Teladoc Health, Inc.

To the Teladoc third quarter 20 earnings conference call. All lives now placed on mute until the end of the conference for the speaker's remarks. At the end of the conference, the speaker's remarks are concluded. You will now have a question and answer session. At that time, we'll ask you to hit star one on your telephone keypad in order to ask a question. If your question has been answered or you'd like to remove yourself from the queue, please press pound. At this time, I'd like to turn the call over to Patrick Felix for his opening remarks. Thank you very much.

Thank you, and good afternoon. Today, after the market closed, we issued a press release announcing our third quarter 2020 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 fourth quarter 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 would now like to turn the call over to Jason.

Thanks, Patrick, and thank you, everyone, for joining us this afternoon. After the market closed, we reported another quarter of significant outperformance across all key financial and operational metrics, driven by broad-based momentum across the entire business. The ongoing pandemic has highlighted the critical role of virtual care within the overall healthcare system, and we continue to see increasing adoption by consumers, clients, and providers. This broad-based strength drove record revenue of $289 million in the third quarter, an increase of 109% from the prior year period, including organic revenue growth of approximately 90%. The strength demonstrated across our diverse channels, products, and geographies, combined with a robust pipeline of new opportunities, continues to give us tremendous confidence in the forward outlook for the business. As a result of our third quarter performance and the continued momentum across the business, we are increasing our full-year revenue guidance to $1.005 to $1.015 billion. During the third quarter, we also announced a combination with Livongo Health. We could not be more excited for this deal to close later in the fourth quarter. And we've already made significant progress toward integrating our two teams, as I'll discuss in more detail later on the call. Turning to visit volumes, our network of providers delivered over 2.8 million virtual visits in the third quarter, more than triple the number of visits provided in the same period last year. We were pleased to see visit volumes increase sequentially despite the COVID-driven volume we experienced in the second quarter, as well as the seasonally lower volumes typically experienced during the third quarter. We continue to see strong evidence of sustained utilization increases for virtual care. While CDC figures and our own internal data point to overall declines in infectious disease transmission in the United States due to social distancing and the use of personal protective equipment, our overall volume growth remains strong, as evidenced by both our third quarter results and our fourth quarter outlook. One clear driver of this strength has been a steady and broad-based acceleration in our non-infectious disease-related visits. Visits for conditions such as hypertension, back pain, anxiety, and depression represent over half of our general medical visit volume, up from approximately one-third a year ago, as our comprehensive portfolio of services enables us to meet the increasing consumer demand for virtual care. New registrations also continue to grow at a rapid pace, increasing more than 80% compared to the third quarter of 2019, while visit growth from newly registered individuals continues to outpace existing user visit growth. These new registrations will continue to benefit us in the future as they create new opportunities to engage with members. Taking a closer look at the volume trends in specialty care, demand for dermatology and behavioral health services continues to significantly outpace overall volume growth. In the B2B channel, for example, visits in these specialties grew over 500% compared to the prior year. Demand for mental health care, in particular, continues to build both through our B2B channel as well as through our direct-to-consumer brand, BetterHelp. Utilization of mental health services has continued to grow in each successive month of the year, which is very encouraging given the high repeat usage profile of the service. On the heels of World Mental Health Day, we are also reminded of the critical role our providers are playing for individuals around the world. At a time when the global pandemic and economic hardship are driving increased need for mental health services, we continue to provide much-needed access for those in need. In fact, 40% of the individuals note that they would not have otherwise sought care if not for access to Teladoc Health. Together, this momentum in specialty visit growth, combined with the broadening diversity of diagnoses and robust overall registration growth, continues to give us a high degree of confidence in the sustainability of our volume growth. It also reinforces our strategy of consistently expanding the clinical scope of our services. which will take a quantum leap forward when we incorporate the Livongo capabilities focused on helping people who live with chronic conditions. Turning to the international channel, we continue to see new and innovative opportunities for growth outside the U.S. Just last week, we launched an exciting new partnership with Telefonica, one of the largest telecom providers in Europe and Latin America, including over 14 million customers in Spain. As part of this partnership, Telefonica will distribute our virtual care offering on a D2C and B2B basis to individuals and employers across Spain. We're optimistic that the results of this partnership will pave the way for similar initiatives in other geographies around the world. Last quarter, we also spoke about new geographic expansion into the Nordic region with a significant new client partnership with a large financial institution in this area. We've already leveraged that foothold with multiple new sales during the quarter, demonstrating the strong demand for a comprehensive virtual solution around the world. Our hospital and health system channel, which now includes InTouch, also continued to experience tremendous growth as health systems and physician practices adopt our technology as a secure, effective, and efficient way to provide care. In addition to the 7.6 million member visits provided by the Teladoc network of clinicians year to date, the combined Teladoc and InTouch technology platform has enabled our clients' own clinicians to provide nearly 3 million consultations for their patients. The pipeline of new opportunities in this channel also continues to expand. It's only four months since we closed the InTouch acquisition, but we've already completed over a dozen cross-sales as health systems are increasingly looking for enterprise-wide integrated solutions. And we're well on our way to achieving both our revenue and our cost synergy targets. Staying with the hospital channel, we're pleased to announce a new partnership with Johns Hopkins. one of the most prestigious academic medical centers in the world. As a fully integrated health system, Hopkins will be implementing the Teladoc Health Platform to provide their patients, health plan members, and their own employees with access to on-demand, 24-7 virtual care. Johns Hopkins selected the Teladoc platform based on our steadfast commitment to quality, our position as the most comprehensive end-to-end solution in the industry, and our innovative approach to advancing virtual care. Finally, before I turn the call over to Mala, I want to provide an update on the Livongo transaction. With each passing day, I become more and more excited by the combination of these two leaders in healthcare and technology. The opportunities in front of us are boundless, and together we will be uniquely positioned to improve the health of millions of people around the world. Our integration teams have made tremendous progress, meeting regularly to map out the integration process and demonstrating impressive collaboration. From a commercial standpoint, we will be working to integrate both teams, so that we have one go-to-market strategy and one unified interface to the client. Clients are increasingly looking for a single integrated solution that brings all of the assets of the two companies together for episodic, chronic, and complex care. We've seen tremendous interest from our clients around the world, and we've already successfully closed our first major cross-sale to GuideWell Health, the parent of Florida Blue, Florida Blue has been a longtime client of Teladoc Health, and we're extremely excited to expand that relationship and bring Livongo's platform to 50,000 of Florida Blue's members living with diabetes. To ensure an easily accessible pathway for the consumer, we will create a seamless user experience where all of the services are integrated into one experience. creating a single access point for all of the consumer's care needs. As we've gone through the planning process, we're encouraged to find that the high level of technological sophistication on both sides will make the integration even smoother than many of our prior acquisitions from a technology perspective. And the teams are actively working to map the APIs and create that unified consumer experience. Our teams have also begun to plan the integration of the unmatched datasets and capabilities of our two organizations, combining the 750 million elements from the Livongo dataset with the data generated by the 10 million plus virtual visits we will provide this year. By applying the Livongo data science to this combined dataset, we will be able to deliver a level of patient insight that has been previously unavailable. Combining meaningful, data-driven insights with clinical expertise will enable better care delivery, better outcomes, and lower costs. As part of the new leadership structure announced earlier this month, we are also in the process of creating a new integrated research and development organization. We're incredibly excited to bring together the product innovation, data science, technological expertise, and clinical excellence from across both companies under one roof. There's a tremendous talent pool in both organizations, and we're eager to continue investing in the development of innovative solutions to improve the lives of consumers and extend our leadership role in the virtual care marketplace. The similar mission-driven cultures and shared vision of the two organizations has become apparent through this process. And the more time our teams spend together, the clearer this has become. I was fortunate to spend some time with several of the Livongo commercial leaders last week. And although it was an outdoor, socially distant setting, I can say that the level of enthusiasm for what we were building together was palpable. In combining these two organizations, we are truly creating something entirely new while extending our position as the global leader in virtual care. With that, I'll turn the call over to Mala for a review of third quarter financials as well as detailed 2020 guidance.