Dive Brief:
- Teladoc Health’s losses soared last year as the virtual care vendor struggled with worsening performance at its direct-to-consumer mental health segment, BetterHelp.
- The company recorded a net loss of $1 billion in 2024, compared with $220.4 million in 2023. Its losses were boosted by a $790 million non-cash goodwill impairment charge linked to BetterHelp, according to financial results published Wednesday.
- The mental health segment’s average count of paying users was down 11% at the end of 2024 from the previous year. Though Teladoc is starting to see user growth from quarter to quarter, “we have not yet reached the level of stability we are striving for,” CEO Chuck Divita said on an earnings call.
Dive Insight:
The financial results released Wednesday mark Teladoc’s first full-year earnings with Divita at the helm. The former insurance executive joined in June, months after long-time Teladoc head Jason Gorevic left the telehealth vendor.
Divita has overseen Teladoc’s recent initiatives to reduce costs and streamline its leadership structure, as the telehealth company faces a significantly lower stock price compared to the height of the pandemic-era boom in virtual care.
The company’s cost savings plans are exceeding its targets “modestly,” CFO Mala Murthy said on the earnings call. Teladoc is also moving to improve performance and boost membership at BetterHelp by expanding internationally, adding a weekly pricing arrangement and planning to accept insurance coverage.
But the mental health unit, once a boon for the business overall, still faced a challenging 2024. BetterHelp’s adjusted earnings before interest, taxes, depreciation and amortization was $77.8 million in 2024, down 43% year over year. Revenue declined 8% last year compared with 2023.
Still, executives were bullish on the mental health segment’s prospects.
Divita said on the earnings call that Teladoc had begun initial conversations with health plans to bring BetterHelp into their networks. Plus, the unit’s strong consumer brand could help ensure members actually use those benefits, he added.
“You’ve seen post-pandemic a lot of players were able to get into network arrangements and so forth, but some are struggling to get the volumes because you have to activate the membership,” he said. “I think both are important, getting in-network but also having the brand and the ability to market your services and meet the need.”
In contrast to BetterHelp, Teladoc’s integrated care unit, which includes its business-to-business virtual care offerings, saw some success last year. The segment’s adjusted EBITDA increased 21% to $232.9 million in 2024, while revenue bumped 4% year over year.
Membership also rose in the integrated care segment, including a 4% increase in enrollment in Teladoc’s chronic condition management services — an area of focus for the telehealth vendor.
Teladoc signed a definitive agreement to acquire virtual preventive care provider Catapult Health for $65 million earlier this month. The deal could help funnel users toward other offerings, including chronic condition programs for diabetes, hypertension, pre-diabetes and weight management, executives said.
“As context, roughly half of the people engaged by Catapult have one or more chronic conditions,” Divita said on the earnings call. “Many indicate challenges with depression and anxiety, and nearly one-third share that they don’t have an established primary care relationship. Our products and services align very well with these needs.”
Overall, Teladoc’s revenue fell 1% to $2.57 billion last year. In 2025, the telehealth vendor expects revenue of $2.47 billion to $2.58 billion, with a net loss between $1.10 and $0.50 per share.
