Teladoc Health, Inc.

Previous wording

Many statements made in this Quarterly Report on Form 10-Q that are not statements of historical fact, including statements about our beliefs and expectations, are forward-looking statements and should be evaluated as such. Forward-looking statements include information concerning possible or assumed future results of operations, including descriptions of our business plan and strategies. These statements often include words such as “anticipates,” “believes,” “suggests,” “targets,” “projects,” “plans,” “expects,” “future,” “intends,” “estimates,” “predicts,” “potential,” “may,” “will,” “should,” “could,” “would,” “likely,” “foresee,” “forecast,” “continue” and other similar words or phrases, as well as statements in the future tense to identify these forward-looking statements. These forward-looking statements and projections are contained throughout this Form 10-Q, including the section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” We base these forward-looking statements or projections on our current expectations, plans and assumptions that we have made in light of our experience in the industry, as well as our perceptions of historical trends, current conditions, expected future developments and other factors we believe are appropriate under the circumstances and at such time. As you read and consider this Form 10-Q, you should understand that these statements are not guarantees of performance or results. The forward-looking statements and projections are subject to and involve risks, uncertainties, and assumptions and you should not place undue reliance on these forward-looking statements or projections. Although we believe that these forward-looking statements and projections are based on reasonable assumptions at the time they are made, you should be aware that many factors could affect our actual financial results or results of operations and could cause actual results to differ materially from those expressed in the forward-looking statements and projections. Factors that may materially affect such forward-looking statements and projections include, but are not limited to, the section entitled “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2025 (the “2025 Form 10-K”) and in our other reports and U.S. Securities and Exchange Commission (“SEC”) filings. These cautionary statements should not be construed by you to be exhaustive and are made only as of the date of this Form 10-Q. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. You should evaluate all forward-looking statements made in this Form 10-Q in the context of these risks and uncertainties.

Current wording

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934 and the safe-harbor provisions of the Private Securities Litigation Reform Act of 1995. Statements that are not statements of historical fact, including statements about our beliefs, expectations, plans, strategies, outlook and possible or assumed future results of operations, are forward-looking statements and should be evaluated as such. These statements often include words such as “anticipates,” “believes,” “suggests,” “targets,” “projects,” “plans,” “expects,” “future,” “intends,” “estimates,” “predicts,” “potential,” “may,” “will,” “should,” “could,” “would,” “likely,” “foresee,” “forecast,” “continue” and similar words or phrases, as well as statements in the future tense. We base these forward-looking statements on our current expectations, plans and assumptions in light of our experience, historical trends, current conditions, expected future developments and other factors we believe are appropriate under the circumstances. These statements are not guarantees of performance or results and are subject to risks, uncertainties and assumptions. Factors that have in the past and/or may in the future cause actual results to differ materially include, among others, a decrease in revenue from users who pay directly out-of-pocket without offsetting growth in insurance-covered services in our BetterHelp segment; the rate and magnitude of declines in BetterHelp cash-pay users and revenue; the extent to which insurance availability changes users’ payment choices; available provider capacity including on a state and payer-specific basis; the timing, cost and effectiveness of provider recruitment, credentialing, enrollment, activation, compensation and retention; the performance of insurance-specific eligibility, matching, booking, scheduling, utilization, session-duration, claims and collection workflows; the effectiveness and revenue consequences of changes in advertising and marketing spending; the effects of BetterHelp’s reduced near-term emphasis and investment outside the United States; the cost, timing and effectiveness of platform and provider-capacity investments; the margin effects of the insurance mix; potential impairment of BetterHelp goodwill; and the other risks described in “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2025 (the “2025 Form 10-K”), this Form 10-Q and our other reports and SEC filings. You should not place undue reliance on forward-looking statements. These cautionary statements are not exhaustive and speak only as of the date of this Form 10-Q. We undertake no obligation to update or revise any forward-looking statement as a result of new information, future events or otherwise, except as required by law.

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. Individuals who have paid access fees offer a greater margin than those who have visit fee only arrangements and, over time, the mix of those who have paid access fees as compared to those who have visit fee only arrangements has declined. 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 2025 Form 10-K. U.S. Integrated Care members decreased by 1.3 million, or 1%, to 101.2 million at March 31, 2026, compared to the same period in 2025.

Current wording

Number of U.S. Integrated Care Members. U.S. Integrated Care members represent the number of unique individuals at the end of the applicable period who have access to our suite of integrated care services in the U.S. under paid access fee and/or visit-based arrangements. Individuals who have paid access fees offer a greater margin than those who have visit fee only arrangements and, over time, the mix of those who have paid access fees as compared to those who have visit fee only arrangements has declined. The number of members with visit fee only arrangements is less directly correlated to revenue than the number of members who have paid access fees, and therefore as the mix of members with visit fee only arrangements continues to grow we expect that the total number of U.S. Integrated Care members will less directly impact our revenue growth rate. Our revenue growth rate and long-term profitability are also affected by our ability to increase cross selling capability among our existing members. 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, employer, and other Clients is a key indicator of our increasing market adoption, the growth of our business, and our future revenue potential.

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 virtual care platform that we believe positions us to drive greater engagement with our platforms and increase revenue. Chronic care program enrollment increased to 1.197 million, or 4%, at March 31, 2026, compared to 1.151 million at March 31, 2025.

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 increase revenue. Chronic care program enrollment increased to 1.272 million, or 14%, at June 30, 2026, compared to 1.117 million at June 30, 2025, driven by an increase in multi-condition product bundles.

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 21% 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 and future revenue growth potential. Average monthly revenue per U.S. Integrated Care member was $1.30 in the three months ended March 31, 2026, compared to $1.27 in the same period in 2025. The change in average monthly revenue versus the prior period is reflective of the decrease in members and the mix of their fees.

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 22% 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 and further product adoption among our Client-base to drive future revenue growth potential. Average monthly revenue per U.S. Integrated Care member was $1.31 in the three months ended June 30, 2026, compared to $1.27 in the same period in 2025. Average monthly revenue per U.S. Integrated Care member was $1.31 in the six months ended June 30, 2026, compared to $1.27 in the same period in 2025. The change in average monthly revenue versus the prior period is reflective of the decrease in members and the mix of their fees.

Previous wording

BetterHelp Paying Users. BetterHelp Paying Users represent the average number of global monthly paying users of our BetterHelp therapy and psychiatry services during the applicable period, including both those who pay directly out-of-pocket and those who utilize their insurance coverage. 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 9% to 0.361 million for the three months ended March 31, 2026, compared to 0.397 million for the three months ended March 31, 2025.

Current wording

BetterHelp Paying Users. BetterHelp Paying Users represent the average number of global monthly paying users of our BetterHelp therapy and psychiatry services during the applicable period, including both those who pay directly out-of-pocket and those who utilize their insurance coverage. We believe that our ability to add new paying users, including through Insurance Covered Services, and retain existing users is a key indicator of the market adoption of BetterHelp, the stability and growth of this segment, and future revenue potential. Effectively reaching potential paying users through various advertising channels remains critical to our success, including the level of advertising and marketing spending deployed. BetterHelp Paying Users decreased by 11% to 0.346 million for the three months ended June 30, 2026, compared to 0.388 million for the three months ended June 30, 2025, and decreased by 10% to 0.353 million for the six months ended June 30, 2026, compared to 0.393 million for the six months ended June 30, 2025. See “Item 1A. Risk Factors— Our BetterHelp segment has experienced, and may continue to experience, declines in revenue from users who pay directly out-of-pocket, and growth in insurance-covered services may not offset those declines as quickly as we expect or at all.” included elsewhere in this Quarterly Report on Form 10-Q.

Previous wording

Seasonality. Our business has historically been subject to seasonality. In our Integrated Care segment, a concentration of our new Client contracts have an effective date of January 1 as a result of many Clients’ introduction of new services at the start of each calendar year. Therefore, while membership increases, utilization and enrollment rates are dampened until service delivery ramps up over the course of the year. In addition, as a result of seasonal cold and flu trends, we historically have experienced our highest level of visit and other fee revenue during the first and fourth quarters of each year.

Current wording

Seasonality. Our business has historically been subject to seasonality. In our Integrated Care segment, a concentration of our new Client contracts have an effective date of January 1 as a result of many Clients’ introduction of new services at the start of each calendar year. Therefore, service utilization and enrollment rates may not directly align with the timing of membership changes. In addition, as a result of seasonal cold and flu trends, we historically have experienced our highest level of visit and other fee revenue during the first and fourth quarters of each year.

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 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.

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 user additions and generally a stronger operating income performance in the fourth quarter. Conversely, as marketing activity typically resumes at the start of the year, we typically experience weaker operating income performance during the first quarter as new user acquisition and associated revenue tend to lag marketing spend.

Previous wording

As of March 31, 2026, goodwill was $283.2 million, which all related to the BetterHelp segment. During the three months ended March 31, 2026, our market capitalization remained below the Company’s carrying or book value. While this factor is considered in our assessment of potential impairment indicators, we did not identify any additional events or changes in circumstances that would indicate it is more likely than not that the fair value of the BetterHelp reporting unit is below its carrying value. As a result, no interim impairment test was required. We will continue to monitor and evaluate events and circumstances, including a sustained decrease in our share price, and should any change, it could require further testing of the goodwill, which may result in an impairment of the BetterHelp reporting unit's goodwill.

Current wording

As of June 30, 2026, goodwill was $283.2 million, which all related to the BetterHelp reporting unit. During the three months ended June 30, 2026, we revised the expected financial performance of the BetterHelp reporting unit. We determined that this was a triggering event and accordingly performed a quantitative goodwill impairment test. The assessment indicated that the fair value of the reporting unit exceeded its carrying value and no impairment was identified. We will continue to monitor and evaluate events and circumstances, including a sustained decrease in our share price and the future performance of the BetterHelp segment, and should any change occur, it could require further testing of the goodwill, which may result in an impairment of the BetterHelp reporting unit's goodwill. Additionally, if the carrying value of the Integrated Care reporting unit exceeds its fair value as of the date of any future business combinations, future business combinations that would be part of the Integrated Care reporting unit could result in goodwill impairment charges.

Previous 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 impairments; 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 costs; goodwill impairments; and stock-based compensation.

Previous wording

We compensate for these limitations by using these non-GAAP measures along with other comparative tools, together with GAAP measurements, to assist in the evaluation of operating performance. Such GAAP measurements include net loss, net loss per share, net cash provided by operating activities, and other performance measures.

Current wording

We compensate for these limitations by using these non-GAAP measures along with other comparative tools, together with GAAP measurements, to assist in the evaluation of operating performance. Such GAAP measurements include net loss, net loss per share, net cash from operating activities, and other performance measures.

Previous wording

The following table reconciles net loss, the most directly comparable GAAP financial measure, to Adjusted EBITDA for the three months ended March 31, 2026 and 2025 (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, 2026 and 2025 (in thousands):

Previous wording

Total revenue was $613.8 million for the three months ended March 31, 2026, compared to $629.4 million for the three months ended March 31, 2025, a decrease of $15.5 million, or 2%. This decrease in revenue was driven by lower revenue in our BetterHelp segment, partially offset by higher revenue in our Integrated Care segment. The acquisitions of Catapult Health, Uplift, and Telecare increased total revenue for the three months ended March 31, 2026 by approximately 3 percentage points. Other revenue predominately includes visit fees and, to a lesser extent, revenue from the sales of our telehealth solutions for hospitals and health systems.

Current wording

Total revenue was $606.9 million for the three months ended June 30, 2026, compared to $631.9 million for the three months ended June 30, 2025, a decrease of $25.0 million, or 4%. This decrease in revenue was driven by lower revenue in our BetterHelp segment, reflecting actions to further prioritize insurance-covered services and decline in users paying directly out of pocket, partially offset by higher revenue in our Integrated Care segment. For further discussion regarding the decrease in revenue in our BetterHelp segment, see below under “Segment Information.” The acquisitions of Uplift and Telecare increased total revenue for the three months ended June 30, 2026 by approximately 1 percentage point. 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 flat at $197.5 million for the three months ended March 31, 2026, compared to $196.8 million for the three months ended March 31, 2025. Comparatively higher labor costs and technology costs for the three months ended March 31, 2026 were offset by lower provider costs.

Current wording

Cost of Revenue (exclusive of depreciation and amortization, which are shown separately below). Cost of revenue was flat at $190.8 million for the three months ended June 30, 2026, compared to $190.5 million for the three months ended June 30, 2025, with higher labor costs being offset by lower technology costs. On a year-to-date basis, cost of revenue was also flat at $388.4 million compared with $387.4 million for the six months ended June 30, 2025.

Previous wording

Advertising and Marketing Expenses. Advertising and marketing expenses were $151.5 million for the three months ended March 31, 2026, compared to $168.2 million for the three months ended March 31, 2025, a decrease of $16.7 million, or 10%. The decrease was driven mainly by lower digital and media advertising costs.

Current wording

Advertising and Marketing Expenses. Advertising and marketing expenses were $143.4 million for the three months ended June 30, 2026, compared to $167.5 million for the three months ended June 30, 2025, a decrease of $24.2 million, or 14%. On a year-to-date basis, advertising and marketing expenses decreased by $40.8 million, or 12%, to $294.9 million. The decrease for both periods was driven mainly by lower digital and media advertising costs associated with actions to prioritize Insurance Covered Services in the BetterHelp segment, and lower employee compensation costs. For further discussion regarding the decrease in advertising and marketing expenses in our BetterHelp segment, see below under “Segment Information.”

Previous wording

For the three months ended March 31, 2026 and 2025, research and development costs, which exclude amounts reflected as capitalized software development costs, were $20.2 million and $22.9 million, respectively.

Current wording

For the three months ended June 30, 2026 and 2025, research and development costs, which exclude amounts reflected as capitalized software development costs, were $19.2 million and $22.1 million, respectively. For the six months ended June 30, 2026 and 2025, research and development costs were $39.5 million and $45.0 million, respectively.

Previous wording

Goodwill Impairments. We did not record a non-cash goodwill impairment charge for the three months ended March 31, 2026. In the three months ended March 31, 2025, 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 exceeded its fair value. As a result, we recognized a goodwill impairment of $59.1 million associated with the acquisition of Catapult Health. If the carrying value of the Integrated Care reporting unit exceeds its fair value as of the date of any future business combinations, the future business combinations that would be part of the Integrated Care reporting unit could result in further goodwill impairment charges.

Current wording

Goodwill Impairments. We did not record a non-cash goodwill impairment charge for the three and six months ended June 30, 2026. In the three months ended March 31, 2025, 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 exceeded its fair value. As a result, we recognized a goodwill impairment of $59.1 million associated with the acquisition of Catapult Health.

Previous wording

Acquisition, Integration, and Transformation Costs. Acquisition, integration, and transformation costs primarily consisted of costs to integrate and upgrade our ERP ecosystem and costs to integrate the operations of acquired businesses and were $1.1 million and $2.2 million for the three months ended March 31, 2026 and 2025, respectively.

Current wording

Acquisition, Integration, and Transformation Costs. Acquisition, integration, and transformation costs primarily consisted of costs to integrate and upgrade our ERP system and costs to integrate the operations of acquired businesses and were $1.7 million and $2.7 million for the three months ended June 30, 2026 and 2025, respectively, and were $2.8 million and $4.8 million for the six months ended June 30, 2026 and 2025, respectively.

Previous wording

Restructuring Costs. Restructuring costs for the three months ended March 31, 2026 were $12.0 million, of which $11.0 million was for employee transition, severance, employee benefits, and related costs and $1.0 million was related to costs associated with office space reductions, including $0.2 million of right-of-use asset impairment charges.

Current wording

Restructuring Costs. Restructuring costs for the three months ended June 30, 2026 were $0.9 million, of which $0.6 million was for employee transition, severance, employee benefits, and related costs and $0.3 million was related to costs associated with office space reductions. Restructuring costs for the six months ended June 30, 2026 were $12.9 million, of which $11.6 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 $0.2 million of right-of-use asset impairment charges.

Previous wording

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.

Current wording

Restructuring costs for the three months ended June 30, 2025 were $5.7 million, of which $5.4 million was for employee transition, severance, employee benefits, and related costs and $0.3 million was related to costs associated with office space reductions, including $0.1 million of right-of-use asset impairment charges. Restructuring costs for the six months ended June 30, 2025 were $10.0 million, of which $9.0 million was for employee transition, severance, employee benefits, and related costs and $1.0 million was related to costs associated with office space reductions, including $0.3 million of right-of-use asset impairment charges.

Previous wording

As a result of our review of the business to drive further efficiency, better align resources, and improve profitability, we continue to expect to incur pre-tax restructuring costs under our plan in the range of $15.0 million to

Current wording

As a result of our review of the business to drive further efficiency, better align resources, and improve profitability, we continue to expect to incur pre-tax restructuring costs under our plan in the range of $15.0 million to $20.0 million for the year ending December 31, 2026. The charges will primarily relate to employee transition, severance, employee benefits, and other costs, including costs associated with office space reductions.

Previous wording

Depreciation of Property and Equipment. Depreciation of property and equipment was $2.5 million for the three months ended March 31, 2026, compared to $3.6 million for the three months ended March 31, 2025, a decrease of $1.1 million, or 31%.

Current wording

Depreciation of Property and Equipment. Depreciation of property and equipment was $2.5 million for the three months ended June 30, 2026, compared to $4.3 million for the three months ended June 30, 2025, a decrease of $1.9 million, or 43%. On a year-to-date basis, depreciation of property and equipment was $4.9 million for the six months ended June 30, 2026, compared to $7.9 million for the six months ended June 30, 2025, a decrease of $3.0 million, or 38%. The decrease in both periods was primarily driven by prior year accelerated depreciation associated with decisions to exit certain leased spaces.

Previous wording

Interest Income. Interest income consisted of interest earned on cash and cash equivalents. Interest income was $6.5 million for the three months ended March 31, 2026, compared to $12.7 million for the three months ended March 31, 2025. The decrease for the three months ended March 31, 2026 was driven by lower interest rate yields and a lower average balance of cash and cash equivalents.

Current wording

Interest Income. Interest income consisted of interest earned on cash and cash equivalents. Interest income was $6.5 million for the three months ended June 30, 2026, compared to $10.1 million for the three months ended June 30, 2025. Interest income was $13.0 million for the six months ended June 30, 2026, compared to $22.7 million for the six months ended June 30, 2025. The decrease for both periods was driven by lower interest rate yields and holding a lower average balance of cash and cash equivalents.

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 $5.4 million for the three months ended March 31, 2026, compared to $5.8 million for the three months ended March 31, 2025. The decrease was driven by the maturation of previously outstanding notes in the prior year.

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 $5.1 million for the three months ended June 30, 2026, compared to $4.5 million for the three months ended June 30, 2025. Interest expense was $10.5 million for the six months ended June 30, 2026, compared to $10.2 million for the six months ended June 30, 2025. The increase for both periods was primarily driven by interest associated with the Revolving Credit Facility, partially offset by the impact of the maturation of certain of the convertible senior notes in the prior year.

Previous wording

Other Expense (Income), net. Other expense (income), net was an expense of $0.2 million for the three months ended March 31, 2026, compared to an income of $2.4 million for the three months ended March 31, 2025. The change primarily reflects the impact of foreign currency exchange rate fluctuations.

Current wording

Other Expense (Income), net. Other expense (income), net was an expense of $2.2 million for the three months ended June 30, 2026, compared to an income of $8.4 million for the three months ended June 30, 2025. Other expense (income), net was an expense of $2.4 million for the six months ended June 30, 2026, compared to an income of $10.8 million for the six months ended June 30, 2025. The change primarily reflects the impact of foreign currency exchange rate fluctuations.

Previous wording

Provision for Income Taxes. We recorded an income tax expense of $3.0 million for the three months ended March 31, 2026 compared to an income tax benefit of $18.3 million for the three months ended March 31, 2025. The tax expense for the three months ended March 31, 2026 resulted primarily from an increase in the valuation allowance. 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.

Current wording

Provision for Income Taxes. We recorded an income tax expense of $1.0 million for the three months ended June 30, 2026 compared to an income tax benefit of $7.8 million for the three months ended June 30, 2025, and an income tax expense of $4.0 million for the six months ended June 30, 2026 compared to an income tax benefit of $26.0 million for the six months ended June 30, 2025. Tax expense recorded for six months ended June 30, 2026 was primarily due to a $19.3 million increase in the valuation allowance and a discrete tax expense related to shortfall from stock-based compensation, offset by an ordinary tax benefit of $20.7 million. The tax benefit for six months ended June 30, 2025 was primarily due to a discrete benefit of $20.1 million related to the completion of a research and development tax credit study and $11.1 million of acquisition related tax benefits, offset by ordinary tax expense of $5.0 million.

Previous wording

The following tables set forth the results of operations by segment for the three months ended March 31, 2026 and 2025 (dollars in thousands):

Current wording

The following tables set forth the results of operations by segment for the three and six months ended June 30, 2026 and 2025 (dollars in thousands):

Previous wording

Integrated Care total revenues increased by $6.0 million, or 2%, to $395.4 million for the three months ended March 31, 2026. The acquisitions of Catapult Health and Telecare increased Integrated Care total revenue for the three months ended March 31, 2026 by approximately 2 percentage points.

Current wording

Integrated Care total revenues increased by $2.8 million, or 1%, to $394.3 million for the three months ended June 30, 2026, and increased by $8.8 million, or 1%, to $789.8 million for the six months ended June 30, 2026. The acquisition of Telecare increased Integrated Care total revenue for the three months ended June 30, 2026 by approximately 1 percentage point and the acquisitions of Catapult Health and Telecare increased Integrated Care total revenue for the six months ended June 30, 2026 by approximately 1 percentage point.

Previous wording

Integrated Care cost of revenue, exclusive of depreciation, amortization, and stock-based compensation, increased by $4.9 million, or 4%, to $135.9 million for the three months ended March 31, 2026. The increase was primarily driven by higher labor and provider costs.

Current wording

Integrated Care cost of revenue, exclusive of depreciation, amortization, and stock-based compensation, increased by $3.5 million, or 3%, to $129.9 million for the three months ended June 30, 2026, and increased by $8.4 million, or 3%, to $265.8 million for the six months ended June 30, 2026. For both periods, the increase was primarily driven by higher labor and provider costs.

Previous wording

Integrated Care advertising and marketing, exclusive of stock-based compensation, increased by $0.2 million, or 1%, to $33.9 million for the three months ended March 31, 2026, primarily reflecting higher digital and media advertising costs and professional fees, partially offset by lower employee compensation costs.

Current wording

Integrated Care advertising and marketing, exclusive of stock-based compensation, decreased by $0.7 million, or 2%, to $31.3 million for the three months ended June 30, 2026 and decreased by $0.5 million, or 1%, to $65.2 million for the six months ended June 30, 2026. For both periods, the decrease primarily reflects lower employee compensation costs, partially offset by higher digital and media advertising costs.

Previous wording

Integrated Care other segment expenses decreased by $5.0 million to $169.4 million for the three months ended March 31, 2026. The decrease was primarily driven by lower employee compensation costs, legal costs, professional fees, and infrastructure, hosting and software license costs, partially offset by higher commissions and indirect taxes.

Current wording

Integrated Care other segment expenses decreased by $7.8 million, or 4%, to $167.9 million for the three months ended June 30, 2026, and decreased by $12.8 million, or 4%, to $337.3 million for the six months ended June 30, 2026. The decrease for both periods was primarily driven by lower employee compensation costs, professional fees, and occupancy and office expense, partially offset by higher commissions and indirect taxes.

Previous wording

BetterHelp total revenue decreased by $21.5 million, or 9%, to $218.4 million for the three months ended March 31, 2026, driven by a 9% decrease in average monthly paying users. The acquisition of Uplift increased BetterHelp total revenue by approximately 6 percentage points. Within BetterHelp, Consumer and Other primarily includes revenue from BetterHelp Paying Users that pay for services directly out-of-pocket while Insurance Covered Services reflects revenue from BetterHelp Paying Users that utilize insurance coverage to pay for services, which includes any copayments.

Current wording

Within BetterHelp, Consumer and Other primarily includes revenue from BetterHelp Paying Users that pay for services directly out-of-pocket while Insurance Covered Services reflects revenue from BetterHelp Paying Users that utilize insurance coverage to pay for services, which includes any copayments. BetterHelp total revenue decreased by $27.8 million, or 12%, to $212.6 million for the three months ended June 30, 2026, and decreased by $49.3 million, or 10%, to $431.0 million for the six months ended June 30, 2026, reflecting a faster than expected shift in demand from Consumer and Other to Insurance Covered Services for which we have not yet been able to fully increase our capacity to serve. Revenue from Insurance Covered Services was first recognized following the acquisition of Uplift in the three months ended June 30, 2025, with the significant increase in the current year reflecting our focus on making therapy services available to BetterHelp paying users who want to utilize insurance coverage.

Previous wording

BetterHelp cost of revenue, exclusive of depreciation, amortization, and stock-based compensation, decreased by $3.9 million, or 6%, to $61.3 million for the three months ended March 31, 2026. The decrease was primarily driven by lower therapist costs.

Current wording

BetterHelp cost of revenue, exclusive of depreciation, amortization, and stock-based compensation, decreased by $2.8 million, or 4%, to $60.8 million for the three months ended June 30, 2026, and decreased by $6.8 million, or 5%, to $122.1 million for the six months ended June 30, 2026. The decrease for both periods was primarily driven by lower therapist costs.

Previous wording

BetterHelp advertising and marketing, exclusive of stock-based compensation, decreased by $16.2 million, or 12%, to $116.8 million for the three months ended March 31, 2026, primarily reflecting lower spending on digital and media advertising.

Current wording

BetterHelp advertising and marketing, exclusive of stock-based compensation, decreased by $22.6 million, or 17%, to $111.7 million for the three months ended June 30, 2026, and decreased by $38.8 million, or 15%, to $228.5 million for the six months ended June 30, 2026, primarily reflecting lower spending on digital and media advertising as we aligned demand generation with available insurance-provider capacity and expected customer acquisition returns, and reallocated resources toward expanding usable provider capacity and improving insurance-specific platform capabilities.

Previous wording

BetterHelp other segment expenses increased by $4.5 million, or 13%, to $38.5 million for the three months ended March 31, 2026. The increase was primarily driven by higher employee compensation costs and professional fees.

Current wording

BetterHelp other segment expenses increased by $9.0 million, or 30%, to $39.6 million for the three months ended June 30, 2026, and increased by $13.5 million or 21%, to $78.1 million for the six months ended June 30, 2026. The increase in both periods was primarily driven by higher employee compensation costs and professional fees as we focus on the implementation and offering of Insurance Covered Services.

Previous wording

The following table presents a summary of our cash flow activity for the three months ended March 31, 2026 and 2025 (in thousands):

Current wording

The following table presents a summary of our cash flow activity for the six months ended June 30, 2026 and 2025 (in thousands):

Previous wording

Our principal source of liquidity is cash generated by our operations together with our cash and cash equivalents on hand, which totaled $750.7 million as of March 31, 2026. Additionally, we entered into the five-year, $300.0 million , Revolving Credit Facility on July 17, 2025 to preserve and enhance our financial and operational flexibility. We do not, however, currently anticipate borrowing any amounts under the facility. See Note 10. “Debt” to the condensed consolidated financial statements for additional information on the Revolving Credit Facility.

Current wording

Our principal source of liquidity is cash generated by our operations together with our cash and cash equivalents on hand, which totaled $774.3 million as of June 30, 2026. Additionally, we entered into the five-year, $300.0 million, Revolving Credit Facility on July 17, 2025 to preserve and enhance our financial and operational flexibility. See Note 10. “Debt” to the condensed consolidated financial statements for additional information on the Revolving Credit Facility.

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 virtual care, 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.

Current wording

We believe that our existing cash and cash equivalents together with our borrowing capacity under the Revolving Credit Facility, our expected future cash flows, and other financing opportunities that we pursue, which may include a term loan, will be sufficient to meet our working capital needs, capital expenditures, and contractual obligations, including refinancing or repayment of the 2027 Notes at maturity, 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 and BetterHelp paying users, the timing and extent of spending to support product development efforts, our sales and marketing activities, the introduction of new and enhanced services offerings (including our efforts to expand BetterHelp therapy services to users who use insurance coverage), the continuing market acceptance of virtual care, and our debt service obligations. In particular, the amount of BetterHelp advertising and marketing expenses, and the number of acquired and retained BetterHelp paying users, may have a significant impact on our expected future cash flows. 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

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 $9.5 million for the three months ended March 31, 2026 compared to net cash provided by operating activities of $15.9 million for the three months ended March 31, 2025. The decrease primarily relates to the payment of annual bonuses during the first three months of the year.

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 $74.2 million for the six months ended June 30, 2026, compared to net cash provided by operating activities of $107.4 million for the six months ended June 30, 2025. The year-over-year change was driven by the timing of collections of accounts receivable, and higher incentive compensation payments.

Previous wording

Cash used in investing activities was $36.5 million for the three months ended March 31, 2026, and $123.3 million for the three months ended March 31, 2025. Cash payments for capitalized software development costs was higher by $4.2 million during the three months ended March 31, 2026 compared to the prior year. During the three months ended March 31, 2025, we paid $64.6 million, net of cash acquired, to purchase Catapult Health and paid $27.0 million to acquire the securities of a private company.

Current wording

Cash used in investing activities was $78.1 million for the six months ended June 30, 2026 compared to cash used in investing activities of $183.0 million for the six months ended June 30, 2025. Cash payments for capitalized software development costs was higher by $4.3 million during the six months ended June 30, 2026 compared to the prior year. Additionally, cash paid for intangible assets associated with Uplift was lower by $16.9 million compared to the prior year. During the six months ended June 30, 2025, we paid $65.3 million, net of cash acquired, to purchase Catapult Health and paid $27.0 million to acquire the securities of a private company.

Previous wording

Cash used in financing activities for the three months ended March 31, 2026 was $2.4 million compared to cash provided by financing activities of $0.8 million for the three months ended March 31, 2025. During the three months ended March 31, 2026, $2.8 million was paid for the outstanding contingent consideration related to the acquisition of Catapult Health.

Current wording

Cash used in financing activities for the six months ended June 30, 2026 was $1.6 million compared to cash used in financing activities of $549.2 million for the six months ended June 30, 2025. During the six months ended June 30, 2026, $2.8 million was paid for the outstanding contingent consideration related to the acquisition of Catapult Health.