Hello, everyone, and welcome to Amwell's conference call to discuss their third fiscal quarter of 2025. Joining us on the call today are Amwell's Chairman and CEO, Dr. Ido Schoenberg; and Mark Hirschhorn, Amwell's CFO and Chief Operating Officer. Earlier today, a press release was distributed detailing their announcement. The earnings report is posted on the Amwell website at investors.amwell.com and is also available through normal news sources. This conference call is being webcast live on the IR page of the website, where a replay will be archived. Before they begin prepared remarks, I'd like to take this opportunity to remind you that during the call, we will make forward-looking statements regarding projected operating results and anticipated market opportunities. This forward-looking information is subject to the risks and uncertainties described in the filings with the SEC. Actual results or events may differ materially. Except as required by law, we undertake no obligation to update or revise these forward-looking statements. On this call, we'll refer to both GAAP and non-GAAP financial measures. A reconciliation of GAAP to non-GAAP financial measures is provided in the earnings release. With that, I would like to turn the call over to Ido.

Thank you, Operator, and good afternoon, everyone. For the third quarter, our results compared favorably to the guidance we provided. We showed steady progress in executing our plan, which is designed to achieve cash flow breakeven by the end of 2026 and to ultimately resume profitable growth. Our plan is based on two main work streams. First, focusing on our enterprise-grade, mature, and well-differentiated new platform to generate considerable value in our select market segments. Second, ensuring that all our operations are extremely efficient and effective. Both efforts rely heavily on the integration and adoption of rapidly evolving technologies, primarily enterprise-grade AI infrastructure. In recent years, we have invested significantly in recruiting exceptional talent and establishing strong governance, compliance, and operational frameworks. We have also committed substantial resources and continue to do so towards building ecosystem interoperability that enables seamless data exchange and deep integration with existing EHRs and clinical systems. These investments help position Amwell as a highly dependable, secure, and scalable technology-enabled care platform for our customers. We enable our customers to align our technology with measurable economic value while helping them address critical challenges such as clinician burnout, staffing shortages, and operational inefficiencies. Additionally, we position them to capitalize on emerging opportunities, including the integration of algorithm-based health care services, comprehensive care coordination, and new digital therapeutic solutions. These integrations may help our customers leverage predictive AI to reduce costly interventions and hospitalizations. Our efforts are beginning to pay off as reflected in our results, and we believe the impact will only accelerate going forward. For our first work stream in Q3, we began socializing our product focus areas through 2026 with our clients and prospects. We are committed to making the new Amwell platform the most effective and valuable hybrid care backbone we have ever offered them. Our mission is to help our customers reduce care costs, improve clinical outcomes, and offer the highest member engagement and satisfaction through exceptional user experience. We strive to achieve this through the following focus areas: First, we are moving AI into the core workflow layer. We're responsibly implementing enterprise-grade AI and other technologies to transform patient intake, personalized dialogue, and navigation, as well as clinical program matching and onboarding. Our efforts benefit from almost two decades of telehealth experience and access to an incredible data and knowledge repository driven by many millions of digital-first care encounters. Second, we are enhancing and simplifying the way we work with our own and third-party partner clinical programs. This enhanced program integration is expected to help offer our customers even more options across the care continuum while adding more value to our clinical program partners. Also, clients will be able to seamlessly integrate clinical programs they've already committed to into their Amwell platform with unprecedented ease. As noted on our earlier calls, these third-party partners represent an important high-margin flywheel growth opportunity for Amwell. Our own clinical programs are likely to be the first to benefit from these changes and further improve our offering across urgent care, virtual primary care, comprehensive behavioral health, nutrition, lactation, and more. Third, we are investing in and will remain heavily committed to our data and analytics infrastructure. We plan to offer our customers even better ways to measure and improve financial and clinical outcomes across all programs while offering patients an even more personalized, simple, and relevant journey. As payers, employers, and health systems look to consolidate their technology-enabled care strategy, we offer a unique and reliable solution. It allows them to realize their financial, clinical, and member engagement goals while maintaining full flexibility to dynamically choose and replace the clinical programs that work best for them in the simplest, most scalable, and reproducible way. Our second work stream is centered around relentless focus and commitment to efficiency and quality. We are further improving our platform to make it even easier to deploy, maintain, and support. Self-management and automation tools for our customers are a good example of this commitment. These tools empower clients to do more faster while simultaneously reducing our own cost of deployment. As we carefully define what we focus on, we are decisively divesting noncore assets. Earlier this year, we announced the sale of Amwell Psychiatric Care, or APC, and are currently pursuing other actions to divert excess resources away from non-core assets. It is important to note that we plan to continue to fully support and maintain legacy assets that still provide value to our customers. These customers have expressed comfort from the stability and reliability of our trusted legacy solutions. We hope to see them gradually migrate to our core offering over time when they are ready. In parallel, we systematically analyzed our own efficiency across all our operations. We were able to find opportunities to improve efficiency, including with widespread AI adoption, while rightsizing headcount across the board. These reductions in force were made possible through various interventions, including careful reallocation of talent across the company. Now I'll take a step back to look broadly at the macro environment. In 2025, we continue to see clear signs that the market is shifting in our favor. Consumer demand for digital health is accelerating. Mental health telehealth utilization reached 27.8% in July, according to the Epic Research data tracker. And 79% of Gen Z now use health technology monthly, according to PwC's 2025 Healthcare Consumer Insight survey. At the same time, digital clinical programs are demonstrating real results. Research shows digital disease management can reduce 30-day readmission rates by 50%. This effectiveness is driving significant investment. AI start-ups, many of which could be considered clinical programs themselves, captured 60% of all digital health funding in Q1, according to the AHA Center for Health Innovation. However, payers, employers, and health systems are struggling with fragmentation. Employers now manage an average of four to nine point solutions, yet only 22% trust these vendors to act in their best interest, according to Evernorth Insights. This fragmentation carries real cost. For example, inefficient data exchange costs healthcare organizations up to $20 million annually. As a result, integration has become a strategic imperative. 62% of health plan leaders identify integrated solutions as a top 2025 priority according to HealthEdge's annual survey. Organizations need help managing technology, engagement, reporting, and the commercial burden of multiple vendors, and that's exactly the gap we are positioned to fill. In that setting, the Amwell platform promises much-needed relief by maintaining future-ready flexibility with the efficiency, effectiveness, and peace of mind of offering one relationship, one user experience, and one data and reporting infrastructure across a dynamic and open-ended array of clinical programs and vendors. Our unique business model never forces our clients to only use Amwell clinical programs. This aligns our interests and positions us well as their long-term partner. While many of our competitors feature their brands to members, we enable our customers to use their own white-labeled experience. Their Amwell platform inside allows them to offer a unified customer-branded gateway to all their covered programs. Finally, and importantly, our ability to supplement automated programs with trusted in-network certified providers at scale enables and accelerates the safe and effective adoption of these new AI-driven solutions. Our special architecture is helpful in making customer acquisition costs more effective and in improving the customers' overall brand value and stickiness by associating it with a wide array of helpful services and exceptional platform experience. Our ability to help customers obtain a clear view of whole-person and cohort outcomes and offer them tools to continuously improve results by switching programs and matching them with the right cohorts is highly desirable and appreciated. In our conversations in the market, our strategy resonates. As we look forward, we fully expect our competitive advantages to become increasingly visible and compelling as we continue to roll out our new Amwell platform. We believe that our long journey is in many ways only beginning, and we are excited about what the future brings to our loyal and sophisticated supporters, our customers, and our company. With that, I would like to turn the call over to Mark for a review of our financials and our guidance.

Thanks, Ido, and good afternoon to everyone on the call. On today's call, I will walk through a few key operating metrics and financial results from the third quarter and then provide an update to our guidance for the remainder of this year. In the third quarter, we delivered results ahead of expectations for both revenue and adjusted EBITDA, reflecting stronger subscription retention, increased visit volume in specialty care and virtual primary care, and meaningful cost efficiencies driven by the successful execution of our restructuring. Our progress this quarter reinforces that the actions we began earlier this year are translating into durable financial improvement and accelerating operating leverage. Today, I will walk you through our quarterly performance, highlight the financial impact of these strategic actions and provide an updated view on our guidance for the balance of 2025. Total revenue was $56.3 million, which represents an 8% decrease year-over-year and includes the step-down in contribution from Leidos and the divestiture of APC. Normalizing for the sale of APC, Q3 revenue would have increased 1.3%. Subscription revenue of $30.9 million increased 18% year-over-year and represented 55% of total revenue compared to 43% of total revenue a year ago. Total visit volume of approximately 1.1 million visits in the third quarter was down 21% from a year ago, although in line with our expectations. Amwell Medical Group, or AMG visit revenue was 23% lower than last year at $21.2 million. Normalizing for the sale of APC, however, visits were down 3.5% from a year ago. Average revenue per visit was $71, which is 14% lower this quarter compared to last year's Q3. But when normalizing for the sale of APC, average revenue per visit was 3.5% higher, driven by a continued mix shift to higher-priced virtual primary care and specialty care visits. GAAP gross margin expanded to 52% compared to 37% a year ago as a result of greater software and services revenue generating stronger margin contribution than last year's comparable quarter revenue mix and divestiture of APC. Our operating expenses totaled $58.9 million in the quarter, a decrease of 16% compared to last year, comprised of a 6% reduction in R&D, a 46% decrease in sales and marketing and a 14% decrease in G&A expenses. We remain focused on optimizing our resources, and we are clearly moving in the right direction and getting closer to our foundational cost basis. Adjusted EBITDA was a loss of $12.7 million for the quarter, which compared favorably to a loss of $31 million a year ago, evidence of our acute focus and execution of our cost containment initiatives. In terms of cash and liquidity, we reported a cash burn of approximately $18 million in Q3 and ended the quarter with approximately $201 million in cash and marketable securities with zero debt. Finally, to wrap up my comments today, I'll share our revised guidance outlook. With just two months remaining in the year, we now expect our full year revenue to be between $245 million and $248 million versus the prior range of $245 million to $250 million. Adjusted EBITDA in the range of a negative $45 million to negative $42 million versus the prior range of negative $50 million to negative $45 million. Our range for AMG visits remained steady between 1.3 million and 1.35 million visits. Our full year guidance assumes the reduction of R&D expenses by more than 10% this year versus 2024 as we streamlined and completed the bulk of our software configuration to our existing build and integration commitments. At the same time, we continue to expect sales and marketing costs to decline more than 25% year-over-year and G&A expense to decline at least 20% for the year as we continue to organize the company around a new lower cost structure. We now project Q4 revenue in the range of $51 million to $54 million and adjusted EBITDA between negative $15 million to negative $12 million. We have made meaningful progress rightsizing the cost structure while diligently working to position Amwell for longer-term success. We have quite a bit of work left to do, but we remain committed to our goal of generating positive cash flow from operations during 2026. I want to thank our entire team for their commitment and passion to our overarching mission of increasing access to affordable, high-quality health care. Thank you all for your time and attention. I'd now like to turn the call back to Ido for his closing remarks.

Thank you, Mark. We're seeing a remarkable transformation in our market. As AI healthcare solutions proliferate both within and beyond Amwell, they're delivering significantly better patient outcomes with greater accessibility and affordability. In this evolving landscape, Amwell's role as an integrated backbone has never been more vital. Our unique ability to seamlessly blend intelligent automation with certified trusted clinicians provides a safe, effective pathway to superior care outcomes today and tomorrow. Our clients value our proven track record of delivering measurable economic value while ensuring compliance and providing essential support to overburdened healthcare providers. Through enterprise-grade workflow automation, we're enhancing both access and operational efficiency. We are proud of our mission and firmly believe it's more relevant now than ever before. With that, I'll open the call for questions.

Our first question comes from Stan Berenshteyn of Wells Fargo Securities.

A couple for me. First, I actually wanted to go back to the prior quarter where you had announced a Florida Blues plan win. I was curious if you can give us some color regarding how you won that? Was that a competitive takeaway? And are you seeing any similar opportunities for you going forward?

Stan, yes, we are very pleased with this important win. It was a competitive situation, and we are deinstalling a major competitor in this setting. The drivers for this really demonstrate everything I spoke about in the prepared remarks. I believe that Florida Blue, like many other payers, understood that there is enormous fragmentation, enormous opportunity in AI programs, but they need to create one infrastructure under their brand that will allow for one efficient consumer engagement solution that will be able to drive care with their own choices of clinical programs, including maybe different choices for different ASOs or different cohorts and one report and one infrastructure. They, like many other people, existing customers and people that we talk with during our dialogue with the pipeline, really talk about vendor fatigue and complexity. There is a tangle of amazing programs, some are better than the others. Many of them have enormous opportunity, but many of them are risky, and there is real need for one technology-enabled care infrastructure, which is an integrator and a distributor, if you will, for members. So all those important value points based on our dialogue with this very important customer, in my opinion, we're leading to this win and are indicative of a future demand that is likely to grow as more AI-driven program proliferate.

And then a follow-up for me here. Regarding the comments you made in the prepared remarks around potential further divestiture of noncore assets. Can you give us any insight as to what those assets might be? And are you in any active discussions here? Or is this more of a theoretical process?

So this is very practical. Let's start there. The key conclusion is that the opportunity we spoke about with Florida Blue and many others is very, very exciting. And because of that, we decided to focus all our efforts around it because we believe that's the best ROI for Amwell and the best way we can create value for our customers. We do have a long list of legacy products that do the job but do the job well. Examples are automated programs for hospitals or inpatient solutions and so on and so forth. These are good products that are secure and reliable and dependable, and we plan to continue and use them, but we are going to spend significantly less in growing these market segments in comparison to this very clear enormous opportunity that I shared earlier. And that's really part of our strategy that we are implementing as we speak.

Our next question comes from the line of Charles Rhyee of TD Cowen.

You talked about AI and implementing that across the enterprise and other technology to sort of inform patient intake, navigation, et cetera. Can you talk a little bit about how that can be monetized? Is that something that you are charging extra for? What is sort of the model as we think about that? And maybe, Mark, I know it's still probably a little early. How should we think about maybe any kind of guardrails to think about when looking out to '26 at all, at least from a top line perspective?

AI is impacting everything we do and the overall ecosystem dramatically. Starting with our products and third-party partners, for instance, a company like Sword can predict the likelihood of someone needing surgery soon, which is crucial. Our capability to connect patients with Sword, document savings, and report back to partners like Elevance adds immense value. Similarly, HelloHeart leverages predictive modeling to improve medication adherence, among other examples. AI is significantly influencing both Amwell and non-Amwell clinical programs. Moreover, AI enables us to create vastly improved experiences for consumers. This experience can be highly personalized, offering immediate attention and easy navigation to programs that could benefit users. This has substantial value as it enhances ROI and traction for our customers. For instance, a positive virtual primary care experience leading to over 30 days of saved costs of $500 is advantageous for both Amwell and our customers. Additionally, utilizing AI for data analytics allows for coherent information sharing regarding outcomes across various programs, helping our customers choose and refine the right options over time. This further personalizes consumer experiences, boosting usage and increasing satisfaction scores. While we don't directly charge more for our platform to achieve these improvements, we have the potential to do so in the future. More importantly, the value generated through increased engagement and referrals, such as with Sword, leads to revenue sharing and is more beneficial than traditional customer acquisition costs. These investments enhance the overall value of our platform. Furthermore, we've attracted talented individuals from major tech companies like Amazon and are examining every aspect of our operations—from core generation to support. We're making significant investments to implement better solutions, improving our effectiveness and efficiency. As we move forward, the most critical financial impact will originate from integrating human expertise with AI-powered programs, resulting in superior financial and clinical outcomes at lower costs and higher engagement. This fusion embodies the influence of AI on our financial performance moving forward.

But I guess it sounds like then maybe, Mark, in terms of how should we think about next year? And also if we're not necessarily charging more for these innovations and obviously demonstrating more ROI for customers, how should we think about margins at least? Is the current rate, I think it was 52% here in the quarter. Is that sort of the right level we should be thinking about next year? Or maybe any kind of thoughts there would be helpful.

Yes. Charles, I don't believe the introduction of the AI features and the attributes that we're looking to implement throughout the year are going to have any meaningful impact on our margins. What's going to lead to the margin probably variation from '25 to '26 will be exactly what we saw in '25, which was the greater ability to bring more software revenues into the top line. Clearly, we had significant to the tune of tens of millions of dollars of implementation revenues generating very high margins. They impacted the margin profile tremendously. And that's why we're exiting at these stronger margins compared to '24. '26, I believe, will be consistent with the '25 margin profile.

And maybe one last one, if I could. You talked about sort of divesting sort of noncore assets. Obviously, APC was an example. Is there a lot of other assets still that you would consider in that noncore bucket? And is there a sense for timing? Is this something that we'd like to do very soon? Or is this when you can get something a good value for it?

It's more the latter, Charles. We're not in the market with either of these, what I would suggest are a couple of defined assets that can be bifurcated from the rest of the business without losing any focus, without challenging any of the clients right now with removing some of these. These are distinct assets that have a certain profile of clients that we could, in fact, cordon off, we could run them separately. But I think throughout '26, we will try to, again, narrow our focus in those areas that Ido shared in his prepared remarks.

Our next question comes from the line of Jenny Cao of Truist Securities.

This is Jenny on for Jailendra. Just had a question around macro, with all the macro noise, tariffs and economic uncertainty. Have you seen any impact on your sales pipeline as health systems continue to evaluate their IT budgets? Just curious how that conversation has been going in terms of the last couple of months? And related to that, can you talk about your direct tariff exposure?

Jenny, essentially, what we see in the market is that our solution addresses crucial pain points that many customers find essential. For payers, having a reliable and effective solution for hybrid and technology-enabled care is a necessity that sponsors and employers demand, generating significant savings. Implementing effective AI-driven care programs is not a matter of choice, but rather how to do it. Our customers recognize this clearly. The process can be complex and error-prone, and we provide a way to reduce confusion by offering a single platform embedded in their infrastructure, alleviating vendor fatigue by managing connections to numerous solutions while maintaining a cohesive experience and reporting. When we discuss this with customers, it's clear they see it as a necessary investment. Regarding health systems, we observe some resistance and caution due to economic factors, which is why we are shifting resources away from promoting certain solutions toward our core offerings. However, for delivery networks adopting value-based care, competition for patients, the need to incorporate behavioral health, and expanding their reach are crucial factors that directly impact revenues and their viability. Our offering remains relevant and resonates in this landscape. Concerning tariffs, the impact on us is minimal. We have a small business line with some hardware outside the U.S., which may be affected, but it doesn’t significantly influence our overall performance. We proudly develop our software as a U.S. firm, and since our operations are based in the U.S., we don't experience any meaningful direct effects from tariffs. While tariffs may influence the broader market, they do not specifically impact Amwell.

Our next question comes from the line of Jack Senft of UBS.

This is Jack Senft on for Kevin. I wanted to revisit the discussion about reallocating resources from noncore assets. To clarify, this is not included in this year's guidance, correct? Additionally, if it is not included, could this affect your timeline for achieving cash flow breakeven next year? Or might it significantly alter your cash flow projections? If you could share your expectations regarding this, it would be appreciated.

Yes. This is not included in any of the guidance that you've seen throughout 2025 or the new guidance we provided for the final quarter this year. The impact that it would likely have would not be substantial to the degree that it would change our perspective on cash flow breakeven from operations in the end of 2026.

And then maybe just a quick follow-up. I know your sales and marketing expense, it took a nice step down sequentially this quarter. I know you're still targeting the declines of at least 25% plus this year. But maybe as we look at each like kind of line item in the operating expenses here, are these kind of good run rates to think about going forward? Or is there still additional leverage that you can pull next year? I think you touched on it a little bit briefly, but if you can just talk a little bit more about it, that would be great.

Yes, we have really optimized our spending and significantly reduced sales and marketing costs compared to last year, which is quite substantial. I believe there are still opportunities to cut costs in other areas, particularly in general and administrative expenses. Another significant area where we can reduce costs, in terms of absolute dollars, is in our delivery operations. We expect to benefit from the implementation of AI tools in both clinical operations and clinical delivery, allowing us to scale growth at a lower cost. This should become evident throughout 2026 and beyond.

Our next question comes from the line of John Park of Morgan Stanley.

I know you mentioned the cash flow breakeven target for 2026. Considering the ongoing discussions about noncore divestitures, if you had to prioritize the factors contributing to that target—such as customer renewals, potential price increases, service mix, and possibly other elements I might not have mentioned—how would you rank them?

Are you asking how we would rank those in consideration of our target for cash flow breakeven next year? Or how do we rank them purely from a top to bottom priority?

Yes. How would you prioritize these factors? Obviously, divesting noncore assets will likely contribute significantly, but are there any other factors to consider in reaching that target?

Yes. The divestiture of those noncore assets will certainly help to focus the company on our core initiatives and would obviously provide some additional dry powder for the balance sheet on top of our $200 million that we just ended the quarter with. And again, we have no debt. So that gives us a little bit more leverage. But I think we primarily have to focus on client retention, ensuring that our platform is delivering and our teams are handling the requests, the growth, the other opportunities for ROI that our clients are demanding. So I'd probably tell you retention is #1. And then, of course, some of the growth initiatives on the product side would then likely be ranked as the #2 priority.

So our service to our customers is the ability to help them under the brand, create one customer acquisition cost gateway connected to programs of their choosing. The fact that we come out of the box with a very long list of solutions across the full continuum doesn't hurt. But even more exciting is the fact that we can very easily add anything they want to or their clients want to implement. So as long as our customers believe that the solution is logistic, it's secure, it's compliant with different regulations, things of that nature, we will gladly implement it as part of their solution so they can benefit and monitor the value of such implementation.

I'm showing no further questions at this time. I would now like to turn it back to Ido for closing remarks.

Thank you, everyone, for joining. We really appreciate your time. It's interesting to see how relevant Amwell is in a time of great change, and it's exciting to see how this will grow even more as we go forward. Thank you again, and have a good evening.

Thank you for your participation in today's conference. This does conclude the program. You may now disconnect. Thank you.