Teladoc Health, Inc 10-Q for FY2022 Q1

Teladoc Health, Inc. (TDOC)

10-Q 2022-05-02 For: 2022-03-31

Added on April 07, 2026

About this 10-Q

Teladoc Health, Inc filed this 10-Q on May 2, 2022, covering the quarter ended March 31, 2022 (FY2022 Q1).

Headline figures

Quarter ended March 31, 2022, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $565.35M; up 24.6% from $453.68M a year earlier
Net loss: $6.67B; compared with a net loss of $199.65M a year earlier
Diluted EPS: -$41.58; compared with -$1.31 a year earlier

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Delaware		04-3705970
(State of incorporation)		(I.R.S. Employer Identification No.)

2 Manhattanville Road, Suite 203
Purchase, New York		10577
(Address of principal executive office)		(Zip code)


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.001 per share	TDOC	The New York Stock Exchange


Large accelerated filer	⌧	Accelerated filer	◻	Non-accelerated filer	◻	Smaller reporting company	☐
Emerging growth company	☐

		Page Number

PART I	Financial Information	2
Item 1.	Financial Statements	2
	Condensed Consolidated Balance Sheets as of March 31, 2022 (unaudited) and December 31, 2021	2
	Condensed Consolidated Statements of Operations and Comprehensive Loss (unaudited) for the quarters ended March 31, 2022 and 2021	3
	Condensed Consolidated Statements of Stockholders’ Equity (unaudited) for the quarters ended March 31, 2022 and 2021	4
	Condensed Consolidated Statements of Cash Flows (unaudited) for the three months ended March 31, 2022 and 2021	5
	Notes to Unaudited Condensed Consolidated Financial Statements	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	22
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	31
Item 4.	Controls and Procedures	32
PART II	Other Information	33
Item 1.	Legal Proceedings	33
Item 1A.	Risk Factors	33
Item 6.	Exhibits	34
Exhibit Index		34
Signatures		36


	March 31,		December 31,
	2022		2021
Assets
Current assets:
Cash and cash equivalents	$	836,444	$	893,480
Short-term investments		2,544		2,537
Accounts receivable, net of provision of $13,056 and $12,384, respectively		191,528		168,956
Inventories		70,654		73,079
Prepaid expenses and other current assets		106,875		87,387
Total current assets		1,208,045		1,225,439
Property and equipment, net		28,419		27,234
Goodwill		7,899,795		14,504,174
Intangible assets, net		1,883,897		1,910,278
Operating lease - right-of-use assets		45,552		46,780
Other assets		26,629		20,703
Total assets	$	11,092,337	$	17,734,608
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable	$	47,412	$	47,257
Accrued expenses and other current liabilities		116,689		102,933
Accrued compensation		46,075		91,941
Deferred revenue-current		83,847		75,569
Advances from financing companies		12,664		13,313
Total current liabilities		306,687		331,013
Other liabilities		1,445		1,492
Operating lease liabilities, net of current portion		40,163		41,773
Deferred revenue, net of current portion		2,884		3,834
Advances from financing companies, net of current portion		8,252		9,291
Deferred taxes, net		57,516		75,777
Convertible senior notes, net		1,532,780		1,225,671
Commitments and contingencies (Note 10)
Stockholders’ equity:
Common stock, $0.001 par value; 300,000,000 shares authorized as of March 31, 2022 and December 31, 2021; 161,434,513 shares and 160,469,325 shares issued and outstanding as of March 31, 2022 and December 31, 2021, respectively		161		160
Additional paid-in capital		17,177,152		17,473,336
Accumulated deficit		(8,023,279)		(1,421,454)
Accumulated other comprehensive loss		(11,424)		(6,285)
Total stockholders’ equity		9,142,610		16,045,757
Total liabilities and stockholders’ equity	$	11,092,337	$	17,734,608


	Quarter Ended March 31,
	2022		2021
Revenue	$	565,350	$	453,675
Expenses:
Cost of revenue (exclusive of depreciation and amortization, which is shown separately below)		187,025		145,959
Operating expenses:
Advertising and marketing		133,600		89,439
Sales		58,329		64,793
Technology and development		87,412		78,008
General and administrative		104,923		105,172
Acquisition, integration, and transformation costs		4,507		6,323
Depreciation and amortization		58,933		48,659
Goodwill impairment		6,600,000		0
Total expenses		7,234,729		538,353
Loss from operations		(6,669,379)		(84,678)
Loss on extinguishment of debt		0		11,459
Other income, net		(724)		(5,652)
Interest expense, net		5,480		22,125
Net loss before taxes		(6,674,135)		(112,610)
Income tax expense		388		87,039
Net loss		(6,674,523)		(199,649)
Other comprehensive loss, net of tax:
Currency translation adjustment and other		(5,139)		(13,492)
Comprehensive loss	$	(6,679,662)	$	(213,141)

Net loss per share, basic and diluted	$	(41.58)	$	(1.31)

Weighted-average shares used to compute basic and diluted net loss per share		160,532,301		152,167,606


								Accumulated
				Additional				Other		Total
	Common Stock			Paid-In		Accumulated		Comprehensive		Stockholders’
	Shares	Amount		Capital		Deficit		Gain (Loss)		Equity
Balance as of December 31, 2021	160,469,325	$	160	$	17,473,336	$	(1,421,454)	$	(6,285)	$	16,045,757
Cumulative effect adjustment due to adoption of ASU 2020-06 (see Note 2)	0		0		(363,731)		72,698		0		(291,033)
Exercise of stock options	267,586		0		3,585		0		0		3,585
Issuance of common stock upon vesting of restricted stock units	697,602		1		(1)		0		0		0
Stock-based compensation	0		0		63,963		0		0		63,963
Other comprehensive loss, net of tax	0		0		0		0		(5,139)		(5,139)
Net loss	0		0		0		(6,674,523)		0		(6,674,523)
Balance as of March 31, 2022	161,434,513	$	161	$	17,177,152	$	(8,023,279)	$	(11,424)	$	9,142,610


Balance as of December 31, 2020	150,281,099	$	150	$	16,857,797	$	(992,661)	$	18,518	$	15,883,804
Exercise of stock options	1,238,112		1		11,907		0		0		11,908
Issuance of common stock upon vesting of restricted stock units	976,999		1		(1)		0		0		(0)
Issuance of common stock for 2022 Notes	1,058,373		1		270,111		0		0		270,112
Equity portion of extinguishment of 2022 Notes	0		0		(224,081)		0		0		(224,081)
Issuance of common stock for 2025 Notes	1,056,861		1		288,485		0		0		288,486
Equity portion of extinguishment of 2025 Notes	0		0		(237,261)		0		0		(237,261)
Recovery of excess common stock issued for acquisition	(205,280)		(0)		(40,329)		0		0		(40,329)
Stock-based compensation	0		0		90,000		0		0		90,000
Other comprehensive loss, net of tax	0		0		0		0		(13,492)		(13,492)
Net loss	0		0		0		(199,649)		0		(199,649)
Balance as of March 31, 2021	154,406,164	$	154	$	17,016,628	$	(1,192,310)	$	5,026	$	15,829,498


	Quarter Ended
	March 31,
	2022		2021
Access Fees Revenue
U.S.	$	421,146	$	327,553
International		70,191		54,553
Total		491,337		382,106

Visit Fee Revenue
U.S.		64,473		57,128
International		3,455		3,383
Total		67,928		60,511

Other
U.S.		5,581		10,671
International		504		387
Total		6,085		11,058

Total Revenues	$	565,350	$	453,675


	As of March 31,		As of December 31,
	2022		2021
Deferred device and contract costs, current	$	27,335	$	22,304
Deferred device and contract costs, noncurrent		7,636		6,249
Total deferred device and contract costs	$	34,971	$	28,553


	Deferred Device and Contract Costs
Beginning balance as of December 31, 2021	$	28,553
Additions		13,986
Cost of revenue recognized		(7,568)
Ending balance as of March 31, 2022	$	34,971


								Weighted
								Average
								Remaining
	Useful			Accumulated		Net Carrying		Useful Life
	Life	Gross Value		Amortization		Value		(Years)
March 31, 2022
Client relationships	2 to 20 years	$	1,463,335	$	(222,285)	$	1,241,050	14.3
Trademarks	2 to 15 years		325,958		(58,823)		267,135	7.4
Software	3 to 5 years		155,456		(45,101)		110,355	2.8
Technology	5 to 7 years		343,310		(77,953)		265,357	5.3
Intangible assets, net		$	2,288,059	$	(404,162)	$	1,883,897	11.4
December 31, 2021
Client relationships	2 to 20 years	$	1,465,926	$	(199,866)	$	1,266,060	14.5
Trademarks	3 to 15 years		326,392		(45,555)		280,837	9.5
Software	3 to 5 years		126,188		(40,767)		85,421	2.7
Technology	5 to 7 years		343,262		(65,302)		277,960	5.6
Intangible assets, net		$	2,261,768	$	(351,490)	$	1,910,278	12.0


Testing dates	Discount Rate	Peer Group Revenue Multiples (current year/subsequent year)	% Excess of Reporting Unit Fair Value over Carrying Value
December 1, 2021	10.5%	7.0x/5.5x	15.0%
March 31, 2022	12.0%	3.0x/2.5x	0% post impairment


	March 31, 2022
	Level 1		Level 2		Total
Cash and cash equivalents	$	836,444	$	0	$	836,444
Short-term investments	$	0	$	2,544	$	2,544


	As of March 31,
Operating Leases:	2022
2022	$	15,023
2023		14,261
2024		9,634
2025		7,197
2026		5,822
2027 and thereafter		12,638
Total future minimum payments	$	64,575



	2027 Notes			2025 Notes			Livongo Notes
Interest Rate Per Year		1.25	%		1.375	%		0.875	%
Fair Value as of March 31, 2022 (in millions) (1)	$	843.5		$	1.0		$	553.3
Fair Value as of December 31, 2021 (in millions) (1)	$	940.0		$	1.3		$	605.0
Maturity Date		June 1, 2027			May 15, 2025			June 1, 2025
Optional Redemption Date		June 5, 2024			May 22, 2022			June 5, 2023
Conversion Date		December 1, 2026			November 15, 2024			March 1, 2025
Share Conversion Rate Per $1,000 Principal Amount as of March 31, 2022		4.1258			18.6621			13.94
Remaining Contractual Life as of March 31, 2022		5.2 years			3.1 years			3.2 years


	Quarter Ended March 31,
	2022		2021
Operating activities:
Net loss	$	(6,674,523)	$	(199,649)
Adjustments to reconcile net loss to net cash used in operating activities:
Goodwill impairment		6,600,000		0
Depreciation and amortization		58,933		48,659
Depreciation of rental equipment		770		824
Amortization of right-of-use assets		3,173		2,948
Provision for doubtful accounts		4,591		3,074
Stock-based compensation		60,436		86,300
Deferred income taxes		(2,319)		87,004
Accretion of interest		826		16,829
Loss on extinguishment of debt		0		11,459
Gain on sale of investment		0		(5,852)
Other, net		0		38
Changes in operating assets and liabilities:
Accounts receivable		(27,842)		(11,717)
Prepaid expenses and other current assets		(18,993)		(12,799)
Inventory		2,023		(2,877)
Other assets		(6,047)		1,244
Accounts payable		492		(11,989)
Accrued expenses and other current liabilities		11,706		(1,889)
Accrued compensation		(48,819)		(43,624)
Deferred revenue		7,479		17,086
Operating lease liabilities		(3,626)		(3,076)
Other liabilities		(7)		(19)
Net cash used in operating activities		(31,747)		(18,026)
Investing activities:
Capital expenditures		(3,913)		(2,115)
Capitalized software		(26,918)		(11,144)
Proceeds from marketable securities		0		50,000
Acquisitions of business, net of cash acquired		0		(55,921)
Other, net		3,264		3,150
Net cash used in investing activities		(27,567)		(16,030)
Financing activities:
Net proceeds from the exercise of stock options		3,585		11,908
Repurchase of 2022 Notes		0		(130)
Proceeds from advances from financing companies		2,232		4,816


	As of March 31,		As of December 31,
	2022		2021
Raw materials and purchased parts	$	25,006	$	26,164
Work in process		379		313
Finished goods		45,269		46,602
Total inventories	$	70,654	$	73,079


	As of March 31,		As of December 31,
	2022		2021
Professional fees	$	5,485	$	5,373
Consulting fees/provider fees		18,029		19,292
Client performance guarantees		10,034		7,653
Interest payable		5,809		1,480
Income tax payable		5,131		3,098
Insurance		5,779		3,884
Marketing		6,104		3,471
Operating lease liabilities - current		13,052		12,687
Franchise and sales taxes		11,429		9,965
Device replacement cost		5,913		6,263
Other		29,924		29,767
Total	$	116,689	$	102,933


	As of March 31,		As of December 31,
2027 Notes	2022		2021
Principal	$	1,000,000	$	1,000,000
Less: Debt discount, net (1)		(17,940)		(250,846)
Net carrying amount	$	982,060	$	749,154

2025 Notes
Principal	$	730	$	730
Less: Debt discount, net (1)		(10)		(166)
Net carrying amount	$	720	$	564

Livongo Notes
Principal	$	550,000	$	550,000
Less: Debt discount, net (1)		0		(74,047)
Net carrying amount	$	550,000	$	475,953


		Quarter Ended
		March 31,
2027 Notes:		2022		2021
Contractual interest expense	$	3,125		$	3,125
Amortization of debt discount		831			9,059
Total	$	3,956		$	12,184
Effective interest rate		0.8	%		3.4	%

	Quarter Ended
	March 31,
2025 Notes:		2022		2021
Contractual interest expense	$	3		$	814
Amortization of debt discount		1			2,719
Total	$	4		$	3,533
Effective interest rate		0.9	%		3.9	%

	Quarter Ended
	March 31,
Livongo Notes:		2022		2021
Contractual interest expense	$	1,203		$	1,203
Amortization of debt discount		0			4,734
Total	$	1,203		$	5,937
Effective interest rate		0	%		5.2	%

	Quarter Ended
	March 31,
2022 Notes:		2022		2021
Contractual interest expense	$	0		$	104
Amortization of debt discount		0			316
Total	$	0		$	420
Effective interest rate		0	%		9.6	%


				Weighted-
		Weighted-		Average
	Number of	Average		Remaining	Aggregate
	Shares	Exercise		Contractual	Intrinsic
	Outstanding	Price		Life in Years	Value
Balance at December 31, 2021	3,426,978	$	22.88	5.32	$	242,569
Stock option grants	45,434	$	79.40	N/A
Stock options exercised	(267,586)	$	13.40	N/A	$	(15,090)
Stock options forfeited	(15,767)	$	19.63	N/A
Balance at March 31, 2022	3,189,059	$	24.50	5.16	$	160,501
Vested or expected to vest at March 31, 2022	3,189,059	$	24.50	8.35	$	2,352
Exercisable at March 31, 2022	3,011,138	$	20.36	4.97	$	158,148


		Weighted-Average
		Grant Date
	RSUs	Fair Value Per RSU
Balance at December 31, 2021	2,133,501	$	168.43
Granted	2,433,620	$	74.74
Vested and issued	(499,486)	$	146.13
Forfeited	(153,581)	$	153.09
Balance at March 31, 2022	3,914,054	$	113.99
Vested and unissued at March 31, 2022	16,507	$	71.96
Non-vested at March 31, 2022	3,897,547	$	113.99


	Quarter Ended March 31,				Year over Year Growth
	2022		2021			Variance	%
Revenue	$	565,350	$	453,675	$	111,675	25	%
Expenses:
Cost of revenue (exclusive of depreciation and amortization, which is shown separately below)		187,025		145,959		41,066	28	%
Operating expenses:
Advertising and marketing		133,600		89,439		44,161	49	%
Sales		58,329		64,793		(6,464)	(10)	%
Technology and development		87,412		78,008		9,404	12	%
General and administrative		104,923		105,172		(249)	0	%
Acquisition, integration, and transformation costs		4,507		6,323		(1,816)	(29)	%
Depreciation and amortization		58,933		48,659		10,274	21	%
Goodwill impairment		6,600,000		0		6,600,000	N/M
Total expenses		7,234,729		538,353		6,696,376	N/M
Loss from operations		(6,669,379)		(84,678)		(6,584,701)	N/M
Loss on extinguishment of debt		0		11,459		(11,459)	(100)	%
Other income, net		(724)		(5,652)		4,928	(87)	%
Interest expense, net		5,480		22,125		(16,645)	(75)	%
Net loss before taxes		(6,674,135)		(112,610)		(6,561,525)	N/M
Income tax expense		388		87,039		(86,651)	(100)	%
Net loss	$	(6,674,523)	$	(199,649)	$	(6,474,874)	N/M
Net loss per share, basic and diluted	$	(41.58)	$	(1.31)	$	(40.27)	N/M

EBITDA (1)	$	(10,446)	$	(36,019)	$	25,573	(71)	%
Adjusted EBITDA (1)	$	54,497	$	56,604	$	(2,107)	(4)	%

	TELADOC HEALTH, INC.

Date: May 2, 2022	By:	/s/ JASON GOREVIC
	Name:	Jason Gorevic
	Title:	Chief Executive Officer

Date: May 2, 2022	By:	/s/ MALA MURTHY
	Name:	Mala Murthy
	Title:	Chief Financial Officer