A number of digital health companies have seen their businesses grow amid the COVID-19 crisis, and so far Livongo Health appears to be no exception. The company announced strong quarterly results headlined by revenue growth and a record number of client launches.
Taking new agreements and the prospect of continued demand for virtual services into account, the company said that it has raised its full-year and second-quarter outlook.
"There is no question in our mind that this pandemic has accelerated a more extensive virtual-care-delivery model," CEO Zane Burke said during yesterday's investor call. "Remote monitoring is here to stay, and we expect it to become the standard of care for the most vulnerable and expensive populations."
The company also used its earnings report to announce a new contract with the Government Employees Health Association (GEHA) that will see Livongo's diabetes, hypertension and diabetes-management products made available to federal government beneficiaries covered by GEHA.
Livongo's total revenue for the first quarter of 2020 came in at $68.8 million, a 115% year-over-year increase that exceeded the company's early-April expectation of $65.5 to $66.5 million in total revenue. GAAP net loss was $5.6 million (–$0.06 per share), compared to a $14.4 million loss (–$0.79 per share) reported last year.
The company brought on 380 new clients in the first quarter to reach 1,252 total clients, a 44% increase over last quarter's 804. The company now reports 328,510 members enrolled in its Livongo for Diabetes program, compared to 164,168 in Q1 2019 and nearly 223,000 in Q4 2019. These increases bring the estimated value of Livongo's agreements to $89 million – just a few million shy of doubling Q1 2019's $48.1 million estimated value of agreements.
ON THE RECORD
"We began 2020 well positioned to pursue our mission of empowering people with chronic conditions to live better and healthier lives," Burke said. "Today, Livongo is even more strongly positioned. Increasingly, everyone is realizing that our remote-monitoring solutions and our focus on the most critical, vulnerable populations are necessary to support our members through this pandemic in the near term and longer term as the market continues to shift to a virtual care model."
Livongo is nearing the one-year mark of its IPO, and has been steadily working to expand its data-driven "whole person platform" for chronic-condition management and health-behavior change.
And much like the last quarter's report, where the company highlighted new agreements with major names like CVS and Express Scripts, Burke took the time to highlight Livongo's highest profile deals within the last few months. These included the closure of the major GEHA contract, and Livongo's selection as the first marketplace partner of the Health Transformation Alliance (HTA) and Welltok.
Total revenue for the second quarter of the year is projected to fall between $73 million and $75 million. Livongo is expecting 70% to 78% revenue growth for the full year, equating to a range of $290 million to $303 million in total annual revenue. This is a bump over the company's prior guidance of $280 million to $290 million.
While the company is primed to meet COVID-19 demand and deliver its digital platform to more clients, CFO Lee Shapiro noted that the epidemic's hardships could affect Livongo indirectly through the company's various affiliates.
“The company continues to closely monitor the situation relating to the COVID-19 pandemic for impacts on our business, as many of our clients and members have experienced economic challenges," Shapiro said in a statement. "Livongo is well positioned to deliver remote care for members at a time when clients appreciate the importance of ensuring the health of their beneficiaries and team members.”