8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, District of Columbia 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(D) OF THE

SECURITIES EXCHANGE ACT OF 1934

Date of report (Date of earliest event reported): February 26, 2020

Teladoc Health, Inc.

(Exact Name of Registrant as Specified in its Charter)

Delaware	001-37477	04-3705970
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer Identification No.)

2 Manhattanville Road, Suite 203
Purchase, New York	10577
(Address of Principal Executive Offices)	(Zip Code)

(203) 635-2002

(Registrant’s telephone number, including area code)

Not applicable

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425).

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12).

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)).

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)).

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the

Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2

of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended

transition period for complying with any new or revised financial accounting standards provided pursuant to Section

13(a) of the Exchange Act. ☐

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.001 per share	TDOC	The New York Stock Exchange

Item 2.02.Results of Operations and Financial Condition.

On February 26, 2020, Teladoc Health, Inc. (the “Company”) issued a press release relating to its financial results for the full year and fourth quarter of 2019. A copy of the press release, which is incorporated by reference herein, is attached hereto as Exhibit 99.1.

The foregoing information (including the exhibit set forth in Item 9.01 hereto) is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, except as expressly set forth by specific reference in such filing.

Item 9.01.Financial Statements and Exhibits.

(d)Exhibits.

Exhibit No.	Description
99.1*	Teladoc Health, Inc. press release, dated February 26, 2020.
104	Cover Page Interactive Data File (formatted as Inline XBRL)

* Furnished herewith.

2

INDEX TO EXHIBITS

ove
Exhibit No.	Description
99.1*	Teladoc Health, Inc. press release, dated February 26, 2019.
104	Cover Page Interactive Data File (formatted as Inline XBRL)

* Furnished herewith.

3

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	TELADOC HEALTH, INC.
Date: February 26, 2020
	By:	/s/ Adam C. Vandervoort
	Name:	Adam C. Vandervoort
	Title:	Chief Legal Officer and Secretary

4

EX-99.1

Exhibit 99.1

Teladoc Health Reports Fourth-Quarter 

and Full-Year 2019 Results

Year-over-year  Q4 revenue grows 27% to $156.5 million and total visits increase 44% to 1.2 million

Year-over-year full year revenue grows 32% to $553.3 million and total visits increase 57% to 4.1 million

Issues Initial 2020 guidance

PURCHASE, NY, February 26, 2020 — Teladoc Health, Inc. (NYSE: TDOC), the global leader in virtual care, today reported financial results for the fourth quarter and full year ending December  31, 2019.

“We demonstrated outstanding performance in the fourth quarter and full year of 2019 as we reported record results that were at the high end or exceeded our expectations on all key metrics. Our diversified growth strategies are driving strong growth across our channels,” said Jason Gorevic, chief executive officer. “Looking forward, we are well positioned with significant momentum to extend our leadership position and to meet the increasing demand for our comprehensive service offering.” 

Financial Highlights for the Fourth Quarter and Full Year Ended December  31, 2019

Revenue
($ thousands)
	Quarter Ended				Year over Year		Year Ended				Year over Year
	December 31,				Growth		December 31,				Growth
	2019		2018				2019		2018
Subscription Access Fees Revenue
U.S.	$	98,052	$	78,340	25	%	$	356,656	$	277,091	29	%
International		28,924		24,362	19	%		106,640		73,693	45	%
Total		126,976		102,702	24	%		463,296		350,784	32	%
Visit Fee Revenue
U.S. Paid Visits		21,265		15,752	35	%		68,738		53,074	30	%
U.S. Visit Fee Only		7,957		3,751	112	%		19,931		12,508	59	%
International Paid Visits		291		536	(46)	%		1,342		1,541	(13)	%
Total		29,513		20,039	47	%		90,011		67,123	34	%
Total Revenue*	$	156,489	$	122,741	27	%	$	553,307	$	417,907	32	%
*Organic fourth-quarter 2019 revenue, excluding MedecinDirect, increased by 27 percent year over year.
Organic full year ended 2019 revenue, excluding Advance Medical and MedecinDirect, increased by 24 percent year over year.

Membership & Visit Fee Only Access
(millions)
	Year Ended		Year over Year
	December 31,		Growth
	2019	2018
Total U.S. Paid Membership	36.7	22.8	61.1	%
Total U.S. Visit Fee Only Access	19.3	9.5	104.2	%

Visits
(thousands)											Quarter		Full Year
											Year over Year		Year over Year
	2019					2018					Growth		Growth
	Q1	Q2	Q3	Q4	YTD	Q1	Q2	Q3	Q4	YTD
Paid Visits from U.S. Paid Membership	365	291	278	441	1,375	298	218	202	302	1,020	46	%	35	%
Percent of Paid Visits from U.S. Paid Membership	51%	48%	45%	52%	49%	54%	50%	46%	50%	50%	4	%	(2)	%
Visits Included from U.S. Paid Membership	353	319	344	409	1,425	256	218	237	305	1,016	34	%	40	%
Total Visits from U.S. Paid Membership	718	610	622	850	2,800	554	436	439	607	2,036	40	%	38	%
U.S. Visit Fee Only	63	54	62	125	304	51	37	36	49	173	154	%	76	%
International Visits	282	244	244	264	1,034	1	60	166	205	432	29	%	139	%
Total Visits	1,063	908	928	1,239	4,138	606	533	641	861	2,641	44	%	57	%
Utilization	11.00%	9.10%	7.98%	9.49%	9.34%	10.90%	8.04%	7.81%	10.75%	9.35%	(126)	pt	1	pt

· Net loss was $(19.0) million for the fourth quarter 2019 compared to $(24.9) million for the fourth quarter 2018. Net loss was $(98.9) million for the full year 2019 compared to $(97.1) million for the full year 2018.

· Net loss per basic and diluted share was $(0.26) for the fourth quarter 2019 compared to $(0.35) for the fourth quarter 2018.  Net loss per basic and diluted share was $(1.38) for the full year 2019 compared to $(1.47) for the full year 2018.

· Gross margin was 64.6 percent for the fourth quarter 2019 compared to 67.4 percent for the fourth quarter 2018. Gross margin was 66.7 percent for the full year 2019 compared to 69.2 percent for the full year 2018.

· EBITDA was $(5.7) million for the fourth quarter 2019 compared to $(8.3) million for the fourth quarter 2018. EBITDA was $(41.5) million for the full year 2019 compared to $(35.3) million for the full year 2018.

· Adjusted EBITDA was a positive $15.2 million for the fourth quarter 2019 compared to a positive $5.8 million for the fourth quarter 2018. Adjusted EBITDA was a positive $31.8 million for the full year 2019 compared to a positive $13.4 million for the full year 2018.

A reconciliation of generally accepted accounting principles (“GAAP”) in the United States to non-GAAP results has been provided in this press release in the accompanying tables. An explanation of these measures is also included below under the heading “Non-GAAP Financial Measures”.

Financial Outlook

Teladoc Health provides guidance based on current market conditions and expectations.

For the first-quarter 2020, we expect:

· Total revenue to be in the range of $169 million to $172 million.

· EBITDA loss to be in the range of $(9) million to $(7) million.

· Adjusted EBITDA to be in the range of $9 million to $11 million.

· Total U.S. paid membership to be approximately 40 million to 41 million members and visit-fee-only access to be available to approximately 19.2 million individuals.

· Total visits to be between 1.4 million and 1.6 million.  

· Net loss per share, based on 73.1 million weighted average shares outstanding, to be between $(0.37) and $(0.34).

For the full-year 2020,  we expect:

· Total revenue to be in the range of $695 million to $710 million.

· EBITDA loss to be in the range of $(15) million to $(5) million.

· Adjusted EBITDA to be in the range of positive $60 million to $70 million.

· Total U.S. paid membership to be approximately 43 million to 45 million members and visit-fee-only access to be available to approximately 19 to 20 million individuals.

· Total visits to be between 5.5 million to 5.9 million.

· Net loss per share, based on 73.7 million weighted average shares outstanding, to be between $(1.19) and $(1.06).

Quarterly Conference Call

The fourth quarter and full year 2019 earnings conference call and webcast will be held Wednesday, February 26, 2020 at 4:30 p.m. EST. The conference call can be accessed by dialing 1-833-241-4255 for U.S. participants, or 1-647-689-4206 for international participants, and including the following Conference ID Number: 5049316 to expedite caller registration; or via a live audio webcast available online at http://ir.teladoc.com/news-and-events/events-and-presentations/. A webcast replay will be available for on-demand listening shortly after the completion of the call at the same web link.

About Teladoc Health

A mission-driven organization, Teladoc Health, Inc. is successfully transforming how people access and experience healthcare, with a focus on high quality, lower costs, and improved outcomes around the world. The company’s award-winning, integrated clinical solutions are inclusive of telehealth, expert medical services, AI and analytics, and licensable platform services. With more than 2,400 employees, the organization delivers care in more than  175 countries and in more than 40 languages, partnering with employers, hospitals and health systems, and insurers to transform care delivery. For more information, please visit www.teladochealth.com or follow @TeladocHealth on Twitter.

Cautionary Note Regarding Forward-Looking Statements

This press release contains “forward-looking statements” within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by words such as: “anticipate,” “intend,” “plan,” “believe,” “project,” “estimate,” “expect,” “may,” “should,” “will” and similar references to future periods. Examples of forward-looking statements include, among others, statements we make regarding future revenues, future earnings, future numbers of members or clients, litigation outcomes, regulatory developments, market developments, new products and growth strategies, and the effects of any of the foregoing on our future results of operations or financial conditions.

Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are based only on our current beliefs, expectations and assumptions regarding the future of our business, future plans and strategies, projections, anticipated events and trends, the economy and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of our control. Our actual results and financial condition may differ materially from those indicated in the forward-looking statements. Important factors that could cause our actual results and financial condition to differ materially from those indicated in the forward-looking statements include, among others, the following: (i) changes in laws and regulations applicable to our business model; (ii) changes in market conditions and receptivity to our services and offerings; (iii) results of litigation; (iv) the loss of one or more key clients; and (v) changes to our abilities to recruit and retain qualified providers into our network. For a detailed discussion of the risk factors that could affect our actual results, please refer to the risk factors identified in our SEC reports, including, but not limited to our Annual Report on Form 10-K and Quarterly Reports on Form 10-Q, as filed with the SEC.

Any forward-looking statement made by us in this press release is based only on information currently available to us and speaks only as of the date on which it is made. We undertake no obligation to publicly update any forward-looking statement, whether written or oral, that may be made from time to time, whether as a result of new information, future developments or otherwise.

CONSOLIDATED BALANCE SHEETS

(In thousands, except share and per share data, unaudited)

	December 31,		December 31,
	2019		2018
Assets
Current assets:
Cash and cash equivalents	$	514,353	$	423,989
Short-term investments		2,711		54,545
Accounts receivable, net of allowance of $3,787 and $3,382, respectively		56,948		43,571
Prepaid expenses and other current assets		13,990		10,631
Total current assets		588,002		532,736
Property and equipment, net		10,296		10,148
Goodwill		746,079		737,197
Intangible assets, net		225,453		247,394
Operating lease - right-of-use assets		26,452		0
Other assets		6,545		1,401
Total assets	$	1,602,827	$	1,528,876
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable	$	9,075	$	7,769
Accrued expenses and other current liabilities		49,848		26,801
Accrued compensation		31,258		27,869
Total current liabilities		90,181		62,439
Other liabilities		11,539		6,191
Operating lease liabilities, net of current portion		24,994		0
Deferred taxes		21,678		32,444
Convertible senior notes, net		440,410		414,683
Commitments and contingencies
Stockholders’ equity:
Common stock, $0.001 par value; 150,000,000 shares authorized as of December 31, 2019 and 2018; 72,761,941 shares and 70,516,249 shares issued and outstanding as of December 31, 2019 and 2018, respectively		73		70
Additional paid-in capital		1,538,716		1,434,780
Accumulated deficit		(507,525)		(408,661)
Accumulated other comprehensive loss		(17,239)		(13,070)
Total stockholders’ equity		1,014,025		1,013,119
Total liabilities and stockholders’ equity	$	1,602,827	$	1,528,876

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except share and per share data, unaudited)

	Quarter Ended December 31,				Year Ended December 31,
	2019		2018		2019		2018
Revenue	$	156,489	$	122,741	$	553,307	$	417,907
Expenses:
Cost of revenue (exclusive of depreciation and amortization shown separately below)		55,355		40,028		184,465		128,735
Operating expenses:
Advertising and marketing		25,356		23,555		109,697		85,109
Sales		16,751		14,509		64,915		59,154
Technology and development		16,246		13,544		64,644		54,373
Legal and regulatory		1,523		1,490		6,762		3,981
Acquisition and integration related costs		2,477		1,434		6,620		10,391
Gain on sale		0		0		0		(5,500)
General and administrative		44,482		36,461		157,694		116,916
Depreciation and amortization		9,887		9,557		38,952		35,602
Total expenses		172,077		140,578		633,749		488,761
Loss from operations		(15,588)		(17,837)		(80,442)		(70,854)
Interest expense, net		7,581		6,663		29,013		26,112
Net loss before taxes		(23,169)		(24,500)		(109,455)		(96,966)
Income tax benefit		(4,125)		379		(10,591)		118
Net loss	$	(19,044)	$	(24,879)	$	(98,864)	$	(97,084)
Net loss per share, basic and diluted	$	(0.26)	$	(0.35)	$	(1.38)	$	(1.47)
Weighted-average shares used to compute basic and diluted net loss per share		72,564,855		70,239,511		71,844,535		65,844,908

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands, unaudited)

	Year Ended December 31,
	2019		2018
Cash flows provided by (used in) operating activities:
Net loss	$	(98,864)	$	(97,084)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization		44,952		35,602
Allowance for doubtful accounts		2,665		2,243
Stock-based compensation		66,702		43,769
Deferred income taxes		(10,868)		(2,247)
Accretion of interest		25,438		19,487
Gain on sale		0		(5,500)
Changes in operating assets and liabilities:
Accounts receivable		(15,884)		(10,931)
Prepaid expenses and other current assets		(2,685)		(2,612)
Other assets		(105)		(414)
Accounts payable		905		(391)
Accrued expenses and other current liabilities		14,841		3,993
Accrued compensation		4,546		8,480
Operating lease liabilities		(2,417)		0
Other liabilities		643		745
Net cash provided by (used in) operating activities		29,869		(4,860)
Cash flows provided by (used in) investing activities:
Purchase of property and equipment		(3,510)		(4,011)
Purchase of internal-use software		(7,390)		(4,396)
Purchase of marketable securities		0		(56,347)
Proceeds from marketable securities		52,100		84,170
Sale of assets		(0)		5,530
Investment in securities		(5,000)		0
Acquisition of business, net of cash acquired		(11,187)		(282,442)
Net cash provided by (used in) investing activities		25,013		(257,496)
Cash flows provided by financing activities:
Net proceeds from the exercise of stock options		33,283		31,322
Proceeds from issuance of convertible notes		0		279,152
Proceeds from borrowing under bank and other debt		0		10
Proceeds from issuance of common stock		0		330,843
Proceeds from employee stock purchase plan		3,380		2,564
Cash (paid) received for withholding taxes on stock-based compensation, net		(1,569)		1,721
Net cash provided by financing activities		35,094		645,612
Net increase in cash and cash equivalents		89,976		383,256
Foreign exchange difference		388		(2,084)
Cash and cash equivalents at beginning of the period		423,989		42,817
Cash and cash equivalents at end of the period	$	514,353	$	423,989
Income taxes paid	$	1,310	$	441
Interest paid	$	12,224	$	10,303

Non-GAAP Financial Measures:

To supplement our financial information presented in accordance with generally accepted accounting principles in the United States, or U.S. GAAP, we use gross margin, EBITDA and Adjusted EBITDA, which are non-U.S. GAAP financial measures to clarify and enhance an understanding of past performance. We believe that the presentation of these financial measures enhances an investor’s understanding of our financial performance. We further believe that these financial measures are useful financial metrics to assess our operating performance from period-to-period by excluding certain items that we believe are not representative of our core business. We use certain financial measures for business planning purposes and in measuring our performance relative to that of our competitors. We utilize Adjusted EBITDA as the primary measure of our performance.

Gross margin is our total revenue minus our total cost of revenue (exclusive of depreciation and amortization shown separately) as a percentage of our total revenue. We believe that it provides investors meaningful information to understand our results of operations and the ability to analyze financial and business trends on a period-to-period basis.

EBITDA consists of net loss before interest, taxes, depreciation and amortization. We believe that making such adjustment provides investors meaningful information to understand our results of operations and the ability to analyze financial and business trends on a period-to-period basis.

Adjusted EBITDA consists of net loss before interest, taxes, depreciation, amortization, stock-based compensation, gain on sale and acquisition and integration related costs. We believe that making such adjustment provides investors meaningful information to understand our results of operations and the ability to analyze financial and business trends on a period-to-period basis.

We believe the above financial measures are commonly used by investors to evaluate our performance and that of our competitors. However, our use of the term gross margin, EBITDA and Adjusted EBITDA may vary from that of others in our industry. Neither EBITDA nor Adjusted EBITDA should be considered as an alternative to net loss before taxes, net loss, loss per share or any other performance measures derived in accordance with U.S. GAAP as measures of performance.

Gross margin, EBITDA and Adjusted EBITDA have important limitation as analytical tools and you should not consider them in isolation or as a substitute for analysis of our results as reported under U.S. GAAP. Some of these limitations are:

· Gross margin has been and will continue to be affected by a number of factors, including the fees we charge our Clients, the number of visits and cases we complete the costs paid to Providers and medical experts as well as the costs of our provider network operations center;

· Gross margin does not reflect the significant depreciation and amortization to cost of revenue;

· EBITDA and Adjusted EBITDA do not reflect the significant interest expense on our debt;

· EBITDA and Adjusted EBITDA eliminate the impact of income taxes on our results of operations;

· Adjusted EBITDA does not reflect the significant gain on sale of certain non-core business contracts;  

· Adjusted EBITDA does not reflect the significant acquisition and integration related costs related to mergers and acquisitions;

· Adjusted EBITDA does not reflect the significant non-cash stock compensation expense which should be viewed as a component of recurring operating costs; and

· other companies in our industry may calculate EBITDA and Adjusted EBITDA differently than we do, limiting the usefulness of EBITDA and Adjusted EBITDA as comparative measures.

In addition, although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, and gross margin, EBITDA and Adjusted EBITDA do not reflect any expenditures for such replacements.

We compensate for these limitations by using gross margin, EBITDA and Adjusted EBITDA along with other comparative tools, together with U.S. GAAP measurements, to assist in the evaluation of operating performance. Such U.S. GAAP measurements include net loss, net loss per share and other performance measures.

In evaluating these financial measures, you should be aware that in the future we may incur expenses similar to those eliminated in this presentation. Our presentation of gross margin, EBITDA and Adjusted EBITDA should not be construed as an inference that our future results will be unaffected by unusual or nonrecurring items.

Reconciliation of EBITDA and Adjusted EBITDA to Net Loss

(In thousands, unaudited)

	Quarter Ended				Year Ended
	December 31,				December 31,
	2019		2018		2019		2018
Net loss	$	(19,043)	$	(24,879)	$	(98,864)	$	(97,084)
Add:
Interest expense, net		7,581		6,663		29,013		26,112
Income tax benefit		(4,125)		379		(10,591)		118
Depreciation expense		682		939		3,382		4,057
Amortization expense		9,205		8,618		35,570		31,545
EBITDA		(5,700)		(8,280)		(41,490)		(35,252)
Stock-based compensation		18,457		12,683		66,702		43,769
Gain on sale		0		0		0		(5,500)
Acquisition and integration related costs		2,477		1,434		6,620		10,391
Adjusted EBITDA	$	15,234	$	5,837	$	31,832	$	13,408

Media:

Courtney McLeod

914-265-6789

cmcleod@teladochealth.com

Investors:
Patrick Feeley

914-265-7925

pfeeley@teladochealth.com

XML

Document and Entity Information	Feb. 26, 2020
Document and Entity Information [Abstract]
Document Type	8-K
Document Period End Date	Feb. 26, 2020
Entity File Number	001-37477
Entity Registrant Name	Teladoc Health, Inc.
Entity Incorporation, State or Country Code	DE
Entity Tax Identificatoin Number	04-3705970
Entity Address, Address Line One	2 Manhattanville Road, Suite 203
Entity Address, State or Province	NY
Entity Address, City or Town	Purchase
Entity Address, Postal Zip Code	10577
City Area Code	203
Local Phone Number	635-2002
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Common Stock, par value $0.001 per share
Trading Symbol	TDOC
Security Exchange Name	NYSE
Entity Emerging Growth Company	false
Entity Central Index Key	0001477449
Amendment Flag	false