Teladoc Health, Inc 8-K, filed Feb 22, 2022
Teladoc Health, Inc. (TDOC)
About this 8-K
Teladoc Health, Inc filed this 8-K on February 22, 2022.
Items reported
- Item 2.02: Financial results
- Item 9.01: Financial statements and exhibits
UNITED STATES
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FORM
CURRENT REPORT
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SECURITIES EXCHANGE ACT OF 1934
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Item 2.02.Results of Operations and Financial Condition.
On February 22, 2022, Teladoc Health, Inc. (the “Company”) issued a press release relating to its financial results for the fourth quarter and full year 2021. A copy of the press release, which is incorporated by reference herein, is attached hereto as Exhibit 99.1.
The foregoing information (including the exhibit set forth in Item 9.01 hereto) is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, except as expressly set forth by specific reference in such filing.
Item 9.01.Financial Statements and Exhibits.
(d)Exhibits.
Exhibit No. | Description | |
99.1* | | Teladoc Health, Inc. press release, dated February 22, 2022. |
| | |
104 | | Cover Page Interactive Data File (formatted as Inline XBRL). |
* Furnished herewith.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| TELADOC HEALTH, INC. | |
| | |
Date: February 22, 2022 | | |
| By: | /s/ Adam C. Vandervoort |
| Name: | Adam C. Vandervoort |
| Title: | Chief Legal Officer and Secretary |
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Exhibit 99.1
Teladoc Health Reports Fourth Quarter and Full Year 2021 Results
| ● | Fourth quarter revenue grows 45% year-over-year to $554.2 million and total visits increase 41% to 4.4 million |
| ● | Full year revenue grows 86% year-over-year to $2,032.7 million and total visits increase 38% to 15.4 million |
| ● | Full year cash flows from operations grew to $194.0 million |
| ● | Full year 2022 Revenue guidance of $2.55 to $2.65 billion, representing 25% to 30% growth |
PURCHASE, NY, February 22, 2022— Teladoc Health, Inc. (NYSE: TDOC), the global leader in whole-person virtual care, today reported financial results for the fourth quarter and full year ended December 31, 2021.
“Teladoc Health took a huge step forward in bringing true whole-person care to life for consumers and clients in 2021,” said Jason Gorevic, chief executive officer of Teladoc Health. “We successfully delivered against performance metrics, solidified our position as the partner of choice for our clients and connected millions of consumers with high-quality care. Our commitment to be the first stop along the consumer healthcare journey – regardless of need – remains unwavering. And Teladoc Health is clearly differentiated by the breadth and depth of our offerings, an integrated suite of virtual care services that connect individuals with chronic, primary, acute and specialty care. We saw meaningful growth and penetration across several key areas of our business, in mental health through both BetterHelp in the direct-to-consumer space and our new MyStrength Complete B2B2C approach to right care at the right time, as well as primary care through Primary 360, all helping to meet a greater share of an individual’s healthcare needs.”
“Healthcare has a ‘new normal’ resulting from the pandemic’s intersection of health needs and virtual solutions that has forever changed the experience of healthcare. We are proud of the role Teladoc Health has played in leading this transformation and are equally excited about our role in 2022 and beyond as we continue to innovate, further evolving whole-person care, introducing new services like Chronic Care Complete, expanding into new markets and deepening our relationships with our clients and consumers," Gorevic added.
Key Financial Data | | | | | | | | | | | | | | | | | | | | |
($ thousands, unaudited) | | | | | | | | | | | | | | | | | | | | |
| | Quarter Ended | | | Year over Year | | Year Ended | | | Year over Year | ||||||||||
| | December 31, | | | Change | | December 31, | | | Change | ||||||||||
|
| 2021 |
| 2020 |
| | |
| 2021 |
| 2020 | | | | ||||||
Revenue | | $ | 554,235 | | $ | 383,321 | | | 45 | % | | $ | 2,032,707 | | $ | 1,093,962 | | | 86 | % |
| | | | | | | | | | | | | | | | | | | | |
Net Loss | | $ | (10,985) | | $ | (393,967) | | | n | m | | $ | (428,793) | | $ | (485,136) | | | n | m |
Net Loss per share, basic and diluted | | $ | (0.07) | | $ | (3.07) | | | n | m | | $ | (2.73) | | $ | (5.36) | | | n | m |
| | | | | | | | | | | | | | | | | | | | |
Adjusted EBITDA* | | $ | 77,077 | | $ | 50,384 | | | 53 | % | | $ | 267,837 | | $ | 126,841 | | | 111 | % |
| | | | | | | | | | | | | | | | | | | | |
Cash Flow from Operations | | $ | 83,208 | | $ | (114,936) | | | n | m | | $ | 193,990 | | $ | (53,511) | | | n | m |
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* A reconciliation of each non-GAAP measure to the most comparable measure under GAAP has been provided in this press release in the accompanying tables. An explanation of these Non-GAAP measures is also included below under the heading “Non-GAAP Financial Measures.”
nm – Not meaningful
Fourth Quarter 2021
Revenue increased 45% to $554.2 million, from $383.3 million in the fourth quarter of 2020. Access fees revenue grew 51% to $469.9 million and visit fee revenue grew 21% to $68.9 million. U.S. Revenues grew 45% to $482.9 million and International revenues grew 40% to $71.3 million.
Net loss totaled $11.0 million, or $(0.07) per share, compared to $394.0 million, or $(3.07) per share, in the fourth quarter of 2020. Results for the fourth quarter of 2021 included stock-based compensation expense of $61.6 million, or $(0.39) per share, amortization of acquired intangibles of $45.1 million, or $(0.28) per share, and non-cash income tax benefit of $49.7 million, or $0.31 per share.
Results for the fourth quarter of 2020 included stock-based compensation expense of $414.4 million, or $(3.23) per share, amortization of acquired intangibles of $33.0 million, or $(0.26) per share, and non-cash income tax benefit of $85.5 million, or $0.67 per share.
Adjusted EBITDA* increased 53% to $77.1 million, compared to $50.4 million in the fourth quarter of 2020.
GAAP Gross margin, which includes depreciation and amortization, was 67.5 percent for the fourth quarter of 2021 compared to 67.2 percent for the fourth quarter of 2020.
Adjusted Gross margin* was 68.4 percent for the fourth quarter of 2021 compared to 67.9 percent for the fourth quarter of 2020.
Average revenue per U.S. paid member increased to $2.49 in the fourth quarter of 2021, from $1.63 in the fourth quarter of 2020 and $2.40 in the third quarter of 2021.
Full Year Ended December 31, 2021
Revenue increased 86% to $2,032.7 million, from $1,094.0 million for the year ended December 31, 2020. Access fees revenue grew 104% to $1,732.0 million and visit fee revenue grew 15% to $254.2 million. U.S. Revenues grew 94% to $1,774.0 million and International revenues grew 44% to $258.7 million.
Net loss totaled $428.8 million, or $(2.73) per share, compared to $485.1 million, or $(5.36) per share, for the year ended December 31, 2021. Results for the year ended December 31, 2021 included stock-based compensation expense of $302.6 million, or $(1.93) per share, amortization of acquired intangibles of $178.9 million, or $(1.14) per share, loss on extinguishment of debt of $43.7 million, or $(0.28) per share, and non-cash income tax expense of $44.1 million, or $(0.28) per share.
Results for the year ended December 31, 2020 included stock-based compensation expense $475.5 million, or $(5.25) per share, amortization of acquired intangibles $57.5 million, or $(0.64)
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per share, loss on extinguishment of debt $9.1 million, or $(0.10) per share, and non-cash income tax benefit $90.9 million, or $1.00 per share.
Adjusted EBITDA* increased 111% to $267.8 million, compared to $126.8 million in 2020.
GAAP Gross margin, which includes depreciation and amortization, was 67.2 percent for the full year 2021 compared to 63.1 percent in 2020.
Adjusted Gross margin* was 68.0 percent for the full year 2021 compared to 64.3 percent in 2020.
Financial Outlook
Teladoc Health provides guidance based on current market conditions and expectations and what we know today. In addition, given the uncertainty of the expected path of the COVID-19 pandemic as well as the broader economic impact, this is an evolving situation and circumstances may change. Based on what we know today, we believe our guidance ranges provide a reasonable baseline for 2022 financial performance.
For the first quarter of 2022, we expect:
| 1Q 2022 Guidance Range |
Revenue | $565 to $571 million |
EBITDA | $(23) to $(16) million |
Adjusted EBITDA | $51 to $55 million |
Net loss per share | $(0.60) to $(0.50) per share |
Total U.S. Paid Membership | 54.0 to 54.5 million members |
Visit Fee Only Access | 24.0 to 25.0 million |
Total Visits | 4.3 to 4.5 million visits |
For the full year 2022, we expect:
| Full Year 2022 Guidance Range |
Revenue | $2.55 to $2.65 billion |
EBITDA | $18 to $48 million |
Adjusted EBITDA | $330 to $355 million |
Net loss per share | $(1.60) to $(1.40) per share |
Total U.S. Paid Membership | 54.0 to 56.0 million members |
Visit Fee Only Access | 24.0 to 25.0 million |
Total Visits | 18.5 to 20.0 million visits |
Earnings Conference Call
The fourth quarter and full year 2021 earnings conference call and webcast will be held Tuesday, February 22, 2022 at 4:30 p.m. E.T. The conference call can be accessed by dialing 1-844-200-6205 for U.S. participants, or 1-929-526-1599 for international participants, and referencing Conference ID Number: 335463; or via a live audio webcast available online at http://ir.teladoc.com/news-and-events/events-and-presentations/. A webcast replay will be available for on-demand listening shortly after the completion of the call at the same web link, and will remain available for approximately 90 days.
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About Teladoc Health
Teladoc Health empowers all people everywhere to live their healthiest lives by transforming the healthcare experience. As the world leader in whole-person virtual care, Teladoc Health uses proprietary health signals and personalized interactions to drive better health outcomes across the full continuum of care, at every stage in a person’s health journey. Ranked best in KLAS for Virtual Care Platforms in 2020 and #1 among direct-to-consumer telehealth providers in the J.D. Power 2021 U.S. Telehealth Satisfaction Study, Teladoc Health leverages more than a decade of expertise and data-driven insights to meet the growing virtual care needs of consumers and healthcare professionals. For more information, please visit www.teladochealth.com or follow @TeladocHealth on Twitter.
Cautionary Note Regarding Forward-Looking Statements
This press release contains “forward-looking statements” within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by words such as: “anticipate,” “intend,” “plan,” “believe,” “project,” “estimate,” “expect,” “may,” “should,” “will” and similar references to future periods. Examples of forward-looking statements include, among others, statements we make regarding future financial or operating results, future numbers of members or clients, future numbers of visits, litigation outcomes, regulatory developments, market developments, new products and growth strategies, and the effects of any of the foregoing on our future results of operations or financial condition.
Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are based only on our current beliefs, expectations and assumptions regarding the future of our business, future plans and strategies, projections, anticipated events and trends, the economy and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of our control. Our actual results and financial condition may differ materially from those indicated in the forward-looking statements. Important factors that could cause our actual results and financial condition to differ materially from those indicated in the forward-looking statements include, among others, the following: (i) changes in laws and regulations applicable to our business model; (ii) changes in market conditions and receptivity to our services and offerings; (iii) results of litigation; (iv) the loss of one or more key clients; (v) changes in valuations or useful lives of our assets; (vi) changes to our abilities to recruit and retain qualified providers into our network; and (vii) the impact of the COVID-19 pandemic on our operations, demand for our services and general economic conditions, as well as orders, directives and legislative action by local, state, federal and foreign governments in response to the spread of COVID-19. For a detailed discussion of the risk factors that could affect our actual results, please refer to the risk factors identified in our SEC reports, including, but not limited to, our Annual Report on Form 10-K and Quarterly Reports on Form 10-Q, as filed with the SEC.
Any forward-looking statement made by us in this press release is based only on information currently available to us and speaks only as of the date on which it is made. We undertake no obligation to publicly update any forward-looking statement, whether written or oral, that may be made from time to time, whether as a result of new information, future developments or otherwise.
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Revenues and Summary Operating Metrics
Revenue (1) | | | | | | | | | | | | | | | | | | |
($ thousands) | | Quarter Ended | | Year over Year | | Year Ended | | Year over Year | ||||||||||
| | December 31, | | Growth | | December 31, | | Growth | ||||||||||
|
| 2021 |
| 2020 |
| |
| 2021 |
| 2020 | | | ||||||
Access Fees Revenue | | | | | | | | | | | | | | | | | | |
U.S. | | $ | 403,095 | | $ | 263,220 | | 53 | % | | $ | 1,488,420 | | $ | 678,168 | | 119 | % |
International | | | 66,821 | | | 48,954 | | 36 | % | | | 243,585 | | | 169,087 | | 44 | % |
Total | | | 469,916 | | | 312,174 | | 51 | % | | | 1,732,005 | | | 847,255 | | 104 | % |
| | | | | | | | | | | | | | | | | | |
Visit Fee Revenue | | | | | | | | | | | | | | | | | | |
U.S. | | | 65,328 | | | 55,437 | | 18 | % | | | 241,515 | | | 211,664 | | 14 | % |
International | | | 3,588 | | | 1,608 | | 123 | % | | | 12,719 | | | 9,792 | | 30 | % |
Total | | | 68,916 | | | 57,045 | | 21 | % | | | 254,234 | | | 221,456 | | 15 | % |
| | | | | | | | | | | | | | | | | | |
Other | | | | | | | | | | | | | | | | | | |
U.S. | | | 14,472 | | | 13,589 | | 6 | % | | | 44,089 | | | 23,888 | | 85 | % |
International | | | 931 | | | 513 | | 81 | % | | | 2,379 | | | 1,363 | | 75 | % |
Total | | | 15,403 | | | 14,102 | | 9 | % | | | 46,468 | | | 25,251 | | 84 | % |
| | | | | | | | | | | | | | | | | | |
Total Revenue | | $ | 554,235 | | $ | 383,321 | | 45 | % | | $ | 2,032,707 | | $ | 1,093,962 | | 86 | % |
| | | | | | | | | | | | | | | | | | |
U.S. Revenue | | $ | 482,895 | | $ | 332,246 | | 45 | % | | $ | 1,774,024 | | $ | 913,720 | | 94 | % |
International Revenue | | | 71,340 | | | 51,075 | | 40 | % | | | 258,683 | | | 180,242 | | 44 | % |
Total Revenue | | $ | 554,235 | | $ | 383,321 | | 45 | % | | $ | 2,032,707 | | $ | 1,093,962 | | 86 | % |
| | | | | | | | | | | | | | | | | | |
Average U.S. Revenue Per Member (2) | | $ | 2.49 | | $ | 1.63 | | 52 | % | | | | | | | | | |
Visits (1) | | | | | | | | | | | | | | | | | | |
(thousands) | | Quarter Ended | | Year over Year | | Year Ended | | Year over Year | ||||||||||
| | December 31, | | Growth | | December 31, | | Growth | ||||||||||
| | 2021 |
| 2020 | | |
| 2021 |
| 2020 | | | ||||||
U.S. Visits | | | 3,291 | | | 2,289 | | 44 | % | | | 11,482 | | | 8,083 | | 42 | % |
International Visits | | | 1,116 | | | 828 | | 35 | % | | | 3,917 | | | 3,096 | | 27 | % |
Total Visits | | | 4,407 | | | 3,117 | | 41 | % | | | 15,399 | | | 11,179 | | 38 | % |
| | | | | | | | | | | | | | | | | | |
Utilization (3) | | | 22.7% | | | 16.0% | | 668 | pt | | | 20.1% | | | 14.5% | | 563 | pt |
| | | | | | | | | | | | | | | | | | |
Platform-Enabled Sessions (4) | | | 982 | | | 1,089 | | (10) | % | | | 4,060 | | | 2,076 | | 96 | % |
| | | | | | | | | | | | | | | | | | |
Total Visits & Sessions Provided & Enabled | | | 5,389 | | | 4,206 | | 28 | % | | | 19,459 | | | 13,255 | | 47 | % |
Membership and Visit Fee Only Access | | | | | | | | |
(millions) | | Year Ended | | | | | ||
| | December 31, | | Growth | | |||
|
| 2021 |
| 2020 |
| | | |
U.S. Paid Membership | | 53.6 | | 51.8 | | 3 | % | |
| | | | | | | | |
U.S. Visit Fee Only Access | | 24.2 | | 21.3 | | 14 | % | |
| | | | | | | | |
Chronic Care Enrollment | | 0.729 | | 0.596 | | 22 | % | |
| | |||||||
(1) During the fourth quarter of 2021, Teladoc Health, Inc. (“Teladoc Health” or “the Company”) refined its definition of international revenues to reflect all international revenues based on location of the customer. Previously, direct to consumer activities were primarily reflected based on the location of operations. In addition, certain activities related to our international operations are now reflected in visit revenues versus access fee revenues. Prior period amounts have been recast to conform with current presentation. Consistent with this change, the corresponding metrics have been updated, including the addition of approximately 590,000 and 588,000 visits for 2021 and 2020, respectively.
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(2) Average U.S. Revenue Per Member measures the average quarterly amount of access revenue that the Company generates from a U.S. paid member. It is calculated by dividing the quarterly U.S. access revenue generated from the Company’s U.S. paid members, excluding certain non-member based access fees, by the total average number of U.S. paid members during the quarter.
(3) Utilization measures the ratio of visits to total U.S. paid members. It is calculated by dividing monthly visits by monthly U.S. paid members in the quarter and annualizing the result. Visit fee only visits are excluded.
(4) Platform-Enabled Sessions are a unique instance in which our licensed software platform has facilitated a virtual voice or video encounter between a care provider and our client’s patient, or between care providers. We believe platform-enabled sessions are an indicator of the value our clients derive from the platform they license from us in order to facilitate virtual care.
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TELADOC HEALTH, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except share and per share data, unaudited)
| | Quarter Ended December 31, | | Year Ended December 31, | ||||||||
| | 2021 |
| 2020 |
| 2021 |
| 2020 | ||||
Revenue | | $ | 554,235 | | $ | 383,321 | | $ | 2,032,707 | | $ | 1,093,962 |
Expenses: | | | | | | | | | | | | |
Cost of revenue (exclusive of depreciation and amortization, | | | 174,985 | |
| 122,942 | |
| 650,258 | |
| 390,829 |
Operating expenses: | | | | | | | | | | | | |
Advertising and marketing | |
| 112,988 | |
| 93,751 | |
| 416,726 | |
| 226,146 |
Sales | |
| 59,330 | |
| 93,942 | |
| 250,581 | |
| 154,052 |
Technology and development | |
| 72,867 | |
| 92,697 | |
| 311,884 | |
| 164,941 |
Acquisition, integration, and transformation costs | | | 4,559 | | | 57,550 | | | 26,643 | | | 88,236 |
General and administrative | |
| 118,603 | |
| 343,985 | |
| 438,007 | |
| 506,684 |
Depreciation and amortization | |
| 52,332 | |
| 36,960 | |
| 204,239 | |
| 69,495 |
Total expenses | | | 595,664 | |
| 841,827 | |
| 2,298,338 | |
| 1,600,383 |
Loss from operations | |
| (41,429) | |
| (458,506) | |
| (265,631) | |
| (506,421) |
Loss on extinguishment of debt | | | 20 | |
| 99 | |
| 43,748 | |
| 9,077 |
Other expense (income), net | | | 405 | |
| (282) | |
| (5,088) | |
| 545 |
Interest expense, net | |
| 18,872 | |
| 21,101 | |
| 80,365 | |
| 59,950 |
Net loss before taxes | |
| (60,726) | |
| (479,424) | |
| (384,656) | |
| (575,993) |
Income tax (benefit) expense | |
| (49,741) | |
| (85,457) | |
| 44,137 | |
| (90,857) |
Net loss | | $ | (10,985) | | $ | (393,967) | | $ | (428,793) | | $ | (485,136) |
| | | | | | | | | | | | |
Net loss per share, basic and diluted | | $ | (0.07) | | $ | (3.07) | | $ | (2.73) | | $ | (5.36) |
| | | | | | | | | | | | |
Weighted-average shares used to compute basic | | | 159,944,335 | | | 128,298,005 | | | 156,939,349 | | | 90,509,229 |
Stock-based Compensation Summary
Compensation costs for stock-based awards were classified as follows (in thousands):
| | Quarter Ended | | Year Ended | | ||||||||
| | December 31, | | December 31, | | ||||||||
|
| 2021 |
| 2020 |
| 2021 |
| 2020 |
| ||||
Cost of revenue (exclusive of depreciation and amortization, | | $ | 1,970 | | $ | 2,572 | | $ | 8,280 | | $ | 2,700 | |
Advertising and marketing | | | 3,811 | | | 22,548 | | | 18,952 | | | 26,995 | |
Sales | |
| 13,837 | |
| 56,265 | |
| 71,475 | |
| 65,730 | |
Technology and development | |
| 18,226 | |
| 53,271 | |
| 95,561 | |
| 60,556 | |
General and administrative | |
| 23,771 | |
| 279,724 | |
| 108,318 | |
| 319,550 | |
Total stock-based compensation expense (1) | | $ | 61,615 | | $ | 414,380 | | $ | 302,586 | | $ | 475,531 | |
(1) Excluding the amount capitalized related to internal software development projects.
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TELADOC HEALTH, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands, unaudited)
| | Year Ended December 31, | ||||
|
| 2021 | | 2020 | ||
Operating activities: | | |
|
| |
|
Net loss | | $ | (428,793) | | $ | (485,136) |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | | | | | | |
Depreciation and amortization | |
| 204,239 | |
| 69,495 |
Depreciation of rental equipment | | | 3,333 | | | 1,697 |
Amortization of right-of-use assets | | | 12,049 | | | 6,895 |
Provision for doubtful accounts | |
| 16,941 | |
| 5,284 |
Stock-based compensation | |
| 302,586 | |
| 475,531 |
Deferred income taxes | |
| 41,800 | |
| (90,158) |
Accretion of interest | | | 61,253 | | | 45,296 |
Loss on extinguishment of debt | |
| 40,652 | |
| 9,077 |
Gain on sale of investment | | | (5,901) | | | 0 |
Other, net | | | (3,845) | | | (1,009) |
Changes in operating assets and liabilities: | | | | | | |
Accounts receivable | |
| (17,510) | |
| (21,091) |
Prepaid expenses and other current assets | |
| (31,090) | |
| (12,565) |
Inventory | | | (19,494) | | | (24,732) |
Other assets | |
| (3,547) | |
| (8,135) |
Accounts payable | |
| 1,188 | |
| (87,995) |
Accrued expenses and other current liabilities | |
| 18,175 | |
| 20,125 |
Accrued compensation | |
| (4,675) | |
| 34,819 |
Deferred revenue | | | 20,554 | | | 17,751 |
Operating lease liabilities | | | (16,532) | | | (6,300) |
Other liabilities | |
| 2,607 | |
| (2,360) |
Net cash provided by (used in) operating activities | |
| 193,990 | |
| (53,511) |
Investing activities: | | | | | | |
Capital expenditures | |
| (8,534) | |
| (4,024) |
Capitalized software | |
| (55,400) | |
| (22,018) |
Proceeds from marketable securities | | | 50,000 | | | 2,496 |
Proceeds from the sale of investment | | | 10,901 | | | 0 |
Acquisitions of business, net of cash acquired | |
| (78,663) | |
| (567,429) |
Other, net | | | 8,715 | |
| 0 |
Net cash used in investing activities | |
| (72,981) | |
| (590,975) |
Financing activities: | | | | | | |
Net proceeds from the exercise of stock options | |
| 25,781 | |
| 54,314 |
Proceeds from issuance of 2027 Notes | | | 0 | | | 1,000,000 |
Payment of issuance costs of 2027 Notes | | | 0 | | | (24,070) |
Repurchase of 2022 Notes | |
| (139) | |
| (228,153) |
Proceeds from the sale of capped call related to the Livongo Notes | | | 0 | | | 91,659 |
Proceeds from advances from financing companies | | | 15,275 | | | 6,002 |
Payment against advances from financing companies | | | (16,050) | | | (8,635) |
Payment of assumed indebtedness | | | 0 | | | (10,000) |
Proceeds from employee stock purchase plan | |
| 16,810 | |
| 4,722 |
Cash received (paid) for withholding taxes on stock-based compensation, net | | | 3,422 | | | (26,703) |
Other, net | | | (4,152) | | | 0 |
Net cash provided by financing activities | |
| 40,947 | |
| 859,136 |
Net increase in cash and cash equivalents | |
| 161,956 | |
| 214,650 |
Foreign exchange difference | | | (1,800) | | | 4,321 |
Cash and cash equivalents at beginning of the period | |
| 733,324 | |
| 514,353 |
Cash and cash equivalents at end of the period | | $ | 893,480 | | $ | 733,324 |
| | | | | | |
Income taxes paid | | $ | 3,974 | | $ | 1,324 |
| | | | | | |
Interest paid | | $ | 16,430 | | $ | 14,890 |
8
TELADOC HEALTH, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share data, unaudited)
| | December 31, | | December 31, | ||
|
| 2021 |
| 2020 | ||
| | | | | | |
Assets | | | | | | |
Current assets: | | | | | | |
Cash and cash equivalents | | $ | 893,480 | | $ | 733,324 |
Short-term investments | | | 2,537 | | | 53,245 |
Accounts receivable, net of provision of $12,384 and $6,412, respectively | |
| 168,956 | |
| 169,281 |
Inventories | | | 73,079 | | | 56,498 |
Prepaid expenses and other current assets | |
| 87,387 | |
| 47,259 |
Total current assets | |
| 1,225,439 | |
| 1,059,607 |
Property and equipment, net | |
| 27,234 | |
| 28,551 |
Goodwill | |
| 14,504,174 | |
| 14,581,255 |
Intangible assets, net | |
| 1,910,278 | |
| 2,020,864 |
Operating lease - right-of-use assets | | | 46,780 | | | 46,647 |
Other assets | |
| 20,703 | |
| 18,357 |
Total assets | | $ | 17,734,608 | | $ | 17,755,281 |
Liabilities and stockholders’ equity | | | | | | |
Current liabilities: | | | | | | |
Accounts payable | | $ | 47,257 | | $ | 46,030 |
Accrued expenses and other current liabilities | |
| 102,933 | |
| 83,657 |
Accrued compensation | |
| 91,941 | |
| 94,593 |
Deferred revenue-current | | | 75,569 | | | 52,356 |
Advances from financing companies | | | 13,313 | | | 13,453 |
Current portion of long-term debt | | | — | | | 42,560 |
Total current liabilities | |
| 331,013 | |
| 332,649 |
Other liabilities | |
| 1,492 | |
| 1,616 |
Operating lease liabilities, net of current portion | | | 41,773 | | | 43,142 |
Deferred revenue, net of current portion | | | 3,834 | | | 2,449 |
Advances from financing companies, net of current portion | | | 9,291 | | | 9,926 |
Deferred taxes, net | |
| 75,777 | |
| 102,103 |
Convertible senior notes, net | | | 1,225,671 | | | 1,379,592 |
Commitments and contingencies | | | | | | |
Stockholders’ equity: | | | | | | |
Common stock, $0.001 par value; 300,000,000 shares authorized as of December 31, 2021 and 2020; 160,469,325 shares and 150,281,099 shares issued and outstanding as of December 31, 2021 and 2020, respectively | |
| 160 | |
| 150 |
Additional paid-in capital | |
| 17,473,336 | |
| 16,857,797 |
Accumulated deficit | |
| (1,421,454) | |
| (992,661) |
Accumulated other comprehensive (loss) gain | | | (6,285) | | | 18,518 |
Total stockholders’ equity | |
| 16,045,757 | |
| 15,883,804 |
Total liabilities and stockholders’ equity | | $ | 17,734,608 | | $ | 17,755,281 |
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Non-GAAP Financial Measures:
To supplement our financial information presented in accordance with GAAP, we use adjusted gross profit, adjusted gross margin, EBITDA, and adjusted EBITDA, which are non-GAAP financial measures, to clarify and enhance an understanding of past performance. We believe that the presentation of these financial measures enhances an investor’s understanding of our financial performance. We further believe that these financial measures are useful financial metrics to assess our operating performance and financial and business trends from period-to-period by excluding certain items that we believe are not representative of our core business. We use certain financial measures for business planning purposes and in measuring our performance relative to that of our competitors. We utilize adjusted EBITDA as the primary measure of our performance.
Adjusted gross profit is our total revenue minus our total cost of revenue (exclusive of depreciation and amortization, which is shown separately) and adjusted gross margin is adjusted gross profit as a percentage of our total revenue.
EBITDA consists of net loss before interest; other expense (income), net, including foreign exchange gain or loss; taxes; depreciation and amortization; and loss on extinguishment of debt. Adjusted EBITDA consists of net loss before interest; other expense (income), net, including foreign exchange gain or loss; taxes; depreciation and amortization; loss on extinguishment of debt; stock-based compensation; and acquisition, integration and transformation costs.
We believe the above financial measures are commonly used by investors to evaluate our performance and that of our competitors. However, our use of the terms adjusted gross profit, adjusted gross margin, EBITDA, and adjusted EBITDA may vary from that of others in our industry. None of adjusted gross profit, adjusted gross margin, EBITDA, nor adjusted EBITDA should be considered as an alternative to net loss before taxes, net loss, net loss per share or any other performance measures derived in accordance with GAAP.
Adjusted gross profit, adjusted gross margin, EBITDA, and adjusted EBITDA have important limitations as analytical tools and you should not consider them in isolation or as a substitute for analysis of our results as reported under GAAP. Some of these limitations are:
| ● | Adjusted gross margin has been and will continue to be affected by a number of factors, including the fees we charge our clients, the number of visits and cases we complete, the costs paid to providers and medical experts, as well as the costs of our provider network operations center; |
| ● | Adjusted gross margin does not reflect the significant depreciation and amortization to cost of revenue; |
| ● | EBITDA and adjusted EBITDA do not reflect the significant interest expense on our debt; |
| ● | EBITDA and adjusted EBITDA eliminate the impact of income taxes on our results of operations; |
| ● | EBITDA and adjusted EBITDA do not reflect the loss on extinguishment of debt; |
| ● | EBITDA and adjusted EBITDA do not reflect other expense (income), net; |
| ● | Adjusted EBITDA does not reflect the significant acquisition, integration and transformation costs. Acquisition, integration and transformation costs include investment banking, financing, legal, accounting, consultancy, integration, fair value changes related to contingent consideration and certain other transaction costs related to mergers and acquisitions. It also includes costs related to certain business transformation initiatives focused on integrating and optimizing various operations and systems, including upgrading |
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| our customer relationship management (CRM) and enterprise resource planning (ERP) systems. These transformation cost adjustments made to our results do not represent normal, operating expenses necessary to operate the business but rather, incremental costs incurred in connection with our acquisition and integration activities; |
| ● | Adjusted EBITDA does not reflect the significant non-cash stock compensation expense which should be viewed as a component of recurring operating costs; and |
| ● | other companies in our industry may calculate adjusted gross profit, adjusted gross margin, EBITDA, and adjusted EBITDA differently than we do, limiting the usefulness of these measures as comparative measures. |
In addition, although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, and adjusted gross profit, adjusted gross margin, EBITDA and adjusted EBITDA do not reflect any expenditures for such replacements.
We compensate for these limitations by using adjusted gross profit, adjusted gross margin, EBITDA, and adjusted EBITDA along with other comparative tools, together with GAAP measurements, to assist in the evaluation of operating performance. Such GAAP measurements include net loss, net loss per share, and other performance measures.
In evaluating these financial measures, you should be aware that in the future we may incur expenses similar to those eliminated in this presentation. Our presentation of adjusted gross profit, adjusted gross margin, EBITDA, and adjusted EBITDA should not be construed as an inference that our future results will be unaffected by unusual or nonrecurring items.
The following is a reconciliation of gross profit and gross margin, the most directly comparable GAAP financial measures, to adjusted gross profit and adjusted gross margin, respectively:
Reconciliation of GAAP Gross Profit to Adjusted Gross Profit and Adjusted Gross Margin
(In thousands, unaudited)
| | Quarter Ended | | Year Ended | | ||||||||
| | December 31, | | December 31, | | ||||||||
|
| 2021 |
| 2020 |
| 2021 |
| 2020 |
| ||||
Revenue | | $ | 554,235 | | $ | 383,321 | | $ | 2,032,707 | | $ | 1,093,962 | |
Cost of revenue (exclusive of depreciation and amortization, which is shown separately below) | | | (174,985) | | | (122,942) | | | (650,258) | | | (390,829) | |
Depreciation and amortization of intangible assets | |
| (5,406) | | | (2,846) | | | (16,546) | | | (12,394) | |
Gross Profit | | | 373,844 | | | 257,533 | | | 1,365,903 | | | 690,739 | |
Depreciation and amortization of intangible assets | | | 5,406 | | | 2,846 | | | 16,546 | | | 12,394 | |
Adjusted gross profit | | $ | 379,250 | | $ | 260,379 | | $ | 1,382,449 | | $ | 703,133 | |
| | | | | | | | | | | | | |
Gross margin | | | 67.5 | % | | 67.2 | % | | 67.2 | % | | 63.1 | % |
Adjusted gross margin | | | 68.4 | % | | 67.9 | % | | 68.0 | % | | 64.3 | % |
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The following is a reconciliation of Net Loss, the most directly comparable GAAP financial measure, to EBITDA and adjusted EBITDA:
Reconciliation of GAAP Net Loss to EBITDA and Adjusted EBITDA
(In thousands, except for guidance data, unaudited)
| | Quarter Ended | | Year Ended | | Guidance in millions (1) | | ||||||||||||
| | December 31, | | December 31, | | First Quarter | | Full Year | | ||||||||||
|
| 2021 |
| 2020 |
| 2021 |
| 2020 |
| 2022 |
| 2022 | | ||||||
Net loss | | $ | (10,985) | | $ | (393,967) | | $ | (428,793) | | $ | (485,136) | | $ | (91) - $(81) | | $ | (259) - $(213) | |
Add: | | | | | | | | | | | | | | | | | | | |
Loss on extinguishment of debt | | | 20 | | | 99 | | | 43,748 | | | 9,077 | | | | | | | |
Other expense (income), net | | | 405 | | | (282) | | | (5,088) | | | 545 | | | | | | | |
Interest expense, net | |
| 18,872 | | | 21,101 | |
| 80,365 | | | 59,950 | |
| | |
| | |
Income tax (benefit) expense | |
| (49,741) | | | (85,457) | |
| 44,137 | | | (90,857) | |
| | |
| | |
Depreciation and amortization | |
| 52,332 | | | 36,960 | |
| 204,239 | | | 69,495 | |
| | |
| | |
Total loss on extinguishment of debt; other expense (income), net; interest expense, net; income tax (benefit) expense; and depreciation and amortization | | | 21,888 | | | (27,579) | | | 367,401 | | | 48,210 | | | 68 - 65 | | | 277 - 261 | |
EBITDA | | | 10,903 | | | (421,546) | | | (61,392) | | | (436,926) | | | (23) - (16) | | | 18 - 48 | |
Stock-based compensation | | | 61,615 | | | 414,380 | | | 302,586 | | | 475,531 | | | | | | | |
Acquisition, integration, and transformation costs | | | 4,559 | | | 57,550 | | | 26,643 | | | 88,236 | | | | | | | |
Total stock-based compensation and acquisition, integration, and transformation costs | | | 66,174 | | | 471,930 | | | 329,229 | | | 563,767 | | | 74 - 71 | | | 312 - 307 | |
Adjusted EBITDA | | $ | 77,077 | | $ | 50,384 | | $ | 267,837 | | $ | 126,841 | | $ | 51 - $55 | | $ | 330 - $355 | |
(1) We have not provided a full line-item reconciliation for net loss to EBITDA or adjusted EBITDA guidance because we do not provide guidance on the individual reconciling items between net loss, EBITDA, and adjusted EBITDA. This is due to the uncertainty as to timing, and the potential variability, of the individual reconciling items such as stock-based compensation and the related tax impact, income taxes and acquisition, integration and transformation costs, the effect of which may be significant. Accordingly, a full line-item reconciliation of the GAAP measure to the corresponding non-GAAP financial measure guidance is not available without unreasonable effort.
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Revenues and Selected Operating Metrics (1) | | | | | | | | | | | | | | | |||||||||||
(In thousands, except Average U.S. Revenue per Member) | | | | | | | | | | | | | | | |||||||||||
| | 1Q | | 2Q | | 3Q | | 4Q | | 1Q | | 2Q | | 3Q | | 4Q | | ||||||||
Revenue | | 2020 | | 2020 | | 2020 | | 2020 | | 2021 | | 2021 | | 2021 | | 2021 | | ||||||||
Access Fees Revenue | | | | | | | | | | | | | | | | | | | | | | | | | |
U.S. | | $ | 99,917 | | $ | 138,396 | | $ | 176,635 | | $ | 263,220 | | $ | 327,553 | | $ | 371,591 | | $ | 386,181 | | $ | 403,095 | |
International | | | 34,147 | | | 40,187 | | | 45,799 | | | 48,954 | | | 54,553 | | | 59,474 | | | 62,737 | | | 66,821 | |
Total | | | 134,064 | | | 178,583 | | | 222,434 | | | 312,174 | | | 382,106 | | | 431,065 | | | 448,918 | | | 469,916 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Visit Fee Revenue | | | | | | | | | | | | | | | | | | | | | | | | | |
U.S. | | | 44,043 | | | 59,556 | | | 52,628 | | | 55,437 | | | 57,128 | | | 59,196 | | | 59,863 | | | 65,328 | |
International | | | 2,692 | | | 2,891 | | | 2,601 | | | 1,608 | | | 3,383 | | | 3,058 | | | 2,690 | | | 3,588 | |
Total | | | 46,735 | | | 62,447 | | | 55,229 | | | 57,045 | | | 60,511 | | | 62,254 | | | 62,553 | | | 68,916 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Other | | | | | | | | | | | | | | | | | | | | | | | | | |
U.S. | | | - | | | - | | | 10,299 | | | 13,589 | | | 10,671 | | | 9,363 | | | 9,583 | | | 14,472 | |
International | | | - | | | - | | | 850 | | | 513 | | | 387 | | | 457 | | | 604 | | | 931 | |
Total | | | - | | | - | | | 11,149 | | | 14,102 | | | 11,058 | | | 9,820 | | | 10,187 | | | 15,403 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Total Revenue | | $ | 180,799 | | $ | 241,030 | | $ | 288,812 | | $ | 383,321 | | $ | 453,675 | | $ | 503,139 | | $ | 521,658 | | $ | 554,235 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
U.S. Revenue | | $ | 143,960 | | $ | 197,952 | | $ | 239,562 | | $ | 332,246 | | $ | 395,352 | | $ | 440,150 | | $ | 455,627 | | $ | 482,895 | |
International Revenue | | | 36,839 | | | 43,078 | | | 49,250 | | | 51,075 | | | 58,323 | | | 62,989 | | | 66,031 | | | 71,340 | |
Total Revenue | | $ | 180,799 | | $ | 241,030 | | $ | 288,812 | | $ | 383,321 | | $ | 453,675 | | $ | 503,139 | | $ | 521,658 | | $ | 554,235 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Average U.S. Revenue | | $ | 0.80 | | $ | 0.92 | | $ | 1.06 | | $ | 1.63 | | $ | 2.09 | | $ | 2.31 | | $ | 2.40 | | $ | 2.49 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Visits | | | | | | | | | | | | | | | | | | | | | | | | | |
U.S. Visits | | | 1,514 | | | 2,108 | | | 2,172 | | | 2,289 | | | 2,461 | | | 2,723 | | | 3,007 | | | 3,291 | |
International Visits | | | 706 | | | 769 | | | 793 | | | 828 | | | 881 | | | 929 | | | 991 | | | 1,116 | |
Total Visits | | | 2,220 | | | 2,877 | | | 2,965 | | | 3,117 | | | 3,342 | | | 3,652 | | | 3,998 | | | 4,407 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
U.S. Paid Membership | | | 42.9 | | | 51.5 | | | 51.5 | | | 51.8 | | | 51.5 | | | 52.0 | | | 52.5 | | | 53.6 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Utilization | | | 12.1% | | | 14.4% | | | 14.8% | | | 16.0% | | | 17.5% | | | 19.1% | | | 21.0% | | | 22.7% | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Platform-Enabled Sessions | | | n/a | | | n/a | | | 987 | | | 1,089 | | | 1,092 | | | 1,017 | | | 969 | | | 982 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
Total Visits & Sessions Provided & Enabled | | | 2,220 | | | 2,877 | | | 3,952 | | | 4,206 | | | 4,434 | | | 4,669 | | | 4,967 | | | 5,389 | |
(1) During the fourth quarter of 2021, the Company refined its definition of international revenues to reflect all international revenues based on location of the customer. Previously, direct to consumer activities were primarily reflected based on the location of operations. In addition, certain activities related to our international operations are now reflected in visit revenues versus access fee revenues. Prior period amounts have been recast to conform with current presentation. Consistent with this change, the corresponding metrics have been updated.
n/a – Not applicable
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Investors:
Patrick Feeley
914-265-7925
IR@teladochealth.com
Media:
Chris Stenrud
860-491-8821
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