Teladoc Health posted better than expected revenue in the third quarter, driven by the virtual care giant’s direct-to-consumer mental health segment, BetterHelp.
The company reported revenue of $611.4 million, a 17% year-over-year increase, above the midpoint of Teldoc’s guidance range. However, the virtual care player reported a net loss of $73.5 million, or $0.45 a share. That compares with $84.3 million, a $0.53 per share loss, for the third quarter last year.
During an earnings call, CEO Jason Gorevic said the economic environment was still challenging. But he argues Teladoc has an advantage offering multiple lines of virtual care, including chronic condition management, primary care and mental health offerings.
Although yield on advertising spend was still lower than expected for BetterHelp, as Gorevic noted in previous quarters, the business still grew year-over-year and between quarters.
“BetterHelp remains on track to deliver strong revenue and margin contribution,” he said. “We expect to continue building upon BetterHelp’s significant leadership position in the direct-to-consumer mental health market while driving both growth and margin.”
Gorevic noted the outlook for BetterHelp next year could depend on larger economic conditions as the business focuses on selling directly to customers.
For the full year, Teladoc adjusted its revenue expectations down slightly to a range of $2.395 billion to $2.41 billion. It expects a full year net loss per share to be between $61.40 and $61.10.
THE LARGER TREND
Teladoc’s stock surged in after-hours trading Wednesday after it posted its improved earnings for Q3. The virtual care giant is coming off two quarters where it posted significant losses, including a $6.7 billion net loss in the first quarter and a $3 billion loss in Q2.
Teladoc launched its chronic care-management program early this year and has been expanding its primary care product, Primary360.