NYSE:TDOC Teladoc Health Q1 2024 Earnings Report $6.78 -0.37 (-5.10%) Closing price 05/6/2025 03:59 PM EasternExtended Trading$6.87 +0.09 (+1.25%) As of 07:22 AM Eastern Extended trading is trading that happens on electronic markets outside of regular trading hours. This is a fair market value extended hours price provided by Polygon.io. Learn more. Earnings HistoryForecast Teladoc Health EPS ResultsActual EPS-$0.49Consensus EPS -$0.47Beat/MissMissed by -$0.02One Year Ago EPS-$0.37Teladoc Health Revenue ResultsActual Revenue$646.13 millionExpected Revenue$637.31 millionBeat/MissBeat by +$8.82 millionYoY Revenue Growth+2.70%Teladoc Health Announcement DetailsQuarterQ1 2024Date4/25/2024TimeAfter Market ClosesConference Call DateThursday, April 25, 2024Conference Call Time5:00PM ETConference Call ResourcesConference Call AudioConference Call TranscriptSlide DeckPress Release (8-K)Quarterly Report (10-Q)Earnings HistoryCompany ProfileSlide DeckFull Screen Slide DeckPowered by Teladoc Health Q1 2024 Earnings Call TranscriptProvided by QuartrApril 25, 2024 ShareLink copied to clipboard.There are 16 speakers on the call. Operator00:00:00Good afternoon. Thank you for attending the Teladoc Health Q1 2024 Earnings Call. My name is Matt, and I'll be your moderator for today's call. All lines will be muted during the presentation portion of the call for an opportunity for questions and answers at the end. I would now like to pass the conference over to our host, Adam Vander Voort, Chief Legal Officer, Teladoc. Operator00:00:21Adam, please go ahead. Speaker 100:00:23Thank you, and good afternoon. Today, after the market close, we issued a press release announcing our Q1 20 24 financial results. This press release and the accompanying slide presentation are available in the Investor Relations section of the teladochealth.com website. On this call to discuss the results are Malamurthy, our acting Chief Executive Officer and Chief Financial Officer and Lasser Kornvasser, our President of Enterprise Growth and Global Markets. During this call, we will also discuss our outlook and our prepared remarks will be followed by a question and answer session. Speaker 100:01:08Please note that we will be discussing certain non GAAP financial measures that we believe are important in evaluating Teladoc Health's performance. Details on the relationship between these non GAAP measures to the most comparable GAAP measures and reconciliations thereof can be found in the press release that is posted on our website. Also, please note that certain statements made during this call will be forward looking statements as defined by the Private Securities Litigation Reform Act of 1995. Such forward looking statements are subject to risks, uncertainties and other factors that could cause the actual results for Teladoc Health to differ materially from those expressed or implied on this call. For additional information, please refer to our cautionary statement in our press release and our filings with the SEC, all of which are available on our website. Speaker 100:02:03I would now like to turn the call over to Mala. Speaker 200:02:07Thank you, Adam, and thanks, everyone, for joining us today. Before we begin, I'd like to take a moment to reflect on the recent leadership changes at Teladoc Health. First off, on behalf of Teladoc's more than 5,000 employees, Board of Directors and executive leadership team, I would like to extend our deepest gratitude to Jason Gorevic for his accomplishments over the past 15 years. Jason leaves a tremendous legacy, having firmly established Teladoc as the industry leader in whole person virtual care. As we mentioned in our February earnings call, Teladoc is in a time of transition. Speaker 200:02:54And as part of this evolution, the Board of Directors decided that it was time to look for a new leader for our company, someone to help us write the next chapter in our growth story. The Board's search for a successor is well underway and our permanent CEO is expected to be named later this year. The Board has appointed me to serve as CEO while they conduct the search, and I'm honored to play this role for a company whose work I believe in so deeply. In the meantime, however, we are wasting no time in identifying and seizing opportunities to leverage our significant assets and capabilities. As an organization, our focus is on accelerating growth on both the top and bottom line over the medium and longer term. Speaker 200:03:50And my focus as acting CEO is to ensure that our strategy continues to be supported by the appropriate level of investment, that our leadership team is executing on our priorities and that we are accelerating the pace of change and innovation across our business. With that, turning now to a review of our Q1 performance. I'm pleased to report a solid start to the year across the business, exceeding our financial and operating guidance for both consolidated revenue and adjusted EBITDA in the Q1. Our team remains laser focused on our key initiatives, which include: building upon our market leadership position, driving increased product penetration through our large installed base of over 90,000,000 virtual care members and accelerating our bottom line performance. This focus is evident in our Q1 results. Speaker 200:04:56In the Integrated Care segment, we are pleased to see continued strong interest in our Whole Person Care suite of products. 1st quarter integrated care revenue grew 7.8 percent year over year to $377,000,000 benefiting from high single digit growth in our chronic care book of business as well as strong visit revenues driven by increased infectious disease activity as well as an 8% increase in membership year over year. Chronic care enrollment remained strong, up 9% year over year in the Q1. BetterHelp revenue of $269,000,000 declined 3.7% versus a difficult comparison in the Q1 of last year. BetterHelp also generated modestly lower revenue on a sequential basis, driven in part by a decline in paying users following our typical pullback in ad spend in the Q4, which is the most expensive time of the year in our marketing channels. Speaker 200:06:07Additionally, as expected, the lower returns on our social media advertising spend we experienced in the second half of twenty twenty three persisted in the Q1 and are impacting our year over year growth rates in the first half of this year. We are making progress to improve our yield on advertising spend, which contemplates not only cost per acquisition, but also retention and other factors as well. I will speak to our efforts to reinvigorate growth in our BetterHelp business later in the call. We continue to make progress on our bottom line performance with 1st quarter consolidated adjusted EBITDA margin of 9.8%, improving 140 basis points year over year and adjusted EBITDA of $63,000,000 growing nearly 20% year over year. We are executing against our cost saving and productivity initiatives, and we remain on track to deliver $43,000,000 in cost savings on a GAAP basis for our business in 2024 and a total of $85,000,000 in 2025. Speaker 200:07:19The breadth of our product portfolio continues to drive productive conversations with both prospective and existing clients. 2 thirds of our bookings in the quarter came from cross selling into our existing book of business, with the remaining third coming from new clients, reflecting a continuation of our cross selling momentum over the past several quarters, along with an acceleration in bookings from new business. Both existing and prospective clients are demonstrating increased interest in our ChronicCare Plus bundle solution and we remain optimistic about our ability to drive increased product penetration through our installed base of nearly 92,000,000 members over the next several years. In Q1, we saw another example of our land and expand strategy playing out as we added our diabetes program into a large health benefits provider, a client who had previously only purchased our telehealth solutions. We are also seeing growing interest in our weight management solution from employers who are grappling with rising costs for GLP-1s and employee demand for these products. Speaker 200:08:36The addition of approximately 2,200,000 members on a sequential basis since Q4 represents additional greenfield opportunity for future cross sell and product penetration. And with more than $1,000,000,000 in cash and cash equivalents on our balance sheet, our financial strength continues to be another differentiator for our company and provides us with significant capacity and flexibility to invest and innovate in our business. We also continue to see growing benefits from our early and ongoing commitment to data and artificial intelligence, with AI models now integrated across nearly all aspects of our business. From provider matching to enrollment optimization to member engagement, this automation is helping us not only reach our revenue and profitability goals, but also achieve our mission of improving health by reaching more consumers. One exciting example is our use of generative AI in member engagement to create hyper personalized content for individuals to get them signed up for Teladoc services they need and then keep them on track. Speaker 200:09:51Our pilots with this AI use case, while still being carefully studied, are already delivering significant improvement in member engagement over prior approaches. I would now like to spend a few minutes reviewing our Q1 financial results in detail. 1st quarter consolidated revenue increased 3% year over year to $646,000,000 while first quarter adjusted EBITDA was $63,000,000 representing a margin of 9.8%. 1st quarter financial performance benefited from higher revenues in our Integrated Care segment and improved expense control. Turning to segment results. Speaker 200:10:34Integrated Care revenue increased 8% year over year to $377,000,000 in the quarter, with growth relatively balanced across the portfolio. 1st quarter Integrated Care adjusted EBITDA was $47,700,000 representing a 260 basis point expansion in margins to 12.6%. The margin outperformance relative to guidance was largely driven by strong chronic care program enrollment during the Q1, which combined with better expense control helped deliver improved gross margin and bottom line performance. Total chronic care program enrollment was $1,120,000 at the end of the first quarter, representing growth of 9% year over year. Total U. Speaker 200:11:29S. Integrated care members grew 6 $900,000 over the prior year, representing 8% growth and grew by $2,200,000 sequentially to $91,800,000 Average integrated care revenue per U. S. Member of $1.38 was down $0.01 over the prior year's Q1, reflecting the timing of new client onboarding and enrollment ramp. The onboarding of large populations and our expanding membership base represent a long runway for continued cross selling of our chronic hair and other B2B products as we execute against our land and expand strategy. Speaker 200:12:161st quarter BetterHelp segment revenue decreased 4% year over year to $269,000,000 driven by an 11% decrease in paying users. 1st quarter better health adjusted EBITDA was $15,500,000 representing a margin of 5.7%. As we have discussed previously, the Q1 is typically the seasonally weakest quarter from a margin perspective for our BetterHelp business as marketing expense ramps up following the Q4 holiday season. As such, we continue to expect the Q1 to be the low point of the year for Better Health segment margins, and we expect consistent quarter over quarter margin improvement through the course of 2024. Consolidated net loss per share in the Q1 was $0.49 compared to a net loss per share of $0.42 in the Q1 of 2023. Speaker 200:13:19Net loss per share in the Q1 includes stock based compensation of $42,300,000 or $0.25 per share restructuring charges, primarily related to severance of $9,700,000 or $0.06 per share and amortization of acquired intangibles of $64,200,000 or $0.38 per share. During the Q1, free cash flow was a net outflow of $27,000,000 compared to a net outflow of $32,000,000 in the first quarter of 2023. As a reminder, the Q1 is our seasonally lowest cash flow quarter given the payment of annual incentive compensation. We ended the quarter with $1,100,000,000 in cash and cash equivalents on the balance sheet. Turning now to forward guidance, beginning with our Integrated Care segment. Speaker 200:14:19We expect Integrated Care revenue in the 2nd quarter to be between 2% 5% versus the prior year period. As a reminder, in our Q1 call, we called out a delay in launching our B2B consumer engagement efforts due to a technical issue in mapping new client populations, with an expected cumulative negative impact of $20,000,000 for the full year, particularly in the 2nd and third quarters. The impact of this delay, coupled with strong year over year Q1 chronic care results and the seasonal fall off of infectious disease driven visit revenues versus the Q1 is expected to result in a lower year over year second quarter growth rate compared to our Q1 results. For the full year, as previously guided, we expect integrated care revenues to be in the low to mid single digits, reflecting higher revenues in the second half versus the first half of the year, due primarily to the enrollment ramp in chronic care and a growing contribution from the nearly 6,000,000 new integrated care members we have added since the Q2 of last year. From an adjusted EBITDA perspective, we expect a 12% to 14% margin in the 2nd quarter, and we continue to expect 150 to 250 basis points of margin expansion for the full year, reflecting revenue driven operating leverage and the impact of our cost saving initiatives. Speaker 200:15:53As it relates to U. S. Integrated TARE membership, we expect 92,000,000 to 93,000,000 members for the 2nd quarter and 92,000,000 to 94,000,000 members for the full year, an increase from previous guidance after adding 2,000,000 members in the Q1. Turning now to our BetterHelp segment. For the Q2, we expect BetterHelp revenues to be in the range of a negative 8% to negative 4% over the prior year period. Speaker 200:16:24Our Q2 guidance reflects challenging cost per acquisition through early Q1, which caused us to pull back on our advertising dollars in the quarter in keeping with our goal of balancing growth and margin. These factors led to a decline in users in Q1, which is impacting our Q2 revenue growth rate on top of a difficult comparison relative to the Q2 of 2023. However, we are seeing signs of stabilization in our cost per per acquisition in more recent weeks, which gives us increased confidence in the back half of the year for our BetterHelp business, something I will speak to momentarily. For the full year, we continue to expect flat to low single digit revenue growth in BetterHelp. We do expect BetterHelp growth to accelerate in the second half of the year. Speaker 200:17:14I'd like to take a moment to discuss what's giving us increased confidence in the future of our BetterHelp business, which has been challenged in recent quarters. Late last year, we brought in new leadership for BetterHelp, who have helped inject a broader and more global perspective on growth levers for this business. We are seeing improvements in retention and in our international business, which are helping offset some of the impact from higher CPAs in the U. S. By improving our overall yield on advertising spend. Speaker 200:17:49The success we are starting to see with these levers, along with the efforts in select international geographies that we expect to ramp in the second half of the year, give us confidence in our second half BetterHelp outlook. We expect these initiatives to lead to meaningfully higher membership growth and improved customer retention versus the first half. We are excited about the international opportunity, particularly in select English speaking geographies that are relatively underpenetrated compared to the U. S. Market, which will allow us to reallocate some advertising and marketing dollars at a higher marginal return as we continue to build out our infrastructure in those markets. Speaker 200:18:33Given these dynamics throughout the year, we expect that a health revenue growth for the full year to be in the flat to low single digit range as previously guided despite our lower first half growth. I would also note that we have thoroughly pressure tested the assumptions that underpin our better health guidance for the rest of the year. We take several factors into account when developing both the low end and the high end of the range, including recent trends in advertising yields, channel dynamics, consumer sentiment and other macro factors, and we have taken a close look at each one of these. That said, the impact of difficult to predict macro events creates unknowns as it pertains to our yield on advertising in the second half of the year, and we will continue to provide updates on the trends that we are seeing in upcoming earnings calls. From a margin perspective, we expect Better Health adjusted EBITDA margins to be in the 9% to 10% range in the Q2 and continue to expect margins to be flat plus or minus 50 basis points for the full year. Speaker 200:19:39The sequential margin improvements that we expect to see over the course of the year primarily reflect the cumulative effect of new members added over the course of the year, the cadence of advertising spending, including the typical seasonal pullback in the Q4 and innovation driven improvements in our yield on advertising spend. On a consolidated basis, we expect 2nd quarter revenue of $635,000,000 to $660,000,000 and adjusted EBITDA of $70,000,000 to $80,000,000 Our full year guidance remains unchanged with the exception of the increase to our U. S. Integrated care membership that I had mentioned previously. We continue to expect consolidated revenue to be in the range of $2,635,000,000 to $2,735,000,000 for the full year, representing revenue growth of 1% to 5%, along with consolidated adjusted EBITDA of $350,000,000 to $390,000,000 representing growth of 7% to 19% on a year over year basis. Speaker 200:20:50We expect full year free cash flow of $210,000,000 to $240,000,000 driven by both the growth in adjusted EBITDA and an expected decline in capitalized software development costs. We are also maintaining our prior EPS guidance for the full year. Lastly, we are reiterating the 3 year outlook that we provided you on our earnings call in February. In closing, I want to recognize my executive team and our broader leadership team for leaning in during this time of change. I've been incredibly pleased with their continued focus on living our values and delivering for our members and clients this year, especially over the past several weeks. Speaker 200:21:35We've had a solid start to the year and are poised to deliver significant growth in the second half of twenty twenty four. I remain focused on our strategy, our execution and on our people. With that, we will open it up for questions. Operator? Operator00:22:17First question is from the line of Stephanie Davis with Barclays. Your line is now open. Speaker 300:22:23Hey, Mala. Thank you for taking my question and for wearing all of the hats right now. I was hoping you could talk a little bit about some early color on the international strategy and timing for BetterHelp. Can you talk to us about the rollout? How we should be thinking about the cadence of that? Speaker 300:22:43And maybe if you've seen some of that come through already, which is giving you that confidence in that second half growth rate? Speaker 200:22:51Thank you, Stephanie. Yes, I'm wearing many hats. Happy to be here. So in terms of the growth in international, as we had said on our last call, last year international as a percentage of our total BetterHelp business was in the mid teens. It is certainly contributing to the second half ramp of revenue this year. Speaker 200:23:21Remember, this is it's not as if we are going into international de novo. We are already in a few markets. Several of them are English speaking markets such as the U. K, Canada, Australia. And the plan we have is for us to continue penetrating into those markets first. Speaker 200:23:45And that is what is driving our confidence in the second half ramp because we have been in these markets. We know the dynamics of the Better Health business in these markets. Based on our experience, we have knowledge of the economics of being in these markets. Obviously, as we penetrate these markets and invest more in these markets, we hope to continue to see the return on ad spend as well as the revenue growth. So the balance of both top line growth and bottom line growth that I expect to see. Speaker 300:24:30And for like a mini follow-up, is there any way to compare the kind of ROAS you're seeing on those international markets where you're already in them versus what we're Speaker 200:24:40seeing in the U. S? Here's what I would say. I expect better international to grow faster than the U. S. Speaker 200:24:50Certainly, that is something that we saw last year and I do expect that to continue. From a rollout perspective, Stephanie, I would say we are going to start in the second half and rollout as we do our ad spending in these markets as we go through the second half. The one thing I will remind you is Q4 typically in the U. S. Is always the seasonally weakest quarter from an ad spending perspective is the quarter where we will typically pull back our ad spend. Speaker 200:25:26And I would say, that dynamic is in the U. S. We will evaluate and assess how much of that dynamic also plays out in the international markets. Operator00:25:40Thank you for your question. Next question is from the line of Lisa Gill with JPMorgan. Your line is now open. Speaker 400:25:47Hi, Hola. Trying to understand 2 things. 1, clearly understand the change in leadership and what the Board is going through, but just also curious if you're looking at any strategic changes to the business. And once again, under pressure on the Better Health side, I just heard you talk about international. But are there things that the Board is reviewing would be my first question. Speaker 400:26:11And then secondly, just really want to understand the opportunity around that 8% membership growth, which was really strong in the quarter. We didn't see an increase in either revenue or adjusted EBITDA. Is that just timing? Is there an opportunity for cross sell? So just really understanding how that's going to play into the numbers. Speaker 200:26:30Thanks, Lisa. Great questions. So from an overall Board perspective and what might that imply for changes. Obviously, as I said in our prepared remarks, right now, the focus of the leadership team, my focus and I would say the focus of the Board as well is for us to be laser heads down focused on implementing our plans, our investments, our priorities, and frankly, leading our employee base, the 5,000 plus employees we have through this period of transition and change. I would say also that, I'm pleased with the solid start we have to the year. Speaker 200:27:23Hopefully, we have given you enough transparency and color as in our prepared remarks on what is really driving our confidence in our growth both from a top line perspective and our bottom line perspective as we roll through the year. We've kept our overall 2024 guidance as is. From a revenue adjusted EBITDA and a cash flow perspective, We continue to make progress on our cost initiatives that we have talked about in February. So all of those are things that require execution and I would say we are laser focused on that. Beyond that, look, we are always looking at different parts of our business. Speaker 200:28:11We are looking at what top line growth they bring in and what bottom line growth they begin. Certainly, as we said in our prepared remarks, the BetterHelp business has been challenged in recent quarters. And I would say, I am focused on the execution of the various initiatives that we talked about that will give us that second half ramp, whether it be improved retention, whether it be the fact that we are driving growth in international markets. And the growth in the much smaller part of better health, the better sleep part of that business, which is also growing nicely. All of these require execution. Speaker 200:28:53On the integrated care side, I would say, I'm pleased with the strong enrollment that we have started out with. Obviously, you know this, the enrollment ramps through the year, and we are certainly working through that, and that is going to drive our revenue growth and our profit, our margin expansion on the Integrated Care side as we go through the year. So the answer to your question in terms of what we are evaluating and assessing is we are executing. We are focused on driving our plans for this year. And we continue to assess how the various parts of our business are doing and whether they are driving the both the top line and the bottom line we see. Speaker 200:29:43Beyond that, I would say there isn't really more to comment on it at this time. On the second question you had around membership, here's what I would say. We certainly are pleased with the 2,000,000 plus member adds that we had in the quarter. Remember, the benefit we have of the membership adds is always the fact that it is the underpinning of our land and expand strategy. So it gives us fertile ground to continue to penetrate cross sell, up sell once we get these members into our fold. Speaker 200:30:21And as we sell in additional products, we expect to see the revenue accretion from that in the quarters ahead. Operator00:30:34Thank you for your question. Next question is from the line of Jalendra Singh with Truist. Your line is now open. Speaker 500:30:42Thank you and thanks for taking my questions. I wanted to ask about chronic care program enrollment metric. I understand it was up year over year, but it actually declined a little over 3% sequentially. Typically, we see a pickup from Q4 to Q1 due to new contract starts and enrollment increase in the new calendar year. So can you provide some color there, Mala? Speaker 500:31:02And then what are your expectations around that metric as the year progresses? And more broadly, anything you can share how you're focused on improving the positioning of your business in chronic care longer term in market, it seems to be getting very competitive. Speaker 200:31:18Yes. So look, I would say, I expect the enrollment to ramp through the year. That is typically always the case in a traditional year and this year would be no different. Now the one thing I would also say is remember we had talked about the marketing pause in the last earnings call. We had talked about $20,000,000 of revenue impact for this year. Speaker 200:31:46I would expect most of the impact of that marketing pause to be in the 2nd and third quarters. But despite that, I would expect for our chronic care program enrollment to ramp up through the year just like in prior years. Blaise, do you want to handle the Gell Anderson's question on competitive? Speaker 600:32:09Sure. When you look at what our customers and our clients are looking for, We are happy with where we are in the selling season. We're having productive conversations with both new and existing accounts. As Mala mentioned in her earlier remarks, for the quarter, 2 thirds of our existing clients 2 thirds of our growth in bookings came from existing clients and 1 third came from new clients. I want to make sure that we highlight that we're happy with the growth in bookings, not just in our domestic business, but also in our international business. Speaker 600:32:51And what are our clients looking for? Our clients are looking for value. They're looking for a scalable, reputable vendor that they can partner with that has a strong balance sheet that they can continue to partner with to drive value for them and for their consumers. And that hasn't changed, and I think that is feeding into our conversations with respect to our bookings. Speaker 200:33:18And then, Jalendra, just finishing up on your question around the chronic care enrollment. Look, this is a function of the fact that typically when we start off the year, we onboard a number of lives. And we also, at the same time in Q1, is typically the time we would also see enrollees come on and enrollees roll off. And the net impact of that is what you're seeing. I would expect as we ramp up the year, despite the marketing pause, I would expect that to continue to go into the rest of the year. Operator00:33:57Thank you for your question. Next question is from the line of Jessica Tassen with Piper Sandler. Your line is now open. Speaker 700:34:05Hi, Mala. Thank you so much for the question and congrats on the good quarter and guide. I wanted to ask about the 3 year outlook that you all issued on the 4th quarter call and then reiterated today. So the low to mid single digit annual consolidated revenue growth, mid single integrated care, low single BetterHelp. Is that target achievable on an organic basis? Speaker 700:34:26And just maybe from an integrated care perspective, should we think about that growth continuing to be led by chronic care? Does it anticipate any new product launches? Just hoping for color around that 3 year guide. Thank you. Speaker 200:34:40Yes. Thanks, Jess, for the question. Look, when we put that guide outlook out there in February, we had thought about the building blocks to those numbers, that trajectory, both on the Integrated Care side and the Better Health side. So let me sort of comment on it 1 by 1. On the Integrated Care side, I would say, as we had stated previously, think of it as a combination of low single digit growth on the much more well penetrated telehealth side and I would say mid to high single digit growth in chronic care. Speaker 200:35:21So yes, we do expect chronic care momentum to help us achieve the overall mid single digit revenue growth for integrated care. On the BetterHelp side, from a revenue growth perspective, we had said low single digit. Look, here's what I would say on the BetterHelp side. The second half ramp that we have talked about, the initiatives that we have going to help us achieve that second half ramp, again, it's whether it be retention, international, continued momentum on better sleep. These are the inputs into the low single digit revenue growth for BetterHelp. Speaker 200:36:05And I would say, we will continue to execute against it and we will continue to monitor it again assuming that we don't have something very, very unfavorable happen from a cost per acquisition perspective, which will impact our advertising yield. So assuming that we see CPAs in a reasonable range, I would say the building blocks that will help us grow in the second half will continue to be contributors into the low single digit revenue growth for BetterHelp. When it comes to margins, I would say the cost initiative programs that we have that will help us with OpEx leverage Along with the revenue growth that we will see on the top line, particularly on the chronic care side, will certainly be contributors into our margin expansion that we have put out there. So what I would say in summary is we have thought of the building blocks that go into the long term outlook And we will continue to assess how they perform. And as I said, this year and especially in the second half, BetterHelp will give us a lot more information on that. Operator00:37:33Thank you for your question. Next question is from the line of Sean Dodge with RBC. Your line is now open. Speaker 800:37:41Yes, thanks. Good afternoon. Mollie, you mentioned in BetterHelp with the new leadership team having seen some improvement in subscriber retention. Speaker 900:37:51Can you give us Speaker 800:37:51a sense of how long you're retaining BetterHelp users now on average? How much has that changed over the last couple of years? And then how much room and what kind of levers do you have to continue to drive improvements in that? What can you do to lengthen that? Speaker 200:38:08Yes. So we haven't given out KPIs metrics, etcetera, specifically on retention, Sean. So I don't want to go into specific retention metrics. What I will say is the following. We are looking we are seeing improved member retention primarily because of the innovation that we are driving in the platform, in our user experience, frankly, with the help of AI models that are continually improving our matching of consumers with their various needs with providers. Speaker 200:38:54So it's never one thing that is driving this improvement in retention. It is many things that are driving this improvement in retention. And I would say that when I talk about the new leadership at BetterHelp, one of the important things to highlight is, we are looking now at pressing on more than one lever in the BetterHelp business. Business. We are looking to beyond the traditional focus on CAC. Speaker 200:39:31As we've talked about, we're looking at additional geographies. How can we continue to innovate in the user experience? In some instances, and we have talked about this in the past, we are looking at small surgical targeted pricing changes. All of which in my view are things that will improve on our revenue growth And it's the innovation that is helping on our member improve member retention the user retention. Lazer, is there anything you would like to add to that? Speaker 600:40:06Yes. I guess the only thing I would add is historically at BetterHelp, we've been very focused on the innovation on patient acquisition. And what I would tell you is, is we are balancing spending time on increasing the value of that member. And I would say there's not one specific thing other than being very innovative and testing out little things that are driving value so that our return on our Operator00:40:41question. Next question is from the line of Alan Lutz with Bank of America. Your line is now open. Speaker 1000:40:48Good afternoon and thanks for taking the questions. Another one on BetterHelp. Myla, have you considered at all moving from just cash pay to participating in health plan networks as a way to drive growth? Is that something that you've considered? And can you kind of talk about the pros and cons of making a move like that? Speaker 1000:41:06Thanks. Speaker 200:41:12So I would say, look, we assess various initiatives to continually innovate to drive growth both on the top line and the bottom line. At this point in time, with the scale that BetterHelp has over $1,000,000,000 in revenue, it is by far one of the largest DTC players. And look, there are other competitors in the market who have done, tried DTC, moved away to B2B. We have built scale in DTC. And I would say we will continue to focus on DTC. Speaker 200:41:54Having said that, I would also say, we are looking for ways to improve and accelerate our growth in different ways. I don't want to comment much more on specifics at this point. To the extent that there is anything relevant to update, we will absolutely do so. But we are looking at various ways to drive top line to accelerate our top line growth in BetterHelp. Operator00:42:29Thank you for your question. Next question is from the line of Sarah James with Cantor Fitzgerald. Your line is now open. Speaker 1100:42:36Thank you. Mala, I was hoping you could help us a little bit with the pacing of this year. So specifically thinking of the items that you have control over, like some of the savings initiatives to get to that run rate of 43% at the end of the year and then the advertising spend. Can you help us pace through how the savings initiatives are going to play out? And then on the ad spend, is there any pull forward of that into 2Q versus your normal cadence? Speaker 1100:43:10And are you thinking about because of the increased efficiency, just lower overall need for ad spend for the year? Speaker 200:43:19Yes. Thanks, Sarah, for the question. So from a pacing perspective, we would be looking for the cost initiatives. And if you think about what those what are underpinning those cost initiatives, things like offshoring, things like automation, savings from our 3rd party supplier spend, Several of those are initiatives that are evenly paced through the year. Now obviously, if you think about something like offshoring, and as we offshore, you will get the incremental impact, the full impact of the offshoring as we go later into the year. Speaker 200:44:05But I would say to you several of the others like 3rd party supplier spend, etcetera, you will see sort of evenly pace through the year. On your question on ad spend, the way I would think about it is as follows. When we in Q1 and especially early in Q1, we did see pressure on our advertising yield. We did see pressure on our cost per acquisition. And we did pull back on our ad spend as we sort of rolled through Q1. Speaker 200:44:45And I would say as we went later into Q1 and into Q2, we are seeing more stable ad spend yield on our ad spend. When I say stable, it's the CPAs still remain elevated relative to the back half of the similar to the back half of last year. But I would say to you that they are they have stabilized relative to the early part of Q1. Having said that, I am not satisfied with our BetterHelp segment margins in the first half in the first quarter. And so one of the things we are assessing is how do we manage the ad spend in Q2 so that we are getting the balance of top line and bottom line that we are seeking. Speaker 200:45:43And we have said this before, that is something that is very dynamic, right? Because we manage the Better Health business based on ROIs. We want to make sure that the marginal return on every dollar or spend is getting to the efficiencies we speak and sort of we toggle that to get to the balance of top line and bottom line. If I think about the second half, I would say we are looking to pull back in Q4 as we typically do. And we would be looking to spend a little bit more on ad spend relative to the Q2 provided again that we see the we get to the efficiencies we seek. Speaker 200:46:37And then the last point I would make is, remember international typically is slightly more efficient from an ad yield perspective. So as we roll out international in the second half, I would expect to see that spend on international markets being more efficient. Operator00:47:08Thank you for your question. Next question is from the line of Kevin Caliendo with UBS. Your line is now open. Speaker 1200:47:16Thank you, Mala. This is Dylan on for Kevin Caliendo. Earlier this week, one of your competitors announced that they were winding down their telehealth business. Could you maybe speak to whether or not the guidance today contemplates any tailwinds from a competitive perspective? Speaker 200:47:35Please, Herb, would you like to address that? Speaker 600:47:37Sure, Moha. So clearly, there's been some noise in the marketplace, and we're really not going to comment on the specifics, and we would refer you to that partner of ours that made that comment. But what I do want to highlight is we have a very strong relationship, partnership and we value the relationship that we have with UnitedHealthcare and we foresee that strong relationship continuing. Operator00:48:13Thank you for your question. Next question is from the line of George Hill with Deutsche Bank. Speaker 200:48:19Your line is now open. Speaker 900:48:20Yes. Good afternoon, guys, and thanks for taking the question. Well, I do like to kind of come back to Lisa's topic, which is, I guess, can you talk about the degree to which the current management team kind of feels empowered to make change at the company as it either relates to margins or growth strategic direction? And then because I know we're trying to keep people to one question, if I can sneak in the second one. I just if there's any way you can kind of quantify the success you're seeing in BetterHelp and what metrics you guys are looking at internally, I think we'd find that helpful. Speaker 900:48:47Thank you. Speaker 200:48:49Yes. Your question on whether the leadership team is empowered to act, I would say absolutely, unhesitatingly a big yes. As I said in our prepared remarks, we are not waiting. We have a plan to deliver. We have investments to execute. Speaker 200:49:17And that is absolutely our focus. We are also reiterating our longer term outlook. That is certainly going to require us to as a leadership team as we do every single year, look at our strategy, look at various aspects of that strategy and think about how do we want to stack our investments against those, what's working, what's not working. Again, that is part of what we do every single year and we will absolutely continue to drive that. So the answer to your question is, we are I'm empowered to drive this business forward. Speaker 200:50:06And we as a leadership team, as I said in our prepared remarks, are all in. We are leaning in and we are focusing on driving this business forward. In terms of BetterHelp metrics, the things that we typically will look at from an internal operating perspective is we will look at obviously the CAC and where it is. We will look at the ROIs of our ad spend. We will look at retention, churn, the lifetime value of the CAC that we are placing. Speaker 200:50:45And we will also look at the users that we are attracting to the platform. So we also so that is those are things that we look at. And besides that, we look at a number of other things that inform the user experience as well as the provider experience, the provider NPS, the user the NPS, all of which, by the way, continue to remain very strong because of the strong experience that people have on the platform. So those are the typical metrics that we would be looking at. Operator00:51:27Thank you for your question. Next question is from the line of Ryan Daniels with William Blair. Your line is now open. Speaker 1300:51:34Hey, this is Jack Sencht on for Ryan Daniels. Thanks for taking the question. I think in your prepared remarks, you mentioned reallocating some of the dollars in the second half as the international penetration ramps up. So first, did I get that right? And then 2, can you just talk a bit more about where you plan to reallocate these dollars? Speaker 1300:51:48Was it just reallocating dollars to ramp up the international portion? Or is there something else? Just curious if you can dive deeper into this. Thanks. Speaker 200:51:57Yes. So we've been talking over the last two calls about the fact that we do expect international in BetterHelp to ramp. Where we are placing our ad spend dollars internationally in BetterHelp is in the markets that we already have a presence in. Those are largely English speaking markets like UK, Canada, Australia. So these are the markets where we would be putting our ad spend dollars in. Operator00:52:33Thank you for your question. Next question is from the line of Elizabeth Anderson with Evercore. Your line is now open. Speaker 1400:52:41Hi, guys. Thanks so much for the question. Molly, as we think about the longer term growth, I appreciate your commentary, but Speaker 700:52:49with sort of all the Speaker 1400:52:49changes in the international focus, etcetera. How do we think about the component that pricing plays in both the integrated care outlook as well as better health? Thanks. Speaker 200:53:03Yes. Great question, Elizabeth. So I think about the pricing lever we have on both sides in a couple of different ways. First, if you think about our integrated care side and think about chronic care and the momentum that we are seeing in chronic care, we've spoken about this dynamic in the past couple of calls. Firstly, we are seeing nice momentum in chronic care bookings. Speaker 200:53:33And if you think about the momentum you're seeing in chronic care bookings, part of what's driving that is the fact that we are selling more chronic care bundles. And if you think about the pricing that with these bundles, it is accretive from a on a per client basis from a revenue perspective. And that is certainly something that as we increasingly gain traction on our land and expand, the fact that we've added over 2,000,000 members in the Q1, again, that gives us fertile ground for us to cross sell more of our chronic care products into that population. The fact that chronic care at the end of the day is still relatively under penetrated, right? You think of our overall 90 +1000000 base, it is still 16% of our overall chronic care of our overall telehealth base. Speaker 200:54:34And so it's things like that that will allow us to get more revenue accretion and that certainly is something that we are focused on. On the better health side, when I think about pricing, I would say it really is us thinking more broadly about how we can do more of targeted surgical pricing as we think about the different, whether it be better health and better sleep. And when I say targeted and surgical, it could be by geography. It could be in other ways. And by the way, that is something that we are doing constantly continuously, right? Speaker 200:55:25This is a business that is dynamic in multiple ways, including in pricing. Operator00:55:37Thank you for your question. The next question is from the line of Daniel Grossley with Citi. Your line is now open. Speaker 1500:55:44Hi, Molla. Thanks for taking the question. There's noise out in the market questioning the cost and efficacy of some digital diabetes management programs. I know it's still pretty early in the selling season for you guys, but I was curious if that report is having any impact on what you're seeing out there in the market. And maybe if you can comment a little bit on where you're currently seeing the greatest uptake from a new sales perspective in terms of indications, that would be great. Speaker 900:56:14Thank you. Speaker 200:56:16Yes. Thanks, Daniel, for the question. Let me start and then I will turn it over to Liza for more comments. Look, if I think about the momentum that we are seeing in the market, the things that we are seeing traction on is a few. The first is, obviously, I've talked about our land and expand. Speaker 200:56:39The second is, when we talk to our clients about both the breadth of our products and solutions. And second, the fact that we are able to show value and ROI that is certainly resonating in the marketplace. And the last is, as I've said before, the strength of our balance sheet relative to many of the other competitors in our markets. And the strength of the balance sheet certainly is compelling if you think about our ability to bring innovation into our products into all our products including chronic care. So those are broadly the trends that we are seeing in the market as we sell. Speaker 200:57:28Let me turn it over to Leyser to address your question. Speaker 600:57:32Yes. So with respect to that specific study, I would say we haven't seen any impact from that study on our business. What I would tell you is just some caveats to keep in mind. The first is that report was a review of limited selected secondary research and the party did not conduct any original testing or any primary analysis of patient data. And I just want to highlight that based on our studies and those of third parties, we believe that our chronic care programs provide a clear ROI for our customers. Speaker 600:58:13Our programs have demonstrated meaningful reductions in A1c over a sustained period of time, but it's more than just A1cs. We also have shown improvements in blood pressure and in weight and the whole concept of value is one that we are having good conversations with our clients about. Our members in our diabetes programs also demonstrate a higher adherence to their diabetes related drugs. And so it's really important that you understand what's based in the research, what's included. But what I would tell you is we aren't seeing an impact, but we are having good conversations with our clients related to the ROI and the value of our products. Speaker 200:59:01Yes. And just to wrap up on that, Daniel, what I would say is, look, we are we continue to see strength and momentum in chronic care. I would say as I think about our guidance this year, Integrated Care is off to a solid start. I expect Integrated Care both from a revenue growth perspective as well as a margin expansion perspective as indicated in our guidance to continue its momentum. I would say certainly if you think about the Better Health business, we have had a couple of challenging quarters and we have the set of drivers that are driving the back half of the year ramp. Speaker 200:59:46So I would say certainly on the integrated care side, we are continuing to drive get traction, especially on our chronic care book. Operator01:00:01Thank you for your question. There are no additional questions waiting at this time. That will conclude the conference call. Thank you for your participation. You may now disconnect your lines.Read morePowered by Conference Call Audio Live Call not available Earnings Conference CallTeladoc Health Q1 202400:00 / 00:00Speed:1x1.25x1.5x2x Earnings DocumentsSlide DeckPress Release(8-K)Quarterly report(10-Q) Teladoc Health Earnings HeadlinesCantor Fitzgerald Predicts Lower Earnings for Teladoc HealthMay 6 at 2:27 AM | americanbankingnews.comLeerink Partnrs Lowers Earnings Estimates for Teladoc HealthMay 5 at 1:27 AM | americanbankingnews.comBuffett’s favorite chart just hit 209% – here’s what that means for goldA Historic Gold Announcement Is About to Rock Wall Street For months, sharp-eyed analysts have watched the quiet buildup behind the scenes. Now, in just days, the floodgates are set to open. The greatest investor of all time is about to validate what Garrett Goggin has been saying for months: Gold is entering a once-in-a-generation mania. Front-running Buffett has never been more urgent — and four tiny miners could be your ticket to 100X gains.May 7, 2025 | Golden Portfolio (Ad)Teladoc Health (NYSE:TDOC) Price Target Lowered to $8.00 at Stifel NicolausMay 4 at 4:28 AM | americanbankingnews.comTeladoc Health (NYSE:TDOC) Price Target Cut to $12.00 by Analysts at Canaccord Genuity GroupMay 4 at 3:45 AM | americanbankingnews.comThe Goldman Sachs Group Cuts Teladoc Health (NYSE:TDOC) Price Target to $10.00May 4 at 3:01 AM | americanbankingnews.comSee More Teladoc Health Headlines Get Earnings Announcements in your inboxWant to stay updated on the latest earnings announcements and upcoming reports for companies like Teladoc Health? Sign up for Earnings360's daily newsletter to receive timely earnings updates on Teladoc Health and other key companies, straight to your email. Email Address About Teladoc HealthTeladoc Health (NYSE:TDOC) provides virtual healthcare services worldwide. The company operates through Teladoc Health Integrated Care and BetterHelp segments. The Integrated Care segment offers virtual medical services, including general medical, expert medical, specialty medical, chronic condition management, and mental health, as well as enabling technologies and enterprise telehealth solutions for hospitals and health systems. The BetterHelp segment operates a mental health platform that provides online counseling and therapy services through website, mobile applications, phones, and text-based interactions by its licensed clinicians. The company offers its products and services under the Teladoc, Livongo, and BetterHelp brands. It serves employers, health plans, hospitals and health systems, and insurance and financial services companies, as well as individual members. The company was formerly known as Teladoc, Inc. and changed its name to Teladoc Health, Inc. in August 2018. Teladoc Health, Inc. was incorporated in 2002 and is headquartered in Purchase, New York.View Teladoc Health ProfileRead more More Earnings Resources from MarketBeat Earnings Tools Today's Earnings Tomorrow's Earnings Next Week's Earnings Upcoming Earnings Calls Earnings Newsletter Earnings Call Transcripts Earnings Beats & Misses Corporate Guidance Earnings Screener Earnings By Country U.S. Earnings Reports Canadian Earnings Reports U.K. Earnings Reports Latest Articles Palantir Stock Drops Despite Stellar Earnings: What's Next?Is Eli Lilly a Buy After Weak Earnings and CVS-Novo Partnership?Is Reddit Stock a Buy, Sell, or Hold After Earnings Release?Warning or Opportunity After Super Micro Computer's EarningsAmazon Earnings: 2 Reasons to Love It, 1 Reason to Be CautiousRocket Lab Braces for Q1 Earnings Amid Soaring ExpectationsMeta Takes A Bow With Q1 Earnings - Watch For Tariff Impact in Q2 Upcoming Earnings Monster Beverage (5/8/2025)Coinbase Global (5/8/2025)Brookfield (5/8/2025)Anheuser-Busch InBev SA/NV (5/8/2025)ConocoPhillips (5/8/2025)Shopify (5/8/2025)Cheniere Energy (5/8/2025)McKesson (5/8/2025)Enbridge (5/9/2025)Petróleo Brasileiro S.A. - Petrobras (5/12/2025) Get 30 Days of MarketBeat All Access for Free Sign up for MarketBeat All Access to gain access to MarketBeat's full suite of research tools. 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There are 16 speakers on the call. Operator00:00:00Good afternoon. Thank you for attending the Teladoc Health Q1 2024 Earnings Call. My name is Matt, and I'll be your moderator for today's call. All lines will be muted during the presentation portion of the call for an opportunity for questions and answers at the end. I would now like to pass the conference over to our host, Adam Vander Voort, Chief Legal Officer, Teladoc. Operator00:00:21Adam, please go ahead. Speaker 100:00:23Thank you, and good afternoon. Today, after the market close, we issued a press release announcing our Q1 20 24 financial results. This press release and the accompanying slide presentation are available in the Investor Relations section of the teladochealth.com website. On this call to discuss the results are Malamurthy, our acting Chief Executive Officer and Chief Financial Officer and Lasser Kornvasser, our President of Enterprise Growth and Global Markets. During this call, we will also discuss our outlook and our prepared remarks will be followed by a question and answer session. Speaker 100:01:08Please note that we will be discussing certain non GAAP financial measures that we believe are important in evaluating Teladoc Health's performance. Details on the relationship between these non GAAP measures to the most comparable GAAP measures and reconciliations thereof can be found in the press release that is posted on our website. Also, please note that certain statements made during this call will be forward looking statements as defined by the Private Securities Litigation Reform Act of 1995. Such forward looking statements are subject to risks, uncertainties and other factors that could cause the actual results for Teladoc Health to differ materially from those expressed or implied on this call. For additional information, please refer to our cautionary statement in our press release and our filings with the SEC, all of which are available on our website. Speaker 100:02:03I would now like to turn the call over to Mala. Speaker 200:02:07Thank you, Adam, and thanks, everyone, for joining us today. Before we begin, I'd like to take a moment to reflect on the recent leadership changes at Teladoc Health. First off, on behalf of Teladoc's more than 5,000 employees, Board of Directors and executive leadership team, I would like to extend our deepest gratitude to Jason Gorevic for his accomplishments over the past 15 years. Jason leaves a tremendous legacy, having firmly established Teladoc as the industry leader in whole person virtual care. As we mentioned in our February earnings call, Teladoc is in a time of transition. Speaker 200:02:54And as part of this evolution, the Board of Directors decided that it was time to look for a new leader for our company, someone to help us write the next chapter in our growth story. The Board's search for a successor is well underway and our permanent CEO is expected to be named later this year. The Board has appointed me to serve as CEO while they conduct the search, and I'm honored to play this role for a company whose work I believe in so deeply. In the meantime, however, we are wasting no time in identifying and seizing opportunities to leverage our significant assets and capabilities. As an organization, our focus is on accelerating growth on both the top and bottom line over the medium and longer term. Speaker 200:03:50And my focus as acting CEO is to ensure that our strategy continues to be supported by the appropriate level of investment, that our leadership team is executing on our priorities and that we are accelerating the pace of change and innovation across our business. With that, turning now to a review of our Q1 performance. I'm pleased to report a solid start to the year across the business, exceeding our financial and operating guidance for both consolidated revenue and adjusted EBITDA in the Q1. Our team remains laser focused on our key initiatives, which include: building upon our market leadership position, driving increased product penetration through our large installed base of over 90,000,000 virtual care members and accelerating our bottom line performance. This focus is evident in our Q1 results. Speaker 200:04:56In the Integrated Care segment, we are pleased to see continued strong interest in our Whole Person Care suite of products. 1st quarter integrated care revenue grew 7.8 percent year over year to $377,000,000 benefiting from high single digit growth in our chronic care book of business as well as strong visit revenues driven by increased infectious disease activity as well as an 8% increase in membership year over year. Chronic care enrollment remained strong, up 9% year over year in the Q1. BetterHelp revenue of $269,000,000 declined 3.7% versus a difficult comparison in the Q1 of last year. BetterHelp also generated modestly lower revenue on a sequential basis, driven in part by a decline in paying users following our typical pullback in ad spend in the Q4, which is the most expensive time of the year in our marketing channels. Speaker 200:06:07Additionally, as expected, the lower returns on our social media advertising spend we experienced in the second half of twenty twenty three persisted in the Q1 and are impacting our year over year growth rates in the first half of this year. We are making progress to improve our yield on advertising spend, which contemplates not only cost per acquisition, but also retention and other factors as well. I will speak to our efforts to reinvigorate growth in our BetterHelp business later in the call. We continue to make progress on our bottom line performance with 1st quarter consolidated adjusted EBITDA margin of 9.8%, improving 140 basis points year over year and adjusted EBITDA of $63,000,000 growing nearly 20% year over year. We are executing against our cost saving and productivity initiatives, and we remain on track to deliver $43,000,000 in cost savings on a GAAP basis for our business in 2024 and a total of $85,000,000 in 2025. Speaker 200:07:19The breadth of our product portfolio continues to drive productive conversations with both prospective and existing clients. 2 thirds of our bookings in the quarter came from cross selling into our existing book of business, with the remaining third coming from new clients, reflecting a continuation of our cross selling momentum over the past several quarters, along with an acceleration in bookings from new business. Both existing and prospective clients are demonstrating increased interest in our ChronicCare Plus bundle solution and we remain optimistic about our ability to drive increased product penetration through our installed base of nearly 92,000,000 members over the next several years. In Q1, we saw another example of our land and expand strategy playing out as we added our diabetes program into a large health benefits provider, a client who had previously only purchased our telehealth solutions. We are also seeing growing interest in our weight management solution from employers who are grappling with rising costs for GLP-1s and employee demand for these products. Speaker 200:08:36The addition of approximately 2,200,000 members on a sequential basis since Q4 represents additional greenfield opportunity for future cross sell and product penetration. And with more than $1,000,000,000 in cash and cash equivalents on our balance sheet, our financial strength continues to be another differentiator for our company and provides us with significant capacity and flexibility to invest and innovate in our business. We also continue to see growing benefits from our early and ongoing commitment to data and artificial intelligence, with AI models now integrated across nearly all aspects of our business. From provider matching to enrollment optimization to member engagement, this automation is helping us not only reach our revenue and profitability goals, but also achieve our mission of improving health by reaching more consumers. One exciting example is our use of generative AI in member engagement to create hyper personalized content for individuals to get them signed up for Teladoc services they need and then keep them on track. Speaker 200:09:51Our pilots with this AI use case, while still being carefully studied, are already delivering significant improvement in member engagement over prior approaches. I would now like to spend a few minutes reviewing our Q1 financial results in detail. 1st quarter consolidated revenue increased 3% year over year to $646,000,000 while first quarter adjusted EBITDA was $63,000,000 representing a margin of 9.8%. 1st quarter financial performance benefited from higher revenues in our Integrated Care segment and improved expense control. Turning to segment results. Speaker 200:10:34Integrated Care revenue increased 8% year over year to $377,000,000 in the quarter, with growth relatively balanced across the portfolio. 1st quarter Integrated Care adjusted EBITDA was $47,700,000 representing a 260 basis point expansion in margins to 12.6%. The margin outperformance relative to guidance was largely driven by strong chronic care program enrollment during the Q1, which combined with better expense control helped deliver improved gross margin and bottom line performance. Total chronic care program enrollment was $1,120,000 at the end of the first quarter, representing growth of 9% year over year. Total U. Speaker 200:11:29S. Integrated care members grew 6 $900,000 over the prior year, representing 8% growth and grew by $2,200,000 sequentially to $91,800,000 Average integrated care revenue per U. S. Member of $1.38 was down $0.01 over the prior year's Q1, reflecting the timing of new client onboarding and enrollment ramp. The onboarding of large populations and our expanding membership base represent a long runway for continued cross selling of our chronic hair and other B2B products as we execute against our land and expand strategy. Speaker 200:12:161st quarter BetterHelp segment revenue decreased 4% year over year to $269,000,000 driven by an 11% decrease in paying users. 1st quarter better health adjusted EBITDA was $15,500,000 representing a margin of 5.7%. As we have discussed previously, the Q1 is typically the seasonally weakest quarter from a margin perspective for our BetterHelp business as marketing expense ramps up following the Q4 holiday season. As such, we continue to expect the Q1 to be the low point of the year for Better Health segment margins, and we expect consistent quarter over quarter margin improvement through the course of 2024. Consolidated net loss per share in the Q1 was $0.49 compared to a net loss per share of $0.42 in the Q1 of 2023. Speaker 200:13:19Net loss per share in the Q1 includes stock based compensation of $42,300,000 or $0.25 per share restructuring charges, primarily related to severance of $9,700,000 or $0.06 per share and amortization of acquired intangibles of $64,200,000 or $0.38 per share. During the Q1, free cash flow was a net outflow of $27,000,000 compared to a net outflow of $32,000,000 in the first quarter of 2023. As a reminder, the Q1 is our seasonally lowest cash flow quarter given the payment of annual incentive compensation. We ended the quarter with $1,100,000,000 in cash and cash equivalents on the balance sheet. Turning now to forward guidance, beginning with our Integrated Care segment. Speaker 200:14:19We expect Integrated Care revenue in the 2nd quarter to be between 2% 5% versus the prior year period. As a reminder, in our Q1 call, we called out a delay in launching our B2B consumer engagement efforts due to a technical issue in mapping new client populations, with an expected cumulative negative impact of $20,000,000 for the full year, particularly in the 2nd and third quarters. The impact of this delay, coupled with strong year over year Q1 chronic care results and the seasonal fall off of infectious disease driven visit revenues versus the Q1 is expected to result in a lower year over year second quarter growth rate compared to our Q1 results. For the full year, as previously guided, we expect integrated care revenues to be in the low to mid single digits, reflecting higher revenues in the second half versus the first half of the year, due primarily to the enrollment ramp in chronic care and a growing contribution from the nearly 6,000,000 new integrated care members we have added since the Q2 of last year. From an adjusted EBITDA perspective, we expect a 12% to 14% margin in the 2nd quarter, and we continue to expect 150 to 250 basis points of margin expansion for the full year, reflecting revenue driven operating leverage and the impact of our cost saving initiatives. Speaker 200:15:53As it relates to U. S. Integrated TARE membership, we expect 92,000,000 to 93,000,000 members for the 2nd quarter and 92,000,000 to 94,000,000 members for the full year, an increase from previous guidance after adding 2,000,000 members in the Q1. Turning now to our BetterHelp segment. For the Q2, we expect BetterHelp revenues to be in the range of a negative 8% to negative 4% over the prior year period. Speaker 200:16:24Our Q2 guidance reflects challenging cost per acquisition through early Q1, which caused us to pull back on our advertising dollars in the quarter in keeping with our goal of balancing growth and margin. These factors led to a decline in users in Q1, which is impacting our Q2 revenue growth rate on top of a difficult comparison relative to the Q2 of 2023. However, we are seeing signs of stabilization in our cost per per acquisition in more recent weeks, which gives us increased confidence in the back half of the year for our BetterHelp business, something I will speak to momentarily. For the full year, we continue to expect flat to low single digit revenue growth in BetterHelp. We do expect BetterHelp growth to accelerate in the second half of the year. Speaker 200:17:14I'd like to take a moment to discuss what's giving us increased confidence in the future of our BetterHelp business, which has been challenged in recent quarters. Late last year, we brought in new leadership for BetterHelp, who have helped inject a broader and more global perspective on growth levers for this business. We are seeing improvements in retention and in our international business, which are helping offset some of the impact from higher CPAs in the U. S. By improving our overall yield on advertising spend. Speaker 200:17:49The success we are starting to see with these levers, along with the efforts in select international geographies that we expect to ramp in the second half of the year, give us confidence in our second half BetterHelp outlook. We expect these initiatives to lead to meaningfully higher membership growth and improved customer retention versus the first half. We are excited about the international opportunity, particularly in select English speaking geographies that are relatively underpenetrated compared to the U. S. Market, which will allow us to reallocate some advertising and marketing dollars at a higher marginal return as we continue to build out our infrastructure in those markets. Speaker 200:18:33Given these dynamics throughout the year, we expect that a health revenue growth for the full year to be in the flat to low single digit range as previously guided despite our lower first half growth. I would also note that we have thoroughly pressure tested the assumptions that underpin our better health guidance for the rest of the year. We take several factors into account when developing both the low end and the high end of the range, including recent trends in advertising yields, channel dynamics, consumer sentiment and other macro factors, and we have taken a close look at each one of these. That said, the impact of difficult to predict macro events creates unknowns as it pertains to our yield on advertising in the second half of the year, and we will continue to provide updates on the trends that we are seeing in upcoming earnings calls. From a margin perspective, we expect Better Health adjusted EBITDA margins to be in the 9% to 10% range in the Q2 and continue to expect margins to be flat plus or minus 50 basis points for the full year. Speaker 200:19:39The sequential margin improvements that we expect to see over the course of the year primarily reflect the cumulative effect of new members added over the course of the year, the cadence of advertising spending, including the typical seasonal pullback in the Q4 and innovation driven improvements in our yield on advertising spend. On a consolidated basis, we expect 2nd quarter revenue of $635,000,000 to $660,000,000 and adjusted EBITDA of $70,000,000 to $80,000,000 Our full year guidance remains unchanged with the exception of the increase to our U. S. Integrated care membership that I had mentioned previously. We continue to expect consolidated revenue to be in the range of $2,635,000,000 to $2,735,000,000 for the full year, representing revenue growth of 1% to 5%, along with consolidated adjusted EBITDA of $350,000,000 to $390,000,000 representing growth of 7% to 19% on a year over year basis. Speaker 200:20:50We expect full year free cash flow of $210,000,000 to $240,000,000 driven by both the growth in adjusted EBITDA and an expected decline in capitalized software development costs. We are also maintaining our prior EPS guidance for the full year. Lastly, we are reiterating the 3 year outlook that we provided you on our earnings call in February. In closing, I want to recognize my executive team and our broader leadership team for leaning in during this time of change. I've been incredibly pleased with their continued focus on living our values and delivering for our members and clients this year, especially over the past several weeks. Speaker 200:21:35We've had a solid start to the year and are poised to deliver significant growth in the second half of twenty twenty four. I remain focused on our strategy, our execution and on our people. With that, we will open it up for questions. Operator? Operator00:22:17First question is from the line of Stephanie Davis with Barclays. Your line is now open. Speaker 300:22:23Hey, Mala. Thank you for taking my question and for wearing all of the hats right now. I was hoping you could talk a little bit about some early color on the international strategy and timing for BetterHelp. Can you talk to us about the rollout? How we should be thinking about the cadence of that? Speaker 300:22:43And maybe if you've seen some of that come through already, which is giving you that confidence in that second half growth rate? Speaker 200:22:51Thank you, Stephanie. Yes, I'm wearing many hats. Happy to be here. So in terms of the growth in international, as we had said on our last call, last year international as a percentage of our total BetterHelp business was in the mid teens. It is certainly contributing to the second half ramp of revenue this year. Speaker 200:23:21Remember, this is it's not as if we are going into international de novo. We are already in a few markets. Several of them are English speaking markets such as the U. K, Canada, Australia. And the plan we have is for us to continue penetrating into those markets first. Speaker 200:23:45And that is what is driving our confidence in the second half ramp because we have been in these markets. We know the dynamics of the Better Health business in these markets. Based on our experience, we have knowledge of the economics of being in these markets. Obviously, as we penetrate these markets and invest more in these markets, we hope to continue to see the return on ad spend as well as the revenue growth. So the balance of both top line growth and bottom line growth that I expect to see. Speaker 300:24:30And for like a mini follow-up, is there any way to compare the kind of ROAS you're seeing on those international markets where you're already in them versus what we're Speaker 200:24:40seeing in the U. S? Here's what I would say. I expect better international to grow faster than the U. S. Speaker 200:24:50Certainly, that is something that we saw last year and I do expect that to continue. From a rollout perspective, Stephanie, I would say we are going to start in the second half and rollout as we do our ad spending in these markets as we go through the second half. The one thing I will remind you is Q4 typically in the U. S. Is always the seasonally weakest quarter from an ad spending perspective is the quarter where we will typically pull back our ad spend. Speaker 200:25:26And I would say, that dynamic is in the U. S. We will evaluate and assess how much of that dynamic also plays out in the international markets. Operator00:25:40Thank you for your question. Next question is from the line of Lisa Gill with JPMorgan. Your line is now open. Speaker 400:25:47Hi, Hola. Trying to understand 2 things. 1, clearly understand the change in leadership and what the Board is going through, but just also curious if you're looking at any strategic changes to the business. And once again, under pressure on the Better Health side, I just heard you talk about international. But are there things that the Board is reviewing would be my first question. Speaker 400:26:11And then secondly, just really want to understand the opportunity around that 8% membership growth, which was really strong in the quarter. We didn't see an increase in either revenue or adjusted EBITDA. Is that just timing? Is there an opportunity for cross sell? So just really understanding how that's going to play into the numbers. Speaker 200:26:30Thanks, Lisa. Great questions. So from an overall Board perspective and what might that imply for changes. Obviously, as I said in our prepared remarks, right now, the focus of the leadership team, my focus and I would say the focus of the Board as well is for us to be laser heads down focused on implementing our plans, our investments, our priorities, and frankly, leading our employee base, the 5,000 plus employees we have through this period of transition and change. I would say also that, I'm pleased with the solid start we have to the year. Speaker 200:27:23Hopefully, we have given you enough transparency and color as in our prepared remarks on what is really driving our confidence in our growth both from a top line perspective and our bottom line perspective as we roll through the year. We've kept our overall 2024 guidance as is. From a revenue adjusted EBITDA and a cash flow perspective, We continue to make progress on our cost initiatives that we have talked about in February. So all of those are things that require execution and I would say we are laser focused on that. Beyond that, look, we are always looking at different parts of our business. Speaker 200:28:11We are looking at what top line growth they bring in and what bottom line growth they begin. Certainly, as we said in our prepared remarks, the BetterHelp business has been challenged in recent quarters. And I would say, I am focused on the execution of the various initiatives that we talked about that will give us that second half ramp, whether it be improved retention, whether it be the fact that we are driving growth in international markets. And the growth in the much smaller part of better health, the better sleep part of that business, which is also growing nicely. All of these require execution. Speaker 200:28:53On the integrated care side, I would say, I'm pleased with the strong enrollment that we have started out with. Obviously, you know this, the enrollment ramps through the year, and we are certainly working through that, and that is going to drive our revenue growth and our profit, our margin expansion on the Integrated Care side as we go through the year. So the answer to your question in terms of what we are evaluating and assessing is we are executing. We are focused on driving our plans for this year. And we continue to assess how the various parts of our business are doing and whether they are driving the both the top line and the bottom line we see. Speaker 200:29:43Beyond that, I would say there isn't really more to comment on it at this time. On the second question you had around membership, here's what I would say. We certainly are pleased with the 2,000,000 plus member adds that we had in the quarter. Remember, the benefit we have of the membership adds is always the fact that it is the underpinning of our land and expand strategy. So it gives us fertile ground to continue to penetrate cross sell, up sell once we get these members into our fold. Speaker 200:30:21And as we sell in additional products, we expect to see the revenue accretion from that in the quarters ahead. Operator00:30:34Thank you for your question. Next question is from the line of Jalendra Singh with Truist. Your line is now open. Speaker 500:30:42Thank you and thanks for taking my questions. I wanted to ask about chronic care program enrollment metric. I understand it was up year over year, but it actually declined a little over 3% sequentially. Typically, we see a pickup from Q4 to Q1 due to new contract starts and enrollment increase in the new calendar year. So can you provide some color there, Mala? Speaker 500:31:02And then what are your expectations around that metric as the year progresses? And more broadly, anything you can share how you're focused on improving the positioning of your business in chronic care longer term in market, it seems to be getting very competitive. Speaker 200:31:18Yes. So look, I would say, I expect the enrollment to ramp through the year. That is typically always the case in a traditional year and this year would be no different. Now the one thing I would also say is remember we had talked about the marketing pause in the last earnings call. We had talked about $20,000,000 of revenue impact for this year. Speaker 200:31:46I would expect most of the impact of that marketing pause to be in the 2nd and third quarters. But despite that, I would expect for our chronic care program enrollment to ramp up through the year just like in prior years. Blaise, do you want to handle the Gell Anderson's question on competitive? Speaker 600:32:09Sure. When you look at what our customers and our clients are looking for, We are happy with where we are in the selling season. We're having productive conversations with both new and existing accounts. As Mala mentioned in her earlier remarks, for the quarter, 2 thirds of our existing clients 2 thirds of our growth in bookings came from existing clients and 1 third came from new clients. I want to make sure that we highlight that we're happy with the growth in bookings, not just in our domestic business, but also in our international business. Speaker 600:32:51And what are our clients looking for? Our clients are looking for value. They're looking for a scalable, reputable vendor that they can partner with that has a strong balance sheet that they can continue to partner with to drive value for them and for their consumers. And that hasn't changed, and I think that is feeding into our conversations with respect to our bookings. Speaker 200:33:18And then, Jalendra, just finishing up on your question around the chronic care enrollment. Look, this is a function of the fact that typically when we start off the year, we onboard a number of lives. And we also, at the same time in Q1, is typically the time we would also see enrollees come on and enrollees roll off. And the net impact of that is what you're seeing. I would expect as we ramp up the year, despite the marketing pause, I would expect that to continue to go into the rest of the year. Operator00:33:57Thank you for your question. Next question is from the line of Jessica Tassen with Piper Sandler. Your line is now open. Speaker 700:34:05Hi, Mala. Thank you so much for the question and congrats on the good quarter and guide. I wanted to ask about the 3 year outlook that you all issued on the 4th quarter call and then reiterated today. So the low to mid single digit annual consolidated revenue growth, mid single integrated care, low single BetterHelp. Is that target achievable on an organic basis? Speaker 700:34:26And just maybe from an integrated care perspective, should we think about that growth continuing to be led by chronic care? Does it anticipate any new product launches? Just hoping for color around that 3 year guide. Thank you. Speaker 200:34:40Yes. Thanks, Jess, for the question. Look, when we put that guide outlook out there in February, we had thought about the building blocks to those numbers, that trajectory, both on the Integrated Care side and the Better Health side. So let me sort of comment on it 1 by 1. On the Integrated Care side, I would say, as we had stated previously, think of it as a combination of low single digit growth on the much more well penetrated telehealth side and I would say mid to high single digit growth in chronic care. Speaker 200:35:21So yes, we do expect chronic care momentum to help us achieve the overall mid single digit revenue growth for integrated care. On the BetterHelp side, from a revenue growth perspective, we had said low single digit. Look, here's what I would say on the BetterHelp side. The second half ramp that we have talked about, the initiatives that we have going to help us achieve that second half ramp, again, it's whether it be retention, international, continued momentum on better sleep. These are the inputs into the low single digit revenue growth for BetterHelp. Speaker 200:36:05And I would say, we will continue to execute against it and we will continue to monitor it again assuming that we don't have something very, very unfavorable happen from a cost per acquisition perspective, which will impact our advertising yield. So assuming that we see CPAs in a reasonable range, I would say the building blocks that will help us grow in the second half will continue to be contributors into the low single digit revenue growth for BetterHelp. When it comes to margins, I would say the cost initiative programs that we have that will help us with OpEx leverage Along with the revenue growth that we will see on the top line, particularly on the chronic care side, will certainly be contributors into our margin expansion that we have put out there. So what I would say in summary is we have thought of the building blocks that go into the long term outlook And we will continue to assess how they perform. And as I said, this year and especially in the second half, BetterHelp will give us a lot more information on that. Operator00:37:33Thank you for your question. Next question is from the line of Sean Dodge with RBC. Your line is now open. Speaker 800:37:41Yes, thanks. Good afternoon. Mollie, you mentioned in BetterHelp with the new leadership team having seen some improvement in subscriber retention. Speaker 900:37:51Can you give us Speaker 800:37:51a sense of how long you're retaining BetterHelp users now on average? How much has that changed over the last couple of years? And then how much room and what kind of levers do you have to continue to drive improvements in that? What can you do to lengthen that? Speaker 200:38:08Yes. So we haven't given out KPIs metrics, etcetera, specifically on retention, Sean. So I don't want to go into specific retention metrics. What I will say is the following. We are looking we are seeing improved member retention primarily because of the innovation that we are driving in the platform, in our user experience, frankly, with the help of AI models that are continually improving our matching of consumers with their various needs with providers. Speaker 200:38:54So it's never one thing that is driving this improvement in retention. It is many things that are driving this improvement in retention. And I would say that when I talk about the new leadership at BetterHelp, one of the important things to highlight is, we are looking now at pressing on more than one lever in the BetterHelp business. Business. We are looking to beyond the traditional focus on CAC. Speaker 200:39:31As we've talked about, we're looking at additional geographies. How can we continue to innovate in the user experience? In some instances, and we have talked about this in the past, we are looking at small surgical targeted pricing changes. All of which in my view are things that will improve on our revenue growth And it's the innovation that is helping on our member improve member retention the user retention. Lazer, is there anything you would like to add to that? Speaker 600:40:06Yes. I guess the only thing I would add is historically at BetterHelp, we've been very focused on the innovation on patient acquisition. And what I would tell you is, is we are balancing spending time on increasing the value of that member. And I would say there's not one specific thing other than being very innovative and testing out little things that are driving value so that our return on our Operator00:40:41question. Next question is from the line of Alan Lutz with Bank of America. Your line is now open. Speaker 1000:40:48Good afternoon and thanks for taking the questions. Another one on BetterHelp. Myla, have you considered at all moving from just cash pay to participating in health plan networks as a way to drive growth? Is that something that you've considered? And can you kind of talk about the pros and cons of making a move like that? Speaker 1000:41:06Thanks. Speaker 200:41:12So I would say, look, we assess various initiatives to continually innovate to drive growth both on the top line and the bottom line. At this point in time, with the scale that BetterHelp has over $1,000,000,000 in revenue, it is by far one of the largest DTC players. And look, there are other competitors in the market who have done, tried DTC, moved away to B2B. We have built scale in DTC. And I would say we will continue to focus on DTC. Speaker 200:41:54Having said that, I would also say, we are looking for ways to improve and accelerate our growth in different ways. I don't want to comment much more on specifics at this point. To the extent that there is anything relevant to update, we will absolutely do so. But we are looking at various ways to drive top line to accelerate our top line growth in BetterHelp. Operator00:42:29Thank you for your question. Next question is from the line of Sarah James with Cantor Fitzgerald. Your line is now open. Speaker 1100:42:36Thank you. Mala, I was hoping you could help us a little bit with the pacing of this year. So specifically thinking of the items that you have control over, like some of the savings initiatives to get to that run rate of 43% at the end of the year and then the advertising spend. Can you help us pace through how the savings initiatives are going to play out? And then on the ad spend, is there any pull forward of that into 2Q versus your normal cadence? Speaker 1100:43:10And are you thinking about because of the increased efficiency, just lower overall need for ad spend for the year? Speaker 200:43:19Yes. Thanks, Sarah, for the question. So from a pacing perspective, we would be looking for the cost initiatives. And if you think about what those what are underpinning those cost initiatives, things like offshoring, things like automation, savings from our 3rd party supplier spend, Several of those are initiatives that are evenly paced through the year. Now obviously, if you think about something like offshoring, and as we offshore, you will get the incremental impact, the full impact of the offshoring as we go later into the year. Speaker 200:44:05But I would say to you several of the others like 3rd party supplier spend, etcetera, you will see sort of evenly pace through the year. On your question on ad spend, the way I would think about it is as follows. When we in Q1 and especially early in Q1, we did see pressure on our advertising yield. We did see pressure on our cost per acquisition. And we did pull back on our ad spend as we sort of rolled through Q1. Speaker 200:44:45And I would say as we went later into Q1 and into Q2, we are seeing more stable ad spend yield on our ad spend. When I say stable, it's the CPAs still remain elevated relative to the back half of the similar to the back half of last year. But I would say to you that they are they have stabilized relative to the early part of Q1. Having said that, I am not satisfied with our BetterHelp segment margins in the first half in the first quarter. And so one of the things we are assessing is how do we manage the ad spend in Q2 so that we are getting the balance of top line and bottom line that we are seeking. Speaker 200:45:43And we have said this before, that is something that is very dynamic, right? Because we manage the Better Health business based on ROIs. We want to make sure that the marginal return on every dollar or spend is getting to the efficiencies we speak and sort of we toggle that to get to the balance of top line and bottom line. If I think about the second half, I would say we are looking to pull back in Q4 as we typically do. And we would be looking to spend a little bit more on ad spend relative to the Q2 provided again that we see the we get to the efficiencies we seek. Speaker 200:46:37And then the last point I would make is, remember international typically is slightly more efficient from an ad yield perspective. So as we roll out international in the second half, I would expect to see that spend on international markets being more efficient. Operator00:47:08Thank you for your question. Next question is from the line of Kevin Caliendo with UBS. Your line is now open. Speaker 1200:47:16Thank you, Mala. This is Dylan on for Kevin Caliendo. Earlier this week, one of your competitors announced that they were winding down their telehealth business. Could you maybe speak to whether or not the guidance today contemplates any tailwinds from a competitive perspective? Speaker 200:47:35Please, Herb, would you like to address that? Speaker 600:47:37Sure, Moha. So clearly, there's been some noise in the marketplace, and we're really not going to comment on the specifics, and we would refer you to that partner of ours that made that comment. But what I do want to highlight is we have a very strong relationship, partnership and we value the relationship that we have with UnitedHealthcare and we foresee that strong relationship continuing. Operator00:48:13Thank you for your question. Next question is from the line of George Hill with Deutsche Bank. Speaker 200:48:19Your line is now open. Speaker 900:48:20Yes. Good afternoon, guys, and thanks for taking the question. Well, I do like to kind of come back to Lisa's topic, which is, I guess, can you talk about the degree to which the current management team kind of feels empowered to make change at the company as it either relates to margins or growth strategic direction? And then because I know we're trying to keep people to one question, if I can sneak in the second one. I just if there's any way you can kind of quantify the success you're seeing in BetterHelp and what metrics you guys are looking at internally, I think we'd find that helpful. Speaker 900:48:47Thank you. Speaker 200:48:49Yes. Your question on whether the leadership team is empowered to act, I would say absolutely, unhesitatingly a big yes. As I said in our prepared remarks, we are not waiting. We have a plan to deliver. We have investments to execute. Speaker 200:49:17And that is absolutely our focus. We are also reiterating our longer term outlook. That is certainly going to require us to as a leadership team as we do every single year, look at our strategy, look at various aspects of that strategy and think about how do we want to stack our investments against those, what's working, what's not working. Again, that is part of what we do every single year and we will absolutely continue to drive that. So the answer to your question is, we are I'm empowered to drive this business forward. Speaker 200:50:06And we as a leadership team, as I said in our prepared remarks, are all in. We are leaning in and we are focusing on driving this business forward. In terms of BetterHelp metrics, the things that we typically will look at from an internal operating perspective is we will look at obviously the CAC and where it is. We will look at the ROIs of our ad spend. We will look at retention, churn, the lifetime value of the CAC that we are placing. Speaker 200:50:45And we will also look at the users that we are attracting to the platform. So we also so that is those are things that we look at. And besides that, we look at a number of other things that inform the user experience as well as the provider experience, the provider NPS, the user the NPS, all of which, by the way, continue to remain very strong because of the strong experience that people have on the platform. So those are the typical metrics that we would be looking at. Operator00:51:27Thank you for your question. Next question is from the line of Ryan Daniels with William Blair. Your line is now open. Speaker 1300:51:34Hey, this is Jack Sencht on for Ryan Daniels. Thanks for taking the question. I think in your prepared remarks, you mentioned reallocating some of the dollars in the second half as the international penetration ramps up. So first, did I get that right? And then 2, can you just talk a bit more about where you plan to reallocate these dollars? Speaker 1300:51:48Was it just reallocating dollars to ramp up the international portion? Or is there something else? Just curious if you can dive deeper into this. Thanks. Speaker 200:51:57Yes. So we've been talking over the last two calls about the fact that we do expect international in BetterHelp to ramp. Where we are placing our ad spend dollars internationally in BetterHelp is in the markets that we already have a presence in. Those are largely English speaking markets like UK, Canada, Australia. So these are the markets where we would be putting our ad spend dollars in. Operator00:52:33Thank you for your question. Next question is from the line of Elizabeth Anderson with Evercore. Your line is now open. Speaker 1400:52:41Hi, guys. Thanks so much for the question. Molly, as we think about the longer term growth, I appreciate your commentary, but Speaker 700:52:49with sort of all the Speaker 1400:52:49changes in the international focus, etcetera. How do we think about the component that pricing plays in both the integrated care outlook as well as better health? Thanks. Speaker 200:53:03Yes. Great question, Elizabeth. So I think about the pricing lever we have on both sides in a couple of different ways. First, if you think about our integrated care side and think about chronic care and the momentum that we are seeing in chronic care, we've spoken about this dynamic in the past couple of calls. Firstly, we are seeing nice momentum in chronic care bookings. Speaker 200:53:33And if you think about the momentum you're seeing in chronic care bookings, part of what's driving that is the fact that we are selling more chronic care bundles. And if you think about the pricing that with these bundles, it is accretive from a on a per client basis from a revenue perspective. And that is certainly something that as we increasingly gain traction on our land and expand, the fact that we've added over 2,000,000 members in the Q1, again, that gives us fertile ground for us to cross sell more of our chronic care products into that population. The fact that chronic care at the end of the day is still relatively under penetrated, right? You think of our overall 90 +1000000 base, it is still 16% of our overall chronic care of our overall telehealth base. Speaker 200:54:34And so it's things like that that will allow us to get more revenue accretion and that certainly is something that we are focused on. On the better health side, when I think about pricing, I would say it really is us thinking more broadly about how we can do more of targeted surgical pricing as we think about the different, whether it be better health and better sleep. And when I say targeted and surgical, it could be by geography. It could be in other ways. And by the way, that is something that we are doing constantly continuously, right? Speaker 200:55:25This is a business that is dynamic in multiple ways, including in pricing. Operator00:55:37Thank you for your question. The next question is from the line of Daniel Grossley with Citi. Your line is now open. Speaker 1500:55:44Hi, Molla. Thanks for taking the question. There's noise out in the market questioning the cost and efficacy of some digital diabetes management programs. I know it's still pretty early in the selling season for you guys, but I was curious if that report is having any impact on what you're seeing out there in the market. And maybe if you can comment a little bit on where you're currently seeing the greatest uptake from a new sales perspective in terms of indications, that would be great. Speaker 900:56:14Thank you. Speaker 200:56:16Yes. Thanks, Daniel, for the question. Let me start and then I will turn it over to Liza for more comments. Look, if I think about the momentum that we are seeing in the market, the things that we are seeing traction on is a few. The first is, obviously, I've talked about our land and expand. Speaker 200:56:39The second is, when we talk to our clients about both the breadth of our products and solutions. And second, the fact that we are able to show value and ROI that is certainly resonating in the marketplace. And the last is, as I've said before, the strength of our balance sheet relative to many of the other competitors in our markets. And the strength of the balance sheet certainly is compelling if you think about our ability to bring innovation into our products into all our products including chronic care. So those are broadly the trends that we are seeing in the market as we sell. Speaker 200:57:28Let me turn it over to Leyser to address your question. Speaker 600:57:32Yes. So with respect to that specific study, I would say we haven't seen any impact from that study on our business. What I would tell you is just some caveats to keep in mind. The first is that report was a review of limited selected secondary research and the party did not conduct any original testing or any primary analysis of patient data. And I just want to highlight that based on our studies and those of third parties, we believe that our chronic care programs provide a clear ROI for our customers. Speaker 600:58:13Our programs have demonstrated meaningful reductions in A1c over a sustained period of time, but it's more than just A1cs. We also have shown improvements in blood pressure and in weight and the whole concept of value is one that we are having good conversations with our clients about. Our members in our diabetes programs also demonstrate a higher adherence to their diabetes related drugs. And so it's really important that you understand what's based in the research, what's included. But what I would tell you is we aren't seeing an impact, but we are having good conversations with our clients related to the ROI and the value of our products. Speaker 200:59:01Yes. And just to wrap up on that, Daniel, what I would say is, look, we are we continue to see strength and momentum in chronic care. I would say as I think about our guidance this year, Integrated Care is off to a solid start. I expect Integrated Care both from a revenue growth perspective as well as a margin expansion perspective as indicated in our guidance to continue its momentum. I would say certainly if you think about the Better Health business, we have had a couple of challenging quarters and we have the set of drivers that are driving the back half of the year ramp. Speaker 200:59:46So I would say certainly on the integrated care side, we are continuing to drive get traction, especially on our chronic care book. Operator01:00:01Thank you for your question. There are no additional questions waiting at this time. That will conclude the conference call. Thank you for your participation. You may now disconnect your lines.Read morePowered by