Teladoc Health, Inc. Q2 FY2025 earnings call

• Strengthened market focus and optimized cost structure over the past year.
• Product innovations: Launched Wellbound employee assistance program, enhanced cardiometabolic health program with new features, AI-enabled virtual sitter solution for hospital clients, and hybrid care models in international.
• Acquisitions: Catapult Health strengthens preventative care and engagement, UpLift supports BetterHelp's insurance entry.
• Strategic priorities: Enhancing integrated care offerings, leveraging mental health position, international growth, and operational excellence.

Integrated Care segment revenue was $391.5 million, increasing 3.7% year-over-year and exceeding the high end of the guidance range. Foreign exchange and Catapult contributed to growth. U.S. Integrated Care membership was 102.4 million members, up 11% year-over-year. Second quarter Integrated Care adjusted EBITDA was $57.5 million with a margin of 14.7%. BetterHelp segment revenue was $240.4 million, up slightly sequentially but down 5% year-over-year in U.S. cash pay business. International users in BetterHelp were up high single-digit percentage year-over-year. BetterHelp adjusted EBITDA was $11.9 million with a margin of 4.9%.

• 2025 consolidated revenue expected $2.501 billion to $2.548 billion, adjusted EBITDA $263 million to $294 million.
• Third quarter consolidated revenue expected $614 million to $636 million, adjusted EBITDA $56 million to $70 million.
• Integrated Care full year revenue guidance revised up and narrowed, BetterHelp revenue outlook lower due to U.S. cash pay headwinds.
• Full year free cash flow guidance $170 million to $200 million unchanged.
• 2025 stock-based compensation expense $95 million to $105 million.

• Unfavorable adjusted EBITDA impact from tariffs, estimated at ~$3 million in 2025.
• Headwinds in BetterHelp's U.S. cash pay business due to soft consumer sentiment, higher customer acquisition costs, and competition from other virtual mental health companies offering insurance coverage.

Q: David Roman from Goldman Sachs asked about the transition from subscription to pay-per-visit model.

A: Chuck Divita said more than 50% of virtual care revenues are now pay-per-visit, with mental health at ~70%, and more growth in visits expected.

Q: Richard Close from Canaccord Genuity asked about BetterHelp's insurance margin and rollout.

A: Mala Murthy said insurance margins lower than cash pay, and rollout is methodical with supply and demand considerations.

Q: Lisa Gill from JPMorgan asked about opportunities to drive cost curve with virtual care.

A: Charles Divita said virtual care can support access and is evolving with product innovation and clinical capabilities.

Q: Jessica Tassan from Piper Sandler asked about 2026 chronic care solutions.

A: Charles Divita and Mala Murthy discussed product innovation and cross-selling opportunities in chronic care.

Q: Daniel Grosslight from Citi asked about BetterHelp insurance revenue contribution in 2026.

A: Mala Murthy said investments in scaling insurance and progress update expected in October and February.

Q: Jailendra Singh from Truist asked about company's pieces in place for growth.

A: Charles Divita said continued investments in organic growth and acquisitions for sustainable growth.

Q: Elizabeth Anderson from Evercore asked about international growth emphasis.

A: Mala Murthy and Charles Divita discussed international growth in Integrated Care and BetterHelp with localized initiatives.

Q: Sarah James from Cantor asked about BetterHelp's return to growth.

A: Mala Murthy said revised guidance reflects U.S. cash pay headwinds and progress in insurance initiative.

Q: Charles Rhyee from TD Cowen asked about limiting factors in virtual care penetration.

A: Charles Divita said continued recognition of primary care needs and use of engagement points for value creation.