Teladoc(TDOC) - 2024 Q2 - Quarterly Report

Membership and Enrollment - U.S. Integrated Care members increased by 6.5 million, or 8%, to 92.4 million at June 30, 2024, compared to the same period in 2023[111] - Chronic care program enrollment increased by 9% to 1.173 million at June 30, 2024, compared to 1.073 million at June 30, 2023[111] - The company believes that increasing membership is integral for innovation and revenue growth[110] Financial Performance - Total revenue for Q2 2024 was $642.4 million, a decrease of$10.0 million or 2% compared to Q2 2023's $652.4 million[129] - For the six months ended June 30, 2024, total revenue was$1,288.6 million, a 1% increase from $1,281.7 million in the same period of 2023[131] - Net loss for Q2 2024 was$837.7 million, compared to a net loss of $65.2 million in Q2 2023, representing a significant increase of$772.5 million[129] - Adjusted EBITDA for Q2 2024 was $89.5 million, an increase of$17.3 million or 24% from $72.2 million in Q2 2023[130] - Adjusted EBITDA for Integrated Care increased by$26.1 million, or 69%, to $64.0 million for the three months ended June 30, 2024, reflecting higher gross profit and lower operating expenses[144] Revenue Breakdown - Access fees accounted for$559.6 million in Q2 2024, down $16.0 million or 3$575.7 million in Q2 2023[130] - Other revenue increased to $82.8 million in Q2 2024, up$6.1 million or 8% from $76.7 million in Q2 2023[130] - International revenue increased by 12$101.6 million in Q2 2024, while U.S. revenue decreased by 4% to $540.8 million[130] - BetterHelp total revenues decreased by$27.3 million, or 9%, to $265.0 million for the three months ended June 30, 2024, primarily due to a 14$1,483.6 million, a 105% increase from $724.1 million in Q2 2023[129] - Advertising and marketing expenses decreased to$170.3 million in Q2 2024, down $8.5 million or 5$178.8 million in Q2 2023[132] - Technology and development expenses decreased by $10.6 million, or 12$76.8 million for the three months ended June 30, 2024, driven by lower employee compensation costs[134] - General and administrative expenses decreased by $16.3 million, or 13$109.6 million for the three months ended June 30, 2024, mainly due to lower employee compensation and therapist onboarding costs[135] Goodwill and Impairment - A goodwill impairment charge of $790 million was recorded for the three and six months ended June 30, 2024, equating to$4.64 per share for the three months[119] - The discount rate used in the goodwill impairment testing increased to 15%, reflecting higher interest rates[120] - Goodwill impairment for Q2 2024 was recorded at $790.0 million, compared to$0 in Q2 2023[129] - A non-cash goodwill impairment charge of $790.0 million was recorded for the three and six months ended June 30, 2024[136] Cash Flow and Liquidity - Net cash provided by operating activities for the six months ended June 30, 2024, was$97.6 million, a decrease of 14.6% from $114.3 million in the same period of 2023[150] - Cash used in investing activities was$63.3 million for the six months ended June 30, 2024, compared to $82.2 million for the same period in 2023, reflecting a decrease of 22.9$34.3 million for the six months ended June 30, 2024, up from $32.1 million in the same period of 2023, representing a year-over-year growth of 6.8$1,162.4 million as of June 30, 2024, indicating a strong liquidity position[147] - A 1% change in interest rates could result in a change of approximately $12 million in interest income generated from cash and cash equivalents over the next 12 months[155] Future Outlook and Financing - The company anticipates continuing positive operating cash flow results for 2024, driven by growth in the business[148] - Cash provided by financing activities was$5.6 million for the six months ended June 30, 2024, down from $7.6 million in the same period of 2023, reflecting lower proceeds from the employee stock purchase plan[153] - The company may seek additional equity or debt financing in the future to fund working capital, capital expenditures, and acquisitions[148] - The company was in compliance with all debt covenants as of June 30, 2024, ensuring financial stability[149] Seasonality and Trends - The business has historically experienced seasonality, with the highest revenue typically in the first and fourth quarters[114] - Non-GAAP financial measures, including Adjusted EBITDA and free cash flow, are used to enhance understanding of financial performance[122] - Adjusted EBITDA does not reflect significant non-cash stock-based compensation expenses, which should be viewed as recurring operating costs[124] - Interest income increased to$13.6 million for the three months ended June 30, 2024, compared to $11.6 million for the same period in 2023, driven by higher interest rate yields[140] - Amortization of intangible assets increased by$22.4 million, or 31%, to $94.9 million for the three months ended June 30, 2024, due to accelerated amortization associated with the Livongo trademark[139] - Restructuring costs for the three months ended June 30, 2024, were$1.5 million, compared to $7.5 million for the same period in 2023[137] - Revenue from the five largest customers accounted for 31% of total Integrated Care segment revenue for the six months ended June 30, 2024, indicating a concentration risk[156]