When Teladoc Health wrapped up its last earnings call in February, the virtual care company gave its revenue projections a modest bump and said that it was keeping an eye on COVID-19 cases in the event that it would need to scale the capacity of its telehealth network.

Three months later, and Teladoc CEO Jason Gorevic is sharing news of the company's "remarkable growth" across revenue, visit volume, service offerings and new client partnerships to those listening in on the company's Q1 2020 earnings call. Of note, he highlighted a March effort adding thousands of new providers to its physician network and allowed Teladoc meet increasing demand across the country.

"Requests from new potential clients are increasing as the outbreak of COVID-19 has highlighted the value of access to a comprehensive virtual healthcare solution," he said on yesterday's investors call. "During the first quarter alone, we onboarded over 6 million new paid members in the U.S. across government and commercial populations. And we anticipate onboarding an additional 6 million to 7 million new members during the second quarter, culminating in the strongest first half membership growth in company history."

But while Teladoc's first quarter exceeded revenue expectations, the company's stock took a light hit on the markets due to worse than expected earnings per share (EPS).

TOPLINE

Teladoc's Q1 year-over-year revenue grew 41% from $128.6 million in 2019 to to $180.8 million in 2020, comfortably topping the company's February projection of $169 million to $172 million.

Total visits during the same periods rose 92%, from 1,063,000 to 2,045,000, an increase largely driven by domestic visit numbers. The company had projected somewhere between 1.4 million and 1.6 million total visits at the beginning of the quarter.

Utilization of the service among paid members increased from 11% to 13.36% year over year, although the company noted that it would of been as high as 17.9% if not for the onboarding of a large health plan population over the course of the year.

The company continues to operate at a loss, this time to the tune of $29.6 million for the quarter (compared to $30.2 million in Q1 2019). EPS came in at –$0.40, not quite hitting the –$0.37 to –$0.34 range it projected in February.

ON THE RECORD

"We are playing a critical role during the global outbreak of COVID-19 and has seen a significant increase in inquiries from both existing and new potential clients. Our clients are turning to us to expand our service offering to new populations and add new products during this time of need," Gorevic said. "The investments in capacity made during the month of March have positioned us to meet the increased demand from existing members as well as the new members we are in the process of onboarding."

LOOKING AHEAD

In light of the COVID-19 trends, Gorevic said that the company is "significantly raising" its projections for the next quarter and full year. Still, he preceded the projections report by stressing industry-wide uncertainty. Although the company generally expects revenue and call volume to remain higher than pre-COVID-19 levels, the gradual decline of stay at home orders and low copays will likely see many of the company's new patients return to traditional healthcare providers.

With that in mind, Teladoc is expecting Q2's total revenue to fall between $215 million and $225 million, with total visits in the range of 2.3 million to 2.4 million. EPS are projected to be between –$0.28 and –$0.23.

For the year, total revenue is projected to sit between $800 million and $825 million. The company is anticipating 8 million to 9 million total visits, and an EPS of –$1.27 to –$1.13.

LOOKING BACK

Prior to COVID-19's high demand, Teladoc was already anticipating a strong 2020. Part of this was due to the company's diversifying offerings for enterprise customers, such as its InTouch Health acquisition, and an early bump in visits driven by the winter's severe flu season.

As for 2019, the company reported a 32% year-over-year increase in full-year revenue, which totaled $553.3 million, and a 57% increase in visit volume, which totaled 4.1 million.

In many ways’ tech has made the world smaller and more interconnected. Information that once took days to reach new countries now takes milliseconds. Digital health is also shaking up the way patients receive care globally, and how they expect to receive care. 

“Our consumer expectations, our knowledge that what we are getting as a consumer in healthcare isn’t matching up to what we are getting as a consumer everywhere else in our lives,” Dr. Don Rucker, National Coordinator for Health Information Technology Office of the National Coordinator for Health IT, said during a HIMSS20 Digital’s "The Washington Perspective: A Fireside Chat with the ONC National Coordinator.”

That consumerization of healthcare is just one of the many forces propelling health innovation all over the world. Health systems have responded with new digital initiatives and departments specifically focused on the digital health. 

Rucker is now working with global thought leaders to help bring digital health to the next level in a cohesive way with the Global Digital Health Partnership, an international effort made up of 30 countries.  

“This is a partnership really of the digital health ministries or health ministries’ digital component in a number of countries and a realization we tend to use a number of the same standards, maybe in some different ways,” he said. 

Collaborating now can help prevent future interoperability. 

“There is a realization that it makes more sense, just the same way that if everyone drove on one side of the road rather than picking between [the two, it] makes more sense. It would make sense if everyone had one voltage coming out of the wall rather than different currencies in different countries. This is an effort to say, 'Hey we are pretty early on. Let’s see what we can standardize here, and let’s see what we can share.''

While every system may have its own way of creating a digital system, some of the main goals and obstacles are strikingly similar. 

“I would say having worked in the GDHP for the last few years, the global takeaway is healthcare is complex. Even though the US reimbursement system is … one of a kind, the reality is much of the world on some level is an imitation of the American system, because we’ve invented much if not most of the tech, and many, if not most of the meds, and many, if not most, of the treatment modalities,” Rucker said. “So, a lot of the world is colored by the view of American medicine and that is a big data-intensive thing. So, we are working with these countries to see what we can do to harmonize standards.

While there may be a long way to go in aligning global, and even in some cases state digital efforts, it’s clear that connected health has uprooted the traditional system for good. 

“I think the internet of things is going to mean the way we look at the body is a much more instrumented way. ... There are technologies that are early stages that are going to totally change the way of healthcare and allow us to catch things far earlier and make a lot of these behavioral decisions.”