Teladoc Health Inc

Previous wording

Number of U.S. Integrated Care Members. U.S. Integrated Care members represent the number of unique individuals who have paid access and visit fee only access to our suite of integrated care services in the U.S. at the end of the applicable period. Our revenue growth rate and long-term profitability are affected by our ability to increase cross selling capability among our existing members over time because we derive a substantial portion of our revenue from access and other fees via Client contracts that provide members access to our professional provider network in exchange for a contractual based periodic fee. Therefore, we believe that our ability to add new members and retain existing members, and to increase utilization and penetration further into existing and new health plan and employer Clients is a key indicator of our increasing market adoption, the growth of our business, and our future revenue potential. We further believe that increasing our membership is an integral objective that will provide us with the ability to continually innovate our services and support initiatives that will enhance members’ experiences. U.S. Integrated Care members increased by 6.9 million, or 8%, to 91.8 million at March 31, 2024, compared to the same period in 2023.

Current wording

Number of U.S. Integrated Care Members. U.S. Integrated Care members represent the number of unique individuals who have paid access and visit fee only access to our suite of integrated care services in the U.S. at the end of the applicable period. Our revenue growth rate and long-term profitability are affected by our ability to increase cross selling capability among our existing members over time because we derive a substantial portion of our revenue from access and other fees via Client contracts that provide members access to our professional provider network in exchange for a contractual based periodic fee. Therefore, we believe that our ability to add new members and retain existing members, and to increase utilization and penetration further into existing and new health plan and employer Clients is a key indicator of our increasing market adoption, the growth of our business, and our future revenue potential. We further believe that increasing our membership is an integral objective that will provide us with the ability to continually innovate our services and support initiatives that will enhance members’ experiences. 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.

Previous wording

Chronic Care Program Enrollment. Chronic care program enrollment represents the total number of enrollees across our suite of chronic care programs at the end of a given period. Our chronic care program enrollments are one of the key components of our whole person virtual care platform that we believe positions us to drive greater engagement with our platforms and increased revenue. Chronic care program enrollment increased by 9% to 1.12 million at March 31, 2024, compared to 1.03 million at March 31, 2023.

Current wording

Chronic Care Program Enrollment. Chronic care program enrollment represents the total number of enrollees across our suite of chronic care programs at the end of a given period. Our chronic care program enrollments are one of the key components of our whole person virtual care platform that we believe positions us to drive greater engagement with our platforms and increased revenue. Chronic care program enrollment increased by 9% to 1.173 million at June 30, 2024, compared to 1.073 million at June 30, 2023.

Previous wording

Average Monthly Revenue Per U.S. Integrated Care Member. Average monthly revenue per U.S. Integrated Care member measures the average monthly amount of global revenue that we generate from a U.S. Integrated Care member for a particular period. It is calculated by dividing the total revenue generated from the Integrated Care segment by the average number of U.S. Integrated Care members during the applicable period. Approximately 20% of total Integrated Care revenues relates to international and hospital and health systems for which membership is not considered as a management metric. We believe that our ability to increase the revenue generated from each member over time is also a key indicator of our increasing market adoption, the growth of our business, and future revenue potential. Average monthly revenue per U.S. Integrated Care member was $1.38 in the three months ended March 31, 2024, compared to $1.39 in the same period in 2023. The change in average monthly revenue versus the indicated prior period is reflective of the growth of onboarding new members and the timing and mix of when fees are realized.

Current wording

Average Monthly Revenue Per U.S. Integrated Care Member. Average monthly revenue per U.S. Integrated Care member measures the average monthly amount of global revenue that we generate from a U.S. Integrated Care member for a particular period. It is calculated by dividing the total revenue generated from the Integrated Care segment by the average number of U.S. Integrated Care members during the applicable period. Approximately 20% of total Integrated Care revenues relates to international and hospital and health systems for which membership is not considered as a management metric. We believe that our ability to increase the revenue generated from each member over time is also a key indicator of our increasing market adoption, the growth of our business, and future revenue potential. Average monthly revenue per U.S. Integrated Care member was $1.36 in the three months ended June 30, 2024, compared to $1.41 in the same period in 2023. Average monthly revenue per U.S. Integrated Care member decreased to $1.37 in the six months ended June 30, 2024 from $1.40 in the same period in 2023. The change in average monthly revenue versus the indicated prior periods is reflective of the growth of onboarding new members and the timing and mix of when fees are realized.

Previous wording

BetterHelp Paying Users. BetterHelp paying users represent the average number of global monthly paying users of our BetterHelp therapy services during the applicable period. We believe that our ability to add new paying users and retain existing users is a key indicator of the market adoption of BetterHelp, the growth of that business, and future revenue potential. BetterHelp paying users decreased by 11% to 0.42 million for the three months ended March 31, 2024, compared to 0.47 million for the three months ended March 31, 2023.

Current wording

BetterHelp Paying Users. BetterHelp paying users represent the average number of global monthly paying users of our BetterHelp therapy services during the applicable period. We believe that our ability to add new paying users and retain existing users is a key indicator of the market adoption of BetterHelp, the growth of that business, and future revenue potential. BetterHelp paying users decreased by 14% to 0.407 million for the three months ended June 30, 2024, compared to 0.476 million for the three months ended June 30, 2023, and decreased by 13% to 0.411 million for the six months ended June 30, 2024, compared to 0.471 million for the six months ended June 30, 2023.

Previous wording

To supplement our financial information presented in accordance with GAAP, we use non-GAAP financial measures to clarify and enhance an understanding of past performance, which include EBITDA (as defined below), Adjusted EBITDA, and free cash flow. We believe that the presentation of these financial measures enhances an investor’s understanding of our financial performance, and are commonly used by investors to evaluate our performance and that of our competitors. We further believe that these financial measures are useful financial metrics to assess our operating performance and financial and business trends from period-to-period by excluding certain items that we believe are not representative of our core business, and that free cash flow reflects an additional way of viewing our liquidity that, when viewed together with GAAP results, provides management, investors, and other users of our financial information with a more complete understanding of factors and trends affecting our cash flows. We use these non-GAAP financial measures for business planning purposes and in measuring our performance relative to that of our competitors. We utilize Adjusted EBITDA as a key measure of our performance.

Current wording

To supplement our financial information presented in accordance with GAAP, we use certain non-GAAP financial measures to clarify and enhance an understanding of past performance, which include Adjusted EBITDA (as defined below) and free cash flow. We believe that the presentation of these financial measures enhances an investor’s understanding of our financial performance, and are commonly used by investors to evaluate our performance and that of our competitors. We further believe that these financial measures are useful financial metrics to assess our operating performance and financial and business trends from period-to-period by excluding certain items that we believe are not representative of our core business, and that free cash flow reflects an additional way of viewing our liquidity that, when viewed together with GAAP results, provides management, investors, and other users of our financial information with a more complete understanding of factors and trends affecting our cash flows. We use these non-GAAP financial measures for business planning purposes and in measuring our performance relative to that of our competitors. We utilize Adjusted EBITDA as a key measure of our performance.

Previous wording

EBITDA consists of net loss before interest income; interest expense; other expense (income), net, including foreign currency exchange gains or losses; provision for income taxes; amortization of intangible assets; and depreciation of property and equipment. Adjusted EBITDA consists of net loss before interest income; interest expense; other expense (income), net, including foreign currency exchange gains or losses; provision for income taxes; amortization of intangible assets; depreciation of property and equipment; stock-based compensation; restructuring costs; and acquisition, integration, and transformation costs.

Current wording

Adjusted EBITDA consists of net loss before provision for income taxes; other expense (income), net; interest income; interest expense; depreciation of property and equipment; amortization of intangible assets; restructuring costs; acquisition, integration, and transformation cost; goodwill impairment; and stock-based compensation.

Previous wording

•EBITDA and Adjusted EBITDA eliminate the impact of the provision for income taxes on our results of operations, and they do not reflect interest income, interest expense or other expense (income), net;

Current wording

•Adjusted EBITDA eliminates the impact of the provision for income taxes on our results of operations, and it does not reflect other expense (income), net, interest income, or interest expense;

Previous wording

•Adjusted EBITDA does not reflect significant acquisition, integration, and transformation costs. Acquisition, integration and transformation costs include investment banking, financing, legal, accounting, consultancy, integration, fair value changes related to contingent consideration and certain other transaction costs related to mergers and acquisitions. It also includes costs related to certain business transformation initiatives focused on integrating and optimizing various operations and systems, including upgrading our CRM and ERP systems. These transformation cost adjustments made to our results do not represent normal, recurring, operating expenses necessary to operate the business but rather, incremental costs incurred in connection with our acquisition and integration activities; and

Current wording

•Adjusted EBITDA does not reflect significant acquisition, integration, and transformation costs. Acquisition, integration and transformation costs include investment banking, financing, legal, accounting, consultancy, integration, fair value changes related to contingent consideration and certain other transaction costs related to mergers and acquisitions. It also includes costs related to certain business transformation initiatives focused on integrating and optimizing various operations and systems, including upgrading our CRM and ERP systems. These transformation cost adjustments made to our results do not represent normal, recurring, operating expenses necessary to operate the business but rather, incremental costs incurred in connection with our acquisition and integration activities;

Previous wording

In addition, although amortization of intangible assets and depreciation of property and equipment are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, and both EBITDA and Adjusted EBITDA do not reflect any expenditures for such replacements.

Current wording

In addition, although amortization of intangible assets and depreciation of property and equipment are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, and Adjusted EBITDA does not reflect any expenditures for such replacements.

Previous wording

The following table reconciles net loss, the most directly comparable GAAP financial measure, to EBITDA and Adjusted EBITDA for the three months ended March 31, 2024 and 2023 (in thousands):

Current wording

The following table reconciles net loss, the most directly comparable GAAP financial measure, to Adjusted EBITDA for the three and six months ended June 30, 2024 and 2023 (in thousands):

Previous wording

Revenue. Total revenue was $646.1 million for the three months ended March 31, 2024, compared to $629.2 million during the three months ended March 31, 2023, an increase of $16.9 million, or 3%. This increase in revenue was driven substantially by higher visit revenues in our Integrated Care segment. Total access fees were $557.2 million for the three months ended March 31, 2024, compared to $550.9 million for the three months ended March 31, 2023, an increase of $6.3 million, or 1%. Other revenue, which predominately includes visit fees and, to a lesser extent, revenue from the sales of our telehealth solutions for hospitals and health systems, was $89.0 million for the three months ended March 31, 2024, compared to $78.4 million for the three months ended March 31, 2023, an increase of $10.6 million, or 14%, primarily related to higher visit revenue. For the three months ended March 31, 2024, 86% of our revenue was derived from access fees and 14% was derived from other revenue, consistent with the three months ended March 31, 2023. By geography, U.S. revenue grew 1% to $547.6 million and International revenue grew 13% to $98.5 million compared to the three months ended March 31, 2023.

Current wording

$16.0 million, or 3%. Other revenue, which predominately includes visit fees and, to a lesser extent, revenue from the sales of our telehealth solutions for hospitals and health systems, was $82.8 million for the three months ended June 30, 2024, compared to $76.7 million for the three months ended June 30, 2023, an increase of $6.1 million, or 8%. For the three months ended June 30, 2024, 87% and 13% of our revenue was derived from access fees and other revenue, respectively, as compared to 88% and 12%, respectively, for the three months ended June 30, 2023. By geography, International revenue increased by 12% to $101.6 million while U.S. revenue decreased by 4% to $540.8 million, each compared to the three months ended June 30, 2023.

Previous wording

Cost of Revenue (exclusive of depreciation and amortization, which are shown separately below). Cost of revenue was $194.5 million for the three months ended March 31, 2024, compared to $190.1 million for the three months ended March 31, 2023, an increase of $4.4 million, or 2%. The increase was primarily driven by higher costs associated with the growth in revenue and higher amortization of device costs, offset by lower physician costs, reflecting various operation optimization efforts to reduce provider costs and overall product mix.

Current wording

Cost of Revenue (exclusive of depreciation and amortization, which are shown separately below). Cost of revenue was $188.1 million for the three months ended June 30, 2024, compared to $190.5 million for the three months ended June 30, 2023, a decrease of $2.5 million, or 1%. The decrease was primarily driven by lower technology costs, partially offset by higher amortization of device costs. On a year-to-date basis, cost of revenue increased by $2.0 million, or 1%, to $382.6 million. The increase was primarily driven by higher costs associated with the growth in revenue and higher amortization of device costs, partially offset by lower technology costs.

Previous wording

Advertising and Marketing Expenses. Advertising and marketing expenses were $183.3 million for the three months ended March 31, 2024, compared to $176.8 million for the three months ended March 31, 2023, an increase of $6.5 million, or 4%, driven mainly by higher engagement marketing in our Integrated Care segment and higher digital and media advertising costs in our BetterHelp segment.

Current wording

Advertising and Marketing Expenses. Advertising and marketing expenses were $170.3 million for the three months ended June 30, 2024, compared to $178.8 million for the three months ended June 30, 2023, a decrease of

Previous wording

Technology and Development Expenses. Technology and development expenses were $81.4 million for the three months ended March 31, 2024, compared to $87.0 million for the three months ended March 31, 2023, a decrease of $5.6 million, or 6%. This decrease reflects lower employee compensation costs and contract labor costs, offset by higher infrastructure and hosting costs associated with running operations and ongoing projects and services to continuously improve and optimize our products and services. For the three months ended March 31, 2024 and 2023, research and development costs, which exclude amounts reflected as capitalized software development costs, were $24.8 million and $30.4 million, respectively.

Current wording

Technology and Development Expenses. Technology and development expenses were $76.8 million for the three months ended June 30, 2024, compared to $87.3 million for the three months ended June 30, 2023, a decrease of $10.6 million, or 12%. This decrease reflects lower employee compensation costs, partially offset by higher professional fees and higher infrastructure and hosting costs associated with running operations and ongoing projects and services to continuously improve and optimize our products and services. On a year-to-date basis, technology and development expenses decreased by $16.2 million, or 9% to $158.1 million. The decrease was primarily driven by lower employee compensation costs and contract labor costs, partially offset by higher infrastructure, hosting and software license costs. For the three months ended June 30, 2024 and 2023, research and development costs, which exclude amounts reflected as capitalized software development costs, were $22.2 million and $33.2 million, respectively. For the six months ended June 30, 2024 and 2023, research and development costs were $47.0 million and $63.6 million, respectively.

Previous wording

General and Administrative Expenses. General and administrative expenses decreased $2.4 million, or 2%, to $111.7 million for the three months ended March 31, 2024, compared to $114.1 million for the three months ended March 31, 2023. The decrease was primarily driven by lower therapist onboarding costs, bad debt reserves, indirect taxes, insurance costs, employee compensation costs, and bank fees, partially offset by higher corporate software and infrastructure costs, legal costs, consultation costs, occupancy costs, and travel expenses.

Current wording

General and Administrative Expenses. General and administrative expenses decreased $16.3 million, or 13%, to $109.6 million for the three months ended June 30, 2024, compared to $125.8 million for the three months ended June 30, 2023. The decrease was primarily driven by lower employee compensation costs, therapist onboarding costs, and indirect taxes. On a year-to-date basis, general and administrative expenses decreased $18.7 million, or 8%, to $221.2 million. The decrease was primarily driven by lower employee compensation costs, therapist onboarding costs, indirect taxes and bad debt expenses, partially offset by higher software and infrastructure costs.

Previous wording

As a result of the termination of the former Chief Executive Officer, we expect to recognize approximately $6.4 million of related costs in the three months ending June 30, 2024, with $1.2 million for cash severance costs and $5.2 million for stock-based compensation.

Current wording

As a result of the termination of our former CEO, we recognized approximately $6.4 million of related costs for the three and six months ended June 30, 2024, with $1.2 million for cash severance costs and $5.2 million for stock-based compensation.

Previous wording

Acquisition, Integration, and Transformation Costs. Acquisition, integration, and transformation costs were $0.4 million and $5.9 million for the three months ended March 31, 2024 and 2023 respectively, and primarily consisted of costs to integrate and upgrade our CRM and ERP ecosystem.

Current wording

Acquisition, Integration, and Transformation Costs. Acquisition, integration, and transformation costs primarily consisted of costs to integrate and upgrade our Customer Relationship Management and Enterprise Resource Planning ecosystem and were $0.5 million and $5.1 million for the three months ended June 30, 2024 and 2023 respectively, and were $0.8 million and $11.0 million for the six months ended June 30, 2024 and 2023, respectively.

Previous wording

Restructuring Costs. Restructuring costs for the three months ended March 31, 2024 were $9.7 million, of which $7.0 million was for employee transition, severance, employee benefits, and related costs and $2.7 million was for other restructuring related costs. Restructuring costs for the three months ended March 31, 2023, were $8.1 million which primarily consisted of employee transition, severance, employee benefits, and related costs.

Current wording

Restructuring Costs. Restructuring costs for the three months ended June 30, 2024 were $1.5 million, of which $1.3 million was for employee transition, severance, employee benefits, and related costs and $0.1 million was for other restructuring related costs. Restructuring costs for the six months ended June 30, 2024, were $11.2 million which primarily consisted of employee transition, severance, employee benefits, and related costs. For the three and six months ended June 30, 2023, restructuring costs were $7.5 million and $15.6 million respectively, and also consisted of charges related to the reduction of office space and severance.

Previous wording

Amortization of intangible assets was $95.1 million for the three months ended March 31, 2024, compared to $66.9 million for the three months ended March 31, 2023, an increase of $28.2 million, or 42%. The higher expense was driven by higher amortization of intangible assets due to the acceleration of amortization associated with the Livongo trademark as well as an increase in the amortization of capitalized software development costs related to our investment in platforms. In the second half of 2023, we initiated a strategy to transition the majority of our chronic condition management Clients and members to the Teladoc Health brand on a phased basis, with a smaller subset continuing to be served under the Livongo trade name beyond 2024. In connection with the brand strategy, we accelerated the amortization of intangible assets that are associated with the Livongo trademark, increasing amortization of intangible assets expense in the year ended December 31, 2023 and in the year ending December 31, 2024, with corresponding reductions thereafter. The change in accounting estimate resulted in additional amortization of intangible expense for acquired intangibles of $18.6 million, or $0.11 per basic and diluted share, for the three months ended March 31, 2024.

Current wording

$72.5 million for the three months ended June 30, 2023, an increase of $22.4 million, or 31%. Amortization of intangible assets was $189.9 million for the six months ended June 30, 2024, compared to $139.4 million for the six months ended June 30, 2023, an increase of $50.5 million, or 36%. The higher expense was driven by higher amortization of intangible assets due to the acceleration of amortization associated with the Livongo trademark as well as an increase in the amortization of capitalized software development costs related to our investment in platforms. In the second half of 2023, we initiated a strategy to transition the majority of our chronic condition management Clients and members to the Teladoc Health brand on a phased basis, with a smaller subset continuing to be served under the Livongo trade name beyond 2024. In connection with the brand strategy, we accelerated the amortization of intangible assets that are associated with the Livongo trademark, increasing amortization of intangible assets expense in the year ended December 31, 2023 and in the year ending December 31, 2024, with corresponding reductions thereafter. The change in accounting estimate resulted in additional amortization of intangible expense for acquired intangibles of $18.6 million, or $0.11 per basic and diluted share, for the three months ended June 30, 2024 and $37.2 million, or $0.22 per basic and diluted share, for the six months ended June 30, 2024.

Previous wording

Interest Income. Interest income consisted of interest earned on cash and cash equivalents. Interest income was $13.9 million for the three months ended March 31, 2024, compared to $8.9 million for the three months ended March 31, 2023. The increase was primarily driven by higher interest rate yields and an increase in cash and cash equivalent balances.

Current wording

Interest Income. Interest income consisted of interest earned on cash and cash equivalents. Interest income was $13.6 million for the three months ended June 30, 2024, compared to $11.6 million for the three months ended June 30, 2023. Interest income was $27.5 million for the six months ended June 30, 2024 compared to $20.5 million for the six months ended June 30, 2023. The increase for both periods was primarily driven by higher interest rate yields and an increase in cash and cash equivalent balances.

Previous wording

Interest Expense. Interest expense consisted of interest costs and the amortization of debt discounts primarily associated with the convertible senior notes. Interest expense was $5.6 million for the three months ended March 31, 2024, compared to $5.3 million for the three months ended March 31, 2023.

Current wording

Interest Expense. Interest expense consisted of interest costs and the amortization of debt discounts primarily associated with the convertible senior notes. Interest expense was $5.6 million for the three months ended June 30, 2024, compared to $5.8 million for the three months ended June 30, 2023. Interest expense was $11.3 million and $11.1 million for the six months ended June 30, 2024 and 2023, respectively.

Previous wording

Other Expense (Income), net. Other expense (income), net was an expense of $0.4 million for the three months ended March 31, 2024, compared to an income of $4.9 million for the three months ended March 31, 2023, primarily reflecting losses on foreign currency exchange rate fluctuations in 2024 and a gain on the partial sale of a business in 2023.

Current wording

$0.9 million for the six months ended June 30, 2024, compared to an income of $4.7 million for the six months ended June 30, 2023, primarily reflecting losses on foreign currency exchange rate fluctuations in 2024 and a gain on the partial sale of a business in 2023.

Previous wording

Provision for Income Taxes. We recorded an income tax expense of $2.7 million for the three months ended March 31, 2024, compared to $0.7 million for the three months ended March 31, 2023.

Current wording

Provision for Income Taxes. We recorded an income tax expense of $3.9 million for the three months ended June 30, 2024, compared to $1.0 million for the three months ended June 30, 2023, and income tax expense of $6.6 million for the six months ended June 30, 2024, compared to $0.3 million for the six months ended June 30, 2023.

Previous wording

The following tables set forth the results of operations for the relevant segments for the three months ended March 31, 2024 and 2023 (dollars in thousands):

Current wording

The following tables set forth the results of operations for the relevant segments for the three and six months ended June 30, 2024 and 2023 (dollars in thousands):

Previous wording

Integrated Care total revenues increased by $27.1 million, or 8%, to $377.1 million for the three months ended March 31, 2024, primarily on higher chronic care results and higher visit revenue in the U.S., as well as strong growth internationally.

Current wording

Integrated Care total revenues increased by $17.4 million, or 5%, to $377.4 million for the three months ended June 30, 2024, primarily on higher chronic care results and higher visit revenue in the U.S., as well as strong growth internationally. For the six months ended June 30, 2024, Integrated Care total revenues increased by $44.5 million, or 6%, to $754.5 million, primarily on higher chronic care results and higher visit revenue in the U.S., as well as strong growth internationally.

Previous wording

Integrated Care Adjusted EBITDA increased by $12.5 million, or 36%, to $47.7 million for the three months ended March 31, 2024, primarily reflecting higher gross profit and flat operating expenses.

Current wording

Integrated Care Adjusted EBITDA increased by $26.1 million, or 69%, to $64.0 million for the three months ended June 30, 2024, primarily reflecting higher gross profit and lower operating expenses. For the six months ended June 30, 2024, Integrated Care Adjusted EBITDA increased by $38.6 million, or 53%, to $111.7 million, primarily reflecting higher gross profit and lower operating expenses.

Previous wording

BetterHelp total revenues decreased by $10.3 million, or 4%, to $269.0 million for the three months ended March 31, 2024, primarily driven by a 11% decrease in average monthly paying users.

Current wording

BetterHelp total revenues decreased by $27.3 million, or 9%, to $265.0 million for the three months ended June 30, 2024, primarily driven by a 14% decrease in average monthly paying users. BetterHelp total revenues decreased by $37.6 million, or 7%, to $534.0 million for the six months ended June 30, 2024, primarily driven by a 13% decrease in average monthly paying users.

Previous wording

The following table presents a summary of our cash flow activity for the three months ended March 31, 2024 and 2023 (in thousands):

Current wording

The following table presents a summary of our cash flow activity for the six months ended June 30, 2024 and 2023 (in thousands):

Previous wording

Our principal sources of liquidity are cash and cash equivalents, totaling $1,097.9 million as of March 31, 2024. During 2023, we experienced positive operating cash flow and we anticipate increasing positive operating cash flow results for 2024.

Current wording

Our principal source of liquidity is our cash and cash equivalents, totaling $1,162.4 million as of June 30, 2024. During 2023, we experienced positive operating cash flow and we anticipate continuing positive operating cash flow results for 2024.

Previous wording

We believe that our existing cash and cash equivalents will be sufficient to meet our working capital, capital expenditure, and contractual obligation needs for at least the next 12 months. Our future capital requirements will depend on many factors including our growth rate, contract renewal activity, number of visits, the timing and extent of spending to support product development efforts, our expansion of sales and marketing activities, the introduction of new and enhanced services offerings, the continuing market acceptance of telehealth, and our debt service obligations. We may in the future enter into arrangements to acquire or invest in complementary businesses, services, technologies, and intellectual property rights. We may be required to seek additional equity or debt financing to fund working capital, capital expenditures and acquisitions, and to settle debt obligations. In the event that additional financing is required from outside sources, we may not be able to raise it on terms acceptable to us or at all, which would adversely affect our business, financial condition and results of operations.

Current wording

We believe that our existing cash and cash equivalents will be sufficient to meet our working capital, capital expenditure, and contractual obligation needs for at least the next 12 months. Our future capital requirements will depend on many factors including our growth rate, contract renewal activity, number of visits, our ability to retain and/or obtain new members, the timing and extent of spending to support product development efforts, our expansion of sales and marketing activities, the introduction of new and enhanced services offerings, the continuing market acceptance of telehealth, and our debt service obligations. We may in the future enter into arrangements to acquire or invest in complementary businesses, services, technologies, and intellectual property rights. We may be required to seek additional equity or debt financing to fund working capital, capital expenditures and acquisitions, and to settle debt obligations. In the event that additional financing is required from outside sources, we may not be able to raise it on terms acceptable to us or at all, which would adversely affect our business, financial condition, and results of operations.

Previous wording

Cash flows provided by operating activities consisted of net loss adjusted for certain non-cash items and the cash effect of changes in assets and liabilities. Net cash provided by operating activities was $8.9 million for the three months ended March 31, 2024 compared to net cash provided by operating activities of $13.2 million for the three months ended March 31, 2023. The year-over-year change was primarily driven by higher incentive compensation payments, partially offset by growth in the business.

Current wording

Cash flows provided by operating activities consisted of net loss adjusted for certain non-cash items and the cash effect of changes in assets and liabilities. Net cash provided by operating activities was $97.6 million for the six months ended June 30, 2024 compared to net cash provided by operating activities of $114.3 million for the six months ended June 30, 2023. The year-over-year change was primarily driven by higher incentive compensation payments, partially offset by growth in the business.

Previous wording

Cash used in investing activities was $35.5 million for the three months ended March 31, 2024, and $45.6 million for the three months ended March 31, 2023. Amounts for both periods substantially relate to payments for capitalized software development costs associated with ongoing projects to continuously improve and optimize our products and services.

Current wording

Cash used in investing activities was $63.3 million for the six months ended June 30, 2024, and $82.2 million for the six months ended June 30, 2023. Amounts for both periods relate to payments for capitalized software development costs associated with ongoing projects to continuously improve and optimize our products and services.

Previous wording

Cash provided by financing activities for the three months ended March 31, 2024 was $1.8 million and $3.4 million for the three months ended March 31, 2023, reflecting lower proceeds from the employee stock purchase plan.

Current wording

Cash provided by financing activities for the six months ended June 30, 2024 was $5.6 million and $7.6 million for the six months ended June 30, 2023, reflecting lower proceeds from the employee stock purchase plan.

Previous wording

Free cash flow was negative $26.6 million for the three months ended March 31, 2024, compared to negative $32.5 million for the three months ended March 31, 2023. Cash flow is typically negative in the first quarter of each year, reflecting the payment of annual bonuses. The year-over-year change was driven by higher incentive compensation payments, partially offset by growth in the business as well as decreases in payments for capitalized expenditures and capitalized software development costs.

Current wording

Free cash flow was $34.3 million for the six months ended June 30, 2024, compared to $32.1 million for the six months ended June 30, 2023. The year-over-year change was driven by decreases in payments for capitalized expenditures and capitalized software development costs as well as growth in the business, offset by higher incentive compensation payments.