Amwell Makes Progress Towards Profitability in Fourth Quarter Results
Dive Brief:
- Amwell, a telehealth vendor, did not see revenue growth in the fourth quarter compared to the previous year, but showed progress in moving towards profitability in its latest financial results.
- The company narrowed its net loss in 2024 to $212.6 million from $679.2 million in 2023, with a focus on achieving positive cash flow by 2026.
- Subscription revenue increased by 36% in the fourth quarter of 2024, driven by a defense contract deployment, according to CFO Mark Hirschhorn.
Dive Insight:
Amwell is targeting between $250 million and $260 million in revenue for 2025, with plans to fully implement its joint contract with Leidos to digitize the military healthcare system.
CEO Ido Schoenberg emphasized the importance of reducing costs and securing recurring revenue to reach their revenue goal for the year.
Deployments for the joint contract are expected to continue in the first half of 2025, with final deployments anticipated in the third quarter.
Despite concerns about the contract’s renewal with the Department of Defense, Schoenberg remains optimistic that a three-year extension will be secured, potentially expanding to include a partnership with Oracle.
Amwell has taken steps to improve its financial situation, including a reverse stock split in response to a warning of delisting from the NYSE and a restructuring of its executive team.
The company has also divested from underperforming service lines and focused on high-demand areas, such as partnering with Vida Health for obesity and diabetes care.
Cost-cutting measures have been implemented, with a 29% reduction in research and development costs in the fourth quarter, and further reductions expected in 2025.
While general and administrative expenses have increased due to fallout from a cyberattack, Schoenberg remains optimistic about future financial improvements driven by growth in online care-seeking behavior.
Overall, Amwell is making strides towards profitability, with a focus on sustainable growth and cautious guidance for the future.
