New York-based virtual care company Teladoc Health saw its stock price drop on Tuesday from $9.44 per share to $8.10 after reporting a 2% decrease in revenue in the second quarter of 2024 at $642.4 million, down from $652.4 million in the same period last year.
Revenue from the company’s BetterHelp segment was reported to be $265 million in the second quarter, down 9% from Q2 2023.
However, revenue from its Integrated Care segment was up 5% year-over-year to $377.4 million, with an adjusted EBITDA margin of 17%.
Teladoc’s net loss in Q2 of this year was $837.7 million, with a net loss per share of $4.92, compared to a loss of $65.1 million, $0.40 per share, in Q2 2023.
Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) rose 24% to $89.5 million compared to the second quarter of 2023 at $73.2 million, and the company reported an operating cash flow of $101.2 million and free cash flow of $64.6 million in Q2 2023.
The company withdrew its financial outlook provided in April for the full year of 2024 for its BetterHelp segment and consolidated operations and its three-year outlook for its consolidated operations and operating segments.
“I am excited to have joined Teladoc Health and for the opportunity to lead the company going forward, building on our strengths while driving higher levels of performance. Our scaled position, core capabilities, and talented employees position us well in this regard,” the company’s new CEO, Chuck Divita, said in a statement.
“I also see opportunities to strengthen execution and to streamline the organization to ensure we are delivering for our customers and stakeholders. While we achieved solid performance in the Integrated Care segment, continued headwinds in the BetterHelp segment impacted overall results. We are focused on addressing the work ahead of us with urgency to unlock greater value across the company over time.”
THE LARGER TREND
Divita joined the telehealth company in June after its previous CEO of 15 years, Jason Gorevic, stepped down in April after its stock plummeted 22% due to missed fourth-quarter earnings estimates and projected decreased 2024 revenue.
In May, Stary v. Teladoc Health, Inc. et al. filed a potential class action lawsuit in the U.S. District Court for the Southern District of New Year, naming defendants as Teladoc Health, Inc., Gorevic, and Mala Murthy, who held the position of chief financial officer but stepped in as acting CEO after Gorevic stepped down.
The suit filed on behalf of Teladoc investors, alleged that the company publicly acknowledged that increasing marketing spend on BetterHelp would be inefficient due to market saturation while allegedly expanding its marketing spend on the online therapy platform throughout 2023.
The suit also claimed that upon releasing its fourth quarter 2023 earnings, the company demonstrated substantially increased advertising costs driven by digital and media advertising costs related to BetterHelp.
The potential class action additionally alleged that such increased spending deteriorated the company’s revenue, leading to a substantial fall in its stock price and that the company made public statements that it had a “long runway” for BetterHelp’s membership growth, all while membership remained unchanged or decreased throughout 2023.
Still, the telehealth company has formed a new partnership since Divita came on board.
In July, the company announced exclusively through MobiHealthNews that it partnered with pediatric virtual behavioral health company Brightline to extend its mental healthcare options for children, adolescents and their families through Teladoc’s platform.
