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Teladoc Health, Inc. (TDOC)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 2024 revenue was $640.5M, down 3% year over year; adjusted EBITDA fell 35% to $74.8M, and GAAP gross margin contracted to 65.7% from 68.8% .
  • Integrated Care grew revenue 2% to $390.7M with adjusted EBITDA of $53.2M (13.6% margin), while BetterHelp revenue declined 10% to $249.8M and adjusted EBITDA fell to $21.7M (8.7% margin) .
  • Management initiated FY 2025 guidance: revenue $2.468B–$2.576B, adjusted EBITDA $278M–$319M, FCF $190M–$220M; Q1 2025 revenue guided to $608M–$629M with lower margins as TRICARE visit ramp takes time and FX headwinds persist .
  • Strategic catalysts: definitive agreement to acquire Catapult Health (dilutive ~40 bps to IC margins in 2025), Amazon Health Benefits Connector enrollment channel, and AI-enabled Virtual Sitter expansion—supporting integrated care scale and engagement .

What Went Well and What Went Wrong

What Went Well

  • “We had a solid finish to the year” with Integrated Care delivering revenue growth and margin expansion; sequential improvement in BetterHelp key metrics (paying users) in Q4 vs Q3 .
  • International Integrated Care delivered mid-teens growth for 2024 and remains a bright spot; international BetterHelp accounted for ~20% of segment revenues .
  • FY 2025 guidance introduced with FCF growth of 12%–30% driven mainly by net working capital benefits; strong balance sheet (~$1.3B cash), plan to retire June 2025 converts with cash .

What Went Wrong

  • Consolidated Q4 revenue declined 3% YoY; adjusted EBITDA down 35% YoY; GAAP gross margin fell 310 bps YoY to 65.7% .
  • BetterHelp revenue down 10% YoY in Q4, with elevated customer acquisition costs and higher churn associated with the weekly pricing offer limiting profitability expansion .
  • Health plan channel headwinds and a client transition of a portion of business in Q2 2025; TRICARE visit ramp taking longer, tempering early 2025 visit volumes .

Financial Results

Consolidated performance vs prior quarters and prior year

MetricQ2 2024Q3 2024Q4 2024
Revenue ($USD Millions)$642.4 $640.5 $640.5
Net Loss per Share (EPS) ($)$(4.92) $(0.19) $(0.28)
Adjusted EBITDA ($USD Millions)$89.5 $83.3 $74.8
GAAP Gross Margin %66.7% 67.2% 65.7%
Adjusted Gross Margin %70.7% 71.9% 70.5%

Segment breakdown

Segment MetricQ2 2024Q3 2024Q4 2024
Integrated Care Revenue ($USD Millions)$377.4 $383.7 $390.7
Integrated Care Adjusted EBITDA ($USD Millions)$64.0 $68.0 $53.2
Integrated Care Adjusted EBITDA Margin %17.0% 17.7% 13.6%
BetterHelp Revenue ($USD Millions)$265.0 $256.8 $249.8
BetterHelp Adjusted EBITDA ($USD Millions)$25.5 $15.2 $21.7
BetterHelp Adjusted EBITDA Margin %9.6% 5.9% 8.7%

KPIs

KPIQ2 2024Q3 2024Q4 2024
Total Visits (Millions)4.2 4.1 4.4
U.S. Integrated Care Members (Millions)92.4 93.9 93.8
Chronic Care Program Enrollment (Millions)1.173 1.179 1.203
Avg Monthly Revenue per U.S. IC Member ($)$1.36 $1.36 $1.39
BetterHelp Paying Users (Millions, avg)0.407 0.398 0.400

Actuals vs Wall Street estimates

S&P Global consensus estimates were unavailable at time of analysis due to provider limit; therefore estimate comparisons cannot be shown. Values would normally be retrieved from S&P Global.

MetricQ4 2024 ActualQ4 2024 ConsensusOutcome
Revenue ($USD Millions)$640.5 N/A (S&P Global unavailable)N/A
EPS ($)$(0.28) N/A (S&P Global unavailable)N/A

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Revenue ($USD Millions)FY 2025None (consolidated guidance previously withdrawn) $2,468–$2,576 Initiated
Adjusted EBITDA ($USD Millions)FY 2025None (consolidated guidance previously withdrawn) $278–$319 Initiated
Net Loss per Share ($)FY 2025None $(1.10)–$(0.50) Initiated
Free Cash Flow ($USD Millions)FY 2025None $190–$220 Initiated
U.S. Integrated Care Members (Millions)FY 2025None101–103 Initiated
Integrated Care Adjusted EBITDA Margin %FY 2025“Endeavor to maintain in line with 2024” 14.3%–15.3% Formalized range
Integrated Care Revenue Growth YoY %FY 2025None0%–3% Initiated
BetterHelp Revenue Growth YoY %FY 2025None(9.75%)–(3.75%) Initiated
Revenue ($USD Millions)Q1 2025None$608–$629 Initiated
Adjusted EBITDA ($USD Millions)Q1 2025None$47–$59 Initiated
Integrated Care Rev Growth YoY %Q1 2025None(0.5%)–2.0% Initiated
Integrated Care Adjusted EBITDA Margin %Q1 2025None11.25%–12.75% Initiated
BetterHelp Rev Growth YoY %Q1 2025None(13.5%)–(9.0%) Initiated
BetterHelp Adjusted EBITDA Margin %Q1 2025None2.0%–4.25% Initiated

Notes: CFO highlighted Catapult Health expected ~40 bps dilutive impact to Integrated Care margin in 2025; FX headwinds cited for Integrated Care growth and BetterHelp margins .

Earnings Call Themes & Trends

TopicPrevious Mentions (Q2 2024, Q3 2024)Current Period (Q4 2024)Trend
Contract mix shift to visit-basedClients gradually migrating, focus on making every visit count; visit revenue growing Emphasis on visit-oriented arrangements; utilization stable; flu season dynamics; importance of visit volumes for engagement Continuing shift; engagement activation priority
TRICARE implementationNot highlightedSlower-than-typical visit ramp; stronger impact in 2H 2025 expected Near-term headwind; back-half tailwind
BetterHelp weekly pricing modelPilot launched; CAC elevated; pulled back ad spend Weekly offer broadly available; improves conversion; higher churn but net positive; ARPU pressured by international mix/taxes Stabilizing users; margin management focus
BetterHelp insurance acceptanceCapability build underway; targeting 2025, measured approach Operational capabilities in place; initial health plan discussions started; no material 2025 contribution expected Early-stage; longer-term TAM expansion
International (IC and BH)Strong B2B momentum; high-teens IC growth; BH expansion beyond English markets IC mid-teens growth; BH ~20% of segment revenue from international; localized models (e.g., France) Positive growth driver
GLP-1/Weight management programsCCM drivers include diabetes prevention & weight management Employer interest strong; tailored solutions amidst rebate dynamics; enrollments to ramp through 2025 Demand growing; operational ramp
Health plan channelChallenging backdrop; bookings tracking lower; retention slightly down Headwinds persist; one client transitioning portion of business in Q2 2025 Near-term pressure
Cost savings & capital allocationOn track: $43M 2024; $85M 2025; retire 2025 converts with cash Exceeding targets modestly; focus on T&D and G&A optimization; share buybacks possible; ~$1.3B cash Ongoing efficiencies; optionality maintained
AI/technology initiativesScaled data science/AI; platform investments AI-enabled Virtual Sitter expansion; point-of-care tech; external ecosystem integration capability Enhancing care & efficiency
Strategic M&A/partnerships—Catapult acquisition ($65M cash + up to $5M earnout); Amazon Health Benefits Connector enrollment channel Scaling engagement & diagnostics

Management Commentary

  • CEO: “Consistent with our guidance range, Integrated Care delivered revenue growth and strong margin expansion… In BetterHelp… the operating environment continues to be challenging and we remain focused on actions to stabilize results” .
  • CEO on priorities: net growth in customers/membership, point-of-care technology, Chronic Care innovation (Catapult), international expansion, and scaled B2B Mental Health (~$150M revenue) .
  • CFO: “Fourth quarter results were generally in line… Consolidated revenue was $640 million and adjusted EBITDA of $75 million represented an 11.7% margin… We closed 2024 with nearly $1.3 billion in cash” .

Q&A Highlights

  • Contract structure: growing interest in visit-based arrangements; aim for gross margin neutrality over time when transitioning from access fees, with land-and-expand offsets .
  • BetterHelp dynamics: weekly pricing boosts conversion but increases churn; ARPU declines driven by international mix and taxes; CACs elevated, optimization over scale growth prioritized .
  • Health plan channel: macro and strategic pressures are near-term headwinds; one client transitioning portion of business in Q2 2025, but relationships remain strong .
  • GLP-1 weight management: employer customization amid rebate considerations; focus on sustainable, comprehensive approaches .
  • Capital allocation: plan to retire 2025 converts with cash; potential share buybacks; continue cost reductions in T&D and G&A .

Estimates Context

  • S&P Global consensus EPS and revenue estimates for Q4 2024 were unavailable at the time of analysis due to provider limit constraints; as a result, beats/misses vs consensus cannot be determined. Future comparisons should anchor on S&P Global consensus when accessible.

Key Takeaways for Investors

  • Integrated Care remains the growth and margin anchor, but 2025 starts softer given FX, selling season outcomes, TRICARE ramp timing, and a client transition; back-half weighted revenue and EBITDA expected .
  • BetterHelp stabilization is progressing (sequential paying user uptick), yet elevated CACs and weekly pricing churn cap near-term margins; international/localization is a positive offset, with insurance acceptance as a longer-term TAM unlock .
  • Guidance initiation (FY 2025) frames expectations: consolidated revenue ~$2.47B–$2.58B and FCF $190M–$220M, with disciplined cost management and working capital improvements underpinning cash generation .
  • Strategic initiatives (Catapult acquisition, Amazon enrollment channel, AI-enabled Virtual Sitter) are levered to deeper engagement, earlier detection, and operational efficiency—potentially enhancing IC revenue and cross-sell over time .
  • Watch near-term catalysts: Q1 2025 margin inflection (IC 11.25%–12.75%, BH 2%–4.25%), TRICARE volume progression, CCM enrollment ramps, FX trajectory, and BetterHelp CAC trends .
  • Balance sheet strength (~$1.3B cash) and convert retirement plan reduce financing risk; potential buybacks provide capital deployment optionality if execution tracks guidance .
  • Narrative drivers for the stock: visibility into BH stabilization, IC margin durability amid Catapult dilution, and evidence that AI/product and partnership investments translate into sustained revenue and EBITDA growth .