Yahoo Finance Teladoc Health (TDOC) Shares Up 5% Since Q1 Earnings Release
Teladoc Health, Inc.'s TDOC shares have gained 5% since it reported first-quarter 2023 results on Apr 26. The quarterly results gained from strong growth in access fees and other revenues coupled with improving segmental profitability of Integrated Care. However, deteriorating earnings of the BetterHelp segment partially offset the positives.
TDOC reported first-quarter 2023 adjusted loss of 37 cents per share, narrower than the Zacks Consensus Estimate of a loss of 51 cents and our estimate of a loss of 54 cents. The bottom line improved 21.3% year over year.
Operating revenues improved 11.3% year over year to $629.2 million (surpassing management’s expected range of $610-$625 million). The top line outpaced the consensus mark by 1.9% and our estimate of $613.7 million.
Teladoc Health, Inc. Price, Consensus and EPS Surprise
Teladoc Health, Inc. price-consensus-eps-surprise-chart | Teladoc Health, Inc. Quote
Operational Update
Revenues from Access Fees (which comprised 87.6% of total quarterly revenues) amounted to $550.9 million, which increased 12% year over year in the quarter under review. The figure beat our estimate by 3%.
TDOC generated $78.4 million of other revenues, which rose 6% year over year. However, the metric missed our estimate by a whisker.
On a geographical basis, revenues from the United States grew 10% year over year to $541.7 million, accounting for 86.1% of total revenues. The metric beat our estimate by 1.2%. International revenues improved 18% year over year to $87.6 million in the first quarter. The metric beat our estimate by 12.3%.
Adjusted EBITDA of $52.8 million slipped 3% year over year. However, the figure surpassed management’s view of $42-$50 million, beating our estimate of $48 million.
The adjusted gross margin of Teladoc Health improved 290 basis points year over year to 69.8% in the quarter under review.
Total expenses of $706.3 million decreased by a huge margin, mainly due to goodwill impairment incurred last year. Sales and technology and development expenses also declined in the quarter.
Segmental Update
In the quarter under review, TDOC reported revenues of $350 million in its Integrated Care segment. The figure grew 5% year over year. The metric beat the Zacks Consensus Estimate by 0.4% and our estimate of $346.9 million.
BetterHelp segment’s revenues of $279.3 million climbed 21% year over year on the back of new member growth and stable customer acquisition cost in the quarter. The metric beat the Zacks Consensus Estimate by 4% and our estimate of $266.8 million.
Adjusted EBITDA of Integrated Care and BetterHelp amounted to $35.1 million and $17.6 million, denoting an increase of 51% and a decrease of 41%, respectively, from their corresponding prior-year quarter’s reported figures. The metric for Integrated Care beat the Zacks Consensus Estimate by 31.3%, while the same for BetterHelp missed the mark by 13.6%.
Visits & Memberships
Total visits came in at 4.9 million, which rose 8% year over year in the first quarter. The metric missed the Zacks Consensus Estimate by 0.5% and our estimate by 2%.
U.S. Integrated Care Members witnessed an uptick of 7% on a year-over-year basis to 84.9 million (within the expectation of 84-85 million) as of Mar 31, 2023. The metric beat our estimate by 1%.
Financial Update (as of Mar 31, 2023)
Teladoc Health exited the first quarter with cash and cash equivalents of $888.6 million, which declined from $918.2 million at 2022-end. Total assets of $4,309.1 million declined from $4,345.4 at 2022-end.
Debt amounted to $1,536.1 million, up from $1,535.3 million at 2022-end. Total stockholders’ equity declined 0.7% from 2022-end to $2,291.2 million.
In the quarter under review, net operating cash flow increased nearly 1.5 times year over year to $13.2 million. Free cash outflows were $32.5 million, narrower than $62.6 million a year ago.
Guidance
Q2
For second-quarter 2023, Teladoc Health anticipates total revenues to be between $635 million and $660 million. Adjusted EBITDA is estimated within $60-$68 million. Net loss per share is expected within 55-45 cents. U.S. Integrated Care Members are forecasted to stay in the 84.5-85.5 million range.
Full Year
TDOC’s management expects revenues for 2023 to be between $2,575 and $2,675 million, the mid-point of which indicates an improvement of 9.1% from the 2022 figure of $2,406.8 million.
Adjusted EBITDA is anticipated to be in the range of $285-$325 million, the mid-point of which suggests 23.7% growth from the 2022 figure of $246.5 million.
Net loss per share is predicted within $1.25-$1.70. U.S. Integrated Care Members are expected in the 84-86 million band.
Zacks Rank
Teladoc Health currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Other Medical Sector Releases
Of the Medical sector players that have reported first-quarter results so far, the bottom lines of Elevance Health, Inc. ELV and UnitedHealth Group Incorporated UNH beat the Zacks Consensus Estimate, while the same for Centene Corporation CNC missed the Zacks Consensus Estimate.
Elevance Health reported first-quarter 2023 earnings of $9.46 per share, which beat the Zacks Consensus Estimate of $9.26 and our estimate of $9.22. Additionally, the bottom line increased 15.5% year over year.
ELV’s operating revenues improved 10.6% year over year to $41,898 million in the quarter under review. The top line beat the consensus mark by 2.5% and exceeded our estimate of $40,766.5 million.
UnitedHealth Group reported first-quarter 2023 adjusted earnings of $6.26 per share, which beat the Zacks Consensus Estimate of $6.24 and our estimate of $6.17. The bottom line improved from the $5.49 per share reported a year ago.
The company’s quarterly performance was driven by sustained membership growth in its UnitedHealthcare business. Strong expansion in value-based arrangements in the Optum Health segment also contributed to the upside, partly offset by elevated operating costs.
Centene Corporation reported first-quarter 2023 adjusted EPS of $2.11, which lagged the Zacks Consensus Estimate by 5.4%. However, the bottom line advanced 15.3% year over year.
Revenues of CNC amounted to $38,889 million, which improved 4.6% year over year. The top line outpaced the consensus mark by 7.1%. The quarterly results took a hit from escalating medical costs. Nevertheless, the downside was partly offset by a growing premium base stemming from solid membership growth within most of its business lines and numerous contract wins.
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