Teladoc Books Q1 Loss, Nosedives on Bleak Outlook

Global telemedicine and virtual healthcare company Teladoc Health, Inc. (NYSE: TDOC) has reported a net loss in the first quarter of 2022. Also, revenues missed analysts’ expectations.

Shares of the company plunged 36.83% in the extended trading session on Wednesday after closing more than 3% lower in the day. The drop in the price was recorded after the company disclosed a non-cash goodwill impairment charge of $6.6 billion in the quarter and reduced its outlook for 2022.

During his earnings call, the CFO of Teladoc, Mala Murthy, said, “The goodwill impairment was triggered by the sustained decline in Teladoc Health share price, with the valuation and size of the impairment charge driven by a combination of recent market-based factors.” 

Results in Detail 

Teladoc incurred a net loss of $41.58 per share in the first quarter. Results were impacted by a non-cash goodwill impairment charge of $41.11 per share, stock-based compensation expense of $0.38 per share, and amortization of acquired intangibles of $0.31 per share. 

Including certain charges, the company had reported a net loss of $1.31 per share in the same quarter last year, while the Street’s estimated loss stood at $0.56 per share. 

Total revenues generated during the quarter grew 25% year-over-year to $565.4 million but missed the consensus estimate of $568.8 million. 

Segment-wise, Access fees revenue stood at $491.3 million, up 29% year-over-year, while Visit fee revenue rose 12% to $67.9 million. Additionally, U.S. revenues stood at $491.2 million, surging 24%, while International revenues came in at $74.2 million, up 27%. 

Adjusted EBITDA came in at $54.5 million, down 4% from the prior-year quarter, while adjusted gross margin was 66.9%, down 90 basis points year-over-year. 

The average revenue per U.S. paid member stood at $2.52 in the reported quarter, up from $2.09 in the first quarter of 2021. 

CEO’s Comments 

Encouragingly, the CEO of Teladoc Health, Jason Gorevic, said, “During the first quarter, we demonstrated significant progress in a number of strategic initiatives, such as successfully launching multiple clients on our innovative services, including Primary360 and our stepped-care chronic condition programs.” 

Guidance 

Gorevic commented, “While we continue to see sustainable growth across our suite of products and services, we are revising our 2022 outlook to reflect dynamics we are currently experiencing in the direct-to-consumer (D2C) mental health and chronic condition markets.” 

For the second quarter of 2022, the company projects revenue in the range of $580 million to $600 million. Additionally, a net loss in the range of $0.72 to $0.60 per share is expected, while adjusted EBITDA is anticipated between $39 million and $49 million. 

For 2022, the company now expects revenue of $2.4 billion to $2.5 billion. Further, it foresees a net loss per share between $43.50 and $43. Adjusted EBITDA for the year is anticipated in the range of $240 million and $265 million. 

Wall Street’s Take  

The Street is cautiously optimistic about the stock and has a Moderate Buy consensus rating based on 16 Buys and 11 Holds. Teladoc’s average price target of $98 implies 75.03% upside potential from current levels. Shares have fallen almost 69% over the past year. 

Bloggers Weigh In 

Bloggers seem enthused by the company’s earnings results. TipRanks data shows that financial blogger opinions are 84% Bullish on TDOC, compared to a sector average of 72%.

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