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American Well (AMWL) Q2 Earnings Beat, 2H21 Visit View Cut
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American Well Corporation (AMWL - Free Report) reported a loss of 15 cents per share for second-quarter 2021, narrower than the Zacks Consensus Estimate of a loss of 19 cents.
Telehealth service provider total revenues of $60.2 million increased 5%, sequentially, driven mainly by an expansion of its technology subscription business. This upside is a result of extended health plan programs and health system modules.
Total visits of 1.3 million were down from 1.6 million in the first quarter, replicating the progress in shifting the mix of its revenues more toward enabling technology compared with visits. The company expects this shift to continue in 2022 and beyond.
Gross margin gained nearly 600 basis points to 44% of revenues compared with 38% recorded in the March quarter. Efficiency measures implemented on the services side, such as shift to Google Cloud and technology improvement contributed to the margins.
Adjusted EBITDA loss of $23.7 million narrowed from a loss of $26.4 million in the first quarter. Operating efficiency will contribute to EBITDA for the full year, which is now expected to be a negative $146 million compared with a negative $154 million, expected earlier.
Like most companies in their growth phase, American Well too is utilizing cash in its operations. For the first six months of 2021, it used cash worth $67.4 million compared with $57.8 million of cash used in the comparative period last year.
With the recent acquisitions of SilverCloud Health and Conversa Health to its credit, American Well aims to be omnipresent across the patient’s care journey. The SilverCloud bolsters the company’s presence in the behavioral healthcare area while Conversa Health offers automated and personalized digital check-ins with patients. The company expects these assets to grow above 100% next year, adding approximately $30 million to its subscription technology business.
These buyouts will fortify the company’s position in the telehealth market where Teladoc Health, Inc. (TDOC - Free Report) holds the lead. Other companies, such as Cigna Corp. (CI - Free Report) and Amazon.com, Inc. (AMZN - Free Report) are also tapping the alluring opportunities available in the market. It will not be surprising to hear about a further acquisition announcement from the company as it tries to achieve rapid growth in this fast-growing telehealth industry.
However, the recent emergence of the Delta variant induced some uncertainties around the virtual visit outlook in the second half. The company trimmed its forecast to a range of 1.4-1.5 million visits from its original 1.5-1.7 million band. This, in turn, leads to a revised total overall revenue guidance of $252-$262 million. The same was lower than the original guidance range of $260 million to $270 million.
Image: Bigstock
American Well (AMWL) Q2 Earnings Beat, 2H21 Visit View Cut
American Well Corporation (AMWL - Free Report) reported a loss of 15 cents per share for second-quarter 2021, narrower than the Zacks Consensus Estimate of a loss of 19 cents.
Telehealth service provider total revenues of $60.2 million increased 5%, sequentially, driven mainly by an expansion of its technology subscription business. This upside is a result of extended health plan programs and health system modules.
Total visits of 1.3 million were down from 1.6 million in the first quarter, replicating the progress in shifting the mix of its revenues more toward enabling technology compared with visits. The company expects this shift to continue in 2022 and beyond.
Gross margin gained nearly 600 basis points to 44% of revenues compared with 38% recorded in the March quarter. Efficiency measures implemented on the services side, such as shift to Google Cloud and technology improvement contributed to the margins.
Adjusted EBITDA loss of $23.7 million narrowed from a loss of $26.4 million in the first quarter. Operating efficiency will contribute to EBITDA for the full year, which is now expected to be a negative $146 million compared with a negative $154 million, expected earlier.
Like most companies in their growth phase, American Well too is utilizing cash in its operations. For the first six months of 2021, it used cash worth $67.4 million compared with $57.8 million of cash used in the comparative period last year.
With the recent acquisitions of SilverCloud Health and Conversa Health to its credit, American Well aims to be omnipresent across the patient’s care journey. The SilverCloud bolsters the company’s presence in the behavioral healthcare area while Conversa Health offers automated and personalized digital check-ins with patients. The company expects these assets to grow above 100% next year, adding approximately $30 million to its subscription technology business.
These buyouts will fortify the company’s position in the telehealth market where Teladoc Health, Inc. (TDOC - Free Report) holds the lead. Other companies, such as Cigna Corp. (CI - Free Report) and Amazon.com, Inc. (AMZN - Free Report) are also tapping the alluring opportunities available in the market. It will not be surprising to hear about a further acquisition announcement from the company as it tries to achieve rapid growth in this fast-growing telehealth industry.
However, the recent emergence of the Delta variant induced some uncertainties around the virtual visit outlook in the second half. The company trimmed its forecast to a range of 1.4-1.5 million visits from its original 1.5-1.7 million band. This, in turn, leads to a revised total overall revenue guidance of $252-$262 million. The same was lower than the original guidance range of $260 million to $270 million.
American Well carries a Zacks Rank #3 (Hold), currently. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here