UPDATED, Feb. 26, 6:55 p.m.
During its fourth-quarter 2024 earnings call with investors, which also revealed full-year 2024 financial results for the business, Teladoc Health executives emphasized the company’s “strong finish” to the year despite posting a $1 billion loss for its full fiscal year in 2024.
Executives touted customer interest in its newer weight management solution, the addition of 4 million members in the U.S. to Teladoc programs and the 6% growth in underlying visit volumes during the year.
Teladoc is still seeking to stabilize its direct-to-consumer mental health business, BetterHelp, which contributed in large part to the company’s hefty losses in 2024 due to a $790 million goodwill impairment charge that hit the company in the second quarter.
Looking forward, Teladoc is leaning on its chronic care management virtual programs and its growth in international markets to help the company hit its 2025 guidance.
Teladoc is looking to new partnerships like its acquisition of Catapult and its contract with TRICARE. Company executives also cautioned about the impact of market headwinds including foreign exchange, inflation and the regulatory landscape. Executives divulged the company lost a customer at the beginning of the month, which could impact financial performance.
“We operate in a complex and dynamic healthcare market which continues to be impacted by macro factors such as medical cost inflation, disease prevalence, mental health challenges, pressures on healthcare providers and regulatory matters, amongst others. We believe virtually enabled care can play an important and constructive role in supporting the needs of our customers in this regard,” Chuck Divita, CEO of Teladoc Health, said in his prepared statement on the call.
Part of its success in chronic condition management will come from its acquisition of Catapult, which it plans to close in February. Teladoc Chief Financial Officer Mala Murthy emphasized that Catapult’s busiest selling season is the fourth quarter and that Teladoc Health’s revenue will favor the third and fourth quarters. Earlier this month, the telehealth giant signed a definitive agreement to acquire the virtual preventive care company to bolster the early detection of health conditions and expand into at-home diagnostic testing.
Divita identified that half of Catapult’s existing customers have chronic diseases, many struggle with mental health conditions and one-third do not have a primary care doctor. He said Teladoc will “seamlessly enroll” Catapult patients into Teladoc programs and vice versa.
“Mental health has actually been one of the most widely adopted in the virtual care setting post the pandemic, and continues to have a lot of secular trends around that, and we see that continuing," Divita said, referring to the promise of its business-to-business mental health solution and its BetterHelp business.
Some of the biggest growth areas for Teladoc in 2025 are in the international market, the expected benefit to the U.S. business of acquiring Catapult, increasing visit revenue growth with its new TRICARE contract and the accelerating enrollment in chronic care programs throughout the year, executives said.
To stabilize BetterHelp, Murthy said the company needs to monitor customer acquisition costs and continue to improve the platform and customer experience. It will continue to focus on international growth, including by expanding localized BetterHelp offerings in Europe. Executives said they’ve seen net benefits from the weekly pricing strategy for BetterHelp the company rolled out in 2024.
Teladoc plans to continue to experiment with pricing models in 2025.
Divita stressed that Teladoc grew its business with health plans in 2024. He also noted the strong forces working against the health plan market currently, like the expiring Affordable Care Act subsidies and congressional threats to Medicaid as well as inflation.
Teladoc's CEO also teased a new feature he said “provides the ability for external ecosystem partners to efficiently integrate with us to support longitudinal care needs and other strategies of our customers.”
Teladoc Health shares fell nearly 15% in after-hours trading Wednesday after the company reported a fourth-quarter loss of $48 million, bigger than analysts expected, and a weak outlook for first-quarter 2025 revenue.
The telehealth giant reported a $1 billion loss for its full fiscal year in 2024, dragged down by the declining value of its BetterHelp direct-to-consumer mental health business. The company was hit with a $790 million impairment charge in the second quarter, which contributed the bulk of its losses in 2024.
Shares of Teladoc fell 61.4% in 2024, BarChart reported. Shares were down 7% in after-hours trading Wednesday.
The company reported a total of $2.6 million in revenue in 2024, down 1% from 2023. Revenue for the Teladoc's integrated care segment, which is comprised of its chronic care management segment, increased 4% to $1.5 billion while the BetterHelp segment saw an 8% revenue decline to to $1 billion for the full year.
Its fourth-quarter revenue was $640.5 million, down 3% year over year, the company said. In the fourth quarter, Teladoc's integrated care business brought in revenue of $391 million, up 2%, while the BetterHelp segment's revenue decreased 10% to $250 million.
Teladoc’s net loss in the fourth quarter totaled $48.4 million, which is nearly double what it lost in the fourth quarter of 2023. Its fourth-quarter 2024 net loss included $5.6 million of restructuring costs including severance and the cost of reducing office space.
Teladoc’s adjusted EBITDA decreased by 35% to $75 million in the fourth quarter from $114 million in the fourth quarter of 2023. The BetterHelp segment's adjusted EBITDA fell by 63% in the fourth quarter.
During the most recent quarter, U.S. revenue declined by 5%, totaling $535 million. International revenue grew 10% to $250 million.
Teladoc reported a net loss of $1 billion in 2024, or a loss of $5.87 per share. A significant portion of the loss was due to a noncash goodwill impairment charge of $790 million attributable to "changes in estimates of future cash flows related to the company’s BetterHelp segment." The company was also in the red in 2023, losing $220 million or a loss of $1.34 per share. It lost $48.4 million ($0.28 per share) in the fourth quarter this year.
Its full-year 2024 adjusted EBITDA was $310.7 million, down 5% year over year. Its full year operating cash flow was $293.7 million, and its full-year operating cash flow was $169.6 million.
Access fees revenue decreased by 3% to $2.2 billion while other revenue grew by 11% to $354 million. International revenue grew by 12%, while U.S. revenue fell by 3%.
Company executives are expected to discuss Teladoc's future strategy and recent acquisition of Catapult Health during a call with investors at 4:30 p.m. today.
“We had a solid finish to the year, both in terms of performance and advancing initiatives important to our future. Consistent with our guidance range, Integrated Care delivered revenue growth and strong margin expansion, and progressed well on key priorities, including the announced agreement to acquire Catapult Health. In BetterHelp, while we were pleased with the sequential improvement in key metrics in the fourth quarter, the operating environment continues to be challenging and we remain focused on actions to stabilize results consistent with our overall virtual mental health strategy,” Divita said in a statement.
“As we look forward in 2025, execution will continue to be a top priority as we advance efforts to unlock growth opportunities and position the company for long term success. We will also remain focused on our cost structure, building on the significant improvements achieved in 2024 over the prior year. I believe we are setting a stronger foundation to drive our business going forward and we have a committed team operating with speed and urgency,” Divita added.
Teladoc is guiding for 2025 revenue between $2.47 billion to $2.58 billion, which represents basically declining or flat growth. The company also expects $278 million to $319 million in adjusted EBITDA for full-year 2025.
The company is projecting net earnings per share of a loss of $1.10 to a loss of 50 cents per share.
2025 guidance also included $190 million to $220 million in free cash flow for the year. Teladoc projects its integrated care program will end the year with 101 million to 103 million U.S. members.