Teladoc’s Q3 earnings were a mixed bag, which is a welcome sign for Purchase, the New York-based telehealth company after a rough first half.
The company’s adjusted gross margin continued to grow, leading to interest in the mental health brand BetterHelp. Teladoc has also changed the way it uses clinicians, from primarily contractors to a consortium of contractors and salaried staff. The company said it has also cut back on its physical office space.
These cost savings were accompanied by an increase in revenue from $592 million in Q2 to $611 million. This was higher than analysts’ expectations of $608 million.
On the negative side, Teladoc Health’s visits decreased by 200,000 compared to Q2 and the company lost $73 million. Adjusted earnings before interest, taxes, depreciation and amortization were $51 million, down from $67 million in the third quarter of 2021.
Teladoc closed trading Wednesday at $26.74 per share. In the after-hours market, it rose 10% to $29.50/share. The company’s share price has fallen from a high of $296.66 in February 2021. Following first-quarter earnings in April, the company’s stock fell 40% and had its biggest sell-off in a year. days since the company listed its shares in 2015.
In June, Teladoc was hit with an investor lawsuit after its share price plummeted.
Overall, the company hit a positive tone on its third-quarter earnings call.
“We are almost identical to the total bookings of where we were last year,” said Teladoc CEO Jason Gorevic. “Our pipeline is similar to last year.”
Teladoc’s chief financial officer, Mala Murthy, said there was a need to strike a balance between making strategic investments and being concerned about broader economic conditions and seeking business performance.
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The company’s net loss for the first nine months of 2022 was $9.8 billion. Nearly all of those losses accrued in the first half of the year, primarily due to a $9.6 billion non-cash loss of goodwill charge related to the Livongo acquisition. There were no new loss charges for the last quarter.
Teladoc acquired Livongo for $18 billion in October 2020. The merger fell short of its expectations, and major insurers dismissed Livongo as the preferred digital health tool for chronic care conditions.
This story first appeared on Digital Health Business & Technology.
