Teladoc Health, Inc. 2026 Q3 Earnings Call

Today, after the market close, we issued a press release announcing our third quarter 2026 financial results. This press release and the accompanying slide presentation are available in the investor relations section of the teladochealth.com website. On this call to discuss the results will be Chuck Divita, Chief Executive Officer, and Mike Grasher, Chief Financial Officer. During this call, we will also discuss our outlook, and our prepared remarks will be followed by a question and answer session. Please note that we will be discussing certain non-GAAP financial measures that we believe are important in evaluating our performance. Details on the relationship between these non-GAAP measures to the most comparable GAAP measures and reconciliations thereof can be found in the press release that is posted on our website.

During this call, we will make forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. Examples of forward-looking statements include, without limitation, statements regarding our financial and operational outlook, the timing, availability, market response, and performance of new products, including Teladoc One, expected BetterHelp insurance revenue and exit run rate, expected cash pay trends, provider network capacity, advertising and marketing spending and efficiency, the timing and impact of our BetterHelp insurance rollout, and the expected benefits of the actions we are taking. Such statements are based on management's current expectations and assumptions and are subject to risks and uncertainties that could cause actual results to differ materially. Please refer to the cautionary statement in today's earnings release and the risk factors in our most recent Form 10-K and Form 10-Q, including risks relating specifically to each of our reporting segments.

I would now like to turn the call over to Chuck.

Thanks, Mike. This quarter reflected solid execution across the business and underlying traction on initiatives supporting our strategic priorities. There's more work ahead, but we're encouraged by the progress made in the quarter. Before I get started, I would like to welcome Mike Grasher, our new Chief Financial Officer, to the call. Mike joined in late August and brings over 12 years of CFO experience at both publicly traded and privately held companies. We're excited to have him on board, and you'll hear from Mike in a moment when he covers our third quarter results in more detail and our outlook. As we look at the business today, we remain highly focused on advancing the priorities we believe are most important to the long-term success of the company.

With respect to the third quarter results, consolidated revenue came in near the upper end of our guidance range and adjusted EBITDA above guidance, with both segments contributing to the quarter's performance. Integrated Care delivered revenue near the high end of the guidance range and adjusted EBITDA margin above guidance. BetterHelp's revenue was also in the upper end of the guidance range, driven by strong insurance revenue growth and better than anticipated cash pay performance. We do continue to expect ongoing challenges in cash pay going forward for the reasons we've spoken about previously. As we consider the market more broadly as a company, we continue to see opportunities for virtual care to play an increasing role in addressing key challenges in healthcare by helping address rising healthcare costs and affordability challenges through solutions designed to lower costs, increase access, and deliver outcomes.

By leveraging our services, clinical breadth, and technology to improve the health and wellbeing of people, including those impacted by chronic disease. By championing the importance of mental health to overall health and creating access to services at scale through both of our segments. By helping alleviate pressure on the healthcare delivery system, extending provider capacity, and deploying purpose-built technology to support virtual care. We believe we are well-positioned against this backdrop, and these themes underscore our organizational focus and the four key strategic priorities we are advancing to drive market differentiation and performance. I'll touch on each priority and provide an update on progress since our last earnings call. Our first priority is enhancing our Integrated Care solutions for the U.S. market to deliver greater value and impact for clients and the people we serve. This has been a key driver of our innovation agenda.

In July, we announced Teladoc One, a first-of-its-kind offering and comprehensive care model that goes beyond condition-specific programs to help detect health risk earlier, engage individuals more comprehensively, and scale outcomes across populations. The underlying care model is delivered through a multidisciplinary care team, complemented by adaptive AI-driven insights from our Pulse intelligence engine, and uniquely leverages our clinical breadth, technology, engagement, and support capabilities. During the quarter, we moved from announcement towards execution, including activating initial launch partners, beginning to engage patients in the new care model, and preparing for broader market availability in 2027. As with any new offering, we expect the pipeline and commercial momentum to build over time.

We are encouraged by the level of client engagement and member feedback on Teladoc One at this point, reinforcing our view that clients are looking for solutions that can deliver a more connected experience, address more care needs, and demonstrate greater accountability for outcomes and impact. We also continue to advance initiatives to increase consumer awareness of our services and make it easier for people to access them. This includes enhancements to our Teladoc Health app and digital experience, sunsetting legacy platforms, and expanding our presence with other consumer-facing organizations. The overarching goal is to broaden our reach and further support the ability for people to benefit from our services. Taken together, we believe these and other initiatives will further our ability to create greater value for clients and members and serve to further strengthen our competitive differentiation.

Another key priority is to build on our global position to serve unique market needs, including through our hybrid care models within Integrated Care that I've spoken about before. Hybrid care, which has been an important source of growth outside the U.S., supports local care delivery organizations by bringing virtual clinical services to physical care settings through our technology. We believe the market dynamics supporting the adoption of our hybrid care models in other countries are also increasingly prevalent with hospitals and health systems in the U.S., including healthcare workforce and capacity challenges, financial pressures, and the need to improve access for underserved and rural communities. As a result, we see an opportunity to leverage our experience in hybrid care within the U.S. to support future growth.

To advance our position, last week, we completed the acquisition of Teledine Health, which provides virtual clinical services to U.S. hospitals and health systems, including leveraging Teladoc's technology to deliver virtual services in physical settings. This acquisition expands our ability to provide services to this part of the healthcare market, in addition to the technology products we are offering them today. We are excited to work with the Teledine team in this more strategic manner as we build our hybrid care business in the U.S. We also continue to innovate the underlying technology utilized in this area. For example, earlier this month, we introduced new AI-powered capabilities integrated within our Solo platform that bring contact-free vital sign measurement and ambient clinical documentation directly into clinical workflows. These capabilities are designed to help reduce administrative burden, improve efficiency, and support patient care.

Our third priority is leveraging our scaled position in mental health, in Integrated Care and BetterHelp, to address the unmet need and underlying demand for these services. With respect to BetterHelp, the business continues to undergo an important pivot towards more of an in-network model in the U.S., given ongoing pressure in the cash pay market. We believe expanding insurance access can help create a more durable position for BetterHelp over time. As discussed in the second quarter earnings call, we are executing important actions to lean into this insurance opportunity and scale that part of the business, including building on the national footprint we established during the second quarter. These include initiatives to expand network capacity, evolve BetterHelp's advertising and marketing approach to increasingly reflect insurance objectives, and reduce near-term emphasis on non-U.S. markets to realign resources.

While there is considerable work ahead, we are seeing constructive initial traction from these initiatives in terms of their intended impact. Insurance revenue for the quarter was $32 million, which exceeded the high end of the range of our expectations. Weekly insurance-covered sessions have continued to grow and recently achieved 27,000 sessions per week, representing an annualized insurance revenue run rate of over $140 million on that basis. This compares to the $110 million annualized revenue run rate from weekly sessions referenced in our second quarter earnings call. We also continue to see the scaling of insurance reflected in overall business metrics, including 36% of acquired U.S. users in the third quarter coming from insurance, up approximately 8 percentage points from the second quarter. From a capacity perspective, over 3,000 therapists were added to the network during the quarter, bringing the aggregate number that had been credentialed to over 11,000.

While early, other metrics reflecting available capacity have generally trended positively since the second quarter, including levels of capacity on a market and payer basis, as well as therapists active on the platform and those accepting new patients. We are also making improvements to our platform, including scheduling and matching capabilities, streamlining provider workflows, and new technology and AI-enabled tools to reduce administrative burden. In addition, local market dynamics are being continuously assessed and targeted adjustments made to support long-term network capacity and expansion, including respective therapist compensation models. As we saw in the third quarter, BetterHelp continues to adapt its advertising and marketing approach to reflect insurance priorities.