Teladoc Health (TDOC) 25 Apr 242024 Q1 Earnings call transcript

Good afternoon. Thank you for attending the Teladoc Health Q1 2024 Earnings Call. My name is Matt, and I'll be your moderator for today's call. [Operator Instructions]. I would now like to pass the conference over to our host, Adam Vandervoort, Chief Legal Officer, Teladoc. ahead. go please Adam,

presentation good press after quarter release press teladochealth.com accompanying results. and Relations the we of section XXXX market issued This the slide the and a announcing release available afternoon. you, in the Investor Today, website. closed, financial are Thank our first

of results On Chief Laizer and Financial the Murthy, Enterprise and acting Markets. are President Global Growth call this discuss Chief our Officer; Kornwasser, Mala to Executive and our Officer

and be we our by that call, also non-GAAP in will Health's important be Please our outlook, evaluating financial are remarks this followed performance. prepared During a note discuss will that discussing measures session. question-and-answer believe Teladoc we we will certain

and reconciliations can in the that posted press found relationship is thereof release these the on our to between measures website. the on measures be Details GAAP non-GAAP most comparable

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

our our For our all Mala. refer in please the over to release turn would call now and I statement to website. additional which press are filings information, our SEC, the on with cautionary of available like to

Adam, everyone, today. Thank for thanks, and us you, joining

on moment reflect a Before take the leadership we changes begin, like I'd Teladoc to recent at Health. to

deepest Jason for Teladoc's years. the legacy, care. I established like of and Jason over having team, Directors a whole virtual behalf to past as would on industry Board Gorevic tremendous of our extend person leaves executive the off, leader than more Teladoc accomplishments XX employees, in X,XXX First firmly his to leadership gratitude

for a our time a this in story. chapter new help write Teladoc is mentioned for for call, named it to expected our Directors us the February as was year. of next Board evolution, our a to part is be time the our decided transition. underway, that successor look is in and company, of search to earnings And CEO leader we this of in later growth As Board's well someone The permanent

appointed so as company CEO while to deeply. The play to and a role work a me I'm has search, Board I conduct serve this in believe they for whose honored

In assets wasting meantime, significant no and in opportunities and are however, we time identifying seizing leverage to capabilities. the our

medium our on the on term. longer an focus and and is growth accelerating both over lines top As the organization, bottom

acting to the accelerating and on that is as my executing the our strategy pace and leadership that is across change our of ensure our focus to our by business. team innovation continues that we appropriate priorities CEO of And be level supported investment, are

I'm review to adjusted to business, our solid first now operating report of and that, a in financial revenue With quarter across the to first a start turning pleased guidance exceeding performance. quarter. both the our consolidated for the EBITDA and year

care through penetration market initiatives, team Our over performance. position. line large XX which our on building increased million include upon base product accelerating laser-focused driving members our our remains key installed our and leadership bottom virtual of

strong our focus see products. Integrated of our Care to segment, in suite the interest quarter care are This In results. person pleased first evident is whole continued we in

as Care from an grew increase revenue business, membership Care increased high driven our growth as Integrated X% disease well in infectious of visit revenues quarter as well to benefiting X.X% book year-over-year by year-over-year. as activity Chronic First in $XXX strong single-digit million,

ad declined in first in basis, paying Chronic part the in typical difficult and lower sequential spend in channels. which also X.X% most remained year. generated marketing in comparison expensive quarter, a Care year-over-year decline of last X% revenue year of $XXX the of a modestly strong, in BeterrHelp in enrollment a by up BetterHelp time quarter. revenue first quarter our following million versus fourth the driven the on pullback users is our the

media our the the first advertising first in we spend XXXX, half expected, returns of persisted social are rate in second our experienced as half Additionally, the of the this quarter. in impacting growth lower on and year-over-year year.

in making speak are other acquisition, I not in which yield business efforts the to progress We retention cost call. our well. our improve our and spend to on later reinvigorate will as per also to only factors contemplates advertising growth BetterHelp but

We of year-over-year. performance X.X%, points improving on continue million, first of adjusted adjusted to nearly margin bottom year-over-year. our line progress growing EBITDA EBITDA $XX and make basis XXX with quarter XX% consolidated

against million in executing XXXX. track XXXX a $XX our savings GAAP a productivity and deliver of initiatives, business are our on cost $XX and in to and cost in for remain We on total basis million savings we

the in existing drive remaining a quarter into portfolio We cross-selling our came to from coming the new with clients. breadth continuation prospective clients, business. continues -- existing business, along our acceleration several of the of the conversations reflecting our new from productive with X/X X/X over of momentum of bookings cross-selling product with an in and bookings our book quarters, from both past

existing base over Both remain Chronic members demonstrating through years. XX our penetration to several of next product about increased installed the drive nearly and our million in clients Care we bundled interest optimistic Plus solutions increased are prospective our ability and

playing saw provider, previously purchased a our had we another example into program as our who solutions. QX, of added our a telehealth land health large diabetes only and In out we client benefits expand strategy

who rising X.X million greenfield opportunity these for are We are demand GLP-Xs basis QX since addition for additional our cross-sell represents seeing future product weight employee and The of also and interest approximately with products. from members in sequential on a growing for penetration. costs solution management grappling employers

cash be and provides our with innovate financial our to our differentiator capacity $X equivalents And continues business. significant in and flexibility invest to and on us for balance than company in our cash more strength billion another sheet, and with

ongoing helping artificial intelligence engagement, revenue and matching From data to not to enrollment early reach models commitment with and from mission continue now to business. optimization We AI achieve improving of us aspects all only is also across also profitability nearly health of consumers. see to growing our but automation our more integrated provider and our goals, this reaching benefits by member our

exciting for One then on is generative them member need our use to of and hyper-personalized example services AI create them individuals in up for they keep content track. to signed engagement get Teladoc

still Our prior in approaches. AI studied, while being already are engagement improvement delivering use over pilot member with carefully significant this case

financial our I would now like quarter first results detail. to few minutes reviewing in a spend

adjusted increased a margin representing while X.X%. $XX quarter consolidated First million, quarter revenue EBITDA million, was X% to year-over-year of $XXX first

First performance And segment expense revenues higher Care -- benefited and quarter improved financial from Integrated in control. our

million to year-over-year balanced Turning Integrated Care to growth across segment portfolio. relatively in increased with quarter, revenue the results. the X% $XXX

quarter expansion First point in Care XXX Integrated adjusted to basis was XX.X%. EBITDA million, representing margins $XX.X a

guidance improved margin strong control And bottom to was driven relative margin gross which line Care the -- with largely during better performance. Chronic helped outperformance program expense enrollment the quarter, and deliver by combined first

reflecting grew $X.X first Total program X% Chronic of $X.X was by U.S. U.S. Care enrollment Total million onboarding year, care the representing growth revenue the the of $X.XX ramp. and representing sequentially member million members and the Average per and down X% care at prior client to and year-over-year. integrated enrollment end over timing $X.XX the million grew quarter, was million. integrated first of growth $X.XX of prior over -- new $XX.X quarter, year's

execute a of our products and our land BXB membership onboarding for of represents other expanding our against and The Care continued we as populations large base expand long cross-selling and strategy. runway Chronic

by XX% First revenue users. decreased quarter to increase an $XXX in paying driven BetterHelp segment X% million, year-over-year

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

quarter perspective BetterHelp business up As for the following as we have quarter holiday fourth is from margin a marketing first expense our discussed the the seasonally quarter previously, season. typically weakest ramps

the to such, As expect consistent the and first year expect quarter the low continue the for margin segment we to quarter-over-quarter through be margins, course of of BetterHelp we XXXX. improvement point

a quarter Net $X.XX includes or acquired net intangibles per share $X.XX $X.XX loss million or $X.XX and of first compared amortization quarter share quarter million share We share, loss $XX.X the related per to $X.XX the per charges, severance first million of stock-based the of $XX.X first per XXXX. in per was of Consolidated -- share per net -- We loss to in primarily in compensation share. of $X.X restructuring or of

net the cash the a the cash cash a $X.X is payment of We flow seasonally quarter to our During the million outflow of first outflow was $XX compensation. We first of cash net given and incentive annual -- ended quarter, with balance in million quarter of sheet. the first in equivalents quarter billion flow on the quarter reminder, a compared free $XX XXXX. as lowest

with Turning our now segment. Care to guidance, Integrated beginning forward

quarter second between the X% the year prior Integrated We and revenue in expect Care period. be X% to versus

call, launching efforts quarter delay reminder, new called first our a As a client in issue due to we mapping technical out in a populations. BXB engagement our consumer in

With the year-over-year compared coupled driven visit growth Care of delay, is year-over-year results versus in an for with cumulative falloff quarter second revenues strong expected seasonal and infectious negative third of this quarter a year, the second of disease to in expected particularly results. million the first the rate full quarter lower our result The to $XX first quarter quarters. impact impact first Chronic and

half of revenues to digits, primarily low year members guided, second nearly added quarter new revenues the reflecting Integrated the due enrollment For contribution a to since as Integrated from growing the Care the second half year, higher mid-single X we the Care have in versus the of first the million Chronic and previously Care in full the year. we expect be last to in ramp

XXX in adjusted expansion points to to reflecting margin XXX From the full a second margin we continue initiatives. expect basis year, XX% the quarter, revenue-driven expect operating EBITDA perspective, and leverage to impact the our an cost-saving of of for and we XX%

members adding guidance in Integrated expect U.S. an membership, members we to million quarter XX for Care relates X second members and it to million million for million first previous the million full year, As XX increase the to after quarter. XX from the XX

Turning now to our BetterHelp segment.

of we to X% the the For quarter, to the over revenues in range year expect X% second prior negative negative BetterHelp a period. be

Our guidance the through margin. in cost pull keeping acquisition our on of early and dollars balancing our in reflects to quarter advertising caused challenging per which quarter back second QX, goal growth with us

is which on in rate These QX, impacting to of to relative our in of users XXXX. decline factors comparison second top quarter growth revenue a a the QX difficult led

in gives the of However, which to for we are a business, I our of the seeing in year BetterHelp more something recent acquisition in cost stabilization momentarily. weeks, us confidence half increased per signs will speak back

revenue accelerate in to to growth half expect For we growth full the BetterHelp in BetterHelp. continue expect the year, the year. flat low to We second do single-digit of

the in quarters. confidence to a business, of take challenged future discuss what's like giving increased in I'd to been recent has our moment BetterHelp us which

Late this we growth in last perspective BetterHelp, inject new for more levers a year, brought business. helped for on broader leadership and global have who

our advertising seeing spend. improvements U.S. helping of from are business. the in retention yield by and overall improving on in international offset higher our which some We CPAs the in impact are

to The confidence success second with geographies half we outlook. that select expect the in are in half efforts give us the second these ramp of international starting levers, see in with our to BetterHelp along we year the

these to retention initiatives membership first customer versus growth and to expect half. We improve higher meaningfully lead the

as a particularly We us at relatively infrastructure are U.S. will to compared the which continue higher market, advertising marginal select allow in that reallocate markets. out underpenetrated opportunity, are geographies some the those in excited marketing return to international build to our about dollars we and English-speaking

lower throughout range dynamics single-digit the in expect these growth. full growth as previously be half revenue BetterHelp for low our the first to we guided flat the Given despite year, to year

of end both macro also of have advertising channel note recent factors the the consumer taken we rest tested at when in assumptions X I developing sentiment trends high including guidance for account these. that and dynamics, our the underpin factors, We low other thoroughly that a and range. into take and would have the the year. BetterHelp look pressure of we several each end the yields, close

are events macro half of second pertains predict on provide yield to in upcoming unknowns the calls. to difficult will we seeing as it of to year. we advertising on And earnings updates in impact continue create the that said, the That the our trends

the in range the perspective, basis to to margins BetterHelp expect to X% quarter From or for continue be full second a flat, margins plus minus adjusted be margin to we XX% expect in year. and XX points EBITDA the

typical cadence seasonal margin see we innovation-driven yield of sequential effect spending, the the advertising spend. the improvements over quarter in on the The of members and the course of pullback including advertising the course added of that primarily expect cumulative year, new fourth year over to in the reflect the our improvements

million basis, $XX million consolidated we EBITDA to quarter and $XXX revenue of On to $XXX adjusted expect of second million. million $XX a

with increase the previously. had of full Integrated Our I remains year that U.S. the exception membership unchanged guidance to Care mentioned our

We continue to XX% to to for revenue revenue million, growth of with of the in billion $XXX year-over-year be X% of billion growth to the EBITDA representing $X.XXX full X% $XXX -- expect range X%, consolidated and of year, adjusted to to basis. $X.XXX consolidated million a representing on along

We driven in an costs. capitalized adjusted year by million expect decline flow EBITDA $XXX free to expected cash million, full and both growth of software the in $XXX development

prior the maintaining are We EPS year. for our guidance also full

you call Lastly, on we our February. earnings we are that reiterating in the X-year provided outlook

with time our living and delivering weeks. I've and pleased team clients this of broader year, members especially this for closing, continued past recognize several our focus values leaning In during want I change. and executive team incredibly in leadership the their been on over our for to my

strategy, solid execution had are people. and -- on a remain to in growth half the our and focused our I We've poised start our XXXX. on deliver We year of the second to significant

open for With Operator? that, questions. we it will up

Instructions]. [Operator

from is Barclays. of line with Davis the Stephanie question First

I Wearing and international right of was early some you strategy all timing BetterHelp. bit now. the about for talk on color could a the little hats hoping

come to confidence be -- the already, you second the thinking that that of half how of if in giving talk us maybe you Can is you which we And that? rate? seen about some cadence that about have should growth rollout, through

here. you, wearing be Yes, many . I'm Thank Happy to hats, Stephanie.

this our in of second call, the the ramp was said last BetterHelp we had as terms total growth is to in year, international So the contributing of business revenue It half International, mid-teens. a in on our of last percentage as year. certainly

novo. international Remember, if de into not we -- this as it's is are going

the We plan Several a them Canada, penetrating is U.K., in And to are us markets. as already Australia. first. markets few are those the English-speaking have continue of for into markets such we

in And BetterHelp dynamics second confidence this these we the in -- Because markets, half that these is of markets. what the is ramp. the our business in have been driving in know we

on the revenue these well to have experience, to these spend knowledge as of in Obviously, see the Based we in and on more we economics penetrate as the markets, our of markets continue being these invest markets. hope return ad we as growth.

expect both top bottom So line growth see. the growth to balance I of and that line

versus And [indiscernible] in international there compare to any of out follow-up, you're is way the in the where markets kind roll we're seeing those them you're U.S.? seeing already what on

do what say. that a . From go spending last and that U.S. start perspective, than in we the through Here's and something we to Stephanie, is we going as I half. say I to half as would would second our second the roll do ad are faster we these out markets. I Certainly, I saw out the international grow expect continue. roll year, that to expect in

you The from ad seasonally we pull in perspective, QX U.S. where it's an the the is spend. weakest typically X the our ad thing typically quarter quarter I is will always back spending will remind

is say U.S. that And will and that in plays we I the much the evaluate international also dynamic assess markets. how of would out dynamic in

Next question line the Lisa with from JPMorgan. Gill is of

clearly, through. Trying in Board to the the understand things. change I leadership what and is One, going understand X

you're would first under the changes international. at heard is side. pressure looking Board are question? if to curious But just about also BetterHelp And the you there I once be business. talk that again just my things any the reviewing But strategic on

membership see that increase just the an really quarter. Is that timing? to how going growth, want or to secondly, understanding revenue there just in opportunity the numbers. Is strong was adjusted EBITDA. which So the didn't really play really opportunity then And We around for either into X% an in understand I just that's cross-sell?

Lisa. Great question. Thanks,

our heads priorities. be now, Board So, an investments, say prepared overall our remarks, I implementing the for my us and focus and said in would for perspective as on of right laser of down well as might focus Board plans, our the to what changes? from the is leadership imply our focus focused I that the team, Obviously,

And employees and I'm transition X,XXX-plus base, period we our pleased frankly, say solid year. have to this with change. employee that the through also start the we of I leading the would have

as given and perspective you perspective prepared bottom line we transparency and top enough growth really confidence through we have Hopefully, from in in roll as color a is our -- on line the what our year. driving remarks our our both

We've is flow cash kept EBITDA a adjusted from a XXXX our overall perspective. and revenue guidance as

about that continue in progress February. initiatives we talked our We cost have make to on

So require a say on I we all that. of focused -- would and are laser things little that those are execution,

Beyond at our parts different that, look, business. we are always of looking

We are line top they growth looking what growth in they bring and bottom in. what bring at line

whether said Certainly, be are challenged I markets that half would am And Bettersleep BetterHelp ramp, improved our give the been part on second business, of us the talked international growth in BetterHelp, that driving whether prepared also about the it it the in fact that in remarks, is quarters. the growing as much of will be say of we nicely. retention, smaller which various we we growth focused business has initiatives and the that that part execution the I in recent

All of these require execution.

through And margin the would Integrated I our enrollment drive say, as certainly the On the this, we side through our the go started strong out going through revenue our with. with Integrated on know you and profit that we year. Care to growth are is expansion and working that -- I'm year. have that Care enrollment pleased the ramps side, Obviously, we the

year we assessing on our to the how bottom we doing various they our see. So, driving is are the driving this assess and the and evaluating executing, of both are top we we continue business are parts line, of focused and we your the plans the terms to for answer -- are whether and question what line are in

Beyond to really that, comment I would say more this isn't time. on it there at

question is Here's X with the would the is fact the quarter. underpinning expand Remember, benefit membership the we second adds of around we million-plus have the membership, in the land We that pleased what and say. it the you adds I On are certainly our had that of member always strategy. had

get fold. the So see accretion to it our in these continue that once we into expect as in products, penetrate, revenue us fertile additional to ahead. gives we members we the ground upsell sell to from cross-sell, quarters And

of The line next from with question the is Jailendra Singh Truist.

wanted about ask it due program I from X% understand actually a declined and year. sequentially. to Chronic I in Care metric. was enrollment QX over new contract QX increase a to year-over-year, up new see little the Typically, calendar enrollment we it but to starts pickup

So provide can there, some you color Mala?

broadly, And Care getting are your of positioning year you're share the as metric seems you what anything improving very around competitive? then more in progresses? to business longer which that be market can in expectations your term And how focused the on Chronic

Yes.

expect always year. typically different. the would through case the That this I be no and year is say look, traditional the So would ramp enrollment to I in year a

impact to the of X pause had say Now revenue this be in for remember, call, we most marketing I I of about year. million marketing the pause in of had thing talked is, last second quarters. the we and the $XX third expect the that would about talked impact would earnings also

Care years. our ramp expect would for despite to prior program like But up in enrollment just the I year, through Chronic that,

Laizer Jailendra's competitive? question to the do on you -- handle want

our and where happy are are the productive having conversations quarter, Sure. We're X/X our look new existing clients. with both When clients what with bookings and new looking season. of as in customers earlier the clients X/X came mentioned we're we for, selling at accounts, -- in came clients growth her remarks, for of X/X our our from existing and in existing Mala you from

And in make but business, our for? I not to we business. clients domestic growth that happy our what with we're bookings looking just highlight our that in also sure want international in are the

that vendor continue our balance to value. that is hasn't sheet are I their bookings. think clients a that can drive Our reputable can that and them a strong for conversations value looking to for partner changed. looking they partner respect to feeding with And scalable, they into with consumers. that our for for They're has And with

typically this lives. typically, enrollees your the Jailendra, then, And roll around onboard on year that And impact we same also is question we also, fact function the of the a Care a of start that of is we what number net come off finishing just up Look, you're the when seeing. enrollees at Chronic off time, would we the QX and is in time the and on see enrollment.

would of up on to the the the would as marketing pause, expect year. I despite year, ramp go continue I the expect we that rest to into

is Tassan from line . question Piper Next the Sandler with Jessica of

outlook the today. to on I issued call quarter all -- and about of guide. quarter kind you then wanted ask Congrats good and that X-year fourth I the the reiterated on

So an revenue that annual to on mid-single-digit achievable care, target consolidated low growth, the BetterHelp, low basis? single integrated organic mid-single Is

And color think maybe we to that hoping perspective, Chronic anticipate And product by around guide. an Integrated Just be launches? Care? from should growth that new it does for just any X-year led about Care

we building we Care blocks both out the BetterHelp and to there had those in the when side. the outlook Thanks, for the on that guide February, Jess, about Yes. that side question. trajectory, thought put Look, Integrated numbers,

So let one. X comment of me it on by sort

a previously, side, Care combination would say Integrated well-penetrated much growth of the side, mid- had would the telehealth say, and Chronic I low to On single-digit in as Care. of on as think it stated high single-digit growth we more I

expect Chronic we momentum growth yes, So revenue integrated to mid-single-digit overall care. Care for us achieve help do the

perspective, said would here's side. the BetterHelp single-digit. Look, what revenue on a we low say from I growth On the BetterHelp side, had

the better for revenue that help the growth BetterHelp. have it ramp the ramp, that whether again, about, us to half second we single-digit going momentum half these talked on second sleep, continued achieve into The have be inputs retention, low that initiatives are we international,

continue continue have and monitor to execute our don't would that will we against unfavorable yields. happen per will from will to I assuming which advertising perspective, it, we something very cost acquisition again, we a And it. very, impact say

CPAs a see for second to us we I half blocks will BetterHelp. that in reasonable the low say contributors in the grow growth into that assuming range, single-digit will would building continue So help revenue the be

I to the revenue on cost with say comes there. particularly programs it will When top we the out along expansion would initiative that on put have with will leverage, that certainly that help see growth our Care that margins, Chronic margin we the us side, have the line, OpEx will be contributors into we

have what give I So in will blocks to assess outlook. would we us a of that. go perform. I will the especially this how say building as is BetterHelp continue more the that on and second in they summary thought into lot we year the said, information half, And And long-term

question the of with Dodge Sean is Next from line RBC.

changed the to last sense to how improvements What over Mala, kind How long to of new average? you can levers you mentioned us and that you what help some have you in seen couple BetterHelp do has continue drive lengthen better years? on leadership that? retaining in users do subscriber a how retention. Can give And of room in much then you're with that? the improvement much having now of team,

Yes.

et on haven't given metrics, we retention, specifically So cetera, Sean. KPIs out

specific into go to want following. don't I will metrics. I . What say the retention is So

we of that needs that -- models platform, help with AI various their We are the user continually frankly the primarily with with are consumers in are of are we in member of the seeing driving looking improving experience, improved our are innovation retention providers. matching because

talk is leadership at I that lever new say And that improvement So this things one important retention. BetterHelp, pressing it's now X retention, highlight more that are driving than improvement looking this in to are X it driving on never we BetterHelp the many would thing things business. the at I in the when in is about of is

traditional We on CAC. beyond are the focus looking to

additional innovate user we've can about, we looking How the As experience. talked in continue we're at geographies. to

that the member that on looking the the targeted all improved about -- it's on past, are talked we're is revenue helping retention, changes, instances, member have growth. my which, our in at in In and improve surgical And innovation things we small some this of view, retention. user our pricing will

Laizer, there like to you anything that? to add is would

that balancing BetterHelp, would Yes. are the other member I would and the than say . on are advertising And add only the very there's value driving I you patient on increasing innovative thing dollars not I specific historically, little acquisition. is, I things spending guess been innovation and time that on we've value would tell of focused increase. X thing being in is out so on very return what our that testing we our

The next Lutz question Bank line is from the of with America. of Allen

plan from about can pros you cons like considered? Another and X making to Mala, BetterHelp, to have kind of you've the paid move a of you moving as a talk considered And X on at health cash in that all participating networks just way something drive that? growth? Is that

various by both scale in players. scale we are done it TriDTC, DTC. time, DTC look, bottom say, line far BetterHelp billion over revenue, there continue would of is focus moved line. away look, to . At market to will would the And and in $X has assess to the we we to say the BXB, other in in I drive that competitors innovate the on the growth initiatives I on top largest point have So continually this X DTC. with have who And built

relevant don't to is our will comment I much at accelerate anything different to we that, growth absolutely and ways I To this looking more update, want said are do ways. point. improve in that to would say, also specifics for we there so. on Having the extent

top line various top line BetterHelp. looking to drive growth ways But our at we and are to -- accelerate

is Cantor line Sarah Fitzgerald. question the from James . Next of with

have thinking you the at and the specifically bit like of the you that I the get little a the of pacing some year control could was advertising year, run over, XX the help Mala, rate initiatives savings hoping spend. million of of end then this of us that with to items to

savings that XQ the the about cadence? initiatives are efficiency, Can your spend you of And normal the the lower are pull play on ad of for ad through pace then overall going because any just is there increased need forward versus out? how you thinking into year? help us spend, to And for

for Sarah, question. Thanks, the Yes.

paced would for that cost underpinning about So if Several offshoring, perspective, those supplier third-party looking our we through from a savings are like you what And initiatives like spend. are the think cost initiatives, of evenly automation, those those -- are things pacing what initiatives. the from things be year.

we like you the think cetera, the you supplier will into year. as the Now go incremental offshoring as see of impact, of get year. something like obviously, if full you you will sort to et But pace others, of through would the third-party I the offshore, evenly later we several spend, offshoring say and the about impact

your think or on When ad -- did we on would and way yield. we on especially it pressure did of as pressure we see pull spend, And as through early On did QX. our on question about our we sort ad back see in I the our in QX cost is QX, acquisition. advertising follows. spend We rolled

to -- of stabilized last have relative CPA to that the ad are early you QX. spend to into year. more they say later it's -- similar half we QX, the -- would remain we stable, When would say yield seeing are back the our as But the spend. the stable relative I elevated part I and I QX say -- on back of And of ad into they half to went still

quarter. satisfied not our am I segment that, margins with the in said BetterHelp Having first

top balance the is the so we bottom And so line line spend the manage how and seeking. QX assessing of things we are we are we getting in that X ad of are that do

is we Because the right? said of to dynamic, very make have that the We we this line and is manage want line. something before. based we That BetterHelp that every the And on balance speak dollar marginal the business sure to to efficiencies of bottom toggle is ROIs. and sort that spend top on return of we getting to get

would quarter, we relative typically QX we to ad I we the the second think about -- efficiencies, the speeds second to looking would a spend And we looking back be we I little to in again seek. we to If provided are that the on more half, pull see bit as spend the get say do.

yield more And slightly typically the is, last international point from then make an remember, perspective. is I ad efficient would

roll So would international as being expect the market I spend that in to international we half, second see out more efficient. on

Next question of UBS. Caliendo is from the line with Kevin

any [indiscernible] Kevin business. a is Caliendo. for their or week, winding competitors competitive are that today contemplates tailwinds you they your maybe the from whether down not announced telehealth This to X speak on of perspective? Could Earlier this guidance Mala.

you would that? Laizer, to . address like

Sure, Mala.

of in the refer partner that we're clearly, been comment that And the marketplace. going there's made So and you comment. to noise specifics, ours we would some really not to on that

strong But have strong highlight we foresee is value with what that and a we and to I relationship that very relationship we have do want continuing. partnership, relationship the we UnitedHealthcare,

from Next question the Deutsche Bank. Hill is George line of with

I the is, which the team strategic to to as come which the feels I company about back don't Yes. management topic, kind margins either of at change relates leases it like growth or make kind to you empowered or guess, of talk can current to direction? degree to Mala,

And can if know to I we're question, second people X I to one. then, sneak trying keep a in because

if can I didn't there's think in are of quantify guys And internally? helpful. at we find looking the you're kind metrics any you that BetterHelp? you success seeing Just way what

Yes.

is Your unhesitatingly say, big yes. team question to the on would whether act leadership empowered I a absolutely

not waiting. in As are I said we our remarks, prepared

to we to investments focus. absolutely plan and is have a have execute We our deliver, that

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what drive single part of will is every that And Again, absolutely continue that. we year. do to we

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metrics, we at, it will terms where In the internal from obviously, is. the perspective look CAC at we of will operating is BetterHelp and that things typically look an

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with Next question the line Ryan is of Daniels Blair. from William

This Ryan is Jack for Daniel. Senft

some think the of ramps the your penetration as mentioned international I reallocating the up. remarks, in second in dollars half prepared you

first, So that get right? I did

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Yes.

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our these spend the So would markets are we be dollars putting where in. ad

the is from question Next Elizabeth with of Anderson Evercore. line

et Integrated pricing changes the how think that mean well focus, but I Mala, Care the BetterHelp? your I the was as component appreciate we outlook international about cetera, other in plays about longer-term growth, commentary, think in the do both there as

Yes. Elizabeth. Great question,

in we ways. So on the have lever different sides couple a about both of I think pricing

Care seeing the our side about calls. think in are the we Care of if think couple that Care, and in First, about and Chronic about this past you momentum we've spoken Integrated dynamic Chronic

fact momentum in in seeing we Care Care are nice the that seeing part Chronic driving Chronic are bundles. we you you're Firstly, more think what's of bookings, about that Chronic And is bookings. Care momentum selling the if

X something -- And pricing about perspective. a population. expand, our as first us is certainly million revenue the ground these for increasingly it per gaining to on you over fertile cross-sell if again, with members that our we've Care us think quarter, that that bundles, in the land basis And is accretive we the Chronic on traction from and from that gives more added that a products that client of -- into fact a

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like us will accretion. something focused are And revenue get that, is allow to And so things it's that more that we certainly that on.

and geography. This in could that we ways, other I say that ways. And the we in side, it the On broadly I thinking by whether is more are continuously, right? as that I we about of when is would dynamic surgical pricing more targeted targeted really BetterHelp It constantly and pricing, think about the when and in BetterSleep, BetterHelp doing business can a pricing. us surgical, is could be it way, different, by about do be how say something it including be multiple is think

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

in questioning season I pretty you and efficacy some There's programs. in still the the digital of management been it's diabetes know guys. selling early market some noise out for the cost

impact from you're the sales would greatest curious And that any be market. perspective a little currently on But is if comment what indications great. uptick report terms having maybe on you the new bit I out a in was you're can of seeing in that if there seeing where

the Daniel, Thanks, for question. Yes.

I Let Laizer turn then for over more comments. will me it to and start,

Look, that on the if we a the that are momentum about seeing market, we few. things think in traction are is seeing I the

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solutions breadth to talk ROI, resonating that fact are we the that and second, clients is of able show the certainly second The and to about the is when both value we marketplace. our our in and products

including said the other the ability balance strength our is care. innovation if sheet the last our products markets. into the balance of -- all the to to think I've sheet And And many our our before, strength relative you products, in into chronic certainly compelling about is, of as competitors our bring of

we are broadly that the those as are XSo sell. in the we trends seeing market

your specific to to over address it turn questions. Laizer me Let

Yes.

specific So study that with would to just haven't keep on we caveats that to would any our study, I you mind. is in respect impact tell from I What some say business. seen

highlight a any for that third research party customers. testing The primary ROI parties, or limited, we and analysis was did of of patient And just report and first on the that a data. not provide based selected secondary I that Chronic believe our to of conduct those review is our programs Care our want clear original studies any

demonstrated meaningful over just more a than but time, have programs it's AXc Our in and of reductions sustained period AXcs.

having shown in and in conversations with We improvements our of value whole clients X blood concept also we pressure, have about. weight and the that are is good

also Our drugs. members demonstrate adherence in programs our their to diabetes-related higher diabetes

I to products. tell really clients aren't we And we the that what's impact, in conversations the with what seeing so important it's an you our you included. of But based good ROI is related are our the but what's would having understand value research, and

we revenue we BetterHelp expansion is a off in are the of back this think of year think of guidance wrap growth would say, to guidance look, our both continue you challenging -- Daniel. Integrated see perspective say certainly, its ramp. half indicated as about would Chronic couple -- margin as perspective, would is, our Care, year, that to What the drivers we had say, have And Care I I in well start. strength to the expect that, as quarters. a set the momentum. I I as if about driving up just have from continue And business, on are and momentum solid Yes. a Integrated I a we to Care.

So Care the are we book. on drive to Chronic our traction, certainly Care I on Integrated continuing would especially say, get side, --

call. this waiting participation. your you at additional questions the no Thank conference are There That will for time. conclude

You may lines. now your disconnect