After missing Q1 revenue expectations, Amwell stock takes a hit

The company is emphasizing the importance of its new platform Converge for future business.
By Laura Lovett
01:51 pm
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Photo: Getty Images/Kwanchai Llerttanapunyaporn

Coming off a year of rapid growth, Amwell's traffic seems to be slowing. While still growing its revenue Y-o-Y, Amwell missed its Q1 revenue expectations, causing its stock to take a tumble in the following days. The company did, however, narrowly beat its EPS by $0.03.

It wasn't all bad news for the telemedicine company. Amwell announced that it exceeded 10 million total visits since it was first created, and that 5.9 million of those visits happened in 2020. The number of visits in Q1 increased by 120% year over year.

During an earnings call, Dr. Ido Schoenberg, chairman and co-CEO of Amwell, stressed the importance of the company's newly released platform, called Converge, which is designed to improve healthcare stakeholder connectivity through third-party device integrations.

"After the quarter, on April 28th, we unveiled our Converge platform to our clients and partners. With over 1,000 clients and partners, it was our most attended forum since inception," Schoenberg said.

"Our clients and prospects' reaction to Converge was extremely positive," Schoenberg said. "One client said Converge helped us see telehealth not as an alternative to normal care, but as an integrated way to deliver care. Another simply called Converge a game-changer."

TOP-LINE DATA

This quarter, Amwell raked in a total of $57.6 million, which equaled a 7% year-over-year increase. The company attributes this to solid subscription growth and continued digital revenue.

Subscription revenue equaled $24.6 million, a 13% increase Y-o-Y. The company said it would equal a 20% increase if normalized for the two customers lost due to M&A. A total of 1.6 million visits were conducted in Q1 which is a 100% increase from last year.

Additionally, the net loss was $39.8 million. The adjusted EBITDA was $26.4 million, compared to $17.7 million last year. 

LOOKING AHEAD

As for the rest of the year, Amwell reiterated its previous guidance. The company is looking at a range of between $260 million to $270 million for the year. The adjusted EBITDA guidance is $26.4 million, up from $17.7 million last year.

The company is planning on an overall increase in R&D spend in 2021, citing expenses from the Converge project. However, numbers are not expected to increase at the same rate as during 2020.

"But looking at Q2 last year, it was the peak of the pandemic, and in that single quarter alone we more than doubled the number of active providers from 24,000 to 57,000," Keith Anderson, chief financial officer of Amwell, said during the earnings call.

"For the remainder of 2020, and through Q1 of this year, we added another 24,000 providers. As detailed in our filings, we define active providers as those providers that deliver care on the platform over the last 12 months.

"So, it is expected, next quarter, when Q2 2020, the peak of the COVID crisis, rolls off the measurement period, we will experience a lockstep decrease in active provider count, as some of these lower-activity providers will now be excluded from the 12-month measurement period."

THE BACKGROUND

It's no secret 2020 was a good year for Amwell. It raked in $245.3 million in revenue for the year, representing a 65% revenue increase year over year.

The company also took the opportunity to go public in September. The opening stock price was roughly $18 per share. As of May 17, 2021, the stock is trading at $12.06 per share.

Amwell's main competitor Teladoc beat its revenue expectations by $1.76 million in Q1, however, reported a net loss of $1.31 per share – missing its expectations by $0.71. After its Q1 earnings call Teladoc raised its revenue expectations for the full year 2021.

 

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AmWell

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