Amwell Extends Contract with Defense Health Agency for Virtual Care Support
Amwell, a leading telehealth vendor, has announced the extension of its contract with the Defense Health Agency (DHA) to continue supporting virtual care within the military health system. This extension marks one of the company’s most significant growth initiatives. However, due to budget restrictions enforced by the Department of Defense, deployments for Amwell’s behavioral health and automated care programs have been excluded from the contract.
CEO Ido Schoenberg revealed this contract change during a second quarter earnings call, which also led to a revision in the company’s revenue guidance for 2025. Amwell now expects revenue to range from $245 million to $250 million this year, compared to its previous outlook of $250 million to $260 million.
The initial contract between Amwell and DHA, valued at up to $180 million, was secured in partnership with technology firm Leidos back in 2023. Amwell’s platform for scheduled virtual visits has since been implemented across the Department of Defense, including at the Military Entrance Processing Command and the Coast Guard. Virtual visits on Amwell’s platform have nearly tripled compared to the military’s legacy system, showcasing the platform’s efficiency and effectiveness.
Despite the exclusion of its behavioral health and automated care programs in the renewed contract, Amwell remains optimistic about the potential for their inclusion in future agreements. Schoenberg emphasized that the programs were well-received and had a positive impact on costs, hinting at the possibility of their reintegration in upcoming contracts.
Following the contract renewal and recent cost-cutting measures, Amwell has adjusted its guidance range for adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA). The company now anticipates an adjusted EBITDA loss between $50 million to $45 million for 2025, a narrower range compared to the previous forecast of a loss between $55 million to $45 million.
In terms of financial performance, Amwell reported a net loss of $19.5 million in the second quarter, a significant improvement from the $50.6 million loss in the same period last year. Revenue for the quarter reached $70.9 million, representing a 13% year-over-year increase from $62.8 million in 2024.
Looking ahead, Amwell remains focused on achieving positive cash flow from operations next year through cost-cutting initiatives and the utilization of artificial intelligence. The company’s commitment to innovation and efficiency positions it as a key player in the telehealth industry, with a strong emphasis on supporting virtual care within the military health system.
