Teladoc Health, a leading telehealth firm, exceeded Wall Street’s revenue and earnings expectations in the second quarter of the year. The company reported a revenue of $631.9 million, a 2% decrease from the previous year, with a net loss of $32.7 million. Teladoc has been focusing on revamping its strategy, particularly by leveraging its mental health assets and expanding internationally.
Despite overall solid results, Teladoc continues to face challenges with its direct-to-consumer mental health segment, BetterHelp. The segment reported a 9% decrease in revenue to $240.2 million, and a 53% decrease in adjusted earnings before interest, taxes, depreciation, and amortization. Paying users also declined by 5%.
To address the issues at BetterHelp, Teladoc has implemented various initiatives such as offering a weekly payment option and accepting insurance for its services. The company believes that accepting health plan coverage for mental healthcare is crucial to making it more affordable and attracting more consumers to enroll.
In response to the softening consumer sentiment and increased competition in the virtual mental health space, Teladoc has made progress in accepting insurance coverage for BetterHelp. The recent acquisition of UpLift, a virtual mental health company that works with major payers like UnitedHealthcare, Aetna, and Cigna, has helped in this effort. Teladoc has also initiated a “soft launch” of BetterHelp insurance in one state, with plans to expand to more markets in the coming quarters.
While Teladoc’s strategic changes show promise, the full impact of these efforts may take time to materialize, especially amidst a challenging macroeconomic environment. In the integrated care unit, which includes business-to-business virtual care offerings, revenue increased by 4% to $391.5 million. However, adjusted EBITDA decreased by 10% to $57.5 million.
Teladoc has revised its revenue and earnings forecast for 2025 to $2.5 billion to $2.55 billion, reflecting a more conservative outlook compared to previous estimates. The company remains optimistic about its growth prospects, particularly as it continues to innovate and adapt to evolving market dynamics.
