Editor's Note: This story has been updated with a statement from Jason Gorevic and comments from a Wall Street analyst
In a major corporate shift, Jason Gorevic has stepped down as CEO of virtual care giant Teladoc after leading the company for 15 years.
The company's chief financial officer, Mala Murthy has been tapped to serve as acting CEO while the board of directors searches for Gorevic's permanent successor, according to an announcement this morning.
Murthy has served as CFO since 2019.
The board has retained an executive search firm, which will evaluate internal and external candidates to identify a new CEO, according to the press release.
“We thank Jason for his many achievements and contributions during the 15 years he led Teladoc Health. We wish him success in his future endeavors,” said David B. Snow, Jr., Chairman of the Teladoc Health Board of Directors in a statement. “We also thank Mala Murthy, a highly capable executive, for assuming the role of chief executive as we seek a permanent replacement."
In a letter to employees, shared with Fierce Healthcare, Murthy said Gorevic not only led Teladoc but also "led the development of the market in which we operate today."
In a statement provided to Fierce Healthcare, Gorevic said, “It’s been a tremendous honor to lead Teladoc Health over these past 15 years. I am proud of the impact we’ve made on the healthcare system, and our many accomplishments in advancing innovation and transforming virtual healthcare from an unrealized promise into a valued reality for our 90 million members. My deepest gratitude goes to Teladoc Health’s outstanding employees, clients, investors, and partners for helping to build an amazing company.”
The telehealth giant, which has been in operation for 20 years, has struggled in the stock market and is facing headwinds as the virtual care market has become crowded with digital health players. Shares of Teladoc dropped 22% in February as the company missed fourth-quarter revenue estimates and offered a downbeat forecast for the rest of the year.
Telaodoc's 2023 revenue grew 8% to $2.6 billion from $2.4 billion a year ago. The company's integrated care segment brought in revenue of $1.5 billion, up 7% from a year ago, and BetterHelp, its direct-to-consumer behavioral health offering, saw revenue jump 11% to reach $1.1 billion in 2023.
Gorevic guided the company through its initial public offering back in 2015. That year, Teladoc reported $77 million in revenue.
Teladoc now touts 90 million users.
The company has been focused on boosting its bottom line. It reported a net loss of $220 million for the year, following 2022's historic loss of $13.7 billion, mostly from a write-off related to the plummeting value of its Livongo acquisition. In 2020, Teladoc shelled out $18.5 billion for the digital chronic condition management company, a record in digital health.
Teladoc reported a fourth quarter 2023 adjusted EBITDA increase of 22% to $114 million, and full year 2023 adjusted EBITDA grew 33% to $328 million.
For 2024, the company is projecting low to mid-single-digit revenue growth for its integrated care business and flat to low single-digit revenue growth for the BetterHelp segment.
Back in October, during the company's third-quarter earnings call, Gorevic told investors the company initiated a comprehensive operational review of the business. "This review includes two broad components. First, we have undertaken a portfolio assessment to identify any opportunities to sharpen the focus across our portfolio of products and services and ensure investments remain highly selective and prioritized in the direction of our integrated whole-person care strategy. Second, we are pursuing a comprehensive review of our cost structure," Gorevic said.
On Friday, the company reiterated its guidance for the first quarter and full year of 2024.
For the first quarter of 2024, Teladoc is projecting revenue in the range of $630 million to $645 million. It also expects an earnings per share loss between 55 cents and 45 cents.
For the full year of 2024, Teladoc expects revenue to range between $2.635 billion and $2.735 billion and forecasts EPS loss between $1.10 and 80 cents.
Commenting on the transition, Snow said the board is confident the "leadership transition will position the company for long-term success and value creation.”
In a research note, Bank of America analyst Allen Lutz said Teladoc standing firm on its Q1 and 2024 guidance "is an important positive as Teladoc makes this [leadership] transition."
"We think it is important to note that despite TDOCs share price, Jason Gorevic has led the company to substantial growth both in terms of total members and revenue over the past several years and the company is the clear industry leader in core telemedicine and direct to consumer behavioral health by wide margins. TDOC operates in a competitive environment, competing against well-capitalized health plans and the next CEO’s most important challenge will be navigating that ongoing threat," Lutz wrote.
In her letter to employees, Murthy wrote, "Teladoc Health is in a strong financial position, as evidenced by today’s additional announcement that we have reiterated our guidance for the first quarter and the full year. With unmatched talent, outstanding clients, and more than one billion dollars in cash on our balance sheet, Teladoc Health is well positioned for even greater long-term success and value creation."