Tdoc

https://ir.teladochealth.com/news-and-events/investor-news/p…

Q4 revenue grows 145% year-over-year to $383.3 million and total visits increase 139% to 3.0 million

Full year revenue grows 98% year-over-year to $1,094.0 million and total visits increase 156% to 10.6 million

Issues 2021 first-quarter and full-year guidance:

For the first-quarter 2021, we expect:

Total revenue to be in the range of $445 million to $455 million.
EBITDA to be in the range of $(46) million to $(43) million.
Adjusted EBITDA to be in the range of $45 million to $48 million, including an estimated $7 million in lower expenses primarily related to Livongo devices as a result of the merger.
Total U.S. paid membership to be in the range of 51 million to 52 million members and visit fee only access to be available to 22 to 23 million individuals, including 2 to 3 million individuals on a temporary basis.
Total visits to be between 2.9 million and 3.1 million.
For the full-year 2021, we expect:

Total revenue to be in the range of $1.95 billion to $2.0 billion.
EBITDA to be in the range of $(110) million to $(90) million.
Adjusted EBITDA to be in the range of $255 million to $275 million, including an estimated $20 million in lower expenses primarily related to Livongo devices as a result of the merger.
Total U.S. paid membership to be in the range of 52 million to 54 million members and visit fee only access to be available to 22 to 23 million individuals, including 2 to 3 million individuals on a temporary basis.
Total visits to be between 12 million to 13 million.

25 Likes

Really bugs me that, in the headline numbers in the press release, they don’t even mention the word “non organic” or anything to make it clear that the headline numbers include LVGO numbers.

I’m listening to the conference call now, and they did at least mention that they had “79% organic revenue growth”. In q4 2019, revenues were 156mm. 79% of 156mm is 123mm, so that means 2020 Q4 revenues for TDOC alone (excluding LVGO) was 156+123 = 279mm.

79% YoY growth sounds pretty great, the problem is that QoQ growth is actually -3%. Before today, TDOC has not ever had negative quarterly growth in its nearly 5 years as a public company. I really hope they explain this in the conference call.

Also, since TDOC alone had 279mm of revs and total revs were 383mm, that means LVGO accounted for 104mm of revenue. Similarly, this is a QoQ deceleration for LVGO, which also never had a quarter of negative growth before today.

20 Likes

Q4 revenue grows 145% year-over-year to $383.3 million

This was disappointing to me in that the stated YOY growth rate is not apples to apples. I’m not sure how it will be portrayed in the conference call, but 145% appears to be obtained from 2020 Q4 rev of both TDOC and LVGO, whereas the 2019 Q4 used to compare it to is just TDOC revenue. If I add in the 2019 Q4 LVGO rev, I get apples to apples YOY growth of 84%. Not bad, but disingenuous at best, deceitful at worst.

It’s the same thing TWLO did a year+ ago that caused me to exit that stock… will need to listen to the CC before making any decision.

3 Likes

I believe the Livongo revenue would have been from the date of the acquisition (two months of rev not a full qtr).

4 Likes

Foodles - Let me get this straight – the CEO of Teledoc secured an amazing merger of a fantastic company and spends all his waking moments integrating two great companies. He sold the board on the deal. He sold the Livongo CEO/board on the deal. He got shareholder approval from both organizations. He raised the capital to complete the deal. He’s paying the expenses of the entire company, and you want him NOT to include the revenue in his discussion of the quarterly results.

Perhaps you would like to rewrite a more accurate statement than the one they issued? Please consider how employees of both organizations would react (which is what he cares about more than anything else)

Why is the money/cash/customers from Livongo not as “good” to you as the “organic”?

It turns out Twilio/Sendgrid was a phenomenal purchase and the integration has gone extremely well. Perhaps Teledoc is following the right path?

The thought that they are trying to fool (small f) people with their statement is crazy…

24 Likes

I agree that it’s difficult to sort out the combined numbers for TDOC/LVGO.

But the overall picture indicates organic revenue growth of 79% for 2020 and guidance for 40-43% organic revenue growth (combined 1.4 billion increasing to 1.95-2 billion) in 2021. That sounds low but seems likely to be conservative. I would anticipate at least 45-50% with beats. It’s also important to remember this is in comparison to some transitory pandemic bumps in 2020. Guidance is a bit of guesswork at this transitional time in healthcare. Per conference call comments, cross-selling is reportedly going well. I would not be surprised if the guidance ends up being very conservative and I’m happy they are confident in at least this type of growth as the pandemic eases. With the after hours drop, this company is valued at about 17 times this year’s projected sales with an outlook for sustainable superior longer term growth. This seems reasonable to me.

Dave

Long TDOC

19 Likes

Remember, Q4 for combined company includes only 2 months of LVGO.
So if LVGO for two months contribution was $104M, that means LVGO Q4 run rate was ~$150M which is a huge acceleration from LVGO last quarter of $106M.

Still digesting rest of the results… but on the surface, it does not look bad, in fact LVGO acceleration is fantastic news.

18 Likes

They said on c.c. that 2/3rds of the deals are multi-product deals. Management was excited about the cross selling from day one and it seems to be playing out.

In terms of using combined revenue numbers. Teledoc stock did not really jump when the deal was announced with LVGO. In fact it went down from $249 to $185.

After hours it is at $238 or lower than it was when it announced merger with LVGO.

It just forecasted 78-83% revenue growth YoY for 2021. Estimating just below 2B dollars. We all know that management is setting the bar low.

I personally like the results so far had to jump off c.c. early so I will read the rest tonight or tomorrow and determine if this is a buying opportunity.

9 Likes

TDOC guided $304M and 79% organic implies they missed that by $24M and only did $280M (don’t believe this is the case).

Likewise, it implies LVGO did $155M (normalized for the fact that their Oct’20 aren’t included) which is an incredible 207% growth!?

TDOC organic could be missing InTouch.

8 Likes

Because TDOC’s merger activity has muddied the past, I thought about looking forward.

Even though guidance is generally sandbagged, I used it and did some math.
1Q guidance of $445 million would be 1780 annualized.
Compare that to their annual guidance of 1950 and you get only 9.6% revenue growth over 3 quarters.

Granted, they are no doubt sandbagging. But that’s pretty low guidance.

Thoughts?

For the past two quarters TDOC has announced their year over year organic growth percent. Here’s what they’ve presented:

                   Q4 2020  Q3 2020  Q4 2019  Q3 2019
Total Revenue:     383.32   288.80   156.50   137.90
Organic Growth %:  79%      90%
Organic Revenue:   280.14   262.01
Q over Q Growth%:  6.9%

In the third quarter of 2020 I’m assuming InTouch revenue was 26.79 (288.80 - 262.01 = 26.79). I don’t know what the revenue for InTouch was for the fourth quarter but assuming there was some revenue added I don’t believe the whole difference between organic growth and total reported revenue (383.32 - 280.14 = 103.18) can be contributed to Livongo.

2 Likes

“organic growth of 79%, excluding the additions of InTouch Health and Livongo.”

So it is not bad. Also, they noted that this Q the visits related to flu season were low due to mask use and social distancing.

What is of interest is that they are projecting proforma growth of 40-43% for 2021 which is 1.95-2B projection. This is apples to apples as proforma considers all 12 months of Livongo and Intouch. If they beat it by just 2.5% which is how much their revenue beat was in 2019 we get 45% growth at the midpoint. In 2017 and 2018 their revenue beat was by double digits! So, I would pencil in at least 45% growth and possibly 50%+ for 2021. A few things that concern me:

  1. They are projecting visits of 12-13M which is only 12-23% higher than 2020.
  2. They are projecting only small increases in subs. Jason did say their pool of potential subs has expanded by 50% in the last 12 months.
  3. Their PCP does not seem to be growing much. I may be wrong here.

On #1 and #2, I am willing to give it a pass as they are coming after a phenomenal year and they are trying to be cautious. But we need to look out and see the growth of competitors like Amwell in the next few Qs.

8 Likes

nmm347

I’d like to comment on Q/Q rates of growth. You display the following for total revenue.

Total Revenue: 383.32 288.80 156.50 137.90

Organic Growth %: 79% 90%

Organic Revenue: 280.14 262.01

Q over Q Growth%: 6.9%

I skimmed the TDOC release (I have to do a more thorough read) and one statistic caught my attention.

Guidance for Q1 is about $445 which represents sequential revenue growth of 16.2%. Even if they are not sandbagging I think that is very promising and indicative of anticipated growth. If sustained it portends an annual growth rate north of 82% for the combined operation. That alone is enough to bolster confidence in my current position.

I am currently long TDOC at 8.5%

cheers
draj

5 Likes

If nmm347’s numbers are right, and I think they are, that means around 75M for LVGO over the two quarters. Assuming the quarter before that is similar but a bit less, I’ll pencil in 32M for that. This gives us a total of 117M for the Q for LVGO. Q3 they reported 106. The QoQ annualizes to 48% which is a HUUUUUUGE slowdown.

I’m concerned for two reasons.

  1. Its very difficult to ascertain LVGO growth numbers. Since my investment thesis is on this, that makes me inclined to sell; or at least lower my conviction
  2. If these growth numbers are right and the growth has really slowed from triple digits to 48%, that’s a big sell flag for me.

Unless I’m missing something, my thesis here has proven to be wrong.

2 Likes

Draj,

Guidance for Q1 is about $445 which represents sequential revenue growth of 16.2%. Even if they are not sandbagging I think that is very promising and indicative of anticipated growth. If sustained it portends an annual growth rate north of 82% for the combined operation. That alone is enough to bolster confidence in my current position.

Keep in mind what I also forgot with my initial look at the numbers, the just released Q4 results were missing 1 month of LVGO rev since the deal didn’t close until end of Oct. Some others have estimated (and I agree) the 2 months LVGO contribution to be maybe $76M, making the missing Oct month of LVGO revenue maybe $35M. If we add that into the $383M for Q4, that would make $418M for a full Q4. Comparing that number to the $445M you used gives sequential rev growth of about 6.5%, annualized 29%, not 82%… not quite the same ringing endorsement.

Includes some guesswork, I wish TDOC were more transparent with breaking out the LVGO numbers.

3 Likes

Foolin,

If nmm347’s numbers are right, and I think they are, that means around 75M for LVGO over the two quarters. Assuming the quarter before that is similar but a bit less, I’ll pencil in 32M for that. This gives us a total of 117M for the Q for LVGO. Q3 they reported 106. The QoQ annualizes to 48% which is a HUUUUUUGE slowdown.

I’m concerned for two reasons.
1. Its very difficult to ascertain LVGO growth numbers. Since my investment thesis is on this, that makes me inclined to sell; or at least lower my conviction
2. If these growth numbers are right and the growth has really slowed from triple digits to 48%, that’s a big sell flag for me.

Unless I’m missing something, my thesis here has proven to be wrong.

Two points:

One, you had an error in your numbers, 75+32=107, not 117… this makes your QoQ and annualized growth rates even worse. I think the LVGO numbers would have been closer to $111M, I just wish TDOC were more transparent with them so we didn’t have to make guesses.

And two (and more importantly), LVGO rev did always have high seasonality to it, so you can’t annualize the Q4 growth and use that for a good proxy for full year growth. Q4 growth was always the lowest of the year, below are the last couple years revs and QoQ growth rates with this quarter using my estimate of $111M.


**4Q18	$21	13%**
1Q19	$32	51%
2Q19	$41	28%
3Q19	$47	14%
**4Q19	$50	 8%**
1Q20	$69	37%
2Q20	$90	30%
3Q20	$106	18%
**4Q20	$111	 5%**

You can see Q4 is significantly slower than other quarters, with the upcoming Q1 historically being the highest growth Q.

7 Likes

Keep in mind what I also forgot with my initial look at the numbers, the just released Q4 results were missing 1 month of LVGO rev since the deal didn’t close until end of Oct. Some others have estimated (and I agree) the 2 months LVGO contribution to be maybe $76M, making the missing Oct month of LVGO revenue maybe $35M. If we add that into the $383M for Q4, that would make $418M for a full Q4.

Point well taken. It did seem like too much to hope for. I note that they are projecting pro forma annual revenue increase of over 40%. So maybe the year will turn out a bit better than that. Reading the transcript its clear that all usage and client growth metrics are growing rapidly which still implies, I believe, growth better than 45%. Not sterling, but not shabby.

In the end it all comes down to execution. TDOC has lots of rapidly growing services including a raft of newer options and a model for health services that promises continued expansion.

Need to wait and see Q1.

cheers
draj

Foodles,

Thank you for the corrections. That makes me feel better and worse about this report… haha!

I’m hearing Bear’s voice (or what I imagine he sounds like), saying things about it being too complicated and doesn’t stay when its overly complicated.

2 Likes