Teladoc Health, Inc 10-Q for FY2021 Q1

Teladoc Health, Inc. (TDOC)

10-Q 2021-05-03 For: 2021-03-31

Added on April 07, 2026

About this 10-Q

Teladoc Health, Inc filed this 10-Q on May 3, 2021, covering the quarter ended March 31, 2021 (FY2021 Q1).

Headline figures

Quarter ended March 31, 2021, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $453.68M; up 150.9% from $180.8M a year earlier
Net loss: $199.65M; compared with a net loss of $29.6M 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
	Consolidated Balance Sheets as of March 31, 2021 (unaudited) and December 31, 2020	2
	Consolidated Statements of Operations and Comprehensive Loss (unaudited) for the quarters ended March 31, 2021 and 2020	3
	Consolidated Statements of Stockholders’ Equity (unaudited) for the quarters ended March 31, 2021 and 2020	4
	Consolidated Statements of Cash Flows (unaudited) for the three months ended March 31, 2021 and 2020	5
	Notes to Unaudited Consolidated Financial Statements	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	24
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	33
Item 4.	Controls and Procedures	34
PART II	Other Information	35
Item 1.	Legal Proceedings	35
Item 1A.	Risk Factors	35
Item 6.	Exhibits	36
Exhibit Index		36
Signatures		38


	March 31,		December 31,
	2021		2020

Assets
Current assets:
Cash and cash equivalents	$	720,104	$	733,324
Short-term investments		2,530		53,245
Accounts receivable, net of allowance of $8,601 and $6,412, respectively		178,341		169,281
Inventories		58,290		56,498
Prepaid expenses and other current assets		73,065		47,259
Total current assets		1,032,330		1,059,607
Property and equipment, net		28,436		28,551
Goodwill		14,451,975		14,581,255
Intangible assets, net		1,997,214		2,020,864
Operating lease - right-of-use assets		44,401		46,647
Other assets		28,002		18,357
Total assets	$	17,582,358	$	17,755,281
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable	$	34,377	$	46,030
Accrued expenses and other current liabilities		82,397		83,657
Accrued compensation		59,439		94,593
Deferred revenue-current		70,458		52,356
Advances from financing companies		13,693		13,453
Current portion of long-term debt		0		42,560
Total current liabilities		260,364		332,649
Other liabilities		1,383		1,616
Operating lease liabilities, net of current portion		40,140		43,142
Deferred revenue, net of current portion		2,716		2,449
Advances from financing companies, net of current portion		10,404		9,926
Deferred taxes		84,876		102,103
Convertible senior notes, net		1,352,977		1,379,592
Commitments and contingencies
Stockholders’ equity:
Common stock, $0.001 par value; 300,000,000 shares authorized as of March 31, 2021 and December 31, 2020; 154,406,164 shares and 150,281,099 shares issued and outstanding as of March 31, 2021 and December 31, 2020, respectively		154		150
Additional paid-in capital		17,016,628		16,857,797
Accumulated deficit		(1,192,310)		(992,661)
Accumulated other comprehensive gain		5,026		18,518
Total stockholders’ equity		15,829,498		15,883,804
Total liabilities and stockholders’ equity	$	17,582,358	$	17,755,281


	Quarter Ended March 31,
	2021		2020
Revenue	$	453,675	$	180,799
Expenses:
Cost of revenue (exclusive of depreciation and amortization, which is shown separately below)		145,959		72,382
Operating expenses:
Advertising and marketing		89,439		32,515
Sales		64,793		17,940
Technology and development		78,008		19,257
Acquisition, Integration and Transformation costs		6,323		3,664
General and administrative		105,172		46,342
Depreciation and amortization		48,659		9,710
Total expenses		538,353		201,810
Loss from operations		(84,678)		(21,011)
Loss on extinguishment of debt		11,459		0
Other (income) expense, net		(5,652)		685
Interest expense, net		22,125		8,618
Net loss before taxes		(112,610)		(30,314)
Income tax expense (benefit)		87,039		(711)
Net loss		(199,649)		(29,603)
Other comprehensive loss, net of tax:
Cumulative translation adjustment		(13,492)		(17,554)
Comprehensive loss	$	(213,141)	$	(47,157)

Net loss per share, basic and diluted	$	(1.31)	$	(0.40)

Weighted-average shares used to compute basic and diluted net loss per share		152,167,606		73,278,857


								Accumulated
				Additional				Other		Total
	Common Stock			Paid-In		Accumulated		Comprehensive		Stockholders’
	Shares	Amount		Capital		Deficit		Gain (Loss)		Equity
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 conversion/redemption of 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 conversion of 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)
Retirement of shares related to acquisition (see Note 4)	(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

Balance of December 31, 2019	72,761,941	$	73	$	1,538,716	$	(507,525)	$	(17,239)	$	1,014,025
Exercise of stock options	671,279		0		14,830		0		0		14,830
Issuance of common stock upon vesting of restricted stock units	642,411		1		(1)		0		0		0
Issuance of common stock for 2022 Notes	655		0		58		0		0		58
Stock-based compensation	0		0		18,421		0		0		18,421
Other comprehensive loss, net of tax	0		0		0		0		(17,554)		(17,554)
Net loss	0		0		0		(29,603)		0		(29,603)
Balance as of March 31, 2020	74,076,286	$	74	$	1,572,024	$	(537,128)	$	(34,793)	$	1,000,177


	Quarter Ended
	March 31,
	2021		2020
Access Fees Revenue
U.S.	$	350,868	$	107,939
International		37,288		29,114
Total		388,156		137,053

Visit Fee Revenue
U.S.		54,340		43,484
International		122		262
Total		54,462		43,746

Other
U.S.		10,671		0
International		386		0
Total		11,057		0

Total Revenues	$	453,675	$	180,799


	As of		As of
	March 31,		December 31,
	2021		2020
Deferred device cost, current	$	10,950	$	3,384
Deferred execution credit, current		792		84
Total deferred cost and other, current		11,742		3,468
Deferred device cost, noncurrent		6,190		2,179
Total Deferred cost and other	$	17,932	$	5,647


	Deferred Device Cost		Deferred Execution Credit			Total
Beginning balance as of December 31, 2020	$	5,563	$	84	$	5,647
Additions		13,827		820		14,647
Revenue recognized		0		(112)		(112)
Cost of revenue recognized		(2,250)		0		(2,250)
Ending balance as of March 31, 2021	$	17,140	$	792	$	17,932


	Livongo		InTouch
Purchase price, net of cash acquired	$	13,876,931	$	1,069,759
Less:
Accounts receivable		80,084		16,986
Short term investment		52,500		0
Inventory		24,299		8,492
Property and equipment, net		8,952		11,366
Right of use assets		15,056		4,965
Other assets		17,337		2,541
Client relationships		1,050,000		164,580
Technology		300,000		29,190
Trademarks		250,000		32,630
Advances from financing companies		0		(26,012)
Accounts payable		(119,302)		(5,589)
Deferred revenue		(997)		(20,729)
Convertible notes		(453,417)		0
Deferred taxes		(32,984)		(30,102)
Lease liabilities		(18,834)		(5,495)
Other liabilities		(40,343)		(13,042)
Goodwill	$	12,744,580	$	899,978


	Unaudited Pro Forma
	Quarter Ended
	March 31,
(in thousands)	2021		2020
Revenue	$	452,201	$	270,421
Net loss	$	(94,228)	$	(600,573)


	As of March 31,		As of December 31,
	2021		2020
Raw materials and purchased parts	$	19,202	$	19,591
Work in process		1,253		1,431
Finished goods		37,835		35,476
Total inventories	$	58,290	$	56,498


								Weighted
								Average
	Useful			Accumulated		Net Carrying		Remaining
	Life	Gross Value		Amortization		Value		Useful Life
March 31, 2021
Client relationships	2 to 20 years	$	1,466,769	$	(123,700)	$	1,343,069	15.2
Non-compete agreements	1.5 to 5 years		5,026		(4,940)		86	0.2
Trademarks	3 to 15 years		326,759		(23,018)		303,741	10.2
Patents	3 years		200		(200)		0	0
Capitalized software development costs	3 to 5 years		67,202		(27,400)		39,802	2.8
Technology	5 to 7 years		339,150		(28,634)		310,516	6.4
Intangible assets, net		$	2,205,106	$	(207,892)	$	1,997,214	12.8
December 31, 2020
Client relationships	2 to 20 years	$	1,460,648	$	(100,844)	$	1,359,804	15.4
Non-compete agreements	1.5 to 5 years		5,097		(4,872)		225	0.4
Trademarks	3 to 15 years		326,786		(15,576)		311,210	10.5
Patents	3 years		200		(200)		0	0
Capitalized software development costs	3 to 5 years		52,518		(24,771)		27,747	2.8
Technology	5 to 7 years		338,150		(16,272)		321,878	6.6
Intangible assets, net		$	2,183,399	$	(162,535)	$	2,020,864	13.1


	March 31, 2021
	Level 1		Level 2		Level 3		Total
Cash and cash equivalents	$	720,104	$	0	$	0	$	720,104
Short-term investments	$	0	$	2,530	$	0	$	2,530
Equity securities without readily determinable fair values	$	0	$	10,852	$	0	$	10,852
Contingent liability	$	0	$	0	$	4,138	$	4,138


	As of March 31,		As of December 31,
	2021		2020
Professional fees	$	3,428	$	4,717
Consulting fees/provider fees		10,643		23,167
Client performance guarantees		5,964		7,215
Legal fees		1,971		2,419
Interest payable		7,295		2,049
Income tax payable		4,420		1,627
Insurance		5,630		3,139
Marketing		4,218		2,815
Operating lease liabilities - current		11,829		11,438
Earnout		4,138		4,514
Other		22,861		20,557
Total	$	82,397	$	83,657


	As of
Operating Leases:	March 31, 2021
2021	$	14,589
2022		14,167
2023		12,840
2024		7,962
2025		5,744
2026		4,006
Total future minimum payments	$	59,308



	2027 Notes			2025 Notes			Livongo Notes
Interest Rate Per Year		1.25	%		1.375	%		0.875	%
Fair Value as of March 31, 2021 (in millions)	$	1,115.5		$	750.0		$	906.6
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
Conversion Rate Per $1,000 Principal Amount as of March 31, 2021		4.1258			18.6621			13.94
Remaining Contractual Life as of March 31, 2021		6.2 years			4.1 years			4.2 years


	As of March 31,		As of December 31,
2027 Notes - Liability component	2021		2020
Principal	$	1,000,000	$	1,000,000
Less: Debt discount, net (1)		(278,857)		(287,916)
Net carrying amount	$	721,143	$	712,084

2025 Notes - Liability component
Principal	$	220,128	$	276,788
Less: Debt discount, net (1)		(49,672)		(65,923)
Net carrying amount	$	170,456	$	210,865

Livongo Notes - Liability component
Principal	$	550,000	$	550,000
Less: Debt discount, net (1)		(88,623)		(93,357)
Net carrying amount	$	461,377	$	456,643

2022 Notes - Liability component
Principal	$	—	$	46,762
Less: Debt discount, net (1)		—		(4,202)
Net carrying amount	$	—	$	42,560


Fair value and historical cost basis at December 31, 2020	$	5,000
Upward adjustment due to observable price change in identical securities		5,852
Fair value at March 31, 2021	$	10,852


Fair value at December 31, 2020	$	4,514
Payments		(187)
Currency translation adjustment		(189)
Fair value at March 31, 2021	$	4,138


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

	Quarters Ended
	March 31,
2025 Notes:		2021		2020
Contractual interest expense	$	814		$	988
Amortization of debt discount		2,719			3,076
Total	$	3,533		$	4,064
Effective interest rate of the liability component		7.9	%		7.9	%

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

	Quarters Ended
	March 31,
2022 Notes:		2021		2020
Contractual interest expense	$	104		$	2,062
Amortization of debt discount		316			3,761
Total	$	420		$	5,823
Effective interest rate of the liability component		9.6	%		10.0	%


				Weighted-
		Weighted-		Average
	Number of	Average		Remaining	Aggregate
	Shares	Exercise		Contractual	Intrinsic
	Outstanding	Price		Life in Years	Value
Balance at December 31, 2020	5,826,685	$	17.19	5.31	$	1,064,944
Stock option grants	3,688	$	107.06	N/A
Stock options exercised	(1,237,399)	$	9.62	N/A	$	(212,993)
Stock options forfeited	(44,031)	$	14.47	N/A
Balance at March 31, 2021	4,548,943	$	19.41	5.69	$	738,498
Vested or expected to vest at March 31, 2021	4,548,943	$	19.41	5.69	$	738,498
Exercisable at March 31, 2021	3,700,190	$	16.88	5.33	$	610,040


		Weighted-Average
		Grant Date
	RSUs	Fair Value Per RSU
Balance at December 31, 2020	3,550,595	$	162.11
Granted	402,210	$	218.88
Vested and issued	(708,798)	$	102.94
Forfeited	(115,243)	$	184.40
Balance at March 31, 2021	3,128,764	$	181.99
Vested and unissued at March 31, 2021	13,755	$	50.90
Non-vested at March 31, 2021	3,115,009	$	182.57


	Payment Due by Period
			Less than		1 to 3		4 to 5		More than
	Total		1 Year		Years		Years		5 Years
Operating leases	$	78,157	$	19,414	$	36,824	$	17,913	$	4,006
Non-cancelable purchase commitments		9,652		7,707		1,945		0		0
Debt obligations under the Convertible Notes		1,770,128		0		0		770,128		1,000,000
Interest associated with the Convertible Notes		108,550		20,339		40,679		33,366		14,166
Total	$	1,966,487	$	47,460	$	79,448	$	821,407	$	1,018,172

	TELADOC HEALTH, INC.

Date: May 3, 2021	By:	/s/ JASON GOREVIC
	Name:	Jason Gorevic
	Title:	Chief Executive Officer

Date: May 3, 2021	By:	/s/ MALA MURTHY
	Name:	Mala Murthy
	Title:	Chief Financial Officer