Teladoc’s first quarter results surpassed Wall Street’s revenue and EPS expectations, providing a measure of reassurance to investors. Management identified several factors behind the recent performance, including execution of its member expansion strategy in the Integrated Care segment and ongoing adjustments to pricing and user engagement at BetterHelp. CEO Chuck Divita highlighted the acquisition of UpLift, aimed at strengthening Teladoc’s position in virtual mental health, as well as the importance of expanding integrated care offerings. Additionally, CFO Mala Murthy pointed to headwinds from increased member onboarding, changes in revenue mix, and the impact of onboarding large populations like Tricare, which initially depresses per-member revenue while offering future upsell potential.
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Teladoc (TDOC) Q1 CY2025 Highlights:
- Revenue: $629.4 million vs analyst estimates of $618.9 million (2.6% year-on-year decline, 1.7% beat)
- Adjusted EPS: -$0.22 vs analyst estimates of -$0.36 (38.9% beat)
- Adjusted EBITDA: $58.09 million vs analyst estimates of $53.54 million (9.2% margin, 8.5% beat)
- The company reconfirmed its revenue guidance for the full year of $2.52 billion at the midpoint
- EBITDA guidance for the full year is $283.5 million at the midpoint, below analyst estimates of $293.2 million
- Operating Margin: -19.2%, down from -13.5% in the same quarter last year
- U.S. Integrated Care Members: 102.5 million, up 10.7 million year on year
- Market Capitalization: $1.4 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions Teladoc’s Q1 Earnings Call
- Jessica Tassan (Piper Sandler) asked about the impact of weekly billing on churn and revenue per member at BetterHelp. CFO Mala Murthy explained that while weekly offers increase user conversion, they also raise churn, but the net effect remains positive relative to monthly offers.
- David Roman (Goldman Sachs) pressed for clarity on declining revenue per member and the balance between profitable growth and expanding membership. Murthy cited the lag between onboarding large cohorts and cross-selling higher-margin services, while CEO Chuck Divita highlighted ongoing investments in technology and chronic care to drive future value.
- Daniel Grosslight (Citi) requested details on BetterHelp margin improvement in the second half of the year. Murthy pointed to incremental insurance revenue from UpLift, international expansion, and a planned pullback in ad spend as factors driving expected improvement.
- Eduardo Ron (Truist, for Jalindra Singh) inquired about customer acquisition cost trends at BetterHelp. Murthy noted that overall CAC remained stable and that improved conversion from weekly pricing supported favorable trends, with no significant difference between U.S. and international markets.
- Charles Rhyee (Cowen) questioned capital deployment strategy, including why share buybacks are not prioritized given current valuation. Murthy and Divita stated capital is being allocated to strategic acquisitions and debt repayment, but buybacks remain under consideration as future opportunities arise.
Catalysts in Upcoming Quarters
In future quarters, our team will focus on (1) the pace of insurance-enabled user growth and engagement following the UpLift integration at BetterHelp, (2) evidence of successful cross-selling and upsell within newly onboarded integrated care member cohorts, and (3) the effectiveness of cost control initiatives in offsetting margin pressures from tariffs and macroeconomic factors. Ongoing product enhancements and international expansion will also be monitored for their contribution to sustainable growth.
Teladoc currently trades at $8.02, up from $7.17 just before the earnings. Is the company at an inflection point that warrants a buy or sell? Find out in our full research report (it’s free).
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