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Teladoc Health Inc. (TDOC) Q1 2024 Earnings: Misses on EPS, Surpasses Revenue Expectations

GuruFocus Research
·3 min read

  • Revenue: Reached $646.1 million, a 3% increase from $629.2 million in the previous year, slightly exceeding estimates of $637.29 million.

  • Net Loss: Reported at $81.9 million, widening from $69.2 million year-over-year, falling short of the estimated loss of $78.04 million.

  • Earnings Per Share (EPS): Recorded a loss of $0.49 per share, compared to a loss of $0.42 per share in the prior year, below the estimated loss of $0.46 per share.

  • Adjusted EBITDA: Increased by 20% to $63.1 million from $52.8 million in the previous year, indicating improved operational efficiency.

  • Free Cash Flow: Improved slightly with a net outflow of $26.6 million compared to a net outflow of $32.5 million in the previous year.

  • International Revenue: Grew by 13% to $98.5 million, highlighting strong global market performance.

  • Future Outlook: Anticipates Q2 2024 revenue between $635 million and $660 million and adjusted EBITDA between $70 million and $80 million.

Teladoc Health Inc (NYSE:TDOC) released its 8-K filing on April 25, 2024, reporting financial results for the first quarter ended March 31, 2024. The company, a global leader in whole-person virtual care, reported a revenue increase to $646.1 million, surpassing analyst estimates of $637.29 million. However, the reported net loss of $81.9 million, or $0.49 per share, missed the estimated loss of $78.04 million, or $0.46 per share.

Teladoc Health Inc. (TDOC) Q1 2024 Earnings: Misses on EPS, Surpasses Revenue Expectations
Teladoc Health Inc. (TDOC) Q1 2024 Earnings: Misses on EPS, Surpasses Revenue Expectations

Company Overview

Teladoc Health is a prominent virtual health provider offering telehealth services via mobile devices, the internet, video, and phone. It operates primarily through two segments: Integrated Care and BetterHelp. The majority of its revenue is generated from subscription-based access fees, supplemented by visit fees and equipment rental and sales to hospital systems. Teladoc Health has established partnerships with employers, health plans, and health systems, and also markets directly to consumers.

Financial Performance and Challenges

The first quarter of 2024 saw Teladoc Health's revenue grow by 3% year-over-year, driven by a 1% increase in access fees revenue and a significant 14% growth in other revenue. Despite this growth, the company's net loss widened by 18% compared to the first quarter of 2023, primarily due to increased expenses in stock-based compensation and amortization of acquired intangibles. Adjusted EBITDA improved by 20%, reflecting operational efficiencies and cost management.

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The company's U.S. revenue saw a modest increase of 1%, while international revenue grew by 13%. The Integrated Care segment experienced an 8% revenue increase, whereas the BetterHelp segment saw a 4% decline. These mixed results highlight the challenges Teladoc faces in different market segments and geographic areas.

Key Financial Metrics

Adjusted gross margin remained stable at 69.9%, slightly up from 69.8% in the previous year. The company's capital expenditures decreased, leading to a smaller free cash flow outflow of $26.6 million compared to $32.5 million in the first quarter of 2023. These figures are crucial as they reflect the company's ability to manage costs and invest in growth despite the net loss position.

Outlook and Future Projections

For the second quarter of 2024, Teladoc Health anticipates revenue between $635 million and $660 million, and adjusted EBITDA between $70 million and $80 million. The full-year outlook projects revenue between $2,635 million and $2,735 million, with significant improvements expected in adjusted EBITDA and free cash flow. These projections suggest a cautious optimism about the company's ability to enhance its financial health over the coming months.

Conclusion

While Teladoc Health's first quarter results mixed with revenue growth and a widening net loss, the company's focus on strategic initiatives and operational efficiencies could position it for improved performance. Investors and stakeholders will likely watch closely how the company navigates its challenges and capitalizes on opportunities in the evolving telehealth market.

Explore the complete 8-K earnings release (here) from Teladoc Health Inc for further details.

This article first appeared on GuruFocus.