Telehealth company Amwell saw continued strong demand for telehealth visits in the first quarter of 2021, more than a year after the virtual care boom propelled by the COVID-19 pandemic.
Amwell performed 1.6 million virtual care visits on its platform in the first quarter, up 120% compared to 725,000 telehealth visits during the same period a year ago, company executives reported during Amwell's first-quarter 2021 earnings call Wednesday.
The company posted $58 million in revenue for the first quarter, up 7% from the $54 million in the same quarter in 2020.
Scheduled visits now make up almost three-quarters of overall telehealth visits, reflecting that virtual care adoption is shifting from urgent care and primary care to specialty care services, Amwell Chief Financial Officer Keith Anderson said during the call late Wednesday.
But the company's growth has slowed compared to the fourth quarter of 2020, boosting investor concerns about a potential deceleration in telehealth usage. In the fourth quarter, Amwell reported 1.6 million telehealth visits, up a massive 350% from 355,000 visits in the fourth quarter of 2019.
Amwell saw its revenue grow 34% in the fourth quarter to reach $60 million, compared to $45 million a year prior.
The telehealth company's losses also widened during the first quarter. Amwell reported a net loss of $40 million, compared to $25 million during the first quarter in 2020.
Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) came to a loss of $26 million during the quarter, versus an adjusted EBITDA loss of $18 million in the prior-year period. Amwell saw higher expenses due to an increased R&D investment in its new Converge technology platform, Anderson said.
Amwell reported earnings per share of a loss of 16 cents. The company's first-quarter earnings beat Wall Street estimates by 3 cents but revenue missed. The consensus estimate from analysts was revenue to come in at $59 million for the quarter.
Amwell reported gross margin of 38% compared to 39% in the prior-year period.
The company hit a significant milestone in the first quarter with total visits surpassing 10 million since the company's inception in 2006, with 5.9 million of that visit volume occurring in 2020, Anderson said.
Amwell co-CEO Ido Schoenberg, M.D., said the market is evolving from telehealth as a service to telehealth as an enabling platform. He also brushed off increasing competition in the telehealth market as Amazon expands its virtual care service and Cigna's Evernorth acquires MDLive.
"In order to create an enabling platform that is fully embedded with lots of other platforms that is covering the full healthcare continuum, it takes a decade and a half, it takes over a billion dollars of institutional investment to create something that enables that. And we are quite sure that as we implement the platform, the subscription fees from the contribution of the platform are going to be far more significant to our top line and bottom line than any other source of revenue," he said.
Amwell's total active providers grew to around 81,000 during the quarter, up 240% compared to 24,000 a year ago. The company had 72,000 total active providers in the fourth quarter of 2020.
The company's revenue continues to shift as subscription revenue made up 43% of overall revenue, compared to 40% a year ago. Subscription revenue came in at $25 million, up 13% compared to $22 million a year ago, and visit revenue was $28 million, up 5% compared to $27 million in the first quarter of 2020.
Scheduled telehealth visits are now outpacing on-demand visits, reflecting growing demand to enable telehealth across the care continuum to include more specialty care visits, Schoenberg said.
"Q1 demonstrates a foundational level of utilization of digital health performed on our platform," Anderson said. "Coming out of the pandemic, conversations with current and prospective customers have been much more thoughtful, as they are now viewing virtual care as a significant and permanent component of their overall care delivery plan. Customers are coming to the table with more crystallized views on the role they want the Amwell platform to play."
Health systems and health plans have expanded their views of telemedicine with a focus on full longitudinal care strategies that require an interoperable platform with virtual care delivery at its core, he said.
In the first quarter of 2021, 80% of all visits performed on Amwell's platform were conducted by health systems' own providers, compared to 50% in the first quarter in 2020 and 75% last year, according to executives.
Amwell Medical Group (AMG) visits totaled 340,000, making up 20% of total visits, compared to 50% of total visit a year ago.
AMG volume continues to shift to higher acuity specialty visits, and the company has seen its average price per telehealth visit increase to the low $80 range, ahead of its expectations, Anderson said.
"The expectation of the full-year average price per visit to be in the low $80 range, up from $73 last year. The acceleration to this $80 range out of the gate in the first quarter was driven by the significant increase in behavioral health visits," he said.
In late April, Amwell unveiled an updated telehealth platform with an open architecture to support other digital health applications like remote monitoring. The platform, called Converge, enables all of the company's products, programs, modules and devices, as well as applications from third parties, to be available in one place with a single code base, the company said.
The first wave of upgrades will focus on hospital systems and then move to health plans, with initial deployment being executed this month, Schoenberg said.
Amwell expects its new Converge technology platform will increase client retention, attraction, addressable market and upsell opportunities as well as improve the company's margins and reduce cost of implementation.