Teladoc Reports Q4 2016 Earnings: Membership Reaches 17.5 Million, Full-Year Revenue Hits $123 Million

Teladoc President and CEO Jason Gorevic

Recently, Teladoc, a publicly listed telemedicine unicorn, released its financial report for the fourth quarter of 2016. In light of its development and strategic layout in 2016, Teladoc’s executives shared impressive figures, along with progress in strategic partnerships and legislation, all of which have been driving Teladoc’s continued upward trajectory and advancement.

Financial reports show that Teladoc’s membership surged to 17.5 million, a year-over-year increase of 43%. The fourth quarter saw a total of 310,467 visits, representing a 68% increase compared to the fourth quarter of 2015. In 2016, there were a total of 952,081 visits, a year-over-year increase of 65%. Total revenue for the fourth quarter of 2016 was $37.4 million,Net Loss of $14.3 Million, RevenueIncreased by 65% year-over-year. Meanwhile, full-year revenue grew by 59%, reaching $123 million in 2016.

Growth in membership, increased revenue, and higher visit volume were the highlights of Teladoc’s fourth-quarter 2016 financial report. For telehealth providers, achieving milestone progress in 2016 was a critical determinant of success or failure.

“Reflecting on the strong performance in 2016, I am proud of the milestones our company has achieved in the industry. We continue to execute our mission of delivering better healthcare experiences for our customers and partners,” said Jason Gorevic, President and Chief Executive Officer of Teladoc.

The company also took the opportunity to announce the appointment of Ken Paulus as a member of Teladoc’s Board of Directors. Mr. Paulus is President and Chief Executive Officer of Allina Health, a healthcare system that operates clinics, hospitals, and specialized care centers.

“Throughout this year, we witnessed numerous milestone events. For instance, the company completed its two-millionth telemedicine visit, demonstrating that our partnerships have collectively saved the U.S. healthcare system over $900 million in costs,” said Gorevic. “It took us approximately 12 years to reach the first million visits, but only 14 months to go from one million to two million. Clearly, this indicates that telemedicine has reached a tipping point and critical mass.”

Gorevic revealed that the Teladoc mobile app recorded over 600,000 home downloads in 2016, indicating increased consumer engagement. The company experienced growth across all sales channels and market segments in terms of customer base. Its core markets of health plans and large employers contributed 1,500 new enterprise clients, with notable additions including Bed Bath & Beyond, Takeda, Magellan, and Petco. Nevertheless, small and medium-sized enterprises (SMEs) remain one of Teladoc’s fastest-growing channels.

“Meanwhile, we have strengthened our partnerships with existing clients such as Rolls-Royce and Huntington Ingalls, and have adopted the tripartite care technology platform developed in collaboration with AARP (American Association of Retired Persons), demonstrating the broad appeal of many of Teladoc’s solutions,” said Gorevic, discussing the company’s relationships with partners. “Furthermore, we continue to maintain strong momentum in the healthcare provider market, collaborating with more than 110 hospitals and health systems, including recently added Einstein Health and Silver Cross. In 2015, this figure stood at approximately 60.”

Another factor driving revenue growth is that existing clients have expanded the range of Teladoc products offered to their employees, such as remote health management. Gorevic stated, “Our behavioral health management services doubled in 2016, generating approximately $12 million in revenue, which indicates that consumers are accelerating their adoption of telemedicine channels for behavioral health management. In 2017, we expect behavioral health to remain a significant growth driver.”

Teladoc has also expanded its telehealth reach by partnering with emerging digital health innovators, including Kinsa (a manufacturer of FDA-cleared smart thermometers), laboratory testing company Analyte Health, and primary care referral service provider Compass Health. “While the contributions from these partnerships are initially modest, they represent critical steps toward further enriching consumer engagement,” said Gorevic.

When asked whether these moves indicated that Teladoc would enter the remote monitoring sector, Gorevic explained that while the company was interested, it remained cautious. Although Teladoc had partnered with Kinsa because its smart thermometers were indeed user-friendly and easy to operate, it might take some time before the company rolled out more complex tools in the future.

“Although the growth potential for remote monitoring is enormous, it is not our primary focus. Teladoc has established a partnership with CareCentrix in home care, enabling home care nurses to bring one of our physicians into patients’ homes to assist with assessments. Delivering these foundational services effectively is more critical,” he stated. “The key to advancing remote monitoring lies in higher-level clinical integration. Therefore, we have begun engaging with hospitals to understand their current practices and explore how Teladoc’s solutions can support them. Specific product roadmaps will be rolled out incrementally over the next 9 to 12 months.”

As for Teladoc’s plans in 2017, Gorevic stated that the pace of new service expansion is expected to slow slightly. Over the past 12 to 14 months, Teladoc has added five new services across its behavioral health, dermatology, smoking cessation, care products, and sexual health program lines.

“We have undertaken extensive product development, guided by the principle of ensuring that our products are both attractive and profitable. Of course, a slowdown in the pace of product development does not mean we will halt new product initiatives,” said Gorevic. “The expansion of our clinical-area products and services will continue, albeit at a more moderate pace in 2017. Over the coming years, we will conduct research and assessments to determine which new services to add—such as currently popular point-of-care and clinical services. In addition to selecting partners, we will also consider building proprietary systems.”