Earnings Call Transcript
Teladoc Health, Inc. (TDOC)
Earnings Call Transcript - TDOC Q2 2021
Patrick Feeley, Vice President of Investor Relations
Thank you, and good afternoon. Today, after the market close, we issued a press release announcing our second quarter 2021 financial results. This press release and the accompanying slide presentation are available in the Investor Relations section of the teladochealth.com website. On this call to discuss the results are Jason Gorevic, our Chief Executive Officer; and Mala Murthy, our Chief Financial Officer. During this call, we will also provide our third quarter and full year 2021 outlook, and our prepared remarks will be followed by a question-and-answer session. Please note that we will be discussing certain non-GAAP financial measures that we believe are important in evaluating Teladoc Health's performance. Details on the relationship between these non-GAAP measures to the most comparable GAAP measures and reconciliations thereof can be found in the press release that is posted on our website. Also, please note that certain statements made during this call will be forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are subject to risks, uncertainties and other factors that could cause the actual results for Teladoc Health to differ materially from those expressed or implied on this call. For additional information, please refer to our cautionary statement in our press release and our filings with the SEC, all of which are available on our website. I would now like to turn the call over to Jason.
Jason Gorevic, CEO
Thank you, Patrick, and good afternoon and thank you for joining us today. After the market close, we reported another strong quarter, marked by continued momentum across the business and robust demand for our broad suite of integrated whole-person virtual care. The broad-based strength across our portfolio drove revenue of $503 million in the second quarter, an increase of 109% over the prior year, including organic revenue growth of 41%, which excludes revenue from acquisitions completed over the past 12 months. The strong momentum across our channels and geographies gives us the confidence and visibility to increase our full year revenue guidance to $2.0 billion to $2.025 billion. As we've discussed previously, Teladoc's aim is to provide whole-person virtual care. It's not enough to simply virtualize the current health care experience, simply putting a doctor on the screen. The health care system is already fragmented, and virtual care shouldn't simply mirror that problem. Instead, we need a single virtual solution that seamlessly takes care of all of a person's health care needs, redefines the consumer experience and uses data to improve care at scale. At Teladoc Health, we're doing that now. And during the second quarter, we continued to demonstrate progress on achieving our goal of completely reimagining the health care experience. Our vision starts with engaging more consumers. During the second quarter, our global network of clinicians provided more than 3.5 million visits, an increase of 28% over the second quarter of last year when we were in the middle of the pandemic. This means that even as more people are being vaccinated and restrictions are lifting in many parts of the world, consumers and providers are increasingly relying on Teladoc Health's virtual care. We're now on track to provide more than 13.5 million visits for the year. The persistent strength in utilization has been driven by growth in visits in noninfectious diseases and specialty care as consumers are turning to our services for a broader array of conditions. During the second quarter, 80% of member visits in the B2B channel were related to noninfectious diseases versus approximately 50% in the pre-pandemic period. Demand for our mental health services remains especially robust as consumers and providers recognize the benefits of the virtual modality for mental health care. We're just starting to see the incidence of infectious diseases, such as acute respiratory illness, begin to trend up for the first time in nearly a year as the usage of PPE and social distancing has declined. This follows a period of historically low infectious disease transmission and gives us confidence in our second half outlook. Turning to chronic care, the number of members enrolled in the Livongo suite of products grew 45% year-over-year to 715,000. Rather than focus on one particular disease, our approach is to treat the whole person in an integrated manner, which is important given that over 40% of adults in the U.S. are living with multiple chronic conditions. As a result of this approach, we continue to drive significant growth in multi-program enrollment. Over 20% of our chronic care members are now enrolled in more than one program, up from 6% in the second quarter of last year. The growth in chronic care members, combined with the greater number of individuals enrolled in multiple programs, such as members enrolled in both our diabetes and hypertension programs, resulted in a 60% year-over-year increase in the total number of chronic programs in which our members are enrolled. Most importantly, our services are driving better outcomes. For example, in a recent survey of over 2,000 consumers of our virtual mental health services, more than 90% of those who sought care experienced improvement, with nearly 40% experiencing a significant breakthrough during treatment. In the marketplace, our whole-person approach to care continues to resonate as clients understand the value we deliver and are coming to us for our broad integrated suite of services. I'm very proud to report that during the second quarter, we signed an expansive new agreement with HCSC, the fifth largest health insurer in the U.S. As part of this agreement, we will provide our suite of chronic care solutions across their commercial fully insured members in several markets and significantly expand our products offered to their ASO clients. Beginning in 2022, we will provide eligible HCSC members in fully insured plans with access to our diabetes and hypertension programs. This agreement also includes bringing our full suite of chronic care products to HCSC's ASO markets embedded into their well-being management and health advocacy solution offerings. We're honored to have earned the trust of HCSC and extremely excited about working together to empower more people living with chronic conditions, and we see tremendous opportunity to expand with HCSC in the future. Our vision to reimagine primary care also continues to gain traction. Our Primary360 product delivers a fully integrated solution of mental and physical health, leveraging technology and data, bringing together a full virtual care team for the consumer and integrating into the physical delivery system to get consumers the right care at the right time. During the second quarter, we signed several new deals to launch Primary360. I'm pleased to report that just this week, we signed a significant Primary360 contract with a national payer, and we're in late-stage discussions with several other health plans. As we turn to hospitals and health systems, it's evident that we are uniquely positioned to help them improve outcomes and reduce costs. During the second quarter, we signed multiple new chronic care agreements in the health system market, including a significant contract with a large Florida-based health system to bring our whole-person diabetes and cardiovascular programs to their at-risk populations. Our pipeline in the health system market continues to grow, and we see further opportunities to expand these relationships as we deliver value for our clients and members. This represents a significant validation of our thesis that Teladoc Health's broad distribution would open up new channels for the Livongo chronic care solutions. In the international market during the second quarter, we signed an agreement to expand our relationship with Telefónica. The new partnership makes our telemedicine services available to more than 60 million customers of Vivo, Telefónica's Brazilian subsidiary and the leading telecom company in that country. This partnership allows Telefónica to provide more value to their customers and enables Teladoc to connect millions of consumers with the care and resources they need to stay healthy. Expanding our international presence, our differentiated global footprint allowed us to collaborate with Cigna International for local populations in India during the recent humanitarian crisis. We worked with Cigna International to rapidly set up live clinical support for hundreds of thousands of individuals facing challenges in accessing the country's overwhelmed health care system. I'm extremely proud to say that we were able to quickly assist U.S. multinational corporations to meet the health needs of their employees in India during a time of great need. Earlier this month, we also announced a new partnership with Microsoft. We're working in conjunction with Microsoft to integrate our Solo platform for hospitals and health systems directly within Microsoft Teams. The combination will allow clinicians to access the Solo platform, including its virtual care workflows, data and tools without having to leave the Teams environment. The combination of our clinical leadership and purpose-built medical-grade technology with Microsoft's communications architecture will enable us to deliver a seamless experience to providers and patients. The integration of Solo into Teams represents the first step in this partnership. And together, we will look for further areas to develop and leverage technologies to improve the health care experience. We're making great progress on our roadmap for innovation. Earlier this month, we launched our first integrated Teladoc-Livongo product, myStrength Complete, which combines care from Teladoc therapists and psychiatrists with the Livongo digital mental health capabilities to deliver a differentiated market-leading solution that provides personalized targeted care to individuals in a single comprehensive experience. The launch of myStrength Complete represents another example of the power of Teladoc's differentiated data and behavioral science capabilities to deliver clinically relevant insights that empower consumers and enable clinicians to deliver high-quality care. Our ability to transform data into actionable insights allows us to provide a highly personalized experience and deliver longitudinal virtual care at scale, which positions us to realize our vision of becoming consumers' trusted destination for whole-person health. We look forward to sharing more about our vision and growth strategy at our Investor Day later this year. With that, I'll turn the call over to Mala for a review of the second quarter and detailed guidance.
Mala Murthy, CFO
Thank you, Jason, and good afternoon, everyone. During the second quarter, total revenue increased 109% to $503 million or 41% excluding acquired revenue. Total U.S. revenue for the quarter was $465 million, representing growth of 121% over the prior year's quarter. Total international revenue of $38 million increased 24% over the prior year. Access fee revenue for the second quarter increased 138% year-over-year to $434 million and represented 86% of total revenue, up from 76% in the prior year's quarter. The increase in access fee revenue as a percent of total revenue is primarily due to the acquisition of Livongo and InTouch Health, both of which generate a majority of their revenue from subscription access fees, as well as growth in direct-to-consumer mental health, which is sold on a subscription basis. Visit fee revenue for the second quarter of $59 million increased $5 million sequentially and $0.5 million year-over-year despite a difficult COVID-related comp in the prior year. Turning to membership and access. We ended the quarter with U.S. paid membership of 52 million members, an increase of 500,000 members sequentially over the first quarter. Individuals with visit fee only access was 22 million at the end of the second quarter. Total unique members enrolled in one or more of our chronic care programs were 715,000 members as of the second quarter, a 45% increase over the 493,000 members as of the prior year's quarter pro forma for the merger with Livongo and an increase of 57,000 members sequentially over the first quarter. Average revenue per member per month was $2.47 in the second quarter, up from $1.02 in the prior year second quarter and $2.24 in the first quarter of 2021. The leading drivers of the $0.23 sequential increase in revenue per member were growth in direct-to-consumer mental health and chronic care program revenue. Turning to visits. During the second quarter, we provided 3.5 million visits through our network of clinicians, representing 28% growth over the prior year's quarter, which was during the height of the pandemic in the U.S. Platform-enabled sessions, which represent encounters facilitated by our license platform and provided by our clients' own clinicians, were an additional 1 million in the quarter. The annualized utilization rate for our members was 21.5% in the second quarter, a 550 basis point increase over the prior year's quarter and a 190 basis point increase sequentially over the first quarter of this year. Adjusted gross profit, which excludes depreciation and amortization of intangibles, increased to $343 million. Adjusted gross margin was 68.1% for the quarter compared to 62.3% in the second quarter of 2020. The 580 basis point improvement in adjusted gross margin is primarily attributable to the increased mix of subscription fee revenue versus the prior year. Gross profit and adjusted gross profit in the second quarter of 2021 include the benefit of approximately $6 million in lower expenses on Livongo devices attributable to purchase accounting adjustments related to the merger. Adjusted EBITDA was $66.8 million in the second quarter compared to $26.3 million in prior year's quarter. Adjusted EBITDA in the second quarter of 2021 includes a benefit of approximately $6 million attributable to purchase accounting adjustments mentioned previously. The adjusted EBITDA outperformance in the second quarter was driven in part by operating expense performance, as we continue to make progress against cost synergies, including integrating back-office functions and consolidating vendors. Net loss in the second quarter was $134 million compared to a net loss of $26 million in the same quarter last year. The larger net loss was primarily attributable to increased stock-based compensation, loss on extinguishment of debt and amortization of acquired intangibles. On a per-share basis, net loss was $0.86 for the second quarter compared to a net loss of $0.34 in the prior year's quarter. Net loss per share includes stock-based compensation expense of $0.53, extinguishment of debt of $0.20, and amortization of acquired intangibles of $0.30. We ended the quarter with $786 million in cash and short-term investments, while our total recorded debt outstanding as of June 30 was $1.2 billion. Operating cash flow in the second quarter was $52 million. Now turning to forward guidance. For the full year 2021, we now expect revenue to be in the range of $2.0 billion to $2.025 billion. We continue to expect adjusted EBITDA in 2021 in the range of $255 million to $275 million, including an approximately $20 million benefit from lower expenses on Livongo devices attributable to purchase accounting adjustments related to the Livongo merger. As discussed previously, during the second half of the year, we do anticipate reinvesting cost synergies back into the business to fuel long-term growth, including the rollout of new capabilities and new products such as myStrength Complete and Primary360, continued integration of Livongo, enhancements to our integrated data platform and expansion into new markets. We now expect total visits in 2021 to be between 13.5 million and 14 million visits, representing growth of 27% to 32% over the prior year. For the third quarter of 2021, we expect revenue of $510 million to $520 million, representing growth of 77% to 80% over the prior year's quarter. We expect total paid membership in the range of 52 million to 53 million and anticipate total visits during the third quarter of between 3.4 million and 3.6 million visits, which represent year-over-year growth of 20% to 27%. We expect third-quarter adjusted EBITDA to be in the range of $60 million to $65 million.
Jason Gorevic, CEO
Thanks, Mala. As you've heard, the second quarter was marked by exciting new client wins, product launches, and tremendous progress on our quest to be a category-defining provider of whole-person virtual care. We're incredibly excited to be uniquely positioned to revolutionize virtual care and transform the health care experience. That opportunity was on full display last week at our 15th Annual Teladoc Health Forum, the preeminent gathering of leaders from across the industry focused on the advancement of virtual care within the health care system. We set a record for attendance this year with over 4,000 registrants, hearing from over 100 industry leaders across the health care system on topics ranging from evolving consumer expectations to hospital-based strategies for virtual care. I'm grateful and humbled that so many industry leaders joined us in this effort. As always, thank you for your continued interest in Teladoc Health. And with that, we'll open the call for questions.
Operator, Operator
Your first question is from Sean Wieland of Piper Sandler.
Sean Wieland, Analyst
Congrats on a great quarter. I was hoping we could go into a little bit more detail on the myStrength Complete launch. I know it's early, but if you can tell us a little bit about what the dialogue with the prospects are like, if there's any pushback, how it's priced, expected uptake and maybe anything else you want to share.
Jason Gorevic, CEO
We're excited about myStrength Complete. We have several sales for our new clients, particularly among large employers, following the product launch. We also have a strong pipeline that includes both employers and health plans. Recently, I spoke on a video call with the senior team from a major health plan that views this as a significant opportunity for step care, which aims to provide consumers with the right solution that not only delivers better outcomes but also ensures the most efficient care delivery using digital technology when appropriate, along with coaching, therapy, and psychiatry as needed. The foundation of this approach is data science, engaging consumers through a personalized method that leverages all those capabilities to effectively manage mental health care needs and provide optimal care. The senior team at this large health system was very enthusiastic about utilizing our comprehensive assets to enhance mental health care while also improving physical health care in an efficient manner, especially given the challenges in finding enough psychiatrists. We aim to utilize mental health professionals effectively. Our pipeline was already strong and continues to grow as we move into the latter half of the year. This is one of the first tangible market-facing integrations that combines the strengths of Livongo and Teladoc.
Operator, Operator
Your next question is from Lisa Gill of JPMorgan.
Lisa Gill, Analyst
Jason, can we just spend a couple of minutes talking about Primary360? I know you said that you have a significant national payer. Can you maybe just give us an idea of how many members that is? Are they currently on your platform? Are they new members? And then also, can you just give us an idea of services that will be rendered and how the payments will work? Will it just be kind of a traditional collect the PMPM and then have a visit fee? Or is it something that's going to be different with this national payer?
Jason Gorevic, CEO
Thank you, Lisa. We are very enthusiastic about Primary360 and are already set to launch with several large national employers, including Fortune 1000 companies, in the latter half of this year. We've also signed a significant national agreement, as you mentioned, and are in advanced discussions with several other large payers. We are focused on this area because it utilizes the full range of our capabilities, which we believe gives us a competitive edge. feedback from potential clients has reinforced this belief, and they are excited about our integrated virtual primary care approach, which combines a team-based care model with data and technology to provide optimal care. This aligns with a virtual-first plan that encourages consumers to seek virtual care initially, ensuring they receive the best treatment, whether in person or virtually. Regarding pricing, we anticipate that initial models will reflect a higher per-member-per-month fee than we've typically seen for general medical services or individual offerings, accompanied by varying visit fees that reflect our value. For instance, a 30-minute introductory visit with a primary care physician holds significantly more value than a virtual urgent care visit for something like strep throat or a sinus infection. We expect both PMPM fees and visit fees to increase. Looking ahead, we are excited about transitioning to more value-based reimbursement models that would reward us for better outcomes and reduce care costs, ultimately leading to shared risk with payers and clients. This transition will take time, but we are already discussing it with clients early in our partnerships. We are looking forward to announcing new clients soon, and while I can't share too much detail now, stay tuned for exciting updates.
Mala Murthy, CFO
Yes. But just to punch one point home, the pipeline for Primary360 that we are seeing is very, very strong. If I look at the growth in the pipeline sequentially, we are seeing real strength in the pipeline. And that, to me, is one of the important markers for our confidence in growth as we look ahead.
Operator, Operator
Your next question is from Sandy Draper of Truist Securities.
Sandy Draper, Analyst
I would like some clarification on the relationship with HCSC. I'm not sure if this means you now have a connection and will be reaching out to members to acquire business, or if you already have business secured and are discussing expansion opportunities. Is this essentially a license to access that large customer base, or is this related to signed contracts with further service expansions? I'm just trying to understand how this relationship is developing, but it certainly sounds promising.
Jason Gorevic, CEO
Yes. Thanks. We're incredibly excited about the HCSC relationship. In fact, I'd call it a landmark deal for us. We will be rolling out into significant and multiple commercial fully insured markets of theirs. So when you ask what's signed in terms of a contract, we have signed contracts to roll out to those populations. We have good visibility into the revenue that will come from that. And so that is essentially locked and loaded. We also work with HCSC to then engage with their self-insured clients and roll out into their self-insured clients, which are obviously multimillion-member population. And we roll out with the broadest array of our chronic care solutions or what we call our whole-person chronic care solutions that wrap in diabetes management with weight management, diabetes prevention and mental health care, for example. Hypertension, that does the same that brings in our stress management and mental health solutions, along with weight management solutions, because those are the sort of the full array of capabilities that we need in order to be able to manage the whole person who are living with those conditions. So we see the opportunity not only to go penetrate that self-insured population, and we've already signed several large self-insured clients through that relationship, but also then to continue to expand the scope of the services that we bring both to their fully insured as well as self-insured markets.
Operator, Operator
Your next question is from Charles Rhyee of Cowen.
Charles Rhyee, Analyst
Jason, maybe following up there on HCSC. When you say multimillion lives, is that something we would expect at the start of the year? Or is that more where you expect to be maybe as you roll out? And is that over the course of maybe the first year? Or is that over a multiyear period? And then just a follow-up on an earlier question around myStrength. Can you kind of describe sort of what the difference between the myStrength Complete platform would be versus BetterHelp? And is there any thoughts to kind of integrate those two at some point down the road?
Jason Gorevic, CEO
Yes. So Charles, nice job sneaking in two questions there. With respect to HCSC, we will see a significant set of growth in the first quarter, in the beginning of '22. But I would expect that will grow and continue to grow over at least to probably 3 years' time. So that's an opportunity that we're very excited about. We'll begin to harvest that opportunity at the beginning of '22, but we'll continue to see growth out of that over the course of at least 2 or 3 years. And as I mentioned, I think we have significant expansion opportunity beyond what we've contracted for today. And then with respect to myStrength Complete, myStrength Complete is really a B2B offering that brings together the best of the Livongo digital mental health assets and underlying data science with the Teladoc Health therapy and psychiatry network to deliver virtual visits. It is not delivered on a direct-to-consumer basis. And we are very excited and continue to be extremely positive about the BetterHelp brand, the growth of BetterHelp in the direct-to-consumer markets. And we think that there's a very, very strong sort of complementary nature to our direct-to-consumer offerings and our B2B offerings. And the step care that we bring into the B2B markets helps to deliver more efficient care for the payers who are buying those services on behalf of their members.
Mala Murthy, CFO
I would like to point out that our specialty visits have more than doubled, a trend that has persisted for several quarters. Specifically, in the area of mental health, both in the B2B sector and direct-to-consumer, there is significant pent-up demand for these services. Therefore, I anticipate continued growth in mental health and specialty. We are very enthusiastic about the launch of myStrength Complete, which Jason mentioned earlier, as it showcases the integration of resources and capabilities between Teladoc and the legacy Livongo.
Operator, Operator
Your next question is from Jailendra Singh of Credit Suisse.
Jailendra Singh, Analyst
I would like to revisit your chronic enrollment numbers disclosure. With 57,000 new additions in the quarter, you exceeded our expectations. However, there seems to be some confusion regarding the appropriate consensus figure. Could you discuss how that number compares to your own expectations? Also, can you provide a breakdown between additional enrollment from previous accounts versus new accounts? While I understand you don't provide guidance on that metric, any insights for the second half regarding how you view that enrollment metric for the future would be appreciated.
Jason Gorevic, CEO
Yes, thank you, Jailendra. We are very pleased with the new enrollment figures. I appreciate your inquiry on this as we want to ensure transparency. We are thrilled to report a 45% year-over-year growth in unique members. Additionally, we are excited to see an increase in the number of members enrolled in multiple chronic care solutions, which rose from 6% a year ago to 20% in the second quarter. This contributes to an overall enrollment growth of 60%. When considering each enrollment in each program as a unique occurrence, we measure a 60% increase. However, we believe it's essential to provide both unique user numbers and the percentage of users engaged in multiple programs. This performance was consistent with our expectations. Historically, Livongo has seen most of its new enrollment in the first half of the year, as clients typically sign on in the first two quarters and then experience modest growth throughout the year. Generally, about 70% to 80% of Livongo's enrollment growth occurs in the first half of the year, and we expect this trend to hold for this year as well. I'm cautious about making predictions beyond this. This understanding is reflected in our modeling and guidance.
Mala Murthy, CFO
And I'd also add, Jailendra, great question. As we have said for the past few quarters and when we guided on the year, we are going to give you metrics on membership and unique enrollees as we've talked about. But remember, we've also said that as we think about our growth and our drivers of growth, it's not just one lever, right? It's not just about more members or more enrollees. It's also about growing our revenue per member. And you can see in what we just said in our prepared remarks, we have actually shown nice expansion and increase in our PMPM. So it is about absolutely growing enrollees and members, which we are focused on. You can see the success we are having in our cross-sell in the pipeline strength that we are seeing. And we have given you all transparency over the client wins we have been having, which will result in membership growth and enrollee growth as we look into the months and the years ahead. But I would also remind you all, it is also about growing our revenue per member.
Operator, Operator
Your next question is from Ryan Daniels of William Blair.
Ryan Daniels, Analyst
Jason, maybe a big-picture question for you. I'm curious, with the timing here following your 15th annual forum, if you could talk a little bit about some of the key areas of focus among the client base or industry leaders and how that is perhaps different than a few years ago or perhaps how it intends to change some of your investment opportunities going forward to capitalize on what the client base is looking for.
Jason Gorevic, CEO
Thank you for the question; it's a valuable one that allows us to reflect. The main themes at the forum focused on whole-person virtual care, virtual primary care, and the integration of different customer channels. Payers and providers are increasingly resembling each other and are interested in more similar product combinations than they were in the past, where distinctions were clearer. This really highlighted for me the importance of our extensive capabilities and our leadership across various customer channels, including hospitals, health systems, and payers both domestically and internationally. A prime example is the success we’re having in delivering chronic care solutions through hospital systems like the Florida health system we mentioned today. There was significant discussion about what it takes to implement whole-person virtual care on a large scale, with insights from major international telecommunications companies and industry leaders from various sectors, including government, payers, consulting, and providers. Another crucial theme, which is reflected in our recent results, is that the shift to virtual care is permanent. Many have questioned whether we could maintain the high standards set in 2020, and I’m proud to say our team delivered accurate forecasts, confirming that this transition is lasting and will continue to evolve towards comprehensive, multi-product, multi-specialty virtual care throughout the healthcare system. This reinforces our strategy, and we are even more dedicated to investing in data science, enhancing whole-person virtual care, and scaling our efforts for all stakeholders.
Mala Murthy, CFO
When considering whole-person care and our investments, we have discussed the importance of investing in an integrated data platform, as well as enhancing our consumer and provider experience. This will be a key focus for us from an investment perspective. As the only global provider of virtual care at this time, we are also concentrating on making targeted and disciplined investments in international assets.
Operator, Operator
Your next question is from George Hill of Deutsche Bank.
George Hill, Analyst
I'll say, Jason, I can't believe this one fell all the way to me, but is it too early to start discussing the selling season for January 1, 2022? And I'm going to try to one up Charles and say, aside from HCSC, as we look ahead, how should we view the sources of growth? Is it more about upselling products like Primary360 and myStrength or visit growth? The question I'm really trying to get to is about the evolving growth strategy of the company. In the past, we focused on new footprints and visit growth, but now it seems to center more on increasing wallet share. I'd love to hear your thoughts on that.
Jason Gorevic, CEO
Thanks, George. I'm glad to discuss the selling season. While I won’t provide specific numbers regarding the pipeline, I’d like to share some insights on it. Reflecting on the start of the year, we indicated that our pipeline was strong, showing a 50% increase compared to the previous year at the same time. However, we also noted that it was primarily filled with early-stage deals, meaning they were in the initial phases, even though the overall size of the pipeline was considerably larger. Since then, many of those deals have successfully moved towards closure, including the East Coast Blue plan, HCSC, and a large health system in Florida that is implementing chronic care management. Additionally, the Primary360 agreement we discussed has also progressed. We’re pleased to see these deals advance, and our late-stage pipeline has now grown by 20% compared to last year due to this progress. We have a clearer perspective on what to expect moving forward because we’ve effectively advanced these deals. What excites me is that while last year, 50% of our bookings were multiproduct, this year, that figure has risen to over 75%. After witnessing a significant rise in our average deal size last year, it has now increased by another 10% compared to last year. All these factors together boost our confidence as we look ahead to 2022 and beyond. Some of the deals we've already announced contribute to that confidence, but I am equally enthusiastic about the opportunities still in our pipeline. Overall, I feel very positive about the situation. Mala, do you have anything to add on the pipeline? If not, we can take George's follow-up question.
Mala Murthy, CFO
No. I think you said it all.
Jason Gorevic, CEO
Regarding our growth strategy, I appreciate the question. We've provided more insights into the growth of our per member per month metric, emphasizing the significance of multiproduct growth and enrollment for members with chronic conditions. This strategy strengthens our competitive edge by offering whole-person virtual care instead of just isolated solutions. As we work on converting our pipeline into bookings and those bookings into revenue, this approach will become even more evident. I encourage you to stay tuned as we plan to hold an Investor and Analyst Day in the fourth quarter. During that event, we will share more detailed information about our long-term growth strategy, the factors driving our growth, and our confidence in achieving consistent top-line and bottom-line growth over the coming years.
Mala Murthy, CFO
I would like to add a couple of additional points. We haven't discussed much on this call about our utilization and the significant expansion we achieved during the quarter, which we have been delivering consistently over the past several quarters. Last year, people were questioning whether our strong visit momentum would continue. As you can see from our results, we are experiencing robust growth in visit volumes, even with a year-on-year decline in infectious disease volumes due to ongoing pandemic measures. We are seeing substantial growth in our noninfectious disease volumes as well as in our specialty volumes, which are driving utilization expansion. Additionally, with the growth in specialty, we are observing increased stickiness, shown by the rise in repeat visits and more of our members utilizing multiple services. All of this indicates our growing relevance in meeting the healthcare needs of our members and clients, and we will share more about our growth in the upcoming years later this year.
Operator, Operator
Your next question is from Richard Close of Canaccord.
Richard Close, Analyst
Congratulations. I appreciate all the details here. Maybe to just dive in a little bit more on George's question. The Street's at like 58 million members, I guess, estimate for next year. And it sounds like you made good progress with HCSC. But is that, call it, 9% year-over-year too robust and maybe ratchet that down and increase the wallet share? Is that something you would recommend?
Jason Gorevic, CEO
So Richard, we won't provide guidance for next year just yet, as it's a bit early for that. However, we have been discussing the growth in our revenue per member. The diversity of our capabilities contributes to this growth, and the increasing role we have within the healthcare system also plays a part. For instance, our Primary360 initiative is a great example of how we expect to see increases in both PMPM and visit fees. Currently, 20% of chronic care enrollees are utilizing multiple chronic care solutions, which boosts revenue per member. Additionally, with over 75% of our sales being multi-product, this also enhances our revenue per member. If you're asking whether a 9% increase in membership will achieve our desired numbers, the answer is no. However, expanding our PMPM across the 70 million people who have access to our service can be a significant factor, and we anticipate continuing to grow in that area. This will involve more individuals accessing a variety of products and services, combined with new payment models, which will drive higher revenue. We'll aim to provide more detailed information to help you with your models during our Investor Day later this year.
Mala Murthy, CFO
Yes. The good thing is, Richard, we are not reliant on one lever, right? As our results demonstrate in different years, we pull on different levers to drive our growth. And I would say the results and the revenue growth that we are delivering this year in totality and on an organic basis is in line with what we had when we gave you a preliminary outlook early last year, and then we followed it up with more specific guidance for the year, is absolutely in line with what we had expected. So as Jason said a few minutes ago, we were reasonably accurate in our forecast, in how we expected our growth to be given the fact that 86% of our revenue is access revenue in a given quarter this year. And that's going to continue to be the flavor of our revenue profile. We do have visibility into how we will grow our revenue, and it will pull on different levers.
Operator, Operator
Your next question is from Stephanie Davis of SVB Leerink.
Stephanie Davis, Analyst
Could you give us an update on the competitive dynamics and kind of end-market trends in the hospital business given the push/pull of return to in-person visits in some areas, Delta variant in other geographies? And just a quick housekeeping follow-up because I want to sneak one in. Is there anything to call out in the other revenues, such as a lower proportion of hardware sales in your recent wins or anything like that?
Jason Gorevic, CEO
I'll discuss the competitive landscape in the hospital market. Mala will address the other revenue. We're very enthusiastic about our partnership with Microsoft. What we're hearing from hospital administrators, especially in the C-suite, is that they want to transform virtual care into a revenue generator, a means to better manage their at-risk populations and to control overall care costs, since they are increasingly responsible for delivering value. Our purpose-built solutions for hospital systems, along with our chronic care solutions that significantly impact readmission avoidance and long-term financing for at-risk populations, combined with Microsoft's strong integration into their administrative functions, utilizing their communication infrastructure, creates a unique opportunity. This combination is what we're hearing from our hospital clients. When we engage with them and present the value of all those assets, including the potential to implement Primary360 as a cost-effective virtual front end for their healthcare system, it reinforces our value proposition.
Mala Murthy, CFO
In response to your question about other revenue, there isn't much to highlight. As you know, the other revenue we report includes both hardware sales and leases. We are noticing some movement towards leasing, likely due to pressures on CapEx budgets, but there aren't any significant changes worth mentioning.
Operator, Operator
Your next question is from Sean Dodge of RBC Capital Markets.
Sean Dodge, Analyst
Jason, maybe going back to the revenue per member discussion. On Primary360, in the pricing models, you said higher PMPM and maybe some higher visit fees. But maybe just to help us better appreciate the potential there, can you give us a sense of the magnitude of the impact we can have on PMPM? And then you said higher initial visit fees, but what impact do these have on increasing the number of visits? How big of a lift can these new programs have on utilization over the longer term?
Jason Gorevic, CEO
Yes, Sean, thank you for your question. I appreciate your thoughts. I won't specify the exact potential of the PMPM increase as it will develop over time with our value-based reimbursement and risk-taking efforts. We have the chance to enhance primary care caps, and this will be a multiyear process. Different clients will progress at their own pace toward this goal. We expect a significant increase for those utilizing the Primary360 product. The overall impact on our business will depend on how quickly we implement that product and transition to value-based reimbursement. Regarding the rise in visit numbers, there's a substantial opportunity here. Transitioning from simply being a virtual urgent care provider focused on episodic care to becoming a virtual medical home will encourage more frequent interactions and add greater value. This will involve a complete care team, including primary care physicians, specialists, mental health providers, physical health providers, coaches, registered dieticians, and digital resources. Therefore, the potential for a significant increase in the frequency, speed, and value of these interactions is very real, and I believe we will be able to capitalize on the value we create through these visits.
Operator, Operator
Your next question is from David Larsen of BTIG.
David Larsen, Analyst
Can you talk a little bit about like the last mile of care? Do you have any interest or plans in getting into, like, say, the visiting nurse business, for example, or partnering with anybody who's actually doing that so you can deliver meds to members at their home and also take diagnostic tests in the home and so forth? Any thoughts around that would be helpful.
Jason Gorevic, CEO
Yes. Dave, it's a great question. And I would say that's a very important evolving part of the market and one that I want to partner with. I think the likelihood of us owning a field team that's going to be making house calls is pretty small. I think it's much more likely that we would partner with those who are doing that, and really importantly, take advantage of the evolving technology as well as the evolving sort of FDA approval process because, as you mentioned, more and more is going to be approved for administration within the home. So totally agree that that's an important part. And we're already doing the work, especially on our Primary360 product to integrate with those solutions.
Operator, Operator
And this concludes today's conference call. Thank you for participating. You may now disconnect.