Teladoc's Livongo Acquisition Impairment Charges Approach $10 Billion

Scott Peters
28 Jul, 2022
New York City

Virtual mental healthcare services provider Teladoc reported another quarter with a large write down of its recent acquisition and lowered its annual outlook. 

Teladoc Health Inc plunged 23.5% to $33.01 after the online healthcare platform operator said June quarter revenues rose 18% to $592 million. 

Net income plunged to $3.1 billion from $133.8 million a year ago after the company took a one-time goodwill charge of $3 billion and increased total charge in the six-month period to $9.6 billion.  

Teladoc's net loss adjusted for impairment charge would be approximately $102 million. 

Net loss includes a sizable goodwill impairment charge of $3.0 billion linked to its $18.5 billion acquisition of Livongo in October 2020, the digital chronic condition management company. 

Two years ago at the time of acquisition, Teladoc highlighted its focus on creating one app for primary care, chronic care, and other virtual care services. 

In early 2020, Teladoc acquired InTouch Health for $600 million, a provider of enterprise telehealth solutions for hospitals and health systems.  

In the second quarter, Teladoc's access fee revenues rose 20% to $518.7 million and visit fee revenues increased 7% to $66.7 million. 

Average revenue per U.S. paid member increased to $2.60 in the second quarter from $2.31 a year ago. 

U.S. paid membership increased 9% to 56.6 million from 52.0 million a year ago and U.S. fee only access visits increased 9% to 24.0 million from 22.0 million. 

In the first-half of 2022, revenues increased 21% to $1.1 billion, access fees revenues increased 20% to $519 million, and visit fees rose 7% to $67 million. 

Teladoc continues to face higher advertising costs in reaching patients with mental health care needs and sales cycles are getting longer in chronic condition market, said chief executive Jason Gorevic to analysts during the conference call.  

 

Outlook and Guidance 

Teladoc reiterated its third quarter and full-year outlook but said results are expected to be towards the lower end of those ranges. 

For the third quarter, revenues are anticipated between $600 million and $620 million and net loss per share between 85 cents and 60 cents. 

Total U.S. paid membership to range between 55.5 million and 56.5 million, fee only access visits about 24 million and total visits between 4.8 million and 5.0 million. 

For the full-year 2022, Teladoc estimates revenues between $2.4 billon and $2.5 billion and net loss per share between $61.0 and $62.0, and total visits between 18.8 million and 19.3 million.  

 

Stock & Performance 

Teladoc stock has lost about 63% of its value this year and dropped more than 91% from its peak in February 2021. 

Teladoc priced its initial public offering on July 1, 2015 at $19 a share and raised $157 million, according to the data compiled by Ticker.com