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What changed in Teladoc Health, Inc.'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of Teladoc Health, Inc.'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+397 added−368 removedSource: 10-K (2025-02-27) vs 10-K (2024-02-23)

Top changes in Teladoc Health, Inc.'s 2024 10-K

397 paragraphs added · 368 removed · 331 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

78 edited+10 added−6 removed159 unchanged
Biggest changeIncrease Engagement and Long-term Relationships with Our Members by Driving Expanded Access & Enhanced Touch Points We believe there is significant opportunity within our existing membership base to increase engagement by continually driving awareness and usage of our solutions. We believe our platform can become the primary entry point for on-demand, virtual healthcare for eligible individuals around the world.
Biggest changeWe believe that these and other enhancements will improve quality of care and patient experience and expand the scope of populations we serve. 8 Table of Contents Increase Engagement and Long-term Relationships with Our Members by Driving Expanded Access & Enhanced Touch Points We believe there is significant opportunity within our existing membership base to increase engagement by continually driving awareness and usage of our solutions.
We believe that we have the largest breadth of integrated whole person products and services in the virtual care industry, enabling us to treat the whole person, from mental healthcare to physical healthcare, and from acute episodic needs to chronic needs.
We believe that we have the largest breadth of integrated products and services in the virtual care industry, enabling us to treat the whole person, from mental healthcare to physical healthcare, and from acute episodic needs to chronic needs.
Competition We view our competitors as those companies that currently (or in the future will) (i) develop and market virtual care technology (devices, software, and systems) and/or (ii) provide virtual care services, such as the delivery of on-demand access to healthcare and chronic condition management.
Competition We view our competitors as those companies that currently (or in the future will) (i) provide virtual care services, such as the delivery of on-demand access to healthcare and chronic condition management and/or (ii) develop and market virtual care technology (devices, software, and systems) .
The customers of our Integrated Care segment primarily consist of employers, health plans, hospitals and health systems, insurance and financial services companies (collectively “Clients”), as well as individual members who utilize our solutions. Clients and individual consumers purchase our solutions to expand access to convenient, affordable, and high-quality healthcare to their constituents and to reduce their healthcare spending.
The customers of our Integrated Care segment primarily consist of employers, health plans, hospitals and health systems, insurance and financial services companies (collectively “Clients”), as well as individual consumers who utilize our solutions. Clients and individual consumers purchase our solutions to expand access to convenient, affordable, and high-quality healthcare to their constituents and to reduce their healthcare spending.
Item 1. Business Overview Teladoc Health is the global leader in whole person virtual care, forging a new healthcare experience with better convenience, outcomes, and value. Our mission is to empower all people everywhere to live their healthiest lives by transforming the healthcare experience.
Item 1. Business Overview Teladoc Health is the global leader in virtual care, forging a new healthcare experience with better convenience, outcomes, and value. Our mission is to empower all people everywhere to live their healthiest lives by transforming the healthcare experience.
Comprehensive Suite of Virtual Healthcare Clinical Services We believe that we are the first and only company to provide a comprehensive and integrated whole person virtual healthcare solution that both provides and enables care for a full spectrum of clinical conditions, including wellness and prevention, acute care, chronic conditions, and complex healthcare needs.
Comprehensive Suite of Virtual Healthcare Clinical Services We believe that we are the first and only company to provide a comprehensive and integrated virtual healthcare solution that both provides and enables care for a full spectrum of clinical conditions, including wellness and prevention, acute care, chronic conditions, and complex healthcare needs.
Our strategy is to deliver 7 Table of Contents a reimagined model for primary care, build on a foundation of integrated, multi-source data, leveraging a unified whole person experience; dedicated care team of physicians and non-medical doctors for a personalized longitudinal care plan; continuous guidance and support; navigation and coordination with high quality providers; and “last mile” services like lab testing, prescriptions, and in-home exams.
Our strategy is to deliver a reimagined model for primary care, build on a foundation of integrated, multi-source data, leveraging a unified whole person experience; dedicated care team of physicians and non-medical doctors for a personalized longitudinal care plan; continuous guidance and support; navigation and coordination with high quality providers; and “last mile” services like lab testing, prescriptions, and in-home exams.
Our BetterHelp segment primarily consists of our market leading D2C mental health platform. The online counseling and therapy services are provided via our network of over 40,000 licensed clinicians leveraging our platform for web, mobile app, phone, and text-based interactions.
Our BetterHelp segment primarily consists of our market leading D2C mental health platform. The online counseling and therapy services are provided via our network of over 35,000 licensed clinicians leveraging our platform for web, mobile app, phone, and text-based interactions.
See “Risk Factors—Risks Related to Our Business and Industry—Our quarterly results may fluctuate significantly, which could adversely impact the value of our common stock.” included elsewhere in this Annual Report on Form 10-K. Health Equity Our commitment to health equity is central to our mission of empowering all people everywhere to live their healthiest lives.
See “Risk Factors—Risks Related to Our Business and Industry—Our quarterly results may fluctuate significantly, which could adversely impact the value of our common stock.” included elsewhere in this Annual Report on Form 10-K. 11 Table of Contents Health Equity Our commitment to health equity is central to our mission of empowering all people everywhere to live their healthiest lives.
Today, we have a vision of making virtual care the first step on any healthcare journey, and we are delivering on this mission by providing whole person virtual care that includes primary care, mental health, chronic condition management, and more.
Today, we have a vision of making virtual care the first step on any healthcare journey, and we are delivering on this mission by providing virtual care that includes primary care, mental health, chronic condition management, and more.
In addition, the government and some courts have taken the position that claims presented in violation of the various statutes, including the Stark Law can be considered a violation of the federal False Claims Act (described below) based on the contention that a provider impliedly certifies compliance with all 12 Table of Contents applicable laws, regulations and other rules when submitting claims for reimbursement.
In addition, the government and some courts have taken the position that claims presented in violation of the various statutes, including the Stark Law can be considered a violation of the federal False Claims Act (described below) based on the contention that a provider impliedly certifies compliance with all applicable laws, regulations and other rules when submitting claims for reimbursement.
In addition, our enterprise security program is periodically evaluated by expert third parties to ensure we are meeting or exceeding standards, best practices, and 6 Table of Contents regulatory requirements. One example of such an independent third-party certification that we have achieved is the Health Information Trust Alliance ("HITRUST").
In addition, our enterprise security program is periodically evaluated by expert third parties to ensure we are meeting or exceeding standards, best practices, and regulatory requirements. One example of such an independent third-party certification that we have achieved is the Health Information Trust Alliance ("HITRUST").
Our engagement science is a unique combination of the application of predictive analytics and modeling, our deep experience with all population demographics, and expertise in applying this knowledge to our member populations on a global scale. With our proprietary engagement science, we target members using behavioral triggers, advanced predictive 5 Table of Contents modeling, and demographic/firmographic insights.
Our engagement science is a unique combination of the application of predictive analytics and modeling, our deep experience with all population demographics, and expertise in applying this knowledge to our member populations on a global scale. With our proprietary engagement science, we target members using behavioral triggers, advanced predictive modeling, and demographic/firmographic insights.
Violations of the Anti-Kickback Statute can result in exclusion from Medicare, Medicaid or other governmental programs as well as civil and criminal penalties, including civil monetary penalties of up to $120,816, and criminal fines of $100,000 per violation, and three times the amount of the unlawful remuneration, and imprisonment of up to ten years.
Violations of the Anti-Kickback Statute can result in exclusion from Medicare, Medicaid or other governmental programs 13 Table of Contents as well as civil and criminal penalties, including civil monetary penalties of up to $120,816, and criminal fines of $100,000 per violation, and three times the amount of the unlawful remuneration, and imprisonment of up to ten years.
We offer our employees full access to our diverse portfolio of whole-person health solutions, including free mental health resources, digital health devices, and on-demand access to the employee assistance program for employees and their dependents. Talent Development. We prioritize and invest in creating opportunities to help employees grow and build their careers, through training and development programs.
We offer our employees full access to our diverse portfolio of integrated health solutions, including free mental health resources, digital health devices, and on-demand access to the employee assistance program for employees and their dependents. Talent Development. We prioritize and invest in creating opportunities to help employees grow and build their careers, through training and development programs.
We also provide a broad range of programs and services, including primary and specialty care telehealth solutions, chronic condition management, expert medical services, mental health solutions, and platform & program services. Global Footprint Spanning Clients, Medical Operations and Members We believe we have the only global virtual healthcare footprint spanning a diverse set of Client channels, medical operations, and members.
We also provide a broad range of programs and services, including primary and specialty care telehealth solutions, chronic condition management, expert medical services, mental health solutions, and platform & program services. 5 Table of Contents Global Footprint Spanning Clients, Medical Operations and Members We believe we have the only global virtual healthcare footprint spanning a diverse set of Client channels, medical operations, and members.
Our principal marketing programs include use of our website to provide information about our company and our solutions, as well as learning opportunities for potential members; integrated marketing campaigns; and participation in industry events, trade shows, and conferences. 9 Table of Contents We sell our BetterHelp services principally by marketing our solution directly to potential users.
Our principal marketing programs include use of our website to provide information about our company and our solutions, as well as learning opportunities for potential members; integrated marketing campaigns; and participation in industry events, trade shows, and conferences. We sell our BetterHelp services principally by marketing our solution directly to potential users.
The non-clinical functions and services we provide under the services agreement primarily include member management services, such as maintaining network operations centers for our members to request a visit with THMG’s providers, member billing and collection administration, and maintenance and storage of member medical records.
The non-clinical functions and services we provide under the services agreement primarily include member management services, such as maintaining network operations centers for our members to request a visit with the THMG Association’s providers, member billing and collection administration, and maintenance and storage of member medical records.
We also require our employees and consultants to disclose and assign to us all inventions conceived during the term of their employment or engagement while using our property or which relate to our business. Additional Information Our website address is teladochealth.com.
We also require our employees and consultants to disclose and assign to us all inventions conceived during the term of their employment or engagement while using our property or which relate to our business. 18 Table of Contents Additional Information Our website address is teladochealth.com.
For example, Brazil adopted the Brazilian General Data Protection Law, which is closely aligned with the EU GDPR and began to be enforced in August 2021. Additionally, China adopted the Personal Information Protection Law (“PIPL”), which also closely aligns with GDPR, although there are differences. PIPL went into effect on November 1, 2021.
For example, Brazil adopted the Brazilian General Data Protection Law, which is closely aligned with the EU GDPR and began to be enforced in 16 Table of Contents August 2021. Additionally, China adopted the Personal Information Protection Law (“PIPL”), which also closely aligns with GDPR, although there are differences. PIPL went into effect on November 1, 2021.
We continue to work toward further mobilizing our workforce to give back to the communities where we live and work through new volunteer programs and corporate matching opportunities for giving. We set out to advance positive social change in our communities with a 2023 achievement of volunteering more than 13,000 hours around the globe.
We continue to work toward further mobilizing our workforce to give back to the communities where we live and work through new volunteer programs and corporate matching opportunities for giving. We set out to advance positive social change in our communities with a 2024 achievement of volunteering more than 19,000 hours around the globe.
Under the services agreement with THMG, we have agreed to serve, on an exclusive basis, as manager and administrator of THMG’s non-clinical functions and services related to the provision of the telehealth services by providers employed by or under contract with THMG.
Under the services agreement with THMG, we have agreed to serve, on an exclusive basis, as manager and administrator of the THMG Association’s non-clinical functions and services related to the provision of the telehealth services by providers employed by or under contract with the THMG Association.
Intelligent, Adaptable and Innovative Solution to Whole Person Care We have taken an innovative approach to technology to address whole person care. We have fused technology, logistics, and behavioral and clinical science, with data science serving as the intelligent connective tissue that powers our whole person care model.
Intelligent, Adaptable and Innovative Solution to Integrated Care We have taken an innovative approach to technology to address integrated care. We have fused technology, logistics, and behavioral and clinical science, with data science serving as the intelligent connective tissue that powers our integrated care model.
We enter into management services contracts with these physician-owned professional associations and professional corporations pursuant to which we provide them with non-clinical functions and services related to the provision of the telehealth services by the providers, such as maintaining network operations centers for our members to request a visit with the providers, member billing and collection administration, and maintenance and storage of member medical records, and the professional associations and professional corporations pay us for those services out of the fees they collect from patients and third-party payors.
We enter into business support services contracts with these physician-owned professional associations and professional corporations pursuant to which we provide them with non-clinical functions and services related to the provision of the telehealth services by the providers, such as maintaining network operations centers 12 Table of Contents for our members to request a visit with the providers, member billing and collection administration, and maintenance and storage of member medical records, and the professional associations and professional corporations pay us for those services out of the fees they collect from patients and third-party payors.
Federal and State Fraud, Waste, and Abuse Laws Federal Stark Law We are subject to the federal self-referral prohibitions, commonly known as the Stark Law.
U.S. Federal and State Fraud, Waste, and Abuse Laws Federal Stark Law We are subject to the federal self-referral prohibitions, commonly known as the Stark Law.
How We Generate Revenue For the year ended December 31, 2023, 88% of our consolidated revenue was derived from access fees. To a lesser extent, we generate revenue from visit fees as well as sales of hardware and other related services to hospital and health systems, which is reported in "other revenue".
How We Generate Revenue For the year ended December 31, 2024, 86% of our consolidated revenue was derived from access fees. To a lesser extent, we generate revenue from visit fees as well as sales of hardware and other related services to hospital and health systems, which is reported in "other revenue".
We plan to execute this strategy by selling additional, high 8 Table of Contents value services to our Clients, including our primary care services, chronic condition management programs, and mental health services. We believe that this strategy will help drive an increase in our average revenue per member over time.
We plan to execute this strategy by selling additional, high value services to our Clients, including our primary care services, chronic condition management programs, and mental health services. We believe that this strategy will help drive an increase in our average revenue per member over time.
As a result of this dynamic, we have typically experienced fewer new member additions and the strongest operating income performance in the fourth quarter. Conversely, as marketing activity typically resumes at the start of the year, we typically experience the weakest operating income performance during the first quarter as new customer acquisition and revenue growth lags marketing spend.
As a result of this dynamic, we have typically experienced fewer new member additions and strong operating income performance in the fourth quarter. Conversely, as marketing activity typically resumes at the start of the year, we typically experience weak operating income performance during the first quarter as new customer acquisition and revenue growth lags marketing spend.
Our seven BRGs include a focus on LGBTQ+, women, multicultural, military veterans, neurodiversity and differing physical and mental abilities, working parents and caregivers, and generational interests of employees who are engaged in four key pillars: • Building internal community/network • Advancing external community • Supporting business impact • Enhancing professional development Focusing on diversity recruiting and talent acquisition.
Our business resource groups (“BRGs”) include a focus on LGBTQ+, women, multicultural, military veterans, neurodiversity and differing physical and mental abilities, working parents and caregivers, and generational interests of employees who are engaged in four key pillars: • Building internal community/network • Advancing external community • Supporting business impact • Enhancing professional development Focusing on diversity recruiting and talent acquisition.
As the first comprehensive virtual healthcare company providing whole person care at scale, we have pioneered solutions and created what we believe are collectively the telehealth industry’s first and only offerings of their kind.
As the first comprehensive virtual healthcare company providing integrated care at scale, we have pioneered solutions and created what we believe are collectively the telehealth industry’s first and only offerings of their kind.
Our Integrated Care segment includes a suite of global virtual medical services including general medical, expert medical services, specialty medical, chronic condition management, mental health, and enabling technologies and enterprise telehealth solutions for hospitals and health systems. Services in this segment are distributed primarily on a business-to-business (“B2B”) basis.
Our Integrated Care segment includes a suite of global virtual medical services including general medical, expert medical services, specialty medical, chronic condition management, mental health, and enabling technologies and enterprise telehealth solutions for hospitals and health systems. Services in this segment are distributed primarily on a B2B basis.
Moreover, in certain cases, providers who routinely waive copayments and deductibles for Medicare and Medicaid beneficiaries can also be held liable under the Anti-Kickback Statute and civil False Claims Act, which can impose additional penalties associated with the wrongful act.
Moreover, in certain cases, providers who routinely waive copayments and 14 Table of Contents deductibles for Medicare and Medicaid beneficiaries can also be held liable under the Anti-Kickback Statute and civil False Claims Act, which can impose additional penalties associated with the wrongful act.
We design a range of programs and initiatives to nurture talent, encourage curiosity and innovation, make room for diverse voices and 16 Table of Contents perspectives, increase engagement and connectiveness, and mentor leaders for future roles.
We design a range of programs and initiatives to nurture talent, encourage curiosity and innovation, make room for diverse voices and perspectives, increase engagement and connectiveness, and mentor leaders for future roles.
Competition focuses on, among other factors, experience in operation, customer service, quality of technology and know-how, ability to generate and demonstrate clinical and financial outcomes for clients, and reputation. Teladoc Health Integrated Care Segment Competitors in the telehealth and expert medical services market include MDLive, Inc.
Competition focuses on, among other factors, experience in 10 Table of Contents operation, customer service, quality of technology and know-how, ability to generate and demonstrate clinical and financial outcomes for clients, and reputation. Integrated Care Segment Competitors in the telehealth and expert medical services market include MDLive, Inc.
Through the THMG Association and our BetterHelp platform, we also contract with a network of providers. In order to ensure predictable availability of providers and a consistent member experience, we expect that THMG will hire more providers and rely less on contractors.
We contract with a network of providers operating through the THMG Association and the BetterHelp platform. In order to ensure predictable availability of providers and a consistent member experience, we expect that THMG will hire more employees and rely less on contractors.
Our competitive advantages allow us to deliver whole person care solutions that create and demonstrate positive clinical outcomes for our members, and strong return on investment for our Clients.
Our competitive advantages allow us to deliver integrated care solutions that create and demonstrate positive clinical outcomes for our members and strong return on investment for our Clients.
We have developed and built upon our diverse capabilities over the course of more than 20 years, evolving our product and service portfolio from a suite of point solutions to a whole person offering.
We have developed and built upon our diverse capabilities over the course of more than 20 years, evolving our product and service portfolio from a suite of point solutions to an integrated offering.
The THMG Association is considered a variable interest entity and its financial results are included in Teladoc Health’s consolidated financial statements. 10 Table of Contents Seasonality Our business has historically been subject to seasonality.
The THMG Association is considered a variable interest entity and its financial results are included in Teladoc Health’s consolidated financial statements. Seasonality Our business has historically been subject to seasonality.
Who We Serve As of December 31, 2023, approximately 90 million members in the United States (“U.S.”) have access to one or more of our products and services.
Who We Serve As of December 31, 2024, approximately 94 million members in the United States (“U.S.”) have access to one or more of our products and services.
We apply analytics to the anonymized data points generated in our millions of visits with patients to continuously improve the clinical quality of our services.
We apply analytics to the de-identified data points generated in our millions of visits with patients to continuously improve the clinical quality of our services.
For example, we provide a unique and proprietary blood glucose meter to members enrolled in our diabetes program. This Class II, Food and Drug Administration (“FDA”)-cleared medical device includes a cellular antenna and color touchscreen to provide seamless integration with our platform.
For example, we provide a unique and proprietary 6 Table of Contents blood glucose meter to members enrolled in our diabetes program. This Class II, U.S. Food and Drug Administration (“FDA”)-cleared medical device includes a cellular antenna and color touchscreen to provide seamless integration with our platform.
During 2023, we launched a new unified mobile app that seamlessly offers members access to all of our virtual health services within a single, modern, user-friendly digital experience, under the Teladoc Health brand to support member engagement, multi-program enrollment, and longitudinal relationships with members.
Our unified mobile app seamlessly offers members access to all of our virtual health services within a single, modern, user-friendly digital experience, under the Teladoc Health brand to support member engagement, multi-program enrollment, and longitudinal relationships with members.
In addition, state laws are changing rapidly, and there is discussion of a new federal privacy law or federal breach notification law, to which we may be subject.
In addition, state laws are changing rapidly, and there is potential for a new federal privacy law or federal breach notification law, to which we may be subject.
In addition, we augment our employee base with contractors to meet resource needs and to increase flexibility in managing our expense base. Of the total employee population as of December 31, 2023, approximately 63% of our employees worked in the U.S. and 37% worked in our international locations.
In addition, we augment our employee base with contractors to meet resource needs and to increase flexibility in managing our expense base. Of the total employee population as of December 31, 2024, approximately 60% of our employees worked in the U.S. and 40% worked in our international locations.
By combining the latest in data science and analytics with an award-winning user experience through a set of highly flexible integrated technology platforms, we completed approximately 18.4 million telehealth visits in 2023 through our business to business and direct-to-consumer ("D2C") channels.
By combining the latest in data science and analytics with an award-winning user experience through a set of highly flexible integrated technology platforms, we completed approximately 17.3 million telehealth visits in 2024 through our business-to-business ("B2B") and direct-to-consumer ("D2C") channels.
These data sets and insights are applied to enhance our providers’ ability to deliver quality care through tools such as our provider dashboards, as well as serving as a foundation for clinical innovation and collaboration with other leading healthcare organizations that are focused on the advancement of virtual care delivery.
These data sets and insights are applied to enhance the ability of providers in the THMG Association (as defined below) to deliver quality care through tools such as provider dashboards, as well as serving as a foundation for clinical innovation and collaboration with other leading healthcare organizations that are focused on the advancement of virtual care delivery.
For example, following a decision of the Court of Justice of the EU in October 2015 (commonly referred to as the Schrems I ), transferring personal data to U.S. companies that had certified as members of the U.S. Safe Harbor Scheme was declared invalid.
In addition, these rules are constantly under scrutiny. For example, following a decision of the Court of Justice of the EU in October 2015 (commonly referred to as the Schrems I ), transferring personal data to U.S. companies that had certified as members of the U.S. Safe Harbor Scheme was declared invalid.
We build a range of total reward programs that support employees through fair, equitable, and competitive pay and benefits, and we invest in technology, tools, and resources to transform and increase the quality of work. As of December 31, 2023, we employed approximately 5,600 people, comprised of approximately 86% full-time employees and 14% part-time employees.
We build a range of total reward programs that support employees through fair, equitable, and competitive pay and benefits, and we invest in technology, tools, and resources to transform and increase the quality of work. As of December 31, 2024, we employed approximately 5,500 people, comprised of approximately 84% full-time employees and 16% part-time employees.
We continue to look for ways to expand a range of programs and initiatives that are focused to attract, develop and retain our workforce – including a focused engagement through diversity, equity, and inclusion (“DEI”). We have enhanced our talent efforts in recent years to include: Supporting Employees through Our Products and Services.
We continue to look for ways to expand a range of programs and initiatives that are focused to attract, develop and retain our workforce. We have enhanced our talent efforts in recent years to include: 17 Table of Contents Supporting Employees through Our Products and Services.
For certain Clients, we also earn visit fees or per-case fees in combination with access fees. Access fees are paid by our Clients on behalf of their employees, dependents, policy holders, card holders, beneficiaries, clinicians, or as is the case with certain of our subscribers, fees are paid by our members themselves.
Access fees are paid by our Clients on behalf of their employees, dependents, policy holders, card holders, beneficiaries, clinicians, or as is the case with certain of our subscribers, fees are paid by our members themselves.
In this event, failure to comply could lead to adverse judicial or administrative action against us and/or our providers, civil or criminal penalties, receipt of cease-and-desist orders from state regulators, loss of provider licenses, the need to make changes to the terms of engagement of our providers that interfere with our business and other materially adverse consequences. U.S.
In this event, failure to comply could lead to adverse judicial or administrative action against us and/or the THMG Association's providers, civil or criminal penalties, receipt of cease-and-desist orders from state regulators, invalidation of certain contracts, demands to repay reimbursements from third party payors, loss of provider licenses, the need to make changes to the terms of engagement of the THMG Association's providers that interfere with our business and other materially adverse consequences.
However, regulatory authorities or other parties, including our providers, may assert that, despite these arrangements, we are engaged in the corporate practice of medicine or that our contractual arrangements with affiliated physician groups constitute unlawful fee splitting.
Regulatory authorities or other parties, including the THMG Association's providers, may assert that, despite our contractual arrangements with the THMG Association and the BetterHelp platform, we are directly engaged in the corporate practice of medicine or that our contractual arrangements with affiliated physician groups constitute unlawful fee splitting.
We have invested in our employees and broadened our external speaker series, interactive expert discussions, and self-paced learning programs to expand knowledge and awareness of diversity and health topics. Business Resource Groups. We believe our business resource groups (“BRGs”) are a foundational element of the DEI ecosystem.
We have invested in our employees and broadened our external speaker series, interactive expert discussions, and self-paced learning programs to expand knowledge and awareness of diversity and health topics. Business Resource Groups.
Teladoc Health Integrated Care Segment Our Integrated Care segment primarily generates revenue on a contractually recurring, access fee basis, typically on a per-member-per-month (“PMPM”) basis. In some cases, Clients pay monthly access fees based on a per-participant-per-month model, based on the number of actively enrolled members each month.
Integrated Care Segment Our Integrated Care segment primarily generates revenue on a contractually recurring, access fee basis. Clients pay monthly access fees on a per-member-per-month ("PMPM") model, or on a per-participant-per-month ("PPPM") model, based on the number of actively enrolled members each month.
In addition, these requirements are subject to broad powers of interpretation and enforcement by state regulators. Some of these requirements may apply to us even if we do not have a physical presence in the state, based solely on our engagement of a provider licensed in the state or the provision of telehealth to a resident of the state.
Some of these requirements may apply to us even if we do not have a physical presence in the state, based solely on our engagement of a provider licensed in the state or the provision of telehealth to a resident of the state.
Our international operations are headquartered in Barcelona, Spain with satellite locations in Europe, South America, and Asia. With these locations, we are able to provide 24x7 services to our members internationally. When medically necessary, our doctors can help members navigate the local health systems to obtain the best healthcare for their situation.
With these locations, we are able to provide 24x7 services to our members internationally. When medically necessary, our doctors can help members navigate the local health systems to obtain the best healthcare for their situation.
Failure to comply with the requirements of GDPR and the applicable national data protection laws of the EU member states may result in fines of up to €20,000,000 or up to 4% of the total worldwide annual revenue from the preceding financial year, whichever is higher, and other administrative penalties. 15 Table of Contents We are also subject to EU laws on data export, as we may transfer personal data from the EU to other jurisdictions, in particular the U.S.
Failure to comply with the requirements of GDPR and the applicable national data protection laws of the EU member states may result in fines of up to €20,000,000 or up to 4% of the total worldwide annual revenue from the preceding financial year, whichever is higher, and other administrative penalties.
Under HIPAA, these two additional federal crimes are: “Healthcare Fraud” and “False Statements Relating to Healthcare Matters.” The Healthcare Fraud statute prohibits 13 Table of Contents knowingly and recklessly executing a scheme or artifice to defraud any healthcare benefit program, including private payors.
Under HIPAA, these two additional federal crimes are: “Healthcare Fraud” and “False Statements Relating to Healthcare Matters.” The Healthcare Fraud statute prohibits knowingly and recklessly executing a scheme or artifice to defraud any healthcare benefit program, including private payors. A violation of this statute is a felony and may result in fines, imprisonment or exclusion from government sponsored programs.
Under the corporate practice of medicine restrictions of certain states, decisions and activities such as scheduling, contracting, setting rates, and the hiring and management of non-clinical personnel may implicate the restrictions on the corporate practice of medicine. State corporate practice of medicine and fee splitting laws vary from state to state and are not always consistent among states.
Under the corporate practice of medicine restrictions of certain states, decisions and activities such as clinician scheduling, contracting, setting rates, and the hiring and management of non-clinical personnel may implicate the restrictions on the corporate practice of medicine.
In addition, we partner with companies, such as consumer telecommunications companies, in certain international markets to offer virtual care services on a co-branded or white-labelled basis directly to customers of those companies and other consumers. Drive Direct-To-Consumer Channel Growth We plan to continue driving growth through investments in our D2C channels, which primarily includes our BetterHelp segment.
In addition, we partner with companies, such as consumer telecommunications companies, in certain international markets to offer virtual care services on a co-branded or white-labelled basis directly to customers of those companies and other consumers.
Numerous states have enacted, or are currently reviewing, legislation that is similar to the CCPA and/or CPRA. For example, the Virginia Consumer Data Protect Act became effective on January 1, 2023; the Colorado Privacy Act and the Connecticut Data Privacy Act both became effective on July 1, 2023; and the Utah Consumer Privacy Act became effective on December 31, 2023.
Numerous states have enacted, or are currently reviewing, legislation that is similar to the CCPA and/or CPRA. For example, the Texas Data Privacy and Security Act and the Oregon Consumer Privacy Act both became effective on July 1, 2024, and the Montana Consumer Data Privacy Act became effective on October 1, 2024.
Visit fees for general medical and specialty visits are typically paid by Clients and/or members. 4 Table of Contents BetterHelp Segment In our BetterHelp segment, we primarily generate revenue from paying users who pay a fee, most commonly monthly, to access our network of therapists and psychiatrists as well as to use our BetterSleep app designed to help people improve their sleep quality and overall well-being .
BetterHelp Segment In our BetterHelp segment, we primarily generate revenue from paying users who most commonly pay a weekly or monthly fee to access our network of psychotherapists as well as to use our BetterSleep app designed to help people improve their sleep quality and overall well-being .
We also have substantial room to drive cross-sell opportunities of chronic condition management products into our Client base of telehealth customers, as we see limited overlap of existing Client bases. Leverage Existing Distribution Channels and Expand Penetration of Global Markets We have developed a highly effective and efficient global distribution network.
We also have substantial room to drive cross-sell opportunities of chronic condition management products into our Client base of telehealth customers. Leverage Existing Distribution Channels and Expand Penetration of Global Markets We have developed a highly effective and efficient global distribution network. Our international operations are headquartered in Barcelona, Spain with satellite locations in Europe, South America, and Asia.
For additional discussion of our regulatory environment, see “Risk Factors” included in Part I, Item 1A of this Annual Report on Form 10-K. 11 Table of Contents Telehealth Provider Licensing, Medical Practice, Certification and Related Laws and Guidelines The practice of medicine, including the provision of mental health services, is subject to various federal, state, and local certification and licensing laws, regulations, and approvals, relating to, among other things, the adequacy of medical care, the practice of medicine (including the provision of remote care and cross coverage practice), equipment, personnel, operating policies and procedures, and the prerequisites for the prescription of medication.
Telehealth Provider Licensing, Medical Practice, Certification and Related Laws and Guidelines The practice of medicine, including the provision of mental health services, is subject to various federal, state, and local certification and licensing laws, regulations, and approvals, relating to, among other things, the adequacy of medical care, the practice of medicine (including the provision of remote care and cross coverage practice), equipment, personnel, operating policies and procedures, and the prerequisites for the prescription of medication.
This PSO is formally recognized by the U.S. Department of Health and Human Services (“HHS”) and certified by the Agency for Healthcare Research and Quality. Our Growth Strategies Enable A Virtual First Strategy for Consumer Healthcare Access Our vision is to position virtual care as the first place individuals go to get the care they need and manage their health.
Our Growth Strategies Enable A Virtual First Strategy for Consumer Healthcare Access Our vision is to position virtual care as the first place individuals go to get the care they need and manage their health.
In light of the HIPAA Omnibus Final Rule, recent enforcement activity, and statements from HHS, we expect increased federal and state HIPAA privacy and security enforcement efforts. 14 Table of Contents The privacy and security of personal information stored, maintained, received or transmitted electronically is an enforcement priority in the U.S. and internationally.
We expect federal and state HIPAA privacy and security enforcement efforts to continue to increase. The privacy and security of personal information stored, maintained, received or transmitted electronically is an enforcement priority in the U.S. and internationally.
Teladoc Health, on our own and as part of our management responsibilities to the THMG Association, is required to comply with HIPAA’s breach notification rule.
Violations of HIPAA may result in significant civil and criminal penalties, and a single breach incident can result in violations of multiple standards. Teladoc Health, on our own and as part of our management responsibilities to the THMG Association, is required to comply with HIPAA’s breach notification rule.
Our acquisition strategy is centered on acquiring products, capabilities, clinical specialties, technologies, and distribution channels that are highly scalable and rapidly growing. We have also established a track record of integrating these acquisitions to deliver incremental value to our Clients and members. Sales and Marketing We sell our Integrated Care services principally through our direct sales organization.
We have also established a track record of integrating these acquisitions to deliver incremental value to our Clients and members. Sales and Marketing We sell our Integrated Care services principally through our direct sales organization.
Many states in which we operate and in which our patients reside also have laws that protect the privacy and security of personal information, including health information. These laws may be similar to, or even more protective, and may apply more broadly than HIPAA and other federal privacy laws, or they apply to personal information that HIPAA does not regulate.
These laws may be similar to, or even more protective, and may apply more broadly than HIPAA and other federal privacy laws, or they apply to personal information that HIPAA 15 Table of Contents does not regulate.
This was a monumental achievement that was consistent with our values, including those of respecting and taking care of people, doing what’s right, and succeeding together.
This was a monumental achievement that was consistent with our values, including those of respecting and taking care of people, doing what’s right, and succeeding together. For 2025, we have continued to challenge ourselves and set goals for volunteer hours to do good and give back to our communities.
Since the effective date of the HIPAA Omnibus Final Rule on September 23, 2013, HIPAA’s requirements are also directly applicable to the independent contractors, agents, and other “business associates” of covered entities that create, receive, maintain, or transmit PHI in connection with providing services to covered entities.
HIPAA’s requirements are also directly applicable to the independent contractors, agents, and other “business associates” of covered entities that create, receive, maintain, or transmit PHI in connection with providing services to covered entities. We are also at times a business associate of other covered entities when we are working on behalf of our affiliated medical groups.
For 2024, we have continued to challenge ourselves and set goals for volunteer hours to do good and give back to our communities. 17 Table of Contents Intellectual Property We own and use trademarks and service marks on or in connection with our services, including both unregistered common law marks and issued trademark registrations in the U.S. and around the world.
Intellectual Property We own and use trademarks and service marks on or in connection with our services, including both unregistered common law marks and issued trademark registrations in the U.S. and around the world. We also have trademark applications pending to register marks in the U.S. and internationally.
We offer a portfolio of services and solutions covering hundreds of medical subspecialties, bolstered by technology, artificial intelligence ("AI"), machine learning and human expertise to provide an effective care experience that people value and trust.
We aim to achieve our vision of making virtual care the first step on any healthcare journey by delivering, enabling, and empowering integrated virtual care services and experiences that span every stage of the healthcare journey. 3 Table of Contents We offer a portfolio of services and solutions covering hundreds of medical subspecialties, bolstered by technology, artificial intelligence ("AI"), machine learning and human expertise to provide an effective care experience that people value and trust.
These obligations may be interpreted and applied in a manner that is inconsistent from one jurisdiction to another and may conflict with other requirements or our practices. In addition, these rules are constantly under scrutiny.
We are also subject to EU laws on data export, as we may transfer personal data from the EU to other jurisdictions, in particular the U.S. These obligations may be interpreted and applied in a manner that is inconsistent from one jurisdiction to another and may conflict with other requirements or our practices.
Some of our contracts place a portion of our fees at risk or provide for gain share opportunity based on achieving desired performance metrics, cost savings, and/or clinical outcomes improvements. Access fees comprise the significant majority of our Integrated Care segment revenue. We also generate revenue on a per-telehealth visit basis through certain Clients with visit fee only arrangements.
Some of our contracts place a portion of our fees at risk or provide an opportunity to earn performance-based payments for achieving specific targets for service-level metrics, cost savings, and/or clinical outcomes. Access fees comprise the significant majority of our Integrated Care segment revenue.
We do not believe that our operations or results will be materially adversely affected by a return to the status quo from a regulatory perspective.
We do not believe that our operations or results will be materially adversely affected by a return to the status quo from a regulatory perspective. For additional discussion of our regulatory environment, see “Risk Factors” included in Part I, Item 1A of this Annual Report on Form 10-K.
Expand Through Focused Investments and Acquisitions We plan to continue to support our overall strategy and market leadership with selective investments and acquisitions. To date, we have completed multiple acquisitions that have expanded our distribution capabilities, broadened our service offering, and created a broad global footprint.
To date, we have completed multiple acquisitions that have expanded our distribution capabilities, broadened our service offering, and created a broad global footprint. Our acquisition strategy is centered on acquiring products, capabilities, clinical specialties, technologies, and distribution channels that are highly scalable and rapidly growing.
Teladoc Health, the THMG Association, our providers, our health plan Clients and our employee welfare benefit plan Clients are all regulated as covered entities under HIPAA.
In addition, numerous states, including California, Colorado, Washington, Nevada, and Connecticut amongst others, have passed consumer privacy laws intended to supplement the protections provided by HIPAA, Teladoc Health, the THMG Association and its providers, our health plan Clients and our employee welfare benefit plan Clients are all regulated as covered entities under HIPAA, and are required to comply both with HIPAA and applicable state privacy laws.
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We aim to achieve our vision of making virtual care the first step on any healthcare journey by delivering, enabling, and empowering integrated whole person virtual care services and experiences that span every stage of the 3 Table of Contents healthcare journey.
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We also generate revenue on a per-telehealth visit basis through certain Clients with visit fee only arrangements. For certain Clients, we also earn visit fees or per-case fees in combination with access fees.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeThese risks include, among others, the following: • our history of losses and accumulated deficit and the risk that we may not achieve profitability; • risk of the loss of any of our significant Clients or partners, or the loss of a significant number of members or BetterHelp users; • failures of our cyber-security measures that expose the confidential information of us, our Clients or members; • compliance with regulations concerning data privacy, including personally identifiable information and personal health information; • our ability to recruit, retain and develop our workforce, and in particular software engineers; • our ability to obtain additional capital through debt or equity financings on commercially reasonable terms or at all; • evolving government regulations and our ability to stay abreast of new or modified laws and regulations that currently apply or become applicable to our business; • our ability to operate in the heavily regulated healthcare industry; • ongoing legal challenges to, or new actions against, our business model, or the failure of the virtual care market to continue to develop; 18 Table of Contents • risks associated with a decrease in the number of individuals offered benefits by our Clients or the number of products and services to which they subscribe; • rapid technological change in the virtual care market or the failure to innovate and develop new applications and services that are adopted; • our expectations and management of future growth, including our ability to introduce new products and any change in product mix that impacts our profitability; • our ability to establish and maintain strategic relationships with third parties; • our ability to recruit and retain a network of qualified providers; • our dependence on a limited number of third-party suppliers for timely access to materials, and the risk of supply chain disruptions or further cost inflation; • our ability to compete successfully in competitive markets; • our level of indebtedness and our ability to fund debt obligations and comply with covenants in our debt instruments; • our dependence on our relationships with affiliated professional entities; • risks specifically related to our ability to operate in competitive international markets and comply with complex non-U.S. legal requirements; • the potential for future non-cash charges for the impairment of goodwill and other intangible assets; • risk that we may be subject to legal proceedings and the insurance we maintain may not fully cover all potential exposures; and • our ability to integrate acquired businesses and achieve fully the strategic and financial objectives related thereto, and their impact on our financial condition and results of operations.
Biggest changeThese risks include, among others, the following: • our history of losses and accumulated deficit and the risk that we may not achieve profitability; • risk of the loss of any of our significant Clients or partners, or the loss of a significant number of members or BetterHelp users; • our ability to compete successfully in competitive markets, including implementing effective solutions that meet the expectations of our Clients and members; • failures of our or our vendors' cybersecurity measures that expose the confidential information of us, our Clients or members; • our ability to operate in the heavily regulated healthcare industry, and comply with regulations concerning data privacy, including personally identifiable information and personal health information; • our ability to recruit, retain and develop our workforce, and in particular software engineers, as well as a network of qualified providers; • our ability to obtain additional capital through debt or equity financings on commercially reasonable terms or at all; • ongoing legal challenges to, or new actions against, our business model, or the failure of the virtual care market to continue to develop; • risks associated with a decrease in the number of individuals offered benefits by our Clients or the number of products and services to which they subscribe; • rapid technological change in the virtual care market or the failure to innovate and develop new applications and services that are adopted; • our expectations and management of potential growth, including our ability to introduce new products, markets and any change in product mix that impacts our profitability; • our ability to establish and maintain strategic relationships with third parties; • our dependence on a limited number of third-party suppliers for timely access to materials, and the risk of supply chain disruptions or further cost inflation; 19 Table of Contents • our level of indebtedness and our ability to fund debt obligations and comply with covenants in our debt instruments; • our dependence on our relationships with affiliated professional entities; • risks specifically related to our ability to operate in competitive international markets and comply with complex non-U.S. legal requirements; • the potential for future non-cash charges for the impairment of goodwill and other intangible assets; • current and potential future legal proceedings against us and that the insurance we maintain may not fully cover all potential exposures; and • our ability to integrate acquired businesses and achieve fully the strategic and financial objectives related thereto, and their impact on our financial condition and results of operations.
We may incur additional non-cash impairment charges for our goodwill or non-cash impairment charges for our other intangible assets which would negatively impact our operating results. Goodwill represents the excess of the total purchase consideration over the fair value of the identifiable assets acquired and liabilities assumed in a business combination.
We may incur additional non-cash impairment charges for our goodwill or incur non-cash impairment charges for our other intangible assets which would negatively impact our operating results. Goodwill represents the excess of the total purchase consideration over the fair value of the identifiable assets acquired and liabilities assumed in a business combination.
These areas include: rules governing the provision of telehealth, including, for example, rules that would require in person visits or consultations prior to the provision of telehealth, including, for example, rules that would require in person visits or consultations prior to provision of telehealth; practice of medicine by physicians; licensure standards for doctors, physician assistants, advanced practice registered nurses, nurses, and mental health professionals; laws limiting the corporate practice of medicine; cybersecurity and privacy laws; laws and rules relating to the distinction between independent contractors and employees; and tax and other laws encouraging employer-sponsored health insurance and group benefits.
These areas include: rules governing the provision of telehealth, including, for example, rules that would require in person visits or consultations prior to the provision of telehealth; practice of medicine by physicians; licensure standards for doctors, physician assistants, advanced practice registered nurses, nurses, and mental health professionals; laws limiting the corporate practice of medicine; cybersecurity and privacy laws; laws and rules relating to the distinction between independent contractors and employees; and tax and other laws encouraging employer-sponsored health insurance and group benefits.
Similar to the federal Anti-Kickback Statute, a person or entity does not need to have actual knowledge of the statute or specific intent to violate it to have committed a violation; • the federal False Claims Act that imposes civil and criminal liability on individuals or entities that knowingly submit false or fraudulent claims for payment to the government or knowingly making, or causing to be made, a false statement in order to have a false claim paid, including qui tam or whistleblower suits; • reassignment of payment rules that prohibit certain types of billing and collection practices in connection with claims payable by the Medicare or Medicaid programs; • similar state law provisions pertaining to anti-kickback, self-referral, and false claims issues, some of which may apply to items or services reimbursed by any payor, including patients and commercial insurers; • state laws that prohibit general business corporations, such as us, from practicing medicine, controlling physicians’ medical decisions, or engaging in some practices such as splitting fees with physicians; • laws that regulate debt collection practices as applied to our debt collection practices; • a provision of the Social Security Act that imposes criminal penalties on healthcare providers who fail to disclose or refund known overpayments; 39 Table of Contents • federal and state laws that prohibit providers from billing and receiving payment from Medicare and Medicaid for services unless the services are medically necessary, adequately and accurately documented, and billed using codes that accurately reflect the type and level of services rendered; and • federal and state laws and policies that require healthcare providers to maintain licensure, certification, or accreditation to enroll and participate in the Medicare and Medicaid programs, to report certain changes in their operations to the agencies that administer these programs.
Similar to the federal Anti-Kickback Statute, a person or entity does not need to have actual knowledge of the statute or specific intent to violate it to have committed a violation; • the federal False Claims Act that imposes civil and criminal liability on individuals or entities that knowingly submit false or fraudulent claims for payment to the government or knowingly making, or causing to be made, a false statement in order to have a false claim paid, including qui tam or whistleblower suits; • reassignment of payment rules that prohibit certain types of billing and collection practices in connection with claims payable by the Medicare or Medicaid programs; • similar state law provisions pertaining to anti-kickback, self-referral, and false claims issues, some of which may apply to items or services reimbursed by any payor, including patients and commercial insurers; • state laws that prohibit general business corporations, such as us, from practicing medicine, controlling physicians’ medical decisions, or engaging in some practices such as splitting fees with physicians; • laws that regulate debt collection practices as applied to our debt collection practices; • a provision of the Social Security Act that imposes criminal penalties on healthcare providers who fail to disclose or refund known overpayments; • federal and state laws that prohibit providers from billing and receiving payment from Medicare and Medicaid for services unless the services are medically necessary, adequately and accurately documented, and billed using codes that accurately reflect the type and level of services rendered; and • federal and state laws and policies that require healthcare providers to maintain licensure, certification, or accreditation to enroll and participate in the Medicare and Medicaid programs, to report certain changes in their operations to the agencies that administer these programs.
In addition, after the initial term, a significant number of our Client contracts allow Clients to terminate such agreements for convenience at certain times, typically with one to three months advance notice. We typically incur the expenses associated with integrating a Client’s data into our healthcare database and related training and support prior to recognizing meaningful revenue from such Client.
In addition, after the initial term, a significant number of our Client contracts allow Clients to terminate such agreements for convenience at certain times, typically with three months advance notice. We typically incur the expenses associated with integrating a Client’s data into our healthcare database and related training and support prior to recognizing meaningful revenue from such Client.
We also may not achieve the anticipated cost savings, synergies or other benefits from the acquired business due to a number of factors, including, but not limited to: • inability to integrate or benefit from acquired technologies or services in a profitable manner; • unanticipated costs or liabilities associated with the acquisition; • difficulty integrating the accounting and operational systems, operations, and personnel of the acquired business; • difficulties and additional expenses associated with supporting legacy products and hosting infrastructure of the acquired business; • difficulty converting the Clients of the acquired business onto our platform and contract terms, including disparities in the revenue, licensing, support, or professional services model of the acquired company; • diversion of management’s attention from other business concerns; • adverse effects to our existing business relationships with business partners and Clients as a result of the acquisition; • the potential loss of key employees; 48 Table of Contents • use of resources that are needed in other parts of our business; and • use of substantial portions of our available cash to consummate the acquisition.
We also may not achieve the anticipated cost savings, synergies or other benefits from the acquired business due to a number of factors, including, but not limited to: • inability to integrate or benefit from acquired technologies or services in a profitable manner; • unanticipated costs or liabilities associated with the acquisition; • difficulty integrating the accounting and operational systems, operations, and personnel of the acquired business; • difficulties and additional expenses associated with supporting legacy products and hosting infrastructure of the acquired business; • difficulty converting the Clients of the acquired business onto our platform and contract terms, including disparities in the revenue, licensing, support, or professional services model of the acquired company; • diversion of management’s attention from other business concerns; 50 Table of Contents • adverse effects to our existing business relationships with business partners and Clients as a result of the acquisition; • the potential loss of key employees; • use of resources that are needed in other parts of our business; and • use of substantial portions of our available cash to consummate the acquisition.
Access revenue is not recognized until our products are implemented for launch. If a Client terminates its contract early and revenue and cash flows expected from a Client are not realized in the time period expected or not realized at all, our business, financial condition, and results of operations could be adversely affected.
Access fee revenue is not recognized until our products are implemented for launch. If a Client terminates its contract early and revenue and cash flows expected from a Client are not realized in the time period expected or not realized at all, our business, financial condition, and results of operations could be adversely affected.
Moreover, because we are incorporated in Delaware, we are governed by the provisions of Section 203 of the General Corporation Law of the State of Delaware (the “DGCL”), which prohibits a person who owns in excess of 15% of our outstanding voting stock from merging or combining with us for a period of three years after the date of the transaction in which the person acquired in excess of 15% of our outstanding voting stock, unless the merger or combination is approved in a prescribed manner. 49 Table of Contents Our amended and restated certificate of incorporation provides that the Court of Chancery of the State of Delaware will be the exclusive forum for substantially all disputes between us and our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers, or employees.
Moreover, because we are incorporated in Delaware, we are governed by the provisions of Section 203 of the General Corporation Law of the State of Delaware (the “DGCL”), which prohibits a person who owns in excess of 15% of our outstanding voting stock from merging or combining with us for a period of three years after the date of the transaction in which the person acquired in excess of 15% of our outstanding voting stock, unless the merger or combination is approved in a prescribed manner. 51 Table of Contents Our amended and restated certificate of incorporation provides that the Court of Chancery of the State of Delaware will be the exclusive forum for substantially all disputes between us and our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers, or employees.
THMG carries professional liability insurance for itself and each of its healthcare professionals (our providers), and we separately carry a general insurance policy, which covers medical malpractice claims. In addition, professional liability insurance is expensive and insurance premiums may increase significantly in the future, particularly as we expand our services.
THMG carries professional liability insurance for itself and each of its healthcare professionals (the THMG Association's providers), and we separately carry a general insurance policy, which covers medical malpractice claims. In addition, professional liability insurance is expensive and insurance premiums may increase significantly in the future, particularly as we expand our services.
It can take six months or longer before a new sales representative is fully trained and productive. Our business may be adversely affected if our efforts to expand and train our direct sales force do not generate a corresponding increase in revenue.
It can take six months or longer before a new sales representative is fully trained and productive. Our business may be adversely affected if our efforts to train our direct sales force do not generate a corresponding increase in revenue.
Our international operations are also subject to particular risks in addition to those faced by our domestic operations, including: • the need to localize and adapt our solutions for specific countries, including translation into foreign languages and associated expenses; • obtaining regulatory approvals or clearances where required for the sale of our solutions, devices, and services in various countries; • potential loss of proprietary information due to misappropriation or laws that may be less protective of our intellectual property rights than U.S. laws or that may not be adequately enforced; • requirements of foreign laws and other governmental controls, including compliance challenges related to the complexity of multiple, conflicting and changing governmental laws and regulations, including employment, healthcare, tax, privacy, and data protection laws and regulations; • data privacy laws that require that Client and member data be stored and processed in a designated territory; • new and different sources of competition and laws and business practices favoring local competitors; • local business and cultural factors that differ from our normal standards and practices, including business practices that we are prohibited from engaging in by the FCPA and other anti-corruption laws and regulations; • changes to economic sanctions laws and regulations; • central bank and other restrictions on our ability to repatriate cash from international subsidiaries; • adverse tax consequences; • fluctuations in currency exchange rates, economic instability, and inflationary conditions, which could make our solutions more expensive or increase our costs of doing business in certain countries; • limitations on future growth or inability to maintain current levels of revenues from international sales if we do not invest sufficiently in our international operations; • different pricing environments, longer sales cycles, and longer accounts receivable payment cycles and collections issues; • difficulties in staffing, managing and operating our international operations, including difficulties related to administering our stock plans in some foreign countries and increased financial accounting and reporting burdens and complexities; 30 Table of Contents • difficulties in coordinating the activities of our geographically dispersed and culturally diverse operations; • political unrest, war, terrorism, economic instability, curtailment of trade, epidemics (including the COVID-19 pandemic), or regional natural disasters, particularly in areas in which we have facilities.
Our international operations are also subject to particular risks in addition to those faced by our domestic operations, including: • the need to localize and adapt our solutions for specific countries, including translation into foreign languages and associated expenses; • obtaining regulatory approvals or clearances where required for the sale of our solutions, devices, and services in various countries; • potential loss of proprietary information due to misappropriation or laws that may be less protective of our intellectual property rights than U.S. laws or that may not be adequately enforced; • requirements of foreign laws and other governmental controls, including compliance challenges related to the complexity of multiple, conflicting and changing governmental laws and regulations, including employment, healthcare, tax, privacy, and data protection laws and regulations; • data privacy laws that require that Client and member data be stored and processed in a designated territory; • new and different sources of competition and laws and business practices favoring local competitors; • local business and cultural factors that differ from our normal standards and practices, including business practices that we are prohibited from engaging in by the FCPA and other anti-corruption laws and regulations; • changes to economic sanctions laws and regulations and imposition of tariffs; • central bank and other restrictions on our ability to repatriate cash from international subsidiaries; • adverse tax consequences; • fluctuations in currency exchange rates, economic instability, and inflationary conditions, which could make our solutions more expensive or increase our costs of doing business in certain countries; • limitations on future growth or inability to maintain current levels of revenues from international sales if we do not invest sufficiently in our international operations; • different pricing environments, longer sales cycles, and longer accounts receivable payment cycles and collections issues; • difficulties in staffing, managing and operating our international operations, including difficulties related to administering our stock plans in some foreign countries and increased financial accounting and reporting burdens and complexities; 31 Table of Contents • difficulties in coordinating the activities of our geographically dispersed and culturally diverse operations; • political unrest, war, terrorism, economic instability, curtailment of trade, epidemics (such as the COVID-19 pandemic), or regional natural disasters, particularly in areas in which we have facilities.
Our growth is expected to require significant capital expenditures and may divert financial resources from other projects such as the development of new applications and services.
Our growth is expected to continue to require significant capital expenditures and may divert financial resources from other projects such as the development of new applications and services.
Any further restrictions in laws such as the CAN-SPAM Act, the Telephone Consumer Protection Act, the Do-Not-Call-Implementation Act, applicable Federal Communications Commission telemarketing rules (including the declaratory ruling affirming the blocking of unwanted robocalls), the FTC Privacy Rule, Safeguards Rule, Consumer Report Information Disposal Rule, Telemarketing Sales Rule, Canada’s Anti-Spam Law and various U.S. state laws, or new federal or state laws and regulations on marketing and solicitation or international privacy, e-privacy, and anti-spam laws that govern these activities could adversely affect the continuing effectiveness of email, online advertising and direct mailing techniques and could force further changes in our marketing strategy.
Any further restrictions in laws such as the CAN-SPAM Act, the Telephone Consumer Protection Act, the Do-Not-Call-Implementation Act, applicable Federal Communications Commission telemarketing rules (including the declaratory ruling affirming the blocking of unwanted robocalls), the FTC Privacy Rule, Safeguards Rule, Consumer Report Information Disposal Rule, Telemarketing Sales Rule, Canada’s Anti-Spam Law and various U.S. state laws, or 44 Table of Contents new federal or state laws and regulations on marketing and solicitation or international privacy, e-privacy, and anti-spam laws that govern these activities could adversely affect the continuing effectiveness of email, online advertising and direct mailing techniques and could force further changes in our marketing strategy.
Our quarterly financial results may fluctuate as a result of a variety of factors, many of which are outside of our control, including, without limitation, the following: • the addition or loss of large Clients, including through acquisitions or consolidations of such Clients; • seasonal and other variations in the timing of the sales of our services or the cost of BetterHelp customer acquisitions, as discussed above; • the timing of recognition of revenue, including possible delays in the recognition of revenue due to sometimes unpredictable Client implementation timelines and performance guarantees; • the amount and timing of operating expenses related to the maintenance and expansion of our business, operations, and infrastructure; • our ability to effectively manage the size and composition of our proprietary network of healthcare professionals relative to the level of demand for services from our members; • the timing and success of introductions of new applications and services by us or our competitors or any other change in the competitive dynamics of our industry, including consolidation among competitors, Clients, or strategic partners; • Client renewal rates and the timing and terms of Client renewals; • the mix of applications and services sold during a period; • the timing of expenses related to the development or acquisition of technologies or businesses and potential future charges for impairment of goodwill and/or other assets; and • changes in the value or useful lives of our assets.
Our quarterly financial results may fluctuate as a result of a variety of factors, many of which are outside of our control, including, without limitation, the following: • the addition or loss of large Clients, including through acquisitions or consolidations of such Clients; • seasonal and other variations in the timing of the sales of our services or the cost of BetterHelp customer acquisitions, as discussed above; • the timing of recognition of revenue, including possible delays in the recognition of revenue due to sometimes unpredictable Client implementation and launch timelines and performance guarantees; • the amount and timing of operating expenses related to the maintenance and expansion of our business, operations, and infrastructure; • the effectiveness of our revenue cycle management processes; • our ability to effectively manage the size and composition of our proprietary network of healthcare professionals relative to the level of demand for services from our members; • the timing and success of introductions of new applications and services by us or our competitors or any other change in the competitive dynamics of our industry, including consolidation among competitors, Clients, or strategic partners; • Client renewal rates and the timing and terms of Client renewals; • the mix of applications and services sold during a period; • the timing of expenses related to the development or acquisition of technologies or businesses and potential future charges for impairment of goodwill and/or other assets; and • changes in the value or useful lives of our assets.
In the event there are further adverse changes in our projected cash flows and/or further changes in key assumptions, including but not limited to an increase in the discount rate, lower market multiples, lower revenue growth, lower margin, and/or a lower terminal growth rate, we may be required to record additional non-cash impairment charges to our goodwill or other intangibles and/or long-lived assets.
In the event there are further adverse changes in our projected cash flows and/or further changes in key assumptions, including but not limited to an increase in the discount rate, lower revenue growth, lower margin, and/or a lower terminal growth rate, we may be required to record additional non-cash impairment charges to our goodwill or other intangibles and/or long-lived assets.
Any claims made against us that are not fully covered by insurance could be costly to defend against, result in substantial damage awards against us, and divert the attention of our management and our providers from our operations, which could have a material adverse effect on our business, financial condition, and results of operations.
Any claims made against us that are not fully covered by insurance could be costly to defend against, result in substantial damage awards against us, and divert the attention of our management and the THMG Association's providers from our operations, which could have a material adverse effect on our business, financial condition, and results of operations.
The failure to secure and 46 Table of Contents adequately protect our intellectual property and other proprietary rights could have a material adverse effect on our business, financial condition, and results of operations. We could incur substantial costs as a result of any claim of infringement of another party’s intellectual property rights.
The failure to secure and adequately protect our intellectual property and other proprietary rights could have a material adverse effect on our business, financial condition, and results of operations. 48 Table of Contents We could incur substantial costs as a result of any claim of infringement of another party’s intellectual property rights.
Furthermore, any failure, or perceived failure, by us to comply with or make effective modifications to our policies, or to comply with any federal, state, or international privacy, data-retention or data-protection-related laws, regulations, orders, or industry self-regulatory principles could result in proceedings or actions against us by governmental entities or others, a loss of 42 Table of Contents customer confidence, damage to our brand and reputation, and a loss of customers, any of which could have an adverse effect on our business.
Furthermore, any failure, or perceived failure, by us to comply with or make effective modifications to our policies, or to comply with any federal, state, or international privacy, data-retention or data-protection-related laws, regulations, orders, or industry self-regulatory principles could result in proceedings or actions against us by governmental entities or others, a loss of customer confidence, damage to our brand and reputation, and a loss of customers, any of which could have an adverse effect on our business.
These losses and accumulated deficit reflect the large non-cash impairment charges for our goodwill and the substantial investments we have made to expand our business and scope of services, acquire new Clients and members, build our proprietary network of healthcare providers, and develop our technology platform.
These losses and accumulated deficit reflect the large non-cash impairment charge for our goodwill and the substantial investments we have made to expand our business and scope of services, acquire new Clients and members, build our proprietary network of healthcare providers, and develop our technology platform.
Additionally, our growth strategy requires the collection and analysis of a high volumes of data from internal and external sources. Failure to effectively utilize our current data or establish new systems of data capture may adversely impact our ability to achieve our strategic goals and business plans.
Additionally, our growth strategy requires the collection, storage, and analysis of a high volumes of data from internal and external sources. Failure to effectively utilize our current data or establish and integrate new systems of data capture may adversely impact our ability to achieve our strategic goals and business plans.
As of December 31, 2023, we had outstanding $1,000.0 million of 1.25% convertible senior notes due 2027 (the “2027 Notes”), $0.7 million of 1.375% convertible senior notes due 2025 (the “2025 Notes”), and $550.0 million of 0.875% convertible senior notes due 2025 that were issued by Livongo Health, Inc.
As of December 31, 2024, we had outstanding $1,000.0 million of 1.25% convertible senior notes due 2027 (the “2027 Notes”), $0.7 million of 1.375% convertible senior notes due 2025 (the “2025 Notes”), and $550.0 million of 0.875% convertible senior notes due 2025 that were issued by Livongo Health, Inc.
Any potential security breach could also result in increased costs associated with liability for stolen assets or information, repairing system damage that may have been caused by such breaches, incentives offered to Clients or other business partners in an effort to maintain our business relationships after a breach, and implementing 41 Table of Contents measures to prevent future occurrences, including organizational changes, deploying additional personnel and protection technologies, training employees, and engaging third-party experts and consultants.
Any potential security breach could also result in increased costs associated with liability for stolen assets or information, repairing system damage that may have been caused by such breaches, incentives offered to Clients or other business partners in an effort to maintain our business relationships after a breach, and implementing measures to prevent future occurrences, including organizational changes, deploying additional personnel and protection technologies, training employees, and engaging third-party experts and consultants.
Our offices may be harmed or rendered inoperable by natural or man-made disasters, including earthquakes, power outages, fires, floods, nuclear disasters, health epidemics (including the COVID-19 pandemic), war (including the conflict in Ukraine), and acts of terrorism or other criminal activities, which may render it difficult or impossible for us to operate our business for some period of time.
Our offices may be harmed or rendered inoperable by natural or man-made disasters, including earthquakes, power outages, fires, floods, nuclear disasters, health epidemics (including the COVID-19 pandemic), war, and acts of terrorism or other criminal activities, which may render it difficult or impossible for us to operate our business for some period of time.
Nevertheless, exchange rate fluctuations may either increase or decrease our revenues and expenses as reported in U.S. dollars. Moreover, foreign governments may restrict transfers of cash out of the country and control exchange rates.
Nevertheless, exchange rate fluctuations may either increase or decrease our revenues and expenses as reported in U.S. dollars. Moreover, foreign governments may restrict transfers of cash out of the country, control exchange rates and enforce exchange controls.
Moreover, if one or more of the analysts who cover us express views regarding us that may be perceived as negative or less favorable than previous views, downgrade our stock, or if our results of operations do not meet their expectations, the share price of our common stock could decline. Item 1B. Unresolved Staff Comments None.
Moreover, if one or more of the analysts who cover us express views regarding us that may be perceived as negative or less favorable than previous views, downgrade our stock, or if our results of operations do not meet their expectations, the share price of our common stock could decline. Item 1B. Unresolved Staff Comments None. 52 Table of Contents
If we are unable to do so, our future growth would be limited and our business, financial condition, and results of operations would be harmed. Our success is dependent upon our continued ability to maintain a network of qualified providers, and demand for such providers in both our Integrated Care and BetterHelp businesses has become increasingly competitive.
If we are unable to do so, any future growth would be limited and our business, financial condition, and results of operations would be harmed. Our success is dependent upon our continued ability to maintain a network of qualified providers, and demand for such providers in both our Integrated Care and BetterHelp segments has become increasingly competitive.
Our ability to conduct virtual care services internationally is subject to the applicable laws governing remote healthcare, including online counseling and therapy services, and the practice of medicine in such location, and the interpretation of these laws is evolving and vary significantly from country to country and are enforced by governmental, judicial, and regulatory authorities with broad discretion.
Our ability to conduct virtual care 30 Table of Contents services internationally is subject to the applicable laws governing remote healthcare, including online counseling and therapy services, and the practice of medicine in such location, and the interpretation of these laws is evolving and vary significantly from country to country and are enforced by governmental, judicial, and regulatory authorities with broad discretion.
In addition, current and 21 Table of Contents potential competitors have established, and may in the future establish, cooperative relationships with vendors of complementary products, technologies, or services to increase the availability of their solutions in the marketplace. Our competitors could also be better positioned to serve certain segments of our markets, which could create additional price pressure.
In addition, current and potential competitors have established, and may in the future establish, cooperative relationships with vendors of complementary products, technologies, or services to increase the availability of their solutions in the marketplace. Our competitors could also be better positioned to serve certain segments of our markets, which could create additional price pressure.
If we are unable to obtain adequate financing or financing on terms satisfactory to us, it could have a material adverse effect on our business, financial condition, and results of operations. The investment of our cash, cash equivalents and fixed income securities is subject to risks which may cause losses and affect the liquidity of these investments.
If we are unable to obtain adequate financing or financing on terms satisfactory to us, it could have a material adverse effect on our business, financial condition, and results of operations. The investment of our cash and cash equivalents is subject to risks which may cause losses and affect the liquidity of these investments.
Our longer-term results of operations and continued growth will depend in part on our ability to successfully develop and market new applications and services that our Clients and members want and are willing to purchase.
Our longer-term results of operations and any growth will depend in part on our ability to successfully develop and market new applications and services that our Clients and members want and are willing to purchase.
A determination that these arrangements violate state statutes, or our inability to successfully restructure our relationships with our providers to comply with these statutes, could hinder our ability to provide services to Clients located in certain states, which would have a materially adverse effect on our business, financial condition, and results of operations.
A determination that these arrangements violate state statutes, or our inability to successfully restructure our relationships with the THMG Association's providers to comply with these statutes, could hinder our ability to provide services to Clients located in certain states, which would have a materially adverse effect on our business, financial condition, and results of operations.
Depending on the circumstances, failure to meet applicable regulatory requirements can result in criminal prosecution, fines or other penalties, injunctions, recall or seizure of products, total or partial suspension of production, denial or withdrawal of product approvals, or refusal to allow a us to enter into supply contracts, including government contracts.
Depending on the circumstances, failure to meet applicable regulatory requirements can result in criminal prosecution, fines or other penalties, injunctions, recall or seizure 45 Table of Contents of products, total or partial suspension of production, denial or withdrawal of product approvals, or refusal to allow a us to enter into supply contracts, including government contracts.
Our results of operations would also suffer if our innovations are not responsive to the needs of our Clients and members, appropriately timed with market opportunity, or effectively brought to market. Rapid technological change in our industry and the interoperability with third-party technologies presents us with significant risks and challenges.
Our results of operations would also suffer if our innovations are not responsive to the needs of our Clients and members, appropriately timed with market opportunity, or effectively brought to market. 24 Table of Contents Rapid technological change in our industry and the interoperability with third-party technologies presents us with significant risks and challenges.
While HIPAA does not create a private right of action allowing individuals to sue us in civil court for violations of HIPAA, its standards have been used as the basis for duty of care in state civil suits such as those for 40 Table of Contents negligence or recklessness in the misuse or breach of PHI.
While HIPAA does not create a private right of action allowing individuals to sue us in civil court for violations of HIPAA, its standards have been used as the basis for duty of care in state civil suits such as those for negligence or recklessness in the misuse or breach of PHI.
In order to ensure predictable availability of providers and a consistent member experience, we expect that the THMG Association will hire more providers and rely less on contractors.
In order to ensure predictable availability of providers and a consistent member experience, we expect that the THMG Association will continue to hire more employed providers and rely less on contractors.
While we have succession plans in place and we have employment arrangements with a limited number of key executives, these do not guarantee that the services of these or suitable successor executives will continue to be available to us. 31 Table of Contents If we fail to develop widespread brand awareness cost-effectively, or are subject to widespread negative media coverage, our business may suffer.
While we have succession plans in place and we have employment arrangements with a limited number of key executives, these do not guarantee that the services of these or suitable successor executives will continue to be available to us. 32 Table of Contents If we fail to develop widespread brand awareness cost-effectively, or are subject to widespread negative media coverage or social media engagement, our business may suffer.
Our operations have consumed substantial amounts of cash since inception and we intend to continue to make significant investments to support our growth, respond to business challenges or opportunities, develop new applications and services, enhance our existing solutions and services, enhance our operating infrastructure, and potentially acquire complementary businesses and technologies.
Our operations have consumed substantial amounts of cash since inception and we intend to continue to make significant investments to support our growth, respond to business challenges or opportunities, develop new applications 33 Table of Contents and services, enhance our existing solutions and services, enhance our operating infrastructure, and potentially acquire complementary businesses and technologies.
Our business is exposed to fluctuations in exchange rates. Although our reporting currency is the U.S. dollar, we operate in different geographical areas and transact in a range of currencies in addition to the U.S. dollar. As a result, movements in exchange rates may cause our revenue and expenses to fluctuate, impacting our profitability and cash flows.
Although our reporting currency is the U.S. dollar, we operate in different geographical areas and transact in a range of currencies in addition to the U.S. dollar. As a result, movements in exchange rates may cause our revenue and expenses to fluctuate, impacting our profitability and cash flows.
Even where we implement hedging strategies to mitigate foreign currency risk, these strategies might not eliminate our exposure to foreign currency exchange rate fluctuations and involve costs and risks of their own, such as ongoing management time and 33 Table of Contents expertise, costs to implement the strategies, and potential accounting implications.
Even where we implement hedging strategies to mitigate foreign currency risk, these strategies might not eliminate our exposure to foreign currency exchange rate fluctuations and involve costs and risks of their own, such as ongoing management time and expertise, costs to implement the strategies, and potential accounting implications.
Implementing our compliance policies, internal controls, and other systems upon our expansion into new countries and geographies may require the investment of considerable management time and management, financial, and other resources over a number of years before any significant revenues or profits are generated.
Implementing our compliance policies, internal controls, and other systems upon our expansion into new countries and geographies may require the investment of considerable management time and management, financial, and other resources over a number of years before any significant revenues or profits are 46 Table of Contents generated.
In addition, if we acquire additional businesses, we may not be able to integrate the acquired personnel, operations, and technologies successfully, or the integration process may take longer than expected or become more costly than expected. Similarly, we may not be able to effectively manage the combined business following the acquisition.
In addition, if we acquire additional businesses, including Catapult Health, we may not be able to integrate the acquired personnel, operations, and technologies successfully, or the integration process may take longer than expected or become more costly than expected. Similarly, we may not be able to effectively manage the combined business following the acquisition.
Moreover, we may not be able to successfully complete these growth initiatives, strategies, and operating plans and realize all of the benefits, including growth targets and cost savings, that we expect to achieve, or it may be more costly to do so than we anticipate.
Moreover, we may not be able to successfully 26 Table of Contents complete these growth initiatives, strategies, and operating plans and realize all of the benefits, including growth targets and cost savings, that we expect to achieve, or it may be more costly to do so than we anticipate.
In our U.S. telehealth business, we are dependent on our relationships with affiliated professional entities, which we do not own, to provide physician services, and our business would be adversely affected if those relationships were disrupted or if our arrangements with our providers or our Clients are found to violate state laws prohibiting the corporate practice of medicine or fee splitting.
In our U.S. telehealth business, we are dependent on our relationships with affiliated professional entities, which we do not own, to provide medical services, and our business would be adversely affected if those relationships were disrupted or if our arrangements with the THMG Association's providers or our Clients are found to violate state laws prohibiting the corporate practice of medicine or fee splitting.
To be substantially equivalent, the proposed device must have the same intended use as the predicate device, and either have the same technological characteristics as the predicate device or have different technological characteristics and not raise different questions of safety or effectiveness than the predicate device. Clinical data is sometimes required to support substantial 43 Table of Contents equivalence.
To be substantially equivalent, the proposed device must have the same intended use as the predicate device, and either have the same technological characteristics as the predicate device or have different technological characteristics and not raise different questions of safety or effectiveness than the predicate device. Clinical data is sometimes required to support substantial equivalence.
We attempt to limit our liability to Clients by contract; however, the limitations of liability set forth in the contracts may not be enforceable or may not 45 Table of Contents otherwise protect us from liability for damages. Additionally, we may be subject to claims that are not explicitly covered by contract.
We attempt to limit our liability to Clients by contract; however, the limitations of liability set forth in the contracts may not be enforceable or may not otherwise protect us from liability for damages. Additionally, we may be subject to claims that are not explicitly covered by contract.
A claim brought against us that is uninsured or underinsured could result in unanticipated costs, thereby reducing our earnings and leading analysts or potential investors to reduce their expectations of our performance, which could reduce the market price of our stock.
A claim brought against us that is uninsured or underinsured could result in unanticipated costs, thereby reducing our earnings and leading analysts or potential investors to reduce their 47 Table of Contents expectations of our performance, which could reduce the market price of our stock.
In each case, our revenue may decline, and our business, financial condition, and results of operations could be materially adversely affected. 38 Table of Contents Additionally, the introduction of new services may require us to comply with additional, yet undetermined, laws and regulations.
In each case, our revenue may decline, and our business, financial condition, and results of operations could be materially adversely affected. Additionally, the introduction of new services may require us to comply with additional, yet undetermined, laws and regulations.
Quality or performance failures of the devices or changes in the contractors’ or vendors’ financial or business condition could disrupt our ability to supply quality products to our Clients and members and thereby have a material adverse impact on our business, financial condition, and results of operations.
Quality or performance failures of the devices or changes in the contractors’ or vendors’ financial or business condition could disrupt our ability to 29 Table of Contents supply quality products to our Clients and members and thereby have a material adverse impact on our business, financial condition, and results of operations.
If the condition of the general economy or markets in which we operate worsens, our business, financial condition, and results of operations could be harmed. Our quarterly results may fluctuate significantly, which could adversely impact the value of our common stock.
If the condition of the general economy or markets in which we operate worsens, our business, financial condition, and results of operations could be harmed. 28 Table of Contents Our quarterly results may fluctuate significantly, which could adversely impact the value of our common stock.
New laws may result in additional reductions in Medicare and other healthcare funding, which may materially adversely affect Client and member demand and affordability for our solutions and, accordingly, our business, financial condition, and results of operations.
New laws may result in additional reductions in Medicare and other healthcare funding, which may materially 21 Table of Contents adversely affect Client and member demand and affordability for our solutions and, accordingly, our business, financial condition, and results of operations.
In the event of a catastrophic event with respect to one or more of our systems, we may experience an extended 34 Table of Contents period of system unavailability, which could negatively impact our relationship with Clients and members.
In the event of a catastrophic event with respect to one or more of our systems, we may experience an extended period of system unavailability, which could negatively impact our relationship with Clients and members.
These contracts include management services 37 Table of Contents agreements with our affiliated physician organizations pursuant to which the physician organizations reserve exclusive control and responsibility for all aspects of the practice of medicine and the delivery of medical services.
These contracts include management services agreements with our affiliated physician organizations pursuant to which the physician organizations reserve exclusive control and responsibility for all aspects of the practice of medicine and the delivery of medical services.
Failure to adequately expand our direct sales force will impede our growth. We believe that our future growth will depend on the continued development of our direct sales force and our ability to obtain new Clients and to manage our existing Client base. Identifying and recruiting qualified personnel and training them requires significant time, expense, and attention.
We believe that our future growth will depend on the continued development of our direct sales force and our ability to obtain new Clients and to manage our existing Client base. Identifying and recruiting qualified personnel and training them requires significant time, expense, and attention.
AI and machine learning present potential bias issues based on our population data and if we enable or offer solutions that draw controversy due to their perceived or actual impact on society, we may experience reputational harm, competitive harm or 24 Table of Contents legal liability.
AI and machine learning present potential bias issues based on our population data and if we enable or offer solutions that draw controversy due to their perceived or actual impact on society, we may experience reputational harm, competitive harm or legal liability.
Breaches affecting 500 patients or more in the same state or jurisdiction must also be reported to the local media. If a breach involves fewer than 500 people, the covered entity must record it in a log and notify HHS at least annually.
Breaches affecting 500 patients or more in the 42 Table of Contents same state or jurisdiction must also be reported to the local media. If a breach involves fewer than 500 people, the covered entity must record it in a log and notify HHS at least annually.
The number of individuals employed by some of our Clients has decreased, and the number of individuals employed by our Clients may in the future decrease, as a result of economic conditions, which could negatively impact our revenue.
The number of individuals employed by some of our Clients has decreased, and the number of individuals employed by our Clients may in the future decrease, as a result of economic conditions or other factors, which could negatively impact our revenue.
Claims that we have 35 Table of Contents violated individuals’ privacy rights or breached our data protection obligations, even if we are not found liable, could be expensive and time-consuming to defend and could result in adverse publicity that could harm our business.
Claims that we have violated individuals’ privacy rights or breached our data protection obligations, even if we are not found liable, could be expensive and time-consuming to defend and could result in adverse publicity that could harm our business.
Bribery Act) and similar laws in other jurisdictions. These laws and regulations apply to companies, individual directors, officers, employees, and agents, and may restrict our operations, trade practices, investment decisions, 44 Table of Contents and partnering activities. Where they apply, the FCPA and the U.K.
Bribery Act) and similar laws in other jurisdictions. These laws and regulations apply to companies, individual directors, officers, employees, and agents, and may restrict our operations, trade practices, investment decisions, and partnering activities. Where they apply, the FCPA and the U.K.
A large part of the demand for our solutions depends on the need of these employers to manage the costs of healthcare services that they pay on behalf of their employees.
A large part of the demand 25 Table of Contents for our solutions depends on the need of these employers to manage the costs of healthcare services that they pay on behalf of their employees.
We generally enter into subscription access contracts with our Clients. Most of our Clients have no obligation to renew their subscriptions for our solutions after the initial term expires. In addition, our Clients may negotiate terms less advantageous to us upon renewal, which may reduce our revenue from these Clients.
We generally enter into contracts with our Clients for a subscription access or usage fee. Most of our Clients have no obligation to renew their contracts for our solutions after the initial term expires. In addition, our Clients may negotiate terms less advantageous to us upon renewal, which may reduce our revenue from these Clients.
The healthcare industry has recently shifted toward value-based care, and 22 Table of Contents increasingly our contracts place a portion of our fees at risk or provide for gain share opportunity based on achieving such metrics, savings, and/or improvements.
The healthcare industry has shifted toward value-based care, and increasingly our contracts place a portion of our fees at risk or provide for gain share opportunity based on achieving such metrics, savings, and/or improvements.
The failure to successfully manage and execute the terms of these agreements could result in the loss of fees and/or contracts and could adversely affect our business and results of operations.
The failure to successfully manage and execute the terms of 23 Table of Contents these agreements could result in the loss of fees and/or contracts and could adversely affect our business and results of operations.
We have been and may become subject, from time to time, to legal and regulatory proceedings, including claims that arise in the ordinary course of business, such as claims brought by our Clients in connection with commercial disputes or employment claims made by our current or former associates.
We have been and may become subject, from time to time, to legal and regulatory proceedings, including claims that arise in the ordinary course of business, such as claims brought by our Clients in connection with commercial disputes or employment claims made by our current or former associates. For example, see Note 17.
We cannot make any predictions or projections as to what the prevailing market price for our common stock will be at any time, including whether you will achieve any capital appreciation. We have been, and in the future could be, subject to securities class action litigation.
We cannot make any predictions or projections as to what the prevailing market price for our common stock will be at any time, including whether you will achieve any capital appreciation. We have been, and in the future could be, subject to securities class action litigation, shareholder derivative complaints and related matters.
As a result, adequate professional liability insurance may not be available to our providers or to us in the future at acceptable costs or at all.
As a result, adequate professional liability insurance may not be available to the THMG Association's providers or to us in the future at acceptable costs or at all.
Our business entails the risk of medical liability claims against both our providers and us.
Our business entails the risk of medical liability claims against both the THMG Association's providers and us.
If we are unable to recruit and retain board-certified physicians, advanced practice providers, mental health providers, and other healthcare professionals, or unable to augment our or the THMG Association’s employee base with contractors to meet resource needs, it would adversely affect our business, financial condition, results of operations, and ability to grow.
If the THMG Association is unable to recruit and retain board-certified physicians, advanced practice providers, mental health providers, and other healthcare professionals, or unable to augment its employee base with contractors to meet resource needs, it would adversely affect our business, financial condition, results of operations, and ability to grow.
The virtual care market is relatively new and unproven, and it is uncertain whether it will continue to achieve and sustain high levels of demand, consumer acceptance, and market adoption. The COVID-19 pandemic increased utilization of virtual care services, but it is uncertain whether such increase in demand will continue in the long-term.
The virtual care market continues to develop, and it is uncertain whether it will continue to achieve and sustain high levels of demand, consumer acceptance, and market adoption. The COVID-19 pandemic increased utilization of virtual care services, but it is uncertain whether such increase in demand will continue in the long-term.
Our proprietary software may not operate properly, which could damage our reputation, give rise to claims against us, or divert application of our resources from other purposes, any of which could harm our business, financial condition, and results of operations.
Our proprietary software may not operate properly or meet the expectations of our Clients or members, which could damage our reputation, give rise to claims against us, or divert application of our resources from other purposes, any of which could harm our business, financial condition, and results of operations.
We have from time to time in the past experienced, and we expect to continue to experience in the future, difficulty in hiring and retaining highly skilled personnel with appropriate qualifications, in particular software engineers and product managers. The pool of qualified personnel with experience working in the healthcare market is limited overall.
We have from time to time in the past experienced, and we expect to continue to experience in the future, difficulty in hiring and retaining highly skilled personnel with appropriate qualifications. The pool of qualified personnel with experience working in the healthcare market is limited overall.
We have been, and may in the future become, subject to such securities class action litigation, and any such litigation could result in substantial costs and a diversion of management’s attention and resources, which could have a material adverse effect on our business, financial condition, and results of operations.
We have been, and may in the future become, subject to such securities class action litigation, shareholder derivative complaints and related matters, and any such proceedings could result in substantial costs and a diversion of management’s attention and resources, which could have a material adverse effect on our business, financial condition, and results of operations.
For the years ended December 31, 2023 and 2022, our net cash provided by operating activities was $350.0 million and $189.3 million, respectively. As of December 31, 2023, we had $1,123.7 million of cash and cash equivalents which are held for working capital purposes, capital expenditures, and other corporate purposes.
For the years ended December 31, 2024 and 2023, our net cash provided by operating activities was $293.7 million and $350.0 million, respectively. As of December 31, 2024, we had $1,298.3 million of cash and cash equivalents which are held for working capital purposes, capital expenditures, and other corporate purposes.
Competition from these parties will result in continued pricing pressures, which is likely to lead to price declines in certain product segments, which could negatively impact our sales, profitability, and market share.
Competition from these parties may result in a loss of Clients and will result in continued pricing pressures, which is likely to lead to price declines in certain product segments, which could negatively impact our sales, profitability, and market share.
Our international solutions need to meet country-specific 29 Table of Contents Client and member preferences as well as country-specific legal requirements, including those related to licensing, virtual care, privacy, data storage, location, protection, and security.
Our international solutions need to meet country-specific Client and member preferences as well as country-specific legal requirements, including those related to licensing, credentialing, virtual care, privacy, data storage, location, protection, and security.
Correction of defects or errors could prove to be impossible or impracticable. The costs incurred in correcting any defects or errors may be substantial and could have a material adverse effect on our business, financial condition, and results of operations.
The costs incurred in correcting any defects or errors may be substantial and could have a material adverse effect on our business, financial condition, and results of operations.
We may also be subject to additional liabilities for non-income based taxes due to changes in U.S. federal, state, or international tax laws, changes in taxing jurisdictions’ administrative interpretations, decisions, policies, and positions, 47 Table of Contents results of tax examinations, settlements or judicial decisions, changes in accounting principles, changes to our business operations, including acquisitions, as well as the evaluation of new information that results in a change to a tax position taken in a prior period.
We may also be subject to additional liabilities for non-income based taxes due to changes in U.S. federal, state, or international tax laws, changes in taxing jurisdictions’ administrative interpretations, decisions, policies, and positions, results of tax examinations, settlements or judicial decisions, changes in accounting principles, changes to our business operations, including acquisitions, as well as the evaluation of new information that results in a change to a tax position taken in a prior period. 49 Table of Contents As we continue to expand internationally, our customers are subject to potential additional indirect tax costs and uncertainties.
Risks Related to Our Financial Position We have a history of cumulative losses, which we expect to continue, and we may never achieve or sustain profitability. We have incurred significant losses in each period since our inception. We incurred net losses of $220.4 million and $13,659.5 million for the years ended December 31, 2023 and 2022, respectively.
Risks Related to Our Financial Position We have a history of cumulative losses, which we expect to continue, and we may never achieve or sustain profitability. We have incurred significant losses in each period since our inception. We incurred net losses of $1,001.2 million and $220.4 million for the years ended December 31, 2024 and 2023, respectively.
The failure to maintain or to secure new cost-effective provider contracts may result in a loss of or inability to grow our membership base, higher costs, healthcare provider network disruptions, less attractive service for our Clients and members, and/or difficulty in meeting regulatory or accreditation requirements, any of which could have a material adverse effect on our business, financial condition, and results of operations.
The failure to maintain or to secure new cost-effective provider contracts may result in a loss of or inability to grow our membership base, higher costs, healthcare provider network disruptions, less attractive service for our Clients and members, and/or difficulty in meeting regulatory or accreditation requirements, any of which could have a material adverse effect on our business, financial condition, and results of operations. 27 Table of Contents Failure to adequately develop our direct sales force could impede our growth.
Our cloud vendors or third-party data center operators could decide to close their facilities without adequate notice.
Our cloud vendors or third-party data center operators could 35 Table of Contents decide to close their facilities without adequate notice.
At December 31, 2023, we had $1,123.7 million in cash, cash equivalents and restricted cash and fixed income securities. Our investments may also include commercial paper, securities issued by the U.S. government obligations, and money market funds meeting the criteria of our investment policy, which is focused on the preservation of our capital.
At December 31, 2024, we had $1,298.3 million in cash and cash equivalents. Our investments may also include commercial paper, securities issued by the U.S. government obligations, and money market funds meeting the criteria of our investment policy, which is focused on the preservation of our capital.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeOur CISO regularly engages with other members of our executive management team to discuss cyber risk, including the Chief Technology Officer, the Chief Information Officer, Deputy Chief Legal Officer, and Chief Compliance Officer, among others, as well as the audit committee of our Board.
Biggest changeOur CISO regularly engages with other members of our executive management team to discuss cyber risk, including the Chief Technology Officer, the Chief Information Officer, and Chief Compliance Officer, among others, as well as the audit committee of our Board. Our executive management team has the appropriate expertise, background, and depth of experience to manage risk arising from cybersecurity threats.
We process and maintain sensitive data on our Clients and members, including in the form of PHI 50 Table of Contents and PII. In addition, we maintain intellectual property for our solutions and personal information of our employees.
We process and maintain sensitive data on our Clients and members, including in the form of PHI and PII. In addition, we maintain intellectual property for our solutions and personal information of our employees.
Our executive management team has the appropriate expertise, background, and depth of experience to manage risk arising from cybersecurity threats. Executive management has also participated in cybersecurity tabletop exercises to test our cyber response playbooks.
Executive management has also participated in cybersecurity tabletop exercises to test our cyber response playbooks. 53 Table of Contents

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeWe lease additional office space in the U.S. and other foreign locations. 51 Table of Contents We have reduced our footprint over the past year reflecting post-pandemic remote work changes.
Biggest changeWe lease additional office space in the U.S. and other foreign locations. We have reduced our footprint over the past year reflecting post-pandemic remote work changes. We intend to relocate our corporate headquarters to New York City in the second half of 2025.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeItem 5. Market for Registrant’s Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities Market Information Our Common Stock trades on the New York Stock Exchange (“NYSE”) under the symbol “TDOC”. Holders On February 16, 2024, there were 91 shareholders of record of our Common Stock.
Biggest changeItem 5. Market for Registrant’s Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities Market Information Our Common Stock trades on the New York Stock Exchange (“NYSE”) under the symbol “TDOC”. Holders On February 18, 2025, there were 84 shareholders of record of our Common Stock.
Purchase of Equity Securities We did not purchase any of our registered equity securities during the period covered by this report. 52 Table of Contents Five-Year Stock Performance Graph The following graph compares the cumulative total stockholder return on our common stock with the comparable cumulative total return of the Russell 2000 Composite Index and the S&P 500 Health Care Index for each of the five fiscal years ended December 31, 2023, assuming an investment of $100 at the beginning of such period and the reinvestment of any dividends in Teladoc Health Common Stock and in each index.
Purchase of Equity Securities We did not purchase any of our registered equity securities during the period covered by this report. 54 Table of Contents Five-Year Stock Performance Graph The following graph compares the cumulative total stockholder return on our common stock with the comparable cumulative total return of the Russell 2000 Composite Index and the S&P 500 Health Care Index for each of the five fiscal years ended December 31, 2024, assuming an investment of $100 at the beginning of such period and the reinvestment of any dividends in Teladoc Health Common Stock and in each index.

Item 6. [Reserved]

Selected Financial Data — reserved (removed by SEC in 2021)

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Biggest changeYear Ended December 31, Variance % 2023 2022 Revenue $ 2,602,415 $ 2,406,840 $ 195,575 8 % Expenses: Cost of revenue (exclusive of depreciation and amortization, which are shown separately below) 760,031 743,987 16,044 2 % Operating expenses: Advertising and marketing 688,854 623,536 65,318 10 % Sales 213,780 227,172 (13,392) (6) % Technology and development 348,521 333,629 14,892 4 % General and administrative 464,659 449,855 14,804 3 % Acquisition, integration, and transformation costs 21,110 15,620 5,490 35 % Restructuring costs 16,942 7,416 9,526 128 % Depreciation 11,138 11,407 (269) (2) % Amortization 325,933 244,620 81,313 33 % Goodwill impairment 0 13,402,812 (13,402,812) n/m Total expenses 2,850,968 16,060,054 (13,209,086) (82) % Loss from operations (248,553) (13,653,214) 13,404,661 98 % Interest income (46,782) (12,674) (34,108) 269 % Interest expense 22,282 21,944 338 2 % Other (income) expense, net (4,445) 859 (5,304) n/m Loss before provision for income taxes (219,608) (13,663,343) 13,443,735 98 % Provision for income taxes 760 (3,812) 4,572 120 % Net loss $ (220,368) $ (13,659,531) $ 13,439,163 98 % Net loss per share, basic and diluted $ (1.34) $ (84.60) $ 83.26 98 % EBITDA (1) $ 88,518 $ 5,625 $ 82,893 n/m Adjusted EBITDA (1) $ 328,120 $ 246,513 $ 81,607 33 % ______________________________________ n/m – not meaningful (1) Non-GAAP Financial Measures 63 Table of Contents The following table reconciles net loss, the most directly comparable GAAP measure, to EBITDA and Adjusted EBITDA for the years ended December 31, 2023 and 2022 (in thousands): Year Ended December 31, 2023 2022 Net loss $ (220,368) $ (13,659,531) Add: Goodwill impairment 0 13,402,812 Interest income (46,782) (12,674) Interest expense 22,282 21,944 Other (income) expense, net (4,445) 859 Provision for income taxes 760 (3,812) Depreciation 11,138 11,407 Amortization 325,933 244,620 EBITDA 88,518 5,625 Stock-based compensation 201,550 217,852 Acquisition, integration, and transformation costs 21,110 15,620 Restructuring costs 16,942 7,416 Adjusted EBITDA $ 328,120 $ 246,513 Teladoc Health Integrated Care $ 191,871 $ 135,153 BetterHelp 136,249 114,116 Other 0 (2,756) Adjusted EBITDA $ 328,120 $ 246,513 Revenue.
Biggest changeYear Ended December 31, Variance % 2024 2023 Revenue $ 2,569,574 $ 2,602,415 $ (32,841) (1) % Costs and expenses: Cost of revenue (exclusive of depreciation and amortization, which are shown separately below) 751,270 760,031 (8,761) (1) % Advertising and marketing 705,787 688,854 16,933 2 % Sales 204,993 213,780 (8,787) (4) % Technology and development 307,274 348,521 (41,247) (12) % General and administrative 435,490 464,659 (29,169) (6) % Goodwill impairment 790,000 — 790,000 n/a Acquisition, integration, and transformation costs 1,743 21,110 (19,367) (92) % Restructuring costs 20,355 16,942 3,413 20 % Amortization of intangible assets 363,365 325,933 37,432 11 % Depreciation of property and equipment 10,183 11,138 (955) (9) % Total costs and expenses 3,590,460 2,850,968 739,492 26 % Loss from operations (1,020,886) (248,553) (772,333) n/m Interest income (57,071) (46,782) (10,289) 22 % Interest expense 23,803 22,282 1,521 7 % Other expense (income), net 6,035 (4,445) 10,480 (236) % Loss before provision for income taxes (993,653) (219,608) (774,045) n/m Provision for income taxes 7,592 760 6,832 n/m Net loss $ (1,001,245) $ (220,368) $ (780,877) n/m Net loss per share, basic and diluted $ (5.87) $ (1.34) $ (4.53) n/m Adjusted EBITDA (1) $ 310,711 $ 328,120 $ (17,409) (5) % ______________________________________ n/m – not meaningful (1) Non-GAAP Financial Measures 64 Table of Contents The following table reconciles net loss, the most directly comparable GAAP measure, to Adjusted EBITDA for the years ended December 31, 2024 and 2023 (in thousands): Year Ended December 31, 2024 2023 Net loss $ (1,001,245) $ (220,368) Add: Provision for income taxes 7,592 760 Other expense (income), net 6,035 (4,445) Interest expense 23,803 22,282 Interest income (57,071) (46,782) Depreciation of property and equipment 10,183 11,138 Amortization of intangible assets 363,365 325,933 Restructuring costs 20,355 16,942 Acquisition, integration, and transformation costs 1,743 21,110 Goodwill impairment 790,000 — Stock-based compensation 145,951 201,550 Adjusted EBITDA $ 310,711 $ 328,120 Integrated Care $ 232,902 $ 191,871 BetterHelp 77,809 136,249 Adjusted EBITDA $ 310,711 $ 328,120 Revenue.
Integrated Care Members. U.S. Integrated Care members represent the number of unique individuals who have paid access and visit fee only access to our suite of integrated care services in the U.S. at the end of the applicable period.
Integrated Care members represent the number of unique individuals who have paid access and visit fee only access to our suite of integrated care services in the U.S. at the end of the applicable period.
Sales Expenses Sales expenses consist primarily of employee-related expenses, including salaries, benefits, commissions, and incentive-based awards, employment taxes, travel and stock-based compensation costs for our employees engaged in sales, account management, and sales support in addition to commissions paid to external brokers. Our sales expenses exclude certain allocations of occupancy expense as well as depreciation and amortization.
Sales Expenses Sales expenses consist primarily of employee-related expenses, including salaries, benefits, commissions, incentive-based awards, and stock-based compensation, employment taxes, travel costs for our employees engaged in sales, account management, and sales support in addition to commissions paid to external brokers. Our sales expenses exclude certain allocations of occupancy expense as well as depreciation and amortization.
We may in the future enter into arrangements to acquire or invest in complementary businesses, services, technologies, and intellectual property rights. We may be required to seek additional equity or debt financing to fund working capital, capital expenditures and acquisitions, and to settle debt obligations.
We may in the future enter into arrangements to acquire or invest in additional complementary businesses, services, technologies, and intellectual property rights. We may be required to seek additional equity or debt financing to fund working capital, capital expenditures and acquisitions, and to settle debt obligations.
Cash from Financing Activities Cash provided by financing activities for the year ended December 31, 2023 was $10.9 million and primarily consisted of $1.5 million of proceeds from the exercise of employee stock options and $9.7 million of proceeds from participants in our employee stock purchase plan.
Cash provided by financing activities for the year ended December 31, 2023 was $10.9 million and primarily consisted of $1.5 million of proceeds from the exercise of employee stock options and $9.7 million of proceeds from participants in our employee stock purchase plan.
We further believe that these financial measures are useful financial metrics to assess our operating performance and financial and business trends from period-to-period by excluding certain items that we believe are not representative of our core business, and that free cash flow reflects an additional way of viewing our liquidity that, when viewed together with GAAP results, provides management, investors, and other users of our financial information with a more complete understanding of factors and trends affecting our cash flows.
We further believe that these financial measures are useful to assess our operating performance and financial and business trends from period-to-period by excluding certain items that we believe are not representative of our core business, and that free cash flow reflects an additional way of viewing our liquidity that, when viewed together with GAAP results, provides management, investors, and other users of our financial information with a more complete understanding of factors and trends affecting our cash flows.
In combination with the expansion of our capabilities, we believe that these trends present significant opportunities for virtual healthcare to address the most pressing, universal healthcare challenges through trusted solutions, such as ours, that deliver convenient, affordable, and high-quality care; empower individuals to manage and improve their health; and enable providers to offer their best care for their patients.
In combination with the expansion of our capabilities, we believe that these trends continue to present significant opportunities for virtual healthcare to address the most pressing, universal healthcare challenges through trusted solutions, such as ours, that deliver convenient, affordable, and high-quality care; empower individuals to manage and improve their health; and enable providers to offer their best care for their patients.
EBITDA, Adjusted EBITDA, and Free Cash Flow To supplement our financial information presented in accordance with U.S. generally accepted accounting principles (“GAAP”), we use non-GAAP financial measures to clarify and enhance an understanding of past performance, which include EBITDA (as defined below), Adjusted EBITDA, and free cash flow.
Adjusted EBITDA, and Free Cash Flow To supplement our financial information presented in accordance with U.S. generally accepted accounting principles (“GAAP”), we use certain non-GAAP financial measures to clarify and enhance an understanding of past performance, which include Adjusted EBITDA (as defined below) and free cash flow.
The research and development expenses may enable future revenue growth but are not directly related to current revenues. 59 Table of Contents Technology and development expenses include personnel and related expenses (including salaries and benefits, incentive compensation, and stock-based compensation) for software engineering, information technology infrastructure, security and compliance, product development, and support for our efforts to add new features and ensure the reliability or scalability of our existing solutions.
The research and development expenses may enable future revenue growth but are not directly related to current revenues. 61 Table of Contents Technology and development expenses include personnel and related expenses (including salaries and benefits, incentive compensation, and stock-based compensation) for software engineering, information technology infrastructure, security and compliance, product development, and support for our efforts to add new features and ensure the reliability or scalability of our existing solutions.
This principle is achieved through applying the following five-step approach: • Identification of the contract, or contracts, with a Client. 55 Table of Contents • Identification of the performance obligations in the contract. • Determination of the transaction price. • Allocation of the transaction price to the performance obligations in the contract. • Recognition of revenue when, or as, we satisfy a performance obligation.
This principle is achieved through applying the following five-step approach: • Identification of the contract, or contracts, with a Client. • Identification of the performance obligations in the contract. 57 Table of Contents • Determination of the transaction price. • Allocation of the transaction price to the performance obligations in the contract. • Recognition of revenue when, or as, we satisfy a performance obligation.
In the event that additional financing is required from outside sources, we may not be able to raise it on terms acceptable to us or at all, which would adversely affect our business, financial condition and results of operations. Historically, we have financed our operations primarily through sales of equity securities, debt issuance, and bank borrowings. See Note 10.
In the event that additional financing is required from outside sources, we may not be able to raise it on terms acceptable to us or at all, which would adversely affect our business, financial condition, and results of operations. Historically, we have financed our operations primarily through sales of equity securities, debt issuance, and bank borrowings.
Today, we have a vision of making virtual care the first step on any healthcare journey, and we are delivering on this mission by providing whole person virtual care that includes primary care, mental health, chronic condition management, and more.
Today, we have a vision of making virtual care the first step on any healthcare journey, and we are delivering on this mission by providing virtual care that includes primary care, mental health, chronic condition management, and more.
Our revenue growth rate and long-term profitability are affected by our ability to increase cross selling capability among our existing members over time because we derive a substantial portion of our revenue from access and other fees via Client contracts that provide members access to our professional provider network in exchange for a contractual based periodic fee.
Our revenue growth rate and long-term profitability are affected by our ability to increase cross selling capability among our existing members over time because we derive a substantial portion of our revenue from access and other fees via Client contracts that provide members access to the THMG Association professional provider network in exchange for a contractual based periodic fee.
Revenue is also generated from contracts with Clients for our chronic care management solutions. Substantially all of this revenue is derived from monthly access fees that are recognized as services are rendered and earned under subscription agreements with Clients that are based on a per-participant-per-month model, using the number of active enrolled members each month for the minimum enrollment period.
Revenue is also generated from contracts with Clients for our chronic care management solutions. Substantially all of this revenue is derived from monthly access fees that are recognized as services are rendered and earned under subscription agreements with Clients that are based on a PPPM model, using the number of active enrolled members each month for the minimum enrollment period.
Components of Results of Operations Cost of Revenue (exclusive of depreciation and amortization, which are shown separately) Cost of revenue (exclusive of depreciation and amortization, which are shown separately) primarily consists of fees paid to the physicians and other health professionals in our provider network; product cost; costs incurred in connection with our provider network operations and data center activities, which include employee-related expenses (including salaries and benefits, incentive compensation, and stock-based compensation); costs related to Client support; and provider network, medical records, magnetic resonance imaging, medical lab tests, translation, postage, medical malpractice insurance, and deferred device costs.
Components of Results of Operations Cost of Revenue (exclusive of depreciation and amortization, which are shown separately) Cost of revenue (exclusive of depreciation and amortization, which are shown separately), or "Cost of revenue," primarily consists of fees paid to the physicians and other health professionals in the THMG Association provider network; product cost; costs incurred in connection with the THMG Association provider network operations and data center activities, which include employee-related expenses (including salaries and benefits, incentive compensation, and stock-based compensation); costs related to Client support; and provider network, medical records, magnetic resonance imaging, medical lab tests, translation, postage, medical malpractice insurance, and deferred device costs.
The income tax provision for the year ended December 31, 2023 reflects the current year operational loss and the impact of lower stock-based compensation deductions for tax purposes compared to the stock-based compensation expense recorded in the consolidated statement of operations.
The income tax provision for the year ended December 31, 2024 reflects the current year operational loss and the impact of lower stock-based compensation deductions for tax purposes compared to the stock-based compensation expense recorded in the consolidated statement of operations.
We further believe that increasing our membership is an integral objective that will provide us with the ability to continually innovate our services and support initiatives that will enhance members’ experiences. U.S.
We further believe that increasing our membership is an integral objective that will provide us with the ability to continually innovate our services and support initiatives that will enhance members’ experiences.
We record access fees from Clients accessing our professional provider network or hosted virtual healthcare platform or chronic care management platforms, visit fee revenue for general medical, expert medical service and other specialty visits as well as other revenue primarily associated with virtual healthcare device equipment included with our hosted virtual healthcare platform.
We record access fees from Clients accessing the THMG Association professional provider network or hosted virtual healthcare platform or chronic care management platforms, visit fee revenue for general medical, expert medical service and other specialty visits as well as other revenue primarily associated with virtual healthcare device equipment included with our hosted virtual healthcare platform.
Integrated Care Segment As it relates to the Integrated Care segment, we primarily generate virtual healthcare service revenue from contracts with Clients who purchase access to our professional provider network or medical experts for their employees, dependents and other beneficiaries.
Integrated Care Segment As it relates to the Integrated Care segment, we primarily generate virtual healthcare service revenue from contracts with Clients who purchase access to the THMG Association professional provider network or medical experts for their employees, dependents and other beneficiaries.
These solutions integrate devices, supplies, access to our web-based platform, and clinical and data services to provide an overall health management solution.
These solutions integrate devices, supplies, access to our web-based platform, mobile application, and clinical and data services to provide an overall health management solution.
Integrated Care Member . Average monthly revenue per U.S. Integrated Care member measures the average monthly amount of global revenue that we generate from a U.S. Integrated Care member for a particular period. It is calculated by dividing the total revenue generated from the Integrated Care segment by the average number of U.S. Integrated Care members during the applicable period.
Average Monthly Revenue Per U.S. Integrated Care Member . Average monthly revenue per U.S. Integrated Care member measures the average monthly amount of global revenue that we generate from a U.S. Integrated Care member for a particular period. It is calculated by dividing the total revenue generated from the Integrated Care segment by the average number of U.S.
As a result of this dynamic, we have typically experienced fewer new member additions and the strongest operating income performance in the fourth quarter. Conversely, as marketing activity typically resumes at the start of the year, we typically experience the weakest operating income performance during the first quarter as new customer acquisition and revenue growth lags marketing spend.
As a result of this dynamic, we have typically experienced fewer new member additions and strong operating income performance in the fourth quarter. Conversely, as marketing activity typically resumes at the start of the year, we typically experience weak operating income performance during the first quarter as new customer acquisition and revenue growth lags marketing spend.
Interest and penalties, if any, related to accrued liabilities for potential tax assessments are included in income tax expense. Valuation allowances are recorded to reduce deferred tax assets when it is more likely than not that a tax benefit will not be realized.
Interest and penalties, if any, related to accrued liabilities for potential tax assessments are included in income tax expense. 60 Table of Contents Valuation allowances are recorded to reduce deferred tax assets when it is more likely than not that a tax benefit will not be realized.
Determination of valuation allowances recorded against deferred tax assets requires significant 58 Table of Contents judgment and use of assumptions, including past operating results, estimates of future taxable income and the feasibility of tax planning strategies.
Determination of valuation allowances recorded against deferred tax assets requires significant judgment and use of assumptions, including past operating results, estimates of future taxable income and the feasibility of tax planning strategies.
Our future capital requirements will depend on many factors including our growth rate, contract renewal activity, number of visits, the timing and extent of spending to support product development efforts, our expansion of sales and marketing activities, the introduction of new and enhanced services offerings, the continuing market acceptance of telehealth, and our debt service obligations.
Our future capital requirements will depend on many factors including our growth rate, contract renewal activity, number of visits, our ability to retain and/or obtain new members, the timing and extent of spending to support product development efforts, our expansion of sales and marketing activities, the introduction of new and enhanced services offerings, the continuing market acceptance of telehealth, and our debt service obligations.
Management’s Discussion and Analysis of Financial Condition and Results of Operations Discussion and analysis of our fiscal year 2021, as well as the year-over-year comparison of our 2022 financial performance to 2021, have been omitted from this section and may be found under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2022 that was filed with the SEC on March 1, 2023.
Management’s Discussion and Analysis of Financial Condition and Results of Operations Discussion and analysis of our fiscal year 2022, as well as the year-over-year comparison of our 2023 financial performance to 2022, have been omitted from this section and may be found under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023 that was filed with the SEC on February 23, 2024.
These transformation cost adjustments made to our results do not represent normal, recurring, operating expenses necessary to operate the business but rather, incremental costs incurred in connection with our acquisition and integration activities; and • Adjusted EBITDA does not reflect the significant non-cash stock-based compensation expense which should be viewed as a component of recurring operating costs.
These transformation cost adjustments made to our results do not represent normal, recurring, operating expenses necessary to operate the business but rather, incremental costs incurred in connection with our acquisition and integration activities; • Adjusted EBITDA does not reflect goodwill impairment charges; and 63 Table of Contents • Adjusted EBITDA does not reflect the significant non-cash stock-based compensation expense which should be viewed as a component of recurring operating costs.
Our Client contracts include a per-member-per-month (“PMPM”) access fee as well as certain contracts that also include additional revenue on a per-virtual healthcare visit basis for general medical, or other specialty visits or expert medical service on a per case basis.
Our Client contracts include a PMPM access fee as well as certain contracts that also include additional revenue on a per-virtual healthcare visit basis for general medical, or other specialty visits or expert medical service on a per case basis.
For example, a sustained increase in the customer attrition rate related to customers acquired in the Livongo transaction could prompt us to reduce our estimate of the remaining useful life of the customer relationships. Should this occur, a one-year reduction to the estimated life would result in an annual increase in amortization expense of approximately $6 million.
For example, a sustained increase in the customer attrition rate related to customers added as a result of the Livongo acquisition could prompt us to reduce our estimate of the remaining useful life of the customer relationships. Should this occur, a one-year reduction to the estimated life would result in an annual increase in amortization expense of approximately $6.0 million.
For additional revenue, deferred revenue, deferred costs, and disclosures, refer to Note 3. “Revenue, Deferred Revenue, and Deferred Costs and Other.” BetterHelp Segment As it relates to the BetterHelp segment, users can purchase virtual therapy services for an access fee, generally on a monthly basis.
For additional revenue, deferred revenue, deferred costs, and disclosures, refer to Note 3. “Revenue, Deferred Revenue, and Deferred Device and Contract Costs.” BetterHelp Segment As it relates to the BetterHelp segment, users can purchase virtual therapy services for an access fee, generally on a monthly or weekly basis.
We estimate the expected amount of refunds to be issued based on historical experience, which are recorded as a reduction of revenue. We issued refunds of approximately $93.0 million and $79.2 million for the years ended December 31, 2023 and 2022, respectively.
We estimate the expected amount of refunds to be issued based on historical experience, which are recorded as a reduction of revenue. We issued refunds of approximately $84.0 million and $93.0 million for the years ended December 31, 2024 and 2023, respectively.
The current estimated cost of these contracts is not expected to be significant to our liquidity and capital resources based on contracts in place as of December 31, 2023. Cash from Operating Activities Cash flows provided by operating activities consist of net loss adjusted for certain non-cash items and the cash effect of changes in assets and liabilities.
The current estimated cost of these contracts is not expected to be significant to our liquidity and capital resources based on contracts in place as of December 31, 2024. 68 Table of Contents Cash from Operating Activities Cash flows provided by operating activities consisted of net loss adjusted for certain non-cash items and the cash effect of changes in assets and liabilities.
For the years ended December 31, 2023 and 2022, revenue recognized from performance obligations related to prior periods for changes in estimated transaction price or Client performance guarantees was $14.7 million and $4.4 million, respectively.
For the years ended December 31, 2024 and 2023, revenue recognized from performance obligations related to prior periods for changes in estimated transaction price or Client performance guarantees was $5.9 million and $14.7 million, respectively.
It also includes costs related to certain business transformation initiatives focused 61 Table of Contents on integrating and optimizing various operations and systems, including upgrading our CRM and ERP systems.
It also includes costs related to certain business transformation initiatives focused on integrating and optimizing various operations and systems, including upgrading our CRM and ERP systems.
Cost of revenue (exclusive of depreciation and amortization, which are shown separately) is driven primarily by the number of general medical visits, expert medical services, and other specialty visits completed in each period and are closely correlated or directly related to delivery of our solutions and monthly access fees.
Cost of revenue is driven primarily by the number of general medical visits, expert medical services, and other specialty visits completed in each period and are closely correlated or directly related to delivery of our solutions and monthly access fees.
Cash provided by operating activities for the years ended December 31, 2023 and 2022 included approximately $15.6 million and $19.1 million, respectively, related to investments in and implementation of cloud computing applications, which are deferred and amortized over multiple years based on the expected contract life.
Cash provided by operating activities for the years ended December 31, 2024 and 2023 included approximately $3.7 million and $15.6 million, respectively, of payments made related to investments in and implementation of cloud computing applications, which are deferred and amortized over multiple years based on the expected contract life.
During 2023, we experienced positive operating cash flow and we anticipate increasing positive operating cash flow results for 2024. We believe that our existing cash and cash equivalents will be sufficient to meet our working capital, capital expenditure, and contractual obligation needs for at least the next 12 months.
During 2024, we experienced positive operating cash flow and we also anticipate continuing positive operating cash flows for 2025. We believe that our existing cash and cash equivalents will be sufficient to meet our working capital, capital expenditure, and contractual obligation needs for at least the next 12 months.
Some of these limitations are: • EBITDA and Adjusted EBITDA eliminate the impact of the provision for income taxes on our results of operations, and they do not reflect goodwill impairment, interest income, interest expense or other (income) expense, net; • Adjusted EBITDA does not reflect restructuring costs.
Some of these limitations are: • Adjusted EBITDA eliminates the impact of the provision for income taxes on our results of operations, and does not reflect other expense (income), net, interest income, or interest expense; • Adjusted EBITDA does not reflect restructuring costs.
Item 6. [Reserved] Not applicable. 53 Table of Contents Item 7.
Item 6. [Reserved] Not applicable. 55 Table of Contents Item 7.
In addition, although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, and both EBITDA and Adjusted EBITDA do not reflect any expenditures for such replacements.
In addition, although amortization of intangible assets and depreciation of property and equipment are non-cash charges, the assets being amortized and depreciated will often have to be replaced in the future, and Adjusted EBITDA does not reflect any expenditures for such replacements.
Many of the elements of the cost of revenue (exclusive of depreciation and amortization, which are shown separately) are relatively variable, and can be reduced in the near-term to offset any decline in our revenue. Our business and operational models are designed to be highly scalable and leverage variable costs to support revenue-generating activities.
Many of the elements of the cost of revenue are relatively variable, and can be reduced in the near-term to offset any decline in our revenue. Our business and operational models are designed to be highly scalable and leverage variable costs to support revenue-generating activities. Cost of revenue does not include an allocation of depreciation and amortization.
Cash provided by financing activities for the year ended December 31, 2022 was $6.5 million and primarily consisted of $5.9 million of proceeds from the exercise of employee stock options and $6.5 million of proceeds from participants in our employee stock purchase plan.
Cash from Financing Activities Cash provided by financing activities for the year ended December 31, 2024 was $8.3 million and primarily consisted of $3.6 million of proceeds from the exercise of employee stock options and $4.7 million of proceeds from participants in our employee stock purchase plan.
Adjusted EBITDA consists of net loss before interest income; interest expense; other (income) expense, net, including foreign currency exchange gains or losses; provision for income taxes; depreciation; amortization; goodwill impairment; stock-based compensation; restructuring costs; and acquisition, integration, and transformation costs. Free cash flow is net cash provided by operating activities less capital expenditures and capitalized software development costs.
Adjusted EBITDA consists of net loss before provision for income taxes; other expense (income), net; interest income; interest expense; depreciation of property and equipment; amortization of intangible assets; restructuring costs; acquisition, integration, and transformation cost; goodwill impairment; and stock-based compensation. Free cash flow is net cash provided by operating activities less capital expenditures and capitalized software development costs.
It also includes costs related to certain business transformation initiatives focused on integrating and optimizing various operations and systems, including upgrading our CRM and ERP systems, incurred in connection with our acquisition and integration activities.
It also includes costs related to certain business transformation initiatives focused on integrating and optimizing various operations and systems, including upgrading our CRM and ERP systems, incurred in connection with our acquisition and integration activities. Amortization of Intangible Assets Amortization of intangible assets consists of the amortization of capitalized software development costs and of acquisition-related intangible assets.
Our contracts do not generally contain refund provisions for fees earned related to services performed. 56 Table of Contents Additionally, certain of our contracts include Client performance guarantees and pricing adjustments that are based upon minimum member utilization and guarantees by us for specific service level performance, member satisfaction scores, cost savings or other value achievements or guarantees, and health outcome guarantees.
Additionally, certain of our contracts include Client performance guarantees and pricing adjustments that are based upon minimum member utilization and guarantees by us for specific service level performance, member satisfaction 58 Table of Contents scores, cost savings or other value achievements or guarantees, and health outcome guarantees.
Average monthly revenue per U.S. Integrated Care member decreased to $1.41 in the year ended December 31, 2023, from $1.42 in the same period in 2022, primarily due to the impact of new members onboarded over the course of the year.
Integrated Care member decreased to $1.37 in the year ended December 31, 2024, from $1.41 in the same period in 2023, primarily due to the impact of new members onboarded over the course of the year.
We recorded an income tax expense of $0.8 million for the year ended December 31, 2023, compared to an income tax benefit of $3.8 million for the year ended December 31, 2022.
We recorded income tax expense of $7.6 million for the year ended December 31, 2024, compared to $0.8 million for the year ended December 31, 2023.
Total revenue was $2,602.4 million for the year ended December 31, 2023, compared to $2,406.8 million for the year ended December 31, 2022, an increase of $195.6 million, or 8%. The increase was driven by an 8% increase in access fees, primarily related to BetterHelp, as well as a 6% increase in other revenues.
Total revenue was $2,569.6 million for the year ended December 31, 2024, compared to $2,602.4 million for the year ended December 31, 2023, a decrease of $32.8 million, or 1%. The decrease was driven by a 3% decrease in access fees, primarily related to BetterHelp, offset by an 11% increase in other revenues.
Integrated Care members increased by 6.3 million, or 8%, to 89.6 million at December 31, 2023, compared to the same period in 2022. 54 Table of Contents Chronic Care Program Enrollment . Chronic care program enrollment represents the total number of enrollees across our suite of chronic care programs at the end of a given period.
U.S. Integrated Care members increased by 4.2 million, or 5%, to 93.8 million at December 31, 2024, compared to the same period in 2023. Chronic Care Program Enrollment . Chronic care program enrollment represents the total number of enrollees across our suite of chronic care programs at the end of a given period.
Our chronic care program enrollments are one of the key components of our whole person virtual care platform that we believe positions us to drive greater engagement with our platforms and increased revenue. Chronic care program enrollment increased by 14% to 1.16 million at December 31, 2023, compared to 1.02 million at December 31, 2022. Average Monthly Revenue Per U.S.
Our chronic care program enrollments are one of the key components of our virtual care platform that we believe positions us to drive greater engagement with our platforms 56 Table of Contents and increased revenue. Chronic care program enrollment increased by 4% to 1.20 million at December 31, 2024, compared to 1.16 million at December 31, 2023.
In connection with the brand strategy, we accelerated the amortization associated with the Livongo trademark, increasing amortization expense in the year ended December 31, 2023 and in the year ending December 31, 2024, with corresponding reductions thereafter.
In connection with the brand strategy,we accelerated the amortization of intangible assets that are associated with the Livongo trademark, increasing amortization of intangible assets expense beginning in the second half of 2023 and continuing through the year ended December 31, 2024 , with corresponding reductions thereafter.
Restructuring Costs Restructuring costs consist primarily of lease impairment costs, losses related to the reduction of office space, and costs for employee transition, severance payments, employee benefits, and related costs. Depreciation Depreciation consists primarily of depreciation of fixed assets. Amortization Amortization consists primarily of amortization of capitalized software development costs, and amortization of acquisition-related intangible assets.
Restructuring Costs Restructuring costs consist primarily of lease impairment costs, losses related to the reduction of office space, and costs for employee transition, severance payments, employee benefits, and related costs.
We believe that our ability to add new paying users and retain existing users is a key indicator of the increasing market adoption of BetterHelp, the growth of that business, and future revenue potential.
We believe that our ability to add new paying users and retain existing users is a key indicator of the market adoption of BetterHelp, the growth of this segment, and future revenue potential. Effectively reaching potential paying users through various advertising channels remains critical to our success.
Cash used in investing activities for the year ended December 31, 2022 of $167.7 million consisted primarily of capitalized software development costs of $156.3 million and capital expenditures of $16.5 million. The decrease of $11.4 million related to lower capitalized software development costs.
Cash used in investing activities for the year ended December 31, 2023 of $156.3 million, and consisted primarily of capitalized software development costs of $144.9 million and capital expenditures of $11.5 million. The decrease of $32.3 million was primarily driven by lower capitalized software development costs.
The primary uses of cash from operating activities are for the payment of cash compensation, provider fees, engagement marketing, direct-to-consumer digital and media advertising, inventory, insurance, technology costs, interest expense and acquisition, integration, and transformation costs.
The primary uses of cash from operating activities are for the payment of cash compensation, provider fees, engagement marketing, direct-to-consumer digital and media advertising, inventory, insurance, technology costs, interest expense and acquisition, integration, and transformation costs. Historically, cash compensation is at its highest level in the first quarter when discretionary employee compensation related to the previous fiscal year is paid.
Unless the context otherwise requires, Teladoc Health, Inc., together with its subsidiaries, is referred to herein as “Teladoc Health,” the “Company,” or “we.” The Company’s principal executive office is located in Purchase, New York.
Unless the context otherwise requires, Teladoc Health, Inc., together with its subsidiaries, is referred to herein as “Teladoc Health,” the “Company,” or “we.” The Company’s principal executive office is located in Purchase, New York. Teladoc Health is the global leader in virtual care focused on forging a new healthcare experience with better convenience, outcomes, and value around the world.
Restructuring costs were $16.9 million and $7.4 million for the year ended December 31, 2023 and 2022, respectively. The costs primarily consisted of losses related to the reduction of office space and severance. See Note 12. ‘Restructuring” to the financial statements for additional information. Depreciation.
Restructuring Costs . Restructuring costs were $20.4 million and $16.9 million for the years ended December 31, 2024 and 2023, respectively. The costs primarily related to the reduction of office space, severance, right-of-use asset impairment charges and other restructuring related costs. See Note 12. ‘Restructuring” to the financial statements for additional information. Amortization of Intangible Assets.
Other (income) expense, net was an income of $4.4 million for the year ended December 31, 2023, compared to an expense of $0.9 million for the year ended December 31, 2022, primarily reflecting a gain on the partial sale of a business. Provision for Income Taxes .
Other expense (income), net was an expense of $6.0 million for the year ended December 31, 2024, compared to an income of $4.4 million for the year ended December 31, 2023, primarily reflecting losses on foreign currency exchange rate fluctuations for the year ended December 31, 2024, whereas the year ended December 31, 2023 reflected a gain on the partial sale of a business, partially offset by losses on foreign currency exchange rate fluctuations. 66 Table of Contents Provision for Income Taxes .
In connection with the brand strategy, we have accelerated the amortization associated with the Livongo trademark, increasing amortization expense in the year ended December 31, 2023 , and in the year ending December 31, 2024, with corresponding reductions thereafter.
In connection with the brand strategy, we accelerated the amortization of intangible assets that are associated with the Livongo trademark, increasing amortization of intangible assets expense beginning in the second half of the year ended December 31, 2023 and continuing through the year ended December 31, 2024 , with corresponding reductions thereafter. Depreciation of Property and Equipment.
The following table shows amortization broken down by components for the periods indicated (in thousands): Year Ended December 31, 2023 2022 % Amortization of acquired intangibles $ 242,976 $ 198,522 22 % Amortization of capitalized software 82,957 46,098 80 % Amortization of intangible assets expense $ 325,933 $ 244,620 33 % Amortization was $325.9 million for the year ended December 31, 2023, compared to $244.6 million for the year ended December 31, 2022, an increase of $81.3 million, or 33%.
The following table shows amortization of intangible assets broken down by components for the periods indicated (in thousands): Year Ended December 31, 2024 2023 % Amortization of acquired intangibles $ 230,328 $ 242,976 (5) % Amortization of capitalized software development costs 133,037 82,957 60 % Amortization of intangible assets expense $ 363,365 $ 325,933 11 % Amortization of intangible assets was $363.4 million for the year ended December 31, 2024, compared to $325.9 million for the year ended December 31, 2023, an increase of $37.4 million, or 11%.
The year-over-year increase was substantially driven by growth in operating cash flow, and to a lesser degree, a decline in capitalized expenditures and capitalized software.
The year-over-year decrease was substantially driven by a decline in operating cash flow, partially offset by a decline in capitalized software.
The following is a reconciliation of net cash provided by operating activities to free cash flow (in thousands, unaudited): Year Ended December 31, 2023 2022 2021 Net cash provided by operating activities $ 350,021 $ 189,292 $ 193,990 Capital expenditures (11,464) (16,480) (8,534) Capitalized software (144,884) (156,284) (55,400) Free Cash Flow $ 193,673 $ 16,528 $ 130,056 Free cash flow was $193.7 million for the year ended December 31, 2023, as compared to $16.5 million for the year ended December 31, 2022.
The following is a reconciliation of net cash provided by operating activities to free cash flow (in thousands, unaudited): Year Ended December 31, 2024 2023 Net cash provided by operating activities $ 293,680 $ 350,021 Capital expenditures (10,790) (11,464) Capitalized software development costs (113,262) (144,884) Free Cash Flow $ 169,628 $ 193,673 Free cash flow was $169.6 million for the year ended December 31, 2024, as compared to $193.7 million for the year ended December 31, 2023.
The higher expense was driven by higher amortization due to the acceleration of certain trademark lives as well as an increase in the amortization of capitalized software costs related to our investment in platforms.
The higher expense was driven by an increase in the amortization of capitalized software development costs related to our investment in platforms, partially offset by lower amortization of acquired intangibles due to certain trademarks becoming fully amortized.
“Intangible Assets, Net and Certain Cloud Computing Costs” to the 57 Table of Contents consolidated financial statements. We also review the useful lives on a quarterly basis to determine if the period of economic benefit has changed.
We also review the useful lives on a quarterly basis to determine if the period of economic benefit has changed.
Depreciation was $11.1 million for the year ended December 31, 2023, compared to $11.4 million for the year ended December 31, 2022, a decrease of $0.3 million, or 2%. Amortization.
Depreciation of property and equipment was $10.2 million for the year ended December 31, 2024, compared to $11.1 million for the year ended December 31, 2023, a decrease of $1.0 million, or 9%. Interest Income. Interest income was $57.1 million for the year ended December 31, 2024, compared to $46.8 million for the year ended December 31, 2023.
Sales expenses were $213.8 million for the year ended December 31, 2023, compared to $227.2 million for the year ended December 31, 2022, a decrease of $13.4 million, or 6%. The decrease was primarily driven by lower employee compensation as well as lower sales and broker commissions. Technology and Development Expenses.
The decrease was primarily driven by lower employee compensation, partially offset by higher professional fees and broker commissions. Technology and Development Expenses. Technology and development expenses were $307.3 million for the year ended December 31, 2024, compared to $348.5 million for the year ended December 31, 2023, a decrease of $41.2 million, or 12%.
In evaluating these financial measures, you should be aware that in the future we may incur expenses similar to those eliminated in this presentation.
In evaluating these financial measures, you should be aware that in the future we may incur expenses similar to those eliminated in this presentation. Our presentation of these non-GAAP measures should not be construed as an inference that our future results will be unaffected by unusual or nonrecurring items.
The increase in other revenues primarily related to higher revenues from sales of our telehealth solutions for hospitals and health systems. By geography, total revenue for the U.S. was $2,237.5 million and for International was $364.9 million for the year ended December 31, 2023, reflecting increases of 6% and 19%, respectively, compared to the year ended December 31, 2022.
The increase in other revenues primarily related to higher visit revenues. By geography, total revenue for the U.S. was $2,160.0 million and for International was $409.6 million for the year ended December 31, 2024, reflecting a decrease of 3% and an increase of 12%, respectively, compared to the year ended December 31, 2023.
Approximately 20% of total Integrated Care revenues relates to international and hospital and health systems for which membership is not considered as a management metric. We believe that our ability to increase the revenue generated from each member over time is also a key indicator of our increasing market adoption, the growth of our business, and future revenue potential.
We believe that our ability to increase the revenue generated from each member over time is also a key indicator of our increasing market adoption, the growth of our business, and future revenue potential. Average monthly revenue per U.S.
BetterHelp Adjusted EBITDA increased by $22.1 million, or 19%, to $136.2 million for the year ended December 31, 2023, primarily reflecting higher gross profit, offset by higher operating expenses, most significantly higher advertising and marketing expenses. 66 Table of Contents Liquidity and Capital Resources The following table presents a summary of our cash flow activity for the years ended December 31, 2023 and 2022 (in thousands): Year Ended December 31, Consolidated Statements of Cash Flows - Summary 2023 2022 Net cash provided by operating activities $ 350,021 $ 189,292 Net cash used in investing activities (156,347) (167,743) Net cash provided by financing activities 10,854 6,497 Effect of foreign currency exchange rate changes 965 (3,344) Total increase in cash and cash equivalents $ 205,493 $ 24,702 Our principal sources of liquidity are cash and cash equivalents, totaling $1,123.7 million as of December 31, 2023.
Liquidity and Capital Resources The following table presents a summary of our cash flow activity for the years ended December 31, 2024 and 2023 (in thousands): Year Ended December 31, Consolidated Statements of Cash Flows - Summary 2024 2023 Net cash provided by operating activities $ 293,680 $ 350,021 Net cash used in investing activities (124,052) (156,347) Net cash provided by financing activities 8,312 10,854 Effect of foreign currency exchange rate changes (3,288) 965 Total increase in cash and cash equivalents $ 174,652 $ 205,493 Our principal source of liquidity is our cash and cash equivalents, totaling $1,298.3 million as of December 31, 2024.
Teladoc Health is the global leader in whole person virtual care focused on forging a new healthcare experience with better convenience, outcomes, and value around the world. We were founded on a simple, yet revolutionary idea: that everyone should have access to the best healthcare, anywhere in the world on their terms.
We were founded on a simple, yet revolutionary idea: that everyone should have access to the best healthcare, anywhere in the world on their terms.
Our ability to reach new potential paying users through various advertising channels helped us to increase BetterHelp paying users by 9% to 0.46 million as of December 31, 2023, compared to 0.42 million as of December 31, 2022. As it relates to the Company: Seasonality. Our business has historically been subject to seasonality.
BetterHelp paying users decreased by 11% to 0.41 million for the year ended December 31, 2024, compared to 0.46 million for the year ended December 31, 2023. As it relates to the Company: Seasonality. Our business has historically been subject to seasonality.
These steps are expected to result in restructuring costs in the year ending December 31, 2024. See Note 19. ‘Subsequent Events” to the consolidated financial statements for additional information. Key Factors Affecting Our Performance We believe that our future performance will depend on many factors, including the following: As it relates to the Integrated Care segment: Number of U.S.
Key Factors Affecting Our Performance We believe that our future performance will depend on many factors, including the following: As it relates to the Integrated Care segment: Number of U.S. Integrated Care Members. U.S.
The increase was primarily driven by higher infrastructure, hosting, and software license costs associated with running operations and ongoing projects and services to continuously improve and optimize our products and services, partially offset by lower professional fees and contract labor costs and lower recruiting and employee-related costs.
The decrease was primarily driven by lower employee compensation costs, partially offset by higher infrastructure, hosting, and software license costs associated with running operations as well as ongoing projects and services to continuously improve and optimize our products and services. For the years ended December 31, 2024 and 2023, research and development costs were $89.1 million and $124.6 million, respectively.
“Convertible Senior Notes” to the consolidated financial statements for additional information on our convertible senior notes. We were in compliance with all debt covenants at December 31, 2023. We routinely enter into contractual obligations with third parties to provide professional services, licensing, and other products and services in support of our ongoing business.
We routinely enter into contractual obligations with third parties to provide professional services, licensing, and other products and services in support of our ongoing business.
Our presentation of these non-GAAP measures should not be construed as an inference that our future results will be unaffected by unusual or nonrecurring items. 62 Table of Contents Consolidated Results of Operations The following table sets forth our consolidated statement of operations data for the years ended December 31, 2023 and 2022 and the dollar and percentage change between the respective periods (dollars in thousands).
Consolidated Results of Operations The following table sets forth our consolidated statement of operations data for the years ended December 31, 2024 and 2023 and the dollar and percentage change between the respective periods (dollars in thousands, except per share data).
Other (Income) Expense, Net Other (income) expense, net includes the impact of foreign currency remeasurement, realized gains on investment securities, and all other non-operating items not included in other financial statement lines. Provision for Income Taxes Provision for income taxes reflects management’s best assessment of estimated current and future taxes to be paid.
Interest Expense Interest expense consists of interest costs and the amortization of debt discounts primarily associated with convertible senior notes. 62 Table of Contents Other Expense (Income), Net Other expense (income), net includes the impact of foreign currency remeasurement, realized gains on investment securities, and all other non-operating items not included in other financial statement lines.
Advertising and Marketing Expenses. Advertising and marketing expenses were $688.9 million for the year ended December 31, 2023, compared to $623.5 million for the year ended December 31, 2022, an increase of $65.3 million, or 10%. This increase was substantially driven by higher digital and media advertising costs related to BetterHelp. Sales Expenses.
The decrease was primarily driven by lower provider and technology costs, partially offset by higher amortization of device costs. Advertising and Marketing Expenses. Advertising and marketing expenses were $705.8 million for the year ended December 31, 2024, compared to $688.9 million for the year ended December 31, 2023, an increase of $16.9 million, or 2%.
For the 64 Table of Contents year ended December 31, 2023 and 2022, research and development costs were $124.6 million and $106.9 million, respectively. General and Administrative Expenses. General and administrative expenses were $464.7 million for the year ended December 31, 2023, compared to $449.9 million for the year ended December 31, 2022, an increase of $14.8 million, or 3%.
General and Administrative Expenses. General and administrative expenses were $435.5 million for the year ended December 31, 2024, compared to $464.7 million for the year ended December 31, 2023, a decrease of $29.2 million, 65 Table of Contents or 6%.
The increase in net revenues was primarily driven by higher chronic care program enrollment and adoption, as well as higher telemedicine product revenue, including higher revenues from our Primary360 offering.
Integrated Care total revenues increased by $60.1 million, or 4%, to $1,528.9 million for the year ended December 31, 2024. The increase in net revenues was primarily driven by higher chronic care program enrollment and adoption, as well as higher telemedicine product revenue.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeItem 7A. Quantitative and Qualitative Disclosures About Market Risk Interest Rate Risk and Foreign Currency Exchange Risk Cash equivalents that are subject to interest rate volatility represent our principal market risk. We do not expect cash flows to be affected to any significant degree by a sudden change in market interest rates as our Notes bear fixed interest rates.
Biggest changeItem 7A. Quantitative and Qualitative Disclosures About Market Risk Interest Rate Risk and Foreign Currency Exchange Risk Our cash and cash equivalents are subject to interest rate volatility, which impacts the amount of interest income earned, and represents our principal market risk.
Our short-term investments are comprised of a portfolio of government and institutional prime money market funds with maturity durations of one year or less. No Client represented over 10% of consolidated revenues for the years ended December 31, 2023 or 2022. For the Integrated Care Segment, a significant portion of our revenue is derived from large enterprises, mainly health plans.
Our cash equivalents are primarily invested in institutional money market funds. No Client represented over 10% of consolidated revenues for the years ended December 31, 2024 or 2023. For the Integrated Care segment, a significant portion of our revenue is derived from large enterprises, mainly health plans.
We do not enter into investments for trading or speculative purposes. We operate our business primarily within the U.S. which accounts for approximately 86% of our revenues. We have not utilized hedging strategies with respect to our foreign currency exchange exposure as we believe it is not expected to have a material impact on our consolidated financial statements.
We do not enter into investments for trading or speculative purposes. 69 Table of Contents We operate our business primarily within the U.S. which accounts for approximately 84% of our revenues. We have not historically utilized hedging strategies with respect to our foreign currency exchange exposure, however we may begin to do so.
Financial Statements and Supplementary Data Our Consolidated Financial Statements are listed in the Index to Consolidated Financial Statements and Supplemental Data filed as part of this Annual Report on Form 10-K. Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure None.
For the BetterHelp segment, there is no significant concentration risk as substantially all revenue is generated from individuals in the direct-to-consumer market. Item 8. Financial Statements and Supplementary Data Our consolidated financial statements are listed in the Index to Consolidated Financial Statements and Supplemental Data filed as part of this Annual Report on Form 10-K. Item 9.
For the year ended December 31, 2023, revenue from the five largest customers was 34% of total Integrated Care segment revenue. For the BetterHelp segment, there is no significant concentration risk as substantially all revenue is generated from individuals in the direct-to-consumer market. 68 Table of Contents Item 8.
Revenue from the five largest customers was 31% and 34% of total Integrated Care segment revenue for the years ended December 31, 2024 and 2023, respectively.
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A 1% change in interest rates would result in a change of interest income generated from our cash and cash equivalents by approximately $12.3 million over the next 12 months. We do not expect cash flows related to our convertible senior notes to be affected by a sudden change in market interest rates as they bear fixed interest rates.
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For further information, see “Risk Factors—Risks Related to Our Business and Industry—We operate in a competitive industry, and if we are not able to compete effectively, our business, financial condition, and results of operations will be harmed,” “—A significant portion of our revenue comes from a limited number of Clients, the loss of which could have a material adverse effect on our business, financial condition and results of operations” included elsewhere in this Annual Report on Form 10-K.
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Changes in and Disagreements with Accountants on Accounting and Financial Disclosure None.

Other TDOC 10-K year-over-year comparisons