Telemedicine company Teladoc saw more than 50% growth in mental health virtual visits in the third quarter of 2019, helping boost its revenue for the quarter by 24% to $138 million.
The company’s total virtual visits grew 45% to 928,000 in the third quarter of 2019 compared to the same period last year, Teladoc CEO Jason Gorevic said during an earnings call after the close of business Wednesday.
Teladoc reported 2.9 million virtual visits so far in 2019, up 64% compared to the first nine months in 2018.
The company reported a net loss of basic and diluted share of $0.28, which beat Wall Street estimates. That compares to a net earnings loss of $0.34 during the third quarter in 2018. Teladoc’s third-quarter revenue also beat Street expectations by $1.5 million.
The company’s stock rose 9% by midday Thursday.
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“I’m very pleased with our results across the full breadth of our business delivering at the high end of our expectations showing progress on several of our strategic initiatives and making strides on our path to profitability,” Gorevic said.
The company expects long-term top-line growth of 20% to 30%, according to Gorevic.
Based on its third-quarter performance, Teladoc raised its revenue and visit guidance for the full year 2019. Revenue for 2019 is expected to be between $546 million to $550 million and adjusted earnings before interest, tax, depreciation and amortization (EBITDA) is projected to be in the range of positive $28 million and $32 million.
The company expects to achieve between 3.9 million and 4.1 million visits in 2019.
The company continues to see accelerated adoption of mental health services, Gorevic said. “On the heels of World Mental Health Day, however, it’s clear to me that we need to do more.”
He cited a study Teladoc conducted that found 61% of 18- to 26-year-olds report that mental health symptoms have affected their job performance.
Teladoc’s holistic portfolio of mental health offerings helps meet this “escalating demand,” Gorevic said.
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“Our portfolio spans services for those with needs ranging from texting or having a video visit with a therapist for conditions such as anxiety and depression to psychiatric treatment and medication management to those needing a full expert review and navigation of the healthcare system to get them back on their feet,” he said.
About 80% of Teladoc’s mental health visits are from repeat users, according to the company.
In the third quarter, Teladoc launched its Teladoc Medical Expert service, a virtual Center for Excellence for complex physical and mental health needs that combines the company’s Advanced Medical and Best Doctors acquisitions, company officials said.
Other performance metrics
The company reported a net loss in the quarter of $20.3 million compared to a loss of $23.3 million a year ago. Adjusted EBITDA increased to a positive $9 million for the quarter, up from $6.3 million from last year’s third quarter.
Teladoc Chief Financial Officer Mala Murthy said the company is on track to deliver positive cash flow for the full year.
The company’s strong revenue growth in the third quarter was driven by global subscription access fees of $119 million, up 23% from a year ago and accounting for 86% of Teladoc’s total revenue in the quarter, she said.
U.S. subscription access fees make up the bulk of that revenue, hitting $92 million in the third quarter, while international subscription revenue came in at $27 million.
Visit fee revenue for the quarter increased to $18.8 million, up 31%, and made up the remaining 14% of global revenue, Murthy said.
Of that visit revenue, U.S. paid membership visits generated $14.1 million in the third quarter, a 25% increase over the third quarter in 2018. Visit-fee-only access revenue grew 72% in the third quarter to $4.3 million.
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U.S. paid membership grew to 35 million members in the third quarter of 2019, up 55% compared to a year ago. Individuals with visit-fee-only access increased to 19 million, representing 100% growth from the year prior.
The third quarter of 2019 marked the greatest population expansion in the company’s history, Gorevic said, with more than 17 million people gaining access to Teladoc’s services. Teladoc signed a partnership with UnitedHealthcare to be the national virtual visit provider for the insurer's 15 million commercial members.
Teladoc's virtual platform is now available to 50 million people, according to Gorevic.
The company also is seeing momentum with Medicare Advantage (MA) plans with six plans under contract.
“I expect that to be a three-year development for that to fully flow through the entire MA population. To be honest, we’re still seeing some of the MA plans who are processing the new rules and figuring out exactly how they’re going to put it into their plans,” Gorevic said.