AmWell at TD Cowen Conference: Strategic Growth in Hybrid Care

On Tuesday, 04 March 2025, at the TD Cowen 45th Annual Healthcare Conference, AmWell (NYSE: AMWL) showcased its strategic initiatives in the hybrid healthcare space. The company highlighted its role as a pivotal intermediary in digital health, emphasizing both opportunities and challenges. While optimistic about growth and technological adoption, AmWell acknowledged hurdles in reimbursement and privacy.

Key Takeaways

• AmWell is optimistic about renewing its Defense Health Agency (DHA) contract, which could become its largest account.
• The Converge platform is gaining traction, with strategic clients like EleVance expanding their use of virtual care.
• AmWell aims for cash flow breakeven by 2026, focusing on cost reduction and high-margin opportunities.
• Virtual care adoption is rising, but challenges in engagement, reimbursement, and privacy persist.
• AmWell addresses investor misconceptions about telehealth, distinguishing itself from traditional urgent care models.

Defense Health Agency (DHA) Partnership

• DHA is poised to surpass EleVance as AmWell’s largest client, with a $60 million account.
• AmWell provides SaaS software to DHA, while military clinicians deliver clinical services.
• The project encompasses urgent care, behavioral health, and chronic care programs.
• Successful integration with the Cerner Oracle EHR system was achieved on time and budget.
• Continued growth is expected through Leidos and military health system deployment.

Converge Platform and Strategic Clients

• Clients prioritize a unified member experience, supported by AmWell’s platform.
• The platform hosts diverse third-party clinical programs, enhancing consumer choice.
• AI integration improves data quality and consumer experiences.
• Strategic clients, such as EleVance, are broadening their virtual care offerings.

Financial Outlook

• AmWell targets cash flow breakeven by 2026, leveraging contracted and potential deals.
• 2025 marks a return to growth, with expectations for accelerated growth thereafter.
• Cost reduction efforts have streamlined operations, boosting product margins.
• The company holds ample cash reserves, allowing for potential share repurchases.

Virtual Care Adoption and Market Trends

• Beyond urgent care, digital behavioral health programs show promising results.
• Consumer adoption of virtual care is increasing, though engagement remains a challenge.
• Technology-enabled care offers hospital efficiencies, such as virtual nursing stations.
• Challenges in reimbursement, security, privacy, and credentialing persist.
• The healthcare market is transitioning from traditional to hybrid and tech-enabled care.

In conclusion, for a detailed understanding of AmWell’s strategic direction and insights from the conference, please refer to the full transcript.

Full transcript - TD Cowen 45th Annual Healthcare Conference:

Charles, Analyst, Cowen: Good morning and thanks for joining us for this next session at the Cowen Healthcare Conference. And we’re pleased to have AmWell joining us today. And speed for the company is Ito Schoenberg, Chairman and CEO. And today’s format will be a fireside chat. So, you know, for those who aren’t aware, Emil is a unique player in the digital health space as an enabler of hybrid care for the existing healthcare system.

And so, you know, maybe to help people, you know, how would you frame where we are in the journey for development of hybrid care and what barriers, you know, do you think still remain, you know, when we think about utilization and reimbursement as well?

Ido Schoenberg, Chairman and CEO, AmWell: So Charles, thank you for having me. And I would suggest that we live in really interesting times. There is enormous opportunity and challenges in healthcare today, probably more than ever before. The most interesting phenomena is that more and more people are going online to seek care. And that’s an opportunity to democratize healthcare to make care more accessible, more efficient, more than ever.

At the same time, with AI and other technologies, there is a plethora of clinical programs of different kinds that are able to focus on specific therapeutic areas to really use technology to offer a much better clinical outcomes at a much more efficient way in a fraction of the cost. The challenge is how do you efficiently engage those people and create a single pathway for them to engage with those clinical programs in a way that is orchestrated, coordinated and allows more good measurement for those outcomes. And that’s exactly where AmWell comes in. We see ourselves as this middle tier between the tsunami of people that are going online to get care and the tsunami of clinical programs that are leveraging new technologies to provide them care in a way that is fully authorized by the sponsors is safe, secure, HIPAA compliant, private and inefficient. The opportunities right now and the challenges revolve around efficient customer acquisition costs, efficient care orchestration and the ability to create a single reporting infrastructure, data infrastructure to personalize the experience for consumers and at the same time to truly provide payers and other sponsors with what they need in order to see that their investment in those clinical programs is indeed working and justified.

Charles, Analyst, Cowen: And in that regard, where do you think the users of this, either the payers or the providers, as they are trying to tackle these issues, do you think they are fully aware of the challenges that they’re facing and or are they still kind of relying on maybe old thinking in trying to tackle some of these problems?

Ido Schoenberg, Chairman and CEO, AmWell: So in my dialogue with many leaders and organizations in the payer space and large providers, it’s very apparent that CIOs and others are very, concerned about the enormous lift of integrating different programs for both memberconsumer engagement and clinical programs. At the same time, they realize that they need to offer diversity. They need to try new things, check whether they are working or not. What we bring to the table, therefore, is really resonating with them because if you have one consumer engagement platform per design, it can the cost of acquisition can be spread upon many clinical programs. So that’s more efficient.

If you only offer a clinical program, operating your store, if you will, in this giant shopping mall is really efficient for you because you benefit from the traffic of many consumers that we offer. So I think that after many years of building the Amul platform and really explaining the benefit of technology enabled care, the market is now appreciative of what we bring to the table as demonstrated by growth in existing customers and acquisition of new ones.

Charles, Analyst, Cowen: And one of those customers obviously is the defense agency, the defense health agency here. And obviously it can be a really good, springboard hopefully, right, for AmWell. Maybe tell us a little bit more about your role, partnering with Leidos, you know, and the work that you’re doing for the Defense Health Agency.

Ido Schoenberg, Chairman and CEO, AmWell: So, as a veteran myself, personally, I want to share that I have been so proud by to have the opportunity to serve those men and women in uniform and their families. And it’s been an amazing twelve to eighteen months that we’ve been working on this project. The Leidos and the military health system chose to use the full breadth of AMOL offering, really the full extent of our platform, including different programs around urgent care and behavioral health and automated clinical programs around chronic care and so on and so forth. So it really was a very big lift that had to be implemented in the gov cloud and checking the box on many, many list of requirements that are unique to the government environment. I’m pleased to say that through this very fruitful and enjoyable collaboration with Leidos and other partners like Oracle, Cerner and so on that are involved in this project, we are now in a situation where most of this integration, if not all of it, is behind us.

A lot of the deployment already took place, and the rest of it, geographically, year. So the project was delivered on time and on budget, which is not always common in those environment that are fairly complicated. And we couldn’t be more pleased. We are focusing on continuing to deliver to this very important customer. And we obviously believe that once we do that, the success will not be lost on other government agencies that could benefit from a similar process.

Charles, Analyst, Cowen: And as we think about the full rollout as it gets completed this year, what is Amoil’s role and responsibility to the DHA going forward? Do you expect a certain level of your OpEx being devoted to DHA on an ongoing basis?

Ido Schoenberg, Chairman and CEO, AmWell: So as a reminder, in this project, we are only providing SaaS software. The service is offered by the great clinicians of the military, Offered to all the users, all the men and women in uniform, the families around the world are 96 nine nine point six million of them, around the world. So the opportunity for efficiency is really staggering. I don’t think we had that spectrum of exchange that is global before. But now really anyone anywhere can use services from anyone anywhere through a very complicated switchboard that we have created together, and everything is fully embedded in the successful deployment of the Cerner Oracle EHR.

So it’s really embedded in the clinical flow of every clinician and every patient. We don’t need to do anything else from our end. So the utilization is really driven by the Leidos and the military health system deployment, which is very successful and is going to continue. So we fully expect that to continue and grow naturally with us making sure that we continue to support the platform, but there is really not much development that we need to do, if any, to sustain this project.

Charles, Analyst, Cowen: And obviously, DHA is on track to be sort of the largest client for AmWell. I know on the last call you guys had been asked about sort of helping size it. Anything that you can help us in terms of the scale of it relative to your 2025 outlook for revenue?

Ido Schoenberg, Chairman and CEO, AmWell: So it’s true that they are going to be our largest customer. The largest customer before was Elavance. We reported a $60,000,000 size of that customer, and this will be bigger, significantly bigger. Unlike Eleventy and others, this is, as I mentioned earlier, a pure software deal. So it’s indeed very meaningful for Amel.

Charles, Analyst, Cowen: And you know, has this helped kind of jump start discussions with other potential customers, you know, that have watched this deployment, maybe talk about how, you know, the DHA and the successful rollout here has maybe created new opportunities either in the government space or in the public sector space?

Ido Schoenberg, Chairman and CEO, AmWell: Yes. So in the last earnings call, I mentioned that our pipeline is growing and it’s growing not only in size, but also in quality. Obviously, projects like the DHA are what we mean when we say quality. It’s software only, very broad, very, very meaningful. The price of entry into this market is very high.

It took us many, many years to get to where we are right now. You need to really qualify. You need to understand the requirements, and we’re done. We checked that box. Our platform works very well on the gov cloud system.

It integrates very well with Oracle, Cerner, which is very prevalent in the government sector. DHA that we are engaging in dialogue in. Some of them are quite sizable. Having said that, you should realize that timelines in this sector are long. Sales cycle is considerable.

But we are very optimistic that we are going to grow beyond DHA to other opportunities in this sector because we are a proven entity. Because what we’ve done really was delivered on time, on budget and is generating significant value in way of improving access to care at a fraction of the cost. In these current days, people are very focused on efficiency and on strengthening our military and our defense systems.

Charles, Analyst, Cowen: Yeah. And then if we think about, I think the one thing that folks are obviously focused on is the renewal because we’re coming to the sort of the end of the initial term. And, but obviously, the DHA will be an ongoing entity. Just maybe just kind of describe sort of how that process is going. And I know you expressed confidence on the last call, but just maybe kind of just remind us where we’re at with that process.

Ido Schoenberg, Chairman and CEO, AmWell: So the headline is that we are we continue to be very optimistic about the renewal, but it’s not done until it’s done. We don’t really control it at the end of the day. But here is what we know. We know that the DHA announced publicly a sole source to Leidos in Q4 of the year. We know that they named our platform as part of the sole sole grant.

We know that the deployment is going very well and the customer is very happy. And we also know that our project is bundled together in the same vehicle with something that is truly mission critical in addition to what we do, which is the EHR for the military. We also know that the renewal timeline is this summer. So it’s it’s pretty close. So we know pretty soon.

And I don’t see a scenario where the military will be left without those critical infrastructure elements that enable care to so many people. So also the good news is we don’t need to wait for long. This should be coming fast and furious to all of us fairly soon.

Charles, Analyst, Cowen: I guess just in that regards, no concerns given obviously a lot of, you know, what’s the right way to say it? A lot of disruptions potentially, in the government right now in terms of, you know, if you think about all the the Doge stuff as well, a lot of focus on spending. Any concerns that that might trickle through, defense budget, etcetera?

Ido Schoenberg, Chairman and CEO, AmWell: So, I really recommend listening to the last earning call of Leidos, where Tom, the CEO, gave a really nice overview about where they sit and the value that they provide in the current environment. He is very optimistic and I agree with him that what we do really saves a lot of money and has some critical functions that are truly impossible to do without. So we feel quite good about our alignment with the priorities of the current administration, that are not very different from what we said before. There is very little bipartisan dispute about the importance of our military and the importance of delivering care at a lower cost and improve the outcomes.

Charles, Analyst, Cowen: Okay. That’s helpful. Maybe switching gears a little bit and talking more broadly about the Converge platform and obviously which is driving which is the underpinning all of this. Your other strategic clients, you mentioned, EleVance as well and I know CVS is another one of them. How has sort of the experience been with them, you know, now that we’re sort of, you know, gotten through a lot of the implementation stage and, you know, what have you learned from these clients, that you think could help you as you look forward to trying to win other strategic, clients in the future?

Ido Schoenberg, Chairman and CEO, AmWell: So without going into specific client information more generally, as I mentioned earlier, clients realize that it’s very, very important to create one member experience, one patient experience. That means that the customer acquisition cost is well spent, but it’s also very good for people. You don’t want to go to million places to get your care. You want to do that in one environment, which in way of example is not unlike online retail. We all enjoy going to Amazon and buying everything that we need in one place through a reproducible, consistent, simple experience.

So that’s one of the unmet needs that we are filling. In addition to that, you do want to have a lot of choice in diversity. Do want to have many clinical programs. And our ability to be very friendly to the likes of Dalio and VIDA and so many other third parties that we now host inside our platform is not lost on people. A lot of effort and focus is on the quality of our data and our analytics.

And with AI, that effort is really resonating with our customers. Yesterday, we announced a new leader in Amwell, Dan Zemansky, who came from Amazon. He focuses on AI, and we brought him in also to further accelerate our effort with this technology to further improve the simplicity and the elegance of the consumer experience, to improve better routing and interaction with clinical programs, and to be better custodians for customers so they can have the information they need to prove the outcomes for their ASO and other customers or their ability to analyze at risk lives for them. So I think that our many year investment in building the annual platform is finally paying off. It’s resonating.

People understand what we do. They understand the value of what we do. The fact that we are doing it for many years at large scale is important because those projects are complicated and have their share of risks in multiple areas. So we feel that there is a lot of upside from where we are for Amoil and for our customers.

Charles, Analyst, Cowen: And but if we think about where the consumer is, and I think when you look at surveys either that we’ve done or others have done, it does seem that the consumer is more open to and willing to get care virtually. I think a lot of it though is still maybe focused on urgent care. But when we think about the ability to deliver primary care or even chronic care management in a virtual kind of setting. There still seems to be the adoption doesn’t seem to be as quick as you might think. And what do you think needs to happen maybe to help accelerate that?

Ido Schoenberg, Chairman and CEO, AmWell: So what we know is that the clinical programs beyond urgent care are phenomenal. So when you have digital behavioral health, for example, we know, as we proved in the military and in the NHS in The UK and in other places, that we can really fight depression, anxiety, important challenges for consumers using this program. We know with VIDA, using GLP-one, that if you think about obesity, those online programs that are hybrid program that include a physical element and an online element really, really work. And I can go on and on, but I think you understand the the direction. On the flip side, one of the challenges is engagement.

If you ask SORD about what would it take to find the people that have back pain right now, that’s super expensive and really hard to justify on a narrow use case of back pain treatment. The fact that we created a shopping mall where everybody benefit from a single source of food traffic, if you will, is really, really helpful. So I would argue that it’s not binary. I would agree that it’s a process. But what we see very clearly is that more and more people are going online, you’re right, initially for simple things like urgent care.

We know that when they use our platform to for other things, they have a phenomenal experience that has very important ROI for their sponsors. So it’s very clear where the trend is. The trend is that more people are going to use more clinical programs across the full care continuum very, very soon. And in order to enable that, you need to route them into a singular experience and you need to have one reporting infrastructure. And that’s really our goal.

Charles, Analyst, Cowen: And can that also be transferred over to the provider market? Because I think early on in the ML story, right, we were very focused on providers and and and we would look at the early adopters like Cleveland Clinic or Intermountain and and can, you know, and and they would be really strong advocates for where sort of this integrated idea of virtual care and extending care can be. But, broad swaths of the provider market still have yet to really fully embrace it, right? I think they’re all using around the edges. But is that also the barrier like for them to try to put together a virtual program which would be piecemeal, you know, and what they really need is maybe like a single kind of, also like a one stop shop for them to be able to fully deploy?

Ido Schoenberg, Chairman and CEO, AmWell: So it’s fascinating. Right? Because the naive view of providers where, doctors are going to spend most of their time in front of video screen talking to the patient versus seeing them in person is not panning out. Many people, when they can, prefer to see their doctors in person, and there is a finite amount of time where people go virtually. But that’s not to say that technology enabled care cannot have a giant impact on health systems as well, And that health system could not participate in the vision that I articulated a few minutes ago.

So let’s start from the basics. Technology enabled care can really create enormous efficiency in hospitals. For example, when you need to bring in a psychiatrist to an ER to free a bed, that’s very, very helpful. When you have a virtual nursing station in your room and you can discharge a patient much sooner or admit a patient much sooner, that’s very, very helpful. Telestroke in a remote hospital bringing a specialist when needed, that’s very, very helpful.

Or a program that helps to keep in touch with the patients to avoid readmissions, we know that works. So that’s one area that is important. Another area is that health systems can not do everything. Some hospitals don’t have behavioral health. Some hospital don’t have, as I mentioned, neurology surgeries for service for for for stroke and so on and so forth.

The ability to create a platform that engages the patients with doctors in the health systems, but also offers programs to complement what they do in a way that is truly integrated in the EHR is something that more and more health systems are talking about. Longer term, we believe that those health systems will participate in the clinical programs that are offered by payers and you’re going to see one continue. We build the AML platform with the sole code base that is addressing both providers and payers, which is fairly unique for Amwell. We’re not holding our breath. At this point, they do what they do with different drivers, business drivers, and we check a lot of boxes for both.

But we really see a multi year opportunity to combine those systems in a way that is totally integrated. There are many examples where you have a dominant pair and in dominant health system operating the same territory and they could really benefit from connecting what they do. Just one example, the dominant health systems could be very helpful in closing gaps in care for the payer that resides in the same territory. And this is not academic. We are having those discussions with some of our customers that realize that they really operate and engage the same individual as a member that is also the patient for those health systems.

Charles, Analyst, Cowen: I guess the following question to that would be though that there isn’t the biggest friction, not necessarily a technology issue or a system issue. It’s really more of a reimbursement issue of like you know, where the value is and, you know, how do you pay appropriately, like, you know, the structure for preventative care or, you know, generating savings or better outcomes. So, you know, having the AMLO platform is all and good, but, you know, isn’t the limiting factors a little bit outside your control in that sense?

Ido Schoenberg, Chairman and CEO, AmWell: Totally. Look, this is not easy. Reimbursement is a giant issue, but there are other issues. Security, privacy, credentialing, for example, state lines. I mean, there are million things that you need to think about.

I’m not suggesting that it’s easy. But overall, the entire healthcare market is interested in cost effective care, improving access to more affordable high quality care. And that’s the most important trend that eventually will arrange everything around that. The movement from brick and mortar care into hybrid care and then technology enabled care is a giant revolution that we are experiencing as we speak. But the path of least resistance at the end of the day will bring all the players to realize what I’m saying, and we’re seeing some significant steps in reality in everything that we’re doing.

You mentioned EleVance earlier. They used to offer only urgent care. Now they offer different 20 programs for the different national accounts, 800 national accounts, because the full care continue. So this is happening as we speak, and some of those are things like second opinion services from Cleveland Clinic, who is a health system and is now part of their own offering. So it will take time, but the trend, I think, is very, very clear.

Charles, Analyst, Cowen: That’s helpful. Then if we translate that for Amwell’s business and maybe just help us think through, obviously, you guys talked about being on track to reach breakeven in ’twenty six and obviously, we’ll have a very strong balance sheet and cash position even at that time. How should investors then think about sort of the sort of like a sales momentum, bookings momentum as we go through this year and into next year? Obviously, the DHA coming on is a big piece of that. But as we as you just described as the market starts to understand or is learning about sort of the opportunities through sort of this idea of technology enabled care, when do you think investors should start to expect or will see that kind of translate into sort of a sales momentum?

Ido Schoenberg, Chairman and CEO, AmWell: So it already is. I mean, this year, we are seeing growth for the first time in a while and we fully expect this growth to accelerate. Our cash flow breakeven plan for ’26 is based on very little go get. It’s based on contracted or extremely likely arrangements that we have. At the same time, we spend a lot of time on this conversation today talking about how well our offering resonates.

And so we really see very good reason for excitement as it relates to demand for our technology enabled platform. At the same time, it’s hard to ignore the enormous focus measures that we took in costs. We are moving from a very large loss to a quarter of the loss this year. That’s very, very significant. So and we did that by really aligning on the high margin opportunity for Armwell and divesting anything else, including the APC divestment in way of example.

That’s not the only measure. So we are entering ’25 in a situation where our cost structure is dramatically smaller. Our pipeline is growing. Our the margin on our product is much higher if you think about the product mix and demand is there. So I see a very good probability of executing on our plan and growing in a multiyear growth opportunity years after that.

Charles, Analyst, Cowen: And given sort of the visibility that it seems like you have and all the efforts that you’ve done in terms of reducing the operating expense base, etcetera, knowing that you’re going to be coming out of this with $100,000,000 plus in cash on the balance sheet, Can you talk a little bit about then how you’re thinking of capital deployment? And could we see things like maybe a bigger share repurchase given sort of the value that maybe is not fully recognized yet?

Ido Schoenberg, Chairman and CEO, AmWell: So our plan calls for at least JPY150 million, just to make sure, and we have very high degree of confidence in realizing this plan. We understand that we’re going to have ample cash in the situation that we are profitable. And definitely, repurchase is extremely tempting in the current place that the stock is. That’s one of the options. There are others.

And right now, we are laser focused on our path to profitability. That’s the most important thing that we are doing right now and everybody in the company is really has their eye on this ball. Once we accomplish that, I agree with you, there are tons of good things that we could do.

Charles, Analyst, Cowen: Great. And then maybe the last question here. Then perhaps what do you think at this point investors perhaps don’t understand or fully appreciate about AmWell at this time?

Ido Schoenberg, Chairman and CEO, AmWell: Well, I think that telehealth got a bad name by many companies over the years. It’s associated with what became commodity urgent care online provider supervision. The market is so much different, and I’m really appreciating the opportunity for speaking with you today to talk about the fact that what we do has little to do with that legacy. Not everybody fully understands that. You need to be a little bit, involved in the market, but everybody will once we’re through with this process.

Our numbers, I think, are showing very, very clearly with improved EBITDA, with improved profitability. And we’re going to basically make sure that everybody understands what we do in way of execution.

Charles, Analyst, Cowen: Great. Well, we’ll look forward to that and I think with that we’re at time. So Ito, thanks for being with us today.

Ido Schoenberg, Chairman and CEO, AmWell: Charles, thank you for having me. It’s a pleasure.

Charles, Analyst, Cowen: And thank you, everyone.

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