Teladoc Announces First Quarter 2017 Results

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| Source: Teladoc, Inc.

First Quarter Revenue of $42.9 million Grew 60% Year-Over-Year
Total Membership of 20.1 million Grew 34% Year-Over-Year
Total Visits of 384,839 Grew 60% Year-Over-Year

LEWISVILLE, Texas, May 08, 2017 (GLOBE NEWSWIRE) -- Teladoc, Inc. (NYSE:TDOC), the undisputed leader in telehealth, providing access to care for millions, today announced results for the first-quarter ended March 31, 2017.

“During the first quarter, we achieved strong results across all our key metrics, while seamlessly onboarding over 2.6 million new lives into the Teladoc platform and growing overall utilization,” said Jason Gorevic, chief executive officer of Teladoc. “We continue to benefit from strong demand for both our core and new clinical offerings, resulting in our deeper integration into the virtual healthcare continuum and an enhanced value proposition to our partners. I remain very confident about our market leadership and progress towards our 2017 financial and strategic targets.”

Financial Performance for the Three Months Ended March 31, 2017

All comparisons are to the three months ended March 31, 2016.

• Total revenue was $42.9 million, an increase of 60%.

  • Revenue from Subscription Access Fees was $34.3 million, an increase of 66%.
  • Revenue from Visit Fees was $8.6 million, an increase of 39%.

• Total membership was 20.1 million, an increase of 34%.

• Total visits of 384,839, an increase of 60%.

  • Paid visits as a percentage of total visits was 56% compared to 63%.

• Gross margin was 71.7% compared to 70.5%.

• Net loss was $15.7 million, compared to $15.3 million.

• Net loss per basic and diluted share was $0.30, compared to $0.40.

• EBITDA improved to a loss of $12.2 million, compared to a loss of $13.2 million.

• Adjusted EBITDA improved to a loss of $9.1 million, compared to a loss of $11.9 million.

A reconciliation of generally accepted accounting principles ("GAAP") in the United States to non-GAAP results has been provided in this press release in the accompanying tables. An explanation of these measures is also included below under the heading “Non-GAAP Financial Measures”.

Business Outlook

Second Quarter 2017 Guidance: Revenue for the second quarter 2017 is expected to be in the range of $44.0 million to $45.0 million. EBITDA is expected to be in the range of a loss of $10.5 million to a loss of $11.5 million. Adjusted EBITDA is expected to be in the range of a loss of $6.0 million to a loss of $7.0 million. Membership is expected to total approximately 20.5 million to 21.0 million at June 30, 2017. Total visits are projected to be between 290,000 and 310,000. Second quarter net loss per share, based on 54.5 million weighted average shares outstanding, is expected to be between $(0.26) and $(0.28).

Full Year 2017 Guidance: Revenue for the full year 2017 is expected to be in the range of $180 million to $185 million. EBITDA is expected to be in the range of a loss of $31 million to $34 million. Adjusted EBITDA is expected to be in the range of a loss of $19.5 million to $22.5 million and the Company targets to be Adjusted EBITDA break-even in the fourth-quarter of 2017. Membership is expected to total approximately 21.5 million to 23.0 million at December 31, 2017. Total visits for the full year are projected to be between 1,400,000 and 1,450,000. Net loss per share, based on 54.2 million weighted average shares outstanding, is expected to be between $(0.85) and $(0.91).

Quarterly Conference Call

The first quarter 2017 earnings conference call and webcast will be held Monday, May 8, 2017 at 5:00 p.m. ET. The conference call can be accessed by dialing 1-877-201-0168 for U.S. participants, or 1-647-788-4901 for international participants, and including the following Conference ID Number: 71800717 to expedite caller registration; 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.

NYSE Rule 303A.08 Disclosure

Pursuant to the requirements of NYSE’s Listed Company Manual Rule 303A.08, Teladoc also announced today that it has granted non-qualified stock options to new employees as material inducements to their hiring. Stock options for the purchase of a total of 35,500 shares of Teladoc’s common stock, par value $0.001 per share, at a price per share of $25.75 were awarded to a total of eight persons. Each of the options awarded vests as to twenty-five percent of the shares it covers on the first anniversary of its grant, with the remainder of the shares vesting ratably over thirty-six months thereafter. All the options were granted outside the terms of Teladoc’s 2015 Incentive Award Plan in reliance on the employment inducement exemption under the NYSE’s Listed Company Manual Rule 303A.08. 

About Teladoc

Teladoc, Inc. (NYSE:TDOC) is the nation’s leading provider of telehealth services and a pioneering force in bringing the virtual care visit into the mainstream of today’s health care ecosystem. Serving some 7,500 clients — including health plans, health systems, employers and other organizations — more than 20 million members can use phone, mobile devices and secure online video to connect within minutes to Teladoc’s network of more than 3,100 board-certified, state-licensed physicians and behavioral health specialists, 24/7. With national coverage, a robust, scalable platform and a Lewisville, TX-based member services center staffed by 400 employees, Teladoc offers the industry’s most comprehensive and complete telehealth solution including primary care, behavioral health care, dermatology, tobacco cessation and more. For additional information, please visit www.teladoc.com.

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 revenues, future earnings, future numbers of members or clients, 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 conditions.

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; and (v) changes to our abilities to recruit and retain qualified providers into our network. 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.

TELADOC, INC.
 
CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per share data, unaudited)
     
  March 31,  December 31,
  2017 2016
      
Assets      
Current assets:      
Cash and cash equivalents $139,948  $50,015 
Short-term marketable securities  36,005   15,793 
Accounts receivable, net of allowance of $1,988 and $2,422, respectively  15,309   13,806 
Prepaid expenses and other current assets  3,564   3,103 
Total current assets  194,826   82,717 
Property and equipment, net  7,441   7,479 
Goodwill  188,184   188,184 
Intangible assets, net  23,078   24,875 
Other assets  424   415 
Total assets $413,953  $303,670 
Liabilities and stockholders’ equity      
Current liabilities:      
Accounts payable $1,949  $2,236 
Accrued expenses and other current liabilities  8,947   7,981 
Accrued compensation  7,242   8,856 
Subordinated promissory note     2,000 
Total current liabilities  18,138   21,073 
Other liabilities  8,104   7,609 
Deferred taxes  1,844   1,694 
Long term bank and other debt, net  42,434   42,424 
Commitments and contingencies      
Stockholders’ equity:      
Common stock, $0.001 par value; 75,000,000 shares authorized as of March 31, 2017 and December 31, 2016; 54,359,434 shares and 46,201,563 shares issued and outstanding as of March 31, 2017 and December 31, 2016, respectively  54   46 
Additional paid-in capital  563,832   435,551 
Accumulated deficit  (220,449)  (204,726)
Accumulated other comprehensive loss  (4)  (1)
Total stockholders’ equity  343,433   230,870 
Total liabilities and stockholders’ equity $413,953  $303,670 
         


TELADOC, INC.
 
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except share and per share data, unaudited)
       
  Quarters Ended March 31,
  2017 2016
Revenue $42,898  $26,888 
Cost of revenue  12,139   7,943 
Gross profit  30,759   18,945 
Operating expenses:      
Advertising and marketing  12,616   8,050 
Sales  7,988   5,270 
Technology and development  6,512   5,225 
Legal  343   1,122 
Regulatory  1,007   848 
General and administrative  14,488   11,637 
Depreciation and amortization  2,607   1,508 
Loss from operations  (14,802)  (14,715)
Interest expense, net  702   427 
Net loss before taxes  (15,504)  (15,142)
Income tax provision  150   162 
Net loss $(15,654) $(15,304)
Net loss per share, basic and diluted $(0.30) $(0.40)
Weighted-average shares used to compute basic and diluted net loss per share  52,192,859   38,584,345 
         


TELADOC, INC.
       
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands, unaudited)
       
  Quarters Ended March 31,
  2017 2016
Cash flows used in operating activities:      
Net loss $(15,654) $(15,304)
Adjustments to reconcile net loss to net cash used in operating activities:      
Depreciation and amortization  2,607   1,508 
Allowance for doubtful accounts  306   777 
Stock-based compensation  3,097   1,288 
Deferred income taxes  150   162 
Accretion of interest  (18)  129 
Changes in operating assets and liabilities:      
Accounts receivable  (1,809)  (2,462)
Prepaid expenses and other current assets  (430)  (543)
Other assets  (9)   
Accounts payable  (287)  (1,135)
Accrued expenses and other current liabilities  966   1,288 
Accrued compensation  (1,921)  (3,244)
Other liabilities  495   353 
Net cash used in operating activities  (12,507)  (17,183)
Cash flows (used in) provided by investing activities:      
Purchase of property and equipment  (620)  (275)
Purchase of internal-use software  (152)  (385)
Purchase of marketable securities  (34,957)  (37,122)
Proceeds from marketable securities  14,740   49,856 
Net cash (used in) provided by investing activities  (20,989)  12,074 
Cash flows provided by financing activities:      
Net proceeds from the exercise of stock options  1,195   496 
Repayment of bank loan and other debt  (2,000)  (313)
Proceeds from issuance of common stock  123,928    
Cash for withholding taxes on stock-based awards, net  306   53 
Net cash provided by financing activities  123,429   236 
Net increase (decrease) in cash and cash equivalents  89,933   (4,873)
Cash and cash equivalents at beginning of the period  50,015   55,066 
Cash and cash equivalents at end of the period $139,948  $50,193 
       
Interest paid $994  $604 
         

Non-GAAP Financial Measures:

To supplement our financial information prepared in accordance with GAAP, we use EBITDA and Adjusted EBITDA, which are non-GAAP financial measures, for business planning purposes and in measuring our performance relative to that of our competitors. EBITDA consists of net loss before interest, taxes, depreciation and amortization. Adjusted EBITDA consists of net loss before interest, taxes, depreciation, amortization and stock-based compensation. A reconciliation of these Non-GAAP financial measures is presented below to net loss, which we believe is the most directly comparable GAAP measure.

We believe that the presentation of these non-GAAP financial measures enhances an investor’s understanding of our financial performance and are useful financial metrics to assess our operating performance from period-to-period by excluding certain items that we believe are not comparable across reporting periods or that do not otherwise relate to the Company’s ongoing operating results.

Our use of the term EBITDA and Adjusted EBITDA may vary from that of others in our industry. Neither EBITDA nor Adjusted EBITDA should be considered as an alternative to net loss or any other performance measures derived in accordance with GAAP as measures of performance.

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:

EBITDA and Adjusted EBITDA:

  • does not reflect the significant interest expense on our debt; and

  • eliminates the impact of income taxes on our results of operations; and

  • although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, and both measures do not reflect any expenditures for such replacements; and

  • other companies in our industry may calculate EBITDA and Adjusted EBITDA differently than we do, limiting the usefulness of EBITDA and Adjusted EBITDA as comparative measures.

Additionally, Adjusted EBITDA does not reflect the significant non-cash stock compensation expense which should be viewed as a component of recurring operating costs.

In evaluating these financial measures, you should be aware that in the future we may incur expenses like those eliminated in this presentation. Our presentation of EBITDA and Adjusted EBITDA should not be construed as an inference that our future results will be unaffected by unusual or nonrecurring items.

Reconciliation of EBITDA and Adjusted EBITDA to Net Loss
(In thousands, unaudited)
       
  Three Months Ended 
  March 31,
  2017 2016
Net loss $(15,654) $(15,304)
Add (deduct):      
Interest expense, net  702   427 
Income tax provision  150   162 
Depreciation expense  658   447 
Amortization expense  1,949   1,061 
EBITDA  (12,195)  (13,207)
Stock-based compensation  3,097   1,288 
Adjusted EBITDA $(9,098) $(11,919)
         
Media:
Courtney McLeod
914-265-6789
cmcleod@teladoc.com
 
Investors:
Jisoo Suh
914-265-6706
jsuh@teladoc.com