Teladoc Health, Inc 10-Q for FY2021 Q2

Teladoc Health, Inc. (TDOC)

10-Q 2021-08-02 For: 2021-06-30

Added on April 07, 2026

About this 10-Q

Teladoc Health, Inc filed this 10-Q on August 2, 2021, covering the quarter ended June 30, 2021 (FY2021 Q2).

Headline figures

Quarter ended June 30, 2021, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $503.14M; up 108.7% from $241.03M a year earlier
Net loss: $133.82M; compared with a net loss of $25.68M 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 June 30, 2021 (unaudited) and December 31, 2020	2
	Consolidated Statements of Operations and Comprehensive Loss (unaudited) for the quarters and six months ended June 30, 2021 and 2020	3
	Consolidated Statements of Stockholders’ Equity (unaudited) for the quarters and six months ended June 30, 2021 and 2020	4
	Consolidated Statements of Cash Flows (unaudited) for the six months ended June 30, 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	25
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	34
Item 4.	Controls and Procedures	35
PART II	Other Information	36
Item 1.	Legal Proceedings	36
Item 1A.	Risk Factors	36
Item 6.	Exhibits	37
Exhibit Index		37
Signatures		39


	June 30,		December 31,
	2021		2020

Assets
Current assets:
Cash and cash equivalents	$	783,724	$	733,324
Short-term investments		2,538		53,245
Accounts receivable, net of allowance of $10,952 and $6,412, respectively		179,436		169,281
Inventories		56,990		56,498
Prepaid expenses and other current assets		82,149		47,259
Total current assets		1,104,837		1,059,607
Property and equipment, net		28,184		28,551
Goodwill		14,454,712		14,581,255
Intangible assets, net		1,963,172		2,020,864
Operating lease - right-of-use assets		41,880		46,647
Other assets		18,334		18,357
Total assets	$	17,611,119	$	17,755,281
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable	$	42,077	$	46,030
Accrued expenses and other current liabilities		91,609		83,657
Accrued compensation		59,629		94,593
Deferred revenue-current		69,293		52,356
Advances from financing companies		13,619		13,453
Current portion of long-term debt		0		42,560
Total current liabilities		276,227		332,649
Other liabilities		1,346		1,616
Operating lease liabilities, net of current portion		36,493		43,142
Deferred revenue, net of current portion		3,501		2,449
Advances from financing companies, net of current portion		9,561		9,926
Deferred taxes		81,882		102,103
Convertible senior notes, net		1,201,039		1,379,592
Commitments and contingencies
Stockholders’ equity:
Common stock, $0.001 par value; 300,000,000 shares authorized as of June 30, 2021 and December 31, 2020; 159,462,979 shares and 150,281,099 shares issued and outstanding as of June 30, 2021 and December 31, 2020, respectively		159		150
Additional paid-in capital		17,314,749		16,857,797
Accumulated deficit		(1,326,129)		(992,661)
Accumulated other comprehensive gain		12,291		18,518
Total stockholders’ equity		16,001,070		15,883,804
Total liabilities and stockholders’ equity	$	17,611,119	$	17,755,281


	Quarter Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
Revenue	$	503,139	$	241,030	$	956,814	$	421,829
Expenses:
Cost of revenue (exclusive of depreciation and amortization, which is shown separately below)		160,273		90,780		306,232		163,162
Operating expenses:
Advertising and marketing		103,221		47,578		192,660		80,093
Sales		63,856		18,687		128,649		36,627
Technology and development		80,759		23,029		158,767		42,286
Acquisition, integration and transformation costs		11,421		1,627		17,744		5,291
General and administrative		111,216		56,615		216,388		102,957
Depreciation and amortization		51,341		9,893		100,000		19,603
Total expenses		582,087		248,209		1,120,440		450,019
Loss from operations		(78,948)		(7,179)		(163,626)		(28,190)
Loss on extinguishment of debt		31,419		7,751		42,878		7,751
Other (income) expense, net		(217)		(111)		(5,869)		574
Interest expense, net		20,473		13,262		42,598		21,880
Net loss before taxes		(130,623)		(28,081)		(243,233)		(58,395)
Income tax expense (benefit)		3,196		(2,399)		90,235		(3,110)
Net loss		(133,819)		(25,682)		(333,468)		(55,285)
Other comprehensive gain (loss), net of tax:
Cumulative translation adjustment		7,265		12,880		(6,227)		(4,674)
Comprehensive loss	$	(126,554)	$	(12,802)		(339,695)	$	(59,959)

Net loss per share, basic and diluted	$	(0.86)	$	(0.34)	$	(2.16)	$	(0.74)

Weighted-average shares used to compute basic and diluted net loss per share		156,055,090		76,512,870		154,187,739		74,919,194


								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
Exercise of stock options	668,942		1		5,872		0		0		5,873
Issuance of common stock upon vesting of restricted stock units	278,206		0		(0)		0		0		(0)
Issuance of common stock under employee stock purchase plan	82,088		0		10,539		0		0		10,539
Issuance of common stock for conversion/exchange of 2025 Notes	4,027,578		4		617,161		0		0		617,165
Equity portion of extinguishment of 2025 Notes	0		0		(421,167)		0		0		(421,167)
Stock-based compensation	0		0		85,716		0		0		85,716
Other comprehensive gain, net of tax	0		0		0		0		7,265		7,265
Net loss	0		0		0		(133,819)		0		(133,819)
Balance as of June 30, 2021	159,462,978	$	159	$	17,314,749	$	(1,326,129)	$	12,291	$	16,001,070

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
Exercise of stock options	927,684		1		18,682		0		0		18,683
Issuance of common stock upon vesting of restricted stock units	109,768		0		(0)		0		0		0
Issuance of common stock under employee stock purchase plan	35,901		0		2,473		0		0		2,473
Issuance of common stock for 2022 Notes	3,949,794		4		693,802		0		0		693,806
Equity portion of extinguishment of 2022 Notes	0		0		(715,151)		0		0		(715,151)
Equity component of 2027 Notes, net of issuance costs	0		0		285,601		0		0		285,601
Stock-based compensation	0		0		22,142		0		0		22,142
Other comprehensive gain, net of tax	0		0		0		0		12,880		12,880
Net loss	0		0		0		(25,682)		0		(25,682)
Balance as of June 30, 2020	79,099,433		79		1,879,573		(562,810)		(21,913)		1,294,929


	Quarter Ended				Six Months Ended
	June 30,				June 30,
	2021		2020		2021		2020
Access Fees Revenue
U.S.	$	396,622	$	152,021	$	747,490	$	259,960
International		37,422		30,150		74,710		59,264
Total		434,044		182,171		822,200		319,224

Visit Fee Revenue
U.S.		59,196		58,512		113,536		101,996
International		130		347		252		609
Total		59,326		58,859		113,788		102,605

Other
U.S.		9,363		0		20,034		0
International		406		0		792		0
Total		9,769		0		20,826		0

Total Revenues	$	503,139	$	241,030	$	956,814	$	421,829


	As of		As of
	June 30,		December 31,
	2021		2020
Deferred costs and other, current		16,658		3,468
Deferred costs and other, noncurrent		7,913		2,179
Total deferred costs and other	$	24,571	$	5,647


	Deferred Costs and Other
Beginning balance as of December 31, 2020	$	5,647
Additions		25,539
Cost of revenue recognized		(6,615)
Ending balance as of June 30, 2021	$	24,571


	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				Unaudited Pro Forma
	Quarters Ended				Six Months Ended
	June 30,				June 30,
(in thousands)	2021		2020		2021		2020
Revenue	$	502,536	$	357,302	$	954,736	$	627,723
Net loss	$	(121,308)	$	(98,952)	$	(215,536)	$	(699,488)


	As of June 30,		As of December 31,
	2021		2020
Raw materials and purchased parts	$	22,720	$	19,591
Work in process		875		1,431
Finished goods		33,395		35,476
Total inventories	$	56,990	$	56,498


								Weighted
								Average
								Remaining
	Useful			Accumulated		Net Carrying		Useful Life
	Life	Gross Value		Amortization		Value		(Years)
June 30, 2021
Client relationships	2 to 20 years	$	1,468,151	$	(149,380)	$	1,318,771	15.0
Non-compete agreements	1.5 to 5 years		5,046		(5,046)		(0)	0
Trademarks	3 to 15 years		326,997		(30,644)		296,353	10.0
Patents	3 years		200		(200)		0	0
Capitalized software development costs	3 to 5 years		81,178		(31,272)		49,906	2.7
Technology	5 to 7 years		339,150		(41,008)		298,142	6.1
Intangible assets, net		$	2,220,722	$	(257,550)	$	1,963,172	12.6
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


	Six Months Ended		Year Ended
	June 30,		December 31,
	2021		2020
Beginning balance	$	14,581,255	$	746,079
Additions associated with acquisitions		47,328		13,812,198
Purchase consideration adjustment (see Note 4)		(61,108)		0
Deferred tax adjustment (see Note 15)		(106,532)		0
Cumulative translation adjustment		(6,231)		22,978
Goodwill	$	14,454,712	$	14,581,255


	As of June 30,		As of December 31,
	2021		2020
Professional fees	$	3,214	$	4,717
Consulting fees/provider fees		19,218		23,167
Client performance guarantees		7,151		7,215
Legal fees		3,419		2,419
Interest payable		1,488		2,049
Income tax payable		6,182		1,627
Insurance		6,170		3,139
Marketing		7,173		2,815
Operating lease liabilities - current		12,996		11,438
Earnout		4,186		4,514
Other		20,412		20,557
Total	$	91,609	$	83,657


	December 31, 2020
	Level 1		Level 2		Level 3		Total
Cash and cash equivalents	$	733,324	$	0	$	0	$	733,324
Short-term investments	$	0	$	53,245	$	0	$	53,245
Equity securities without readily determinable fair values	$	0	$	5,000	$	0	$	5,000
Contingent liability	$	0	$	0	$	4,514	$	4,514


Fair value and historical cost basis at December 31, 2020	$	5,000
Upward adjustment due to observable price change in identical securities		5,901
Sale of investment		(10,901)
Fair value at June 30, 2021	$	0


Fair value at December 31, 2020	$	4,514
Payments		(187)
Change in fair value		(6)
Currency translation adjustment		(135)
Fair value at June 30, 2021	$	4,186


	As of
Operating Leases:	June 30, 2021
2021	$	9,810
2022		14,130
2023		12,051
2024		8,529
2025		5,318
2026		5,440
Total future minimum payments	$	55,278



	2027 Notes			2025 Notes			Livongo Notes
Interest Rate Per Year		1.25	%		1.375	%		0.875	%
Fair Value as of June 30, 2021 (in millions)	$	1,107.0		$	19.0		$	843.6
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 June 30, 2021		4.1258			18.6621			13.94
Remaining Contractual Life as of June 30, 2021		5.9 years			3.9 years			3.9 years


				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	15,672	$	180.94	N/A
Stock options exercised	(1,906,565)	$	9.30	N/A	$	(383,015)
Stock options forfeited	(45,406)	$	16.45	N/A
Balance at June 30, 2021	3,890,386	$	21.72	5.91	$	563,821
Vested or expected to vest at June 30, 2021	3,890,386	$	21.72	5.91	$	563,821
Exercisable at June 30, 2021	3,261,942	$	18.73	5.67	$	481,348


		Weighted-Average
		Grant Date
	RSUs	Fair Value Per RSU
Balance at December 31, 2020	3,550,595	$	162.11
Granted	491,823	$	207.73
Vested and issued	(987,004)	$	121.45
Forfeited	(523,210)	$	188.55
Balance at June 30, 2021	2,532,204	$	177.30
Vested and unissued at June 30, 2021	13,755	$	50.90
Non-vested at June 30, 2021	2,518,449	$	177.30


	Payment Due by Period
			Less than		1 to 3		4 to 5		More than
	Total		1 Year		Years		Years		5 Years
Operating leases	$	55,278	$	9,810	$	26,180	$	13,848	$	5,440
Non-cancelable purchase commitments		0		0		0		0		0
Debt obligations under the Convertible Notes		1,556,098		0		0		556,098		1,000,000
Interest associated with the Convertible Notes		94,574		17,396		36,637		29,083		11,458
Total	$	1,705,950	$	27,206	$	62,817	$	599,029	$	1,016,898

	TELADOC HEALTH, INC.

Date: August 2, 2021	By:	/s/ JASON GOREVIC
	Name:	Jason Gorevic
	Title:	Chief Executive Officer

Date: August 2, 2021	By:	/s/ MALA MURTHY
	Name:	Mala Murthy
	Title:	Chief Financial Officer