Teladoc Health Inc
For the period ended Mar 31, 2025. Filed May 1, 2025.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Mar 31, 2025 · Filed May 1, 2025
TDOC$8.77-6.8%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-09-30; filed 2024-10-31.
0001477449-24-000225
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-03-31; filed 2025-05-01.
0001477449-25-000049
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 94 previous paragraphs and 90 current paragraphs.
36 unchanged; 37 reworded; 17 added; 20 removed; 1 previous and 0 current paragraphs rearranged.
Tables are not compared: 10 previous and 8 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (17)
Current report
The impact that the imposition of tariffs and changes to global trade policies will have on our consolidated results of operations is uncertain. We expect tariffs on goods imported into the U.S. from Canada, Mexico, and China, and other countries upon which tariffs may be imposed, to continue to be met with retaliatory tariffs from those countries which would impact our consolidated results of operations as we import components for assembling welcome kits, refill kits, and replacement components for our chronic care management solutions and virtual healthcare devices manufactured for sale or lease as part of our hosted virtual healthcare platform solution. The extent and duration of tariffs and the resulting impact on macroeconomic conditions and on our business are uncertain and may depend on various factors, including negotiations between the U.S. and affected countries, retaliation imposed by other countries, tariff exemptions, negative sentiment toward U.S. companies and products, and availability of lower cost inputs that may be sourced domestically or in other countries with no or lower tariffs. We will continue to evaluate the nature and extent of the impact to our business and consolidated results of operations. For further information, see “Risk Factors—We depend on a limited number of third-party suppliers for certain components of our medical devices, and the loss of any of these suppliers, or their inability to provide us with an adequate supply of materials, could harm our business,” and “—Our international operations pose certain political, legal and compliance, operational, regulatory, economic, and other risks to our business that may be different from or more significant than risks associated with our domestic operations, and our exposure to these risks is expected to increase” included in our 2024 Form 10-K.
Current report
N/M - Not Meaningful
Current report
Revenue. The following table presents revenues disaggregated by revenue source and geography:
Current report
$15.1 million, or 8%. This decrease was primarily due to lower digital and media advertising costs, partially offset by higher professional fees.
Current report
Technology and Development Expenses. Technology and development expenses were $70.0 million for the three months ended March 31, 2025, compared to $81.4 million for the three months ended March 31, 2024, a decrease of $11.4 million, or 14%. The decrease primarily reflects lower employee compensation costs.
Current report
Goodwill Impairment. Concurrent with the completion of the acquisition of Catapult Health, we performed a goodwill impairment test on the Integrated Care reporting unit and determined that the carrying value of the reporting unit continued to exceed its fair value. As a result, we recognized an immediate impairment of $59.1 million of goodwill associated with the Catapult Health acquisition in the three months ended March 31, 2025. As the carrying value of the Integrated Care reporting unit continues to exceed its fair value, any future business combinations that would be part of the Integrated Care reporting unit could result in further goodwill impairment charges.
Current report
Amortization of intangible assets was $84.3 million for the three months ended March 31, 2025, compared to
Current report
Depreciation of Property and Equipment. Depreciation of property and equipment was $3.6 million for the three months ended March 31, 2025, compared to $2.8 million for the three months ended March 31, 2024, an increase of $0.7 million, or 26%.
Current report
(1)Other segment expenses includes advertising and marketing expenses, sales expenses, technology and development expenses, and general and administrative expenses, each exclusive of stock-based compensation.
Current report
Integrated Care total revenues increased by $12.4 million, or 3%, to $389.5 million for the three months ended March 31, 2025. The increase in revenue was primarily driven by higher chronic care program enrollment and adoption, as well as higher telemedicine product revenue, and to a lesser extent, driven in part by the acquisition of Catapult Health.
Current report
Integrated Care cost of revenue, exclusive of depreciation, amortization, and stock-based compensation, increased by $10.7 million, or 9%, to $131.0 million for the three months ended March 31, 2025. The increase was primarily driven by higher labor costs, technology costs, and amortization of device costs, partially offset by lower physician costs.
Current report
Integrated Care other segment expenses decreased by $1.0 million to $208.1 million for the three months ended March 31, 2025. The decrease was primarily driven by lower employee compensation, partially offset by higher indirect taxes, professional fees, advertising costs, and legal and regulatory costs.
Current report
(1)Other segment expenses includes sales expenses, technology and development expenses, and general and administrative expenses, each exclusive of stock-based compensation.
Current report
BetterHelp total revenues decreased by $29.1 million, or 11%, to $239.9 million for the three months ended March 31, 2025, driven by a 4% decrease in average monthly paying users.
Current report
BetterHelp cost of revenue, exclusive of depreciation, amortization, and stock-based compensation, decreased by $7.6 million, or 10%, to $65.2 million for the three months ended March 31, 2025. The decrease was primarily driven by lower therapist costs.
Current report
BetterHelp advertising and marketing, exclusive of stock-based compensation, decreased by $14.0 million, or 10%, to $133.0 million for the three months ended March 31, 2025, primarily reflecting lower spending on digital and media advertising, partially offset by higher professional fees.
Current report
BetterHelp other segment expenses increased by $0.2 million, or 1%, to $34.0 million for the three months ended March 31, 2025. The increase was primarily driven by higher legal and regulatory fees, software and infrastructure costs, and professional fees, partially offset by lower indirect taxes and therapist recruiting and retention costs.
Removed paragraphs (20)
Previous report
Goodwill Impairment Charge
Previous report
As a result of sustained decreases in our publicly quoted share price and market capitalization through June 30, 2024 as well as changes in the operating results of the BetterHelp reporting unit, we conducted an interim test of our goodwill, definite-lived intangibles, and other long-lived assets at June 30, 2024. Following this test, we did not identify an impairment to our definite-lived intangible assets or other long-lived assets, but recorded a $790.0 million non-deductible, non-cash goodwill impairment charge for the three months ended June 30, 2024. No goodwill impairment charge was recognized for the three months ended September 30, 2024.
Previous report
Our June 30, 2024 goodwill impairment testing was performed using a discounted cash flow method under the income approach. Unlike in prior testing, we did not utilize the market approach because of limited availability of relevant comparable company information. We believe using only the income approach is appropriate as it most directly reflects our future growth and profitability expectations. For our June 30, 2024 impairment testing, we reduced our estimated future cash flows related to our BetterHelp reporting unit used in the impairment assessment, including revenues and margin, to reflect our best and most recent estimates at this time. We also updated certain significant inputs into the valuation models including the discount rate, which increased to 15%, reflecting, in part, higher interest rates. Our updates to our discount rate and estimated future cash flows each had a significant impact to the estimated fair value of the reporting unit.
Previous report
After recording this goodwill impairment charge, there is no excess of the BetterHelp reporting unit’s fair value over its carry value, so any further decrease in the reporting unit’s fair value would result in an additional impairment charge. In the event there are further adverse changes in our projected cash flows and/or further changes in key assumptions, including but not limited to an increase in the discount rate, lower revenue growth, lower margin, and/or a lower terminal growth rate, we may be required to record additional non-cash impairment charges to our goodwill, other intangibles, and other long-lived assets. Such non-cash charges could have a material adverse effect on our Condensed Consolidated Statement of Operations and Balance Sheets in the reporting period of the charge.
Previous report
(2)N/M - not meaningful
Previous report
(1)Non-GAAP Financial Measure
Previous report
(2)N/M - not meaningful
Previous report
For the nine months ended September 30, 2024, the decrease of total revenue was 1%, from $1,941.9 million for the nine months ended September 30, 2023 to $1,929.1 million. This decrease was driven substantially by lower revenue in our BetterHelp segment. Revenue from access fees was $1,672.1 million for the nine months ended September 30, 2024, compared to $1,708.6 million for the nine months ended September 30, 2023, a decrease of $36.5 million, or 2%. Other revenue was $257.0 million for the nine months ended September 30, 2024, compared to $233.3 million for the nine months ended September 30, 2023, an increase of $23.7 million, or 10%. For the nine months ended September 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 nine months ended September 30, 2023. By geography, International revenue increased by 13% to $304.5 million while U.S. revenue decreased by 3% to $1,624.6 million, each compared to the nine months ended September 30, 2023.
Previous report
Technology and Development Expenses. Technology and development expenses were $72.4 million for the three months ended September 30, 2024, compared to $84.3 million for the three months ended September 30, 2023, a decrease of $11.9 million, or 14%. On a year-to-date basis, technology and development expenses decreased by $28.1 million, or 11%, to $230.5 million. The decreases for both the three month and year-to-date periods reflect lower employee compensation costs and professional fees, partially offset by higher infrastructure, hosting, and software license costs associated with running operations as well as ongoing projects and services to continuously improve and optimize our products and services.
Previous report
As a result of the termination of our former CEO, we recognized approximately $6.4 million of related costs for the nine months ended September 30, 2024, with $1.2 million for cash severance costs and $5.2 million for stock-based compensation.
Previous report
Goodwill Impairment. As discussed earlier under the section "Critical Accounting Estimates and Policies: Goodwill Impairment Charge," we recorded a non-cash goodwill impairment charge of $790.0 million for the nine months ended September 30, 2024 resulting from the June 30, 2024 interim goodwill impairment testing performed. The non-cash charge had no impact on the provision for income taxes.
Previous report
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 continuing through the six months ended June 30, 2024, with corresponding reductions thereafter.
Previous report
Amortization of intangible assets was $86.9 million for the three months ended September 30, 2024, compared to
Previous report
Amortization of intangible assets was $276.8 million for the nine months ended September 30, 2024, compared to $231.2 million for the nine months ended September 30, 2023, an increase of $45.6 million, or 20%. 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.
Previous report
Depreciation of Property and Equipment. Depreciation of property and equipment was $2.7 million for the three months ended September 30, 2024, compared to $2.5 million for the three months ended September 30, 2023, an increase of $0.2 million, or 8%. On a year-to-date basis, depreciation of property and equipment was $7.2 million for the nine months ended September 30, 2024, compared to $8.3 million for the nine months ended September 30, 2023, a decrease of $1.1 million, or 14%
Previous report
Integrated Care total revenues increased by $9.3 million, or 2%, to $383.7 million for the three months ended September 30, 2024, reflecting higher visit revenue in the U.S., as well as strong growth internationally. For the nine months ended September 30, 2024, Integrated Care total revenues increased by $53.8 million, or 5%, to $1,138.2 million, primarily on higher chronic care results and higher visit revenue in the U.S., as well as strong growth internationally.
Previous report
Integrated Care Adjusted EBITDA increased by $5.2 million, or 8%, to $68.0 million for the three months ended September 30, 2024, primarily reflecting higher gross profit and lower other operating expenses. For the nine months ended September 30, 2024, Integrated Care Adjusted EBITDA increased by $43.8 million, or 32%, to $179.7 million, primarily reflecting higher gross profit and lower other operating expenses.
Previous report
BetterHelp total revenues decreased by $29.0 million, or 10%, to $256.8 million for the three months ended September 30, 2024, primarily driven by a 13% decrease in average monthly paying users. BetterHelp total revenues decreased by $66.6 million, or 8%, to $790.9 million for the nine months ended September 30, 2024, primarily driven by a 13% decrease in average monthly paying users.
Previous report
BetterHelp Adjusted EBITDA decreased by $10.7 million, or 41%, to $15.2 million for the three months ended September 30, 2024, primarily reflecting the impact of revenues declining more than expenses. BetterHelp Adjusted EBITDA decreased by $21.6 million, or 28%, to $56.1 million for the nine months ended September 30, 2024, primarily reflecting the impact of revenues declining more than expenses.
Previous report
We were in compliance with all debt covenants at September 30, 2024.
Reworded paragraphs (37)
Previous wording
Teladoc, Inc. was incorporated in the State of Texas in June 2002 and changed its state of incorporation to the State of Delaware in October 2008. Effective August 10, 2018, Teladoc, Inc. changed its corporate name to Teladoc Health, Inc. Unless the context otherwise requires, Teladoc Health, Inc., together with its subsidiaries, is referred to herein as “Teladoc Health,” the “Company,” or “we.” The Company’s principal executive office is located in Purchase, New York. Teladoc Health is the global leader in whole person virtual care focused on forging a new healthcare experience with better convenience, outcomes, and value around the world.
Current wording
Teladoc, Inc. was incorporated in the State of Texas in June 2002 and changed its state of incorporation to the State of Delaware in October 2008. Effective August 10, 2018, Teladoc, Inc. changed its corporate name to Teladoc Health, Inc. Unless the context otherwise requires, Teladoc Health, Inc., together with its subsidiaries, is referred to herein as “Teladoc Health,” the “Company,” or “we.” The Company’s principal executive office is located in Purchase, New York. Teladoc Health is the global leader in virtual care focused on forging a new healthcare experience with better convenience, outcomes, and value around the world.
Previous wording
We were founded on a simple, yet revolutionary idea: that everyone should have access to the best healthcare, anywhere in the world on their terms. Today, we have a vision of making virtual care the first step on any healthcare journey, and we are delivering on this mission by providing whole person virtual care that includes primary care, mental health, chronic condition management, and more.
Current wording
We were founded on a simple, yet revolutionary idea: that everyone should have access to the best healthcare, anywhere in the world on their terms. Today, we have a vision of making virtual care the first step on any healthcare journey, and we are delivering on this mission by providing virtual care that includes primary care, mental health, chronic condition management, and more.
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 3.7 million, or 4%, to 93.9 million at September 30, 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 the THMG Association 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. However, certain health plans that have historically promoted our services to our employer Clients have developed, and may in the future continue to develop, solutions that replicate our services or offer competitive services at discounted prices to our current or prospective Clients, which could result in a loss of members. For further information, see “Risk Factors—Risks Related to Our Business and Industry—We operate in a competitive industry, and if we are not able to compete effectively, our business, financial condition, and results of operations will be harmed,” and “—A significant portion of our revenue comes from a limited number of Clients, the loss of which could have a material adverse effect on our business, financial condition and results of operations” included in our 2024 Form 10-K. U.S. Integrated Care members increased by 10.7 million, or 12%, to 102.5 million at March 31, 2025, compared to the same period in 2024.
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 5% to 1.179 million at September 30, 2024, compared to 1.122 million at September 30, 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 virtual care platform that we believe positions us to drive greater engagement with our platforms and increased revenue. Chronic care program enrollment increased by 3% to 1.151 million at March 31, 2025, compared to 1.121 million at March 31, 2024.
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 $1.36 in the three months ended September 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 nine months ended September 30, 2024 from $1.40 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 $1.27 in the three months ended March 31, 2025, compared to $1.38 in the same period in 2024.
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 13% to 0.398 million for the three months ended September 30, 2024, compared to 0.459 million for the three months ended September 30, 2023, and decreased by 13% to 0.407 million for the nine months ended September 30, 2024, compared to 0.467 million for the nine months ended September 30, 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 this segment, and future revenue potential. Effectively reaching potential paying users through various advertising channels remains critical to our success. BetterHelp paying users decreased by 4% to 0.397 million for the three months ended March 31, 2025, compared to 0.415 million for the three months ended March 31, 2024.
Previous wording
Due to the higher cost of customer acquisition during the end-of-year holiday season, our BetterHelp segment has historically reduced marketing activity during the fourth quarter. As a result of this dynamic, we have typically experienced fewer new member additions and the strongest operating income performance in the fourth quarter. Conversely, as marketing activity typically resumes at the start of the year, we typically experience the weakest operating income performance during the first quarter as new customer acquisition and revenue growth lags marketing spend.
Current wording
Due to the higher cost of customer acquisition during the end-of-year holiday season, our BetterHelp segment has historically reduced marketing activity during the fourth quarter. As a result of this dynamic, we have typically experienced fewer new member additions and strong operating income performance in the fourth quarter. Conversely, as marketing activity typically resumes at the start of the year, we typically experience weak operating income performance during the first quarter as new customer acquisition and revenue growth lags marketing spend.
Previous 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.
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 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
Adjusted EBITDA consists of net loss before provision for income taxes; other (income) expense, 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.
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
•Adjusted EBITDA eliminates the impact of the provision for income taxes on our results of operations, and it does not reflect other (income) expense, net, interest income, or interest expense;
Current wording
•Adjusted EBITDA eliminates the impact of the provision for income taxes on our results of operations, and does not reflect other expense (income), net, interest income, or interest expense;
Previous wording
•Adjusted EBITDA does not reflect goodwill impairment; and
Current wording
•Adjusted EBITDA does not reflect goodwill impairment charges; and
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 Adjusted EBITDA does 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 amortized and depreciated 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 sets forth our Condensed Consolidated Statements of Operations data for the three months ended September 30, 2024 and 2023 and the dollar and percentage change between the respective periods (in thousands, except per share data):
Current wording
The following table sets forth our Condensed Consolidated Statements of Operations data for the three months ended March 31, 2025 and 2024 and the dollar and percentage change between the respective periods (dollars in thousands, except per share data):
Previous wording
The following table reconciles net loss, the most directly comparable GAAP financial measure, to Adjusted EBITDA for the three and nine months ended September 30, 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 months ended March 31, 2025 and 2024 (in thousands):
Previous wording
Revenue. Total revenue was $640.5 million for the three months ended September 30, 2024, compared to $660.2 million during the three months ended September 30, 2023, a decrease of $19.7 million, or 3%. This decrease in revenue was driven substantially by lower revenue in our BetterHelp segment. Total access fees were $555.3 million for the three months ended September 30, 2024, compared to $582.1 million for the three months ended September 30, 2023, a decrease of $26.8 million, or 5%. 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 $85.2 million for the three months ended September 30, 2024, compared to $78.2 million for the three months ended September 30, 2023, an increase of $7.1 million, or 9%. For the three months ended September 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 September 30, 2023. By geography, International revenue increased by 15% to $104.3 million while U.S. revenue decreased by 6% to $536.2 million, each compared to the three months ended September 30, 2023.
Current wording
Total revenue was $629.4 million for the three months ended March 31, 2025, compared to $646.1 million during the three months ended March 31, 2024, a decrease of $16.8 million, or 3%. This decrease in revenue was driven by lower revenue in our BetterHelp segment, partially offset by higher revenue in our Integrated Care segment. Other revenue predominately includes visit fees and, to a lesser extent, revenue from the sales of our telehealth solutions for hospitals and health systems.
Previous wording
Cost of Revenue (exclusive of depreciation and amortization, which are shown separately below). Cost of revenue was $179.7 million for the three months ended September 30, 2024, compared to $186.0 million for the three months ended September 30, 2023, a decrease of $6.2 million, or 3%. The decrease was primarily driven by lower physician and product shipping costs, partially offset by higher amortization of device costs. On a year-to-date basis, cost of revenue decreased by $4.3 million, or 1%, to $562.3 million. The decrease was also primarily driven by lower physician and product shipping costs, partially offset by higher amortization of device costs.
Current wording
Cost of Revenue (exclusive of depreciation and amortization, which are shown separately below). Cost of revenue was $196.8 million for the three months ended March 31, 2025, compared to $194.5 million for the three months ended March 31, 2024, an increase of $2.3 million, or 1%. The increase was primarily driven by higher labor costs, technology costs, and amortization of devices, partially offset by lower physician costs.
Previous wording
Advertising and Marketing Expenses. Advertising and marketing expenses were $177.5 million for the three months ended September 30, 2024, compared to $186.2 million for the three months ended September 30, 2023, a decrease of $8.7 million, or 5%. This decrease primarily reflects lower digital and media advertising costs. On a year-to-date basis, advertising and marketing expenses decreased by $10.6 million, or 2%, to $531.1 million. The decrease was driven mainly by lower digital and media advertising costs and lower employee compensation costs.
Current wording
Advertising and Marketing Expenses. Advertising and marketing expenses were $168.2 million for the three months ended March 31, 2025, compared to $183.3 million for the three months ended March 31, 2024, a decrease of
Previous wording
Sales Expenses. Sales expenses were $47.5 million for the three months ended September 30, 2024, compared to $52.3 million for the three months ended September 30, 2023, a decrease of $4.8 million, or 9%. On a year-to-date basis, sales expenses decreased by $8.1 million, or 5%, to $152.3 million. The decreases in both the three month and year-to-date periods reflect lower employee compensation costs, partially offset by higher costs for professional fees.
Current wording
Sales Expenses. Sales expenses were $48.7 million for the three months ended March 31, 2025, compared to $54.4 million for the three months ended March 31, 2024, a decrease of $5.7 million, or 10%. The decrease reflects lower employee compensation and commission costs, partially offset by higher costs for professional fees.
Previous wording
For the three months ended September 30, 2024 and 2023, research and development costs, which exclude amounts reflected as capitalized software development costs, were $22.4 million and $31.8 million, respectively. For the nine months ended September 30, 2024 and 2023, research and development costs were $69.5 million and $95.4 million, respectively.
Current wording
For the three months ended March 31, 2025 and 2024, research and development costs, which exclude amounts reflected as capitalized software development costs, were $22.9 million and $24.8 million, respectively.
Previous wording
General and Administrative Expenses. General and administrative expenses decreased $1.5 million, or 1%, to $114.2 million for the three months ended September 30, 2024, compared to $115.7 million for the three months ended September 30, 2023. The decrease was primarily driven by lower employee compensation costs, indirect taxes, therapist onboarding costs, and bad debt expense, offset by higher legal costs, professional fees, and software and infrastructure costs. On a year-to-date basis, general and administrative expenses decreased $20.2 million, or 6%, to $335.5 million. The decrease was primarily driven by lower employee compensation costs, therapist onboarding costs, indirect taxes, and bad debt expenses, partially offset by higher legal costs and software and infrastructure costs.
Current wording
General and Administrative Expenses. General and administrative expenses increased $1.1 million, or 1%, to $112.8 million for the three months ended March 31, 2025, compared to $111.7 million for the three months ended March 31, 2024. The increase was primarily driven by higher indirect taxes, professional fees, legal costs, and software and infrastructure cost, partially offset by lower employee compensation costs.
Previous 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 $5.8 million for the three months ended September 30, 2024 and 2023 respectively, and were $1.3 million and $16.8 million for the nine months ended September 30, 2024 and 2023, respectively.
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 $2.2 million and $0.4 million for the three months ended March 31, 2025 and 2024, respectively.
Previous wording
Restructuring costs for the three months ended September 30, 2023 were $0.4 million, of which $0.2 million was for employee transition, severance, employee benefits, and related costs and $0.2 million was related to costs associated with office space reductions. During the nine months ended September 30, 2023, the Company recorded $16.0 million of restructuring costs, of which $7.9 million was for employee transition, severance, employee benefits, and related costs and $8.1 million was related to costs associated with office space reductions, including $4.9 million of right-of-use asset impairment charges.
Current wording
Restructuring Costs. Restructuring costs for the three months ended March 31, 2025 were $4.3 million, of which $3.6 million was for employee transition, severance, employee benefits, and related costs and $0.7 million was related to costs associated with office space reductions, including $0.2 million of right-of-use asset impairment charges.
Previous wording
Restructuring Costs. Restructuring costs for the three months ended September 30, 2024 were $3.6 million, of which $2.3 million was for employee transition, severance, employee benefits, and related costs and $1.3 million was related to costs associated with office space reductions, including $1.0 million of right-of-use asset impairment charges. Restructuring costs for the nine months ended September 30, 2024, were $14.8 million, with $10.7 million of employee transition, severance, employee benefits, and related costs, $1.3 million of costs associated with office space reductions, including $1.0 million of right-of-use asset impairment charges, and $2.8 million of other restructuring related costs.
Current wording
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 related to other restructuring related costs.
Previous wording
$91.8 million for the three months ended September 30, 2023, a decrease of $4.9 million, or 5%. The decrease was primarily driven by the lower amortization associated with the Livongo trademark, partially offset by an increase in the amortization of capitalized software development costs related to our investment in platforms.
Current wording
$95.1 million for the three months ended March 31, 2024, a decrease of $10.8 million, or 11%. The decrease was primarily driven by the lower amortization associated with the Livongo trademark, partially offset by an increase in the amortization of capitalized software development costs related to our investment in platforms.
Previous wording
Interest Income. Interest income consisted of interest earned on cash and cash equivalents. Interest income was $15.3 million for the three months ended September 30, 2024, compared to $12.6 million for the three months ended September 30, 2023. Interest income was $42.8 million for the nine months ended September 30, 2024 compared to $33.1 million for the nine months ended September 30, 2023. The increase for both periods 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 $12.7 million for the three months ended March 31, 2025, compared to $13.9 million for the three months ended March 31, 2024. The decrease was driven by lower interest rate yields.
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 $5.7 million for the three months ended September 30, 2024, compared to $5.6 million for the three months ended September 30, 2023. Interest expense was $17.0 million and $16.7 million for the nine months ended September 30, 2024 and 2023, respectively.
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 $5.8 million for the three months ended March 31, 2025, compared to $5.6 million for the three months ended March 31, 2024.
Previous wording
Other (Income) Expense, net. Other (income) expense, net was an income of $2.2 million for the three months ended September 30, 2024, compared to an expense of $1.8 million for the three months ended September 30, 2023, primarily reflecting the impact of foreign currency exchange rate fluctuations. Other (income) expense, net was an income of $1.3 million for the nine months ended September 30, 2024, compared to $2.9 million for the nine months ended September 30, 2023, primarily reflecting gains on foreign currency exchange rate fluctuations for the nine months ended September 30, 2024 and a gain on the partial sale of a business, partially offset by losses on foreign currency exchange rate fluctuations for the nine months ended September 30, 2023.
Current wording
Other Expense (Income), net. Other expense (income), net was an income of $2.4 million for the three months ended March 31, 2025, compared to an expense of $0.4 million for the three months ended March 31, 2024, primarily reflecting the impact of foreign currency exchange rate fluctuations.
Previous wording
Provision for Income Taxes. We recorded an income tax expense of $0.8 million for the three months ended September 30, 2024, compared to $2.5 million income tax benefit for the three months ended September 30, 2023, and an income tax expense of $7.4 million for the nine months ended September 30, 2024, compared to $2.8 million income tax benefit for the nine months ended September 30, 2023.
Current wording
Provision for Income Taxes. We recorded an income tax benefit of $18.3 million for the three months ended March 31, 2025, compared to $2.7 million income tax expense for the three months ended March 31, 2024. The tax benefit in 2025 resulted primarily from a discrete benefit of $20.1 million related to completion of a research and development tax credit study. The tax expense in 2024 was primarily due to a shortfall related to stock-based compensation awards that vested in the quarter.
Previous wording
The following tables set forth the results of operations by segment for the three and nine months ended September 30, 2024 and 2023 (dollars in thousands):
Current wording
The following tables set forth the results of operations by segment for the three months ended March 31, 2025 and 2024 (dollars in thousands):
Previous wording
The following table presents a summary of our cash flow activity for the nine months ended September 30, 2024 and 2023 (in thousands):
Current wording
The following table presents a summary of our cash flow activity for the three months ended March 31, 2025 and 2024 (in thousands):
Previous wording
Our principal source of liquidity is our cash and cash equivalents, totaling $1,243.9 million as of September 30, 2024. During 2023, we experienced positive operating cash flow and we anticipate continuing positive operating cash flow results for 2024.
Current wording
Our principal source of liquidity is our cash and cash equivalents, totaling $1,193.3 million as of March 31, 2025. We anticipate continuing positive operating cash flows for 2025.
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, 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.
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 additional 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
At September 30, 2024, we had outstanding convertible notes for an aggregate principal amount of $550.7 million due within the next 12 months. See Note 9. “Convertible Senior Notes” to the condensed consolidated financial statements for additional information on our convertible senior notes.
Current wording
An aggregate principal amount of $550.7 million of our convertible senior notes is due within the next quarter. See Note 10. “Convertible Senior Notes” to the condensed consolidated financial statements for additional information on our convertible senior notes.
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 $207.8 million for the nine months ended September 30, 2024 compared to net cash provided by operating activities of $219.9 million for the nine months ended September 30, 2023. The year-over-year change was primarily driven by higher incentive compensation payments.
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 $15.9 million for the three months ended March 31, 2025 compared to net cash provided by operating activities of $8.9 million for the three months ended March 31, 2024. The year-over-year change was primarily driven by lower incentive compensation payments.
Previous wording
Cash used in investing activities was $94.4 million for the nine months ended September 30, 2024, and $119.8 million for the nine months ended September 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.
Current wording
Cash used in investing activities was $123.3 million for the three months ended March 31, 2025, and $35.5 million for the three months ended March 31, 2024. We paid $64.6 million, net of cash acquired, to complete the acquisition of Catapult Health and paid $27.0 million to acquire securities of a private company during the three months ended March 31, 2025. The remaining change drivers primarily related to lower amounts paid 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 nine months ended September 30, 2024 was $6.3 million and $12.6 million for the nine months ended September 30, 2023, primarily reflecting lower proceeds from the employee stock purchase plan.
Current wording
Cash provided by financing activities for the three months ended March 31, 2025 was $0.8 million and $1.8 million for the three months ended March 31, 2024, primarily reflecting lower proceeds from the employee stock purchase plan.
Previous wording
Free cash flow was $113.4 million for the nine months ended September 30, 2024, compared to $100.1 million for the nine months ended September 30, 2023. The year-over-year change was driven by decreases in payments for capitalized expenditures and capitalized software development costs, offset by higher incentive compensation payments.
Current wording
Free cash flow was an outflow of $15.7 million for the three months ended March 31, 2025, compared to an outflow of $26.6 million for the three months ended March 31, 2024. The year-over-year change was driven by decreases in incentive compensation payments and lower payments for capitalized software development costs, offset by higher capitalized expenditures.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
The following table sets forth our Condensed Consolidated Statements of Operations data for the nine months ended September 30, 2024 and 2023 and the dollar and percentage change between the respective periods (in thousands, except per share data):