The year 2019 was good to Teladoc Health. Although still operating at a loss, the virtual care provider enters the new year hot with reports that revenue and visits — domestic and international, paid membership and visit fee — all outpaced the company’s projections.
Teladoc said during a Wednesday afternoon earnings call that it is expecting that growth to continue. Part of this is due to the company’s diversifying offerings for enterprise customers, CEO Jason Gorevic said.
“From our expansion in the hospital and health system market with the anticipated close of the [InTouch Health] acquisition, and our expected 5.5 million to 5.9 million visits this year, we will empower even more patients around the globe to get care on their terms,” he said.
The other area of optimism is an early bump in 2020 visits that the company attributed to this winter’s severe flu season, which it said comprised as many as one in eight of its US general medical visits earlier this month.
“According to the Teladoc Health flu tracker, which gives us a look at flu trends in real time, even before CDC data is available, this year's flu season has been more severe than the prior year,” Gorevic said during the call. “Once members use our services for the first time, they are much more likely to use us again. … We expect a strong flu season to continue to benefit us and help drive increased adoption of our products as new users look to Teladoc Health for more of their healthcare needs.”
The increasingly likely possibility of a widespread coronavirus outbreak and its impact on Teladoc’s business was a primary concern among investors during the Q&A. Here, Gorevic and CMO Lewis Levy said that it was still to early to quantify how increasing transmissions might affect the company, but reassured investors that Teladoc is actively monitoring the situation and outfitting its teams with up-to-date treatment guidance.
“In the US specifically, we have been actively partnering with the CDC for several weeks now,” Levy said during the call. “Led by our clinical quality leadership team, we are equipped to provide near real-time disease surveillance data as well as proliferate disease specific clinical practice guidelines.”
In terms of its financials, Teladoc reported a 27% increase in year-over-year Q4 revenue, to the tune of $156.5 million, and a 32% year-over-year increase in full-year revenue, which totaled $553.3 million. Quarterly and full-year visits increased 44% to 1.2 million and 57% to 4.1 million, respectively. Of these visits, roughly 1,034,000 full-year visits were among international users (57% year-over-year growth).
Net loss for the fourth quarter came to $19 million, from $24.9 million in Q4 2018. Over the 12 month period, net loss was roughly on par between 2019 and 2018 ($98.9 million and $97.1 million).
Looking forward, Teladoc is projecting Q1 2020 revenue to fall within the range of $169 million to $172 million, with total visits landing around 1.4 million to 1.6 million. For the full year, the company predicts revenue between $695 million to $710 million, and 5.5 million to 5.9 million total visits.
WHY IT MATTERS
With influenza and COVID-19 threatening to test the US’ healthcare infrastructure, industry stakeholders are beginning to petition policymakers for telehealth adoption and coverage. Should these conditions come to pass, Teladoc and other remote care providers would likely see their services come into greater demand — which is good news for a company that’s already outpacing its expectations.
“We see the pace of virtual care adoption accelerating and we’re well positioned to satisfy the increasing needs of the marketplace,” Gorevic said. “We look forward to 2020 and beyond and are confident in our ability to continue to positively impact the way healthcare is delivered.”
THE LARGER TREND
A key component to Teladoc’s future business came to light last month when it announced the purchase of InTouch Health, a fellow provider focused specifically on enterprise products. The $600 million deal is still set to close in Q2, but Gorevic said the companies are been cutting deals with health systems for the combined offerings.
Teladoc Health has generally enjoyed rising revenues over the past year or so, although it did undergo some noteworthy shakeups at the executive level in the wake of former VP, COO and CFO Mark Hirschhorn’s resignation. And outside of the InTouch Health deal, the virtual care company hasn’t shied away from purchasing other telehealth providers both small (TelaDietitian) and large (Advance Medical, Best Doctors).
Teladoc is hardly the only large telehealth vendor in the market. In November, American Well struck a deal to acquire Aligned Telehealth that, at the time, it said would make it the largest enterprise telepsychiatry platform operating within the US. Not too long after came the merger of InSight Telepsychiatry and Regroup Telehealth, a move that the two similarly claimed would yield the country’s largest telepsychiatry provider.