Telehealth firms continue to report revenue growth, net losses in Q1

Bright Health scoops up telehealth startup


Telehealth companies continued to see revenue gains in 2021’s first quarter as they prepare their business for a world not dominated by the COVID-19 crisis.

Amwell posted $57.6 million in revenue for the quarter, up 7.2% from the year-ago period, while Teladoc Health, a market leader in the telehealth space, continued to see sizeable growth with $453.7 million in quarterly revenue, up 150.9% year-over-year. SOC Telemed, which focuses on the acute-care sector, posted $14.8 million, up 0.1%.

The three companies, all of which reported net losses, are working to differentiate themselves in a crowded market—in part by convincing investors they can be a single vendor for all or many of their customers’ virtual care needs.

Reston, Va.-based SOC Telemed in March acquired Access Physicians, a multispecialty acute-care telehealth company, for $194 million, which added service lines including infectious disease, cardiology, maternal-fetal medicine and nephrology to SOC Telemed’s portfolio. Access Physicians contributed $364,000 to SOC Telemed’s $14.8 million in quarterly revenue, according to financial results posted Thursday.

SOC Telemed now sells services across roughly a dozen clinical specialties, which “differentiates” the company from competitors that might only focus on one specialty, according to John Kalix, SOC Telemed’s CEO. That paves the way for customers to implement the breadth of SOC Telemed’s tools, rather than point solutions from other companies, since there are “challenges and complexity that come from working with multiple vendors,” Kalix said.

“In a fragmented space with significant resource constraints, healthcare systems and hospitals are looking for a single partner,” Kalix said on a call with investment analysts Thursday.

SOC Telemed, which went public in October through a merger with a special purpose acquisition company, works with hospitals and post-acute care providers to provide specialist coverage. Unlike other telehealth companies, it didn’t see a revenue boom amid COVID-19 as patients stayed home and out of healthcare facilities.

SOC Telemed posted a $12.6 million net loss for the quarter, compared with a $7.2 million net loss in 2020’s first quarter, which company officials attributed to costs linked with the Access Physicians acquisition.

The company expects full-year 2021 revenue to be in the range of $97 million to $103 million.

SOC Telemed’s stock rose to $7.26 Friday morning, up from $6.84 when markets closed Thursday.

Executives with Boston-based Amwell, which posted financial results Wednesday, spent most of a call with investment analysts discussing Converge, a product it launched last month.

Converge, a platform that provides one access point to Amwell’s products and applications from partners like Google Cloud and Cleveland Clinic, will let customers select which tools they need on their version of the platform, with the option to subscribe to more as needed. Those apps will add another revenue stream for Amwell, executives say.

The idea is to create a platform that’s “future-ready,” so that customers know they can continue to use Amwell’s technology as they expand their virtual care programs, said Dr. Ido Schoenberg, Amwell’s chairman and co-CEO, on Wednesday’s call. Executives said they expect the platform to begin contributing to revenue growth in 2022.

“The value of accessing the network effect in our ecosystem is very considerable to all parties … so we believe that we are going to see very high-margin revenue stream and much greater stickiness,” Schoenberg said.

Schoenberg has previously said that he sees the company moving toward primarily being a technology provider, rather than a services provider. In 2021’s first quarter, Amwell’s medical group accounted for just 20% of total visits on Amwell’s platform, with the remainder conducted by health system and health plans’ own clinicians.

In last year’s first quarter, Amwell Medical Group had conducted half of the visits on its platform.

Amwell’s first-quarter revenue primarily comprises $24.6 million from subscriptions, up 12.8% year-over-year, and $27.8 million from visits, up 4.9%. The company posted 1.6 million visits in total for the quarter, up 120.7% from 725,000 visits during the same period last year, and reported a net loss of $39.8 million, compared with a $25.2 million net loss in the prior-year quarter.

Amwell, which went public in September with a $100 million investment from Google, expects its full-year 2021 revenue to be in the range of $260 million to $270 million.

Amwell’s stock dipped to $12.14 on Thursday morning, down from $12.82 when markets closed Wednesday—the day the company released its quarterly earnings—and a sizable drop from its high of $42.80 in January. It hit $9.75 Thursday afternoon, but was back up to $11.57 as of Friday afternoon.

Purchase, N.Y.-based Teladoc’s stock was $136.99 as of Friday morning. Teladoc two weeks ago posted quarterly earnings including $388.2 million in revenue from subscription access fees, up 183.2%, and $54.5 million in revenue from visit fees, up 24.5%. The company reported 4.3 million visits, up 109.4%, including 1.1 million conducted with customers’ own clinicians.

Teladoc reported net loss of $199.6 million, compared with a $29.6 million net loss in the prior-year quarter.

Teladoc’s “competitive advantage” is that the company offers a broad set of clinical tools and services, bolstered by the company’s acquisitions of InTouch Health, a telehealth company focused on the provider market, and Livongo, a digital health company focused on chronic disease management.

Teladoc has been working to cross-sell Livongo’s chronic condition management programs into hospitals and health systems that are already using Teladoc’s virtual care services.

That opportunity “continues to grow, particularly among hospitals that are increasingly bearing risk,” said Jason Gorevic, Teladoc’s CEO, on a call with investment analysts April 28. “Clients are looking for comprehensive, multiproduct solutions. They’re not looking for point solutions that they have to integrate themselves (and) stitch together.”

Teladoc on April 28 raised its full-year 2021 guidance by $20 million, now pegging revenue for the year to be in the range of $1.97 billion to $2.02 billion.



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Marie Maynes
Marie Maynes is a Sports enthusiast and writes for the Sports section of ANH.