Teladoc Health, Inc.

Welcome to Teladoc Health's first quarter 2019 earnings conference call and webcast. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star, then the number one on your telephone keypad. If you'd like to withdraw your question, press the pound key. Thank you. It is now my pleasure to turn the floor over to Valerie Hartel at Teladoc Health Investor Relations.

Thank you, and good afternoon, everyone. Today, after the market closed, we issued a press release announcing our first quarter 2019 financial results. The press release is available in the investor relations section of the teladochealth.com website. Joining me this afternoon to discuss our results are Jason Gorovic, our Chief Executive Officer, and Gabe Capucci, our Chief Accounting Officer and Controller. We will also provide our second quarter 2019 outlook and our prepared remarks will be followed by a Q&A session. On today's call, we will discuss certain non-GAAP financial measures that we believe are important in evaluating our performance. More details on these non-GAAP measures, the most comparable GAAP measures, and the reconciliation of the two can be found in our press release posted on our website. As a reminder, certain statements made during this call will be forward-looking statements. which are subject to risks, uncertainties, and other factors that could cause actual results for tele-doc health to differ materially from those expressed or implied by the forward-looking statements. For additional information, please refer to our cautionary statement in the earnings press release and our filings with the SEC available on our website. At this time, I would like to turn the call over to Jason.

Thanks, Valerie, and thank you, everyone, for joining us this afternoon. Thank you so much for joining us. Visit volume of 1.06 million visits increased 75% or 29% excluding advanced medical. U.S. paid membership grew to 26.7 million members, adding 3.9 million new members in the quarter versus 1.2 million new members in the first quarter of 2018 as we saw especially strong growth among new and existing health plan clients. and adjusted EBITDA came in within our expected range at $1.2 million. Our robust first quarter growth underscores the increasing diversification of our business across products, channels and geographies and our enterprise-wide commitment to operational excellence. Let me spend a few minutes on our very strong visit volumes. It's worth noting that this is the first quarter in which we've crossed the million visits threshold, and I couldn't be prouder of our team and our physicians who make this possible. The same primary factors I identified in our last call drove our first quarter volume, as we realized the benefits of our diversification strategy, the impact of our surround sound campaigns, and tailwinds from mainstream adoption trends, all of which offset a weaker flu season. Compared to last year's epidemic flu levels, this season was marked by a slow start, followed by a modest lift later in the quarter, resulting in overall flu visits declining by 32% year over year. Despite this headwind, we were able to deliver 29% organic visit growth. As we significantly expand the breadth of our clinical capabilities and continue to increase the effectiveness of our surround sound engagement efforts, Our visit growth becomes even more predictable, resulting in a Q1 annualized utilization rate of 11%, which was slightly ahead of last year. Among our clinical specialties, behavioral health continues to be a strong driver of growth, with continued momentum in both our DTC and B2B channels. As a result of this strong adoption, we expect behavioral health total revenue growth to exceed 50% for the full year. Additionally, as we enter Mental Health Awareness Month in May, I'm particularly gratified by the fact that total behavioral health visit volume in the quarter increased by over 100% versus last year, a strong testament to the value of this much-needed service. Switching to our pipeline for 2019 and beyond, the U.S. health plan market continues to present one of the greatest potential areas for growth I recently had the opportunity to spend a few days with leaders from across the healthcare landscape, including the C-suite of many large health plans and health systems. And I was incredibly encouraged by the intensity of focus on virtual care as a key component of product, medical delivery, and consumer strategies. As traditional players wrestle with how to make virtual care the front door to the healthcare system, it's becoming increasingly clear to me that Teladoc Health is uniquely positioned to equip them to achieve their goals. Due to the broad scope of our clinical services, our ability to address the widest array of consumer healthcare needs through a single intuitive interface, and importantly, our proven ability to drive consumer adoption. Our growth of over 3 million paid members in Q1 2019 through the Health Plan channel is proof of our continued success. As we've said in the past, strong growth in this channel can actually have a dampening effect on our average PMPM and overall utilization rates initially. We typically see utilization rates grow over time as we deploy our engagement strategies to these large populations. You'll see in our quarterly metrics that this is entirely due to mix and is a case of us being the victims of our own success. Gabe will further delve into these dynamics when he reviews our financials. On the international front, we have continued to execute on our strategy of positioning Teladoc as the only global virtual care solution, while maintaining focus where we see the greatest opportunity to capitalize on our first mover advantage. In the first quarter, we took several steps to accelerate this leadership position. The European market is a good example of this, where we're seeing excellent organic growth and have successfully closed several cross-sales in the first quarter. Additionally, we recently announced the acquisition of Paris-based Midsend Direct that expands our European footprint in a market where regulatory and reimbursement conditions are increasingly favorable toward virtual care. Made Sin Direct has a well-established and highly complimentary client base of leading insurance partners that can now benefit from access to a much broader spectrum of clinical services through Teladoc Health. Finally, we announced the launch of Teladoc Telemedicine Services in Canada, a growth initiative we highlighted on the February call. This first-of-its-kind offering provides Canadians with 24-7 access to convenient and high-quality medical care regardless of their location across Canada or the U.S. Market reception has been very positive, and our first client is scheduled to go live in the third quarter of 2019. In summary, our pipeline of new business opportunities across all our channels has never been stronger. We continue to see positive trends in the global regulatory environment, leading to a promising picture for the 2019 selling season and beyond. Before I turn the call over to Gabe, I'd like to briefly cover the recently released CMS rule, since this has been a key topic as we head into the 2020 year for Medicare Advantage. CMS is very much behind the inclusion of telemedicine to increase accessibility to medical care and to lower costs. It's important to note that while the government has estimated savings from telemedicine in the ruling, it did not prescribe pricing for reimbursement. Pricing for services will be negotiated directly between virtual care providers like us and the health plans. We're in active discussions with Medicare Advantage plans spanning both existing and prospective clients, and we expect to have information on how we'll be serving this important market in the back half of this year. Now, I'd like to turn the call over to Gabe to review our financials for the quarter and our second quarter guidance.