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Teladoc Health (TDOC) Q2 Earnings Top Estimates on Lower Expenses
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Teladoc Health, Inc. (TDOC - Free Report) reported second-quarter 2023 adjusted loss of 40 cents per share, narrower than the Zacks Consensus Estimate of a loss of 44 cents. The bottom line improved 9.1% year over year.
Operating revenues improved 10.1% year over year to $652.4 million (within management’s expected range of $635-$660 million). The top line outpaced the consensus mark by 0.5%.
The quarterly results gained from strong growth in access fees and other revenues coupled with improving segmental profitability of Integrated Care. However, rising advertising and marketing, technology and development expenses partially offset the positives.
Teladoc Health, Inc. Price, Consensus and EPS Surprise
Revenues from Access Fees (which comprised 88.2% of total quarterly revenues) amounted to $575.7 million, which increased 11% year over year in the quarter under review. The figure beat our estimate by 1.9%.
TDOC generated $76.7 million of other revenues, which rose 4% year over year. However, the metric missed our estimate by 4.4%.
On a geographical basis, revenues from the United States grew 8% year over year to $561.8 million, which accounted for 86.1% of total revenues. The metric beat our estimate by a whisker. International revenues improved 28% year over year to $90.6 million in the second quarter. The metric beat our estimate by 8.8%.
Adjusted EBITDA of $72.2 million surged 54% year over year. The figure surpassed management’s view of $60-$68 million and beat our estimate by 7.1%.
The adjusted gross margin of Teladoc Health improved 160 basis points year over year to 70.8% in the quarter under review.
Total expenses of $724 million decreased by a huge margin, mainly due to goodwill impairment incurred last year. Sales expenses also declined in the quarter.
Segmental Update
In the quarter under review, TDOC reported revenues of $360 million in its Integrated Care segment. The figure grew 5% year over year. The metric beat our estimate by 0.6%.
BetterHelp segment’s revenues of $292.4 million climbed 18% year over year on the back of new member growth and stable customer acquisition cost in the quarter. The metric beat our estimate by 2%.
Adjusted EBITDA of Integrated Care and BetterHelp amounted to $38 million and $34.2 million, denoting an increase of 29% and 71%, respectively, from their corresponding prior-year quarter’s reported figures. The metric for Integrated Care beat our estimate by 7.3%, while the same for BetterHelp beat the mark by 19.6%.
Visits & Memberships
Total visits were 4.7 million, which remained consistent year over year in the second quarter. The metric missed our estimate by 7.8%.
As of Jun 30, 2023, U.S. Integrated Care Members witnessed an uptick of 7% on a year-over-year basis to 85.9 million (surpassing the expectation of 84.5-85.5 million). The metric beat our estimate by 0.8%.
Financial Update (as of Jun 30, 2023)
Teladoc Health exited the second quarter with cash and cash equivalents of $958.7 million, which increased from $918.2 million at 2022-end. Total assets of $4,316.4 million declined from $4,345.4 at 2022-end.
Debt amounted to $1,537 million, up from $1,535.3 million at 2022-end. Total stockholders’ equity declined 0.5% from 2022-end to $2,295.1 million.
In the quarter under review, net operating cash flow increased 9.4% year over year to $101.2 million. Free cash inflows were $64.6 million, higher than $47.6 million a year ago.
Guidance
Q3
For third-quarter 2023, Teladoc Health anticipates total revenues to be between $650 million and $675 million. Adjusted EBITDA is estimated to be in the range of $72-$82 million. Net loss per share is expected to be in the band of 50-40 cents. U.S. Integrated Care Members are forecasted to be $86 million.
Full Year
TDOC’s management expects revenues for 2023 to be between $2,600 and $2,675 million, the mid-point of which indicates an improvement of 9.6% from the 2022 figure of $2,406.8 million.
Adjusted EBITDA is anticipated to be in the range of $300-$325 million, the mid-point of which suggests 26.8% growth from the 2022 figure of $246.5 million.
Net loss per share is predicted to be in the range of $1.60-$1.25. U.S. Integrated Care Members are expected to be 86 million.
Of the Medical sector players that have reported second-quarter results so far, the bottom lines of Elevance Health, Inc. (ELV - Free Report) , UnitedHealth Group Incorporated (UNH - Free Report) and Universal Health Services, Inc. (UHS - Free Report) beat the Zacks Consensus Estimate.
Elevance Health reported second-quarter 2023 adjusted net income of $9.04 per share, which outpaced the Zacks Consensus Estimate by 2.5%. The bottom line improved 13.4% year over year.
ELV’s operating revenues, which amounted to $43,377 million, rose 12.7% year over year in the quarter under review. The top line surpassed the consensus mark by 4.5%.
UnitedHealth Group reported second-quarter 2023 adjusted earnings per share (EPS) of $6.14, which outpaced the Zacks Consensus Estimate by 3.7%. The bottom line advanced 10.2% year over year.
Revenues improved 16% year over year to $92.9 billion in the quarter under review, attributable to sound contributions made by the UnitedHealthcare and Optum business lines. The top line surpassed the consensus mark by 2.5%.
Universal Health reported second-quarter 2023 adjusted EPS of $2.53, which outpaced the Zacks Consensus Estimate by 2%. The bottom line advanced 15% year over year.
UHS’s operating revenues, which amounted to $3.6 billion, rose 6.9% year over year in the quarter under review. The top line surpassed the consensus mark by 1.3%.
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Teladoc Health (TDOC) Q2 Earnings Top Estimates on Lower Expenses
Teladoc Health, Inc. (TDOC - Free Report) reported second-quarter 2023 adjusted loss of 40 cents per share, narrower than the Zacks Consensus Estimate of a loss of 44 cents. The bottom line improved 9.1% year over year.
Operating revenues improved 10.1% year over year to $652.4 million (within management’s expected range of $635-$660 million). The top line outpaced the consensus mark by 0.5%.
The quarterly results gained from strong growth in access fees and other revenues coupled with improving segmental profitability of Integrated Care. However, rising advertising and marketing, technology and development expenses partially offset the positives.
Teladoc Health, Inc. Price, Consensus and EPS Surprise
Teladoc Health, Inc. price-consensus-eps-surprise-chart | Teladoc Health, Inc. Quote
Operational Update
Revenues from Access Fees (which comprised 88.2% of total quarterly revenues) amounted to $575.7 million, which increased 11% year over year in the quarter under review. The figure beat our estimate by 1.9%.
TDOC generated $76.7 million of other revenues, which rose 4% year over year. However, the metric missed our estimate by 4.4%.
On a geographical basis, revenues from the United States grew 8% year over year to $561.8 million, which accounted for 86.1% of total revenues. The metric beat our estimate by a whisker. International revenues improved 28% year over year to $90.6 million in the second quarter. The metric beat our estimate by 8.8%.
Adjusted EBITDA of $72.2 million surged 54% year over year. The figure surpassed management’s view of $60-$68 million and beat our estimate by 7.1%.
The adjusted gross margin of Teladoc Health improved 160 basis points year over year to 70.8% in the quarter under review.
Total expenses of $724 million decreased by a huge margin, mainly due to goodwill impairment incurred last year. Sales expenses also declined in the quarter.
Segmental Update
In the quarter under review, TDOC reported revenues of $360 million in its Integrated Care segment. The figure grew 5% year over year. The metric beat our estimate by 0.6%.
BetterHelp segment’s revenues of $292.4 million climbed 18% year over year on the back of new member growth and stable customer acquisition cost in the quarter. The metric beat our estimate by 2%.
Adjusted EBITDA of Integrated Care and BetterHelp amounted to $38 million and $34.2 million, denoting an increase of 29% and 71%, respectively, from their corresponding prior-year quarter’s reported figures. The metric for Integrated Care beat our estimate by 7.3%, while the same for BetterHelp beat the mark by 19.6%.
Visits & Memberships
Total visits were 4.7 million, which remained consistent year over year in the second quarter. The metric missed our estimate by 7.8%.
As of Jun 30, 2023, U.S. Integrated Care Members witnessed an uptick of 7% on a year-over-year basis to 85.9 million (surpassing the expectation of 84.5-85.5 million). The metric beat our estimate by 0.8%.
Financial Update (as of Jun 30, 2023)
Teladoc Health exited the second quarter with cash and cash equivalents of $958.7 million, which increased from $918.2 million at 2022-end. Total assets of $4,316.4 million declined from $4,345.4 at 2022-end.
Debt amounted to $1,537 million, up from $1,535.3 million at 2022-end. Total stockholders’ equity declined 0.5% from 2022-end to $2,295.1 million.
In the quarter under review, net operating cash flow increased 9.4% year over year to $101.2 million. Free cash inflows were $64.6 million, higher than $47.6 million a year ago.
Guidance
Q3
For third-quarter 2023, Teladoc Health anticipates total revenues to be between $650 million and $675 million. Adjusted EBITDA is estimated to be in the range of $72-$82 million. Net loss per share is expected to be in the band of 50-40 cents. U.S. Integrated Care Members are forecasted to be $86 million.
Full Year
TDOC’s management expects revenues for 2023 to be between $2,600 and $2,675 million, the mid-point of which indicates an improvement of 9.6% from the 2022 figure of $2,406.8 million.
Adjusted EBITDA is anticipated to be in the range of $300-$325 million, the mid-point of which suggests 26.8% growth from the 2022 figure of $246.5 million.
Net loss per share is predicted to be in the range of $1.60-$1.25. U.S. Integrated Care Members are expected to be 86 million.
Zacks Rank
Teladoc Health currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Stocks to Consider
Of the Medical sector players that have reported second-quarter results so far, the bottom lines of Elevance Health, Inc. (ELV - Free Report) , UnitedHealth Group Incorporated (UNH - Free Report) and Universal Health Services, Inc. (UHS - Free Report) beat the Zacks Consensus Estimate.
Elevance Health reported second-quarter 2023 adjusted net income of $9.04 per share, which outpaced the Zacks Consensus Estimate by 2.5%. The bottom line improved 13.4% year over year.
ELV’s operating revenues, which amounted to $43,377 million, rose 12.7% year over year in the quarter under review. The top line surpassed the consensus mark by 4.5%.
UnitedHealth Group reported second-quarter 2023 adjusted earnings per share (EPS) of $6.14, which outpaced the Zacks Consensus Estimate by 3.7%. The bottom line advanced 10.2% year over year.
Revenues improved 16% year over year to $92.9 billion in the quarter under review, attributable to sound contributions made by the UnitedHealthcare and Optum business lines. The top line surpassed the consensus mark by 2.5%.
Universal Health reported second-quarter 2023 adjusted EPS of $2.53, which outpaced the Zacks Consensus Estimate by 2%. The bottom line advanced 15% year over year.
UHS’s operating revenues, which amounted to $3.6 billion, rose 6.9% year over year in the quarter under review. The top line surpassed the consensus mark by 1.3%.