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Boston-based American Well Corp (NYSE:AMWL) has announced an amendment to the employment agreement with one of its top executives, according to a recent filing with the Securities and Exchange Commission. The telehealth company's modification to the contract pertains to Kathy Weiler, the Chief Commercial & Growth Officer, and is effective as of Thursday.
Under the new terms, if Weiler, who has been with the company since April 2023, leaves her position without a "Good Reason" on or after June 1, 2025, she will be entitled to a range of benefits.
These include her accrued compensation, any unpaid annual bonus, a pro rata bonus for the year of termination based on actual performance, a year's base salary paid over 12 months, and immediate vesting of certain unvested equity awards. Additionally, Weiler will receive COBRA health benefits for a year following her departure.
The agreement also stipulates that the company will cover up to $15,000 of Weiler's legal fees related to the amendment. The details of the compensation and benefits are designed to avoid triggering excise taxes under Section 4999 of the Internal Revenue Code.
The amendment comes as part of the company's ongoing adjustments to its executive compensation arrangements. American Well, incorporated in Delaware and headquartered at 75 State Street (NYSE:STT), Boston, Massachusetts, operates in the business services sector, providing telehealth services that have seen significant growth in recent years.
In other recent news, American Well Corp reported a favorable second-quarter 2024 revenue of $63 million, exceeding consensus estimates. The company's adjusted EBITDA loss of $35 million outperformed the projected $40 million loss. In light of these results, TD Cowen has increased the price target for the company to $12.00, up from the previous $2.00, while maintaining a Hold rating on the stock.
American Well Corp has also confirmed its revenue outlook for 2024 and improved its adjusted EBITDA forecast by $10 million, citing effective cost management strategies. The company is making strides with expansions and renewals, reflecting customer satisfaction with its Converge platform.
In addition, the company has received initial positive feedback from the Defense Health Agency (DHA), and the deployment of its services remains on track. American Well has also undergone leadership changes, with Co-founder Roy Schoenberg transitioning to Executive Vice Chairman of the company's Board of Directors, and Ido Schoenberg assuming the role of sole Chief Executive Officer.
InvestingPro Insights
In light of American Well Corp's (NYSE:AMWL) recent executive agreement amendment, investors may be contemplating the company's financial health and prospects. According to InvestingPro data, American Well holds a market cap of $125.1 million, with a significant negative price-to-earnings (P/E) ratio of -0.4, which reflects the company's challenges in achieving profitability. The revenue for the last twelve months as of Q2 2024 stands at $254.91 million, indicating a contraction of 7.27% compared to the previous year.
InvestingPro Tips suggest that while American Well maintains more cash than debt, signaling a degree of financial stability, analysts are not optimistic about the company turning a profit this year. Additionally, the company is experiencing a rapid cash burn and the valuation implies a poor free cash flow yield. Despite the short-term liquidity, with liquid assets surpassing short-term obligations, the stock has suffered a significant decline over the last six months, and it does not offer a dividend to shareholders.
For investors seeking a deeper dive into American Well's financials and future outlook, there are additional InvestingPro Tips available at https://www.investing.com/pro/AMWL, including analysts' revised earnings expectations and the company's profitability track record over the last twelve months.
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