Shares of Teladoc Health Inc. plunged more than 24% in after-hours trading Thursday after the telehealth company took another multibillion-dollar impairment charge, helping to bring its total losses for the first six months of the year up to nearly $10 billion.
Teladoc
TDOC,
executives disclosed a $3.0 billion goodwill impairment charge during the second quarter after taking a $6.3 billion charge in the first quarter. Chief Financial Officer Mala Murthy said on the company’s earnings call that the latest charge “was triggered by the decline in Teladoc Health share price” and impacted by “an increased discount rate and decreased market multiple for a relevant peer group of high-growth digital healthcare companies.”
Taking into account the $3.0 billion impairment, the company reported a second-quarter net loss of $3.1 billion, or $19.22 a share, compared with a loss of $133.8 million, or 86 cents a share, in the year-prior quarter. The FactSet consensus was for a 61-cent GAAP loss per share.
Teladoc also posted adjusted earnings before interest, taxes, depreciation and amortization (Ebitda) of $46.7 million, down from $66.8 million a year before, while analysts were expecting $45.3 million.
Revenue increased to $592.4 million from $503.1 million, whereas analysts had been projecting $588 million.
“While we continue to see increased uncertainty in the macroeconomic backdrop, we remain confident in our ability to execute against our strategy to deliver a unified care experience that we believe only Teladoc Health has the breadth and scale to achieve,” Chief Executive Jason Gorevic said in a release.
He added on the earnings call that the company’s Primary360 business has been “a significant bright spot in terms of commercial momentum.”
At the same time, he cited some pressures on the company’s BetterHelp product, which offers online therapy. That business performed toward the low end of the company’s expectations.
“We still see smaller, private competitors pursuing what we believe are low- or no-return customer acquisition strategies to establish market share,” Gorevic continued. “Although we do not see this as sustainable, it’s difficult to predict how long this dynamic may continue.”
Further, “the weakening economic environment and declining consumer sentiment” are likely impacting BetterHelp, with Gorevic noting “modest incremental decline in yield on advertising spend” that could be the result of more cost-conscious attitudes among consumers.
For the third quarter, Teladoc executives anticipate revenue of $600 million to $620 million. The FactSet consensus was for $617 million.
Shares of the company have lost 53% so far this year as the S&P 500
SPX,
has fallen 16%.
