Teladoc Health, Inc. (NYSE:TDOC) is gearing up to announce its third-quarter 2023 results on October 24, after the close of the market. What can we expect from the upcoming earnings report?
Estimates Overview
The Zacks Consensus Estimate for the third quarter points to a loss of 37 cents per share, indicating a 17.8% improvement compared to the previous year’s loss of 45 cents. This consensus estimate remained stable over the past week. Additionally, the consensus forecast for third-quarter revenues is $662.8 million, reflecting an 8.4% increase from the figure reported a year ago.
Earnings Performance
Teladoc has consistently surpassed earnings expectations in the past four quarters, with an average positive surprise of 18.8%.
Let’s take a closer look at the previous quarter’s performance before diving into the details of the upcoming report.
Q2 Earnings Recap
In the previous quarter, Teladoc Health reported an adjusted loss per share of 40 cents, narrower than the Zacks Consensus Estimate of a loss of 44 cents. The quarter was marked by strong growth in access fees and other revenues, along with improving profitability in the Integrated Care segment. However, increased expenses in areas such as advertising, marketing, technology, and development partially offset these positive developments.
Key Factors for Q3
Teladoc’s third-quarter results are expected to benefit from increased access fees, visits, and growth in both the Integrated Care and BetterHelp segments. It is anticipated that the number of paying users for BetterHelp significantly increase during the quarter.
Both the Zacks Consensus Estimate and our estimate for third-quarter Access Fees revenues suggest a 6.6% increase from the previous year’s $540.1 million. Similarly, both estimates for other revenues are projected to be around $80.5 million, indicating a 12.8% growth from the prior year.
The Zacks Consensus Estimate for BetterHelp paying users in the third quarter suggests a more than 12% rise from the previous year. Our model predicts a 4.8% year-over-year increase in total visits for the third quarter of 2023. Furthermore, U.S. Integrated Care members are expected to increase by 5.1% compared to the same period last year.
These factors are likely to position Teladoc for revenue growth. U.S. revenues for the third quarter are expected to increase by more than 6% year-over-year, with international revenues anticipated to rise by more than 13%.
However, it’s worth noting that expenses, excluding goodwill impairments, are expected to rise in the quarter. This is primarily due to increased technology and development costs, COGS (Cost of Goods Sold), and general and administrative costs. These escalating expenses could impact profits and create uncertainty around achieving an earnings beat.
During the second-quarter earnings release, Teladoc’s management indicated expectations of total revenues ranging between $650 million and $675 million, with adjusted EBITDA projected to fall between $72 million and $82 million for the third quarter of 2023. U.S. Integrated Care Members were forecasted to remain at around 86 million.
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