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Teladoc Health (TDOC) Q2 Loss Wider Than Expected, Worsen Y/Y
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Teladoc Health, Inc. (TDOC - Free Report) reported second-quarter 2021 loss of 86 cents per share, wider than the Zacks Consensus Estimate of 59 cents. The bottom line also worsened from the year-ago loss of 34 cents per share. Higher expense associated with Livongo stock awards dragged earnings.
The company’s operating revenues of $503.2 million (came within the management’s expected range of $495-$505 million) surpassed the Zacks Consensus Estimate by 0.3% and also surged 109% year over year.
Teladoc Health, Inc. Price, Consensus and EPS Surprise
The increase in access fee revenues as a percentage of total revenues is primarily owing to the acquisition of Livongo and InTouch Health, both of which generate the majority of their revenues from subscription access fees.
The company generated $59.3 million of visit fee revenues from general and medical visits, which increased 1% year over year.
Adjusted gross margin expanded 580 basis points year over year to 68.1%, primarily attributable to the higher gross margin profile associated with Livongo revenues.
Total visits of 3.51 million (higher than the projection of 3.2-3.4 million) rose 28% year over year, driven by a 32% and 5% increase in visits from the United States and International segments, respectively.
Teladoc ended the quarter with U.S. paid membership of 52 million, up 1% year over year and U.S. visit fee only access membership of 22 million (up 1%).
Total expenses rose to $582.1 million, up 134.5%, primarily due to general and administrative expenses, technology and development, cost of revenues, advertising and marketing, sales, acquisition and integration.
Adjusted EBITDA was $66.8 million, soaring 2.5 times higher than $26.3 million in the year-ago quarter. The metric surpassed management’s estimated range of $61-$64 million.
Strong Financial Update (as of Jun 30, 2021)
The company had $783.7 million as cash and cash equivalents, up 6.9% year over year.
Total debt was $1.20 million, down 13% from the December 2020-end level.
Higher Cash Generated by Business
During the first six months, net cash provided by operating activities of $34.2 million compared with cash generated of $29.2 million in the first six months of 2020.
Revised Third-Quarter Guidance
The company expects third-quarter revenues between $510 million and $520 million, net loss between 78 cents and 68 cents a share and adjusted EBITDA in the range of $60-$65 million.
Total visits are expected in the range of 3.4-3.6 million while total U.S. paid membership is envisioned in the band of 52-53 million members. Visit-fee-only access is estimated to be approximately 22 million individuals.
Net loss per share, based on 159.8 million weighted average shares outstanding, is anticipated between 78 cents and 68 cents.
Updated 2021 Outlook
The company raised its guidance for revenues and visits for the second time this year. The telehealth provider anticipates total revenues of $2-$2.025 billion (up from the previous estimate of $1.97-$2.02 billion). Total adjusted EBITDA is estimated to be $255-$275 million.
The company projects total visits between 13.5 million and 14 million (compared with the 12.5-13.5 million range anticipated earlier). Total U.S. paid membership is expected in the range of 52-54 million members and visit fee only access is projected to be approximately 22 million individuals.
Net loss per share, based on 157.4 million weighted average shares outstanding, is predicted between $3.60 and $3.35.
A Lacklustre 2021 So Far
The year 2021 has not been too kind to Teladoc so far as some of the takers of its products and services already started visiting doctors’ clinics, courtesy of easing restrictions on movement. The same is pretty evident in membership and visit growth guidance, which is lower than last year’s. At the same time, the company is yet to turn profitable and there is still no sign of recovery for its bottom line in the near future.
Competition is also heating up with players like Cigna Corp. (CI - Free Report) , Amazon.com Inc. (AMZN - Free Report) and American Well Corporation (AMWL - Free Report) expanding their presence in the space.
It’s no surprise then that the stock has lost 24% of its value year to date against its 139% gain in 2020.
Therefore, it’s better to dodge the stock as of now. It carries a Zacks Rank #5 (Sell) at present.
Image: Shutterstock
Teladoc Health (TDOC) Q2 Loss Wider Than Expected, Worsen Y/Y
Teladoc Health, Inc. (TDOC - Free Report) reported second-quarter 2021 loss of 86 cents per share, wider than the Zacks Consensus Estimate of 59 cents. The bottom line also worsened from the year-ago loss of 34 cents per share. Higher expense associated with Livongo stock awards dragged earnings.
The company’s operating revenues of $503.2 million (came within the management’s expected range of $495-$505 million) surpassed the Zacks Consensus Estimate by 0.3% and also surged 109% year over year.
Teladoc Health, Inc. Price, Consensus and EPS Surprise
Teladoc Health, Inc. price-consensus-eps-surprise-chart | Teladoc Health, Inc. Quote
The increase in access fee revenues as a percentage of total revenues is primarily owing to the acquisition of Livongo and InTouch Health, both of which generate the majority of their revenues from subscription access fees.
The company generated $59.3 million of visit fee revenues from general and medical visits, which increased 1% year over year.
Adjusted gross margin expanded 580 basis points year over year to 68.1%, primarily attributable to the higher gross margin profile associated with Livongo revenues.
Total visits of 3.51 million (higher than the projection of 3.2-3.4 million) rose 28% year over year, driven by a 32% and 5% increase in visits from the United States and International segments, respectively.
Teladoc ended the quarter with U.S. paid membership of 52 million, up 1% year over year and U.S. visit fee only access membership of 22 million (up 1%).
Total expenses rose to $582.1 million, up 134.5%, primarily due to general and administrative expenses, technology and development, cost of revenues, advertising and marketing, sales, acquisition and integration.
Adjusted EBITDA was $66.8 million, soaring 2.5 times higher than $26.3 million in the year-ago quarter. The metric surpassed management’s estimated range of $61-$64 million.
Strong Financial Update (as of Jun 30, 2021)
The company had $783.7 million as cash and cash equivalents, up 6.9% year over year.
Total debt was $1.20 million, down 13% from the December 2020-end level.
Higher Cash Generated by Business
During the first six months, net cash provided by operating activities of $34.2 million compared with cash generated of $29.2 million in the first six months of 2020.
Revised Third-Quarter Guidance
The company expects third-quarter revenues between $510 million and $520 million, net loss between 78 cents and 68 cents a share and adjusted EBITDA in the range of $60-$65 million.
Total visits are expected in the range of 3.4-3.6 million while total U.S. paid membership is envisioned in the band of 52-53 million members. Visit-fee-only access is estimated to be approximately 22 million individuals.
Net loss per share, based on 159.8 million weighted average shares outstanding, is anticipated between 78 cents and 68 cents.
Updated 2021 Outlook
The company raised its guidance for revenues and visits for the second time this year. The telehealth provider anticipates total revenues of $2-$2.025 billion (up from the previous estimate of $1.97-$2.02 billion). Total adjusted EBITDA is estimated to be $255-$275 million.
The company projects total visits between 13.5 million and 14 million (compared with the 12.5-13.5 million range anticipated earlier). Total U.S. paid membership is expected in the range of 52-54 million members and visit fee only access is projected to be approximately 22 million individuals.
Net loss per share, based on 157.4 million weighted average shares outstanding, is predicted between $3.60 and $3.35.
A Lacklustre 2021 So Far
The year 2021 has not been too kind to Teladoc so far as some of the takers of its products and services already started visiting doctors’ clinics, courtesy of easing restrictions on movement. The same is pretty evident in membership and visit growth guidance, which is lower than last year’s. At the same time, the company is yet to turn profitable and there is still no sign of recovery for its bottom line in the near future.
Competition is also heating up with players like Cigna Corp. (CI - Free Report) , Amazon.com Inc. (AMZN - Free Report) and American Well Corporation (AMWL - Free Report) expanding their presence in the space.
It’s no surprise then that the stock has lost 24% of its value year to date against its 139% gain in 2020.
Therefore, it’s better to dodge the stock as of now. It carries a Zacks Rank #5 (Sell) at present.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.