Teladoc Health Reports Fourth Quarter and Full Year 2021 Results

February 22, 2022
  • Fourth quarter revenue grows 45% year-over-year to $554.2 million and total visits increase 41% to 4.4 million

  • Full year revenue grows 86% year-over-year to $2,032.7 million and total visits increase 38% to 15.4 million

  • Full year cash flows from operations grew to $194.0 million

  • Full year 2022 Revenue guidance of $2.55 to $2.65 billion, representing 25% to 30% growth

PURCHASE, NY, Feb. 22, 2022 (GLOBE NEWSWIRE) -- Teladoc Health, Inc. (NYSE: TDOC), the global leader in whole-person virtual care, today reported financial results for the fourth quarter and full year ended December 31, 2021.  

“Teladoc Health took a huge step forward in bringing true whole-person care to life for consumers and clients in 2021,” said Jason Gorevic, chief executive officer of Teladoc Health. “We successfully delivered against performance metrics, solidified our position as the partner of choice for our clients and connected millions of consumers with high-quality care. Our commitment to be the first stop along the consumer healthcare journey – regardless of need – remains unwavering. And Teladoc Health is clearly differentiated by the breadth and depth of our offerings, an integrated suite of virtual care services that connect individuals with chronic, primary, acute and specialty care. We saw meaningful growth and penetration across several key areas of our business, in mental health through both BetterHelp in the direct-to-consumer space and our new MyStrength Complete B2B2C approach to right care at the right time, as well as primary care through Primary 360, all helping to meet a greater share of an individual’s healthcare needs.”

“Healthcare has a ‘new normal’ resulting from the pandemic’s intersection of health needs and virtual solutions that has forever changed the experience of healthcare. We are proud of the role Teladoc Health has played in leading this transformation and are equally excited about our role in 2022 and beyond as we continue to innovate, further evolving whole-person care, introducing new services like Chronic Care Complete, expanding into new markets and deepening our relationships with our clients and consumers," Gorevic added.

                                 
Key Financial Data                                
($ thousands, unaudited)                                
    Quarter Ended   Year over Year   Year Ended    Year over Year
    December 31,   Change   December 31,   Change
    2021   2020       2021   2020    
Revenue   $ 554,235     $ 383,321     45%   $ 2,032,707     $ 1,093,962     86%
                                 
Net Loss   $ (10,985 )   $ (393,967 )   nm   $ (428,793 )   $ (485,136 )   nm
Net Loss per share, basic and diluted   $ (0.07 )   $ (3.07 )   nm   $ (2.73 )   $ (5.36 )   nm
                                 
Adjusted EBITDA*   $ 77,077     $ 50,384     53%   $ 267,837     $ 126,841     111%
                                 
Cash Flow from Operations   $ 83,208     $ (114,936 )   nm   $ 193,990     $ (53,511 )   nm

* A reconciliation of each non-GAAP measure to the most comparable measure under GAAP has been provided in this press release in the accompanying tables. An explanation of these Non-GAAP measures is also included below under the heading “Non-GAAP Financial Measures.”
nm – Not meaningful

Fourth Quarter 2021

Revenue increased 45% to $554.2 million, from $383.3 million in the fourth quarter of 2020. Access fees revenue grew 51% to $469.9 million and visit fee revenue grew 21% to $68.9 million. U.S. Revenues grew 45% to $482.9 million and International revenues grew 40% to $71.3 million.

Net loss totaled $11.0 million, or $(0.07) per share, compared to $394.0 million, or $(3.07) per share, in the fourth quarter of 2020. Results for the fourth quarter of 2021 included stock-based compensation expense of $61.6 million, or $(0.39) per share, amortization of acquired intangibles of $45.1 million, or $(0.28) per share, and non-cash income tax benefit of $49.7 million, or $0.31 per share.

Results for the fourth quarter of 2020 included stock-based compensation expense of $414.4 million, or $(3.23) per share, amortization of acquired intangibles of $33.0 million, or $(0.26) per share, and non-cash income tax benefit of $85.5 million, or $0.67 per share.

Adjusted EBITDA* increased 53% to $77.1 million, compared to $50.4 million in the fourth quarter of 2020.

GAAP Gross margin, which includes depreciation and amortization, was 67.5 percent for the fourth quarter of 2021 compared to 67.2 percent for the fourth quarter of 2020.

Adjusted Gross margin* was 68.4 percent for the fourth quarter of 2021 compared to 67.9 percent for the fourth quarter of 2020.

Average revenue per U.S. paid member increased to $2.49 in the fourth quarter of 2021, from $1.63 in the fourth quarter of 2020 and $2.40 in the third quarter of 2021.

Full Year Ended December 31, 2021

Revenue increased 86% to $2,032.7 million, from $1,094.0 million for the year ended December 31, 2020. Access fees revenue grew 104% to $1,732.0 million and visit fee revenue grew 15% to $254.2 million. U.S. Revenues grew 94% to $1,774.0 million and International revenues grew 44% to $258.7 million.

Net loss totaled $428.8 million, or $(2.73) per share, compared to $485.1 million, or $(5.36) per share, for the year ended December 31, 2021. Results for the year ended December 31, 2021 included stock-based compensation expense of $302.6 million, or $(1.93) per share, amortization of acquired intangibles of $178.9 million, or $(1.14) per share, loss on extinguishment of debt of $43.7 million, or $(0.28) per share, and non-cash income tax expense of $44.1 million, or $(0.28) per share.

Results for the year ended December 31, 2020 included stock-based compensation expense $475.5 million, or $(5.25) per share, amortization of acquired intangibles $57.5 million, or $(0.64) per share, loss on extinguishment of debt $9.1 million, or $(0.10) per share, and non-cash income tax benefit $90.9 million, or $1.00 per share.

Adjusted EBITDA* increased 111% to $267.8 million, compared to $126.8 million in 2020.

GAAP Gross margin, which includes depreciation and amortization, was 67.2 percent for the full year 2021 compared to 63.1 percent in 2020.

Adjusted Gross margin* was 68.0 percent for the full year 2021 compared to 64.3 percent in 2020.

Financial Outlook
Teladoc Health provides guidance based on current market conditions and expectations and what we know today. In addition, given the uncertainty of the expected path of the COVID-19 pandemic as well as the broader economic impact, this is an evolving situation and circumstances may change. Based on what we know today, we believe our guidance ranges provide a reasonable baseline for 2022 financial performance.

For the first quarter of 2022, we expect:

   
  1Q 2022 Guidance Range
Revenue $565 to $571 million
EBITDA $(23) to $(16) million
Adjusted EBITDA $51 to $55 million
Net loss per share $(0.60) to $(0.50) per share
Total U.S. Paid Membership 54.0 to 54.5 million members
Visit Fee Only Access 24.0 to 25.0 million
Total Visits 4.3 to 4.5 million visits

For the full year 2022, we expect:

   
  Full Year 2022 Guidance Range
Revenue $2.55 to $2.65 billion
EBITDA $18 to $48 million
Adjusted EBITDA $330 to $355 million
Net loss per share $(1.60) to $(1.40) per share
Total U.S. Paid Membership 54.0 to 56.0 million members
Visit Fee Only Access 24.0 to 25.0 million
Total Visits 18.5 to 20.0 million visits

Earnings Conference Call

The fourth quarter and full year 2021 earnings conference call and webcast will be held Tuesday, February 22, 2022 at 4:30 p.m. E.T. The conference call can be accessed by dialing 1-844-200-6205 for U.S. participants, or 1-929-526-1599 for international participants, and referencing Conference ID Number: 335463; or via a live audio webcast available online at http://ir.teladoc.com/news-and-events/events-and-presentations/. A webcast replay will be available for on-demand listening shortly after the completion of the call at the same web link, and will remain available for approximately 90 days.

About Teladoc Health

Teladoc Health empowers all people everywhere to live their healthiest lives by transforming the healthcare experience. As the world leader in whole-person virtual care, Teladoc Health uses proprietary health signals and personalized interactions to drive better health outcomes across the full continuum of care, at every stage in a person’s health journey. Ranked best in KLAS for Virtual Care Platforms in 2020 and #1 among direct-to-consumer telehealth providers in the J.D. Power 2021 U.S. Telehealth Satisfaction Study, Teladoc Health leverages more than a decade of expertise and data-driven insights to meet the growing virtual care needs of consumers and healthcare professionals. For more information, please visit www.teladochealth.com or follow @TeladocHealth on Twitter.

Cautionary Note Regarding Forward-Looking Statements

This press release contains “forward-looking statements” within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by words such as: “anticipate,” “intend,” “plan,” “believe,” “project,” “estimate,” “expect,” “may,” “should,” “will” and similar references to future periods. Examples of forward-looking statements include, among others, statements we make regarding future financial or operating results, future numbers of members or clients, future numbers of visits, litigation outcomes, regulatory developments, market developments, new products and growth strategies, and the effects of any of the foregoing on our future results of operations or financial condition.

Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are based only on our current beliefs, expectations and assumptions regarding the future of our business, future plans and strategies, projections, anticipated events and trends, the economy and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of our control. Our actual results and financial condition may differ materially from those indicated in the forward-looking statements. Important factors that could cause our actual results and financial condition to differ materially from those indicated in the forward-looking statements include, among others, the following: (i) changes in laws and regulations applicable to our business model; (ii) changes in market conditions and receptivity to our services and offerings; (iii) results of litigation; (iv) the loss of one or more key clients; (v) changes in valuations or useful lives of our assets; (vi) changes to our abilities to recruit and retain qualified providers into our network; and (vii) the impact of the COVID-19 pandemic on our operations, demand for our services and general economic conditions, as well as orders, directives and legislative action by local, state, federal and foreign governments in response to the spread of COVID-19. For a detailed discussion of the risk factors that could affect our actual results, please refer to the risk factors identified in our SEC reports, including, but not limited to, our Annual Report on Form 10-K and Quarterly Reports on Form 10-Q, as filed with the SEC.

Any forward-looking statement made by us in this press release is based only on information currently available to us and speaks only as of the date on which it is made. We undertake no obligation to publicly update any forward-looking statement, whether written or oral, that may be made from time to time, whether as a result of new information, future developments or otherwise.

 
Revenues and Summary Operating Metrics
                                     
Revenue (1)                                    
($ thousands)   Quarter Ended   Year over Year   Year Ended    Year over Year
    December 31,   Growth   December 31,   Growth
    2021   2020       2021   2020    
Access Fees Revenue                                    
U.S.   $ 403,095   $ 263,220   53 %   $ 1,488,420   $ 678,168   119 %
International     66,821     48,954   36 %     243,585     169,087   44 %
Total     469,916     312,174   51 %     1,732,005     847,255   104 %
                                     
Visit Fee Revenue                                    
U.S.     65,328     55,437   18 %     241,515     211,664   14 %
International     3,588     1,608   123 %     12,719     9,792   30 %
Total     68,916     57,045   21 %     254,234     221,456   15 %
                                     
Other                                    
U.S.     14,472     13,589   6 %     44,089     23,888   85 %
International     931     513   81 %     2,379     1,363   75 %
Total     15,403     14,102   9 %     46,468     25,251   84 %
                                     
Total Revenue   $ 554,235   $ 383,321   45 %   $ 2,032,707   $ 1,093,962   86 %
                                     
U.S. Revenue   $ 482,895   $ 332,246   45 %   $ 1,774,024   $ 913,720   94 %
International Revenue     71,340     51,075   40 %     258,683     180,242   44 %
Total Revenue   $ 554,235   $ 383,321   45 %   $ 2,032,707   $ 1,093,962   86 %
                                     
Average U.S. Revenue Per Member (2)   $ 2.49   $ 1.63   52 %                  

 

                             
Visits (1)                            
(thousands)   Quarter Ended   Year over Year   Year Ended    Year over Year
    December 31,   Growth   December 31,   Growth
    2021   2020       2021   2020    
U.S. Visits   3,291     2,289     44 %   11,482     8,083     42 %
International Visits   1,116     828     35 %   3,917     3,096     27 %
Total Visits   4,407     3,117     41 %   15,399     11,179     38 %
                             
Utilization (3)   22.7 %   16.0 %   668  pt   20.1 %   14.5 %   563  pt
                             
Platform-Enabled Sessions (4)   982     1,089     (10 )%   4,060     2,076     96 %
                             
Total Visits & Sessions Provided & Enabled   5,389     4,206     28 %   19,459     13,255     47 %

 

                   
Membership and Visit Fee Only Access                  
(millions)   Year Ended      
    December 31,   Growth
    2021     2020      
U.S. Paid Membership   53.6     51.8     3 %
                   
U.S. Visit Fee Only Access   24.2     21.3     14 %
                   
Chronic Care Enrollment   0.729     0.596     22 %
 

(1) During the fourth quarter of 2021, Teladoc Health, Inc. (“Teladoc Health” or “the Company”) refined its definition of international revenues to reflect all international revenues based on location of the customer. Previously, direct to consumer activities were primarily reflected based on the location of operations. In addition, certain activities related to our international operations are now reflected in visit revenues versus access fee revenues. Prior period amounts have been recast to conform with current presentation. Consistent with this change, the corresponding metrics have been updated, including the addition of approximately 590,000 and 588,000 visits for 2021 and 2020, respectively.

(2) Average U.S. Revenue Per Member measures the average quarterly amount of access revenue that the Company generates from a U.S. paid member. It is calculated by dividing the quarterly U.S. access revenue generated from the Company’s U.S. paid members, excluding certain non-member based access fees, by the total average number of U.S. paid members during the quarter.

(3) Utilization measures the ratio of visits to total U.S. paid members. It is calculated by dividing monthly visits by monthly U.S. paid members in the quarter and annualizing the result. Visit fee only visits are excluded.

(4) Platform-Enabled Sessions are a unique instance in which our licensed software platform has facilitated a virtual voice or video encounter between a care provider and our client’s patient, or between care providers. We believe platform-enabled sessions are an indicator of the value our clients derive from the platform they license from us in order to facilitate virtual care.

 
TELADOC HEALTH, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except share and per share data, unaudited)
                         
    Quarter Ended December 31,   Year Ended December 31,
    2021      2020      2021      2020
Revenue   $ 554,235     $ 383,321     $ 2,032,707     $ 1,093,962  
Expenses:                        
Cost of revenue (exclusive of depreciation and amortization, which is shown separately below)     174,985       122,942       650,258       390,829  
Operating expenses:                        
Advertising and marketing     112,988       93,751       416,726       226,146  
Sales     59,330       93,942       250,581       154,052  
Technology and development     72,867       92,697       311,884       164,941  
Acquisition, integration, and transformation costs     4,559       57,550       26,643       88,236  
General and administrative     118,603       343,985       438,007       506,684  
Depreciation and amortization     52,332       36,960       204,239       69,495  
Total expenses     595,664       841,827       2,298,338       1,600,383  
Loss from operations     (41,429 )     (458,506 )     (265,631 )     (506,421 )
Loss on extinguishment of debt     20       99       43,748       9,077  
Other expense (income), net     405       (282 )     (5,088 )     545  
Interest expense, net     18,872       21,101       80,365       59,950  
Net loss before taxes     (60,726 )     (479,424 )     (384,656 )     (575,993 )
Income tax (benefit) expense     (49,741 )     (85,457 )     44,137       (90,857 )
Net loss   $ (10,985 )   $ (393,967 )   $ (428,793 )   $ (485,136 )
                         
Net loss per share, basic and diluted   $ (0.07 )   $ (3.07 )   $ (2.73 )   $ (5.36 )
                         
Weighted-average shares used to compute basic
and diluted net loss per share
    159,944,335       128,298,005       156,939,349       90,509,229  
                                 

Stock-based Compensation Summary

Compensation costs for stock-based awards were classified as follows (in thousands):

                                 
    Quarter Ended   Year Ended 
    December 31,   December 31,
    2021   2020   2021   2020
Cost of revenue (exclusive of depreciation and amortization,
which is shown separately)
  $ 1,970     $ 2,572     $ 8,280     $ 2,700  
Advertising and marketing     3,811       22,548       18,952       26,995  
Sales     13,837       56,265       71,475       65,730  
Technology and development     18,226       53,271       95,561       60,556  
General and administrative     23,771       279,724       108,318       319,550  
Total stock-based compensation expense (1)   $ 61,615     $ 414,380     $ 302,586     $ 475,531  

(1) Excluding the amount capitalized related to internal software development projects.

 
TELADOC HEALTH, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands, unaudited)
             
    Year Ended December 31,
    2021   2020
Operating activities:            
Net loss   $ (428,793 )   $ (485,136 )
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:            
Depreciation and amortization     204,239       69,495  
Depreciation of rental equipment     3,333       1,697  
Amortization of right-of-use assets     12,049       6,895  
Provision for doubtful accounts     16,941       5,284  
Stock-based compensation     302,586       475,531  
Deferred income taxes     41,800       (90,158 )
Accretion of interest     61,253       45,296  
Loss on extinguishment of debt     40,652       9,077  
Gain on sale of investment     (5,901 )     0  
Other, net     (3,845 )     (1,009 )
Changes in operating assets and liabilities:            
Accounts receivable     (17,510 )     (21,091 )
Prepaid expenses and other current assets     (31,090 )     (12,565 )
Inventory     (19,494 )     (24,732 )
Other assets     (3,547 )     (8,135 )
Accounts payable     1,188       (87,995 )
Accrued expenses and other current liabilities     18,175       20,125  
Accrued compensation     (4,675 )     34,819  
Deferred revenue     20,554       17,751  
Operating lease liabilities     (16,532 )     (6,300 )
Other liabilities     2,607       (2,360 )
Net cash provided by (used in) operating activities     193,990       (53,511 )
Investing activities:            
Capital expenditures     (8,534 )     (4,024 )
Capitalized software     (55,400 )     (22,018 )
Proceeds from marketable securities     50,000       2,496  
Proceeds from the sale of investment     10,901       0  
Acquisitions of business, net of cash acquired     (78,663 )     (567,429 )
Other, net     8,715       0  
Net cash used in investing activities     (72,981 )     (590,975 )
Financing activities:            
Net proceeds from the exercise of stock options     25,781       54,314  
Proceeds from issuance of 2027 Notes     0       1,000,000  
Payment of issuance costs of 2027 Notes     0       (24,070 )
Repurchase of 2022 Notes     (139 )     (228,153 )
Proceeds from the sale of capped call related to the Livongo Notes     0       91,659  
Proceeds from advances from financing companies     15,275       6,002  
Payment against advances from financing companies     (16,050 )     (8,635 )
Payment of assumed indebtedness     0       (10,000 )
Proceeds from employee stock purchase plan     16,810       4,722  
Cash received (paid) for withholding taxes on stock-based compensation, net     3,422       (26,703 )
Other, net     (4,152 )     0  
Net cash provided by financing activities     40,947       859,136  
Net increase in cash and cash equivalents     161,956       214,650  
Foreign exchange difference     (1,800 )     4,321  
Cash and cash equivalents at beginning of the period     733,324       514,353  
Cash and cash equivalents at end of the period   $ 893,480     $ 733,324  
             
Income taxes paid   $ 3,974     $ 1,324  
             
Interest paid   $ 16,430     $ 14,890  

TELADOC HEALTH, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share data, unaudited)

             
    December 31,   December 31,
       2021      2020
           
Assets            
Current assets:            
Cash and cash equivalents   $ 893,480     $ 733,324  
Short-term investments     2,537       53,245  
Accounts receivable, net of provision of $12,384 and $6,412, respectively     168,956       169,281  
Inventories     73,079       56,498  
Prepaid expenses and other current assets     87,387       47,259  
Total current assets     1,225,439       1,059,607  
Property and equipment, net     27,234       28,551  
Goodwill     14,504,174       14,581,255  
Intangible assets, net     1,910,278       2,020,864  
Operating lease - right-of-use assets     46,780       46,647  
Other assets     20,703       18,357  
Total assets   $ 17,734,608     $ 17,755,281  
Liabilities and stockholders’ equity            
Current liabilities:            
Accounts payable   $ 47,257     $ 46,030  
Accrued expenses and other current liabilities     102,933       83,657  
Accrued compensation     91,941       94,593  
Deferred revenue-current     75,569       52,356  
Advances from financing companies     13,313       13,453  
Current portion of long-term debt           42,560  
Total current liabilities     331,013       332,649  
Other liabilities     1,492       1,616  
Operating lease liabilities, net of current portion     41,773       43,142  
Deferred revenue, net of current portion     3,834       2,449  
Advances from financing companies, net of current portion     9,291       9,926  
Deferred taxes, net     75,777       102,103  
Convertible senior notes, net     1,225,671       1,379,592  
Commitments and contingencies            
Stockholders’ equity:            
Common stock, $0.001 par value; 300,000,000 shares authorized as of December 31, 2021 and 2020; 160,469,325 shares and 150,281,099 shares issued and outstanding as of December 31, 2021 and 2020, respectively     160       150  
Additional paid-in capital     17,473,336       16,857,797  
Accumulated deficit     (1,421,454 )     (992,661 )
Accumulated other comprehensive (loss) gain     (6,285 )     18,518  
Total stockholders’ equity     16,045,757       15,883,804  
Total liabilities and stockholders’ equity   $ 17,734,608     $ 17,755,281  
                 

Non-GAAP Financial Measures:

To supplement our financial information presented in accordance with GAAP, we use adjusted gross profit, adjusted gross margin, EBITDA, and adjusted EBITDA, which are non-GAAP financial measures, to clarify and enhance an understanding of past performance. We believe that the presentation of these financial measures enhances an investor’s understanding of our financial performance. We further believe that these financial measures are useful financial metrics to assess our operating performance and financial and business trends from period-to-period by excluding certain items that we believe are not representative of our core business. We use certain financial measures for business planning purposes and in measuring our performance relative to that of our competitors. We utilize adjusted EBITDA as the primary measure of our performance.

Adjusted gross profit is our total revenue minus our total cost of revenue (exclusive of depreciation and amortization, which is shown separately) and adjusted gross margin is adjusted gross profit as a percentage of our total revenue.

EBITDA consists of net loss before interest; other expense (income), net, including foreign exchange gain or loss; taxes; depreciation and amortization; and loss on extinguishment of debt. Adjusted EBITDA consists of net loss before interest; other expense (income), net, including foreign exchange gain or loss; taxes; depreciation and amortization; loss on extinguishment of debt; stock-based compensation; and acquisition, integration and transformation costs.

We believe the above financial measures are commonly used by investors to evaluate our performance and that of our competitors. However, our use of the terms adjusted gross profit, adjusted gross margin, EBITDA, and adjusted EBITDA may vary from that of others in our industry. None of adjusted gross profit, adjusted gross margin, EBITDA, nor adjusted EBITDA should be considered as an alternative to net loss before taxes, net loss, net loss per share or any other performance measures derived in accordance with GAAP.

Adjusted gross profit, adjusted gross margin, EBITDA, and adjusted EBITDA have important limitations as analytical tools and you should not consider them in isolation or as a substitute for analysis of our results as reported under GAAP. Some of these limitations are:

  • Adjusted gross margin has been and will continue to be affected by a number of factors, including the fees we charge our clients, the number of visits and cases we complete, the costs paid to providers and medical experts, as well as the costs of our provider network operations center;
  • Adjusted gross margin does not reflect the significant depreciation and amortization to cost of revenue;
  • EBITDA and adjusted EBITDA do not reflect the significant interest expense on our debt;
  • EBITDA and adjusted EBITDA eliminate the impact of income taxes on our results of operations;
  • EBITDA and adjusted EBITDA do not reflect the loss on extinguishment of debt;
  • EBITDA and adjusted EBITDA do not reflect other expense (income), net;
  • Adjusted EBITDA does not reflect the significant acquisition, integration and transformation costs. Acquisition, integration and transformation costs include investment banking, financing, legal, accounting, consultancy, integration, fair value changes related to contingent consideration and certain other transaction costs related to mergers and acquisitions. It also includes costs related to certain business transformation initiatives focused on integrating and optimizing various operations and systems, including upgrading our customer relationship management (CRM) and enterprise resource planning (ERP) systems. These transformation cost adjustments made to our results do not represent normal, operating expenses necessary to operate the business but rather, incremental costs incurred in connection with our acquisition and integration activities;
  • Adjusted EBITDA does not reflect the significant non-cash stock compensation expense which should be viewed as a component of recurring operating costs; and
  • other companies in our industry may calculate adjusted gross profit, adjusted gross margin, EBITDA, and adjusted EBITDA differently than we do, limiting the usefulness of these measures as comparative measures.

In addition, although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, and adjusted gross profit, adjusted gross margin, EBITDA and adjusted EBITDA do not reflect any expenditures for such replacements.

We compensate for these limitations by using adjusted gross profit, adjusted gross margin, EBITDA, and adjusted EBITDA along with other comparative tools, together with GAAP measurements, to assist in the evaluation of operating performance. Such GAAP measurements include net loss, net loss per share, and other performance measures.

In evaluating these financial measures, you should be aware that in the future we may incur expenses similar to those eliminated in this presentation. Our presentation of adjusted gross profit, adjusted gross margin, EBITDA, and adjusted EBITDA should not be construed as an inference that our future results will be unaffected by unusual or nonrecurring items.

The following is a reconciliation of gross profit and gross margin, the most directly comparable GAAP financial measures, to adjusted gross profit and adjusted gross margin, respectively:

 
Reconciliation of GAAP Gross Profit to Adjusted Gross Profit and Adjusted Gross Margin
(In thousands, unaudited)
 
    Quarter Ended   Year Ended 
    December 31,   December 31,
       2021      2020      2021      2020
Revenue   $ 554,235     $ 383,321     $ 2,032,707     $ 1,093,962  
Cost of revenue (exclusive of depreciation and amortization, which is shown separately below)     (174,985 )     (122,942 )     (650,258 )     (390,829 )
Depreciation and amortization of intangible assets     (5,406 )     (2,846 )     (16,546 )     (12,394 )
Gross Profit     373,844       257,533       1,365,903       690,739  
Depreciation and amortization of intangible assets     5,406       2,846       16,546       12,394  
Adjusted gross profit   $ 379,250     $ 260,379     $ 1,382,449     $ 703,133  
                         
Gross margin     67.5 %     67.2 %     67.2 %     63.1 %
Adjusted gross margin     68.4 %     67.9 %     68.0 %     64.3 %

The following is a reconciliation of Net Loss, the most directly comparable GAAP financial measure, to EBITDA and adjusted EBITDA:

 
Reconciliation of GAAP Net Loss to EBITDA and Adjusted EBITDA
(In thousands, except for guidance data, unaudited)
                               
  Quarter Ended   Year Ended    Guidance in millions (1)
  December 31,   December 31,   First Quarter   Full Year
  2021    2020    2021    2020    2022    2022
Net loss $ (10,985 )   $ (393,967 )   $ (428,793 )   $ (485,136 )   $(91) - $(81)   $(259) - $(213)
Add:                              
Loss on extinguishment of debt   20       99       43,748       9,077          
Other expense (income), net   405       (282 )     (5,088 )     545          
Interest expense, net   18,872       21,101       80,365       59,950          
Income tax (benefit) expense   (49,741 )     (85,457 )     44,137       (90,857 )        
Depreciation and amortization   52,332       36,960       204,239       69,495          
Total loss on extinguishment of debt; other expense (income), net; interest expense, net; income tax (benefit) expense; and depreciation and amortization   21,888       (27,579 )     367,401       48,210     68 - 65   277 - 261
EBITDA   10,903       (421,546 )     (61,392 )     (436,926 )   (23) - (16)   18 - 48
Stock-based compensation   61,615       414,380       302,586       475,531          
Acquisition, integration, and transformation costs   4,559       57,550       26,643       88,236          
Total stock-based compensation and acquisition, integration, and transformation costs   66,174       471,930       329,229       563,767     74 - 71   312 - 307
Adjusted EBITDA $ 77,077     $ 50,384     $ 267,837     $ 126,841     $51 - $55   $330 - $355

(1) We have not provided a full line-item reconciliation for net loss to EBITDA or adjusted EBITDA guidance because we do not provide guidance on the individual reconciling items between net loss, EBITDA, and adjusted EBITDA. This is due to the uncertainty as to timing, and the potential variability, of the individual reconciling items such as stock-based compensation and the related tax impact, income taxes and acquisition, integration and transformation costs, the effect of which may be significant. Accordingly, a full line-item reconciliation of the GAAP measure to the corresponding non-GAAP financial measure guidance is not available without unreasonable effort.

                                                 
Revenues and Selected Operating Metrics (1)                          
(In thousands, except Average U.S. Revenue per Member)                          
    1Q   2Q   3Q   4Q   1Q   2Q   3Q   4Q
Revenue   2020   2020   2020   2020   2021   2021   2021   2021
Access Fees Revenue                                                
U.S.   $ 99,917     $ 138,396     $ 176,635     $ 263,220     $ 327,553     $ 371,591     $ 386,181     $ 403,095  
International     34,147       40,187       45,799       48,954       54,553       59,474       62,737       66,821  
Total     134,064       178,583       222,434       312,174       382,106       431,065       448,918       469,916  
                                                 
Visit Fee Revenue                                                
U.S.     44,043       59,556       52,628       55,437       57,128       59,196       59,863       65,328  
International     2,692       2,891       2,601       1,608       3,383       3,058       2,690       3,588  
Total     46,735       62,447       55,229       57,045       60,511       62,254       62,553       68,916  
                                                 
Other                                                
U.S.     -       -       10,299       13,589       10,671       9,363       9,583       14,472  
International     -       -       850       513       387       457       604       931  
Total     -       -       11,149       14,102       11,058       9,820       10,187       15,403  
                                                 
Total Revenue   $ 180,799     $ 241,030     $ 288,812     $ 383,321     $ 453,675     $ 503,139     $ 521,658     $ 554,235  
                                                 
U.S. Revenue   $ 143,960     $ 197,952     $ 239,562     $ 332,246     $ 395,352     $ 440,150     $ 455,627     $ 482,895  
International Revenue     36,839       43,078       49,250       51,075       58,323       62,989       66,031       71,340  
Total Revenue   $ 180,799     $ 241,030     $ 288,812     $ 383,321     $ 453,675     $ 503,139     $ 521,658     $ 554,235  
                                                 
Average U.S. Revenue
per Member
  $ 0.80     $ 0.92     $ 1.06     $ 1.63     $ 2.09     $ 2.31     $ 2.40     $ 2.49  
                                                 
Visits                                                
U.S. Visits     1,514       2,108       2,172       2,289       2,461       2,723       3,007       3,291  
International Visits     706       769       793       828       881       929       991       1,116  
Total Visits     2,220       2,877       2,965       3,117       3,342       3,652       3,998       4,407  
                                                 
U.S. Paid Membership     42.9       51.5       51.5       51.8       51.5       52.0       52.5       53.6  
                                                 
Utilization     12.1 %     14.4 %     14.8 %     16.0 %     17.5 %     19.1 %     21.0 %     22.7 %
                                                 
Platform-Enabled Sessions     n/a       n/a       987       1,089       1,092       1,017       969       982  
                                                 
Total Visits & Sessions Provided & Enabled     2,220       2,877       3,952       4,206       4,434       4,669       4,967       5,389  

(1) During the fourth quarter of 2021, the Company refined its definition of international revenues to reflect all international revenues based on location of the customer. Previously, direct to consumer activities were primarily reflected based on the location of operations. In addition, certain activities related to our international operations are now reflected in visit revenues versus access fee revenues. Prior period amounts have been recast to conform with current presentation. Consistent with this change, the corresponding metrics have been updated.

n/a – Not applicable

Investors:
Patrick Feeley
914-265-7925
IR@teladochealth.com 

Media:
Chris Stenrud
860-491-8821
pr@teladochealth.com


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Source: Teladoc Health, Inc.

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Michael Minchak | Vice President, Investor Relations | IR@teladochealth.com