Teladoc Health (TDOC) 20 Feb 242023 Q4 Earnings call transcript

Good afternoon, ladies and gentlemen. Thank you for joining today's Teladoc Health Q4 Earnings Call. My name is Tia, and I will be your moderator for today's call. [Operator Instructions] I would now like to pass the call over to Patrick Feeley, Head of Investor Relations. Please proceed.

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

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

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

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

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

thanks, and us. everyone, Patrick, you, Thank joining for

line accelerate in As significant we'll continue made strides an much start realizing and we This past that year XXXX, transition benefits Teladoc we're focus progress. several more over Health has the in bottom a as a on of time performance, very to of economy, quarters. increased company. an scale industry our

million XXXX. in adjusted most profitable flow our delivering EBITDA of is growth cash evident XX% success in Our and free in $XXX year-to-date,

million drive virtual bookings double-digit base over is penetration as care out product approximately of season to XX our large that closed prior of success The through our XX% continues installed product our expansions This bookings strong selling year. also XXXX a with of breadth clients. We cross-selling representative growth upsells existing driving nearly were or of portfolio the our increased with members. yielded

innovation, and we flow while making our adjusted million both will margins removing this This innovation. in of and XXX expansion organic years, puts options by restructuring. flexibility the to and to of And us position grow basis adjusted EBITDA strong the in we on in all in efficiencies investments line struggle. growing to tuck-in year, our and others $XXX targeting EBITDA points next as $XX than repurchase. M&A, through over annual table, our the to time, space have At including at top continued continue our the million giving This the more in back through We're share do us to We'll grow line. XX revenue have margin same provides investments free of sight debt expenses retiring in money least XXXX. investors and cash continued financial a it will X

broader the range clients person approximately million We're even work our thousands excited a to bring virtual With in like members of to around to care. in areas of technology And we we world, XX initiatives whole this be continue engagement to to in the leading productivity market and and profitability. continue invest we leader weight year capabilities. services our management will mean pediatrics as achieve and

through we're that as I'd this key results, going, organizational walk With to QX our ongoing we our XXXX for where where milestones our journey. guidance, you like framing quickly review in and are and

results. quarter First, fourth

fourth of Segment growing X% $XXX points million, line margin of margin benefit our Revenue representing grew segment Care points our the efficiency. expectations, from XX.X%. consolidated XX% result, line, over on of over the XXX grew XXX in year-over-year, expansion EBITDA operating expansion the XXX X% quarter and in year-over-year in a top expanded and segment leverage year-over-year year-over-year Consolidated basis fourth full points was revenue basis adjusted basis the strong $XXX to growth Integrated for million. adjusted On $XXX of XX% with our Integrated delivered margins prior improved margin to fourth EBITDA Including to year's million. a XX.X%, quarter the basis the quarter Care year. to

which adjusted BetterHelp $XX was despite XXX lower over prior million year-over-year revenue. basis fourth was fourth points helped expanded of Turning $XXX the the to EBITDA Revenue adjusted growth BetterHelp year's EBITDA margins segment. in million. quarter, quarter, the XX% drive while

year, below While we're we full the on pleased growth expectations quarter lower were revenue saw deliver the to double-digit and margins for as yields in marketing adjusted our at the both and spend. BetterHelp, EBITDA quarter

will spend returns our outlook the a impact will moment. the Specifically, BetterHelp as media advertising our in half speak first was rates of persist, experienced a But XXXX experienced below certain relative We'll second that to result, assumes in channels the to on our yields year-over-year of year, the second target social a the departure of were in in guidance first in half. half and the XXXX. lower which half we growth

I'd of revenue into At million our From our a that and spend approximately a steady sell like asset you I'll as additional large roughly including traditional is a virtual half think of how from with the stable it's of we Care business may a Integrated that is source perspective, long-term virtual higher-level base general to revenue Care high services. a business, products for our beauty care members which provides with take very U.S.-based Teladoc XX business derived the our what our thinking we're business. a providing a begin and a framework model segment outlook. client of medical care segment. Integrated few step minutes about back and level,

have today. remember time, same urgent access the that health consumers most to At it's virtual care care important to U.S.

fairly anticipate products from will so. U.S. in penetrated. this So we it's growth taken forward. consistently well single it's virtual a digits and accordingly, to to point. the care this But we market share be replacement continue largely our market We've in low at going And expect do revenue

growth. stable think Integrated the So segment lower half of roughly Care of but as

comprised Integrated virtual revenue segment of chronic business. of products primarily suite is of Care our half care care remaining The international and our

Our chronic care of of million care of base today, care medical look cross-selling general or medical at products XX% products, about that's runway chronic to chronic And XX products as we ago. general up expand our one X long care from has of when our business, including for against our our land continued represent suite of XX% our client more members book strategy. I only just virtual access urgent and a execute our years

over there's still years with X of for within penetration, long chronic book. runway virtual lot growth XX% a made existing the we've progress our last care a While care

care single-digit our care the So growth us existing products we've client average to years. a that of revenue that confidence mid- gives selling successful and over chronic next book, chronic been deliver in high we lot through our few can

Our us continues steady growth. presence visibility international expanded contributor good year into in and this a XXXX BXB to business revenue growth, gives be Canada to revenue our

over revenue growing business So X combined, suite virtual years. growth next and reliably products our Altogether, segment we mid-single-digit Integrated we annual a channel of have expect international rate. a an of stable a the for the and higher Care at each in care care chronic asset book

operating significant capacity innovation investment while productivity for maintaining opportunities expansion also leverage long-term improvements, and margin and in robust Integrated from in We see strong sustained both for all segment, the growth. Care

We this X growth will of segment majority expect drive next margin over years. consolidated the the

BetterHelp. Turning now to our for outlook

we broad As segment the growth going drivers. think about think of step back three and BetterHelp forward, I

to services And health overall rise. is demand demand that need, continues for mental supply. First, significant unmet with outpacing

services This continues business, gated in health and deploy amount be BetterHelp's with a time to acceptable services modality. focus shift preference of individuals new That BetterHelp acquisition dependent Second, At means awareness rate convert to by members. the profitable to increased growth, given reach return on virtual same part ability time, member mental of in them capital BetterHelp's to on direct-to-consumer we is consumer create our an a continues can any new for efficiently tailwind. for the growth period. to as is somewhat towards the our at

its and news a efficiently the unique deploying at advertising for amount size large strong driving affords deploying BetterHelp flow. the each given largest drive by scale, therapy cash we this the dollars, provider the and algorithm is in an while year good continued business steady The we is, we can current margin. experience capital in and runway virtual free market well-established of believe for our growth advantage growth us scale direct-to-consumer BetterHelp's of At believe far today. attractive

internationally. there's see these To new outside and We're XXXX, also internationally, hired English-speaking the begin to fiscal primarily and BetterHelp's year think this growth the year. recently Roughly and growing countries, to we as more the through goal the particularly we potential markets, revenue a we're untapped lot revenue in on U.S. working increasing half a BetterHelp's our meaningfully We generated in the our expect U.S., Canada XX% U.K., BetterHelp in presence international XXXX BetterHelp's of expand actively of was to move as of and leader. outside accelerate second such advance financial contributing results to efforts focus

margin an and on with in the of revenue $X.X maintaining We focus flow over the BetterHelp attractive business. and With grow bottom continue to free toward our eye next new cash increased will customer in responsibly, billion growth efficiently single-digit the to revenue believe we over drive the opportunities can low BetterHelp margin modest X years for with expansion. performance, line range we deploy capital acquisition at and profile

review, update you long-term to investing reinforce our results our and on in operational of I technology the ongoing our the commitment Before growth company. of to I want

to for effectively outcomes technology to data clients. drive to and leverage utilization ability Our delivering costs lower engagement multiproduct fundamental and better and our is

it's data members investments continue competitive to engagement engage a we improving important learning basis. technologies differentiation capabilities through underpinned such our in as by advantage. Therefore, Our ability with remain a science machine data key that and and driving greater hyper-personalized AI, on the

product, expect to we continue to across while sizable you productivity data. organization, hard work should and the efficiency us in targeted and drive continue to investments to make technology So

and improvement our bottom rate flow upon expected substantial the time, initiatives, continuing by including actions have to and in of savings process XXXX expense sustained generation the productivity on identified third-party the focus we and are realignment make we from total have build improvements, initiatives performance. while we increased efficiency organizational and date, on in cost delivered These in cash in spend approximately At annual we line driving million run innovation. investments savings We're automation operating end will internal same increased $XX To result margin reduction. expect XXXX. and that

We savings XXXX identified of to adjusted total million and $XX stock-based expenses, these impact GAAP million to cost benefit in inclusive expect XXXX of $XX EBITDA compensation.

also invest in These we improvements Our provide as near-term will continuing And ongoing. initiatives our growth updates in line our efforts of the drive we and and will path while to industry. position generation. future remain towards are allow to strong, cash and long-term efficiency performance flow free productivity business to are bottom The unlock and appropriate. opportunities growth expanding fundamentals enhanced us our committed productivity leadership

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

revenue of increased good you, the a to EBITDA XX% consolidated year-over-year. margin year basis adjusted increased prior XXX full quarter afternoon, $X.X to XX.X%. of consolidated an year X% Full year Thank $XXX consolidated of was quarter million. XX% EBITDA points million, Jason, and $XXX increased margins everyone. EBITDA year, Fourth million increased representing revenue billion increase XX.X%. X% of over adjusted Full adjusted $XXX Fourth year-over-year, while

$X.XX share compared loss in expense intangibles of per compensation in in loss $X.XX a stock-based fourth share quarter amortization $X.XX quarter fourth the and the share loss of of the included XXXX. share was $XX.XX per per quarter of per net to acquired per of share. Net Consolidated net fourth

to fourth compared year Fourth the million Full was in year and in was with balance prior over We sheet. $XX.X in quarter cash XXXX. cash $XX.X cash flow free million ended flow $XXX.X compared cash billion on the free quarter year. the equivalents $X.X of million million to $XX.X the

million Care X% to $XXX in fourth year-over-year increased segment X% results. revenue quarter, to Turning Integrated growing the sequentially. segment

the $X.X to expansion. revenue to growth. The fourth XXXX Integrated Integrated prior Chronic was the Care representing million, year's segment Care X% Fourth of increase Integrated billion. year, Care an basis $XX was quarter, full margin point largest revenue quarter a For over growth adjusted EBITDA XXX XX% Care contributor increased

million, and were drivers sequentially. fiscal an new Care X% in enrollment year-over-year prevention and weight of of Chronic increase growth grew Chronic We quarter, X.XX enrollment net member quarter of Chronic hypertension enrollment by by enrollment bringing Care year During XX% programs. in full our biggest followed ended XX,XXX, diabetes XXXX programs fourth year to the with XXX,XXX. the management Care fourth The

As in followed management management, at benefit program total growth prevention enrollment, and of of of Chronic both approximately success Program our Chronic enrollment. management enrollment bundled year-end, diabetes comprised diabetes selling approximately and hypotension XX% weight Care half to program XX% from solutions. continues Care by

Care $X.XX over year million XX.X the Integrated quarter. Total Integrated decreased the of year's membership members. Care ended fourth $X.XX per U.S. revenue at segment Average member prior

Excluding the new member impact year, the care added members per increased $X.XX. of virtual during revenue

million, the $XXX BetterHelp. compared roughly million XX% for year. down over of basis a Fourth the quarter. flat margin quarter. XX% the an XX% increased of versus XX.X% BetterHelp year. in year XX.X% adjusted representing the EBITDA fourth fourth year over to EBITDA fourth million, over the $XX was $XXX of Full year grew in prior year's sequentially. year to increase Revenue growth last was of Turning quarter, revenue to Adjusted prior X% over quarter billion, full year's $X.X points XX% prior the BetterHelp EBITDA margin representing the was adjusted prior and XXX prior

Now turning guidance. to forward

full be to expect year segment. low X%. revenue We low in of The includes BetterHelp Integrated $X.XXX growth year-over-year to and X.X% growth mid-single-digit range $X.XXX XXXX our billion, billion represents approximately Care segment XXXX which revenue of in to in growth the to outlook our digit single flat to

for adjusted margin Integrated XXX year-over-year million basis of a adjusted XX the be flat in growth million, range Care Consolidated includes plus points the to We consolidated segment And basis increase of XX.X%. guidance X.X% segment. representing expect and year margins $XXX year-over-year to XXX EBITDA minus to or between for EBITDA full to of BetterHelp XXXX points. the $XXX

growth $XXX $XX of a Full approximately XX%. of stock-based We million X% year year-over-year representing free expect full cash approximately $XXX million, is be representing to flow of year $XXX expected to compensation million, million. decline to

$XXX range million. the revenue of the to we first to expect million quarter, For be $XXX in

be to compared to First quarter Integrated first the expected BetterHelp X% in of growth growth revenue revenue of segment range Care year-over-year X% X% last expected while is is down be down segment to to X%, the year. to quarter

to consolidated quarter be to expected of in adjusted $XX First EBITDA million. range $XX the is million

XX.X% adjusted Integrated segment EBITDA First guidance X.X%. the XX% to BetterHelp between EBITDA quarter adjusted includes and in adjusted Care margins X.X% of and margins EBITDA range

a issue first guidance engagement efforts in in client is One our that launching thing I to technical BXB want a call we did to experience mapping to our out related due consumer populations. XXXX new the quarter delay during

effect While impact of campaigns, is an XXX we segment basis which year-over-year our approximately impact This segment our have points fixed onetime million of represents Integrated Care the have million. issue and approximately relaunched XXXX growth, this to marketing XXXX outlook. revenue we Integrated expect of in Care on $XX the reflected cumulative $XX delay

annual the single-digit we low of mid-single growth we as reflected long-term XXXX, growth today's the are BetterHelp Care includes revenue and press years beyond annual a also which for release, segment. for the low over segment, as Looking outlook Integrated follows: in providing digits to next digits, the consolidated expect in X mid-single

line targeting items. over XX adjusted identified expansion points in and leverage driven large margin annually cost XXX We the are next million years, G&A development at to be least discussed and in X margin inclusive by and of to XXXX, We our anticipate operating expansion earlier. over technology of EBITDA the of $XXX actions part basis

manage expect decline We march the XXXX. compensation $XX GAAP compensation including annual stock-based and towards year-over-year as declines million an next in our years over we X in approximate profitability, expense

our believe business flow, our increasing helpful cash would thought and balance Finally, unique capital of tuck-in amounts of members billion us on One, XX We with remind million M&A. be with base our cash products it priorities to allocation generating forward. you a business. bring our I sheet, of to $X.X in new and of strong clients ability book large to gives existing free going our

to We capabilities. our opportunities continue to will, therefore, look for expand

debt Two, pay down.

our and to we cash the choose. balance that the if in have convertible We bond issuance XXXX on allows us due sheet retire a flexibility

as strategic annual buybacks buybacks. to dilution as generating share we The stock grants. of free flexibility minimize share cash us provide Three, are do the well level from increasingly flow employee will potential

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

we'll questions. Operator? With Thanks, think Mala. open I that, up for it

question [Operator JPMorgan. line comes first Lisa with from Instructions] The of Gill the

back minute just want go gave. for you the try I about square and selling talk to to just of and Mala a Jason, numbers that a and season couple gave

So Mala being talked about up chronic members XX%.

You like you're talked about Can you chronic you business high? growth talked programs integrated high the that about booking the help talked is single-digit and season. when as understand bundled But the growth yet, selling mid- doing double-digit isn't and therefore talked of component that, me the to growth. in about to you more about

as of what where this XXX% as secondly, some of talked you forward, think the an base XX% can my about Or be that base we I your have would it then And is question. about going access? number access, about think opportunity having this is smaller

Thanks, question. appreciate Lisa. I the

to about our we we'll of from sales of we've Chronic outlook, XX% came as about penetrate our clients. As said, with And longer-term think our we continue programs. do our to book selling think business that existing Care

And made XX% years over the that make progress we XX% so we as continue last penetration, that X will and we -- progress. to that's think from we progress

we points went centered growth, that million discussed weeks, As of then Care impact that year and onboardings member Chronic bookings or that $XX new versus this programs. has is pause last issue and XXX think with all to of about an which us basis our Care of about on almost marketing for about X the Integrated temporary mapping through caused had in remarks, we the year, I about prepared as this

growth majority, on vast Chronic Care And impact the year, our of you majority that as is the Care so programs. Chronic in this think about

amount we sales we as think business of -- question to late came revenue. And year is, we in-year about when do first, but in this sales not beginning those live through have as that some to in did always which actually in We there's second January, have go meaningful The that second the and a revenue start timing going a is produce last launched year. last year, started quarter. starts of booked for of thing

comes so year outlook, full And that the revenue the growth that's into therefore, and along with it. factored

Integrated will growth that of think do Care, it we consider us as you into revenue provides that higher news levels And very as book Care base to that The driver more virtual care Chronic out, being revenue. pointed stable to is, good the in especially more do We be of programs the continue it you and relative about bundled sold. which of sell. see we

talked we when a actually, As sell revenue tend when but your bundle we about we services, member at per higher sell conference lower get of than individual revenue we products. to

member per matter, we get for outlook lower and the all you entire we revenue our sell but feel we So to Care revenue per revenue when Chronic a together, about international of sort on than good Care la being for basis, Integrated the growth. carte that that put higher of population, an When so multiyear client of speak. drivers of

of question line the The Barclays. Stephanie from next comes with Davis

the get and the into is you the And tear What Is baked hoping around if ramp? it's the the some such talk resumption? yields much any as just BetterHelp of there to risk me your to outlook, in through could assumptions improves can how getting provide half macro was you color improved? I to back gearing underlying general, assumptions outlook.

earnings guidance think I'll in in acquisition if Mala about we BetterHelp half range. direct-to-consumer third our to customer our you call, talked market cost quarter how So start result growth back BetterHelp, On deeper. then would in the and lower of the can go trends Stephanie,

the range some double-digit Our growing growth low that up deterioration the outlook to the assumed high original end some BetterHelp range. mid-teens just called for 'XX at full the improvement year. and over at the ended end of XX% of for for BetterHelp, range

of the part in guidance it our So range. lower was

acquisition particular, I second What into drove of of that half on channels. costs in that. set pressure of a we the In our customer higher is, saw the and bunch a customer in acquisition social we levels the levels, get more the go as the channels. press fortunate, There are we those guess that was trends on media weaker factors channels We're year. have we across sort good overall to all part diversified of of higher spend

in year. of felt the second we of that the impact So the half

some persist. to year As start our that far. those good of seen the this we that a We international markets our into dollars we back think higher made costs XXXX, but as benefit year in international for markets, the thus those of outlook limited from results, is half of in the levels assumption customer get do at acquisition which a we'll shift scale we've

international tend The costs markets. customer lower acquisition to be the in

same the of -- if goods as And gross two those slightly up they roughly business. our be the margin to you end things, at sold balance net Although cost higher. the tends domestic

lower we current at of situation guidance end the if when range higher assumes for the guidance that the the some improvement. So it our is assumes brackets deterioration. forward, there extend sort of look outlook, that some of end The you outlook, the current meaning

Yes.

levels Jason. as is first assuming of trends I by back the Stephanie, think the covered are to we cost most our that quarter to say, continue would have of measured the saw half, continuing in acquisition as What frankly, in per and a of taken we you've see year. believe I we guidance approach it, we this

have if end think about provided, guidance we assume So at at end range, in the second acquisition as the of deterioration said, in Jason half the improvement low the trends the some and the range in we we trends. those of customer some assume range, you high

during be somewhat deploy would -- the acceptable our is you remarks, any given our return prepared just growth, our new -- think at businesses we a acquisition I can business, of sort what take And profitable by step on of if focus say and increased the is, member what to capital BetterHelp of as the consider period. we BetterHelp about rates with also back gated we of said in would amount

products the dependent ability reach services. means individuals for that is BetterHelp BetterHelp's our is in So efficiently new in what that and awareness create growth to on part to

So guidance we it our are into line per top and growth profitability continuing the with would we theme we that are I a is business both, into balancing -- in that this trends have seeing how business. factored say, acquisition cost of our

And will it's half against but that. on our out probably second evident 'XX, from be comments, calling 'XX pressure acquisition customer in with back that comped half it's costs the of of worth the

And so it actually has a -- a the first has half half has a more lower challenging comp. The back bar.

The next with question Singh Truist Jailendra comes Securities. from

Singh is Jailendra This Truist. from

So Can on the efficiency half this EBITDA. of up just wanted like second coming half any on more two benefit segments? program understand help that program, to QX. more how is benefit than Are follow expecting question across spread why And QX? benefit better is the million seems us in loaded? from $XX you you It in this in is benefit

on Integrated of efficiency of cost takeout cost question, side. on second say these the benefit the would most Jailendra, is I and Care really your programs So

As we we said through Integrated side year. house. drive in see the leverage more of side we our operating will as expansion prepared expense Care go the on remarks, the margin of Integrated more where We Care can is the

basis of an on whether automation be the different benefit a we initiatives areas, taking And it I be of Look, basis. EBITDA productivity improvements, terms say how it including be million, are offshoring, or accrue adjusted million whether year of $XX organizational this -- a obviously, on supplier in $XX would including we number third-party -- GAAP like the of spend. things whether it initiatives across doing are

particular the say I benefits will So ramp wouldn't we them that through see are these one year. loaded quarter, back-end into

with comes question the Close Canaccord line Richard next from of Genuity. The

enrollment or not details that delayed comfortable can get side you side, exactly I what you on it you on side? how your Was on more Care was that the going that your if again? provide do was? Chronic engagement details the impact that's about happen that or on And to marketing financial talked But there. the the appreciate the and customer

with we of these We issue. amount number had to -- a all while January, our happening consumer record inherent the same X of of implementations mapping be who issue with delayed out and by of an And record very Care The at weeks these affected health care members an our out pushes diagnosed in complexity. turned for for January implementations marketing we implementations. deal The In data actually files, of for communications just client out XXXX. and companies to come number member like eligibility small. implementations engagement some enrollment But delayed of resolved consumer we this caution, Chronic X abundance programs. curve primarily the with time, halted about discovered the

year. as out ends we so anticipate shifting said, we sort the to And rippling by of that delay the the through full about curve that, up tune of $XX million for

seen the issues. we've marketing restarted new absolutely no and We've engine,

turns would the the caution we actually making our that it is back was I the members on. out, of behind affected that scale very the diagnosis we sure And us. What as and is full it issue confident affected issue say the that campaigns So marketing population of before and completely in the scope was our we're turned identified had small.

behind that have us. So we're confident we it

identified the the of clearly have source scale the We and was small. of issue the actually very, issue very

question of line The Sandler. from with Jessica Tassan next Piper comes the

on just kind it guess reporting got And ad BetterHelp worse observe declining just observed maybe year-to-date XXXX? whether of Thank to in yield terms BetterHelp, of you in what any in over the you've the I the and course you I'm on first guide. ad all of maybe when XXXX. curious the on understand for on detail yield update

the talked actually about in had year, in improvement, had about that we deteriorating, had coming had being started given last back range the call, at expected we observing We are if the we the end quarter fact back the we at the third We of had we right? the half talked of had are initially about were the high year. -- yields the we lower October the in it yields in range, lower than fact We talked see yields about the in range the half earnings coming and of come when to saw actually the the the if starting -- that low of end start we talking year.

and kept So we over sort back trends. the minutes factored that year. have have still are reason few the that persisted as They into is have half the a They guidance. through said those we why of we the persisting of watch ago,

the providing of that of similar half last the are that Jason low the comp are expect would as that, the the year, And assumes the to providing. we of the we Again, in reason say second half we a the improvement. the year. range the of The Having to easier second what that's said, is get deterioration. in said assumes end we range high year, range end comps

January I mean, -- we see in Jess, generally January. improvement see in generally improvement

we closely stubbornly channels, monitored through we so frame. especially saw in we And -- going were January the them as And time higher. those stubbornly

basis guidance And as so we're using forward. for going our that the

next line Cowen. with Rhyee Charles of TD from The the question comes

years. more that's I Care XX%, general you has think back Innovative XX% is Jason, I said that mention the of made -- real And medical go products over one and few base want last up Care Chronic from you or to to the quick. of the

are sales what for make like? also it's be these of the people about, rates how You guess it of a from And may time. slow little given decision? I just over you gradual clients have you're it a that And often how you talking often base selling up is, clients. question existing that growth your like but bit about seems a what XX% coming improvement sort the looks potential are sort are cross-sell. mention to of a talk that pipeline sales -- not like the large would into, is to choosing Can Because

Just understand if trying of don't they decision-making add to to among already. Chronic dynamics the clients have it Care

we're at of we're point year. many pipeline, That's to the the is question early refreshing this pipeline With try it. to of through the of year. toward happens year, And dimensions the respect we can. that as really what's I sell generally, exactly And the I'll answer of end now. as the the in happening what

in sort the our season So pipeline later what at like of when and refills on it I'll selling reserve year bolus. looking until looks we're sort the significant commentary of

the essentially a base are business sign -- into to base, existing trying upsellers with who our customers. Teladoc reps is our into build out managers and our Health account client sales dynamics whose job respect to go who our clients to With essentially split and don't new with have of new broken is force relationship

the same selling selling about two are When dimensions products clients, of is we that. think new population. into there essentially One more into

health products we or selling serve. client. new populations as the to tends we of that as is managed and we second geographies, within Medicare into happen mostly that Medicaid plans Advantage, lines such business, The within new population new That into go expand

think, of mostly asking, clients really first products. selling about clients, you're I So one existing upselling additional that or into which into new is

constantly through We're would And that. programs say goes Chronic through the an for evolution. I working adoption Care

previously have us. place. and bought Equally have don't solutions frequently one in that clients our solutions they suite Chronic as we're Care those other it's in Some for replacement business with of they where a going of

is that evolutionary It at sale. all so certainly an happen And doesn't once.

XX% expect wouldn't XX% to us XX% of I from go a penetration. sudden So or to all

solutions our on guide we to on working But accelerate existing now, are We and our penetration. bundling what right in the order trends are. structures like what based we know

to of now the see is But guidance. So on haven't we'll not more yet rapidly on we're based identified. breakthroughs degree breakthroughs we that we breakthroughs outlook to what we business, guidance our based right any see on and that the making our based our progress penetrate know, update ability as our that in book our we

Bank. the Deutsche George with comes line from The Hill of question next

'XX Mala, here. to be with I points and I'll questions XXX my try And expansion per ]. [ guess savings cost points of the one, give first savings programs on my over which efficient you margin margin basis cost is XXX basis targeting year, XX points but is you guys are expansion in to should XXX the basis alone almost program,

through So don't you savings the margin I'd cost ask the are offsets underlying business you programs eroding I in guess the what give expansion? where more

that have if includes revenue gross EBITDA, to to million about we margin some for that we pressure the $XX on about. seeing that's very was in volume play of in PXXX. talked million XXXX we million way out, primarily margins million about up said, associated visit you the the $XXX and expect members talked over in our up margins expect The and about XXXX, modest line to PrimaryXXX the just from added significant is, we through XXXX. our So reality we of in We 'XX, think adjusted $XX that from ramp the about clinical expected very, higher we've continue course $XXX those you of a savings cost have revenue costs, increase in as with guidance are the volumes. PrimaryXXX And ramping think if to

And that modest year some create gross this margins to ramp will XXXX. on so pressure relative

delta particular, from said being and remarks, as development leverage expenses that offset is in variance, prepared we our that by operating technology G&A. in Now and and

the whole the of is feathering P&L. way sort through that's the margin So the sort structure of

the comes RBC Dodge The of Markets. line next from Sean question with Capital

be those anymore? And assessment sense in efficiency quarter, undertaking you operational update sense out Is you talked may maybe there you make portfolio be that? what Are give to from businesses if the the also you the with geographies, on along Are some don't actions of savings portfolio would laid then any portfolio assessment. just that there program? involve? particular could there about share of books Last Or us a markets, any a can in review, incremental?

the One, growth dimensions. cetera. the there doing products So to two et what's it portfolio, be talk significant about by for incremental business customer within anything profitability would we the saying I'll in geographies, are and investments. When do we various place that. really second would portfolio outlook a and across contemplated segments, start we our where no our channels do for is portfolio And guidance assessment, is looking then that changes

do advertising marketing. and technology and investing in and our development where yield dollars, we So especially greatest the on get

what's that's significant lot think actions, I we'll So involved in it, announce of is it. it. If quite any fine-tuning. have frankly, A we obviously,

fine-tuning it's pricing. Sometimes

Sometimes go-to-market it's strategy. fine-tuning

that allocation of Sometimes versus service profitability or make given it's resource and intensity model a segment fine-tuning we products. optimizing to our the service are customer sure

set as they well I -- have our years, say would of top business bottom add, various Sean, as line few would look, to as at line the I line bottom expectations pieces as profitability. top growth growth contribute how we'll line profitability, both next at both we we Yes, the continue for as well look our to look

is a that that's so review ongoing. And

that. continue We will at look to

judicious as That to leverage in we robustly getting have invest science. And are make, we be product, to investments said, development the and are the we Jason talked in of data it whether in terms from business, said, G&A. we technology about and also continue data, going

us of to investments to as order for responsible parts capacity, well top and is in are investment so the And how to continue just the those of at terms look for both line. in do bottom business thing us to fuel they our as all contributing line to

next the of Daniels Ryan comes Blair. from question line The with William

to different just questioning. a I'm bit curious in regards of capital a Maybe of line little deployment.

You a lot clearly cash. have of

repo, some million of structure more after bigger the will the about it. Livongo view have a a but and in I a of and about then you how know of you be maybe mentioned concurrent You couple years converts June $XXX that capital that. overall convert curious

thinking down quarters? coming So the of refi about potential or cash are how you over use that to pay

cash as $X.X with capital have generated take that we balance and year. -- a last are on that I our ] step the the for and question. [ fact we Listen, flexibility cash that structure, sheet free billion have at we back strong we flow our Thanks the look

continue free to flow generate cash expect to this strong We year.

sheet certainly more. So strengthen that will our even balance

that M&A set I I the or we ourselves, right, use to strength say they would are interesting M&A is, those are the what our the need we it opportunities sheet opportunities prioritize of uses sense that think about our for I as whether sheet of there attractive. right for always, financially use M&A opportunities. first, meet balance strategic Obviously, If make balance whether the would said, we for. that cash, I to way the towards are us expect could the out as criteria But would they

I you $X specifically, have that would then time cash convert And We mentioned retire the would is is that to to and flexibility still in look of XXXX. billion the pay in which our middle XXXX. down. use I due debt the the maturing convert, convert some to Livongo pay down for

about strategically we the more extent offset even opportunistically, buybacks on term the And employee the then last balance longer to general think over share from that is, as in have to flexibility buybacks. grants. about the think dilution Share we sheet, and said, potential to stock

about sort think would different those I of those -- in So ways. it in

of Citi. The the next question from comes Grosslight line with Daniel

I I remain detail to was yield go being more you the yields provide those depressed? why want back marketing could little if consumers a a to marketing wondering BetterHelp here. on little Are be very from another vendors? that's there more helpful. big detail additional like you would DTC competition spending vendor other you saw Is there seeing Any 'XX? discerning? there out in more Are

rates. general see up is a of similar So advertisers do driving population. a it's going lot question answer the competitor don't the -- second a of the we part We the significant to in see after

ad a the the as in wouldn't to I overall space, competitor speak. single opposed say to So that traffic it's so

And right? say return -- our do thing looking each spend, the it the then the see we're as is on increase I'll as that So marginal more more, incremental we ad dollar. we last at maybe we on certainly spend constantly

then spend And money of to curve out inflection run we rather make we where room the an at each degree get on productively than that pull we is so to growth sure And we we the the profitability. work that incremental hard back of that us. to chasing where productive dollar expense can for see

I those So contributors think are major to the it.

That at today's conference are time. There questions this concludes additional no you. left Thank you. call. Thank

your lines. disconnect may You now