Teladoc Health, Inc.

Current report

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.

Current report

In our BetterHelp segment, we primarily generate revenue from paying users, including those who pay directly out-of-pocket (cash-paying users) and those who utilize their insurance coverage. Historically, the majority of BetterHelp’s revenue came from cash-paying users, but in recent years we have introduced the ability for users to utilize their insurance coverage to pay for BetterHelp’s services. The continued expansion of insurance coverage for BetterHelp within the U.S. has resulted in, and may continue to result in, further declines in revenue from users who pay cash for BetterHelp. Existing users and potential new users who may have otherwise paid directly out-of-pocket have elected, and may in the future elect, to utilize insurance coverage instead, or, if insurance coverage is not available to them, may forego using BetterHelp’s services altogether, any of which has resulted, and may in the future result, in lower cash-pay revenue and lower overall revenue for BetterHelp. Additionally, revenue recognized from cash-paying users is initially higher than from users who use their insurance coverage as insurance revenue depends on completed visits, visit length, and other factors over time for each user, whereas cash-pay revenue is based on cash received on purchase of a subscription or individual session.

Current report

Further, to enable BetterHelp users to utilize their insurance coverage, we must be able to match those users with insurance credentialed providers, and have the ability provide sufficient capacity for services. As we continue to ramp up insurance coverage for BetterHelp, we have experienced challenges increasing the capacity of our provider network to meet the growing demand for users, who would like to elect to use their insurance coverage, which has prevented the revenue we generate from insurance coverage from offsetting the declines in revenue from the decrease in cash-paying users. There is no guarantee that we will be able to recruit and retain enough credentialed providers to meet the demand of users, who would like to elect to use their insurance coverage, to offset any additional declines in cash-pay revenue or segment revenue. If BetterHelp’s revenue growth from our insurance-covered services does not offset declines in our cash-pay revenue, our business, financial condition, results of operations, and cash flows may be adversely affected.

Current report

Because demand for insurance utilization has at times exceeded our capacity, and in order to reallocate resources to expand provider capacity and improve our platform, we have reduced BetterHelp advertising and marketing spending to align demand generation with available capacity and expected returns. That reduction, in turn, reduced acquired paying users and near-term revenue. We are prioritizing initiatives and reallocating resources toward increasing U.S. provider capacity and insurance-specific platform capabilities, and have also reduced near-term investment and advertising and marketing levels in cash-pay markets outside the United States. Such reduction has resulted, and any continued or additional reduction in advertising spend may result, in fewer paying users and lower revenue, both from cash-paying users and those who utilize insurance coverage.

Current report

Our BetterHelp marketing efforts may not acquire users at the levels or economics we expect.

Current report

We believe the vast majority of consumers make purchasing decisions for mental health services on the basis of traditional factors, such as affordability. Particularly in light of BetterHelp’s continued expansion of insurance coverage, this traditional decision-making process does not always account for restrictive and complex insurance plans, high deductibles, expensive co-pays and other factors, such as discounts or savings available at alternative therapists or practices. To effectively market our platform, we must educate consumers about the various purchase options, and the benefits of using BetterHelp for mental health services, including when such services may not be covered by their health insurance benefits. However, we may not be successful in changing consumer purchasing habits, or achieve broad market education or awareness among consumers. Even if we are able to raise awareness among consumers, they may be slow in changing their habits and may be hesitant to use our platform for a variety of reasons.

Current report

We spend significant resources marketing BetterHelp’s services, both to cash-paying users and increasingly to those who utilize their insurance benefits. During the three months ended June 30, 2026, our advertising and marketing spend on BetterHelp was reduced, including to further align with insurance objectives, and we expect that to continue for the remainder of 2026. Such reduction has resulted, and may continue to result, in acquisition of fewer total BetterHelp paying users or acquisition of users at a higher cost that we expect, and lower revenue. Any continued or additional decrease in the amount or effectiveness of our BetterHelp marketing efforts could lead to lower revenue, and profitability of this business. Further, if the cost of customer acquisition for BetterHelp increases, it could materially adversely affect our business, financial condition and results of operations.