We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Teladoc Health (TDOC) Q4 Loss Narrows on Lower Expenses
Read MoreHide Full Article
Teladoc Health, Inc. (TDOC - Free Report) incurred a fourth-quarter 2023 adjusted loss of 17 cents per share, narrower than the Zacks Consensus Estimate of a loss of 22 cents per share and the year-ago quarter’s figure of a loss of $23.49 per share. The figure also came narrower than the management’s estimated range of a loss of 33-23 cents per share.
Operating revenues improved 4% year over year to $660.5 million (within management’s expected range of $658-$683 million). The top line missed the consensus mark by 1.5%.
The quarterly results were aided by a growing membership base within the Integrated Care segment. A significant decline in overall expenses along with improved access fees also contributed to the upside. However, the upside was partly offset by a decline in visits.
Teladoc Health, Inc. Price, Consensus and EPS Surprise
Revenues from access fees (which accounted for 87% of total quarterly revenues) amounted to $573.9 million, which advanced 4% year over year in the fourth quarter. However, the metric fell short of the Zacks Consensus Estimate of $590 million and our estimate of $589.8 million.
Other revenues of $86.6 million grew 3% year over year and outpaced the consensus mark of $83 million and our estimate of $82.8 million.
On a geographical basis, revenues from the United States increased 2% year over year to $564.8 million in the quarter under review. U.S. revenues made up 86% of total revenues. However, the figure fell short of the Zacks Consensus Estimate of $581 million and our estimate of $580.7 million. Teladoc Health generated international revenues of $95.8 million, which advanced 15% year over year and surpassed the consensus mark of $92 million and our estimate of $91.9 million.
Adjusted EBITDA of $114.4 million climbed 22% year over year in the fourth quarter and remained within the management’s anticipated range of $107-$117 million. The metric beat our estimate of $111.4 million. The adjusted gross margin improved 30 basis points (bps) year over year to 70.7%.
Total expenses of TDOC declined more than six-fold year over year to $695.6 million and also came lower than our estimate of $702.6 million. The significant year-over-year decline resulted from a fall in general and administrative costs, lower restructuring expenses and a goodwill impairment cost recorded in the year-ago quarter.
Segmental Update
The Integrated Care segment’s revenues grew 8% year over year to $384.4 million in the fourth quarter but missed the Zacks Consensus Estimate of $386 million and our estimate of $387.8 million. Adjusted EBITDA was $56 million, which climbed 28% year over year and came higher than our estimate of $45.8 million. Adjusted EBITDA margin improved 233 bps year over year to 14.6%.
The BetterHelp segment recorded revenues of $276.2 million in the quarter under review, which remained flat year over year and fell short of the consensus mark of $285 million and our estimate of $284.7 million. The unit’s adjusted EBITDA rose 11% year over year to $58.5 million but missed our estimate of $65.6 million. Adjusted EBITDA margin of 21.2% improved 210 bps year over year.
Visits & Memberships
Teladoc Health witnessed total visits of 4.4 million, which fell 8% year over year in the fourth quarter and lagged the Zacks Consensus Estimate of 5 million and our estimate of 4.7 million.
U.S. Integrated Care Members were 89.6 million as of Dec 31, 2023, which improved 8% year over year and came within the management projected range of 89-90 million. The figure matched our estimate.
Financial Update (as of Dec 31, 2023)
Teladoc Health exited the fourth quarter with cash and cash equivalents of $1.1 billion, which rose 22.4% from the 2022-end level. Total assets of $4.4 billion inched up 1.1% from the figure at 2022 end.
Debt amounted to $1.5 billion, up 0.2% from the figure as of Dec 31, 2022. Total stockholders’ equity of $2.3 billion inched up 0.8% from the 2022-end level.
TDOC generated operating cash flows of $130.1 million in the fourth quarter, which surged 98.5% year over year. Free cash flows increased more than eight-fold year over year to $93.6 million. Capex was $36.5 million, which dropped 32.3% year over year in the quarter under review.
Update on Efficiency Program
Management anticipates net pre-tax expense reductions of around net $43 million in 2024 in relation to the comprehensive operational review of the business targeted at lowering costs and driving profits. Teladoc Health expects to incur pre-tax restructuring charges within $12-$16 million in 2024 as part of the efficiency program, out of which roughly $11 million is likely to occur in the first quarter of 2024.
1Q24 View
Teladoc Health projects total revenues between $630 million and $645 million. Adjusted EBITDA is estimated to lie between $52 million and $62 million. Net loss per share is anticipated to be in the band of 55-45 cents. U.S. Integrated Care Members are expected to stay within 89.5-90.5 million.
The Integrated Care segment is expected to witness year-over-year revenue growth in the range of 5-7%, while adjusted EBITDA margin is likely to remain within 10.5-12%. Meanwhile, revenues in the BetterHelp segment are forecasted to decline within 3-6% and adjusted EBITDA margin is anticipated to be between 5.5-6.5%.
2024 Outlook Unveiled
Management estimates revenues to lie between $2.635 billion and $2.735 billion, the midpoint of which indicates a 3.2% improvement from the 2023 figure of $2.602 billion.
Adjusted EBITDA is anticipated within $350-$390 million, the midpoint of which implies a 12.8% rise from the 2023 figure of $328.1 million.
Net loss per share is projected to lie between $1.10 and 80 cents in 2024. A loss of $1.34 per share was reported in 2023. U.S. Integrated Care Members are expected to remain within 90-92 million.
Revenues in the Integrated Care segment are forecasted to witness low to mid-single-digit growth on a year-over-year basis, while the BetterHelp unit is expected to record flat to low-single-digit growth.
Adjusted EBITDA margin in the Integrated Care segment is estimated to expand in the range of 150-250 bps year over year in 2024, while it is expected to remain flat or witness a 50-bps increase or decrease from the 2023 reported figure.
Free cash flows are anticipated within $210-$240 million.
Three-Year View
Teladoc Health anticipates annual consolidated revenues to grow in the low to mid-single-digit. The metric is estimated to record increases in mid-single-digit and low single-digit, respectively, for the Integrated Care and BetterHelp units. Margin expansion is likely to witness an annual increase of 50-100 bps. Meanwhile, management targets to achieve an adjusted EBITDA of a minimum of $425 million in 2025, considering the cost actions related to the efficiency program.
Of the Medical sector players that have reported fourth-quarter 2023 results so far, the bottom-line results of Tenet Healthcare Corporation (THC - Free Report) , Encompass Health Corporation (EHC - Free Report) and The Ensign Group, Inc. (ENSG - Free Report) beat the respective Zacks Consensus Estimate.
Tenet Healthcare reported fourth-quarter 2023 adjusted earnings per share (EPS) of $2.68, which beat the Zacks Consensus Estimate by 69.6% and surpassed management’s expectations. The bottom line jumped 36.7% year over year. Net operating revenues of THC amounted to $5.4 billion, which improved 7.8% year over year in the quarter under review. The top line outpaced the consensus mark by 2.2%.
Adjusted net income from continuing operations of $283 million rose 32.9% year over year. Adjusted EBITDA increased 12.8% year over year to more than $1 billion. The Hospital Operations and Services segment’s net operating revenues rose 6% year over year to $4.3 billion in the fourth quarter. Higher adjusted admissions, improved pricing yield and a favorable payer mix contributed to the unit’s results. The Ambulatory Care unit reported net operating revenues of $1.1 billion, which climbed 15.4% year over year.
Encompass Health’s fourth-quarter 2023 adjusted EPS of 95 cents outpaced the Zacks Consensus Estimate by 14.5%. The bottom line rose 8% year over year. Net operating revenues amounted to $1.2 billion, which advanced 9.6% year over year in the quarter under review. The top line beat the consensus mark by a whisker.
EHC’s net patient revenue per discharge inched up 0.9% year over year in the fourth quarter. Total discharges of 59.2 million improved 8.3% year over year. Net and comprehensive income of $119.1 million grew 1.4% year over year in the quarter under review. Adjusted EBITDA advanced 9.6% year over year to $255 million, which beat our estimate of $234.5 million. EHC added five beds to its existing hospitals in the quarter under review.
Ensign Group reported a fourth-quarter 2023 adjusted EPS of $1.28, which beat the Zacks Consensus Estimate by a whisker. The bottom line advanced 16.4% year over year. Operating revenues of $980.4 million improved 21.1% year over year in the quarter under review. The top line outpaced the consensus mark by a whisker. Adjusted net income grew 17.5% year over year to $73.7 million in the fourth quarter.
Same-store occupancy improved 240 bps year over year while transitioning occupancy expanded 150 bps year over year. The Skilled Services unit’s revenues rose 21% year over year to $940.8 million in the fourth quarter. Segment income of $116.8 million improved 9.7% year over year. Skilled nursing and campus operations of the segment totaled 259 and 27, respectively, at the fourth-quarter end. Rental revenues amounted to $21.9 million, which grew 12.7% year over year.
Unique Zacks Analysis of Your Chosen Ticker
Pick one free report - opportunity may be withdrawn at any time
Image: Shutterstock
Teladoc Health (TDOC) Q4 Loss Narrows on Lower Expenses
Teladoc Health, Inc. (TDOC - Free Report) incurred a fourth-quarter 2023 adjusted loss of 17 cents per share, narrower than the Zacks Consensus Estimate of a loss of 22 cents per share and the year-ago quarter’s figure of a loss of $23.49 per share. The figure also came narrower than the management’s estimated range of a loss of 33-23 cents per share.
Operating revenues improved 4% year over year to $660.5 million (within management’s expected range of $658-$683 million). The top line missed the consensus mark by 1.5%.
The quarterly results were aided by a growing membership base within the Integrated Care segment. A significant decline in overall expenses along with improved access fees also contributed to the upside. However, the upside was partly offset by a decline in visits.
Teladoc Health, Inc. Price, Consensus and EPS Surprise
Teladoc Health, Inc. price-consensus-eps-surprise-chart | Teladoc Health, Inc. Quote
Quarterly Operational Update
Revenues from access fees (which accounted for 87% of total quarterly revenues) amounted to $573.9 million, which advanced 4% year over year in the fourth quarter. However, the metric fell short of the Zacks Consensus Estimate of $590 million and our estimate of $589.8 million.
Other revenues of $86.6 million grew 3% year over year and outpaced the consensus mark of $83 million and our estimate of $82.8 million.
On a geographical basis, revenues from the United States increased 2% year over year to $564.8 million in the quarter under review. U.S. revenues made up 86% of total revenues. However, the figure fell short of the Zacks Consensus Estimate of $581 million and our estimate of $580.7 million. Teladoc Health generated international revenues of $95.8 million, which advanced 15% year over year and surpassed the consensus mark of $92 million and our estimate of $91.9 million.
Adjusted EBITDA of $114.4 million climbed 22% year over year in the fourth quarter and remained within the management’s anticipated range of $107-$117 million. The metric beat our estimate of $111.4 million. The adjusted gross margin improved 30 basis points (bps) year over year to 70.7%.
Total expenses of TDOC declined more than six-fold year over year to $695.6 million and also came lower than our estimate of $702.6 million. The significant year-over-year decline resulted from a fall in general and administrative costs, lower restructuring expenses and a goodwill impairment cost recorded in the year-ago quarter.
Segmental Update
The Integrated Care segment’s revenues grew 8% year over year to $384.4 million in the fourth quarter but missed the Zacks Consensus Estimate of $386 million and our estimate of $387.8 million. Adjusted EBITDA was $56 million, which climbed 28% year over year and came higher than our estimate of $45.8 million. Adjusted EBITDA margin improved 233 bps year over year to 14.6%.
The BetterHelp segment recorded revenues of $276.2 million in the quarter under review, which remained flat year over year and fell short of the consensus mark of $285 million and our estimate of $284.7 million. The unit’s adjusted EBITDA rose 11% year over year to $58.5 million but missed our estimate of $65.6 million. Adjusted EBITDA margin of 21.2% improved 210 bps year over year.
Visits & Memberships
Teladoc Health witnessed total visits of 4.4 million, which fell 8% year over year in the fourth quarter and lagged the Zacks Consensus Estimate of 5 million and our estimate of 4.7 million.
U.S. Integrated Care Members were 89.6 million as of Dec 31, 2023, which improved 8% year over year and came within the management projected range of 89-90 million. The figure matched our estimate.
Financial Update (as of Dec 31, 2023)
Teladoc Health exited the fourth quarter with cash and cash equivalents of $1.1 billion, which rose 22.4% from the 2022-end level. Total assets of $4.4 billion inched up 1.1% from the figure at 2022 end.
Debt amounted to $1.5 billion, up 0.2% from the figure as of Dec 31, 2022. Total stockholders’ equity of $2.3 billion inched up 0.8% from the 2022-end level.
TDOC generated operating cash flows of $130.1 million in the fourth quarter, which surged 98.5% year over year. Free cash flows increased more than eight-fold year over year to $93.6 million. Capex was $36.5 million, which dropped 32.3% year over year in the quarter under review.
Update on Efficiency Program
Management anticipates net pre-tax expense reductions of around net $43 million in 2024 in relation to the comprehensive operational review of the business targeted at lowering costs and driving profits. Teladoc Health expects to incur pre-tax restructuring charges within $12-$16 million in 2024 as part of the efficiency program, out of which roughly $11 million is likely to occur in the first quarter of 2024.
1Q24 View
Teladoc Health projects total revenues between $630 million and $645 million. Adjusted EBITDA is estimated to lie between $52 million and $62 million. Net loss per share is anticipated to be in the band of 55-45 cents. U.S. Integrated Care Members are expected to stay within 89.5-90.5 million.
The Integrated Care segment is expected to witness year-over-year revenue growth in the range of 5-7%, while adjusted EBITDA margin is likely to remain within 10.5-12%. Meanwhile, revenues in the BetterHelp segment are forecasted to decline within 3-6% and adjusted EBITDA margin is anticipated to be between 5.5-6.5%.
2024 Outlook Unveiled
Management estimates revenues to lie between $2.635 billion and $2.735 billion, the midpoint of which indicates a 3.2% improvement from the 2023 figure of $2.602 billion.
Adjusted EBITDA is anticipated within $350-$390 million, the midpoint of which implies a 12.8% rise from the 2023 figure of $328.1 million.
Net loss per share is projected to lie between $1.10 and 80 cents in 2024. A loss of $1.34 per share was reported in 2023. U.S. Integrated Care Members are expected to remain within 90-92 million.
Revenues in the Integrated Care segment are forecasted to witness low to mid-single-digit growth on a year-over-year basis, while the BetterHelp unit is expected to record flat to low-single-digit growth.
Adjusted EBITDA margin in the Integrated Care segment is estimated to expand in the range of 150-250 bps year over year in 2024, while it is expected to remain flat or witness a 50-bps increase or decrease from the 2023 reported figure.
Free cash flows are anticipated within $210-$240 million.
Three-Year View
Teladoc Health anticipates annual consolidated revenues to grow in the low to mid-single-digit. The metric is estimated to record increases in mid-single-digit and low single-digit, respectively, for the Integrated Care and BetterHelp units. Margin expansion is likely to witness an annual increase of 50-100 bps. Meanwhile, management targets to achieve an adjusted EBITDA of a minimum of $425 million in 2025, considering the cost actions related to the efficiency program.
Zacks Rank
Teladoc Health currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Other Medical Sector Releases
Of the Medical sector players that have reported fourth-quarter 2023 results so far, the bottom-line results of Tenet Healthcare Corporation (THC - Free Report) , Encompass Health Corporation (EHC - Free Report) and The Ensign Group, Inc. (ENSG - Free Report) beat the respective Zacks Consensus Estimate.
Tenet Healthcare reported fourth-quarter 2023 adjusted earnings per share (EPS) of $2.68, which beat the Zacks Consensus Estimate by 69.6% and surpassed management’s expectations. The bottom line jumped 36.7% year over year. Net operating revenues of THC amounted to $5.4 billion, which improved 7.8% year over year in the quarter under review. The top line outpaced the consensus mark by 2.2%.
Adjusted net income from continuing operations of $283 million rose 32.9% year over year. Adjusted EBITDA increased 12.8% year over year to more than $1 billion. The Hospital Operations and Services segment’s net operating revenues rose 6% year over year to $4.3 billion in the fourth quarter. Higher adjusted admissions, improved pricing yield and a favorable payer mix contributed to the unit’s results. The Ambulatory Care unit reported net operating revenues of $1.1 billion, which climbed 15.4% year over year.
Encompass Health’s fourth-quarter 2023 adjusted EPS of 95 cents outpaced the Zacks Consensus Estimate by 14.5%. The bottom line rose 8% year over year. Net operating revenues amounted to $1.2 billion, which advanced 9.6% year over year in the quarter under review. The top line beat the consensus mark by a whisker.
EHC’s net patient revenue per discharge inched up 0.9% year over year in the fourth quarter. Total discharges of 59.2 million improved 8.3% year over year. Net and comprehensive income of $119.1 million grew 1.4% year over year in the quarter under review. Adjusted EBITDA advanced 9.6% year over year to $255 million, which beat our estimate of $234.5 million. EHC added five beds to its existing hospitals in the quarter under review.
Ensign Group reported a fourth-quarter 2023 adjusted EPS of $1.28, which beat the Zacks Consensus Estimate by a whisker. The bottom line advanced 16.4% year over year. Operating revenues of $980.4 million improved 21.1% year over year in the quarter under review. The top line outpaced the consensus mark by a whisker. Adjusted net income grew 17.5% year over year to $73.7 million in the fourth quarter.
Same-store occupancy improved 240 bps year over year while transitioning occupancy expanded 150 bps year over year. The Skilled Services unit’s revenues rose 21% year over year to $940.8 million in the fourth quarter. Segment income of $116.8 million improved 9.7% year over year. Skilled nursing and campus operations of the segment totaled 259 and 27, respectively, at the fourth-quarter end. Rental revenues amounted to $21.9 million, which grew 12.7% year over year.