TDOC - Earnings call transcript Q2 2019

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

Operator

Welcome to Teladoc's Second Quarter 2019 Earnings Conference Call and Webcast. At this time, all participants have been placed in a listen-only mode and the floor will be open for your questions following managements 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

afternoon. good and you, Thank Today, after announcing a release we market second quarter closed, our issued XXXX press the financial results. is website. This of release available Investor the press Relations the teladochealth.com in section

are On to Officer; Mala our this Murthy, our Financial discuss results and Officer. call Chief Chief Jason the Executive Gorevic,

and will this by be During quarter a we and outlook question-and-answer provide will year call, followed our third session. our full prepared remarks

in most we evaluating will we discussing non-GAAP believe be the on are posted that that relationship thereof measures important measures press Health's Please these note that is in reconciliations on the Teladoc financial certain be Details comparable performance. non-GAAP measures website. found our and release can between to GAAP the

will Securities as by that actual are other materially or Also, implied Teladoc please note could on Reform that Litigation subject those and Health the expressed to certain Such call forward-looking the call. to defined be statements forward-looking Private factors of this cause this made XXXX. Act uncertainties statements from for risks, statements results differ during

in For statement to our of are on please press release with refer SEC our which available cautionary our all additional website. the and information, filings our

turn over Jason. now to I call the

Jason Gorevic

everyone you Thanks, Adam, this call incredibly afternoon. I'm to joining and thank start by two for highly us making excited today the off anticipated introductions.

and I'm she success across her have as an end to The leading pleased with to team. the a track you joined an chance the a public as running a joined June of us has with the on Chief speak Murthy and board. is ground our she first hit of of most Officer. that with Express at and already refresher, came impact record But Mala American of brings from had say is diverse us Mala set industries. to Financial Many having who recently companies accomplished Mala since

to Officer, very and skills our have as board strategic Chief combination Sides. he is that David second unique suited David brings commercial new excited on perfectly introduction to technical, our a to We're trajectory. are Operating The come strong growth profitable of

health comes As public a health and New with later of David care of clear tech a ahead relocating strategic understands with and exciting be care view CEO the the Health. well experience, area in to landscape broader Teladoc family his opportunities former company deep York this summer. David will and the

thorough the entire introducing cultural Teladoc look Health as team, months. we're for for them join right in search when of standards company I Our to these fit. the you one, mission-oriented fill our to the both very pleased process the and roles a David have many to and the know we appropriate both I I I both well as capabilities person in high held of speak say was to coming as functional Mala forward

clients and I'd Before we operated their if Peter remiss to their take leadership for shareholders. this Under dig into the deliver didn't seamlessly McClennen second for stewardship, our and to I be Cappucci opportunity quarter, members, period. continuing we during Gabe transition thank this

this Lastly, Haertel and I'd Relations Investor Valerie her like wish her to in future during transitional thank of endeavors. oversight her for well period

Advance expectations. at particular quarter. saw volumes, the strength from our million, first you organic second We for XXX,XXX or continue when visits QX, XX% to $XXX.X high-end growth exclude to quarter volume XX% revenue excluding revenue the total Medical. Turning including of Advance XX% in coming momentum increased of Medical. results Visit both the to comparison In XX% the XXXX, grew visit with and in our

of maintains million the members new and XX.X in compared EBITDA growing in million. last second at This expected eight of range adding of adjusted new X.X XXX,XXX membership grew quarter And consistent came in paid seven million quarter to within the record our track quarters. to XXXX. membership members, U.S. when XX.X $X.X the members million members the our

deeper points, benefits Drilling our bit to visits, particularly we down realize increase utilization basis as XXX a of I'm continue diversification see strategy. into the than more pleased to

uniquely We capitalize the to adoption included business. both our and consumer the populations our abroad macro tailwinds, with book and able of associated growth are on across growing total visits some of seeing international of rates domestically fastest

growth pleased see and deals all in persisting robust Domestically, in utilization to clinical across our pay-for-performance QX. I'm specialties our strong

stands health drivers strongest behavioral visit example, the an of of growth. one out As as

During increasing to watermarks of coming visits set the of our number for in of several single-day high we conditions. quarter, an number us terms members with for BXB service

arena. the better address On which our launch retention quarter, sustainable enhancements, be results metrics of we portfolio provide solutions These to that member expect improve member to the to continued the time. experience mental health team is positioned the proof health in the over need unmet outstanding extremely in second global well through of massive

see our excellent all dimensions to to we of strategy. the momentum benefits growth across long-term diversified of selling terms our season, continue In the speaks

XXXX. and quarter continued seeing volume RFP The above products. remaining quarter this Overall, wins to across is of team all well accelerate second our channels

in seeing clients products multiple to our success are with deals selling and continues accelerate. products year-to-date for to multiple We our increasing bookings

clients. robust seeing with In both business, activity new existing our employer we are and

a to logos are also base of extends combination in Fortune for our We client and to XXX appetite many late-stage which have multiple populations. of products. add contracting, healthy reflecting additional existing a This products several new

plan wins new business, health where expanded on are In strong both largest as growth of and our geographies recently continued to track penetration lines well growth relationship also increase commercial diversify area business, and strategic is expectations. terms into business, sales with Blues both and our continues seeing and new of penetration channel, very existing books with this we our relationships. This in a client's populations plan of we programs. distribution velocity of major healthy government as with In in our to

our that our disease chronic to June management was and in an Vida announcement build second populations of provides deployment or our partner the buy capital. quarter U.S. early-stage is strategy, across virtual market with a partnership programs of selective large our from the group of payer members new Another exciting great strategic minority development of company Health, path through accelerating stated with employer to products investment This example

strategic partner made us members. to chronic multi-condition a identified As through became and know to as we care on right overlapping their the and this to model solutions them our potential that base to coach-led got Vida, to offer process partner key it client clear deliver our long-term plan enable them

In platforms health and hand complex care needs health and that XXXX, an acute chronic across often physical go hand. virtual experience care challenges we the supporting mental in will deliver and integrated addressing

update some the of Mala turn of our I over strategic investments. quarter I to more our on Before financial a call for to detailed want second provide an review results,

partner into client progressing of is channel a signing expansion TPA us the to our with will Our significant schedule the on product Canada and market. access the first quarter afford in launch second that the Canadian

integration and in in work are and with capabilities and on United Here Medicare development both beyond. have the these schedule XXXX progressing our of the initiatives I'm also the revenue about will U.S., impact optimistic

Health wide on broader of range in eight joint regarding well the HealthHUB by HealthHUB as MinuteClinic as as CVS leadership including enterprise visits states the their services, potential connection as we're their care engaging announcement with CVS strategy. additional virtual Finally, development expansion. to with expansion of encouraged We're our areas strategy, actively well recent virtual applications

With I'll over that, call turn Mala. to the

Mala Murthy

as the experience care Jason, Teladoc. I'm as global the financial and mission that for to good inspired way the growth. and experience you, my health of Thank to and people value joined our impressed leadership commitment I'm with well everyone. add extensive to prospects and by energy our transform thrilled team have I access leadership will and afternoon, hope have Teladoc Teladoc the been in broader community. team the

will our like echo and detail. continued I'd financial now strong objective of quarter more execution second regarding review performance comments Health's in our to XXXX Teladoc I Jason's

Let XX% for me global our $XXX.X with revenue organic as quarter the million in quarter of discussion Total subscription the a a XX% by of access revenue quarter. with accounted from start increased year of total revenue compared Revenue our second fees to increased $XXX.X and expectations. On for XX% XXXX to XX% year ago ago. consistent million, the our basis, compared for an second increased to revenue.

subscription revenue of subscription U.S. about continues $XX.X represent balance. revenue for $XX.X of international million to fee quarters while Additionally, million the access three subscription account revenue, global of

quarter XX% Looking the members, the at drivers a of access we with fees, ended paid XX.X U.S. ago. year compared to subscription million up

second plan remarks, to reflects quarter a result seven his an expected existing of in the in large last its this expansion client lower quarter said in Jason shifted the from Membership quarters. of membership XXXX. from rollout the a health as growth than in eight that out the population was third expansion As of

paid impact members with visit-fee-only $X does PMPM when members a PMPM includes basis, As pro are not Advance that for and the definition from a our membership a U.S. saw from forma $X.XX $X.XX reminder, paid increase access. ago, of associated year XXXX second We on quarter a or to U.S. just include or Medical. adjusting the

basis, sequential the a On increased quarterly PMPM from $X.XX.

PMPM, was reflected have the we number experience members quarter onboard indicated, dampening health in we first as effect large quarterly on a in of sequential previously of a when we XXXX. new As typically plan trending our

global year to growth revenue revenue. $XX quarter prior million, fee for of representing the and the Visit compared increased XX% constituted to of remaining XX% the

reminder, visit access. revenue U.S. individuals fee our membership visits as with paid a As well visit-fee-only our by as driven is

includes in well visits is comprised second health as comprised balance membership This visit-fee-only medical line and quarter The behavioral the commercial medical quarter, expert over services. revenue our of visit other specialty $XX.X revenue of access. increase XX% fee of million from general visits XXXX. paid primarily the visits primarily U.S. of as generated a

the revenue. Looking visit at drivers of fee

volume visit an mentioned, visits year XX% of a respect we Advance had quarter prior the for to as visit increased When the to to XX% for excellent impact of an ago. year. volume Jason compared the XXX,XXX with by with compared Medical, quarter increase As adjusting

XXX,XXX, grew Visits XX% XXX,XXX visits paid totaled quarter. rate the International membership the which year's from our X.X%, quarter. and to paid XXX,XXX an visits visits were U.S. or XXX,XXX utilization in of a paid visits-included increase membership members. of Approximately, represents XXX over point last from annualized our U.S. our second XX% were basis other

of our We XX% quarter To of second the slightly base. round last quarter individuals we within visits out end X.X the over at year's a for visit-fee-only down with quarter. previous access access, growth completed million client of had with my from existing individuals visits visit-fee-only XX,XXX the discussion

in for Gross mix impact the of year-over-year margins with net percentage including last of The in the acquisition in line year. product our margin the quarter to decline Advance of shift compared XX.X% XXXX the the expectations primarily at Medical. XX% gross quarter were second reflects May

increase sequential of QX a As experience as a in result gross a reminder, our margins typically seasonality.

terms to ago, generated In gross the we increase. million margin quarter $XX.X in representing dollars, a a year second of million compared $XX.X XX%

quarter increase acquisition-related costs such or eliminated, Operating of the expense revenue. When of amortization, $XX.X in an XX% as the operating million the as non-cash are from total and depreciation million second totaled compared to one-time XX% revenue of $XX last XXXX million, $XX.X XX% in million well compensation charges quarter second expenses stock year. $XXX.X quarter are adjusted of as or

last XXX quarter reflects as the million the EBITDA in to maintaining leverage $XX.X the compared of spend. of quarter relative period loss year This point a for operating basis improved while loss million improvement $XX.X our the same of was XXXX our a including second for marketing year. prior synergies to

EBITDA adjusted aforementioned increased EBITDA improved second to million operating compares of last leverage. positive the favorably Adjusted for year's to million which the quarter our from $X.X ability generate a quarter, to reflecting $X.X

of commentary my statement. the Concluding income

$XX.X was the year. compared was On $XX.X XXXX compared of a loss net Our net quarter $X.XX $X.XX per-share for second loss million million quarter in a year. to loss the the to our last in of basis, prior

sheet. balance ended in strong million quarter. equivalents we We $XXX.X the liquidity to have strategically business the as quarter investments the maintained the in and with position cash, to Turning continuing during our invest cash short-term while

note convertible Our X.XX consists of million, was X% end which and XXXX June XX, percentage million of $XXX.X at as of the mature our the convertible $XXX total notes mature during that issuances; the notes two debt that XXXX $XXX.X XXXX. million

expectations our and quarter commentary year. full for third conclude I'll the the with my

between million, EBITDA quarter $XX.X to to total available EBITDA we million to U.S. million to For $X to be be million, positive million, between million between to approximately million $X to XX.X be loss to million the of revenue million and $XX.X adjusted to expect access XX individuals. loss visit-fee-only membership third a of to paid approximately $XXX XXXX, an be total $XXX XX.X be

XXX,XXX of between share, be to average weighted and visits $X.XX share and million total XXX,XXX on based shares to expect in between $X.XX net loss We and XX.X per per loss be the a quarter outstanding.

million year year follows: million and XXXX of the of look between weeks flow expect $XX to positive $XX positive be over million million on and $XXX getting to X full to XX members; cash total said forward $XX U.S. visits before, per months. of loss EBITDA paid the expect as million loss to an and loss the our revenue and we XXXX. shares be approximately weighted XX expectations adjusted and and operating as a know approximately in are based you all the total course and to XX For X.X be million average total for million; $X.XX net between I for million the between updated EBITDA to $XXX membership to share individuals; we $XX million; million; $X.XX have available XX visit-fee-only million per between coming share, to between access outstanding; million; we time first

Let to me the back now Jason for closing remarks. turn his call

Jason Gorevic

Mala. Thank you,

As full increasing breadth unique continues globally as our and the conclude to Health's of our across provide. Clients the increasingly value and be momentum the channels can I more grow utilization embrace call, couldn't value populations pleased across offering we strategic Teladoc about see business.

we of our the any we range, learnings complex deliver business. in serving buffer half back our strength to large this within health broad-based the ability new to remain with plan Looking confident year, to implement as

leadership annual macro forces, this their that amongst commitment month, well and our by global as was adoption increasing by our from our quality success passion strategies our of for the and strategic execution. clients, Driven our I team. in and struck with and of are promises. hard was leadership gathered energy meeting the we resoundingly work both Their Earlier operational instrumental keep nature the feedback our team of external we conversations ensuring and growth the as reaffirming global the

always, thank for your our Health story. continued you and As in interest Teladoc

for Operator? And questions. call with that, we'll the open

Operator

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

Your line is open.

Lisa Gill

gave the Jason, just year talk comments can that I'm Thanks if some of to the into things very you call, season. you on context. appreciated time put the wondering it's I selling much. the about but

a But about you else I of don't season. know to and seeing that about of just maybe talking that a you always selling quantify could like frame to winning this the So RFPs XXXX being Anything multiple color about we clients. up that. I think year, would maybe know you existing really on versus last help with to of this into some us products us? maybe ton way can lot you be engagement helpful. talked just as give going around a if give

Jason Gorevic

Sure, a talked with Lisa. about won't more Thank give I a the question point, volume little last time. you break this I'm bit happy At that color. year bookings I for and the four tradition, I'll offerings. to give you little but times more. or multiproduct integrated of this had about we multiproduct this number of the year and at sales multiproduct we're at bit

to really of that think full of the I attraction scope speaks our offering. So the

respect Similarly, RFP last requests RFPs, about of our integrated to the with offering full solutions XX% for relative are year. to up

market we've commentary that few a So about in I the moving strategy about offering comprehensive those quarters and think direction. given of both laid that, last the the we've out reinforce that over the

the a season. that hopefully, you bit So, color more gives little on selling

channels our all guess, of among thing would customers. all I say across seeing I last we're strength of is the our

community. and and systems It's health among true internationally. It's employers it is smaller seeing and it and health true both domestically also hospitals So both large true among the we're broker plans. and employer among

Lisa Gill

always And want helpful. my be That's just United. I follow-up more. would around

You And you talked you remind XXXX. XXXX? will about just what into Can it us being it said, also on for go schedule. you anticipate

understand of to online want XXXX. what half in to Just come going back we're the see

Jason Gorevic

Yes.

The planning. of technically, together, and and implementation in terms deep are communication. we in marketing and are So working actively launch operationally teams both

fact XXXX. will impact, be we're the it of have although, still half right now, opportunity in impact given year the you. But that sort of of the that go, the we're the in some launch expect will all We course, XXXX. of able size The will we in not to systems for majority back

Lisa Gill

Thank Okay. you.

Jason Gorevic

Thanks, Lisa.

Operator

question Wells line next Jamie Our from Stockton Fargo. the of comes from

Your line is open.

Jamie Stockton

strength be Good Is would us give there order? evening. I common my most just guess, there. give first second us of sense Thanks it are the second for taking one, to color about on If thing products that and questions. opinion? behavioral? you great. that follow some some maybe that attaching the Is could up you the comments multiple the your Can people

Jason Gorevic

Yeah. with set sort offering number as of or and second expert medical Right the But of opinion two. or we're combinations. we're growing with now, the general general of health medical seeing health combined behavioral medical expert services opinion rapidly most the seeing as behavioral expert

So, integrated are health up significantly. speak. a RFPs to offering, full so Behavioral

behavioral In increase the XXX% the health RFPs through fact, seen year. a in half we've year-over-year of first

the So, I adoption the also it's not about our of remarks in think my visit the the behavioral the prepared health the tenor is market. commentary but growth of only the about growth in Institute volume, in about and conversation is the for the areas topics at the of We We're employers. behavioral of biggest focus were and same plans. health of thing one also health hearing from just AHIP

Jamie Stockton

with board, David background. That's great. on he's And Okay. international somewhat an got obviously maybe coming then of

dropped any would be be talk times about Can will Just there in disproportionately global great. you his multiple commentary. color focus You've your international?

Jason Gorevic

say proportionally I wouldn't international. say appropriately disproportionately I would Yeah. international.

someone who find we a certainly, had plus search, international through going as the were was experience. to significant So, it

care U.S. experience. has it's As someone find rare global in you arena in who Jamie, health the to the know,

him And have and candidate. both here great so abroad. and experience, think the operationally in made technically And we both commercially and internationally, a an impact domestically David's both he'll U.S.

Jamie Stockton

Okay. Thank you.

Jason Gorevic

Jamie. Thanks,

Operator

from comes question next line Citi. Damko Stephanie from the Our of

open. Your line is

Stephanie Damko

you so buy Hey, before, for about guys talk about talked the on I versus strong channel the taking behavioral had growth health to and just demographics. question. my expand want you guys. and to thoughts Thank your that bit as little further build a the

Jason Gorevic

Yeah. user both direct-to-consumer well and And been better both, visit are arena as population Both well strong business. incredibly rapidly. growing volume the really health see we as BXB visits the Thanks in per health our Behavioral Stephanie. as has growing growing. as

On the tenure to that we're really We've cost, and the talked member in go on member continue all levers duration the of three good acquisition the or behavioral health three retention. metrics we always right or side, about that increasing fact feel about business: major tenure those and value. lifetime direction. And customer

to With respect very and general medical our significantly BXB And our would say growth visit greater as really be multiple encouraging. to seeing know, volume. offering, for visits population pattern like are. outpaced among visits tends employers, episodic to opposed in visit that That's adoption as I we're you the

we point. With go would to strategic there. respect find to offering asset, partner we were build a as strong feature-oriented have versus a out the going capabilities or If to after this it set opposed to like feel we very there a target and buy, of I be good have demographic probably at demographic, think sort after a of a we new because go

Stephanie Damko

a we the a of see broader So, Z from maybe a BetterHelp product to little Gen bit asset could evolving offering? more

Jason Gorevic

expand who seeing the engages with consistently. population pretty I we're BetterHelp mean Yeah.

expanded what look or acquisition. a as was from if BetterHelp new to So, demographics at it team channels of you two continued seek the year three it ago has or customer the for the has distribution

Stephanie Damko

health. it That's for

BetterHelp on quarter? could an one, housekeeping kind update of us trajectory quick give you one Just growth the for the

Jason Gorevic

of was and do at out that break to are to we we generally more we've beginning XX% said don't -- very grow business we target expect year, health BetterHelp itself. we by the much historically than the What year, behavioral our our or by So, said that. this on

Stephanie Damko

members. you All main to thank and Well, welcome much, right. the team so

Mala Murthy

you. Thank

Operator

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

Your line is open.

Sean Wieland

impactful wanted was out Hi. membership Thanks. business, the just wanted stronger. but if to but it's bit like know -- I hugely not there. just quite visit-fee-only the looks the total On see were And your to a visits it you revenue, a bit call can lighter, anything

Jason Gorevic

with some natural membership, membership she subscription populations that of Yes. cetera. and et I'll impact hiring those Mala add segment, see it. because in so there's can the we has In expansion and if Obviously, I anything have there on size and missed, no doesn't color. contraction the populations are with associated any our big start, revenue, with fee

I Sean, good a and point is decreased pretty visits increased population which out significantly. has volume membership has or think you thing

where rollout our think our consultant the we increasing engagement where is more Aetna clients sciences a population to that And to that we're like like I with act speak. so fully we attributed utilization insured to we're volume along general like Those with growth behavioral rollout the there. that offer, expansion medical. in meaning and we also services gone population, with the have visit FEP hand-in-hand of dermatology seeing health of significant in

So said that of we're we positive. as sensitive to is less little And a we the think all population. very

know… I Mala, don't

Mala Murthy

Yeah.

our I some And prepared captured pleased -- is as saw you The our It's that it, are individual members momentum with than would there's more really overall. in part small nothing that. visit on volume think of we in base the highlights. you've say natural a I remarks. the attrition the overall

Sean Wieland

mentioned you. business. around specifically business put maybe you behavioral? in Thank And that member then behavioral right. then you around And retention the in metrics. member improved in general any any All the commentary Can numbers broader retention across

Jason Gorevic

found things the No. I improvement and been some I'm the business. what BetterHelp quantify full seen. order and successful to not member member components have to consistently features was that test in mean expanded we've control retention. about drive populations figure those we speaking experience and better going population. out But very And we the really to do member have I that

saw metric our seeing guess, last say same the we're what I really year. Sean broader I isn't is, of retention maybe population. for Member what visit to we kind consistent would patterns

users are general in we XX/XX registrants; almost the That's of of and about medical it's in the returning repeat what new So second quarter about saw visits the users. terms versus were XX% visits coming we last in and year. from where to XX/XX XX% users from quarter existing new for first identical

I substantial good flywheel we're of but there number new both from adoption users. sort that and is existing of creates that also that that on the in builds utilization bringing members, think our seeing itself. news we're repeat a And

Sean Wieland

you very Thank much.

Jason Gorevic

Thanks Sean.

Operator

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

Your open. is line

Ryan Daniels

Hey taking guys, question. one you. for Jason for thanks the

multiproduct You talked about volume the of bookings.

the I with in perhaps what's the about bit I'm Xx larger contract's size hoping to think average up I employer on sales year-over-year. general, get uptick size. But clarity contract contracts little that the what in based the a more who on know And or clearly amount means from vary average group. and a will multiproduct for contracts? just of the the that

Jason Gorevic

good a it's Ryan So, question.

is if getting up we're going selling you're at, what it right? average drive into that PMPM think population? multiple to I products that our Is

Ryan Daniels

Yeah. That's at a it. look fair way to

Jason Gorevic

Yeah.

combination it depends product is magnitude is answer the depends. but what will, right. on it the the But So is, it

overall So deal and is at up as bookings. our we as look pipeline of average and size are itself in work

Services average the PMPM dependent, health for Medical Expert combination deal you're to which behavioral being we being Average about has on than up right? of in up is as year. PMPM line So, last example. is incremental really talking smaller see versus up. it product a magnitude size So And

Ryan Daniels

Okay.

but like that some comments, out about that contents prepared then your bit forward? or my update any you or it on of Okay. solution going That's in talked to a just of alluded curious color. what mean, Virtual Thanks. helpful little follow-up, looks specific First. for demand and And just how rolling that's kind I as

Jason Gorevic

Thanks, rollouts. plan implementations take Center a virtual designs, sessions to the We're virtual-centric employers Yeah. how what Virtual model. plan And and care what level like, around looks plans primary they how exciting. starting clicks, strategy Ryan. plans our Excellence who with having discussions like, the a real are out whiteboard trying country First what looks big incorporate of Virtual across is of looks high in a are design bricks like, figure strategy First solidify advantage they into and to capabilities and a very virtual

about good to to So it. XXXX. for we feel going like what going look size that's not I'm

But will it over do I years. meaningful think be will some think be XXXX concepts over of several next I plan a year. that the proofs there the ramp

Ryan Daniels

Okay. Thanks again.

Operator

comes Canaccord question next Genuity. of Close from Our line the Richard from

Your open. line is

Richard Close

Jason, Doctors little It's Thanks bit Congratulations Mala. Best the for if in Great. you below were, talk questions. or rates obviously, was growth about been Advance Medical. those in year Both Medical core a wondering I a about growth and growth. the Advance welcome could now. the

about have you talk second this been having to in rate, can it about But sounds You talked high like a multiproduct. attachment those the you directionally, both opinion able businesses? in accelerate growth

Jason Gorevic

it Best and our process. operations go-to-market Yeah. fully business the for don't question. and our RFP I Best our When the a selling we strategy, Richard, thanks look about business, think of at even as Doctors Doctors terms anymore. We're integrated in

market, clients. pull telemedicine, I it's those into roll Canadian and which feel opinion business. what on of the -- out as that's the us which an really just good second took example growth our similar because anymore. platform about don't Best to with so expert us with Doctors, then apart Canadian gave We And But the

Doctors' So Best it's into selling that we're it. clients existing were that who -- legacy cross-selling demanding

of on I So selling out set Medical U.K., Europe would business legacy clients. also in, Medical the in say, the full on there but are, synergies parts synergies then business, into And the Doctors capabilities revenue of revenue legacy has look Doctors' Best other at been we've the both Best because that that the you Advance especially if ways business. Advance

pieces. and So we see than rather I would a say capabilities, of qualitatively, it as we're very individual pleased set with the the but growth legacy full portfolio clients across

Richard Close

I see that like about to don't want just bit we to but dive anything if helpful. That's out. work? how how into is Okay. deeper, just just that? With if you economics wondering share to respect think or or rolling that And could a the how going should Health, you was you exactly that Vida little combination I know integration

Jason Gorevic

chronic the is services, that take full talked care chronic strong long can as excited really really Vida We've about of services portfolio of offering continuum our of We're Yeah end-to-end And time of do the market really or for part we that. to remote a after so going care care. a virtual Vida. about care platform

interested go I've and multi-condition that platforms after And times are presents really said interested in point less Vida solutions market. I'm to that the chronic multiple that. care in more single-condition

we so commercial and still and go with stage like early minority it investment strategy right the a was They're to a felt relationship.

year to that the can XXXX. over that fruits go to of to this seamless market and the expect of we we remainder expect year, integration the beginning see And in with so partnership. next do We a the of

Mala Murthy

will point being to consistent another we example consistent We've our out sort this are and example our that. on partnership Vida certain of with great strategy. before it there and a that strategy is are focused said very that I of of buy is areas us being

Richard Close

Okay. Thank you.

Jason Gorevic

Richard. Thanks,

Operator

Our comes from next Matthew line the question from Gillmor Baird. of

Your line open. is

Matthew Gillmor

question. the for thanks Hey,

of respond same integration. competitive the that integrated or Following-up that improve are limit those on expect you've set your number are you'd RFPs, over these with looks to season telehealth mentioned included vendors that with of RFPs the the selling qualified some full Jason big so to point comments. the the vendors Does on win to RFPs? at this there about where offerings that time, enough increase rate

Jason Gorevic

the virtual more us. can and care, along in capabilities. coming win the size with rates, set who offer more deal are select The bigger full size. works only I their broader what deal as of about of answer strategic I the the us And our to sophisticated, they better to with think more several XXX we indicated seeing We're likely think The that is comes Fortune we as yes. companies certainly talked bigger really player It view favor.

plays in So favor. it our definitely

Matthew Gillmor

the then Got into that metric And guide. ties of the sort membership on it. and revenue how

Mala the was was think sort payer pushed sequencing explains I had mentioned there that XQ the of into membership. XQ a from that of

if understand that of seem us there's for issue. kind drove at was sense give So of client maybe And just then a I impact revenue assume a kind that all just of sort something that what to didn't revenue so impact didn't us why it? offset that. it help the the

Jason Gorevic

Yeah.

very did out when don't dates. they frequently once. And for our the are, number the shifting they likely number point you out, So, They as It a it impact impact one, little roll there at membership, we two, usually the didn't bit roll of our all out in more stages. large bigger but out in payers; is launch really roll revenue. these

of In range. end were the high the fact, we at

that really those of strength customer seeing different we're think the the that of I model, revenue channels across and channels. the to our all speaks diversification

didn't we of does -- a to it's situation last beat little this miss and with to one Again, had massive business and saw diversification respect with the hitting solutions not We this numbers. we TRICARE shift a year to a respect our it's the strength the of of of I a shift. really quarter, think speak our broad-based it business. But so our set bit

Mala Murthy

they of contracts in used what start thing talked I'll all Jason X/X have right? sort how in our to, us of to sales. as our that year revenue bit you of the exit -- said add is, into we The And XXXX, should Yeah. not some So we the about through little give wind that's a year. the as will clients' see on-boarding

Matthew Gillmor

Got Thank you. it.

Jason Gorevic

Matt. Thanks

Operator

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

Your line is open.

Donald Hooker

Great.

and lot maybe Kind on anything just TRICARE us around have Aetna items. last just kind been I an maybe the confidence of renewal. pending that? a mean few of maybe or any Obviously questions of asked. some So, that give confidence incremental update a

Jason Gorevic

Yes.

great have strategic having before, the we everybody respect together. and strategic side of And would said in CVS discussions we're the increasingly where So house. relationship both is say, Aetna with side house I the to room with increasingly of the the and I've improving as relationship relationship an Aetna a

rolls executed hands we've And have in partners is is expectation in I that will think no out the that So pilot. I certainly be we when if Aetna buyer. larger. that respect terms TRICARE the terms it's My it's well expectation -- significant to years that I when really change for the it and now there, on will come. of with every but and can't control of business, CVS out With of our expansion to

Donald Hooker

business missed guess that But I the do just direct-to-hospital don't penetrated? area unless Super. here? of going big started Where from sort one, other been that that stabilize it market the touched Has had hospital to grower see the was last And maybe -- out? years. maybe the it Has one prior think provider, on. I I a in you been

Jason Gorevic

No. of a It really channels We the amount the our business. remarks Children's point rollout. much talked -- quarter various into Cincinnati time-limited it didn't and the had so strength in prepared fair some about last make it only because all at with we've we're

growing it's No well. really

see virtual to see lines to the we across We We business care their hospitals embrace opportunity service of strong and continue clinical there. see continuing success excellent there.

I on working bringing portion it's that market. providers career among our think strength David another at and for with large his of think way the a just Cerner, in reinforce his that we I background

Donald Hooker

you. much. Got Thank you very

Operator

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

is line Your open.

Mohan Naidu

question. your members your any interaction roadmap. solution say offering? my with AI-driven Thanks have at product Are potentially investments or that in Jason, maybe for on your platform taking you that Triage enhanced improve could one looking overall for

Jason Gorevic

Yes.

Mohan. virtual We consumer to the year tool and AI-driven Health and our continued or thanks processing enables from assistant the rolled out care virtual from interact assistant a that to expand. essentially That's to natural right get a of Teladoc right service the guided last us. line So that's us line language

need and have so questions are we just in to That's clinical with get rather way. lines, the multiple where directed they have know automatically consumer integrated doesn't answer important to but they offerings selecting, particularly where that some service that

I IBM physician, rather AI We tool Insights would obviously We AI We look continue call see augmented artificial intelligence program. Oncology at to on intelligence. with today Watson work tools. our it the assist as diagnostic than a the to

the physician's and So physician but replacing augmenting capabilities resources, the not diagnostic at point. this

enough Most something of been user-friendly probabilistic But case we that to in are we a we the the we of keep the most across there market attention has certainly feedback legs. to just too sure we enough. see and we ear our that everything about looked of far. come thus not market believe in the not the things that that's and And at out lot think market and definitive make still we've pay

Mohan Naidu

quick that in I guidance, implementations. UnitedHealth the on you expecting Do half? the in membership follow-up in you're -- that color. one have your Maybe membership for lives guess guidance second Thanks the

Mala Murthy

do have in in So United want we revenues of and to not just to clear, include are United, their incredibly and But we and the get our included rollout our and guidance. of respectful of in the terms in for the the overall we be membership communication skis do their the cost membership that have of guidance. didn't our rest ahead financials so Obviously we guidance.

Mohan Naidu

much. so you Thank Okay.

Jason Gorevic

Mohan. Thanks

Operator

Our next of question America. from the Allen line Bank of Lutz from comes

Allen Lutz

taking about health the is with year? the were mentioned then compare How does your question. growth for RFP year-over-year? behavioral And improving Thanks year-over-year. Jason that up RFPs you last win XXX% rate volume

Jason Gorevic

It's front I a the in don't XXXX good certainly I'd data, before. have up the behavioral the volume so that don't of It we health to you question. from relative don't just have with to something just year magnitude. I one. RFP last on it to year-over-year was for circle Certainly XXXX the have I have year me. have back

I improving. the rate And say win is board our across then rate the win would

where improvements for seeing channels and we're could those things As year-over-year. major win fact strong all where areas I And seeing volume and look of one we doing rates. strong across We're you said in of better. RFP our customer maybe both it's be areas strength of

Allen Lutz

you And with can partnership that? the talk is what the offering strategy basically as for about And can is you be Great. should what CVS, the go-to-market with marketing about about, telemedicine the strategy MinuteClinic think for integrated how talk that? you

Jason Gorevic

communications first publicly that yet remarks significant the virtual CVS time there I about service. promotion. we're the when prepared that articles really that is of are them. And branded written has to in the do virtual visits. They it. obviously that. then responsible release don't The my care in did line some they're and marketing, specifically for -- And really structured, the press and time The not promoted And with the to the Yes. for it's they're have pleased they it's have a means deal a around that program they said marketing I and as marketing control see for of labeled -- really direct-to-consumer way were private going the that begun marketing

With I think with going to it's the time. MinuteClinics, to the integration respect evolve over

to our our physicians. our early structure nurse using practitioners contemplates physicians. So, uses relationship The the their on in addition platform

workforce and over a their So, there's uses time. seamless really resources that resources our

specialists MinuteClinics the evolved than when bigger traditional Brennan Troy the bring opportunity into Day our down the rather virtually our comes road think health the can talked this at I about in Investor they maybe and them a order in practitioners supplement hubs. workforce without site that so necessarily ill advantage and in they having on they to chronically the the can that health to those on-site nurse have treat of take staff remote hubs

excited be locations environment the Aetna-insured a what So, that bricks-and-clicks as and about about as we're CVS done really can between bigger in physical population. thinking opportunity well the

Allen Lutz

Great. you. Thank

Jason Gorevic

Thanks Allen.

Operator

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

Your line is open.

Matt Hewitt

I noticed one. some growth been Good a into this on have sets And more both new solution of a driving that with Mala skill and markets about experiences wondering been afternoon. and Thank focused to hit and this will David the but you platform? I more profitability of engaged of little the asked, as I'm maybe and you allow bit on But I'll maybe leverage And for if quarter. maybe geographically. questions. come incremental commentary standpoint board and Thank get they Most you. realize mine some with their overarching taking kind topline you -- you've from expanding find

Jason Gorevic

our opportunity bit of front then first foremost, give me can start little bigger a to a on say commentary and us. let Mala would with we in So still that of the massive I sort is and profitability. path more there picture believe

we're and far We leader. have the virtually by opportunity a market unlimited

we're the to expanding presence of system. And and focus going and the so, virtual care role continue health to in care growth on first

to the of of in Mala, bottom respect consistently very terms continued positive. on to flow said EBITDA more business. that, have progress first making the to our adjusted board are and on you financial line progress a company, to Maybe expense the also And performance financial we little focused made want focusing positive; Having cash is give side with color? and of getting we second the getting

Mala Murthy

Yes.

the we I would what on and are EBITDA. focused delivering to path on and getting So is say strong adjusted listen,

This the last we we cash to positive this that flow And have to expect quarter progress as quarter. was a relative on be nice said, year.

with the were in We are the as about appropriately sure efficiency making we as levers, margins growth pretty to think And a portfolio. say the that on I the way right driving to managing globally, and making focused are would growth I revenue investments if well. of the there get that topline it's the

the And say at and on the we will focus we get how demonstrated to record is would I have leverage. can continue thing third operating we

my margins, So that and EBITDA the it's which those the we are balancing the in investments, drive leverage cash get how growth, of revenue all view expense focused we flow can will adjusted at and levers, of on. really the

Matt Hewitt

much. very you, Understood. Thank

Jason Gorevic

Matt. Thanks

Operator

SunTrust. from comes Our Stan the line question from next of Berenshteyn

is line Your open.

Stan Berenshteyn

comment you a one Maybe question announced guess you participated that could Thanks in you with to for here. Amwell. me compares CVS. I RFP that you Rite on how to on with offering Thanks. whether your in if if for similar any partnership squeezing recently They CVS? I had the quick have just and curious, a on comments partnership just was and Aid

Jason Gorevic

Yes.

So InTouch read about with and read about Health Amwell. anything I Aid haven't maybe but Stan, something yesterday a Rite I partnership,

can't speak a... to I So

Stan Berenshteyn

was It InTouch

Jason Gorevic

we've what that that's -- So say My of in kiosk I won't in. location more competed physical competed or a not understanding a strategy. is and

were in so that involved And process. not we

Stan Berenshteyn

Got it. Thank you.

Jason Gorevic

Stan. Thanks

Operator

Steve comes question Fitzgerald. the Halper next of line Cantor Our from from

Your open. line is

Steve Halper

And during plans? your to benefit How wanted you process plans around contribution? commentary their that the The outlook put presumably obviously, all XXXX fare together. opportunity. the some with did for Medicare, just packages what's ask first big I

Jason Gorevic

Thanks Yes. Steve.

been be decisions placed We're that rollout. with when made as work to generally continuing lot sort give We say for of their continue commentary in will to the they'll won't we've work put solders -- plans. is bids. we the made. be be have point, And said will the I that generally been what have XXXX think all we October with the made, we'll them. A to report we but plans by able X in of January

we're meantime, we who existing health and space. the our the after our the in Medicare have both Advantage discussions new to in plan productive space going bids clients clients well as In with as continue

So, I I really online don't Xst, all bang said a also feel never come good it. consistently happens. where million this is going think members That XX that January virtual I've be big about XXXX. to for care

multiyear-phased rollout across So, I the be think a population. it will MA

Steve Halper

Great. Thank you.

Jason Gorevic

Thanks Steve.

Operator

Our next Daniel SVB line of question comes from from Leerink. the Grosslight

Your open. line is

Daniel Grosslight

more just your the typical you are or models taking incorporating curious for as was I question. PMPM you pricing see shared seeing really them plans into thanks Hi, savings more adopting is plus fee? it their telehealth visit

Jason Gorevic

savings point. Yes, I a wouldn't say shared that preponderance this of at we're seeing

environment more that there's care primary environment toward of we or different think a role. playing move Virtual virtual possibility a we're a see I First the that materially where as we

we at We contracts. call in I have incredibly what only well this pay-for-performance point, to those. tend would a perform few But

like those But have I don't we them. actually So, a contracts. of ton

Daniel Grosslight

Got it. Thank you.

Operator

David line comes question from the next from Our of Jefferies. Windley

Your line open. is

David Windley

question virtual. I thinking of just and prior per member visits thanks the question. and might users essentially be turn the was Hi into to but capture about version It my -- paid of taking for a opportunity increase nonusers that

would been more if wondered your drive to PMPM that any how member I the might successful in I versus look metric per restructuring And metrics traditional of provide a some that structure? visit think of the Aetna was compare you can if that structure that. like compensation intended has that

Jason Gorevic

Yes.

well. expectations year or was last at maybe first really year it's which up contract again. And very restructured above year this of the contract. our is has performed It Aetna slightly Our the

say the over second points basis our would utilization quarter I XXX generally up about is rates year. more speaking for last

we -- speaks define utilization really as that so rate. And population over visits

were XXX year. when second annualize so And up our last we basis over points annualized the about results, second quarter you quarter

consistently per results I best improving So, measure to see we And there. that's visits the think way probably user.

points had three the tough just comparable about plan million were in we recall might we new basis up as against members flu also the the quarter XX over season You in only that health we and first in a onboarded were space. up

to in to XXX basis the second quarter. So, nice that expand it's see points

David Windley

so Jason specific sorry that's overall correct? net-net statement I'm an not a statement,

Jason Gorevic

book members. paid That's our that's Yes, correct. whole U.S. of about

David Windley

-- phrase -- the than Yes. going model? And highly that would I maybe to a guess savings expect faster utilization visit-incented mean more I utilization structure a traditional that's rate drive increases shared does you back if right

Jason Gorevic

rates. Aetna their in is generally going What And faster to that I not results grown those utilization say I'm than very contracts. general book -- pay-for-performance strong business. our specific speaking, of have utilization we've rates performed would seen We've our give

can utilization -- greater when have tend certainly we sciences are our So, when incentive we that we better using against we results. engagement to drive drive spend to and

your at to our but than would pay-for-performance yes, single look it answer So, as a is I block rather of question think whole I business client. the

David Windley

Got it. Understand. Thank you.

Operator

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

Your line open. is

Charles Rhyee

that one XQ? cost maybe that about think is for think thanks here just delayed Thanks. that earlier is we've we been pushed about are the that had adjusted squeezing about Yes, is me given fair in -- guidance the Presumably as the the to guess guidance think think onboarding about for mid-year when to revenue about the third on-boarded? sort can we talked that for number client set -- of confirm the as -- we was where here. that quarter was where that the we're some that was year? on And we into out particularly ask I starts to talked right I full range has EBITDA the earlier customers is

Mala Murthy

you So EBITDA in the the you gotten two have quarter ramp half the that if adjusted guidance of and QX QX. would the I have see would how back think and will at have and understand we QX, to is you it year, also it got together and the the to look about at we what for the full I for QX those look is our way, look in at in you and for year. revenue for we

Charles Rhyee

about we off – that pickup quarter OpEx so, COGS the should onboarded the think modeling the in So But costs gross in would is it think out? I that? as in it's in collect best right is more to margin we quarter. that that are of the other you mean, the some as in it we're are lines the fourth rolling the is we really How fourth when way is say, the or we – think having more then more about

Mala Murthy

Yep.

our advertising would is of So we year. lot generally the the I factored would cost as EBITDA our in the rest the and that have and guidance, our for think marketing. on-boarding That's where has on-boarding been we've of about into thought a cost generally

And ramp so of is, have the the back we say would what revenue you think I that in to half.

that more through similar Our that. before. than gross then think the said flows and for we are to get to margin what QX. how guidance expectations QX have about don't into And EBITDA specific I want

Charles Rhyee

interest your not of comments about more as in you talked think is book more visit Jason, of of that is That's model any visit? the currently about total new but like sort the in question earlier And that businesses looking are last kind helpful. just clients much at you, one – included of contracts, is you in versus kind maybe that selling PMPM-plus how for there maybe season half, than or type more the

Jason Gorevic

channel-specific. customer It's

end visits see included, employers. go to smaller visits large international want our visits included. we don't see do the In the nor included. So market, plans of markets at really very we Health

DTC then basis, and – its So mostly included. a visits on

in much much those channel-specific. characteristics change so channels. different very it's So of And we're seeing not customer the

Charles Rhyee

Thank you. Great. Okay.

Jason Gorevic

Thanks, Charles.

Operator

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

Your line is open.

Jailendra Singh

Quick United everyone. Hello, on lot. a Thanks contract. clarification

run that more contract guidance that for included half. it or say expect in the it the is did is continues through ramp Do is you from in contract of second your annual XXXX? a You revenue half, rate that which second

Jason Gorevic

and So view ramp. But We're as with client, start space especially over I new revenue the as we that time. that a expect – launch year. any going in utilization health to grow plan and would to this

that And would so I to ramp. expect

call a full fourth annualized expectation. quarter wouldn't So I rate run our

Jailendra Singh

better about you been up-selling from see Help seen expectations that negative And Investor quarters? of also a these last Clearly, – in or they want services. $X.XX Okay. talked from positive to new pricing you your then any cross-selling has change your your you're to it you new on At benefit I on have mentioned your signing expectations. also long-term us pricing. impact Day, members, on $X.XX expansion up understand year understand few pricing, been but based then has clients last there target and what pricing long-term your this

Jason Gorevic

No. in our of example outlook $X.XX. health No, membership, $X.XX you total if we quarter the population a of you bit did good dampening I onboard large you'll paid think and in see quarter to step-up plan we where our the quarter, in a a some significantly dampening step-up think where populations. would exactly that numbers you real second then members but of that when members you And see the also first large But sequentially sequential our gave I see where same to the of then continue trend. of subtract we XXX,XXX little saw change in is added that U.S. first

which very absent come-in and clients they expect trajectory. see you mix should large in we So, that changes, significant love similar to if

Jailendra Singh

And around that from in second on Medical on numbers Advance impact. XXXX for organic your impact is – Medical there we one I expect your will trends how for Because thing that discussion be Okay. growth Advance depending half. half organic was just last doing? in should second mean, follow-up, expectations growth any of

Mala Murthy

we on is Medical. talked what still an are from to and us we have Jailendra, would XX% progress say overall about with would the the to think of really before. growth you momentum Advance I pleased XX% I perspective that in And say Yeah. organic the

So, no, outlook. change to that

Jailendra Singh

a Thanks Okay. lot.

Operator

no will over this call time. Gorevic are any there for the back closing turn to further And Jason I questions remarks. at

Jason Gorevic

into second in tuning the really for performance excited great we're the and everybody and looking and forward. team new about questions. the the excited David to members much And future the the so quarter about call more Welcome Thanks Mala. even

the So with call. end that I think we'll

Operator

And this concludes today's conference call.

disconnect. may now You

Teladoc Health (TDOC) 31 Jul 192019 Q2 Earnings call transcript