Despite the poor financial performance of BetterHelp, whose revenue fell by 11% in Q1, Teladoc has grown its investment in virtual mental healthcare by acquiring UpLift in a $30 million all-cash transaction.
The deal closed on April 30, the same day as Teladoc’s first quarter 2025 earnings call. The company fared worse than Wall Street expected in Q1, posting a net loss of $93 million, or $0.53 lost per share. Wall Street analysts expected the company share price to decrease by $0.33.
A significant upside to the acquisition is the new-found ability for BetterHelp customers to use insurance coverage for mental health services, a barrier that has kept some customers from signing up with the cash-pay mental health provider. UpLift will be included in the company’s BetterHelp reporting segment going forward, executives said.
UpLift provides virtual mental health therapy, psychiatry and medication management services. It serves the health plan market and covers 100 million lives. It has a network of over 1,500 mental health providers.
UpLift’s revenue last year was $15 million. The $30 million deal has an additional $15 million in additional contingent earnout consideration.
UpLift contracts with all major commercial insurers, including Medicare and Medicaid, according to a press release from Teladoc. The acquisition also further cements Teladoc’s investment in the virtual mental health market, despite the company’s struggle with its BetterHelp direct-to-consumer segment.
Teladoc’s first quarter 2025 revenue was $629.4 million, a decrease of 3% from the first quarter last year according to the company's earnings report released on Wednesday. Integrated Care segment revenue grew 3% year-over-year to reach $389.5 million in Q1. BetterHelp’s revenue fell 11% from last year, bringing in just $239.5 million. The revenue was also down from the last quarter of 2024, when its revenue decreased 10% year-over-year to $250 million.
Teladoc had a pre-tax goodwill impairment charge of $59.1 million in the first quarter of 2025, or $03.34 per share. It did not include the charge in its 2025 outlook.
Teladoc’s 2024 fourth-quarter revenue was $640.5 million, down 3% year over year. In the fourth quarter, Teladoc's integrated care business brought in revenue of $391 million, up 2%.
A significant part of the company’s $1 billion loss in 2024 was due to its $790 million non-cash goodwill impairment charge, incurred by BetterHelp.
In its full-year 2024 earnings call in February, Teladoc Health CEO Chuck Divita stressed the continued interest in virtual mental healthcare post-pandemic.
Teladoc executives expect the acquisition of UpLift to bring in more customers and increase member duration by 30%.
“First, we believe that access to benefits coverage will lead to significantly higher conversion rates relative to BetterHelp's cash pay business, driven by greater affordability as prospective users would incur relatively low or potentially no out of pocket costs to access mental health care based on their particular benefits,” Mala Murthy, Chief Financial Officer of Teladoc told investors Wednesday. “Next, we expect increased member duration relative to the current BetterHelp model, as many cash pay users that pause subscriptions cite cost as the primary factor. For covered benefits, we initially assumed that sessions per user will be 30% above that of cash pay, which is conservatively below Uplift’s historical utilization rates.”
“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 during Teladoc's Q4 earnings call in February, referring to the promise of its business-to-business mental health solution and its BetterHelp business.
In the last several investor calls, Divita has said the company is considering accepting insurance for BetterHelp’s virtual therapy services, a potential move that seemed to please investors to help boost the business.
During the J.P. Morgan HealthCare Conference in January, Divita noted that Teladoc has a scaled mental health offering within its Integrated Care segment, its virtual care business aimed at health plans, employers and health systems. Teladoc conducts 1 million virtual visits a year related to mental health inside its Integrated Care business, he noted.
"Given the secular trends around mental health, our scaled position in integrated care and mental health and we have the largest, by far, direct-to-consumer mental health business, there's an opportunity for us to continue to progress forward. That's why we think that's the right place for us to be at this point in time with BetterHelp as we're able to pursue those priorities from a position of strength," Divita said during JPM.
President of BetterHelp, Fernando Madeira said in a statement that UpLift will help further the BetterHelp mission of making therapy more accessible and drive topline revenue.
BetterHelp therapists “will have an opportunity to be considered for inclusion in the benefits coverage network, based on the respective requirements, needs and interests," Teladoc said in the press release.
Kyle Talcott, founder and CEO of UpLift, will continue to lead UpLift, its network of providers and its acceptance of insurance, under the ownership of Teladoc.
Teladoc acquired Catapult Health in early February for $65 million to expand its chronic condition management programs with Catapult’s at-home diagnostic testing to detect high blood pressure and diabetes.
Divita jumped on board at Teladoc Health last June from GuideWell following the abrupt departure of longtime CEO Jason Gorevic in April. The company is focused on boosting its top- and bottom-line performances as its shares have come under pressure.
Teladoc, which has been in business for 20 years, faces pressure in a saturated telehealth market.
"In our view, Teladoc remains in the midst of a transitional phase—navigating slower growth and a difficult payer end-market with an increased emphasis on profitability and capital deployment into new growth assets," William Blair analyst Ryan Daniels wrote in a research note.
"Looking forward, we anticipate a sharper operating focus, particularly within BetterHelp, which could help stabilize the stock and unlock value through strategic actions such as restructuring, asset sales, or innovative growth initiatives (e.g., more focus on international markets or moving BetterHelp toward a B2B model via organic initiatives and investments like Uplift Health)," Daniels wrote.
Teladoc maintained its 2025 revenue outlook between $2.5 billion and $2.576 billion, but lowered its guidance for adjusted EBITDA, expected to range between $263 million to $304 million. The company also reduced its free cash flow expectations to a range between $170 million and $200 million, from a range of $190 million to $220 million previously.