American Well Q2 2026 Earnings Report

American Well EPS Results

• Actual EPS: -$0.59
• Consensus EPS: -$0.86
• Beat/Miss: Beat by +$0.27
• One Year Ago EPS: N/A

American Well Revenue Results

• Actual Revenue: $52.05 million
• Expected Revenue: $49.87 million
• Beat/Miss: Beat by +$2.18 million
• YoY Revenue Growth: N/A

American Well Announcement Details

• Quarter: Q2 2026
• Date: 8/4/2026
• Time: After Market Closes
• Conference Call Date: Tuesday, August 4, 2026
• Conference Call Time: 5:00PM ET

American Well (NYSE:AMWL), operating under the trade name Amwell, is a Boston-based digital health company that develops and delivers telehealth solutions to healthcare providers, payers, employers and patients. Through its cloud-based platform, the company enables secure virtual visits, remote patient monitoring and integrated care coordination across a range of medical disciplines, including primary care, behavioral health, chronic disease management and urgent care.

The company’s core offering, the Amwell Telehealth Platform, facilitates live video consultations, asynchronous messaging, e-prescribing and electronic health record integration. In addition, American Well provides white-label solutions that allow hospitals, health systems and health plans to brand and manage their own telehealth services. Its suite of services also extends to medical device integration for real-time monitoring, population health analytics and specialized telepsychiatry, enabling partners to deliver comprehensive care remotely.

Founded in 2006 by Dr. Ido Schoenberg and brothers Roni and Roy Schoenberg, American Well pioneered the digital health sector by forging early partnerships with leading health systems and insurers in the United States. Over time, the company has expanded its footprint beyond North America, collaborating with healthcare organizations and technology partners in Europe, Asia and Latin America. Its platform is designed to comply with regional privacy and data security regulations, including HIPAA in the U.S. and GDPR in Europe.

Under the leadership of CEO Ido Schoenberg, American Well has focused on advancing telehealth interoperability, user experience and clinical quality. The executive team includes seasoned professionals from healthcare, technology and regulatory backgrounds, supporting a mission to make telemedicine an integral part of mainstream care delivery. As telehealth adoption grows globally, American Well continues to invest in platform enhancements, strategic partnerships and new care modalities to meet evolving provider and patient needs.

American Well Q2 2026 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: DHA intends to award Amwell a direct sole-source contract, with negotiations underway and an expected transition by July 2027. The deal could provide longer-term visibility and potentially expand Amwell’s scope of services, although revenue terms are not yet finalized.
• Positive Sentiment: Cost reductions drove adjusted EBITDA loss down to approximately $1.2 million from $4.7 million a year ago, while operating expenses fell 38% year over year. Amwell raised full-year adjusted EBITDA guidance to a loss of $7 million-$9 million and remains confident in reaching adjusted EBITDA and operating cash-flow breakeven in Q4 2026.
• Negative Sentiment: Second-quarter revenue declined 26.6% year over year to $52 million, primarily reflecting previously disclosed customer churn and the absence of a one-time DHA-related subscription benefit from last year. Management expects third-quarter revenue of $46 million-$48 million, with seasonal visit declines and project-related costs weighing on results.
• Positive Sentiment: Subscription revenue increased 3.2% sequentially and now represents more than half of total revenue, while higher-acuity programs lifted revenue per AMG visit and virtual primary care visits grew 30% year over year. Management also cited strong renewals and a growing payer and government pipeline, with a goal of returning to double-digit growth in 2027.
• Neutral Sentiment: Amwell is narrowing its strategy around a single platform for payer and government customers, while continuing to divest or de-emphasize non-core assets. Executives said health systems remain important customers, but government and payer opportunities currently offer the greatest growth potential.

Presentation

[Operator]

Hello, everyone, and welcome to Amwell's conference call to discuss their second fiscal quarter of 2026. Joining us on the call today are Amwell's Chairman and CEO, Dr. Ido Schoenberg, and Mark Hirschhorn, Amwell's CFO and Chief Operating Officer. Earlier today, a press release was distributed detailing their announcement. The earnings report is posted on the Amwell website at investors.amwell.com and is also available through normal news sources.

[Operator]

This conference call is being webcast live on the IR page of the website, where a replay will be archived. Before they begin prepared remarks, I'd like to take this opportunity to remind you that during the call, we will make forward-looking statements regarding projected operating results and anticipated market opportunities. This forward-looking information is subject to the risks and uncertainties described in the filings with the SEC.

[Operator]

Except as required by law, we undertake no obligation to update or revise these forward-looking statements. On this call, we'll refer to both GAAP and non-GAAP financial measures. A reconciliation of GAAP to non-GAAP financial measures is provided in the earnings release. With that, I would now like to turn the call over to Ido.

[Ido Schoenberg, Chairman and CEO at Amwell]

Good evening, and thank you for joining our Q2 earnings call. As recently announced, we reached an important milestone. The Defense Health Agency issued an intent to award notice for a sole source contract directly with Amwell. We are thrilled by the DHA's decision, which signals an opportunity to strengthen and expand our relationship for many years to come.

[Ido Schoenberg, Chairman and CEO at Amwell]

This is a deliberate choice by the government to build its core platform around the partners it depends on. The DHA's decision aligns with its policy direction to achieve long-term improvements in cost efficiency.

[Ido Schoenberg, Chairman and CEO at Amwell]

This transition to direct contracting ensures uninterrupted continuity of operations and ensures inter-agency continuum of care remains stable and undisrupted. We are honored by their trust. Our platform is already built into MHS GENESIS, which operates as the platform that anchors the unified federal health IT ecosystem.

[Ido Schoenberg, Chairman and CEO at Amwell]

The Amwell platform has connected deployed units in combat zones to hospitals back home. We are proud to serve the 9.6 million service members, families, and retirees of the Military Health System, and we are committed to delivering for them every single day.

[Ido Schoenberg, Chairman and CEO at Amwell]

More broadly, our strategy is simple. Everything centers on the unified Amwell platform. We give our clients the premier infrastructure for technology-enabled care. It is one platform, not many. Through it, government, payers, and health systems offer patients a simple, streamlined experience.

[Ido Schoenberg, Chairman and CEO at Amwell]

Members connect to a growing range of clinical programs, and they do so with measurable improvements in both clinical and financial outcomes. This focus is showing up in our revenue mix. Subscription revenue has grown to more than half of our total revenue. That is reoccurring, stable, high-quality revenue. It is the foundation of a healthier, more predictable business.

[Ido Schoenberg, Chairman and CEO at Amwell]

Throughout 2026, we're delivering a better user experience. We've also greatly enhanced our ability to engage members and activate them into care. The platform brings clinical partners online quickly, turns their data into useful insight, and runs with the reliability and compliance our customers depend on. In short, we are easier to adopt, easier to build on, and easier to trust. Let me be specific about the value we create, because it is the heart of our story.

[Ido Schoenberg, Chairman and CEO at Amwell]

Payers are under real pressure. Premiums are not keeping pace with the rising cost of care. Technology and AI-powered care are among the best tools they have to control cost and improve outcomes. The demand is there, but acting on it has been hard. Most payers are buried in vendor sprawl, dozens of separate point solutions that are costly to connect and impossible to measure against one another.

[Ido Schoenberg, Chairman and CEO at Amwell]

Tired of that fragmentation, payers and employers increasingly want fewer, deeper partnerships. One partner who can meet many needs through a single relationship. This is the problem Amwell solves. We give customers one unified platform, so they no longer must stitch dozens of vendors together themselves.

[Ido Schoenberg, Chairman and CEO at Amwell]

They put a single Amwell gateway behind their own brand and their own front door. Members get one simple place to reach the programs they need, and our customer keeps the member relationship. Behind that gateway, customers can mix and match programs, ours, a partner's, or their own.

[Ido Schoenberg, Chairman and CEO at Amwell]

Swap them in quickly without disrupting the member experience. Because every program runs on the same platform, we bring all the data together. For the first time, customers can see clearly what is working, prove the clinical and financial results, and adjust in real time. We are not selling an AI feature.

[Ido Schoenberg, Chairman and CEO at Amwell]

We are the trusted environment where AI-powered care runs. We saw a clear illustration of this in DarioHealth's recent announcement that it will bring a new program to the Amwell healthcare marketplace in Arizona. One more market shift makes this even more important. Customer increasingly focus on actual use. Engagement is no longer a soft metric. It is a financial driver.

[Ido Schoenberg, Chairman and CEO at Amwell]

Value comes from getting members into the right care, improving their health, and avoiding expensive downstream costs. That is exactly what our platform is built to do. One front door makes services easy to find and use. Our data and analytics power targeted personal outreach. Working closely with employers and health plans, we turn members into active users, and we can prove it.

[Ido Schoenberg, Chairman and CEO at Amwell]

This quarter, a randomized trial of our SilverCloud behavioral health program was published in "Nature Human Behaviour." It was funded by the National Institute of Mental Health and led by investigators from Washington University, Penn State, and UCLA. It followed more than 6,200 students for two years, one of the largest studies of its kind. The results were clear. Students offered SilverCloud engage at more than double the rate of traditional care.

[Ido Schoenberg, Chairman and CEO at Amwell]

They had lower rates of mental health disorders over two years, and the study pointed to about $1.2 million in avoided costs in the study group alone. Better engagement, better outcomes, lower cost, independently validated.

[Ido Schoenberg, Chairman and CEO at Amwell]

That is exactly what payers are looking for. Our market momentum is building. Our pipeline is growing. Renewals are strong. We're engaged in encouraging discussions with new prospects across both the commercial and government sectors.

[Ido Schoenberg, Chairman and CEO at Amwell]

This quarter, we also moved closer to a goal we have been clear about: positive cash flow from operations by the Q4 of 2026. This is not a one-time result. It builds a durable foundation for healthy growth in 2027 and beyond. Our path here has been deliberate. In 2025, we reduced our losses by roughly $100 million.

[Ido Schoenberg, Chairman and CEO at Amwell]

In the Q2, our adjusted EBITDA loss of approximately $1 million is the closest we have been to breakeven as a public company and gives us increased confidence in achieving our goal of positive adjusted EBITDA in the Q4. We did this while holding more than $195 million in cash and carrying no debt. We have the runway to execute and a team focused on doing it with discipline. We are achieving all of this with a linear cost structure.

[Ido Schoenberg, Chairman and CEO at Amwell]

Our focused platform strategy and our operational discipline make that possible, including the integration of AI across our workflows. Underneath it all is something harder to replicate: A purpose-driven culture that attracts and motivates exceptional people. Let me close with why this matters now. As AI-driven care accelerates, the pressure on payers only grow.

[Ido Schoenberg, Chairman and CEO at Amwell]

In that environment, a single, reliable infrastructure layer becomes essential. That is what Amwell is. We have completed our transformation from a telehealth vendor into the infrastructure for AI-powered care programs. We have a mature platform, a focused operation, financial stability, and independent proof that what we deliver works.

[Ido Schoenberg, Chairman and CEO at Amwell]

We are confident in our path to adjusted EBITDA breakeven in Q4 of this year. We are excited about the growth that follows. With that, I will turn the call over to Mark, who will walk you through our operational and financial metrics. Mark?

[Mark Hirschhorn, CFO and COO at Amwell]

Thanks, Ido. Good afternoon, everyone. On today's call, I'll start with a few highlights from the Q2, walk through our financial results in detail. Close with an update on our Q3 and full year 2026 outlook. In the Q2, we delivered revenue results in line with our expectations, reflecting continued subscription stability and a favorable mix shift within our visit portfolio.

[Mark Hirschhorn, CFO and COO at Amwell]

Adjusted EBITDA was slightly ahead of our expectations, driven primarily by continued cost discipline across the organization. These results build on the momentum we discussed last quarter. Reinforce our confidence in reaching cash flow breakeven in the Q4 of this year.

[Mark Hirschhorn, CFO and COO at Amwell]

Total revenue for the Q2 was $52 million, down approximately 26.6% year-over-year. Subscription revenue was $25.7 million, down approximately 36.5% year-over-year, though up approximately 3.2% sequentially from the Q1.

[Mark Hirschhorn, CFO and COO at Amwell]

The year-over-year decline continues to reflect the previously disclosed churn, as well as a one-time subscription revenue benefit recognized in last year's Q2 related to the deployment of our platform across the DHA. Encouragingly, sequential improvement reflects the stability we've continued to see in our core payer and government subscription base.

[Mark Hirschhorn, CFO and COO at Amwell]

Amwell Medical Group, or AMG visit revenue, was $24.4 million, up approximately 7.4% year-over-year. AMG paid visits totaled approximately 315,000 visits, flat year-over-year, with revenue per visit of approximately $77 per visit, up approximately $4 or 6% per visit year-over-year.

[Mark Hirschhorn, CFO and COO at Amwell]

This is reflected by the continued shift in our visit mix toward higher acuity, higher value clinical programs and virtual primary care. Virtual primary care visits were up approximately 30% year-over-year, continuing their strong growth trajectory.

[Mark Hirschhorn, CFO and COO at Amwell]

Total platform visits were approximately 835,000 visits, down approximately 28.4% year-over-year, but consistent with the portfolio changes we've previously discussed. Our gross profit was $27.6 million, with gross margin of 53%, down approximately 310 basis points year-over-year from the 56.1% in the Q2 of 2025. It is up approximately 200 basis points sequentially.

[Mark Hirschhorn, CFO and COO at Amwell]

As we've noted, our existing revenue mix is generating a margin profile broadly consistent with recent quarters, and we continue to expect our revenue mix to shift toward higher margin SaaS offerings over time.

[Mark Hirschhorn, CFO and COO at Amwell]

Total operating expenses, including depreciation and amortization, were $37.1 million, down approximately 38% year-over-year and down approximately 18% sequentially. As a percentage of revenue, operating expenses improved to 71.3%, compared to 84.8% in the Q2 of last year, reflecting the continued benefit of our transformation actions and ongoing cost discipline across Amwell.

[Mark Hirschhorn, CFO and COO at Amwell]

Adjusted EBITDA for the Q2 was a loss of $1.15 million, compared to a loss of $4.7 million in the Q2 of 2025. Operating loss was $9.6 million, compared to $20.4 million in the Q2 of 2025, which is an improvement of approximately 53% year-over-year. Turning to the balance sheet. We ended the Q2 with $196 million in cash and marketable securities with zero debt.

[Mark Hirschhorn, CFO and COO at Amwell]

On to guidance. For the Q3 of 2026, we expect revenue in the range of $46 million-$48 million and an Adjusted EBITDA loss in the range of -$5 million to -$3 million. This outlook reflects normal seasonality in visit volumes as we move throughout the remaining summer months, along with the continued stability we're seeing in our subscription base.

[Mark Hirschhorn, CFO and COO at Amwell]

The step down in Adjusted EBITDA from 2Q to 3Q reflects the impact of certain costs associated with the completion of internal projects that we expect to complete prior to the end of this year. For the full year, we are narrowing our revenue range and raising our Adjusted EBITDA range to reflect our year-to-date performance.

[Mark Hirschhorn, CFO and COO at Amwell]

We now expect full year 2026 revenue in the range of $200 million-$205 million, raising the low end of our previously communicated range of $195 million-$205 million. We are raising our full year Adjusted EBITDA guidance to a loss in the range of -$9 million to -$7 million, a meaningful improvement from our prior range of a loss of $16 million-$12 million.

[Mark Hirschhorn, CFO and COO at Amwell]

We continue to expect full year AMG visits toward the high end of our previously communicated range of 1.32 million-1.37 million visits. In summary, Q2 was another step forward on our path to right-sizing the company and working towards achieving profitability.

[Mark Hirschhorn, CFO and COO at Amwell]

Continued subscription stability, a favorable visit mix, and a leaner cost structure give us confidence that we remain on track to achieve our cash flow breakeven goal in the Q4. I want to thank the entire Amwell team for their continued hard work and dedication. These results reflect their dedication and tremendous efforts. With that, I'll turn it back to Ido.

[Ido Schoenberg, Chairman and CEO at Amwell]

Thank you, Mark. Before we open the call for your questions, let me leave you with the takeaways that matter most. First, the DHA's intent to award a sole source contract directly to Amwell is a powerful vote of confidence. It deepens the partnership at the heart of the Military Health System and affirms our position as core infrastructure for the unified federal health IT ecosystem, an opportunity we expect to build on for many years.

[Ido Schoenberg, Chairman and CEO at Amwell]

Second, the quality of our business keeps improving. Subscription revenue is now more than half of total revenue and grew sequentially this quarter. That recurring stable foundation is what makes Amwell more predictable and more valuable over time. Third, our strategy is resonating in the market. Payers want fewer, deeper partnerships, our single unified platform is built precisely for that. We no longer just claim results, we prove them.

[Ido Schoenberg, Chairman and CEO at Amwell]

The independently run study, published in Nature Human Behaviour, showed more than double the engagement, better outcomes, and meaningful avoided costs. That is the evidence payers are looking for, it's powering a growing pipeline and strong renewals. Fourth, our discipline is delivering. An adjusted EBITDA loss of roughly $1 million, the closest we have ever been to breakeven as a public company. Raised full year adjusted EBITDA guidance.

[Ido Schoenberg, Chairman and CEO at Amwell]

Nearly $200 million in cash and no debt. We are firmly on track for positive adjusted EBITDA and positive operating cash flow in the Q4, that milestone is not the finish line. It is the foundation for healthy, durable growth in 2027 and beyond. Amwell has completed its transformation. We have the platform, the proof, the partnerships, and the financial strength to lead as AI-powered care accelerates.

[Ido Schoenberg, Chairman and CEO at Amwell]

I want to thank the Amwell team for their exceptional work and our shareholders for their continued trust. With that, we're now happy to open the call for your questions. Operator, please go ahead.

[Operator]

Thank you. At this time, we will conduct the question and answer session. To ask a question, you will need to press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one one again. Please stand by while we compile the Q&A roster. Our first question comes from the line of Ryan MacDonald of Needham & Company. Your line is now open.

[Matt Shea, Analyst at Needham & Company]

Hey, this is Matt Shea on for Ryan. Thanks for taking the question. Start on the DHA contract. Not really sure what the best way to ask this is, ultimately just help us kind of bridge the difference between the DHA's intent. Sounds like you guys are kind of in the pole position, the bridging from the intent to actual implementation, what's left from here?

[Matt Shea, Analyst at Needham & Company]

What does that kind of timing look like from here to close out the contract? I think last quarter you had talked about the opportunity for there to be an inclusion of additional programs that weren't in the prior implementation, notably the mental health program. Where does that opportunity kind of stand today, how do you kind of foresee that timeline playing out as well?

[Mark Hirschhorn, CFO and COO at Amwell]

Hi, it's Mark. This is where we stand with the current negotiations. The DHA in June put out a release calling for a direct sole source contract with Amwell and four other vendors. We are all currently negotiating with the DHA. They dropped the deadline of July 30th of this year with an intent to get some of those contracts live.

[Mark Hirschhorn, CFO and COO at Amwell]

As is almost expected in these cases, all the parties required some additional information and some time. Their drop-dead date is July of next year, their intention from our last conversations, even this past week, was that they need a couple more months to negotiate. We're currently in those negotiations. They've noted that they would like to transition over as soon as possible.

[Mark Hirschhorn, CFO and COO at Amwell]

We're working very closely with our trusted partners over at Leidos and also with the DHA in order to make this as smooth of a transition as possible.

[Matt Shea, Analyst at Needham & Company]

Okay. That's helpful.

[Mark Hirschhorn, CFO and COO at Amwell]

Yep. The second part of your call, I think, likely references our behavioral health SilverCloud offering, which we did have active in force in that environment for several months last year. It was decided after the issues with DOGE and a number of other things that affected our ability to continue at that service level,

[Mark Hirschhorn, CFO and COO at Amwell]

That we would reintroduce that offering, in conjunction with having our direct sole-sourced contract. That conversation also is underway, and we would expect that the opportunity to turn those services on, the soonest opportunity would be in 2027.

[Matt Shea, Analyst at Needham & Company]

Okay, great. That's super helpful, Mark. I appreciate that. Maybe switching gears to the payer segment. I believe it was last quarter you talked about reintroducing Amwell to several health plans, and that part of the mandate is the coming back into the market as you think the relevance of Amwell was lost.

[Matt Shea, Analyst at Needham & Company]

With Elements and DHA implementations, that credibility is coming back. Maybe first, how important is the DHA renewal to support that credibility narrative? Second, and really more the meat of the question is,

[Matt Shea, Analyst at Needham & Company]

It sounds like there's some marketing efforts behind this reintroduction to health plans, it would be helpful to maybe hear how you're positioning Amwell with health plans this selling season, any marketing investments you're making or what's resonating so far.

[Matt Shea, Analyst at Needham & Company]

Are efforts enough to translate to January 1, 2027 wins, or is this more of an evolving opportunity that might not take root until, say, next selling season? Sorry, I know there's a lot there, just think it's an important topic.

[Mark Hirschhorn, CFO and COO at Amwell]

I'm going to have Ido take the first part of that.

[Ido Schoenberg, Chairman and CEO at Amwell]

Okay, sorry.

[Mark Hirschhorn, CFO and COO at Amwell]

Okay?

[Ido Schoenberg, Chairman and CEO at Amwell]

Yeah. Can you hear me now? Can you hear me?

[Mark Hirschhorn, CFO and COO at Amwell]

Yes.

[Matt Shea, Analyst at Needham & Company]

Yes.

[Ido Schoenberg, Chairman and CEO at Amwell]

Okay.

[Mark Hirschhorn, CFO and COO at Amwell]

Yep.

[Ido Schoenberg, Chairman and CEO at Amwell]

Matt, great question, and thank you. There is no question that the DHA relationship, which we're super proud of, is an important milestone and a great proof point. They're certainly not the only one, not that is published and not that is coming. It definitely creates momentum.

[Ido Schoenberg, Chairman and CEO at Amwell]

The infrastructure of the DHA is very common across the entire government infra system, and our ability to work so well for such large audience in such scale with such result that is demonstrated very importantly with the decision to do sole source,

[Ido Schoenberg, Chairman and CEO at Amwell]

which usually also means, and they said as much, very long-term agreement, three to five years at least, is an indication of how things are going, and it's totally not lost on the rest of the government market. In many ways, what government players are dealing with is very similar in some ways to commercial payers.

[Ido Schoenberg, Chairman and CEO at Amwell]

Essentially, the problem today, more zooming out for a second, is that the cost of care is rising through the roof. Activating members to engage in technology-enabled care is extremely inefficient and ineffective, and when they do engage, the ability to understand and prove the outcomes is increasingly complicated in a scenario where there are so many vendors,

[Ido Schoenberg, Chairman and CEO at Amwell]

There is vendor fatigue, piecing that together data is so hard, and so on and so forth, and that's exactly where we come in. The reason we see this market receptivity is fairly simple. One, almost all our customers and potential customers have vendor sprawl and vendor fatigue.

[Ido Schoenberg, Chairman and CEO at Amwell]

They hire more and more people to manage more and more relationships that don't always pan out. The pressure, because of rising cost of care and inability to raise premium accordingly, where the margins are distressed, is very much to try to improve efficiency of care, and that's really our business. The technology-enabled care is a fantastic experience for members, it's also a way to attract and retain members and comfort clients.

[Ido Schoenberg, Chairman and CEO at Amwell]

The fact that the platform is built inside their infrastructure and it's inside the trusted brand is very important. Essentially, they are very open in this time of distress to talk about consolidation and simplification of what could be an important lifeline for them, to try to improve financial and clinical outcomes. That's exactly us. Less integration under a known brand, which is their brand, not losing the patient-member relationship to anyone.

[Ido Schoenberg, Chairman and CEO at Amwell]

We've proven at the DHA and elsewhere, that we are fairly effective in attracting people to their digital door, to their infrastructure. We're not only there, we are activating members, using technology and clinical measures.

[Ido Schoenberg, Chairman and CEO at Amwell]

The infrastructure of AMG, for example, is a very important technology-enabled care, a piece of what we do that allows to form longstanding, reoccurring relationship between doctors and patient that is not a dead end, but rather an orchestration layer to growing array of AI-powered care.

[Ido Schoenberg, Chairman and CEO at Amwell]

That works really, really well as a gateway, as an enabler. When we talk about this care, we are offering our own native programs, there are so many of them, urgent care, primary care, behavioral health.

[Ido Schoenberg, Chairman and CEO at Amwell]

Mark talked about the growth there, nutrition, psychiatry, and so on, but also a rapidly growing roster of partners, Sword, Hello Heart, Vida, Dario, DermatologistOnCall, to name a few. Much more importantly, the pressure is to prove outcome, we build a data infrastructure that allows to piece together the results and really understand what's working and not working.

[Ido Schoenberg, Chairman and CEO at Amwell]

When something doesn't work or doesn't work as well, we have the ability to switch over programs very easily. Our customers are able to accommodate their own client very dynamically in an era where new programs show up every day.

[Ido Schoenberg, Chairman and CEO at Amwell]

This entire solution of Amwell is very differently received from the way that traditional telehealth, say, was received, and it's working. I'm not going to name all the names because most of the people on the call know our clients.

[Ido Schoenberg, Chairman and CEO at Amwell]

They are very, very big. You mentioned the marketing to those payers and government. We have a very seasoned team. Our customers are sizable. We don't need an army in order to engage in those platforms.

[Ido Schoenberg, Chairman and CEO at Amwell]

No one buys those platforms in a seasonal way. You don't buy an infrastructure for a database in the summer. We do is a strategic solution for our customers that is essential today more than ever and is working. Our two decades of experience is showing. They know they can trust us.

[Ido Schoenberg, Chairman and CEO at Amwell]

They know they can trust us to take off a lot of weight they have off their shoulders and manage this zoo, this dynamic array of clinical programs without new integrations, without multiple contracts, without piecing different pieces of data together, and with protecting the downside in areas like cybersecurity and privacy and compliance, which are also very, very important. I know it was a mouthful.

[Ido Schoenberg, Chairman and CEO at Amwell]

It was a relatively long answer to a short question. These are the reasons why you see the results that you see, and this is the reason why I said I'm so optimistic about our growth in 2027 and beyond. We are seeing it right now. There is good receptivity. The pipeline is growing. There is a lot of activity on the sales side. Much more importantly, we see the impact on our existing customers.

[Ido Schoenberg, Chairman and CEO at Amwell]

When you think about some of them, we're talking about people with tens of millions of potential members. Across the board today, only a few members actually enroll, less than half in some cases. Only 4% or 5%, and I'm optimistic, actually engage and bring outcomes. We are changing that, and the financial impact and value to payers and their customers is enormous.

[Ido Schoenberg, Chairman and CEO at Amwell]

I don't think we've ever been as optimistic as we are. I don't think we've ever been as focused as we are. It's a delightful experience to be in the market today with our existing customers and with new ones and see the twinkle in their eyes as we solve something that is a high priority problem for them.

[Matt Shea, Analyst at Needham & Company]

That's great to hear. Appreciate all that, Ido. Thank you.

[Operator]

One moment for our next question. Our next question comes from the line of David Larsen of BTIG. Your line is now open.

[David Larsen, Analyst at BTIG]

Hi. Can you talk about the progression of EBITDA from two Q to break even four Q, sort of how you're planning to get there, and just sort of maybe an update on your cost restructuring efforts? Thanks very much.

[Mark Hirschhorn, CFO and COO at Amwell]

Yeah, certainly. We communicated at the beginning of the year that we would have a cycle of costs that would end or would bring us to the point where we would have a number of quarters working towards a break even at the end of the year. There's some project work that we had commenced at the end of last year. It brought us through to the beginning of this year.

[Mark Hirschhorn, CFO and COO at Amwell]

It's cycling down now in the Q3. While we will have a quarter that's going to have a small degree of losses, we have great visibility and a certain degree of conviction around where those costs will be over the next several months, and that's why we are very confident that we will hit our cash flow break even and adjusted EBITDA break even in Q4.

[Mark Hirschhorn, CFO and COO at Amwell]

Conservatively, we've given a range for full year EBITDA. Obviously, it's our internal goal to beat that. We've been successful over the last several quarters doing that and coming in with better bottom line and top line results, and I believe we're very conservative in the top line as well. Assuming we have a status quo with our existing clients, we have not incorporated any new revenues, just a little bit of seasonality in Q4 for visit volume.

[David Larsen, Analyst at BTIG]

Okay. As we think about 2027, can you provide some color around maybe backlog metrics? Is that a number you sort of track? Bookings, anything around expected retention levels in 2027? Basically, at a high level, without guiding, is your revenue going to grow year-over-year in 2027? Thanks.

[Mark Hirschhorn, CFO and COO at Amwell]

Yeah. We will obviously share much more visibility on expected 2027, perhaps earlier than the end of this year. If the prospects that we're currently speaking to on the government side do in fact come to fruition and we have signed contracts, that will give us a great degree of visibility into revenue growth for 2027.

[Mark Hirschhorn, CFO and COO at Amwell]

Internally, again, we would like to see the company return to a level of double-digit growth. We think that is very attainable with the consummation of the contracts that are currently under discussion with those clients that form the majority of our pipeline.

[David Larsen, Analyst at BTIG]

One more quick one from me, please. With the DHA contract, the intent to award Amwell a sole source deal, number one, was that a renewal? Will there be any incremental revenue tied to that? Number two, I think I heard you say there were four other vendors included in that.

[David Larsen, Analyst at BTIG]

Can you sort of correct me, when I hear sole source, it sounds to me like Amwell is the only vendor that was awarded something, I heard you say that there were four other vendors who may have been awarded something. Do you know what the revenue is that you will realize under that deal, or is that all kind of getting worked through? Thanks.

[Mark Hirschhorn, CFO and COO at Amwell]

Yeah. The release I'm referring to is under the new model, the DHA stated they're going to contract directly with proprietary solution providers for their core system capabilities rather than going through pass-through entities. In these cases, or in this particular case, that was Leidos. Leidos has been a wonderful partner.

[Mark Hirschhorn, CFO and COO at Amwell]

We may end up, obviously, working with Leidos on a number of other things, but in relation to this particular contract, these services are provided by four distinct companies: Amwell, Oracle Health, Philips. Oh, five actually. Solventum, which was that former 3M subsidiary, and Henry Schein. The DHA's intent prior to the end of July next year is to create and execute contracts with each of these five companies.

[Mark Hirschhorn, CFO and COO at Amwell]

Will we end up seeing a little more revenue for additional services that we may have to take on in lieu of the third-party systems integrators and others? That's absolutely a likelihood.

[David Larsen, Analyst at BTIG]

Okay. You're the only sort of telehealth platform of those handful that you mentioned. These other ones are important, but they are basically providing different pieces of the overall project. Okay, thanks very much.

[Ido Schoenberg, Chairman and CEO at Amwell]

Absolutely, David. Absolutely.

[Operator]

As a reminder, to ask a question, please press star one one on your telephone and wait for your name to be announced. One moment for our next question. Our next question comes from the line of Jailendra Singh of Truist Securities. Your line is now open.

[Jailendra Singh, Analyst at Truist Securities]

Thank you, and thanks for taking my question. Just to make sure I understand that this DHA contract, is there any change to the annual revenue compared to what the current arrangement is? Or is the primary benefit here is that we have now greater contract visibility and duration? Just trying to understand the change here.

[Mark Hirschhorn, CFO and COO at Amwell]

There is obviously an opportunity to create more services being directly provided by Amwell to the DHA. There are a number of things that are currently in discussion, we would expect that there will be opportunity for a broader scope of services.

[Jailendra Singh, Analyst at Truist Securities]

My follow-up on your comment about strong renewal and a growing pipeline. Anything you can share in terms of, is the current pipeline expanding with your existing customers versus you are seeing now new logos, new customers coming through? How much of these pipeline discussions are involving some of your AI focus and investment you're doing there? Just trying to understand the AI focus versus non-AI and also the existing versus new customers.

[Ido Schoenberg, Chairman and CEO at Amwell]

Hi, Jailendra. Yes to all. Basically, many of the market players are now in search of platforms. Vendor fatigue, cost of engagement, things I discussed earlier. The market is definitely alive and kicking to change platforms. They want to change platform also because they want or sometimes are forced to add more programs because some of the new programs are just very effective.

[Ido Schoenberg, Chairman and CEO at Amwell]

Some of them are dangerous and ineffective, and it's hard to tell which is which. One thing for sure, managing it yourself is incredibly taxing, super expensive, super complicated, super hard, and that's what we've done for a really long time, and that's what our platform does. There is enormous interest by new players in what we have, but their interest is really driven very much because of the success we see with our existing customers.

[Ido Schoenberg, Chairman and CEO at Amwell]

The DHA elephants, there are quite a few others, that are basically performing and performing very well. You see it in renewal. As it relates to AI changes everything. It's hard for me to overstate the enormity of the revolution that touches everything, not only in healthcare, of course. First, and boringly, we're using AI across the company in everything we do. Better deliverables, better workflows, better data-driven strategy, better everything.

[Ido Schoenberg, Chairman and CEO at Amwell]

You saw the dramatic change in our cost structure that was simply not possible without AI. We are nowhere near done. We are going to be dramatically more effective only because we have AI, and I assume that many companies are doing the same. It's not a great necessarily differentiator, but not doing it is existentially dangerous in our opinion.

[Ido Schoenberg, Chairman and CEO at Amwell]

Much more importantly, in way of our infrastructure and product, of course, we have also AI investment in our own product, in managing data analytics, data science engagement, and all those things. Zooming out on the big picture, our biggest contribution is to basically free our customers from the need to diligent, to integrate, to piece together a lot of new programs.

[Ido Schoenberg, Chairman and CEO at Amwell]

They turn to us to do that job, and our platform is designed to do that, and we do it quite well. The fact that we have a national network of thousands of doctors around the clock with short wait times, that are extremely experienced in high clinical quality, with very, very high NPS, that are all connected and engaged to this platform, is incredibly important.

[Ido Schoenberg, Chairman and CEO at Amwell]

You need a clinical human in the loop in order to enable a lot of the greatness that new and existing clinical programs are offering. The fact that we saw recent renewals on very large audiences, and the fact that we are much better in marketing to individuals, members, patients, beneficiaries, employees, regardless of how you call them, and we are able to dramatically improve the engagement per individual, and

[Ido Schoenberg, Chairman and CEO at Amwell]

That results in measurable outcomes that we can prove, and the ability to switch over and monitor, is something that is fairly basic, and fundamental, to our customers, and could drive, and is already driving, and you saw some of the numbers today, drive a higher utilization, with our existing customers. The wide space of same-store growth is hard to exaggerate on.

[Ido Schoenberg, Chairman and CEO at Amwell]

That growth and that success will definitely have, already have, and will continue to have a great impact in our ability to sell. We sell what works, and what works with our existing customers.

[Ido Schoenberg, Chairman and CEO at Amwell]

Our priority is to maximize the value to them, and that's the best sales and marketing tool for new ones in a time where there is great distress and great need. We are not viewed as extra SaaS expense. We are viewed as a tool to consolidate, save, simplify, and achieve results in a very meaningful way.

[Jailendra Singh, Analyst at Truist Securities]

Great. Perfect. Thanks a lot.

[Operator]

One moment for our next question. Our next question comes from the line of Craig Hettenbach of Morgan Stanley. Your line is now open.

[Craig Hettenbach, Analyst at Morgan Stanley]

Yes, thank you. Understanding the opportunity set has been kind of shifting to the government programs you've been talking about. Can you just touch on what you're seeing at your health system customers? What's resonating with them today? What are some areas that they're focused on most versus maybe cutting back?

[Ido Schoenberg, Chairman and CEO at Amwell]

Sure, Craig. Essentially, everybody is trying to do what I said, right? Everybody has addressable population that they need to engage to use more technology-enabled care powered by AI to improve outcome, improve them. Then if it doesn't work, fix that. That's true across the board.

[Ido Schoenberg, Chairman and CEO at Amwell]

The government, obviously, is a huge infrastructure or huge container of a lot of people, that is very impacted by the value that we can create, and you see the momentum there. It's almost the same momentum with commercial payers. We see it very clearly.

[Ido Schoenberg, Chairman and CEO at Amwell]

Their interests are the same. Their clients, employers, especially self-insured employers, are demanding that type of infrastructure, that type of agility and ability to improve. The health systems issue is different. We used to have a very wide net of products across different areas.

[Ido Schoenberg, Chairman and CEO at Amwell]

Some of them are growingly occupied by the traditional EHR players, urgent care, for example, telepsychiatry that we sold recently, and so on and so forth.

[Ido Schoenberg, Chairman and CEO at Amwell]

While we see, and we have a loyal base of customers in health systems, and we are proud of that relationship, and we believe that providers have a very important role also in the future in enabling AI-enabled care, the financial opportunity right now that moves our needle is very much in the government and payer sector as priorities.

[Ido Schoenberg, Chairman and CEO at Amwell]

We are certainly not discounting the health systems. Per design, they're smaller, they move in different dynamics. Our focus area today is much better defined than it was before, which I think is very positive for everybody. We're not doing things that we're not great at. We do one thing, and we think we are very good at that.

[Ido Schoenberg, Chairman and CEO at Amwell]

It has a very clear implication on all players. Our priorities were as said it was.

[Craig Hettenbach, Analyst at Morgan Stanley]

Got it. Just to follow up for Mark, in a scenario where you are able to get back to double-digit revenue growth, can you talk about just the operating leverage in the model at this point? I know you guys have done a lot of cost reductions and have tightened up. In that double-digit revenue scenario, how would you envision OpEx in terms of headcount or just things, even if it's at kind of a high level?

[Mark Hirschhorn, CFO and COO at Amwell]

Yeah, Craig, we've completed the vast majority of our cost reductions coming to the latter half of this year. Our margin profile will likely pick up about 1,000, looking at 1,000 basis points between where we are today and run rate Q4 of 2027, as we achieve a significant improvement on the subscription revenue line.

[Mark Hirschhorn, CFO and COO at Amwell]

The costs to manage and to continue to grow and support that line are considerably less than where we had been, with services creating a larger component. We would likely look at our headcount to be somewhat similar, between years with, I would say mid-teens growth projections if all of our prospects that we believe have a high probability of coming in, between now and the end of next year, do materialize.

[Craig Hettenbach, Analyst at Morgan Stanley]

Got it. Thank you.

[Mark Hirschhorn, CFO and COO at Amwell]

Welcome.

[Operator]

One moment for our next question. Our next question comes from the line of Stan Berenshteyn of Wells Fargo Securities. Your line is now open.

[Stan Berenshteyn, Analyst at Wells Fargo Securities]

Hi. Good evening. Thanks for taking my questions. I apologize if I'm re-asking anything. I did hop on a little late here. Given your comments related to the pipeline growth, are there any changes in R&D or sales and marketing focus for you or reinvestment as we think about the next six to twelve months? Furthermore, I just wanted to get a follow-up. Are you looking at any opportunities to further rationalize any of your non-core assets? Thank you.

[Ido Schoenberg, Chairman and CEO at Amwell]

Hi, Stan. I think the two parts of your question really complement each other perfectly. We are laser-focused. We have one platform that does what I said earlier on the call, and that means that we are divesting assets that are non-core, and are going to reinvest our efforts in doing what I said earlier on the call. Our R&D team is much more efficient today.

[Ido Schoenberg, Chairman and CEO at Amwell]

It's much smaller than it was, but it's more productive in many ways, mostly because of the strategic focus, but also because of the layering and reorganization and different processes and liberal use of AI and other tools. That's really what's going to continue to allow us to be very effective.

[Ido Schoenberg, Chairman and CEO at Amwell]

Some of the contracts that we're looking at or some of the opportunities may require some investment, but these are going to be accretive investments that are not going to change our position as we talk about growth and profitability. We are very disciplined now, much more than before, in only engaging in opportunities that do not require us to defocus and do not require us to do any custom development or things that their profitability is unclear.

[Ido Schoenberg, Chairman and CEO at Amwell]

It's one engine, it does something very specific. It is customizable, but we are not creating any different variation of it for different customers. They're all using the same backbone, in the same way, and that allows us just to be much more impactful.

[Ido Schoenberg, Chairman and CEO at Amwell]

I think in many ways, some of the pipeline growth that we see, some of the reason our story is resonating is the fact that it's truly trustworthy. There are so many casualties right now, also of different programs, especially new AI programs and so on, that are not necessarily panning out, that experimenting with them is a must,

[Ido Schoenberg, Chairman and CEO at Amwell]

But experimenting with them on a trusted platform that does consistent member experience, that spits consistent reports in the same format, that requires one integration, that reduces the number of contracts and relationships that you have to manage.

[Ido Schoenberg, Chairman and CEO at Amwell]

In addition to that, enables a flywheel where the same patient can actually get multiple types of service that reinforce each other and work in harmony, is the reason where the revenue per employee, the impact of the company, its profitability, is going to, in our opinion, continue to grow over the next few years.

[Stan Berenshteyn, Analyst at Wells Fargo Securities]

Appreciate the color. Ido, it seems like you agreed that perhaps there might be some non-core assets that might be divested. Is there anything, from, like, a timing standpoint that you can haircut here and suggest that maybe there's something on the horizon, or is this more of just, like, a theoretical thing that may or may not happen? Thanks.

[Ido Schoenberg, Chairman and CEO at Amwell]

I wouldn't call it theoretical. We did divest quite a few things already. We care deeply about our customers, so that's our number 1 priority. Whatever we do, we're going to do in a responsible way to make sure that we maintain important relationships in the market and not leave anyone in any type of an issue.

[Ido Schoenberg, Chairman and CEO at Amwell]

We are actively working on that. You should expect us to continue to defocus. It may come with some revenues. Or income, not revenues, I'm sorry. The main benefit is the laser focus of the company. Our plan is to be left with one platform, one product, 1 type of service for everyone that we serve.

[Stan Berenshteyn, Analyst at Wells Fargo Securities]

Great. Thanks so much.

[Operator]

I am showing no further questions at this time. I would now like to turn it back to Ido for closing remarks.

[Ido Schoenberg, Chairman and CEO at Amwell]

Thank you, operator, and thank you everyone for joining. Have a good evening.

[Operator]

Thank you for your participation in today's conference. This does conclude the program. You may now disconnect.

Participants

Executives

• Ido Schoenberg, Chairman and CEO

Analysts

• Mark Hirschhorn, CFO and COO at Amwell
• Matt Shea, Analyst at Needham & Company
• David Larsen, Analyst at BTIG
• Jailendra Singh, Analyst at Truist Securities
• Craig Hettenbach, Analyst at Morgan Stanley
• Stan Berenshteyn, Analyst at Wells Fargo Securities