Teladoc Health, Inc.

Good afternoon, and thank you for attending today's Teladoc Fourth Quarter 2022 Earnings Conference Call. My name is Donyell, and I will be the moderator for today's call. All lines will be muted during the presentation portion of the call with an opportunity for questions and answers at the end. If you would like to ask a question, please press star followed by one on your telephone keypad. It is now my pleasure to pass the conference over to our host, Patrick Feely, Head of Investor Relations. Patrick, the floor is yours.

Thank you and good afternoon. Today after the market closed, we issued a press release announcing our fourth quarter and full year 2022 financial results. This press release and the accompanying slide presentation are available in the investor relations section of the TeladocHealth.com website. On this call to discuss the results are Jason Gorovic, Chief Executive Officer, and Mala Murthy, Chief Financial Officer. During this call, we will also provide our first quarter and full year 2023 outlook Our prepared remarks will be followed by a question and answer session. Please note that we'll 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.

Thank you, Patrick. Good afternoon, and thanks for joining us. This afternoon, I'm pleased to share strong fourth quarter results to finish what was undoubtedly a challenging year. Today, we're providing our 2023 guidance, which reflects a balanced approach to top and bottom line growth. And we'll speak to changes to our reporting that will help you better track our progress. First, let's start with a brief recap of the past quarter and year. Overall, despite a more challenging macro environment, our underlying business continues to perform with positive momentum demonstrated by our ability to continue driving solid full year revenue growth. Fourth quarter consolidated revenue grew 15% year over year to $638 million, near the high end of our guidance range. For the full year, total revenue grew 18% to more than $2.4 billion. Fourth quarter consolidated adjusted EBITDA of $94 million was in line with the outlook we provided in October, delivering upon our expectation for a significant margin increase in the quarter. We're pleased with the performance of our BetterHelp business, which grew 29% year over year in the fourth quarter, while delivering on our profitability target. We also remain excited about the momentum we're seeing for our integrated whole person platform, which includes chronic care, mental health, and primary 360. Now all accessible through a single login and account in our new unified app. Looking to 2023 and beyond, our leadership position in whole person virtual care is clear. The breadth and depth of our market leading portfolio of products and services provides a strong platform for growth and expansion. I'm very pleased with our progress as we continue to deliver on our mission and realize our vision of making virtual care the first step on any healthcare journey. Top of mind as we begin the new fiscal year is vendor consolidation. We hear a growing desire from our clients to shift away from point solutions and toward multi-product integrated virtual and digital platforms. At the same time, we're seeing clients increasingly focused on demonstrated results. Teladoc Health has been at the forefront of the adoption curve, and we believe that our scale, breadth of product offering, and proven outcomes will enable us to maintain and expand our position in the market. While there remains a healthy demand for solutions that promise better access and outcomes while lowering the cost of healthcare, the challenging macro environment is likely to persist. This is particularly the case with regard to ongoing economic uncertainty, as well as a moderation in overall market growth rates. Given the current operating environment, as well as the larger scale at which we now operate, you should expect us to balance growth and margin with an increased focus on efficiency going forward. Part of that approach is right-sizing the cost structure to reflect the current growth rates of the business. As such, the management team has been working diligently on ways to optimize the cost structure of the organization, which includes beginning the year with some tough decisions regarding layoffs and the restructuring of some teams. This restructuring will enable us to improve efficiency while still allowing us to effectively build upon our integrated virtual care offering in a market that remains in the early innings. These actions are reflected in our Q1 and full year 2023 outlook. This more balanced approach does not mean that we will stop relentlessly pursuing growth and increased adoption of virtual care across the industry. Virtual care's role within the healthcare industry remains under-penetrated and we will continue to invest to expand our leadership position. Our key strategic priorities remain our whole person suite of services, including our virtual primary care offering, Primary 360, our suite of chronic care management solutions, and our mental health products, and continued growth in our BetterHelp consumer brand. Access to our platform is available to over 80 million individuals in the US today, primarily through our relationships with employers and health plans. Over 50% of that population has access to more than one of our products. And when I look at our suite of chronic care solutions, 30% of enrollees are now utilizing more than one chronic care product. Our BetterHelp offering provided over a million individuals with access to mental health care over the past year, many of whom are unlikely to have received any care at all if not for our services. Our platform enabled over 22 million visits across specialties last year and over half a billion digital health interactions with an unmatched consumer experience and a net promoter score over 60. That breadth and scale is unrivaled in the industry and gives us a strong foundation on which to expand. With the more balanced approach I referenced a moment ago, we will pursue growth in a more focused way with the goal of expanding our margins consistently over the next several years as we march toward gap profitability while still achieving attractive and sustainable top line growth rates. You see this more balanced approach reflected in our 2023 guidance today. For the full year 2023, we expect revenue of $2.55 to $2.675 billion, representing year-over-year growth of 6% to 11%. We expect adjusted EBITDA of $275 to $325 million, representing growth of 12% to 32%. You'll also notice some changes in the way that we report our results in today's press release, reflective of the way we are managing the business going forward. As our BetterHelp direct-to-consumer brand has scaled up rapidly over the past few years, we also felt it is the appropriate time to provide increased disclosure for this business. As such, you will now see our results reported along two segments, Teladoc Health Integrated Care which primarily consists of our B2B distribution channels, including business sold through employers, health plans, and providers, both domestically and internationally, and BetterHelp, which primarily consists of mental health services sold through our direct-to-consumer distribution channel. Mala will discuss some of the additional assumptions underpinning our guidance in a moment. including how we're thinking about performance between these two segments. Hopefully, you'll find this new disclosure helpful in modeling the business going forward. Let me end by saying the company remains strongly positioned both strategically and financially. Our vision to deliver integrated whole person virtual care and our multi-product strategy continues to resonate in the marketplace. And from a financial perspective, we continue to generate positive free cash flow and maintain a strong balance sheet. This is a clear differentiator for Teladoc Health and provides us with the ability to invest in the expansion of our leadership position at a time when many of our smaller competitors are facing significant financial stress. With that, I'll turn the call over to Mala. for a review of the fourth quarter and our forward guidance.