Teladoc Health outlines a year of knockout growth in Q4 2020 earnings call

The virtual care company disclosed all-time-high revenue and membership growth during 2020, yet offered 2021 projections below what investors anticipated.
By Dave Muoio
03:44 pm
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The virtual care company disclosed all-time-high revenue and membership growth during 2020, yet offered 2021 projections below what investors anticipated.

Teladoc Health has capped off what has proven to be a defining year for the virtual care company, if not telehealth at large.

In its quarterly earnings call yesterday afternoon, the company announced that it had outpaced its revenue and earnings targets for both Q4 and FY 2020. In addition, CEO Jason Gorevic highlighted investments and acquisitions made throughout the year to develop services focused provider customers, virtual primary care and long-term virtual chronic care.

"During the fourth quarter, we continued to make strong progress in bringing our platform solution to international markets with multiple new deals, including a new contract supporting critical care programs for a large network of hospitals in Germany," Gorevic said during the earnings call.

"Our expanded capabilities in the management of chronic disease have uniquely positioned us to deliver on the promise of whole person care. The combination with Livongo extends our leadership position and enhances our opportunity to redefine the future of virtual care, leveraging technology and data at unmatched scale to drive better outcomes and lower costs while delivering a better consumer experience."

But in spite the strong performance, the company's stock price has dipped as much as 10% as of the time of writing. Market analysts attributed this activity to Teladoc's lower-than-anticipated forecasts regarding revenue, membership and other metrics for the coming year.

TOP-LINE

Total revenue for the quarter landed at $383.32 million, a 145% year-over-year (YoY) increase from Q4 2019. This broke down to $315.96 million in total access-fee revenue (a 149% increase YoY), $53.26 million in visit-fee revenue (an 80% increase YoY) and $14.1 million in other revenue.

The company logged 2.96 million total visits, (a 139% increase YoY), 2.51 of which were conducted among U.S. users.

Net loss for the quarter was $394 million, versus $19 million in Q4 2019. The company noted that this includes acquisition- and integration-related costs, as well as a hefty $331.7 million of accelerated stock-based awards expense related to the Livongo merger.

Looking at the full year, Teladoc reported annual total revenue of $1.09 billion, a 98% increase over 2019's $553.30 million. Total visits grew to 10.59 million (a 156% increase YoY).

The company's U.S. paid membership grew 41% to 51.8 million (a 41% increase YoY), while U.S. visit-fee-only access, in comparison, inched up to 21.3 million (a 10% increase YoY). The company also added a new metric for Livongo enrollees, called chronic care enrollment, which right now sits at 600,00 thousand.

Net loss for the full year was $485.1 million, compared to last year's $98.9 million. This similarly includes the Livongo-related $331.7 million expense.

ON THE RECORD

"I want to thank the entire Teladoc team for their amazing commitment to serving our clients and members around the world during a challenging year," Gorevic said during the call. "Over the past 12 months, we’ve seen a monumental change in consumer expectations for the way they access and experience healthcare as virtual care has firmly entered the mainstream.

"As a company, we’ve responded by significantly expanding our capabilities to meet the rising demands of clients and consumers around the world while extending our leadership position by delivering, enabling and empowering virtual care."

LOOKING AHEAD

For the upcoming quarter, Teladoc said that it's looking for total revenue to fall between $445 million and $455 million (about 150% growth), and total visits between 2.9 million and 3.1 million. The company expects its U.S. paid memberships to stay within 51 million to 52 million members, with its visit-fee-only access available for 22 to 23 million individuals (which includes two to three million on a temporary basis).

Across all of 2021, the virtual care company is eyeing revenue between $1.95 billion and $2.0 billion (78% to 83% growth). Total visits are predicted to fall between 12 million and 13 million. Paid membership is predicted to be within 52 to 54 million members, with visit-fee-only access available to 22 million to 23 million individuals (which also includes two to three million on a temporary basis).

LOOKING BACK

Teladoc was in a prime position to capitalize on the spike in telehealth and virtual care demand driven by COVID-19, reporting high growth during every quarterly report of 2020.

But in addition to scaling its existing services, the company was also tied up by two big-ticket purchases: InTouch Health for $600 million, which was announced in January and formally closed over the summer, and a $18.5 billion merger with data-driven disease-management platform Livongo that was announced over the summer and closed in late October.

Gorevic said that these deals have provided Teladoc with a strong presence in new markets, as well as numerous cross-sale opportunities with Livongo's existing customers in particular.

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