Teladoc Health (TDOC) 25 Jul 232023 Q2 Earnings call transcript

Hello, and welcome to the Teladoc Second Quarter 2023 Earnings Conference Call. My name is Alex, I'll be coordinating the call today. [Operator Instructions]

I'll now hand it over to your host, Patrick Feeley, Head of Investor Relations. Please go ahead.

afternoon. good and you, Thank Today after announcing a release we market second quarter closed, our issued XXXX press the financial results. and Relations teladochealth.com This on release the presentation slide press are the Investor section website. the of accompanying available On Chief Murthy, Officer; Gorevic, are Executive to this Officer. and discuss call Financial results Jason the Chief Mala

are Health’s release believe press measures performance. on the we can GAAP will certain question-and-answer important most measures our thereof the the our call, in third that financial non-GAAP will these remarks During session. prepared is Details we be in year note followed evaluating found full discussing we reconciliations be this and posted a will quarter Teladoc measures relationship on that also discuss to comparable by non-GAAP website. Please that and be XXXX outlook between our

statements Also, to call this XXXX. the Securities made from results Litigation please Reform defined Health cause this for uncertainties, the that will those actual could materially be forward-looking subject statements that call. of by note implied statements as and on other or Private are Teladoc during Act expressed factors differ to risks, certain forward-looking Such

our our For our all refer on please to release and statement website. additional which press are filings information, our SEC, the on with cautionary of available

like the would call turn to I now over to Jason.

our of adjusted or results guidance met stability It's end we're afternoon, across pleased the the and a to seen guidance. are that business EBITDA we've we of why report and rest raising the operating strength the all Patrick, you, This the and low for year. financial reflection second for thanks of revenue and quarter strong us. Thank of and with joining everyone a our exceeded

through changing the care to brief on seen today, remarks let's with loss with and, demand mark begin the of start first want of discussion but quarter, my of half In then for QX drugs trends the whole some the explosion continuing I'll we've also course, But to from the growing economic and uncertainty of recap of AI. and themes touch a the around the results. year person weight in I'll interest

XX% grew sequentially a last $XXX X% quarter to million. and revenue Consolidated basis on year-over-year

EBITDA full both adjusted remain our grew segment to grew sequentially, of higher care Integrated end our for track BetterHelp part high our segments Care factors $XX the Care a driven year-over-year end to targets, raise Revenue to Integrated quarter, consolidated which of giving At million is revenue million. of expectations, Our one on by from exceeded in $XXX enrollment year chronic point, the first halfway range. bottom program. the the large the enrollment we in the of had Compared strong quarter. guidance confidence and our us X% X% our and the

Care seeing suite. is they members approach and date. person within effectiveness particular, now our segment, in the of recognize Within clients shift clients an market more of person ongoing are one example enrolled as and all their more the solutions whole of programs program than we're our growth across a care more the care. as three programs. every towards chronic of strategies value multiple holistic in our It's in In our advantage more diabetes the prevention chronic care digital of Today, whole Integrated year portfolio expand to taking to

the our delivering our to exceptional ability second strategies clients report expectations. against in and category. industry's shift which approach. reflects this revenue value quarter, As person continued execute This a was strong apart in performance company, our offerings, its to segment driving in execute for against members. set BetterHelp our player year-over-year, services. mental and expanding with more Teladoc whole health leading to the both growing we're going the Health clear also remains We're happy our growth, our leader to a itself and our continues to demand And keep XX% to successfully as

to We've the This meant given the incorporate even consistently uncertainty from margin significantly with households proven facing. with year, economy, we're headlines with first that members. combined exceptional of year, BetterHelp also are our that value demand our broader cautious margins to year. end to customer Consumer costs many strong the first a which we'll gross acquisition pressures was at half range. guidance stability the QX the through through of seen the quarter. forecast. the outlook are Those main the provide of low improved our a our result But resilient the also financial over more consistent Regardless, last continue performance in continuing stable has half the

a from of the I'll take clients. to talk few in and about we're hearing our themes the Now what seeing minutes some marketplace we're

next of combined they These more they're expect tells employers First, more four as that will convenient incentivize are their the spend consolidating out virtual trends grow. fact care strategy we'll the the by said us opportunities approach. care person over toward represents in with our role consumers next move Health and vendors. the plans we leading whole and of employers interested on half over the virtual the care three keep half recent health way. every for virtual care. the virtual years the stop for validates journeys, be affordable looking continues options they It mean that people also commissioned virtual on of of market first And implement care Over that comprehensive Teladoc This surveyed our for a care years. employers said A three significant more to business. three plan survey to to

to them virtual of health found every diabetes, lose these to to about challenges out GLP-X weight. of medications. clients the Employers to high of drugs. meet originally rising that drugs four been designed patients talking Right want cost also way demand, in doesn't manage These were are bank. help help but us managing Clients our the access of since plans consumer treat five have cost that believe a but can programs roughly in break now, care to

care growing Teladoc launch we're in access developed our our interest this seeing management care result, announced As weight Health programs, scheduled to in recently patients collaboration with later gives physician. provider a personalized based program a year. plans to This program especially

And the know a GLP-X it more because clients we and help their drugs based medication. strategy It's support tailored on on broader costs to weight. aren't program the our effective of is helps manage runaway enough with patients lose own,

continue concerns We uncertainty. hear overall economic also to about

with access and less. to vendor clients all being strong, partner forced stable means yet size factor to continuing all become This financial of are generating struggling drive who can causing is want strong innovation more care value explore some to are because startups they deliver another a solid while free As over more a companies providing the has long At that partner real innovate, with cash consolidation, to foundation. quality capital Teladoc flow. and has Health, and This tighter, a term. working high do we're

proprietary landscape our me for Teladoc this to our the strengthen investments Health, models leveraging making drive healthcare we AI our members. continues brings across members, business, better key year, create outcomes keep another clients. we better to will Which XX experience theme and AI. AI for and our evolve, to At As more and clinicians, than use products leveraging to technology a

allows connecting thousands visits us grow at patient solve account taking to preferences. virtual to provider is same For AI us real to facilitate that requires tens day, geography, and in specialty, scale every proprietary helping with providers efficient a the and care system of of the more and time. one example, into complex queuing patients It's at licensing, problem our right availability, time. become

The provider make the same mental to comes difference. true finding it the is When for right all BetterHelp. can health,

no member industry advantage. every XXX AI one life Besides say. different margin also use drive optimize strong on On performance therapists we for helping a it's criteria. and competitive based we're seconds, a with matching else to in the XX our patients providers, making provider to a and gross matching can better So, average, patient over something

them Finally, real want a a driving a their impact, size enough. content us actions costs. all fits next good Because members, isn't AI sustainable to approach have personalized customized lower We in outcomes behavior way. you helping change scale best massive a one on to at and provide insights to better deliver if allows our

further. So advantage of taking week, with partnership we're we even across our that Teladoc Nuance expanding already services open Last capabilities announced platform. AI we're bring going AI Dax’s our Microsoft's And onto the now, and to we're business. Microsoft

exams, of and caring do clinical the on more virtual the for during improving visits providers documentation medical to data, quality more best, goal they what of focus efficient, making Our letting patients. is automate

experience of We're generative AI also to exploring use to members. our improve the ways

our a making strong what we're strong and members. clients our value pace now, generating and to on business higher efficient us delivering results our setting right very today advantage, focused margins, come. drive allow more puts years It So more competitive for us to and will in the to keep and for expanding our position that's

forward over second Mala the to turn to With I'll share the and review call guidance. that, quarter our

Jason, you, good and Thank afternoon, everyone.

quarter. consolidated sequentially million Second of XX% $XXX revenue to X% the compared quarter as first increased or year-over-year

margin Second representing million, $XX XX.X%. quarter a was of EBITDA adjusted

care year-over-year On growth the growth largest relatively the chronic XX,XXX Turning the an year-over-year growth to segment and X.XX was basis, first revenue enrollment results. quarter to a million at over quarter. basis, second X% a the million new Integrated Care of $XXX driver quarter, of revenue enrollment segment X% Integrated sequentially. was was care first year-over-year over segment Care program of program the increased chronic On X% Total the the sequential quarter. of increase X% across and segment grew end in portfolio. revenue balanced

the Care XXX US over Second second basis $XX prior at growth $X.XX XX.X adjusted Average members representing added The million quarter, second impact was prior year quarter Integrated quarter. down telemedicine member a sequentially, US nearly Care XX% was over last Integrated expansion members. new the by member ending million, margin X XX $X.XX Care segment and revenue EBITDA addition months. Integrated point year X driven over the million million a of the of per

As average member US compared quarter, first increased per $X.XX. revenue to the

to in Turning increased second quarter, the Revenue million by to BetterHelp. $XXX year-over-year primarily XX% membership growth. driven

quarter and customer resulting line with of last represents year's result A EBITDA quarter expectation. in a a quarter. environment point XXX gross of Second over stable was first acquisition improved XX.X%, improvement increase second BetterHelp and point both, in million, over margin basis a basis margins. XXX a the more our $XX This adjusted

per per loss share, based share, Consolidated compensation amortization primarily $X.XX $X.XX includes of second expense of the in compared net quarter quarter restructuring second quarter in stock charges second office XXXX. and share share to share loss the net acquired per rationalization. per $X.XX per based in related was intangibles $X.XX Net a loss share $XX.XX per of the to of of

$XX the and million the Second term million cash compared XXXX. quarter $XX flow million in We ended free the balance short with investments was on cash to in of quarter second sheet. $XXX quarter

Now turning guidance. to forward

to For expect the percentage $XX to in segment margins now Integrated to now expect high in million increase Integrated growth at We the the now digit of year expectations XX of percentage $X.XXX points in EBITDA points growth single digit prior on full our XX Care million prior high end. for XXXX to expect to of billion, revenue to an margin approximately in to XXX billion $XX mid full our increase $XXX for flat range full million Care for contemplates the basis low an single $XXX of adjusted expectation segment. be versus our the outlook to the million, low growth year our for end. year, double consolidated segment $X.X digit We versus improvement. mid low be adjusted BetterHelp teen increase EBITDA the This and we basis range to

basis increase BetterHelp an We XXX now for free the anticipate continue segment. We of $XXX year to points approximately expect to of full cash million. flow XXX

growth X% quarter, third to the of to XX% $XXX we expect year-over-year. revenue For million, representing million of $XXX

range of the million million. to $XX in EBITDA adjusted expect $XX We

segments overall the in consolidated the roughly revenue we for revenue year-over-year expect growth. For line growth of third quarter, with each

exceed in margins quarter. segment We Care to margin third expect BetterHelp segment Integrated the

Finally, we of membership total expect million Care members. approximately XX Integrated US segments

With that, to I turn will Jason. the call back

Mala. Thanks,

health I get partner We to around clients our XXX was more discussed plans, just happy want in care. our week It I people Boston. questions, AI, I to themes clients and vendor, Health many your employers, key I spend more world. was event than as the take including we as about, talked way the great with but from how in pleasure so many the of of innovation. a more time and last Mala had that at that is a of becoming just true systems, annual of addressing their the GLP-Xs, share us to forum Before hospital of many And our Teladoc and not see see governments

half pleased to the I'm our providing performance our on with updates So year. and first forward throughout progress look

the open we'll that, call for Operator? With questions.

question Thank first Draper you. [Operator Sandy for Our of Guggenheim. from today Instructions] comes

Your line is ahead. now go open. Please

a Thanks change big the my to a in really solid pretty your flow second very or $XXX congrats question, versus million free consecutive at much, I Mala, $XXX previously. notable cash and on the me latter comment about million improvement guess change now looking was quarter.

XX% of at benefits, a improving bit, at lower that -- because up cash math. a trying improving jump what to Where the what's but trying dynamics is Just to little simple understand because just mid EBITDA that the what's uses, that's not cash the much. understand

improvement. So a pretty that's big

Yes. really free the pleased first flow the the year. we cash question. our Thank with you, performance Sandy, business are half Look, of for through the of

seeing results. You're our in that

Our you about over as into million. step prior of talk of If and business. part cash drivers free visibility is we performance over the said, have it, outlook, now and generate of flow, that I opted call to of $XXX $XXX expect we million back our operating the improved for

end guidance million EBITDA the initial of as with low expectation. reflects range $XX adjusted up Our versus well that the our

also expectations. a better is it of of Part reflection CapEx

million by see sequentially. software example, capitalized quarter, that nearly for our You'll $X have costs come this down quarter-over-quarter,

including part due to completion pleased and trend. of this see the consumer year, So are launch of the unified to projects, earlier is in app that we improvement that

to is there finally, to And, also component flow it. predict is harder cash free frankly, little a significant because a timing

at through when we year, year. timing visibility have the did may as the of more the than of halfway we land things start naturally, a on So we are little the

better cash the drivers of are what if is, are summarize So I adjusted expectations, It were we key cash seeing expectations. to revised the flow flow EBITDA.

lower taking table of guidance. the are We off the range said our we in the end as

and said, when more we We through the the efficiencies when control as timing flows year, timing to comes move it we to generally especially component cash continue to since, see comes have cost good it flows, visibility of as And just is the spending. on cash capital the I large.

and the cash and of about want job our more of CFOs the I through the are our speaking of back And think more, Mala flow, stability, strength about an free did importance we the into would flow. step with can with then we flow of cash their for talk performance greater looks financial our their very the phone the us I add, positive of we our very like free us. clients partners. And And and they who vendors the becomes Sandy, when have drivers concerns because comes it a just our visibility walk the of of CFO team partners. commercial and going excellent cash free welcome sheet cash our financial If strong I drain that have the it clients”, them we discussion, says, what becomes positive through to and “Hey, flow really a get when can balance or on cash you

Great. Thanks.

you. Thank

Our next Truist question Securities. Jailendra comes Singh from of

now open. is line Please ahead. Your go

came trends how about margin the I like, the And around rest bit much specific you are expectations. How a my for Can questions. gross go in mean, you outperformed year? to BetterHelp key trends at to provide do thanks margin drivers there? little more for back What I your of thinking than at the compared you. expectations? gross comments trends color, -- Thank seems It actually you want taking to better BetterHelp. those

question. for margins. talked you Integrated about in are and we the the performance look, Yes, the to you Jailendra, business, Yes, across Specific seeing strong thank improvements that seeing gross as margin gross we we XXXX said, the of Care overall, BetterHelp over side. the BetterHelp are side BetterHelp, course on both

I And We sessions, to that is of of certainly in that's trends of improvement say are therapist the productivity all productivity our seeing improve digital sessions gross that a we've ranging number seeing taken key group margin group in the have initiatives done therapist the overall gross would BetterHelp. really to actually of that we therapy a more interactions. expansion improvements. resulting number from for margin driver are we things,

Okay. Thank you.

Thank you.

comes Our next question from Lisa of Gill JPMorgan.

now line is ahead. open. Your Please go

spent weight Thanks very with go talking and comments Good about you to to I loss your know afternoon. much. Jason, I clients want your last week. back time programs,

employer? of to the you So about I these it's to thinking quarter, opportunity for start are As how is as again, you're do try an in thinking be. we to opportunity going but view how I addition Are just as there's direct consumer to third this who could the to just potential programs? there programs, if that opportunity direct consumer think frame to also an we know I as this a direct chronic understand in want incremental? And And, here. those a as to well both that? about adding big

BXB over year. in the in to I cost. who month. increase employer seeing the the these are we employer, saw guess a Appreciate in health newly medications management who certainly, especially fourfold weight very topic talk of updated now, now, of our Lisa. question. increase single clients. market. sort significant and concerned of talked the course which we're about focusing care are demand We XXXX a one And features weight to employers program who hot Right provider GLP-Xs the our solutions GLP-X's right cost Thanks, $XXX,XXX a based mid-sized cost others Yes. and employees We're that are and -- plan GLP-Xs employer among seeing a of on management the large from of

and their for in is front center to cost overall And very, very terms them concerns so, that care. relative of of

the these market. Of saying the with market. and that think the we're in weight course, we're like benefits this certainly consumer can today on I with management with from to So take living door to direct they that terms as our those programs I never more market. the want benefits that But you'll of a would see BXB close derived balance diabetes we of very on to people XXXX. focused wouldn't affect into something in And that focused be medications BXB they today

Thank you.

Our next of question comes from Daniel Grosslight Citi.

is go Please line now ahead. Your open.

for quarter. I'd congrats bit Hi, the like and in the on taking dig BetterHelp guide. to into question the guys. a more Thanks

the So a at first it year-over-year year in step growth half XX% of to in the implies in guidance, the high end this of around XX-ish percent XXXX half. the second from down around

kind the curious some is general step change the Or Given Is would given in macro of the structural I'm backdrop? business the down. that low slow cause causing what's to stability digits? conservatism in to there tax, double it just that that

Yes. structural Thank question. No change. you, for Daniel, the

of give on Let me color business. just some you the that dynamics

So lower of course will, ad if it of spend as of sort think you year, the sequential by the is in the fueled, over planned cadence the last different from part growth of year. is which

ad business first the for over half. half ad This the We place few quarters, past the with year. BetterHelp over in that point have spend the took Last taking it. the the in spend year, place year's opposite calls to finer just put of the about half a plan on half in in second of of talked but

different looked the ad experience of the dynamics in through year. cadence to year's last talked half about our way we've due So channels some we

we XQ which reflected year did saw XQ in up back we then over BetterHelp accelerated spent that year, XQ to last course than the in the XQ to of declined last in So we in and more XQ. And XQ. actually margins

spending this balanced contrast to is three year. across steep quarters the ramp So of year, last cadence the more over the same first of period ad in the year the

quarters is, is to going And sequential is, the of also the about revenue contribution the year. than what it so, think if balanced means implication be what that across last more you

guiding it's year comps that's we've versus spend the beginning you and now is new, have set something are the now what seeing line Again, not the this ad resulting just second the means up in it's differently, as half to this deceleration in versus right that the the now of that you're half. in numbers the difference talked that of prior year first we we essentially the the that of guidance. this and -- actualized that we half. from when is see revenue as the the about sort the second -- are is year first It's in in So pacing -- we half the

Thank you.

Our ahead. next Sean, RBC. comes open. question from now is Dodge go Please line Sean of your

any payer right. with Thanks. with in person you how are the I just you anything All Thanks. [indiscernible] health seeing or interest behavioral been growth enterprise is? can give guess, what mental lots care. you're meaningful us of all utilization. Great. How share those can in your recent this offerings? whole updates Maybe on How health BXB contributor You it's commentary integrated in integral around there mentioned growing? maybe health then care? And fast within conversations? mental to is Jason, help

Yes.

other see the concert products demand to our very in health they continue and general, with mental are our say demand -- services. programs. I would is for in We strong

of than to bolstered we're health and strong which sales the We that's individual chronic really And person our our very most chronic frequently isolated where are if that in sales an seeing programs. provide health continue our included of that mental mental care strength it point solution. we believe We're solution continued the for see and our by can a rather or as very So with pleased in an growth quarters second we're whole programs, strongly now results multiproduct care integral over of will. part you sort three product, seeing is sales.

it's continues a tremendously. which results. to primary but part as continue off of base, mental see a XXX, also important of small health to Obviously, We it the we're very grow very with pleased

be health mind health very, among among demand our obviously say of business. as would BetterHelp in we continues well consumers to very I and plans, mental employers, the strong that as see top strength for So

again. Thanks Okay.

Thank you.

question next from Our Sadler. comes Tassan from Piper Jessica

open. ahead. line Please go is now Your

you much and the for great the quarter. Thank guys so on taking congratulations question

So, incremental to prior those if alternative. know management there studies integrated is just possible products? evidence or iterations then all maybe solution diabetes Thanks. supporting price with you the and weight going market any on of kind to are of of solution, versus And the validity the just curious case any Teladoc versus clinical

Yeah.

our diabetes our weight hypertension provider We our management Obviously, So with the does component premium that care solution part based that the had based includes strongly as previously virtual obviously, a is quarter. this it. as third very of care out modest based solution. provider just to rolled at care in being to that in unique positioned market management chronic a program. It And we introduced care a bring we of believe uniquely to weight programs. are provider management isn't sell and

chronic provider It's solutions, based the our are our to launching strongly and that able success I saw well just and in enrollment the quarter. we as care that bring the supporting third -- quarter. gains to studies be second market. to Obviously, in we're care season feel management to management early, waste those Jess, clinical weight as overall selling relative in the

bring have data we to adequate from we that program, the results be weight have So able as and to as But certainly, will we yet. on And that measuring to demonstrating always we improved in management rely studies don't soon market well. as demonstrate outcomes. clinical

you. Thank

question go of Richard comes Genuity. next open. ahead. is your Richard, Our Close now Canaccord from Please line

Thank if can there. growth looked part maybe be second business, the quarter? is update to update Jason, somewhat on accelerating quarter like you. I helpful. international us quarter. any small give an relatively of Congratulations strong you a first It but is know would And

healthcare into seeing of Yes. say, and in of are We're systems out number UK call pleased the for -- among governments. selling with the the And of as I years. with growth I would relatively success respect strength actually hospitals we're seeing well strength We're our overseas. would couple a international, the over and technology as Those among selling our new results recent nationalized dimensions. into health to Canada specifically us last wins in wins systems. Richard,

significant working nationalized we've into in healthcare the right see course, to to Systems. systems. be larger the our hard able Of Healthcare we and been selling to capabilities Nationalized solutions a opportunity those And adapt create

feel board, arena across opportunity. say opportunity, about taking not resources and we the our international would domestic of in So the positive to the the very growth global the continue advantage and I just focus efforts

Thanks.

Thank you.

next comes Our from Bank. of Hill Deutsche question George

now Please ahead. Your go line is open.

are to the product, [indiscernible] opportunity about to of still just weight XXXX. kind care or see outlook you cross for the about can say the to as Yeah. more about to season guess sell like taking question, focused kind question sales thinking products guys focused of I guys. lot for of I'll a Thanks new for product, trying do Good morning, add and of thanks integrated you the think me Gill XXXX. for diabetes XXXX. Lisa management leaving the kind the the on talk you selling guys of an Jason, business? I'm the you about whether lives think

Multi sales back the multiproduct continues plan pleased the to especially with tends the year. we're in the been the of deals to ahead of our market. I say first over the half. line for say question, be product Yes. of appreciate make the course, three the strong market employer to through decisions being with part And year. key of quarters half a sales. health in slightly generally selling half would the of say George. the would speaking, our I first of I it's I expectations season would in it's

bring clients to more services seeing signed Teladoc mental solutions, in I our go, full XXX entire are half telemedicine, deals the all chronic care with to in where first And suite they and the We buy of we clients. primary would suite call, of plan what health health

bookings about in I pay expand and be our upsell. for to continuing land us certainly and with dividends new versus the of cross think If logos, sell our strategy about we're cross see half sell first XX%

within upsell, course, of maybe an additional populations existing client. Now

result in lives. that So could additional

think our want those X Care XX populations the million, opportunity I But say Having segment, with months, opportunity don't say that preclude more to biggest growth. strong I So we've Integrated XX I as members overall new is that, very over would would to XX those. to the million million about penetrate continue added which is, members, products. I our said with to last

you. Thank

Thank you.

open. Charles, Our of Cowen. now Please from next ahead. comes TD your line is question Charles Rhyee go

GLP-X that to a able mentioned of Yeah. Thanks for sort are prior from want physicians get drugs a in sort of is network deliver of the guys deliver patients? that put your diabetes sort setting guys usual regular something you having from allow broad to that to these in health appropriate way for. there And you're ensure compliance something aspect kind plan are Is I -- the what that to validate you can that would so unique to there diagnosis, the struggling back we've more to clients comment, of taking etcetera. with employers requirements, Jason, lot in heard, restrictive a go cost and trying because authorization the of what question. of you that's

is appreciate I question. Charles, yes. the And the Yes, absolutely answer

weight programs are existing management solutions. care our Our new prediabetes of an provider-based and evolution

Of are digital native programs. course, those

meaning care, our coaches. titrate And as delivery provider-based a so, and mechanism well medications both prescribe the on physician-based existing we're to working with adding ability the through as those

their to of medications with and with solutions, that local We're and solution well nutritionists, limited working the them other their of behavior our someone if these scope goal physicians and think is make including who changes, that a the we're of lifestyle exercise. the and prescription. services, those and that between local going about the as bringing sure the are including ensuring appropriate to to simply our in get as our physician all dieticians of difference in we the need plans market, with So them relative physician the our to people engaging employer activity clients coaches digital health full coaching and registered are and the you

the the sure right off a healthier that support and really life, who are healthier people a term live so of time to And can at move them eventually those getting for that medications maintaining making goal they be the long need while on same of weight. ultimately a the don't

for perspective, coming clients our they finding the looking broader, a exactly to in our are that: solution marketplace. than general what more from us are comprehensive So

you. Thank

you. Thank

next Ryan question from of William Our Daniels Blair. comes

Your now go Please line open. ahead. is

question. Yeah. you. Thanks Jason, taking for my one for

few gain that organic your be to two, there you'll talked smaller entities. with competitors, a or Thanks. to and You clients give just times capital if their client in the to market Or share? leverage number valuation? market unique some of the market favorable having noise for M&A the more are base maybe balance one, get sheet sustainable end number in the they're comfort at either a opportunities not expand about curious, I'm to going products that some perhaps the

a stark those Yes. smaller competitors, financials that Thanks, And when decisions or going in Ryan. we're go -- favor into And to clients buying our financial to in decisions favor. our mentioned, leverage I see for as there's difference. resulting relative our our in Certainly, strength our growth. we organic prospects deep

-- hurdle who I growth of both some for cost of to companies say we're and starting some see raise starting subsequent to rates to given see rounds companies capital to would their terms starting higher see certainly of in finally rationalization definitely profitability. and are among capital And struggling the valuations. are We higher private

financial continue us to our have to clinical in move looking be whole-person of strong of For virtual opportunistic proposition regard to that is be a for always make imperative the care. deliver promise as scope that able those to to to us, solutions on that both expand the to able and strategic line to up be and with forward. well a there we We're sure strategic priorities as

say would likely the current I both So yield sides that environment will of that equation. on benefits

Thank you.

Scott line next Our comes KeyBanc. go your ahead. from now Please Schoenhaus open. is question Scott, from

for taking question. Hi, team. my Thanks

to driving that associated So be mix Care in the chronic there something BetterHelp. higher this? PMPM above here? be else levels. pretty that you Could shift? care Is Thanks. a BetterHelp of? following with we aware color on actually and noted more Or breakout up XQ between you expect us for Care should the acceleration margins Integrated nice XQ, What's accelerating you and this is give margins Integrated It's for that

question. the for Scott, you, Thank Yes. Thanks.

is, So particularly really, different think certainly and One are Integrated you margin chronic seeing margins. expansion, if and Care the care a I our of the few down about our to the drivers. it revenue the benefit comes flow-through to flow-through revenue

So that is the first.

physicians The nice from Care gains margins. our second the modest productivity some on in employed tailwind thing fact our that the side seeing is, gross we we from are some certainly Integrated are getting

seeing So you're of benefit the that.

we technology good G&A, across such I control I on demonstrating say. say then would line And even spend, the are would development as business and items cost

T&D last As we quarters, for the quarters. the to our get do leverage said from have next of spend over couple expect several we

together, and our margin is you all what driving that is that performance. So gross our -- overall of put

you. Thank

of Our ahead. go open. Fargo. next question now Wells comes is Stan from your Berenshteyn line Stan, Please

back Hi. Membership Thanks questions. taking sequentially. swinging grew Revenue to my grew X% X% for BetterHelp. sequentially. Maybe

revenue Thanks. what performance in curious excess growth. So drove just incremental the of membership

of it's It's -- about. also combination you in performance, And ad was quarter. we as significant then as talked essentially spend user of think the -- first our the -- quite it a the both it's

You results. quarter saw first in our that

on think through those what revenue, that users the of at terms you in second about of really from lot realized a the If happens the quarter, of yields quarter. coming the end revenue that

the for our that seeing So revenue really second is pickup quarter you that in BetterHelp. are

Thank you.

Caliendo Kevin from comes UBS. question from next Our

go Please ahead. is open. now line Your

people of contemplating, repayments impact was taking October. back your Have you're on -- pay if you guys loan student for on of and are for if who guys overlap BetterHelp with Great. I might I the those analysis Thanks my you again users? accounts question. have anything board wondering what done volumes. it the guess, as any to coming in and that BetterHelp specifically

go the into I won't Kevin, Yes, components guide. our of

I upper would end impact the relative of out our economic as factors isolated range of at of included into big where, to a be scenarios think break as put of greater end the environment, at range think And a of category that lower the of what us you own factor. to, we've economic impact overall student And overall such. I its it's contemplates say, heard our economic I expectations I it variety quite of a say frankly, the range. enough wouldn't loans factors. and don't would less an I that

enough. Fair you. Thank That's helpful.

you. Thank

David Our ahead. Larsen next question BTIG. comes of David, from open. Please your line go is now

the good Hi. on quarter. Congratulations

about or Just presence? matter There looks in plan to or kinds potentially on about proposed telehealth MA for talking a mean your telehealth. primary not, for I me. physicians. it couple do any have Does can reimbursement have on large things that they're that the physician clients you schedule for fairly were favorable of in care of or talking a expanding fee revenue that especially there the providers thoughts XXXX? Like increasing participate

color does Just not matter? thoughts any it or Thanks. be there would Or helpful.

a I basis David. relative say, level, administration from respect a the for to With direct don't Medicare. coming trends are fee-for-service on favorable the the we Thanks, itself, Yes. would the care. reimbursement get at of CMS fee out government and virtual macro to schedule

us affect really So doesn't directly. it

and work We on with on health managed plans MA the Medicaid.

tailwind, our overall would for it and a don't us favorable changes those revenue. bearing so on I directly have And call would specific I the environment really while is say,

Okay. Thank you.

Thank you.

your now from Elizabeth, comes of question is Anderson Evercore. line next Please Our ahead. Elizabeth go open.

it's Thanks improvement, Hi, of result that I like benefits nice much I talk sort the bit you would next I assume over little you. through sort that for either next initiatives of broadly, and that And that the wondering a be more new the deal sort if of question announced. the about the doing? early on a mentioned. of Is something couple the with too productivity Thank you're some for congrats of like of you of a have thought so or years? over could quarter. sort that sort what was Mala, think, you like guys. Microsoft of of financial you year

things Yes. we at including at efficiency can continuously provider things Thanks are for AI greater efficiency. of uses at our our about remarks on technology. we his you in as looking such the leverage When of geography, that how we Jason for of the all across and some we look how question, leveraging talked as are prepared Elizabeth. costs. lines, such Look, look productivity

productivity. we we seeking better of result XX who to said, is, can just ultimately look the providers with are get and better productivity. in that our do over he models it -- As care, way we alone how AI more And matching manifests use members does already in

tailwind physicians. also modest seeing our in when comes productivity some employee are it We certainly to

and in the are tailwind of have that are we from between we W-Xs, terms XXXXs about know, modest terms model force talked shift you productivity. of seeing we hybrid making our provider As in the in the and that some

not it's one is series a It So of initiative. initiatives.

at looking continuously improve ways are We our to margin profile.

Thanks it. Got so much.

you. Thank

go Vikram from Vikram, line comes question from next Baird. your Please now Our Kesavabhotla is open. ahead.

at I you follow the around to thank just behavior taking Yes, the for of the some user wanted question. BetterHelp. up on comments

I is us BetterHelp performance And of million. the could curious are joins X.X scale? how as if much color related total long back? with someone to the they in are you continues are typically behavior how you business staying And give when to some contributing was when that, they coming they the how to specifically, that And So the also service? often leave, seeing on platform, Thanks. visit any changes

Yes.

questions. Vikram, for the of set So thanks

specific a which I customer is And is lifetime haven't last or component. We What to a frequency member that then, the the cost, part say duration. average of in we given of to would improvements returning member, course, see is duration of value continue it. pricing of acquisition to And platform. of return then incorporates consistent platform

lifetime together, of wrap to of see So a if value terms continue member. that strong of we you in performance all

last a was there of sorry, question... -- the the part With

Volume.

We therapy. and group can for What you is BetterHelp. volume. as digital more interaction the don't break out more that I actually visit Oh, we're volume tell said, Mala seeing,

because call visits if serves count with or therapist actually a we that -- we the only a interaction So live what visit to clinician. depress a a it's

seen faster And the to our BetterHelp group interactions serves as -- count interactions actually are visits we growing digital on actually so fact on the the we've side. depress and what the volume that

margins better drives that us. course, of Now for gross

a trend. see that So favorable as we

you. Thank Okay.

for today. questions no take further Due time, we'll Thank you. to

today's that for So conference Thank all call. concludes joining. you

disconnect now lines. may your You