Dive Brief:
- Teladoc Health is continuing to trim expenses in a bid to boost its bottom line, but the telehealth vendor could still look to make technology investments or pursue mergers and acquisitions, executives said on a Tuesday earnings call.
- The company posted a net loss of $220.4 million for 2023, compared with a loss of $13.7 billion in 2022, a period that included several hefty non-cash goodwill impairment charges. Revenue increased 8% year over year to $2.6 billion in 2023.
- Teladoc generated “strong” free cash flow last year, and expects to continue this year, CFO Mala Murthy said on the earnings call. That could free the virtual care giant to pay down debt or acquire companies, she said.
Dive Insight:
Teladoc missed Wall Street’s forecasts on revenue in the third quarter, and kicked off an operational review aimed at boosting the virtual care company’s bottom line. The vendor also cut jobs in engineering and data science earlier this year, according to a report from Endpoints News.
The company has focused on cutting costs, including with automation, internal process improvements, organizational realignments and cutting spending on third party supplies, CEO Jason Gorevic said on the earnings call. The operational review will net about $43 million in expense savings this year, according to the company’s earnings report.
Teladoc could still make “sizable” investments, including in technology that could help the vendor stand out among its competitors, he added. The company is also considering tuck-in M&A deals, Murthy said.
“It's important that we continue driving greater differentiation through investments in technology, such as machine learning and AI, improving our ability to engage with members on a hyper-personalized basis,” Gorevic said.
Teladoc reported mixed results in the fourth quarter of 2023, missing investor expectations on revenue, but beating Wall Street expectations on earnings per share.
Revenue increased 4% to $660.5 million during the fourth quarter, compared with $637.7 million during the same time in 2022. Net loss was $28.9 million in the fourth quarter, compared with $3.8 billion in the prior-year period.
Teladoc’s integrated care segment, which includes its business-to-business virtual care offerings, increased revenue 8% in the fourth quarter.
But revenue was flat in its direct-to-consumer mental health offering, BetterHelp, as the company saw lower yield on its marketing spend, especially on social media advertising.
The telehealth vendor expects between $2.64 billion and $2.74 billion in revenue for the full-year 2024, and a net loss per share from $1.10 and $0.80.
