Teladoc Health, Inc.

Thank you and good afternoon. Today, after the market closed, we issued a press release announcing our second quarter 2025 financial results. This press release and the accompanying slide presentation are available in the investor relations section of the teledochealth.com website. On this call to discuss our results are Chuck DeVita, Chief Executive Officer and Mala Murthy, Chief Financial Officer. During this call, we will also discuss our 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 our 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 our actual results to differ materially from those expressed or implied on this call. For additional information, please refer to our cautionary statement and 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 Chuck.

Thanks, Mike. I'm pleased with our strong performance in the second quarter with consolidated revenue and adjusted EBITDA both at the higher end of our guidance ranges. This reflects continued discipline execution and builds on our solid results from the first quarter. Based on our results and outlook for the second half of the year, we're narrowing our guidance range in 2025 consolidated revenue and adjusted EBITDA. Model will provide more details on our performance and outlook later in the call. It's now been a year since I joined Teladoc Health, and I would like to take the opportunity to comment on the progress we've made and the direction of the company. It's been a transformative year in many respects as we've worked with urgency and purpose to improve performance and reposition the business. As I shared when I first joined, I saw the need to strengthen our market focus and increase the efficiency of our business. And we've taken decisive actions that have resulted in a more streamlined organization with greater agility and market orientation and a more efficient and scalable cost structure. I also shared the importance of accelerating innovation across our products and capabilities. We've made considerable progress in that regard, including a product innovation pipeline that's gaining momentum. Let me share some examples. We recently launched WellBound, a new employee assistance program offering for the US integrated care market. It provides mental health and wellbeing support, including access to online therapy services from BetterHelp and seamless access to other available Teladoc services. While early, we're pleased with the level of interest we're seeing and we look forward to building a position in the EAP market. We're enhancing our cardiomelabolic health program this year, including new connected devices, as well as registered dietician access, sleep support and other new features. And to further engage in support enrollees with rising risk and higher acuity conditions, we're developing additional clinical interventions leveraging our primary care specialist and care support teams. We believe that a comprehensive approach focused on both prevention and the progression of diabetes, hypertension and obesity will have the greatest sustained impact on patient health and value for our clients. For our hospital and health system clients, we launched a new AI enabled virtual sitter solution fully integrated into our proprietary technology. This new offering extends and supports our clients workforce capacity and their care delivery and patient safety objectives, including matters such as fall risk and patient elopement. In our international integrated care business, we also continue to add new solutions, including hybrid care models for public health systems to support a variety of needs, including access to primary care and emergency department care in rural and remote communities. Product innovation will be an ongoing focus of our organization. Over the past year, we've also added important capabilities, including through strategic acquisitions. Catapult Health strengthens our approach to preventative care through its virtual checkup and other solutions, as well as being an important and complimentary engagement capability with other Teladoc services. And we recently acquired Uplift to support better helps entry into insurance, an important initiative I also shared when I joined the company. I'll provide an update on our progress in this area in a moment. Additionally, we've strengthened operational execution, added new partnerships and collaborations and made advancements in our technological infrastructure, all aimed at supporting our strategic priorities and our ability to deliver more services and value to customers. We've also hit some noteworthy milestones, including exceeding 100 million US integrated care members, providing additional opportunities to grow our services over time. While there is important work ahead, I'm pleased with the progress overall, and I'm confident we're in a stronger position to execute in an evolving market. As we've all seen, the healthcare challenges are substantial. Affordability and rising costs, the impact of disease and chronic conditions, unmet mental health needs, provider pressures and other issues continue to impact all stakeholders. And it's clear to us that virtual care can and must play a greater role going forward, given the extent and magnitude of these challenges. Prior to 2020, virtual care was largely about convenience and access to quality cost-effective care. Teladoc led the way through technology, services and scale, and also delivered during the pandemic. Now, virtual care has become widely adopted, and there's also been a proliferation of point solutions, adding to fragmentation and complexity. Teladoc again led the way by taking an integrated approach across physical health, mental health, and chronic conditions, placing the whole patient at the center. Looking ahead, we intend to build on our leadership position, our assets, clinical capabilities and range of services with an intensified focus on orchestration across patients, providers, platforms and partners, all aimed at enhancing the patient experience, improving outcomes and delivering greater value. We're uniquely positioned to advance this important work, and we're prioritizing investments that are aligned with this vision. And we plan to deliver on it through our four strategic priorities. First, we're enhancing our integrated care offerings particularly in the US to drive a greater impact on both clinical outcomes and the cost equation. We'll support our growth objectives through continued product innovation, and we intend to launch new and enhanced offerings across our portfolio on a sustained basis. By leveraging our millions of engagement points in new and unique ways, advancing clinical intervention opportunities, and orchestrating care more holistically, we intend to deliver greater value for clients and the people we serve. Second, we're further leveraging our scaled mental health position. In addition to new products such as WellBound, we have several initiatives underway to expand mental health access and our ability to serve more needs. This includes momentum in integrated care, where we saw a 13% year over year increase in mental health visits in the US during the second quarter. And in better health, where we'll be building on our unparalleled consumer position by adding insurance capabilities to grow and expand our market opportunity. On that front, I would like to take a moment to provide an update on BetterHelp's insurance coverage initiative. As we've shared, we believe insurance will leverage BetterHelp's strong consumer activation, experience, and scale, while having a positive impact on conversion rates, the number of user sessions, and return on advertising spend over time. With ongoing headwinds in the consumer cash pay business, we see insurance coverage as essential to the stability and growth outlook for BetterHelp. And we believe we can meaningfully scale insurance over time. We are being methodical in our approach to ensure the long-term success of this business. This includes ensuring a robust and scalable operating infrastructure, growing our network of credentialed mental health professionals, and supporting and expanding our payer relationships and corresponding membership coverage. From an operating infrastructure standpoint, the BetterHelp and Uplift teams are partnering in a seamless way. Execution is progressing well, including unifying the platforms and experience, and ability to leverage and scale the combined capabilities. In late June, we began a soft launch of BetterHelp Insurance in a single state, laying the groundwork for a methodical ramp of the business over the next several quarters. We're encouraged by the early results, including the performance of our technology, the strength, reliability, and durability of the insurance processes, and growth of the insurance provider network. We see significant opportunities to access and leverage BetterHelp's expansive network of 35,000 therapists to support growth in the insurance network. As a reminder, BetterHelp's therapists are all fully licensed and with a master's degree or higher. The network averages eight years of experience and consistently delivers results, including over 70% of patients reporting symptom reduction within 12 weeks, as well as high satisfaction rates, including over 80% of patients that would recommend their therapist to others. In this regard, we've begun initial outreach to many of our BetterHelp therapists to join the insurance network, and we're seeing good interest. To date, over 2,000 have engaged and are now in various stages of the credentialing process. This outreach will continue as we look to complement and further build on Uplift's already robust base of over 1,500 mental health professionals. We're also seeing success in further expanding payer relationships. Uplift brought arrangements covering over 100 million lives, and over the past few months, we have signed additional new contracts adding over 15 million lives. We'll provide further updates on progress during the third quarter call. Our third strategic priority is international growth. Our international business now accounts for over 15% of our consolidated revenue, and we see continued growth potential. We already operate a robust international business and integrated care that has delivered steady, double-digit growth and is well positioned to meet diverse needs across countries, markets, and client segments, including leveraging our hospital health system technologies to support public health systems in several countries. We continue to evaluate opportunities to increase our position across both existing and new geographies. Fourth, we're highly focused on operational excellence to consistently deliver for clients and to achieve our business and financial objectives. We've made considerable progress in driving operational excellence, including a highly successful client implementation season for 2025 coming off of a very challenging one in 2024. This was also a key priority when I joined. With respect to cost efficiency, as noted last quarter, we're tracking modestly ahead of our cost savings and productivity targets. We've made meaningful progress across several areas, including technology and development, administrative costs, and stock-based compensation, and we'll continue to make progress while balancing the need to invest in our strategic priorities. In closing, I'm encouraged by our first half performance. We're making progress against each of our key strategic priorities, and our teams continue to operate with focus, urgency, and discipline. We're committed to maintaining a balanced approach by delivering solid financial performance and investing in the products and capabilities important to our future. While broader market dynamics continue to impact healthcare and the operating environment, I remain confident in our strategy and our ability to return the company to an overall growth trajectory over time, including through the initiatives I have outlined. With that, I'll turn it over to Mahal.

Thank you, Chuck, and good afternoon, everyone. Second quarter consolidated revenue was $631.9 million near the high end of the guidance range and down .6% year over year, driven by a decline at better health, offset to some extent by growth in integrated care revenue. A jocity bidet of $69.3 million was also at the upper end of the guidance range and represented a margin of 11%. Net loss per share was 19 cents compared to a net loss per share of $4.92 in the second quarter of 2024, which included a $4.64 related to a pre-tax non-cash goodwill impairment charge. Net loss per share in the second quarter of 2025 included amortization of intangibles of 50 cents per share pre-tax and stock-based compensation expense of 13 cents per share pre-tax. These items were partially offset by a discrete tax benefit of 6 cents per share. Pre-cash flow was $61 million in the second quarter, slightly ahead of the prior year period. On a -to-day basis, pre-cash flow increased by $11 million compared to the same period last year. We ended the quarter with $618 million in cash and cash equivalents after retiring $551 million in convertible senior notes at the door during the quarter. Turning to our segment results, integrated care segment revenue of $391.5 million increased .7% over the prior year period and exceeded the high end of our guidance range. We saw good growth in visit revenue and continued strong performance in our international business, which then delivered mid-teens growth on constant currency basis. Catapult contributed approximately 240 basis points to segment growth. Foreign exchange also contributed roughly 50 basis points to growth in the quarter. Underlying fundamentals continue to trend favorably. US integrated care segment membership at quarter end was 102.4 million members towards the high end of our guidance range and up 11% year over year, while US integrated care virtual visit volume increased by 6% versus the prior year period. Chronic care program enrollment at quarter end was 1.12 million down versus the first quarter due to the previously discussed contract loss. Excluding the impact of this loss, underlying program enrollment would have increased by a low single digit percentage on a sequential basis. Second quarter integrated care adjusted EBIDA was $57.5 million, which represented a margin of .7% and was at the high end of our guidance range. This benefited from revenue flow through, which was partially offset by higher op-ex in the quarter, including marketing spend and legal fees. While this compares to an adjusted EBIDA margin of 17% in the prior year period, recall that we had cited a roughly 340 basis point tailwind to adjust the EBIDA margin in the second quarter of 2024, from performance based revenue, variable compensation costs and the timing of certain marketing and other operating expenses. Moving to the better health segment, second quarter revenue was $240.4 million, up slightly sequentially and just above the midpoint of our guidance range. Foreign exchange contributed approximately 45 basis points to year over year growth, while uplift contributed roughly 100 basis points. Second quarter average paying users declined by roughly 9,000 sequentially to 388,000 and were 5% lower versus the second quarter of 2024. Despite encouraging early progress on our insurance and international initiatives, we continue to see headwinds in the underlying US cash pay business. While the year over year decline has moderated relative to 2024 levels, US cash pay users saw a high single digit percentage decline versus the second quarter of 2024. Last quarter, we pointed to a slight uptick in churn rates, which we believe was reflective of softening consumer sentiment and uncertainty around the macro environment. That trend continued through the second quarter, while we also saw an increase in customer acquisition costs and fewer growth user ads. We believe these factors and consumer interest in accessing therapy through insurance coverage is impacting the cash pay business. We believe that validates our insurance acceptance with uplifts meaningfully accelerating our efforts. We continue to believe the unification of customer acquisition funnel between cash pay and insurance coverage will allow us to more effectively leverage better health advertising and marketing budget and leads to a lower acquisition cost per user over time. While not enough to offset the headwinds in the US cash pay business, international users were up by a high single digit percentage over the second quarter of 2024. With more attractive customer acquisition costs, we plan to continue reallocating advertising spent to those markets. While still early, our localized launches continue to see good month over month growth in users, and we are evaluating opportunities for additional localized market launches over the balance of 2025. Insurance revenue totals $2.4 million for the quarter, which was in line with expectations and attributable to uplift as we continue to build out the operating infrastructure to support the future scaling of our better health insurance business. Better health adjusted EBITDA was $11.9 million in the second quarter. Adjusted EBITDA margin of .9% was in the upper half of our guidance range of .5% to 5.25%. The margin declines on a year over year basis was mainly due to lower revenue and incremental investments to advance the insurance initiative. Turning to guidance, we now expect 2025 consolidated revenue of $2.501 billion to $2.548 billion, with the midpoint increasing slightly versus our prior range. With an increase in integrated care, outpacing a lower better health outlook. Fiasco EBITDA is expected to be in the range of $263 million to $294 million. The midpoint of this range is likely below the previous outlook, impacted by similar segment dynamics and now incorporating the anticipated impact of tariffs, which I will speak about momentarily. Full year free cash flow guidance of $170 million to $200 million remains unchanged. We now expect 2025 stock based compensation expense in the range of $95 million to $105 million, approximately $10 million below our prior outlook and a continued area of focus for us. For the third quarter, we expect consolidated revenue in the range of $614 million to $636 million. And a John Cediva Dough in the range of $56 million to $70 million. Drilling down into the segment, starting with integrated care, we are raising and narrowing our full year 2025 revenue guidance, which we now expect to be up .75% to .25% year over year versus our prior guidance of last to up 3%. The increase of 100 basis points at the midpoint reflects our strong first half performance relative to guidance, coupled with updated assumptions on foreign exchange. We continue to expect HATFL to contribute approximately 200 basis points to full year revenue growth. We are narrowing our full year 2025 adjusted EBITDA margin guidance to .5% to .25% versus our prior range of .3% to 15.3%, which is up slightly at the midpoint. As previously discussed, this includes a roughly 40 basis point headwind from the catapult acquisition, excluding catapult dilution. Adjusted EBITDA margin would be up slightly year over year at the midpoint to the guidance range. Our guidance of 101 million to 103 million US integrated care member remains unchanged. Last quarter, we provided a preliminary review on the potential impact of tariffs. The initial estimate we provided, which was not included in our prior guidance, given the fluidity of the situation, was based on proposed rates at the time, including a 145% China tariff and the impact of our mitigation efforts. Based on the latest information, we now estimate an unfavorable adjusted EBITDA impact in 2025 of approximately $3 million, which is now included in our guidance ranges. This reflects a partial year of impact based on the timing of new rates and inventory on hand. We continue to evaluate additional levers to mitigate the impact of tariffs now and into the future. This includes assessing alternative sourcing arrangements to diversify our supply chain, which we think is a prudent long-term action. For the third quarter, we expect integrated care segment revenue growth to be down .5% to up .25% and adjusted EBITDA margin in the range of 14% and 15.5%. Recall that the third quarter of 2024 had included a favorable resolution of a prior period billing adjustment, which will drive a roughly 115 basis point headwind to revenue growth and roughly 95 basis point headwind to adjusted EBITDA margin in the third quarter of 2025. Importantly, we assume a return to sequential growth in chronic care program enrollment in the third quarter, driven in part by continued growth in our weight management program, which was augmented by the addition of one of our largest customers at the start of 2025. Regarding the second half cadence, our updated guidance implies a sequential step up in revenue in the fourth quarter, driven largely by typical seasonality related to infectious disease visits, as well as contribution from new business implementation. It also implies a sequential increase in adjusted EBITDA dollars driven by the revenue increase coupled with discipline cost control. Moving to better health, we are narrowing our revenue guidance range with a revised midpoint reflecting ongoing headwinds in our US cap pay business. Although still in the early stages, we are encouraged by the progress of our insurance initiative, which we view as the critical driver for restoring long-term growth in the better health business. We now expect a -over-year revenue decline of .8% to .2% in 2025, compared to our prior outlook of a .75% to .75% decrease. Our guidance continues to reflect approximately $10 million in insurance revenue for 2025, net of any mixed shifts from the existing cash pay business. We expect a more meaningful revenue contribution in 2026 as we continue to methodically scale operations and expand our fair therapist network over the next six to 12 months, while steadily enabling access across additional states. We now expect a better health adjusted EBITDA margin of 4% to .5% for the full year, with the midpoint down 75 basis points versus our prior guidance. This revision primarily reflects the flow-through impact of a lower revenue outlook, partially offset by incremental GNA reductions as we continue to prioritize investments that support the growth of our insurance initiative. We remain focused on balancing top-line growth with bottom-line discipline. While we will not pursue inefficient customer acquisition, we are committed to maintaining strong traffic to better health in preparation for the broader insurance roll-out. For the third quarter, we are guiding to better health segment revenue down 5% to .75% -over-year. And an adjusted EBITDA margin of 1% to 3.75%, reflecting the early investment phase of scaling our insurance initiative. Lastly, our balance sheet remains strong. We retired $551 million in convertible senior notes that came due in the second quarter with cash on hand. The $1 billion convertible note maturing in June, 2027 is our only remaining debt outstanding. We remain comfortable with our leverage as net debt to trailing adjusted EBITDA stood at 1.1 times at quarter end. We continue to believe our strong cash balance, cash flow generation, and business position provides us with optionality in the future. Separately, in mid-July, we entered into a new $300 million revolving credit facility which enhances our financial and operational flexibility. At the current time, there is nothing drawn on the facility and we have no immediate plans to use it. Our capital allocation priorities remain unchanged. First, we look to maintain a strong balance sheet and an appropriate net leverage profile. Second, we will invest in the business to support our strategy to both organic and inorganic initiatives. And third, we will evaluate share repurchases as a potential use of cash. With that, let me turn the call back to Chuck.