guidance at We more in have margin margins heavy ago in fact obviously that the we what The principally provided remains quarter previously. have seasonality. in season stronger and but guided from intact. we impact much third a realm of into a month the that’s visit

Jailendra Singh

the me then follow-up CMS proposal And let telehealth. comments on Okay. MA on

some And dollar process. plans seniors submission like CMS in color mean in Given paid probably MA will you given it around benefit, bid use like willing model push get going be I Can give whether more and feedback only visit concerns the they’re younger on What that some to PMPM how for fact will included that? not like at gives be your uncertainty compared $X.XX like estimates dollar. comfort received commercial by all adopted around population. they’d to telehealth or the least to you the for

Mark Hirschhorn

Yes.

really otherwise I you’re They earlier will people the but cost another. really know of Actually, the they would. know full They an I with the $X.XX. they gave explicitly don’t they talking about CMS So impact be said. avoidance. impact what of know said movement They what healthcare the getting care think example, don’t impact really came don’t out what the from they and to what by exactly know what improved know than that that’s transportation one because actually don’t impact of provider don’t cost

an example impact themselves acknowledged yet was think up. to I what gave be. work don’t they what think they that they they is how But going cost that I really so know And of

Just as about talking be, month. payers to the well and be relative can we’re of we’ve or the to that to I government visit to macro traditional going with that a as I as more that MA, to be per – as we’re manage that’s that’s models a what responded the the when Ana. going member say think as in Medicaid about transparent be models as I at per – past we’re to those talking fee look all other seeing we’ll be said, not I case there But done not always won’t trend. It’s we always

Jailendra Singh

know of I quarter this you What Okay. would the percentage Do if your And then have third question, have actually repeat you the visits data. users? quarter? data for last third

Jason Gorevic

have my I it that Repeat on are don’t of head. users, top Mark at and I staring number.

Sorry.

Jailendra Singh

lot. a Thanks problem. No Okay.

Jason Gorevic

Thank you.

Operator

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

Your open. is line

Matt Hewitt

been wrap of to up. Most questions there. things Hi my have but maybe answered,

differentiated point? Medical platform be in integrations, Regarding a used markets offerings? models at plan all some And to forward or the that’ll consolidated software going the will depending in the Advance have this upon have different markets of been acquisition have those completed if the all you

Mark Hirschhorn

and point, expected request exact of traveling certain those high throughout world in the format The or either their platform have for Our the of same integration consultation. Advance taken are access service who regardless parts goal app medical has place a individuals ubiquitous to is the in quality place same and the where Medical has of of same fact, they we’re selling the going providing country with offer take seasons. that will very the to existing position comprehensive integration into services XXXX. basis regarding possible XXXX. throughout we in app, When Jason integrated on be throughout to platform, services. The real those team ubiquitous the what suggesting deep but a really feel ties that a in-depth that And best was on

Jason Gorevic

question that I’d think clear area Advance to the we Ryan’s pretty to see our add significant clients. Medical I capabilities just And to that, among a a that rollout was opportunity engagement That was the with where get our the Advance capabilities to and our excited practices. area assets clear best access about respect a Medical earlier surround was to engagement. to sound team

Matt Hewitt

great. That’s Thanks very Okay. much.

Mark Hirschhorn

you. Thank

Jason Gorevic

into We all. really appreciate XXXX. great a good We momentum about We thank very going it. quarter. feel So our you had

our very, of a in as being have geographic services you And tailwinds very portfolio are broad Our we see, and well footprint business. of can received. our lot

look time your your seeing some appreciate questions of at we today forward to So and the upcoming conferences. you and

Operator

conference today’s call. concludes This

disconnect. may now You

Teladoc Health (TDOC) 1 Nov 182018 Q3 Earnings call transcript