Teladoc Health, Inc.

Welcome to Teladoc's fourth quarter 2019 earnings conference call and webcast. At this time, all participants have been placed in a listen-only mode, and the floor will be open for your questions following management's prepared remarks. If you would like to ask a question at that time, simply press star 1 on your touchstone phone. If at any point your question has been answered, you may remove yourself from the queue by pressing the pound key. We ask that you please pick up your handset for optimal sound quality. Lastly, if you should require operator assistance, please press star zero. It is now my pleasure to turn the floor over to Patrick Thiele, Vice President of Investor Relations. You may begin.

Thank you and good afternoon. Today, after the market closed, we issued a press release announcing our fourth quarter and full year 2019 financial results. This press release is available in the Investor Relations section of the TeladocHealth.com website. On this call to discuss the results are Jason Gorovic, our Chief Executive Officer. and Mala Murthy, our Chief Financial Officer. During this call, we will also provide our first quarter and full year 2020 outlook and our prepared remarks will be followed by a question and answer session. Please note that we will be discussing certain non-GAAP financial measures that we believe are important in evaluating Teladoc Health's performance. Details on the relationship between these non-GAAP measures to the most comparable GAAP measures and reconciliations thereof can be found in the press release that is posted on our website. Also, please note that certain statements made during this call will be forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are subject to risks, uncertainties, and other factors that could cause the actual results for Teladoc Health to differ materially from those expressed or implied on this call. For additional information, please refer to our cautionary statement in our press release and our filings with the SEC, all of which are available on our website. I will now turn the call over to Jason.

Thanks, Patrick. It's great to have you on board, and thank you to everyone for joining us this afternoon. 2019 was an important year for Teladoc Health, and today we're reporting record performance as the robust growth trajectory we experienced in the first three quarters continued through the fourth quarter. The benefit of our diversified growth strategies across multiple channels continues to pay off, enabling us to meet or exceed our expectations across key metrics in 2019. and it gives us great confidence in our ability to deliver even stronger results in 2020. You see that confidence reflected in the guidance that we issued this afternoon, which we'll discuss later in our remarks. We ended 2019 with 36.7 million US paid members, adding another 1.8 million members in the fourth quarter. This brings our total to approximately 14 million new paid members in 2019, The largest number of new member ads in company history, representing a 61% growth rate over 2018. Visit fee only access increased to 19.3 million individuals at year end, more than double the prior year. The pace of new client wins and expansions reflects how our competitive and comprehensive virtual offerings are resonating in the marketplace. Visit growth was a highlight again in the fourth quarter. With total visits growing 44% over the prior year's fourth quarter, resulting in over 4.1 million visits for the full year 2019. We continue to see accelerating adoption across specialties, as our clients are increasingly embracing our engagement strategies. This is particularly evident among our largest clients with multiple products. as our diversified product offering helped drive over 50% visit growth from our top 10 clients versus the prior year's fourth quarter. Visit volume is also impacted by the flu season, although the flu is not as meaningful to our overall operating results as it was in the past, given the diversification of our business. According to the Teladoc Health Flu Tracker, which gives us a look at flu trends in real time, even before CDC data is available, This year's flu season has been more severe than the prior year. We have experienced more than double the number of flu cases this season versus the prior year, and during the peak of the flu season in early February, approximately one out of eight of our U.S. general medical visits was flu related. We also see that once members use our services for the first time, they are much more likely to use us again. About half of our visits completed in the month of January came from users who had not previously utilized our services. We expect the strong flu season to continue to benefit us and help drive increased adoption of our products as new users look to Teladoc Health for more of their healthcare needs. Mental health continues to be a strong driver as we see increased adoption and momentum in both the B2B and D2C channels. On the B2B side, mental health has been a significant contributor to our multi-product adoption. Bookings that include mental health more than doubled in 2019, reflecting accelerating client demand for our mental health solution. In fact, the fourth quarter was one of the strongest we've experienced for new mental health product ads. On the D2C side, our BetterHelp product continues to outperform. Not only is BetterHelp significantly improving our members' lives, but it has consistently exceeded expectations, extending our leadership position in the direct-to-consumer channel. During the fourth quarter, we continued to expand our product offering with the launch of Teladoc Nutrition, offering personalized nutrition counseling combined with specialized care. Members utilizing the service work directly with a registered dietitian to develop a personalized program based on the latest science-based guidelines consistent with the Academy of Nutrition and Dietetics. This latest expansion of our comprehensive virtual offering will allow us to improve long-term health outcomes for our members and ultimately reduce overall medical costs, particularly for individuals with chronic conditions. Before I turn the call over to Mala to discuss 2019 results and 2020 guidance in more detail, I wanted to talk briefly about our outlook for 2020. Following a robust selling season and the significant momentum we saw exiting 2019, we feel confident in our outlook for 2020 revenue growth. For the full year 2020, we expect revenue to be in the range of $695 to $710 million. representing 26 to 28% growth toward the upper end of our long-term 20 to 30% target range. We expect visit revenue growth to accelerate as we activate the large populations we added in 2019. And we're very pleased with the broad-based momentum we're seeing across the business, including continued strength in mental health and in the international marketplace. We also expect Medicare Advantage to begin to become a more meaningful contributor to our growth. As we've said previously, we expect that opportunity to play out over a multi-year period as MA plans begin to adopt virtual care strategies. As of January 31st, we have more than 15 Medicare Advantage clients with over 1 million lives and a robust pipeline of new opportunities that will benefit us in the future. I also would like to highlight a proposal from CMS released last month, which would ease network adequacy requirements for Medicare Advantage plans that contract with telehealth providers. We view this as further evidence of CMS encouraging the adoption of virtual care in the Medicare population, and we continue to see a significant avenue for growth within the Medicare program. Finally, as previously announced, We expect to close the InTouch Health acquisition at the end of the second quarter. Only six weeks have passed since signing the deal, but our teams have hit the ground running and we could not be more pleased with the progress being made on the combined commercial strategy and integration planning. We have signed a commercial agreement with InTouch that allows us to jointly sell the combined InTouch Health and Teladoc Health offerings ahead of the transaction closing. and the feedback from our collective health system clients has been extremely positive. In fact, we already have our first committed health system cross-sale in contract. We see a tremendous opportunity for cross-selling, upselling and virtualizing care across our collective customer bases and I'm extremely excited to welcome the InTouch team to the Teladoc Health family. With that, I'll turn the call over to Mala for a review of our fourth quarter and full-year financials, as well as detailed 2020 guidance.