Teladoc at Goldman Sachs Conference: Strategic Focus on Growth

On Wednesday, June 11, 2025, Teladoc Inc (NYSE:TDOC) presented at the Goldman Sachs 46th Annual Global Healthcare Conference. CEO Chuck Davita provided a strategic overview of the company’s priorities, highlighting strengths such as its leadership in virtual care, while acknowledging challenges like the transition from subscription to utilization-based models. The company aims to leverage its market position to enhance value for clients and shareholders.

Key Takeaways

• Teladoc’s strategy focuses on integrated care, mental health, international expansion, and operational excellence.
• The company is transitioning from subscription-based to utilization-based models to boost engagement.
• International business is growing at double-digit rates, with significant expansion planned in Europe, the UK, and Canada.
• Recent acquisitions aim to enhance capabilities and market reach, though they pose a slight headwind to adjusted EBITDA.
• BetterHelp is shifting towards benefits coverage to improve conversion rates and growth.

Financial Results

• Revenue: Transition to utilization models is impacting top-line growth, but utilization and visits are increasing.
• Members: Integrated Care business has over 100 million members, with a 12% year-over-year growth in Q1.
• Mental Health: 62% penetration in the Teladoc GenNet base, up from 49% two years ago.
• International Revenue: Accounts for 15% of Integrated Care, with a potential 50% growth over the next few years.
• Utilization: Visit utilization levels are in the mid-single to mid-high single digits.
• BetterHelp: Despite an 80% drop-off rate, it remains a close to $1 billion business.

Operational Updates

• Integrated Care: Unified clinical capabilities and using data and AI for intervention initiatives.
• Mental Health: BetterHelp is incorporating benefits coverage to increase conversion rates.
• International Expansion: Focus on public health systems and hybrid models in Europe, the UK, and Canada.
• Cost Structure: Significant reductions in technology, development, and administrative costs.
• Acquisitions: Uplift and Catapult acquisitions aim to expand insurance coverage and enhance preventative care.

Future Outlook

• Top-Line Growth: Targeting acceleration through international expansion and increased engagement in the U.S.
• International Expansion: Expecting double-digit growth, with a 50% increase in revenues over the next few years.
• BetterHelp: Projected growth driven by benefits coverage in 2026.
• Profitability: Anticipating moderation in the shift from subscription to visit-based models.

Q&A Highlights

• Member Engagement: Emphasis on growing engagement and utilization within the existing member base.
• M&A Strategy: Focus on strategic priorities, particularly in international markets.
• Capital Allocation: Balanced approach between organic investments and strategic acquisitions.
• EBITDA: Company is repositioning and will soon provide updates on its financial trajectory.

For further details, please refer to the full transcript below.

Full transcript - Goldman Sachs 46th Annual Global Healthcare Conference 2025:

Operator: Very pleased to welcome the management team from Teladoc Chuck Davita, Chief Executive Officer and Mal Amorthy, Chief Financial Officer. Very much appreciate you taking the time to participate in the conference and look forward to getting an update on Teladoc here.

Chuck Davita, Chief Executive Officer, Teladoc: Great. Thanks for having

Operator: Maybe I’ll start with you’ve been about a year. Maybe just start by giving us some of your reflections on how the past year has gone and maybe if you could highlight some of the things that kind of surprised you positively and some of the areas that you’re like, I don’t know what I was getting myself into.

Chuck Davita, Chief Executive Officer, Teladoc: Yes. Actually, I celebrated my one year anniversary yesterday. So there was no cake or anything that showed up. But yes, one year yesterday. I’m as excited as I was when I came in, in terms of the potential that we have to use virtual care to impact some of the challenges that we have in health care.

I think coming in, I was a pretty informed about the company. I was a customer for many years. I was a health plan executive, obviously, a market observer and through the interview process. So that was all there. I think when I came in, I was pleasantly surprised by a number of things.

Clearly, the assets that we had, the level of talent, the market position that the company had built, all of that, but also saw some things that we needed to change and some opportunities and some challenges that we needed to address. So really been going through the company pretty deeply, obviously meeting with customers and employees and investors and so and doing a deep dive on each one of our businesses kind of what the position we have, what’s the outlook, where we need to make investments in the strategy going forward. I think also early on making sure that we had an ability to set some appropriate expectations with the public markets. I’m sure you know this, but the first quarter that I joined, we made the decision to pull guidance on some of the elements of our guidance with some of the challenges in BetterHelp. Didn’t make that decision lightly, but we thought that was appropriate.

But we also wanted to make sure we were sharing messages along the way in terms of where the company is, where we’re headed. And we did ultimately reinstate guidance for 2025 and want provide some longer term outlook as well. And then in January, I think we were in a good spot to share some strategic priorities that we had. We did that at a health care conference out West in early January and we’ve been pretty focused on executing against those.

Operator: Yes. And maybe we could talk go into the strategy a little bit more because sometimes a new CEO takes over there’s a digestion period then there’s an analyst meeting or some form is like the grand unveil of like what is the strategy going forward? What’s the mark you want to put on the company? Is that something that you’re planning to host? Or when do you think we’ll hear kind of the Chuck D’Vita strategy version of Teladoc?

Chuck Davita, Chief Executive Officer, Teladoc: Yes. Well, I mean, I’d like to take some time here to kind of unpack that a bit if you will. Please. The company has, as you said, coming in having a year behind me. The company, I’m sure you all know this, but has played a really important, what I would call a pioneering role in the adoption and scaling of virtual care as we know it today and generated this market leading position in The U.

S. As well as operating globally as well. So with that in mind, there’s four areas that we’re focused on from a strategic perspective. And then I want to give some examples of what we’re doing about that. The in integrated care, particularly in The U.

S, it’s all about enhancing our offerings to drive more value for clients. we want to leverage the scaled mental health position we have to serve more people. I think that’s an important theme. expand internationally. We’ve got tremendous growth opportunities ahead of us internationally and to seize on those opportunities.

And is around operational excellence, about efficiency and effectiveness of what we do. In integrated care and particularly in The U. S, we have over 100,000,000 members at this point that we’ve grown to, over 1,000,000 people in our chronic condition management programs, over 12,000 customers of all shapes and sizes and a broad range of services millions and millions of visits each year. While that’s grown, we’ve also I think played a role in maturing the market and what the expectations of customers are. And so that including this move from subscription based models to more things that are payments based on utilization and levels of engagement and outcomes.

And so that if you think about those levers, it’s even more important for us that from a top line perspective and offsetting some of those mix shift changes. And so really looking at the various assets that we have, we think we’re uniquely positioned in that environment. So how are we going after that? Three things I would point to. we brought together all of our different clinical capabilities.

We have virtual care and chronic condition management all those things. We brought those together in one unified team. Think of it as an integrated practice, if you will. And we’re putting all of our solutions and products around that and our operating model to go after that from unified perspective, so that we can meet the broader patient needs. The thing we’re doing is we’re taking all those the data and insights that we have with the scale that I mentioned and we’re really pointing that and the engagement capabilities in ways that we can activate additional what I call intervention initiatives, things like closing care gaps, reducing unnecessary specialist spend, the ability to activate programs either ours or other people’s programs.

And all of that really aimed at driving utilization engagement and outcomes. We’ve been sharing that with our clients along the way and feel good about how that’s going to improve our value proposition going to ’26. In mental health, post pandemic, there’s been a I think a much greater recognition of the importance of mental health and the mental health needs that are out there and importance of mental health to physical health. We have in The U. S.

Integrated care business over 60,000,000 people have access to our mental health services there. And obviously with BetterHelp, we have the largest direct to consumer virtual therapy business in the world. And so with that sort of secular tailwind in terms of mental health needs and the fact that virtual care has been very widely adopted in mental health, we think there’s significant opportunities for us there. So in integrated care, it’s all about these initiatives to drive greater access and ability to take on the market need there. So we see significant growth opportunities there.

In BetterHelp and I’m sure we’ll touch on this, we’re moving the model more and more into what we call benefits coverage. One of the things observations when I came in was we had this juggernaut that had been created, but frankly missing the boat in the sense of that there’s a lot of people that drop off that can’t afford a direct to consumer model and we want to make benefits coverage available. That’s a major move that we’re making there. And then the thing we’re doing is the BetterHelp team and integrated care are working on some joint product development. So we think heading into 2026, we’re going have a much different trajectory around mental health.

The area, which is international expansion, we operate in many countries in Europe and in The U. K. And in Canada. And we if you look at those markets and you add them up, they rival the size of The U. S.

And they’re underpenetrated in virtual care. So we have really three things we’re focused on there. We see significant growth opportunity there. It’s about 15% of the revenues of integrated care. We think we can grow that business upwards of 50% over the next few years.

We are working with public health systems. As you know a lot of those countries have public health models. We’re bringing actually interestingly leveraging technology we use in our hospital health system business in The U. S. And bringing that to those markets and then expanding services on top of that.

we’re working with global employers to bring virtual care there. And we’re working on some hybrid models where we’re bringing virtual care and into the brick and mortar environment to drive growth there. So that’s what we’re doing internationally. And then the last thing around operational excellence, we’re focused a lot on our cost structure. We’ve taken out significant costs, reduced technology and development expenditures, administrative costs, stock based compensation, so the financial kinds of things.

But also we’ve got a complex business we run and there’s tons of opportunities to hone the engine. So I think when you zoom out, we’ve got I think the strategy is leveraging our strengths, leans into macro trends that are out there. We have the opportunity to create more value with virtual care and we believe drive better business value for our investors. Excellent. Maybe we

Operator: could go into a few of those in some more detail and then that was a very helpful overview. Maybe we start with integrated care. One of the things that I struggle with is thinking about the balance of going deep versus going wide. And I know that PMPM is not a metric that you give per se, but you look at the number of members you have and just divide by the revenue, looks like low levels, it would either imply low PMPM or low utilization. And one of the things that I sort of asked myself and Eric thinking about the business is like there seems a lot of focus on this 100,000,000 plus member number.

Like is that really a relevant metric? Or like how do you think about member for member size versus depth of penetration within that member base?

Chuck Davita, Chief Executive Officer, Teladoc: Yes. I think it’s a great question. So a couple of data points. The $100,000,000 is important because that means the number of people that have access to your services. But because I mentioned before the shift from subscription models to utilization models, it’s somewhat of a less important metric.

It’s all around penetration of services against that. And if you think about 100,000,000 people, I mean, estimated at $350,000,000,000 of total medical spend. And so our ability to and this is mentioned before the broad adoption of virtual care and sort of maturity of the market and somewhat commoditization of some of that. With that kind of scope and our clinical position that we have, it’s all about adding more value to those customers to access more of those dollars. So yes, that is an important metric, but I think the more important metric is the level of penetration of services that we can deliver over time.

And we’re going to do that by bringing like I said, bringing those teams together, going to customers and saying we can handle more of your health care needs than you’ve seen in the past.

Mal Amorthy, Chief Financial Officer, Teladoc: So David and let me add to that. Look, if you think about it’s a question we think about constantly, right? How do we make progress on our revenue per integrated care member PMPM, however you want to call it? And I’d say a few things. of all, if you look at the metrics we have put up on a think of it on a same store sales basis, if you were to normalize for the very significant increase in membership we’ve had over the past many quarters, In Q1 alone, it was a 12% year over year growth in members, right?

And that follows many quarters of membership growth. On a same store sales basis, we actually are slightly increasing our revenue per integrated care member. But the point is the broader point is, the way we are going to grow our revenue per member to the point that Chuck made is around a few things. For several quarters now, we have been following what we call our land and expand. So we land typically with our core telehealth.

And then over time, we expand into our other products and services, which are largely revenue accretive, right? So they will add to our overall revenue per integrated care member. Why do we think there is massive opportunity for that? It’s basically the data we have shown over the past few quarters. So if you think about as of July of mid July of last year, our mental health penetration into our own GenNet base is sixty two percent.

Now that’s a significant improvement in terms of access versus the 49% it was two years prior to that, But it still shows you there’s opportunity for us to penetrate further. Chronic care, 20%, tons of opportunity for us to penetrate further. And I would say to you the work we are doing using our data capabilities, our AI capabilities is around how do we engage more, how do we do better predictive modeling to be able to fully utilize the 100,000,000 plus member assets we have. How many other companies are there that have access to such an enormous base of membership? So it is about growing engagement, growing visits and utilization.

It is about taking advantage of the base of recruitables we have, which is the people who have access to our chronic care programs and actually enrolling them with our engagement capabilities and being able to bring them the broad base of chronic care programs we have. One of the things we talk to our clients about all the time is around the fact that we offer the breadth. And so the fact that we are able to offer both physical and mental health services is what is going to ultimately expand that revenue per member.

Operator: And is there a way to think about, I don’t know, sort of silly marketing terms, Tam to Sam, of like the $100,000,000 like what percent are actively engaged, however you define that, just to get a more sort of, I don’t know a more narrow picture of what utilization is like?

Mal Amorthy, Chief Financial Officer, Teladoc: Yes. So of all, if you think about just sort of Sam, just with our members and the services that we offer, safe to say that in The U. S, we are talking about tens of billions of opportunity there, right? So there is a very, very large and fertile ground for us to take advantage of. One would estimate around £100,000,000,000 plus of that.

And to the point Chuck made, our international is about the same size of that. Utilization levels, I would say, are still in the call it the mid single digits to mid to high single digits. How

Chuck Davita, Chief Executive Officer, Teladoc: that?

Mal Amorthy, Chief Financial Officer, Teladoc: It’s basically the percentage of the frequency of use based on the membership over the base of members we have. That’s our visit utilization. On enrollment, it’s slightly different. It’s basically how many of our members who have access to recruitables actually engage in our products and services. So I would say to you in both instances, we have tremendous opportunity in terms of with the people who have access to our programs using our capabilities to drive access to drive usage.

Now what is actually going to drive that enrollment and usage? It’s everything that Chuck said, right? It is about bringing differentiated and higher value services and making us increasingly more relevant and that is all that we are focused on from an investment, from an org structure, all of those things that Chuck just talked about from a strategic priorities perspective to be able to get that.

Chuck Davita, Chief Executive Officer, Teladoc: Yes. Think look, like I said before, we’ve got a market that Teladoc played a premier role in terms of even laying the groundwork regulatory wise to get virtual care. And we had a lot of adoption obviously with the pandemic. And fortunately companies like Teladoc were there. But you’ve seen post pandemic sort of the maturity of the market.

And so what we’re going after is and we’re bringing those teams together like I mentioned is how do we widen the aperture of the things that we can do so that we can serve more needs of people and create more value. And I think that’s what we’re going after.

Operator: And maybe we can toggle over to BetterHelp. I want to come to some of the acquisitions like Catapult in a So think that is very consistent with the strategy here. But maybe just on BetterHelp has been obviously a transition from cash pay only to now providing the option to move on to a covered program. And then I think on the February call you talked about other engagement models either pay per use or pay monthly. What is maybe just give us an update on how the business model has evolved?

Chuck Davita, Chief Executive Officer, Teladoc: Yes. I’ll make a few comments. I think of all with BetterHelp, it’s the most widely recognized brand out there. It’s not it’s hard to find someone hasn’t necessarily had some level of awareness in that. And in The U.

S, we have about 4,000,000 people that sign up or start the registration process with BetterHelp. So it’s massively larger than anything else close to it. However, over 80% of people drop off and don’t become active users and it’s because it’s cash pay and it’s expensive and obviously the consumer has been under a lot of pressure.

Operator: And that’s like the 4,000,000 January gym enrollment type phenomenon and then it peters off? No, throughout the year. Throughout the year.

Chuck Davita, Chief Executive Officer, Teladoc: Yes, throughout the year we and these are people that have a need, have awareness, obviously, BetterHelp, have a need, start the registration process, give us their e mail, take the quiz and so But when it comes down to sort of like this is what the product can cost, etcetera, you have a significant drop off and the thing that people refer to most is obviously the out of pocket costs that come with that. So and even with that, it’s still close to $1,000,000,000 business. So if you think about taking bringing benefit coverage to say we now can offer you the consumer the ability to use your benefit coverage, obviously, you’re in network, we think we’re going to have a material impact in terms of our conversion rate. You take just a one percentage point net increase in conversion off of the 80% that go away, it’s like $40,000,000 in revenue. So it’s a massive opportunity for us.

And so that’s why we’ve been pushing hard to get into that insurance space. And we can touch more on that. I think the other things will better help the other points you mentioned, it’s because it’s such a massive consumer activation machine, if you will, has a really highly engaging platform, a 70 net promoter score, 35,000 therapists and so It’s like well they’re going to continue to innovate their product, different pricing models, different features, etcetera. And the last thing I would say and then we can take it wherever you’d like to go is about 20% of the revenues of the company right now are internationally. So we’re still going to operate on a D2C basis internationally and we see continued growth opportunities there because the mental health issues aren’t just unique to The U.

S. It’s a global issue as well.

Operator: Okay. So maybe just touch on international here. Maybe just highlight some of the key markets that you’re going after and where you are kind of in the development curve both of the market, right? You point out telehealth is much lower penetrated outside The United States even in developed markets. Where are you in that kind of progression?

Chuck Davita, Chief Executive Officer, Teladoc: Yes. Think on the one the integrated care both businesses operate globally. But on the integrated care side, which I was referring to earlier, we operate in a number of different countries. But a lot of that concentration sits in Europe, U. K.

And Canada. We have a local model, so we have teams there that really understand the local dynamics and what those client needs are and market needs are. And we’re doing some really innovative things. I’m really proud of those teams. So one thing as an example and this is really a cross business synergy that they’ve realized.

We have these devices and software that we use in acute care settings over 15,000 care locations globally. If you go to our website, you’ll see pictures of some of these devices that sit in there worked on Telestroke bringing Telenic U and all these really kind of complex use cases. So the team is because those are public health systems in a lot of those countries, they’re bringing that technology. So we’re getting obviously a sale with respect to the technology and then we’re bringing virtual services alongside of it and getting a multiplier effect. That’s been very successful in terms of a differentiation against other people that are doing virtual care there, but the opportunity to expand services.

So each country is different, but we’re approaching it sort of in a market relevant way. Another thing that I think is really interesting the team is doing and creating I think a lot of upside is what we’re calling these hybrid models. So again bringing technology to bear, but partnering with their brick and mortar locations. So for example, a location might have a nurse there that’s working with the patient and we’re bringing the clinician and the specialist in with them. So internationally, it’s underpenetrated large TAMs.

They’re different markets, but we see an opportunity to materially grow that business over the next few years.

Operator: And as you kind of wrap that together, I asked this question on the last call very poorly, but you kind of wrap this all together. How do you get the top line growth rate to accelerate?

Chuck Davita, Chief Executive Officer, Teladoc: Yes. Well, I think let me take it in some pieces. The international business top line is growing. It’s been growing double digits. It’s going to continue to grow there.

Better Health, it’s all about balancing out this direct to consumer and insurance model. Again, we think that’s going to position a much different position for 2026 in terms of a growth posture, the international growth, but also the acceleration of the benefit coverage that’s out there. And then when you think about The U. S. Integrated Care business, which is probably what most people think about when they think about Teladoc, It’s all about the things that we mentioned.

The top line headwind we have is this move from subscription models to these utilization models. Our underlying utilization is growing. It’s been growing. Visits are growing and usage of services is growing, but we’ve got that mix shift that’s been going on. Ultimately, where we get the underlying top line growth is going to be what I said.

It’s all about engagement, utilization and creating value for our customers. So I think I’ve touched on that, but that’s where you’ll see the move. But just know over the last few years because of maturity in the market that mix shift from subscriptions to visit based models has had a headwind at the midpoint.

Operator: And what is the rough mix today between subscriptions and visit based?

Chuck Davita, Chief Executive Officer, Teladoc: I don’t think we’ve publicly shared that, but it’s if you think about the history of Teladoc and other virtual care, it was all about subscription models because it was new and customers needed to be able to predict what it was and businesses like Teladoc needed to have visibility to cash flows and all those kinds of things. And post pandemic, it’s really shifted. So the majority of our business is on a visit base now versus a subscription base.

Operator: And do you think the big chunks of that transition kind of fade behind us after 2025, so you can get that business back to growth next year? That a fair way to think about it?

Chuck Davita, Chief Executive Officer, Teladoc: I think we’re going to continue to see some level of shift going on there. I think it’s moderating, just the magnitude of the past few years. But I think it’s still a bit of a headwind. So that’s why we’ve been sharing more information in terms of what’s the underlying growth of the business, what are visits doing, Ultimately, if that’s how we’re going to get paid, how is utilization going? But yes, I think we’re going to see that pivot going forward.

Operator: And I think it makes a ton of sense. I think that dynamic around the subscription model was a real thorn in the side of benefit managers, especially coming out of COVID as you saw lower rates of utilization in some of these services. And that’s probably why you’ve seen many companies in this space end up in very challenging positions because you have all these subscriptions that people are paying and then no one’s using it.

Chuck Davita, Chief Executive Officer, Teladoc: Yes. I think it’s if you think about The U. S. Health care system, we’re really moving more to where the rest of The U. S.

Health care system works, which is a utilization we pay for what you do kind of thing. That’s why it’s very important these moves that we’re making so that we can not just it’s not just about utilization of what we do today, but ultimately increasing the funnel of things that we can do and the care that we can do is much more runway for us. Now we have to invest in that create those capabilities and some of the things that I touched on earlier, but that’s what we’re going after. Yes, utilization is going to drive the revenue growth of the company, but it’s also the expansion of services as well.

Operator: And the expansion of services effectively means higher it seems to be higher revenue per member?

Chuck Davita, Chief Executive Officer, Teladoc: I should because we’re doing more things for the member. We’ve got a somewhat narrow scope in virtual care generally of what is done, but I think there’s more that can be done.

Operator: And maybe we can talk about the chronic disease management business, the chronic care business for a It is becoming what appears to be more competitive. There are a number of players all over LinkedIn in various degrees of promotional activity. How do you see kind of retaining your leadership position? I think on a member basis at 1,000,000 still sit above where most other companies likely in their development. How do you maintain how do you retain your leadership position and or potentially grow it?

Chuck Davita, Chief Executive Officer, Teladoc: Yes. So a few comments. I mean, of all, the prevalence of chronic conditions is still quite widespread and the burden that it places on those individuals as well as on the cost of health care system. And care delivery system isn’t really fully set up to do that longitudinal care for people with chronic conditions. So there’s plenty of need for these.

But as you point out because of that need and that market opportunity there’s been a lot of competition that’s come in and particularly in areas where we operate. I think we’ve had a long history of focusing on cardiometabolic health, different parts of that equation diabetes, hypertension, weight and so And so we think we’re well positioned in that regard. I think to your point, while there’s a need and while there’s a lot of competition, we need to continue to innovate what we do. And I think we are uniquely positioned with the breadth of clinical things that we can do, because we’re a provider to drive greater value and impact than just a pure digital health approach and that’s what we’re going after.

Mal Amorthy, Chief Financial Officer, Teladoc: And I would also say this is where the assets that we have, I would say, give us a pretty unique position competitively, David. Think of the scale that we have, the fact that to your point over 1,000,000 already enrolled, the fact that we have the many millions more recruitables. The amount of data that we have with all of the interactions that we do is a real advantage. This is where acquisitions like Catapult can really also help us, right? That is one of the things we said when we talked about the deal and the strategic rationale for the deal.

And it actually allows us increasingly to address chronic conditions and chronic diseases proactively. So we are putting we have the assets in place and we’re building on it to be able to go after it in a much more aggressive way.

Operator: And maybe it’s a good segue to talk about M and A. Mean, I think this does there are a lot of assets out there. I think it’s relatively attractive sticker prices based on what you’ve done so far and given some of the dynamics in this market. You did catapult, you did uplift pretty reasonable sizes. But how are you thinking about M and A as kind of a key lever here?

Chuck Davita, Chief Executive Officer, Teladoc: Yes. If you don’t mind, let me just make a few comments on both those acquisitions and then I’ll respond on M and A. I think with Uplift, hopefully it was pretty clear with the opportunity in terms of insurance coverage and that was going to be a nice accelerant for us. We were making really good progress I think organically for sure capabilities, talent, having those network conversations. But we saw this entrepreneurial company, great team, had built insurance capabilities, had over 100,000,000 lives under contract, but we’re challenged by the scale and we certainly bring plenty of scale in terms of BetterHelp.

So we’re really excited about what we’re going to do there and we’ve got I think tremendous opportunity to make a significant dent in that market. With respect to CATAPULT as Mala said that was really if you think about integrated care and just health care more broadly, one of the biggest challenges in health care is engagement and also preventative care. It’s made for sick care as opposed to preventative care. So we found this company that entrepreneurial had developed this really consumer focused really easy to use diagnostic capability including some in home testing, some blood draws, some other kinds of things and a really engaging experience and screening process that’s looking at mental health, looking at conditions and so And then you send that kid in and you then have a visit with a nurse that goes through and develops a care plan for you. And what we found what they found and what we found too is of the people that they see a significant portion that’s the only care opportunity they have.

So from a preventative standpoint that was it. They don’t have primary care. Significant people with mental health issues that aren’t being addressed. A lot of chronic conditions there, people finding out for the time that they’ve got out of control sugar and blood pressure and then the ability and that trust to sort of make them aware of things they need to do for their health. We ran a pilot.

This is why we were very excited. We ran a pilot and said, okay, So if they’re a Teladoc Health member that has access to some of our programs, you’ve now got this engagement with this patient, make them aware of this program. And if it makes sense for them and it’s appropriate, see if you can enroll them in there, very high adoption rate. So it’s just another place for us to meet people where they are, help them with preventative care, identify conditions and get them plugged in. And I’m very excited.

The team is doing great. They’re hitting every milestone and measure we’ve created for them. And from an M and A perspective with those strategic themes I mentioned, we’re an important point of the company at this pivotal time. And we’re going to make investments not just for the short term, but things that we think are going to start to increase that TAM, start to increase the scope and range of what we can do and we think that’s the right place to deploy our capital. Obviously, we’ve got a balanced approach.

Mal has talked about this in the past in terms of our debt that’s out there and we just recently paid off our $20.25 notes. So we’re going to be balanced with our capital allocation. But M and A should play an important role if it’s on point with our strategy.

Mal Amorthy, Chief Financial Officer, Teladoc: Yes. Listen, I think we think about our overall capital spend David in a balanced way between organic and inorganic, right? So we will invest appropriately in our data and analytics and engagement. We’ve talked a lot about engagement and engaging the customer. Product enhancements that we talked about increasing competitive marketplace, absolutely we will focus on innovation.

We have the right team in place. The fact that we have now brought all of the clinical organizations together is going to help that as well. And inorganically, as we think about the priorities, we will focus on if there are any tuck ins around engagement, if there is anything expand the aperture in terms of services what Chuck talked about international, is there anything interesting? But it’s always going to be strong strategic rationale and it has to make sense for us in terms of driving our top line growth on a sustained basis. That’s essentially what we’d be looking for.

Operator: Got it. And then maybe just sort of close on profitability. I think, some of the acquisitions you’ve done this year create a little bit of a headwind to adjusted EBITDA after a few years of improvement. I don’t know if we have tariffs anymore or not, but tariffs obviously was I think on the purchase of equipment to serve most of the chronic care members. Help us think about the trajectory of adjusted EBITDA margins and where those can go?

Mal Amorthy, Chief Financial Officer, Teladoc: Yes. So look, I would say, if you think about the adjusted EBITDA, we’ve driven, I would consider strong adjusted EBITDA margin over the past few years, really on the back of being disciplined in terms of cost, productivity initiatives, driving cost takeout. We have talked about the fact that we will continue to do so. We are modestly above our targets for this year and it’s never a one and done. We will continue to do that.

We made a lot of strides under Chuck’s leadership in terms of streamlining the organization and flattening the top of the house, if you will. We’ll continue to look at our overall ORC structure, David. But at the end of the day, if you think about our overall adjusted EBITDA trajectory, it’s going to be on the back of how do we drive our top line and all of the things that Chuck talked about, right? Driving more value for all of the interactions that we have driving more engagement and enrollment. And it will be around being disciplined and continually rightsizing our organization.

If you think about our costs, we are taking continuously scrutinizing technology and development, G and A, our stock based compensation. We’ve shown tremendous progress in terms of stock based compensation over the last two, three years and sort of bringing it under a certain zip code. So we will continue to do things like that to drive our adjusted EBITDA.

Operator: And do you think you’ll be at a point where you can commit to some level of annual improvement 50 to 100 basis points of sustained improvement? When do you think you’ll be able to give targets like that?

Mal Amorthy, Chief Financial Officer, Teladoc: Yes. So look, if you think about what we are driving this year, if you were to take out on the Innovative side, the Integrated Care side, if you were to take out the dilution from Catapult, we are essentially at a flat margin on a year over year basis. This after considerable adjusted EBITDA margin expansion over the last two years, right? So I would say, look, we are repositioning the company under Chuck’s leadership. We have articulated Chuck just articulated all the key things that he is focused on prioritizing in order to reposition the company.

We are hard at work as we speak pulling that together in terms of what does that mean in terms of our overall trajectory going forward. And I expect over the next few quarters, we will give you all a calibration in terms of what does that result in, in terms of how it repositions the top and the bottom line.

Chuck Davita, Chief Executive Officer, Teladoc: Yes. And I would say, from a philosophical standpoint, obviously, we’re looking to create efficiencies, but also to create capacity to invest during this important moment in time. We’ve taken T and D technology development down, but we’ve also invested in technology. We built what we call the Teladoc Health prison care delivery platform that’s putting be able to surface information at the point of care, integrate with parties, deploy AI into our workflow. So we’re really just trying to rationalize the spend, rationalize the portfolio, make investments, but also making sure we can deliver appropriate bottom line results.

So while it was flat year over year in terms of the EBITDA margin like Mala said, we’ve been able to self fund, if you will, significant investments that are important to the business.

Operator: Excellent. Well, I think with that we are out of time. Chuck and Molla, thank you for making the trip and look forward to hearing your next update in late July.

Chuck Davita, Chief Executive Officer, Teladoc: Great.

Mal Amorthy, Chief Financial Officer, Teladoc: Thank you. Thank you, David.

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