Teladoc's (NYSE:TDOC) Q1 Sales Top Estimates, Next Quarter Growth Looks Optimistic

Adam Hejl /
2023/04/26 4:17 pm EDT
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Digital medical services platform Teladoc Health (NYSE:TDOC) reported Q1 FY2023 results that beat analyst expectations, with revenue up 11.3% year on year to $629.2 million. The company expects that next quarter's revenue would be around $647.5 million, which is the midpoint of the guidance range. That was roughly in line with analyst expectations. Teladoc made a GAAP loss of $69.2 million, improving on its loss of $6.67 billion, in the same quarter last year.

Is now the time to buy Teladoc? Access our full analysis of the earnings results here, it's free.

Teladoc (TDOC) Q1 FY2023 Highlights:

  • Revenue: $629.2 million vs analyst estimates of $618.2 million (1.78% beat)
  • EPS: -$0.42 vs analyst estimates of -$0.50 (15.6% beat)
  • Revenue guidance for Q2 2023 is $647.5 million at the midpoint, above analyst estimates of $642.7 million
  • The company reconfirmed revenue guidance for the full year, at $2.63 billion at the midpoint
  • Free cash flow was negative $32.5 million, down from positive free cash flow of $11.7 million in previous quarter
  • Gross Margin (GAAP): 69.8%, up from 66.9% same quarter last year
  • US Integrated Care Members: 84.9 million, up 5.4 million year on year

“Teladoc Health delivered strong first quarter results across all key financial and operating metrics to start the year,” said Jason Gorevic, chief executive officer of Teladoc Health.

Founded to help people in rural areas get online medical consultations, Teladoc Health (NYSE:TDOC) is a telemedicine platform that facilitates remote doctor’s visits.

Marketplaces have existed for centuries. Where once it was a main street in a small town or a mall in the suburbs, sellers benefitted from proximity to one another because they could draw customers by offering convenience and selection. Today, a myriad of online marketplaces fulfill that same role, aggregating large customer bases, which attracts commission paying sellers, generating flywheel scale effects which feed back into further customer acquisition.

Sales Growth

Teladoc's revenue growth over the last three years has been incredible, averaging 67.5% annually. This quarter, Teladoc reported a mediocre 11.3% year on year revenue growth, roughly in line with what analysts expected.

Teladoc Total Revenue

Guidance for the next quarter indicates Teladoc is expecting revenue to grow 9.31% year on year to $647.5 million, slowing down from the 17.7% year-over-year increase in revenue the company had recorded in the same quarter last year. Ahead of the earnings results the analysts covering the company were estimating sales to grow 7.68% over the next twelve months.

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Usage Growth

As a online marketplace, Teladoc generates revenue growth both by growing the number of users on the platform and the average spend per transaction of the users.

Over the last two years the number of Teladoc's paying users, a key usage metric for the company, grew 7.77% annually to 84.9 million users. This is decent growth for a consumer internet company.

Teladoc US Integrated Care Members

In Q1 the company added 5.4 million paying users, translating to a 6.79% growth year on year.

Key Takeaways from Teladoc's Q1 Results

With a market capitalization of $4.34 billion Teladoc is among smaller companies, but its more than $888.6 million in cash and positive free cash flow over the last twelve months give us confidence that Teladoc has the resources it needs to pursue a high growth business strategy.

Teladoc topped analysts’ revenue expectations this quarter, even if just narrowly. And we were also glad that the revenue guidance for the next quarter exceeded analysts' expectations. On the other hand, revenue growth is overall a bit slower these days. Zooming out, we think this was still a decent, albeit mixed, quarter, showing the company is staying on target. The company is up 4.77% on the results and currently trades at $26.99 per share.

Should you invest in Teladoc right now? It is important that you take into account its valuation and business qualities, as well as what happened in the latest quarter. We look at that in our actionable report which you can read here, it's free.

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The author has no position in any of the stocks mentioned.