Q1 2021 Teladoc Health Inc Earnings Call
We drove revenue of $454 million in the first quarter, an increase of 151% over the prior year, including organic revenue growth of 69% for legacy Teladoc.
As a result of the momentum demonstrated across our channels and geographies and the continued development of the pipeline of new and expanded opportunities. We are raising our full year revenue guidance by $20 million to $1 97 to $2 $2 billion for the year.
Turning to utilization our network of clinicians provided $3 2 million visits during the first quarter, representing more than 50% growth over the prior year's quarter. Despite of historically weak flu season.
We continue to see significant strength, the non infectious disease and specialty visits with mental health volumes in particular driving growth in both <unk> and DTC channels.
We're also finding that specialty growth is acting as the gateway into multi service usage are members, who engage with the specialty care are significantly more likely to utilize for example members who out of specialty visit had 40% more general medical visits per member than those who use general medical.
Alone this is particularly encouraging given client trends toward multi product sales with over 40% of our members now having access to more than one product.
Membership in the La <unk> chronic care suite of products grew 66% over the prior year as we added 62000, new chronic care members in the quarter and our share of wallet continues to expand as we gain deeper penetration within clients.
As a result, we've seen year over year revenue expansion within all of our top 10 chronic care accounts in the first quarter.
Particularly encouraging is that over 15% of chronic care members are now enrolled in more than one program compared to less than 5% of year ago.
With over 40% of adults in the U S living with more than one chronic condition. The opportunity is significant and we continue to execute on our whole person care strategy to address the full spectrum of consumer health needs rather than just one particular disease.
Enrollment in chronic care programs as a percentage of recruiter bowls remained strong throughout 2020 and into the first quarter enrollment rates are consistent with the <unk> performance in recent years for us across the various books of business, which is the significant achievement given that we have been addressing meaningfully larger populations.
<unk> that are newer to us such as government employee benefit programs Medicare advantage populations and people with hypertension.
The strong enrollment performance is a direct result of our investments in data science, which has consistently led to greater consumer engagement across populations.
As our differentiated and comprehensive product portfolio continues to resonate in the marketplace, we're seeing significant traction in both expanding our offering within existing clients as well as adding new clients.
Earlier this month, we signed an extensive agreement to expand our relationship with the regional Blue Cross GOP plan on the east coast to offer.
For our comprehensive whole person virtual care solution to its members.
Beginning early next year, we will provide members access to our suite of products, including our virtual care solutions and a full suite of digital chronic care solutions diabetes prevention and mental health.
This deal is notable as it covers all of the planned commercial books of business and represents another significant competitive takeaway.
Moreover, the demonstrates the power of our broad and integrated suite of products and our proven ability to deliver industry, leading utilization and member engagement, which ultimately drive clinical and financial ROI for our clients.
In addition to our large pipeline of new and expansion opportunities, we continue to see opportunities for competitive takeaways, particularly in the health plan channel as these clients look for enterprise platforms that can leverage technology and data at scale to deliver actionable insights.
We're also seeing strong interest in our primary of 360 offering from health plans employers and even hospitals and health systems and our vision to re imagine the primary care experience is gaining traction in the market.
Our primary 360 pilots that launched earlier this year are progressing well and delivering encouraging results for clients and consumers and we have already signed several additional deals expected to launch later this year.
Our comprehensive virtual care solution also continues to gain momentum in the international marketplace.
During the quarter, we signed a strategic partnership with Generali, Hong Kong of leading insurance carrier in the region to offer our virtual care solutions to its members across Asia.
In Australia, we recently announced the partnership with Metlife to offer access to a customized platform across our comprehensive virtual care service to Metlife as members in the region.
In the hospital and health system market, our industry, leading enterprise platform solution continues to see strong demand around the world.
In addition to new and expanded enterprise deals domestically.
We reached multiple new agreements this quarter with health systems in Europe and Asia.
As our strategy to take the Intouch capabilities to the Inc.
International Arena continues to pay dividends.
Similarly, the pipeline of opportunities to bring the law bango suite of chronic care products for the product.
Wider market continues to grow, particularly among hospital.
Both of that are increasingly bearing risk through acos and their own health plans and we've now signed several deals to bring our chronic care solutions to the health system market.
Integration, we've made considerable progress across our key work streams.
As we previously noted our commercial organization has been fully integrated with sales team selling across the entire whole person portfolio of products since early this year.
We have now closed several deals for our new integrated mental health product that combines the teladoc therapists and psychiatrist with the <unk> digital mental health capabilities to deliver of market leading solution.
Earlier. This month, we also enabled the first wave of members to access and register for Levonne go programs from within the Teladoc App.
This is an important first step towards creating a seamless member experience that will allow us to engage with members more effectively across the programs.
Additionally, we recently enabled capabilities for clinicians to refer members into <unk> chronic care programs from within the Teladoc provider workflow.
Leveraging our combined data to deliver clinically relevant insights that aid in decision, making and get consumers the right care at the right time.
We're making significant investments to integrate and enhance our tech lies on our robust data and behavioral science capabilities across the entire organization.
Data is of significant part of what underpins our ability to provide a highly personalized experience and deliver longitudinal virtual care, it's fully integrated with our digital solutions the.
The investments, we're making in data capabilities will enable us to drive greater consumer engagement expand the breadth and depth of our product offerings and consistently increase the value we provide to consumers providers and clients.
Our ability to deliver data driven insights combined with clinical expertise at scale will further our vision of becoming consumers trusted destination for whole person health.
Finally, while we're on the topic of innovation in data science I'd like to welcome class Jensen as our new Chief Innovation Officer.
With more than 20 years of experience, leading digital transformation at enterprise healthcare and technology organizations class has deep experience across product innovation information systems health Informatics and data products I am extremely pleased to have class join our team and look forward to as the <unk>.
<unk> and contributions to our growth.
And with that I'll turn the call over to Mala for a review of the first quarter as well as detailed guidance.
Thank you, Jason and good afternoon, everyone.
During the first quarter total revenue increased 151% to $464 million or 69% excluding.
Acquired revenue.
Total U S revenue for the quarter was for.
$416 million.
Representing growth of 175% over the prior year quarter International revenue of $38 million increased 29% over the prior year.
The revenue for the first quarter increased 183% or other.
To $388 million and comprised 86% of total revenue up from 76% in the prior year quarter.
The increase in access the revenue as a percent of total revenue is primarily due to the acquisition of La Bonne vie and Intouch health, both of which generates the majority of the revenue from subscription access.
Let's see.
This is the revenue for the first quarter increased 24% year over year to $54 million.
Income as compared to 24% of revenue in last year's onetime.
Turning to membership.
Ex that.
We ended the quarter with U S paid membership of $51 5 million members, an increase of 20% over the finance market.
Note that as we discussed on last quarter's earnings call.
The approximately $1 5 million temporary manpower.
And part of during the pandemic.
All of the off during the first quarter and are now excluded from non membership count.
Individuals with visit fee only the access with $22 million at the end of the first quarter.
Total chronic care enrollment which includes the.
The individuals enrolled in one of them more of our chronic care program was 658000 members as of the first quarter of 66% increase over the 396000 members as of the prior.
Third quarter pro forma for the margin of the PM TM was $2.24 in the first quarter up from 87%.
In the prior year first quarter and $8 76 in the fourth quarter.
After the 48 <unk> sequential increase in PMT and.
Roughly half was driven by the contribution of an extra month of November revenue in the <unk>.
Good luck.
Yes.
We provided $3 2 million visits in the quarter as Jason mentioned through.
Through our network of clinicians representing 56% growth over the prior year's first of all time.
Platform enables session, which represents encounters facilitated by our license revenue platform and provided by our clients own clinicians plus an additional $1 1 million in the quarter.
The annualized utilization rate for our members from <unk>.
19 six.
6% in the first quarter.
620 basis point increase over the prior year's first quarter.
A 190 basis point increase sequentially.
Over the fourth quarter.
Adjusted gross profit, which excludes depreciation and amortization of intangibles increased $308 million, an increase of 184% as compared to the prior years first quarter.
Adjusted gross margin was 67, 8% compared to 60% in the first quarter of 2020.
The 780 basis point increase in adjusted gross margin is primarily attributable to higher gross margin profile associated with love on the revenue.
Gross profit and adjusted gross profit in the first quarter of 2021 include the benefit of approximately $7 million and lower expenses on November the devices attributable to purchase accounting adjustments related to the merger.
Adjusted EBITDA increased to $56 6 million in the quarter compared to $10 $7 million, Inc. Q1 of 2020.
Adjusted EBITDA in the first quarter includes the benefit of approximately $7 million attributable to purchase accounting adjustments mentioned previously.
The adjusted EBITDA outperformance in the first quarter was driven in part by strong and better operating expense performance as we continue to make progress against cost synergies Inc.
<unk> integrating back office functions streamlining processes and consolidating vendors.
As discussed previously we anticipate reinvesting cost synergies back into the growth in the business over the remainder of the year.
Overall, we continue to have the high degree of confidence in our ability to achieve our multiyear revenue and cost synergy targets.
Net loss in the quarter was $199 $6 million from.
Paired to a net loss of $29 6 million in the first quarter of 2020.
The larger net loss was primarily attributable to increased stock based compensation.
The amortization of acquired intangibles and income tax adjustments primarily related to the merger with Avago.
On a per share basis net loss was $1 31 for the first quarter compared to the loss of <unk> 40.
In the first quarter of last year.
Net loss per share includes a default.
For the income tax valuation adjustments of 57.
Amortization of acquired intangibles of 30.
And stock based compensation expense of <unk> 57.
We ended the quarter of the $723 million in cash and short term investment record of debt outstanding as of March 31 was $1 4 billion.
Now turning to forward guidance.
For the full year 2021.
We now expect revenue to be in the range of $1 97 billion.
Sure.
<unk> 2.02 billion.
Up $20 million from prior guidance driven by strong growth in per member per month fees as well as higher than expected utilization, particularly among specialty amendments.
We expect adjusted EBITDA in 2021 in the range of $265 million to $275 million.
Including an approximately $20 million benefit from lower expenses on Lovaza devices attributable to purchase accounting adjustments related as we've previously discussed we expect increased spending over the course of the year.
As we invest in the growth of the business, particularly in new product launches and expansions into new markets. The integration of Levonne, though and the development of our integrated data platform.
We now.
We expect total visits in 2021 to be between 12 five.
And $13 5 million visits.
Representing growth of 18% to 27% over the prior year.
For the second quarter think of any one of our $495 million to $505 million.
Representing growth of 105% to 110% over the prior year's quarter.
We expect total paid membership in the range of $52 million to $52 million.
And anticipate total visits.
During the second quarter of between three two and three four per million visits.
We expect second quarter adjusted EBITDA to be in the range of 61% to $64 million, including an approximately $6 million.
Effects from lower expenses on Levonne, the devices attributable to purchase accounting adjustments related to the the volume of Montana.
With that I will turn the call back to Jason.
Closing remarks.
Thanks, Mala before I turn the call over to Q&A I want to take a moment to acknowledge the hard work of our team members around the world.
This week, we were very pleased to be recognized in time magazine's first ever compilation of the 100. Most influential companies are inclusion of along other global leaders as a meaningful recognition of our 4500 colleagues and the direct result of all of that we do for our members as always.
Thank you for your continued interest in Teladoc health and with that we'll open the call for questions operator.
At this time I would like to remind everyone that you're asking the question press star and the number of one on your telephone keypad.
As a reminder, please ask only one question so that we can accommodate as many analysts as possible.
And your first question comes from Lisa Gill with Jpmorgan.
Good afternoon, Jason Thank you for taking my question.
I just wanted to start with share most recent thoughts on competition.
Okay.
As we think about some of the comments that you talked about displacing.
Others with some of your business wins at the idea of.
Whole care talking about growth.
Player as well as well as health plans looking for someone that has a deep embedded in kind of a lot of questions around how do we think about Amazon care. The fact that <unk> has been for the sake that Dr. <unk> on demand and Grand rounds coming together. So can you just maybe just level the playing field for who are you seeing when you are out there.
Winning these pieces of business and how you think about how that competitive landscape has really shifted and changed over the last couple of years.
Sure. Thanks, Lisa.
We focus on our competitive advantages and our competitive advantages as you mentioned are around the broadest set of clinical solutions ranging from acute episodic.
The two specialty care chronic care and complex care as well as being panels, ranging from employers to health plans to hospitals and health systems and on our direct to consumer basis.
More and more and I think this is really characterized by the makeup of our pipeline clients are looking for a comprehensive multi product solutions, they're not looking for point solutions that they have to integrate themselves.
Stitched together.
And get the benefit of that and I think the data that we've talked about today.
Okay about multi multi product usage and specialty usage in particular be higher general medical visits.
As the consumer proof point behind that.
Really nobody in the market who comes close to the the comprehensive solution.
For both acute episodic and chronic care as well as the range of both digital and professional services.
In terms of our clinicians.
That we can bring to bear and and we see that in our pipeline based on the fact that it's.
It's characterized by larger deals than we've ever seen book for.
The multi product deals are sort of the preponderance of the pipeline.
And we see it in the competitive takeaways that we have.
On the call of large east coast.
Blues plan as well as other very large opportunities in the pipeline.
With respect to the moves in the market that you've seen youll recall last summer when we announced the <unk> acquisition, we talked about the fact that the market had accelerated.
Granted.
And that we foresaw the strategic chessboard moving.
And ours was a move to put the leaders together in the market.
To create an unmatched solution and bringing together and Teladoc certainly does that.
There is no comparable move.
Net debt, we didn't foresee in some cases, we've seen.
Success and increased interest as some of those smaller competitors have gone to health plans.
<unk>.
For the most part one health plan doesn't want to buy from another competing health plan.
And then in other cases.
The moves in the market has been.
Somewhat antagonistic toward the health plans.
In an effort to dis intermediate them, it's always been our view.
But against debt in that.
It's proven to be beneficial for us as we align with.
From greater value so.
All of those are.
Sort of within the realm.
Of what we expected.
And.
I'm not going to call out individual solutions that you mentioned are for our competitors that you mentioned.
But.
For the most part many of them, we almost never bump into and some of the new entrants were just not seeing gained traction.
Just as a quick follow up because you did say the word pipeline several times in that conversation and you know I'd love to ask about that as we think about the flow of gear is there any anything that you can give us around the size of the pipeline versus previous years or.
Quantify it in any way is as we think about going into this next year.
Here for 2022.
Sure.
So I would say a few things one as you recall two months ago, when we reported for the fourth quarter and full year results, we talked about the fact that.
Our pipeline of new members was about 50% larger than at the same time last year. It has only grown since then.
And it has also moved along in terms of the deal stage. So Youll also recall that we said that it was characterized by a larger sort of gross opportunity, but they were earlier stage deals and we've seen those deals move along in the pipeline.
As we would have expected.
Yes.
One of those materialized into.
A very significant sale for us and we have others in.
And very late stage the other.
Of the thing is that we are seeing more large multi product deals than we've ever seen before.
And.
I'm very very encouraged by faster than I would have expected opportunities are arising for the <unk> suite of products into the hospital and health system channel.
That's moving along faster than I would've expected.
And then and then maybe last.
We've talked about our primary 360 offering.
That pipeline has also increased.
Materially since just the two months ago.
And we see large deals moving along there so.
When we look and Youll recall that it's very unusual for us to raise guidance at this time in the year.
We did it last year, but that was in the face of the the massive wave that we saw.
COVID-19 hitting the states.
But we've really I don't think before that we've ever increased our guidance at this time in the year.
So I think the the increase in our revenue guidance for this year.
As both based on the performance, we're seeing today as well as the expectations that we have going forward.
And your next question comes from Schein Wigwam of with Piper Sandler.
Thank you very much so I'm most interested in this whole person care at the Blues plan you mentioned your whole book of business, but I'd really like to know beyond that.
What role of you taken on to really coordinate the care, especially across medical and behavioral and are the economics on a contract like this any different than standard economics.
So the what we said is it's for the entire commercial book.
Of this blues plan.
And that we are selling our full suite of telehealth and the chronic care solutions.
We will also bring to bear as we mentioned the integration within a single app of the ability to.
For the consumer to get access to the full set of services as well as the ability for our clinicians to refer across those solutions. So we have now.
Executed on the first wave of that integration that will continue to develop over the course of this year and will launch this the.
Service for them early next year.
And that that resonates and that was part of the thesis behind bringing together.
All of these assets under under one roof and it's a significant competitive advantage when we're going out.
Ed.
Two in this case displace a competitor.
With respect to the economics, there are certainly some economies that we get from selling all of our solutions are a full suite into a single client.
It's one data feed for multiple products and Sean as we mentioned, we get benefit from higher utilization when people use our specialty products.
So we are able to bring it to bear at a more competitive.
Dave price because of the economies that we get out of it and ultimately drive higher revenue per user because they are using multiple services.
And our next question comes from Sean Dodge with RBC capital.
Thanks and.
Good afternoon, Jason on the primary of 360 program you mentioned the pipeline. They are increasing can you give us a sense of how.
How quickly you think of.
Offerings like virtual primary care could ramp.
Maybe what kind of adoption of that you can achieve of it over the next few years and then you.
<unk> said before there is the revenue opportunity per member there is much larger can you put any bookends around that any quantification, maybe some of the pilots how much how much data.
The virtual primary care of primary if we could enhance the.
Revenue per member.
Yes.
The pipeline is very strong.
We've already closed deals.
Several of Fortune 1000 to launch here.
And we expect to rollout nationally.
Over in the first quarter next year.
<unk> always said, we don't expect it to be a material contributor to our revenue this year.
And we've taken that into account even as we've increased our guidance for this year, we do expect year and to increase.
So over time, when we talk about the the revenue opportunity per member.
Still a mixed bag when we talk about what's in the pipeline.
And what clients are looking for some of them are happy with the higher <unk> and higher visit fees that reflect the inc.
The increase the value that each one of those visits and the increase of intensity of each one of those visits.
Others are looking for more sort of value based arrangements.
Including leading up to more risk arrangements, where where we have the opportunity to really benefit from the savings that we generate.
We're going to migrate into those over time, that's not going to be the preponderance of her of arrangements in the short term but.
But I do think that that's where we're going to go and I think we have a unique opportunity and capability to do that.
Because of our scale relative to anyone else in the market. The other thing I would also add Shawn is.
One of the reasons why as we think about Pn pn over the sort.
The medium to long term.
Expand our PM PM because by the very nature of our if you think about timely to the 60 it is multi product okay.
So we will the <unk>.
Looking to capture the economics, both from the expansion of PMT and because of that and the incremental population.
And your next question comes from of Ryan Daniels with William Blair.
Just wanted to follow up on the strength of the behavioral business. It sounds like from our channel checks if thats one area.
Particular that not only has benefited unfortunately due to COVID-19 with an increase in the need for care, but also more insurers and employers wanting that and then more of a sustained movement towards telehealth versus in person visits.
It is true.
For the conversational and maybe has a lot of the stigma of et cetera. So I'm curious of being just dive a little staying in that market. Both on the D to C. And then the more emerging <unk> market.
Perfect for the organization.
Yes, Brian Youre exactly right.
Okay.
Mental health continues to be the.
Fastest growing specialty in.
In our portfolio.
And we are seeing in.
The need for that.
That service continuing to increase for our product continuing to increase I mentioned, we're bringing together.
Net loss.
Non go digital assets with our therapists and psychiatrist capabilities into a single offering and Thats clearly resonating in the market.
<unk> talked last year Ryan of doubt.
<unk>.
About growing our <unk> mental health visits by over 500%.
In 2020, and we're on track to more than double that this year as well.
Even after that incredibly explosive growth in 2020, so that should give you an idea of how much traction we're getting.
The other thing that I think is meaningful as debt.
We mentioned that over 40% of our members now have access to multiple specialties and.
And certainly mental health is the.
Sort of leading second product if you will.
General medical on the.
On the direct to consumer side, we also continue to see.
Just surging demand.
For that product, we also see the utilization continuing the shift toward more live interactions.
What used to be.
Many years ago of service that was focused primarily on tech.
Text based interactions.
Migrated to more live interactions.
Between the therapist, and the consumer and our ability to continue to scale that I think is a credit to the team.
To the therapists, who work with us and to the scalability of the <unk>.
The platform. It also enables.
<unk> us to continue to bring significant value to consumers.
At an attractive price point, both for the consumer and one that is economically advantageous for us.
And your next question comes from Stephanie Davis with SBB Leerink.
Hey, guys congratulations on the quarter once again and thank you for taking my question.
H Dana about six months from the Bango deal closed. So I was hoping we can get an update on the platform integration side, where are you on the backend.
One could we see an integrated front end because it had been the path of them together from the user experience standpoint.
Yes, well thank you Stephanie I appreciate your comments.
We're very excited about the progress of integration.
We mentioned the the rapid progress on the commercial side and I think the team has just done incredible work to bring that together.
Breaking up the territories, and reallocating and bringing to market a comprehensive and unified suite is hard work and the team has done it.
Tremendous job.
The we mentioned that we have now launched the first wave of consumers, who can access the the levonne, though.
Capabilities and products through the Teladoc app.
That's really just the first step.
I would expect early next year to have a completely redesigned user experience.
Integral right all of those capabilities.
And really sort of optimizes the experience for the consumer and off the funnel if you will.
For those different products.
The provider integration is material because we believe that providers, referring into those programs will be a significant source of consumer engagement.
Which of course drives.
Directly drives revenue in those products.
And then on the back end you asked about the data platform and the data integration.
Is is really critical we just have an incredible treasure trove of data and the more we can integrate the $12 million plus $12 5 million plus visits that we'll do this year.
And all of the data from those visits with the more than 2 million blood glucose readings of week, we get for example.
As well as the from all of the other products. It just makes everything much more powerful and much more personalized for the consumer.
And much more able to move the needle on consumer behavior change, which which results in better outcomes.
Our ROI for our clients so.
We are deep in that process.
ISS and I'm really excited that Klaus.
Janssen is joining us.
We spent some time today just talking about the vision for what that can be.
We're going to really get the benefit of bringing the teams together and as with many of.
The good thing is we have of being very clear roadmap and we have.
And a fair amount of time.
As a leadership team prioritizing that roadmap so that.
The investments we put against that as we've talked about I expect 2021 to the an investment year.
It is stacked and aligned against those very clear of our priorities in the R&D growth.
Whether it be in terms of data integration of recognizing of unique member from the lithium and many of the murky ending identity perspective.
That's the client deep integration and I would say we are well on our range.
Good day.
And your next question comes from Daniel qualified with Cte.
Hey, guys. Thanks for taking my question just a couple of questions around better health specifically.
I'd already to sell that into the EAP. So I was curious how that will work alongside your your traditional <unk> behavioral health platform and then on the DTC side, we've heard that cash remain pretty elevated.
In behavioral specifically.
Clearly for paid search curious how thats impacting your marketing strategy this year.
If theres any changes for the previously mentioned, 50% revenue growth.
And better health.
Yes, actually we continue to see revenue per dollar spent on customer acquisition increase.
In our DTC channels that continues to get more efficient.
As we use as we sort of optimize the channels as well as I spoke of I think we are benefiting from the fact that the market acceptance of getting therapy virtually.
The increased substantially and so.
Awareness of that as a service.
In acceptance of that as the service also provides a tailwind but I believe helps in addition to all of the test and learn.
That we've gotten over the course over the last several years so.
We are not seeing.
The challenge relative to customer acquisition cost in that channel.
The EAP services actually are always alongside behavioral health services that are.
Built into the benefit package.
It's really not an or it's an and for most large employers.
And there are different buyers on the on the health plan side. So most of the the large insurers also offer an EAP and sell them together and some of them.
We're selling our commercial behavioral health <unk> services into the same health plan. That's also bundling our better health capabilities into their EAP.
JP generally has limited number of visits.
And so the recipe there is debt.
Are there for the consumer to provide them with those visits and then if they exhaust that benefit they had the option of rolling in on the direct to consumer basis.
The that becomes an opportunity for us to continue the relationship with the consumers.
Coming back to your question on on task and as Jason mentioned the.
Efficiencies that we continue to see and that we monitor as Dave said, a lot of metrics across our business.
For our DTC and we continue to see gains the in terms of debt our attention.
And that drives greater lifetime value for the sort of the underlying lever.
That drive the revenue growth are still strong.
And your next question comes from George Hill with Deutsche Bank.
Good afternoon, Jason of model and thanks for taking the for roadmap, but the space continues.
Can we evolve pretty rapidly as it relates to partnerships and M&A I guess, so can you talk about the opportunities that you guys don't touch and maybe how you think about moving up the value chain into higher dollar cost areas as it relates to your clients. Thank you.
Yes, Thanks George.
We will.
Continue to expand the scope of our clinical portfolio.
You saw us earlier this year.
Making it make some announcements around chronic kidney disease.
You'll continue to see us develop the loan of cardio metabolic.
Continuum, which of course to your point has.
Dollar impact and therefore, a higher economic opportunity for us to make an impact.
And again, our focus is on the whole person care and so there are things that you can do remotely there things that you can't do remotely I think you'll see.
My guess is we'll continue to see more of a trend toward at home diagnostics.
And that provides us with an opportunity to expand the scope of what we do.
And the value we can deliver for the consumer.
And then the.
The opportunity for us to bring our Rabago solutions, Inc. As they increase in scope into both the hospital and health system channel as well as internationally.
We will continue to provide us with the with opportunities so.
I don't.
I don't see an end to our continue and continuing expansion.
And as always we'll look at that in terms of build buy and partner.
And your next question comes from from interesting with Credit Suisse.
Thank you, it's actually Jason you talked about the faster than expected opportunities from the <unk> business within the hospital doesn't help us from market.
These hospitals health systems that have been sutcliffe from contacting lead the.
Have those been existing clients of <unk>, they were a little bit the employees of the health of commodity for the organic contract wins.
Maybe.
On the centers with more of about the the.
The differentiation of what they want.
If there's anything with the assembly has.
As with the clients.
Yes, most of them are cross sells where we're bringing in the <unk> capabilities into our existing hospital and health system clients on the Teladoc and touch side.
The big move in the Big shift Joe Andrea is moving from the HR Department, which is where the longer used to sell into the C suite because the C suite of the hospital or health system is focused on their in their ACO or within their own sort of owned or capped.
For the health plan.
So whether that means that they are in a direct contracting relationship where they stood up the health plan or they have a JV or an ACO relationship with the health plan more and more of the hospitals are are going at risk for.
Populations and their ability to discharge.
One of their patience with the Levonne go capabilities.
There is a massive step up in terms of their capabilities and ability to avoid readmission readmissions.
<unk> exacerbations and avoid higher cost members.
And your next question comes from of Richard close with Canaccord Genuity.
Great. Thanks for the question, Jason a lot of <unk>.
Time spent on the fourth quarter call on membership.
And in your answer to leases pipeline question you ended with the raised guidance.
However, the membership guidance didn't change so.
On the takeaway deals that you are referencing does that provide upside to 2021 potentially.
Or should we think of it more of them start.
The business.
Yes. So thanks, Richard it's a good question I would say the membership increases and the sales that we're closing over the course of this year, we'll have a much bigger impact on 2022, then on 2021 and actually I have great confidence.
And.
And what 2022 looks like based on the current status.
Of our pipeline and our line of sight into and the significant deals.
Where we're likely to see upside in 'twenty 'twenty. One is in increase Levonne go chronic care enrollment.
We've factored in essentially no flu season in the back half of this year. So if we were to see a more normal flu season in the back half of this year that would be upside.
The two two of our revenue numbers and of course on our DTC channel that's.
That's performing incredibly well and if that were to accelerate it would also provide upside in 'twenty one.
And our next question Quinn.
Yes. Thanks, Thanks for taking the question.
Jason one of your competitors today talked about.
Opening the platform, particularly for third party developers to add additional capabilities.
I think the working with Google cloud as well.
I'm talking about sort of how you think about the broader ecosystem going forward and maybe some of the opportunities that presents for you guys.
In that kind of area as you think about you talked about of about five build.
Kind of decision, making on investments can you talk about sort of that with the teladoc platform and can you remind us I don't know if you talked about sort of who you are using us as the cloud partner, but maybe you can just remind us that as well thanks.
Sure.
On the cloud side, we're a multi platform so we don't.
With only one cloud provider.
Rather we work across.
Cloud providers.
Sort of take advantage of.
The best.
Of all of them.
And we think it's best to be able to the a little bit more diversified.
And then with respect to the.
The platform and my vision of of what we want to own and partner and an open.
It is concentric circles, where there are things that we really want to own and deeply integrate because that's going to deliver on the vision of whole person care, it's kind of best impact the.
Outcomes from a clinical perspective, as well as of financial perspective for the consumer and the client.
And it is integral to the consumer experience.
Then there is a set of things and what I think of it as the next circle.
Debt or <unk>.
Areas, where we need deep partnership because.
It's really important to the consumer experience, but they're not assets that we want to own.
For all kinds of reasons, either it is not part of our core competencies or it's not a beneficial economic model.
But we do think that there is opportunity for deep partnership in order to optimize the consumer experience and then there are many things outside of that were.
I believe we will open the <unk>.
Opportunity for other curated right, so I'm not going to I don't intend to open the platform.
For integration to all comers.
I think it's our responsibility quite frankly to curate.
That set of.
And the third ring.
But also areas, where we can bring value to the consumer as well as value to those those third parties.
By providing access.
Add to that large population that we serve and I think the fact that we have really an unmatched population and meaningfully larger scale than anyone else in the market makes us the ideal partner.
And your next question comes from all of the lines with Bank of America.
Thanks for taking the question Molly you said that you expect increased spending over the course of the year, where specifically is that increase coming from debt from is that from better health and then also was that an absolute increase or as a percent of revenue.
Yes, it's a great question.
We talked about.
The R&D roadmap and the fact that especially now with growth coming in even more so we will launch too.
The investigation.
Since the clear roadmap we have.
Of the pay.
The investments will be against that whether it be an integrated data platform, whether it be the unified <unk>.
Product experience that we definitely primary 2016.
The big bet for us.
It is something that day.
And talked about it it's a multi year round and it will require investment so that is definitely from.
We will continue to invest in behavioral health.
Whether it be on the <unk> side on the BTC sides of that will continue to be an investment for us.
So that would be those of the kinds of the areas that we're looking at from an investment perspective.
Going to your second question on percentage of revenue versus absolute.
We look for I think about it really in both ways.
The end of the day, what I am looking at is.
What are the priorities.
What are the return what are the rois against those investments.
And can I see.
Very clear payback for the investments we make.
It will have to be.
I do look at the percentage of revenue of at the end of the day, we have margin to manage and grow importantly.
But I also look at what is the dollar investments and what priorities of heating.
And the next question comes from Kevin Caliendo with UBS.
Hey, Thanks for the question this is Adam noble on for Kevin.
Just wanted to circle back a little bit to your comments around the MTM of the quarter I think you mentioned that.
The 48 sequential jump.
Versus <unk> half of that came from the extra months of <unk>. So.
The kind of 24.
Beyond that and I'm curious if you could break that 24 cents down.
The growth in the behavioral business.
Entre growth just in the chronic care.
<unk> itself as well as the Upsells.
The other dynamics.
Yes, Adam.
We don't provide very specific breakout on the different components of our business and staff for the different components of Pn Pn.
But what I will say.
More generally inc.
I do we have.
With the numbers that we have given out in our prepared remarks.
Can see.
The sort of the.
The buckets of.
The drivers that drove the expansion of MTN pn.
And as the have talked about the overarching trends in the business, whether it be multi product whether it be multi service usage.
And I would say even with the addition of La volume go now.
Those are all key drivers of the continued expansion in Pn Pn that I do foresee.
Maybe I'll give you just a couple of of that some of them, we talked about in our prepared remarks, and some of them may be incremental.
But we talked about the fact that now 15% of our chronic care members are using more than one product.
More than tripled.
The since a year ago.
<unk>.
And we're now at the point, where about a third of our chronic care clients are buying more than one product from us from about 18% of year ago right. So when we talk about multi product sales, it's across really our entire portfolio of both on the chronic care as well as of Q.
And then maybe lastly, and again an important data point is what is our and this really gets to my point about the pipeline, but what's our revenue per client look like and our revenue per chronic care client is up 33% versus a year ago. When you can.
Buying all of those you can understand how we're not only getting more revenue per client, but we're also getting more revenue per.
Per member.
And all of that contributes to increasing <unk> and by the way. It also shows that there is significant runway to continue to expand right. So the fact is its growth and there is enormous runway ahead of US same thing. If you think about the clients of the of contracting led to the point is we've made progress and there is.
Inefficient room to continue that expansion.
And that is all the time, we have for questions Ladies and gentlemen. This concludes today's conference call. Thank you for participating you may now disconnect.
Okay.
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Yes.
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Okay.