Q1 2024 Teladoc Health Inc Earnings Call

April 25, 2024

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Matt: Good afternoon. Thank you for attending the Teladoc Health Q1 2024 earnings call. My name is Matt, and I'll be your moderator for today's call. All lines will be muted during the presentation portion of the call to allow an opportunity for questions and answers at the end. If you would like to ask a question, please press star one on your telephone keypad. I would like to pass the conference over to our host, Adam Vandervoort, Chief Legal Officer, Teladoc. Adam, please go ahead.

Matt: Good afternoon, and thank you for attending the Teladoc Health Q1, 'twenty 'twenty four earnings call. My name is Matt and I'll be your moderator for today's call all lines have been muted during the presentation portion of the call up an opportunity for questions and answers at the end if you like to ask a question. Please press star one on your telephone keypad.

Matt: Pass the conference over to our host Adam Vandervoort, Chief legal officer to tell a Doc Adam. Please go ahead.

Adam Vandervoort: Thank you, and good afternoon. Today, after the market close, we issued a press release announcing our first quarter 2024 financial results. This press release and the accompanying slide presentation are available in the Investor Relations section of the TeladocHealth.com website. On this call to discuss the results are Mala Murthy, our Acting Chief Executive Officer and Chief Financial Officer, and Laser Kornvasser, our President of Enterprise Growth and Global Marketing.

Adam Vandervoort: And good afternoon.

Adam Vandervoort: Today after the market close we issued a press release announcing our first quarter 2024 financial results.

Adam Vandervoort: This press release and the accompanying slide presentation are available in the Investor Relations section of the Teladoc health Dot Com website.

Adam Vandervoort: On this call to discuss the results are Mala Murthy, our acting Chief Executive Officer, and Chief Financial Officer, and laser corn Foster our president of enterprise growth in global markets.

Adam Vandervoort: During this call, we will also discuss our outlook, and our prepared remarks will be followed by a question and answer session. Please note that we will be discussing certain non-GAAP financial measures that we believe are important in evaluating Teladoc Health's performance. Details on the relationship between these non-GAAP measures to the most comparable GAAP measures and reconciliations thereof can be found in the press release that is posted on our website. Also, please note that certain statements made during this call will be forward-looking statements, as defined by the Private Securities Litigation Reform Act of 1995.

Adam Vandervoort: During this call. We will also discuss our outlook and our prepared remarks will be followed by a question and answer session.

Adam Vandervoort: Please note that we will be discussing certain non-GAAP financial measures that we believe are important in evaluating teladoc health's performance.

Adam Vandervoort: Details on the relationship between these non-GAAP measures to the most comparable GAAP measures and reconciliations thereof can be found in the press release that is posted on our website.

Adam Vandervoort: Also please note that certain statements made during this call will be forward looking statements as defined by the private Securities Litigation Reform Act of 1095.

Adam Vandervoort: Such forward-looking statements are subject to risks, uncertainties, and other factors that could cause the actual results for Teladoc Health to differ materially from those expressed or implied on this call. For additional information, please refer to our cautionary statement in our press release and our filings with the SEC, all of which are available on our website. I would now like to turn the call over to Mala.

Adam Vandervoort: Such forward looking statements are subject to risks uncertainties and other factors that could cause the actual results for teladoc health to differ materially from those expressed or implied on this call for additional information. Please refer to our cautionary statement in our press release and our filings with the SEC all of which are available on <unk>.

Adam Vandervoort: Our website I would now like to turn the call over to Mala.

Mala Murthy: Thank you Adam and thanks, everyone for joining us today.

Mala Murthy: Thank you, Adam. And thanks, everyone, for joining us today. Before we begin, I'd like to take a moment to reflect on the recent leadership changes at Teladoc. First off, on behalf of Teladoc's more than 5,000 employees, board of directors, and executive leadership team, I would like to extend our deepest gratitude to Jason Gorevic for his accomplishments over the past 15 years. Jason leaves a tremendous legacy, having firmly established Teladoc as the industry leader in whole person virtual care. As we mentioned in our February earnings call, Teladoc is in a timeless transition. And as part of this evolution,

Mala: Before we begin I'd like to take a moment to reflect on the recent leadership changes at Teladoc health.

Mala: First off on behalf of Tullow docs more than 5000 employees board of directors and executive leadership team I would like to extend our deepest gratitude to Jason <unk> for his accomplishments over the past 15 years.

Mala: Jason leaves a tremendous legacy having firmly establish teladoc as the industry leader in whole person virtual care.

Mala: As we mentioned in our February earnings call tell a Doc is in a time of transition.

Mala: As part of this evolution the board of Directors decided that it was time to look for a new leader for our company somewhat to help US write the next chapter in our growth story.

Mala Murthy: The board of directors decided that it was time to look for a new leader for our company, someone to help us write the next chapter in our growth story. The board's search for a successor is well underway, and our permanent CEO is expected to be named later this year. The board has appointed me to serve as CEO while they conduct the search, and I'm honored to play this role for a company whose work I believe in so deeply.

Mala: The board search for a successor is well underway and our permanent CEO is expected to be named later this year.

Speaker Change: The board has appointed me to serve as CEO, while we conduct the search and I'm honored to play this role for a company, whose work I believe and so deeply.

Speaker Change: In the meantime, however, we are wasting no time in identifying and seizing opportunities to leverage our significant assets and capabilities.

Mala Murthy: In the meantime, however, we are wasting no time in identifying and seizing opportunities to leverage our significant assets and capabilities. As an organization, our focus is on accelerating growth on both the top and bottom lines over the medium and longer term. And my focus as acting CEO is to ensure that our strategy continues to be supported by the appropriate level of investment, that our leadership team is executing on our priorities, and that we are accelerating the pace of change and innovation across our business. With that, I am turning now to a review of our first quarter performance.

Speaker Change: As an organization our focus is on accelerating growth on both the top and bottom line over the medium and longer term.

Speaker Change: And my focus as acting CEO is to ensure that our strategy continues to be supported by the appropriate level of investment that our leadership team is executing on our priorities and that we are accelerating the pace of change and innovation across our business.

Speaker Change: With that turning now to a review of our first quarter performance.

Mala Murthy: I'm pleased to report a solid start to the year across the business, exceeding our financial and operating guidance for both consolidated revenue and adjusted EBITDA in the first quarter. Our team remains laser focused on our key initiatives, which include building upon our market leadership position, driving increased product penetration through our large installed base of over 90 million virtual care members, and Accelerating our Bottom Line Performance. This focus is evident in our first quarter results. In the integrative care segment, we are pleased to see continued strong interest in our whole person care suite of products.

Speaker Change: I'm pleased to report a solid start to the year across the business exceeding our financial and operating guidance for both consolidated revenue and adjusted EBITDA in the first quarter.

Speaker Change: Our team remains laser focused on our key initiatives which include.

Speaker Change: Building upon our market leadership position driving increased product penetration through our large installed base of over 19 million virtual care members.

Speaker Change: And accelerating our bottom line performance.

Speaker Change: This focus is evident in our first quarter results.

Mala: In the integrated care segment, we are pleased to see continued strong interest in our whole person care suite of products.

Mala Murthy: First quarter integrated care revenue grew 7.8% year over year to $377 million, benefiting from high single-digit growth in our chronic care book of business, as well as strong visit revenues driven by increased infectious disease activity, as well as an 8% increase in membership year over year. Chronic care enrollment remains strong, up 9% year-over-year in the first quarter. Better Health revenue of $269 million declined 3.7% versus a difficult comparison in the first quarter of last year. BetterHelp also generated modestly lower revenue on a sequential basis.

Mala: First quarter integrated care revenue grew seven 8% year over year to $377 million bench.

Mala: Benefiting from high single digit growth in our chronic care book of business.

Mala: As well as strong visit revenue driven by increased infectious disease activity as well as an 8% increase in membership year over year.

Mala: Chronic care enrollment remained strong up 9% year over year in the first quarter.

Mala: That'll help revenue of $269 million declined three 7% versus a difficult comparison in the first quarter of last year.

Mala: That'll help also generated modestly lower revenue on a sequential basis driven in part by a decline in paying users following our pepco pullback in AD spend in the fourth quarter, which is the most expensive time of the year and our marketing channels.

Mala Murthy: This was driven in part by a decline in paying users following our typical pullback in ad spend in the fourth quarter, which is the most expensive time of the year for our marketing. Additionally, as expected, the lower returns on our social media advertising spend we experienced in the second half of 2023 persisted in the first quarter and are impacting our year-over-year growth rates in the first half of this year. We are making progress to improve our yield on advertising spend, which considers not only cost per acquisition but also retention and other factors as well.

Mala: Additionally, as expected the lower returns on our social media advertising spend we experienced in the second half of 2023 persisted in the first quarter.

Mala: And are impacting our year over year growth rates in the first half of this year.

Mala: We are making progress to improve our yield on advertising spend which contemplates not only cost per acquisition, but also retention and other factors as well.

Mala Murthy: I will speak to our efforts to reinvigorate growth in our better health business later in the call. Meanwhile, we continue to make progress on our bottom line performance, with a first quarter consolidated adjusted EBITDA margin of 9.8%, improving 140 basis points year over year, and adjusted EBITDA of $63 million, growing nearly 20% year over year. We are executing against our cost savings and productivity initiative, and we remain on track to deliver $43 million in cost savings on a gap basis for our business in 2024 and a total of $85 million in 2025. The breadth of our product portfolio continues to drive productive conversations with both prospective and existing clients. Two-thirds of our bookings in the quarter came from cross-selling into our existing book of business.

Mala: I will speak to our efforts to reinvigorate growth and our better health business later in the call.

Mala: We continue to make progress on our bottom line performance with first quarter consolidated adjusted EBITDA margin of nine 8%, improving 140 basis points year over year, and adjusted EBITDA of $63 million growing nearly 20% year over year.

Mala: Executing against our cost savings and productivity initiatives and we remain on track to deliver $43 million in cost savings on a GAAP basis for our business in 2024.

Mala: And a total of $85 million in 2025.

Mala: The breadth of our product portfolio continues to drive productive conversations with both prospective and existing clients.

Mala: Two thirds of our bookings in the quarter came from cross selling into our existing book of business with the remaining third coming from new clients.

Mala Murthy: With the remaining third coming from new clients, reflecting a continuation of our cross-selling momentum over the past several quarters, along with an acceleration in bookings from new business. Both existing and prospective clients are demonstrating increased interest in our Chronic Care Plus bundle solutions, and we remain optimistic about our ability to drive increased product penetration through our installed base of nearly 92 million members over the next several years. In Q1, we saw another example of our land and expand strategy playing out as we added our diabetes program to a large health benefits provider, a client who had previously only purchased our telehealth solution. We are also seeing growing interest in our weight management solution from employers who are grappling with rising costs for GLP-1s and employee demand for these products.

Mala: <unk>, a continuation of our cross selling momentum over the past several quarters, along with an acceleration in bookings from new business.

Mala: Both existing and prospective clients are demonstrating increased interest in our chronic care plus bundle solution and we remain optimistic about our ability to drive increased product penetration through our installed base of nearly 92 million members over the next several years.

Mala: In Q1, we saw another example of our land and expand strategy playing out as we added our diabetes program into a large health benefits provider.

Mala: And who had previously only purchased our telehealth solution.

Mala: We're also seeing growing interest in our waste management solution from employers who are grappling with rising costs for G. L. P. One unemployed demand for these products.

Mala Murthy: The addition of approximately 2.2 million members on a sequential basis since Q4 represents additional greenfield opportunity for future cross-sell and product penetration, and with more than $1 billion in cash and cash equivalents on our balance sheet. Our financial strength continues to be another differentiator for our company and provides us with significant capacity and flexibility to invest in and innovate in our business. We also continue to see growing benefits from our early and ongoing commitment to data and artificial intelligence, with AI models now integrated across nearly all aspects of our platform. From provider matching to enrollment optimization to member engagement, this automation is helping us not only reach our revenue and profitability goals but also achieve our mission of improving health by reaching more consumers. One exciting example is our use of generative AI in member engagement to create hyper-personalized content for individuals to get them signed up for Teladoc services they need and then keep them on track.

Mala: The addition of approximately $2 2 million members on a sequential basis since Q4 represents additional greenfield opportunity for future cross sell and product penetration.

Mala: And with more than 1 billion in cash and cash equivalents on our balance sheet.

Mala: Our financial strength continues to be another differentiator for our company and provides us with significant capacity and flexibility to invest and innovate in our business.

Mala: We also continue to see growing benefits from our early and ongoing commitment to data and artificial intelligence with AI models now integrated across nearly all aspects of our business.

Mala: From provider matching to enrollment optimization to member engagement.

Mala: Automation is helping us not only reach our revenue and profitability goals.

Mala: It also achieve our mission of improving health by reaching more consumers.

Mala: One exciting example is our use of generative AI in member engagement to create hyper personalized content for individuals to get them signed up for Teladoc services, They need and then keep them on track.

Mala Murthy: Our pilots with this AI use case, while still being carefully studied, are already delivering significant improvements in member engagement over previous. I would now like to spend a few minutes reviewing our first quarter financial results in detail. First quarter consolidated revenue increased 3% year over year to $646 million, and first quarter adjusted EBITDA was $63 million, representing a margin of 9.8%. First quarter financial performance benefited from higher revenues in our integrated care segment and improved expense control.

Mala: Our pilots, but this AI use case, while still being carefully studied are already delivering significant improvement in member engagement over prior approaches.

Speaker Change: I would now like to spend a few minutes reviewing our first quarter financial results in detail.

Speaker Change: First quarter consolidated revenue increased 3% year over year to $646 million, while first quarter adjusted EBITDA was $63 million, representing a margin of nine 8%.

Mala: First quarter financial performance benefited from higher revenues in our integrated care segment and improved expense control.

Mala: Turning to segment results.

Mala Murthy: Turning to segment results, integrated care revenue increased 8% year-over-year to $377 million in the quarter, with growth relatively balanced across the portfolio. First Quarter Integrated Care Adjusted EBITDA was $47.7 million, representing a 260 basis point expansion in margins to 12.6%. The margin outperformance relative to guidance was largely driven by strong chronic care program enrollment during the first quarter, which, combined with better expense control, helped deliver improved gross margins and bottom line performance. Total chronic care program enrollment was 1.12 million at the end of the first quarter, representing growth of 9% year over year.

Mala: Integrated care revenue increased 8% year over year to $377 million in the quarter.

Mala: With growth relatively balanced across the portfolio.

Mala: First quarter integrated care, adjusted EBITDA was $47 $7 million, representing a 260 basis point expansion in margin to 12, 6%.

Mala: The margin outperformance relative to guidance was largely driven by strong chronic care program enrollment during the first quarter, which combined with better expense control helped deliver improved gross margin and bottom line performance.

Mala: Total chronic care program enrollment was one point to one 2 million at the end of the fourth quarter representing growth of 9% year over year.

Mala Murthy: Total U.S. integrated care members grew $6.9 million over the prior year, representing 8% growth, and grew by $2.2 million sequentially to $91.8 million. Average integrated care revenue per U.S. member of $1.38 was down one cent over the prior year's first quarter, reflecting the timing of new client onboarding and enrollment rounds. The onboarding of large populations and our expanding membership base represent a long runway for continued cross-selling of our chronic care and other B2B products as we execute against our launch and expand strategy. First quarter beta health segment revenue decreased 4% year over year to $269 million, driven by an 11% decrease in paying users.

Mala: Total U S integrated care members grew $6 9 million over the prior year, representing 8% growth.

Mala: And grew by $2 2 million sequentially to $91 8 million.

Mala: Average integrated care revenue per U S member of one dollar and 38 cents was down 1% over the prior year's first quarter, reflecting the timing of new client on boarding and enrollment ramp.

Mala: The onboarding of large populations and our expanding membership base.

Mala: Represents a long runway for continued cross selling of our chronic care and other b to b product as we execute against our land and expand strategy.

Mala: First quarter, better health segment revenue decreased 4% year over year to $269 million driven by an 11% decrease in paying users.

Mala Murthy: First Quarter Better Health Adjusted EBITDA was $15.5 million, representing a margin of 5.7%. As we have discussed previously, the first quarter is typically the seasonally weakest quarter from a margin perspective for Better Health, as marketing expense ramps up following the fourth quarter holiday season. As such, we continue to expect the first quarter to be the low point of the year for better health segment margins, and we expect consistent quarter over quarter margin improvement through the course of 2024.

Mala: First quarter better health adjusted EBITDA was $15 $5 million, representing a margin of five 7%.

Mala: As we have discussed previously the first quarter is typically the seasonally weakest quarter from a margin perspective for a better health business as marketing expense ramps up following the fourth quarter holiday season.

Mala: As such we continue to expect the first quarter to be the low point of the year for better health segment margins.

Mala: And we expect consistent quarter over quarter margin improvement through the course of 'twenty 'twenty four.

Mala: Consolidated net loss per share in the first quarter was 49 cents compared.

Mala Murthy: Consolidated net loss per share in the first quarter was $0.49 compared to a net loss per share of $0.42 in the first quarter of 2023. Net loss per share in the first quarter includes stock-based compensation of $42.3 million, or $0.25 per share, and restructuring charges, primarily related to severance, of $9.7 million, or $0.06 per share.

Mala: Fair to a net loss per share of 42 cents in the first quarter of 2023.

Mala: Net loss per share in the first quarter includes stock based compensation of $42 $3 million or 25 per share restructuring charges, primarily related to severance of $9 $7 million or <unk> <unk> per share.

Mala Murthy: An amortization of acquired intangibles of $64.2 million, or $0.38 per share. During the first quarter, free cash flow was a net outflow of $27 million compared to a net outflow of $32 million in the first quarter of 2020. As a reminder, the first quarter is our seasonally lowest cash flow quarter given the payment of annual incentive compensation. We ended the quarter with $1.1 billion in cash and cash equivalents on the balance.

Mala: And amortization of acquired intangibles of $64 $2 million or <unk> 38 cents per share.

Mala: During the first quarter, our free cash flow was a net outflow of $27 million compared to a net outflow of $32 million in the first quarter of 2023.

Mala: As a reminder, the first quarter is our seasonally lowest cash flow quarter, given the payment of annual incentive compensation.

Mala: We ended the quarter with $1 1 billion in cash and cash equivalents on the balance sheet.

Mala: Turning now to forward guidance, beginning with our integrated care segment.

Mala Murthy: Turning now to forward guidance, beginning with our integrated care segment, we expect integrated care revenue in the second quarter to be between 2 and 5% versus the prior year period. As a reminder, in our first quarter call, we called out a delay in launching our B2B consumer engagement efforts due to a technical issue in mapping new client populations, with an expected cumulative negative impact of $20 million for the full year, particularly in the second and third quarters.

Mala: We expect to integrated care revenue in the second quarter to be between 2% and 5% versus the prior year period.

Mala: As a reminder, in our first quarter call, we called out a delay in launching our b to b consumer engagement efforts due to a technical issue in mapping new client populations with an expected cumulative negative impact of $20 million for the full year, particularly in the second and third quarters.

Mala: The impact of this delay coupled with strong year over year first quarter chronic care results.

Mala: The seasonal falloff of infectious disease, driven visit revenues versus the first quarter is expected to result in a lower year over year second quarter growth rate compared to our first quarter results.

Mala Murthy: The impact of this delay, coupled with strong year-over-year first quarter chronic care results and the seasonal fall-off of infectious disease-driven visit revenues versus the first quarter, is expected to result in a lower year-over-year second quarter growth rate compared to our first quarter results.

Mala: For the full year as previously guided we expect the integrated care revenues to be in the low to mid single digits, reflecting higher revenues in the second half versus the first half of the year due primarily to the enrollment ramp and chronic care and a growing contribution from the nearly 6 million new integrator.

Mala Murthy: For the full year, as previously guided, we expect integrated care revenues to be in the low to mid single digits, reflecting higher revenues in the second half versus the first half of the year, due primarily to the enrollment ramp in chronic care and a growing contribution from the nearly six million new integrated care members we have added since the second quarter of last year. From an adjusted EBITDA perspective, we expect a 12 to 14% margin in the second quarter, and we continue to expect 150 to 250 basis points of margin expansion for the full year, reflecting revenue-driven operating leverage and the impact of our cost-saving initiatives.

Mala: <unk> members, we have added since the second quarter of last year.

Mala: From an adjusted EBITDA perspective, we expect a 12% to 14% margin in the second quarter.

Mala: And we continue to expect 150 to 250 basis points of margin expansion for the full year, reflecting revenue driven operating leverage and the impact of our cost saving initiatives.

Mala: As it relates to U S integrated care membership, we expect 92 to 93 million members for the second quarter and 92 to 94 million members for the full year and an increase from previous guidance. After writing 2 million members in the first quarter.

Mala: Turning now to our better health segment.

Mala: For the second quarter, we expect better help revenues to be in the range of a negative 8% to negative 4% over the prior year period.

Mala Murthy: As it relates to U.S. integrated care membership, we expect 92 to 93 million members for the second quarter and 92 to 94 million members for the full year, an increase from previous guidance after adding 2 million members in the first. Turning now to our Better Health segment.

Mala: Our second quarter guidance reflects challenging cost per acquisition through early Q1, which caused us to pull back on our advertising dollars in the quarter in keeping with our goal of balancing growth and margin.

Mala: These factors led to a decline in users in Q1, which is impacting our Q2 revenue growth rate on top of a difficult comparison relative to the second quarter of 2023. However, we are seeing signs of stabilization in our cost per acquisition in more recent weeks, which gives us increased confidence in the back half of the year.

Mala Murthy: For the second quarter, we expect BetterHelp revenues to be in the range of a negative 8% to negative 4% over the prior year period. Our second quarter guidance reflects challenging cost per acquisition through early Q1, which caused us to pull back on our advertising dollars in the quarter in keeping with our goal of balancing growth and margins. These factors led to a decline in users in Q1, which is impacting our Q2 revenue growth rate on top of a difficult comparison relative to the second quarter of 2023.

Mala: For a better health business, something I will speak to momentarily.

Mala: For the full year, we continue to expect flat to low single digit revenue growth and better health.

Mala: We do expect that'll help growth to accelerate in the second half of the year.

Mala: I'd like to take a moment to discuss what's giving us increased confidence in the future of our better health business, which has been challenged in recent quarters.

Mala Murthy: However, we are seeing signs of stabilization in our cost per acquisition in recent weeks, which gives us increased confidence in the back half of the year for a better health business, something I will speak to momentarily. For the full year, we continue to expect flat to low single-digit revenue growth and better health. We do expect better health growth to accelerate in the second half of the year. I'd like to take a moment to discuss what's giving us increased confidence in the future of our better health business, which has been challenged in recent quarters.

Mala: Late last year, we brought in new leadership for better health, who have help inject a broader and more global perspective on growth levers for this business.

Mala: We are seeing improvements in retention and in our international business.

Mala: Which are helping offset some of the impact from higher see periods in the U S by improving our overall yield on advertising spend.

Mala: The success, we are starting to see what these levers.

Mala: Along with the efforts and select international geographies that we expect to ramp in the second half of the year.

Mala: Give us confidence in our second half better help outlook.

Mala: We expect these initiatives to lead to meaningfully higher membership growth and improve customer retention versus the first half.

Mala Murthy: Late last year, we brought in new leadership for better health, who have helped inject a broader and more global perspective on growth levers for this business. We are seeing improvements in retention and in our international business, which are helping offset some of the impact from higher CPAs in the U.S. by improving our overall yield on advertising spend. The success we are starting to see with these levers, along with the efforts in select international geographies that we expect to ramp up in the second half of the year, give us confidence in our second half better health.

Mala: We are excited about the international opportunity, particularly in select English speaking geographies that are relatively underpenetrated compared to the U S market, which will allow us to reallocate some advertising and marketing dollars at a higher margin will return as we continue to build out our infrastructure in those markets.

Mala: Given these dynamics throughout the year, we expect that'll help revenue growth for the full year to be in the flat to low single digit range as previously guided despite our lower first half growth.

Mala: I would also note that we have thoroughly pressure tested the assumptions that underpin up better health guidance for the rest of the year, we take several factors into account when developing both the low end and the high end of the range, including recent trends in advertising yield channel dynamics consumer sentiment and other macro factors and.

Mala Murthy: We expect these initiatives to lead to meaningfully higher membership growth and improve customer retention compared to the first half. We are excited about the international opportunity, particularly in select English-speaking geographies that are relatively underpenetrated compared to the U.S. market, which will allow us to reallocate some advertising and marketing dollars at a higher marginal return as we continue to build out our infrastructure in those markets.

Mala: We have taken a close look at each one of these <unk>.

Mala: That said the impact of difficult to predict macro events creates unknowns as it pertains to our yield on advertising in the second half of the year and we will continue to provide updates on the trends that you're seeing in upcoming earnings calls.

Mala: From a margin perspective, we expect better help adjusted EBITDA margin to be in the 9% to 10% range in the second quarter and continue to expect margins to be flat plus or minus 50 basis points for the full year.

Mala Murthy: Given these dynamics throughout the year, we expect health revenue growth for the full year to be in the flat to low single-digit range as previously guided, despite our lower first half growth. I would also note that we have thoroughly pressure-tested the assumptions that underpin our better health guidance for the rest of the year. We take several factors into account when developing both the low-end and the high-end of the range, including recent trends in advertising yields, channel dynamics, consumer sentiment, and other macro factors, and we have taken a close look at each one of these.

Mala: The sequential margin improvement that we expect to see over the course of the Europe, primarily reflect the cumulative effect of new members added over the course of the year the cadence of advertising spending, including the typical seasonal pullback in the fourth quarter and innovation driven improvements in our yield on advertising spend.

Mala: On a consolidated basis, we expect second quarter revenue of $635 million to $660 million and adjusted EBITDA of 70 million to $80 million, our full year guidance remains unchanged with the exception of the increase to our U S integrated care membership.

Mala Murthy: That said, the impact of difficult-to-predict macro events creates unknowns as it pertains to our yield on advertising in the second half of the year, and we will continue to provide updates on the trends that we are seeing in upcoming earnings calls. From a margin perspective, we expect better health adjusted EBITDA margins to be in the 9 to 10% range in the second quarter and continue to expect margins to be flat, plus or minus 50 basis points for the full year.

Mala: That I've mentioned previously.

Mala: We continue to expect consolidated revenue to be in the range of $2 63, $5 billion to $2 73 $5 billion for the full year, representing revenue growth of 1% to 5% along with consolidated adjusted EBITDA of $350 million to 309.

Mala: $19 million, representing growth of 7% to 19% on a year over year basis.

Mala: We expect full year free cash flow of $210 million to $240 million driven by both the growth in adjusted EBITDA and unexpected decline in capitalized software development costs.

Mala Murthy: The sequential margin improvements that we expect to see over the course of the year primarily reflect the cumulative effect of new members added over the course of the year, the cadence of advertising spending, including the typical seasonal pullback in the fourth quarter, and innovation-driven improvements in our yield on advertising spending. On a consolidated basis, we expect second-quarter revenue of $635 million to $660 million and adjusted EBITDA of $70 million to $80 million.

Mala: We're also maintaining our prior EPS guidance for the full year.

Mala: Lastly, we are reiterating the three year outlook that we provided you on our earnings call in February.

Mala: In closing I want to recognize my executive team and our broader leadership team for leaning in during this time of change.

Mala: Have been incredibly pleased with our continued focus on living our values and delivering for our members and clients this year, especially over the past several weeks.

Mala Murthy: Our full year guidance remains unchanged with the exception of the increase to our U.S. integrated care membership that I've mentioned previously. We continue to expect consolidated revenue to be in the range of $2.635 billion to $2.735 billion for the full year, representing revenue growth of 1% to 5%, along with consolidated adjusted EBITDA of $350 million to $390 million, representing growth of 7% to 19% on a year-over-year, We expect full year free cash flow of $210 million to $240 million, driven by both the growth in Adjusted EBITDA and an expected decline in capitalized software development costs.

Mala: We've had a solid start to the year and are poised to deliver significant growth in the second half of 2024.

Mala: I remain focused on our strategy, our execution and on our people.

Speaker Change: With that we will open it up for questions.

Mala: Later.

Mala: If you would like to ask a question. Please press star followed by one on your telephone keypad. If for any reason you would like to leave that question. Please press star followed by two again to ask a question Chris Star one.

Mala: A reminder, if youre using a speakerphone please pick up your handset before asking your question.

Mala: We ask that you please limit yourself to one question.

Speaker Change: I'll say briefly a questions registered.

Mala: Yeah.

Mala: First question is from the line of Stephanie Davis with Barclays. Your line is now open.

Stephanie July Davis: <unk>. Thank you for taking my question and for wearing all behalf right now.

Mala Murthy:

Stephanie July Davis: Was hoping you could talk a little bit about some early color on the international strategy and timing for that or how can you talk to us about the rollout how we should be thinking about the cadence of that and maybe is.

Mala Murthy: We're also maintaining our prior EPS guidance for the full year. Finally, we are reiterating the three-year outlook that we provided you on our earnings call in February. In closing, I want to recognize my executive team and our broader leadership team for leaning in during this time of change. I've been incredibly pleased with their continued focus on living our values and delivering for our members and clients this year, especially over the past several weeks.

Stephanie July Davis: Have you seen some of that come through already which is giving you that confidence in that second half growth rate.

Speaker Change: Thank you Stephanie, yes, I'm wearing many hats happy to be here.

Stephanie: So in terms of the growth in international as we had said on our last call.

Stephanie July Davis: Last year, our international as a percentage of our total better health business was in the mid teens.

Mala Murthy: We've had a solid start to the year and are poised to deliver significant growth in the second half of 2024. I remain focused on our strategy, our execution, and on our plan. With that, we will open it up for questions. Operator.

Mala Murthy: It is certainly contributing to the second half ramp of revenue this year.

Stephanie: Remember.

Stephanie: This is it's not as if we are going into international de Novo we are already in a few markets.

Mala Murthy: Several of them are English speaking markets, such as the U K, Canada, Australia and the plan. We have is for us to continue penetrating into those markets first and that is what is.

Operator: If you'd like to ask a question, please press star followed by one on your telephone keypad. If, for any reason, you'd like to remove that question, please press star followed by two. Again, to ask a question, press star one. As a reminder, if you're using a speakerphone, please remember to pick up your handset before asking your question. We ask that you please limit yourselves to one question. We will pause here briefly as questions are registered. The first question is from the line of Stephanie Davis with Barclays. Your line is now open.

Stephanie: Driving our confidence in the second half ramp because we happen in these markets. We know the dynamics of the better health business in the in these markets.

Stephanie July Davis: You know based on our experience we have knowledge of the economics of being in these markets.

Stephanie July Davis: Obviously as we penetrate these markets and invest more in these markets.

Stephanie July Davis: We hope to continue to see the return on AD spend.

Stephanie: As well as the revenue growth for the balance of both topline growth and bottom line growth that I expect to see.

Operator: Okay.

Speaker Change: And for like a mini follow up is there any way to compare that kind of roll off you're seeing on those international markets, where you're already in them versus what we're seeing in the U S.

Stephanie July Davis: Hey Mala, thank you for taking my question and for wearing all of the hats right now. I was hoping you could talk a little bit about some early color on the international strategy and timing for better health. Can you talk to us about the rollout, how we should be thinking about the cadence of that, and maybe if you've seen some of that come through already, which is giving you that confidence in that second half-throat rate?

Mala Murthy: Here's what I would say I expect international to grow faster than the U S.

Speaker Change: Certainly that is something that we saw last year I do expect that to continue from a rollout perspective, Stephanie I would say we are going to start in the second half and rollout as you know do our AD spending in these markets.

Mala Murthy: Thank you, Stephanie. Yes, I'm wearing many hats. I'm happy to be here.

Stephanie July Davis: As we go through the second half of the one thing I will remind you is Q4 typically in the U S is always.

Mala Murthy: So in terms of the growth in international, as we had said on our last call, last year, international as a percentage of our total better health business was in the mid-teens. It is certainly contributing to the second-half ramp of revenue this year. Remember, it's not as if we are going into international de novo.

Mala Murthy: The seasonally weakest quarter from an AD spending perspective is the quarter, where we will typically pull back our outspend and I would say that dynamic is in the U S. We will evaluate and assess how much of that dynamic also plays out in the international markets.

Speaker Change: Mhm.

Speaker Change: Thank you for your question.

Mala Murthy: Next question is from the line of Lisa Gill with Jpmorgan. Your line is open.

Mala Murthy: It's really about understand two things one.

Mala Murthy: We are already in a few markets. Several of them are English-speaking markets, such as the UK, Canada, and Australia. The plan we have is for us to continue penetrating those markets first. That is what is driving our confidence in the second-half ramp because we have been in these markets. We know the dynamics of the better health business in these markets. Based on our experience, we have knowledge of the economics of being in these markets.

Speaker Change: Clearly understand that the change in leadership and what the board is going through but just also curious if you're looking at any strategic changes to the business and once again under pressure on the better hotspot Ive just heard you talk about international but you know or are there things that the board is reviewing would be my first question and then secondly, just really.

Mala Murthy: Want to understand the opportunity around that 8% membership growth, which was really strong in the quarter. We didnt see an increase in either revenue or adjusted EBITDA is that the timing is there an opportunity for cross sell so it gets really understanding how that that's going to play into the numbers.

Mala Murthy: Obviously, as we penetrate these markets and invest more in these markets, we hope to continue to see the return on ad spend, as well as revenue growth, so the balance of both top-line growth and bottom-line growth that I expect.

Speaker Change: Yeah, Thanks, Lisa great questions.

Mala Murthy: So from an overall board perspective and.

Mala Murthy: And for like a mini-follow-up, is there any way to compare the kind of ROAS you're seeing in those international markets where you're already in them versus what we're seeing in the US? Um, here's what I think.

Speaker Change: What might that.

Speaker Change: Implied for changes, obviously as I said in our prepared remarks right now the focus of the leadership team.

Mala Murthy: Here's what I would say. I expect international business to grow faster than the U.S. Certainly, that is something that we saw last year, and I do expect that to continue. From a rollout perspective, Stephanie, I would say, you know, we are going to start in the second half and roll out as we, you know, do our ad spending in these markets as we go through the second half. The one thing I will remind you is Q4 typically in the U.S. is always the seasonally weakest quarter from an ad spending perspective. It's the quarter where we will typically pull back on our ad spend, and I would say that dynamic is in the U.S.

Mala Murthy: My focus and I would say the focus of the board as well is for us to be.

Speaker Change: Ladies are heads down focused on implementing our plans our investments our priorities.

Mala Murthy: And frankly, leading our employee base the 5000 plus employees behalf through this period of transition and change.

Mala Murthy: I would say also that.

Mala Murthy: I am pleased with the solid start we have to the E. R. M. Hopefully we have given you enough transparency and color as in our prepared remarks on what is really driving our confidence in our growth both from a topline perspective on our bottom line perspective as we roll.

Operator: The next question is from the line of Lisa Gill with J.P. Morgan. Your line is now open.

Lisa Gill: Through the year.

Lisa Gill: We've kept our overall 2020 for guidance.

Lisa Gill: Hi Mala.

Lisa Gill: I just really want to understand two things. One, clearly understand the change in leadership and what the board is going through, but I'm also curious if you're looking at any strategic changes to the business. And, you know, once again, under pressure on the Better Health side, I've just heard you talk about international, but, you know, are there things that the board is reviewing? That would be my first question. And then, secondly, just really want to understand the opportunity around that 8% membership growth, which was really strong in the quarter. We didn't see an increase in either revenue or adjusted EBITDA.

Lisa Gill: From a revenue adjusted EBITDA and a cash flow perspective, we continue to make progress on our cost initiatives that we have talked about in February. So all of those are things that require execution and I would say we are laser focused on that beyond that look.

Speaker Change: We are always looking at different parts of our business. We are looking at what top line growth they bring in and what Bottomline growth. They began suddenly as we said in our prepared remarks, but that'll help business has been challenged in recent quarters.

Lisa Gill: And I would say I am focused on the execution of the various initiatives that we talked about that will give us that second half ramp whether it be improved retention, whether it'd be the fact that we are driving growth in international markets.

Mala Murthy: Is that just timing? Is there an opportunity for cross-sell? So just really understanding, you know, how that's going to play into the numbers. You know, thanks, Lisa.

Mala Murthy: And the growth in the much smaller part of better health better sleep part of that business, which is also growing nicely all of these require execution.

Mala Murthy: Thanks, Lisa. Great questions. So, from an overall board perspective and, you know, what that might imply for changes, obviously, as I said in our prepared remarks, right now, the focus of the leadership team, my focus, and I would say the focus of the board as Lisa, is heads down, focused on implementing our plans, our investments, our priorities, and frankly, leading our employee base, the 5000 plus employees we have through this period of transition and change.

On the integrated care side, I would say I'm pleased with our strong enrollment that we have started out with obviously you know this the enrollment ramp through the year.

Mala Murthy: And we are certainly working through that and that is going to drive our revenue growth and our profits our margin expansion on the integrated care side as we go through the year. So.

Lisa Gill: Yeah. So to your question in terms of what we are evaluating and assessing is we are executing we are focused on driving our plans for this year.

Mala Murthy: I would also say that, you know, I'm pleased with the solid start we have to the year. Hopefully, we have given you enough transparency and color, as in our prepared remarks, on what is really driving our confidence in our growth, both from a top line perspective and from a bottom line perspective as we roll through the year. We've kept our overall 2024 guidance as is, from a revenue adjustment and a cashflow perspective.

Mala Murthy: And we continue to assess how the various parts of our business are doing.

Mala Murthy: You know whether they are driving the both the topline and the bottom line, we see beyond that I would say there isn't really more to comment on it at this time on the second question you had around membership here's what I would say.

Mala Murthy: We continue to make progress on our cost initiatives that we talked about in February. So all of those are things that require execution, and I would say we are laser focused on that. Beyond that, look, we are always looking at different parts of our business. We are looking at what top line growth they bring in and what bottom line growth they bring in. Certainly, as we said in our prepared remarks, the better health business has been challenged.

Mala Murthy: We certainly are pleased with the 2 million plus member adds that we had in the quarter remember the benefit we have of the membership that is always the fact that it is the underpinning of our land and expand strategy. So it gives off fertile ground to.

Mala Murthy: Continue to penetrate cross sell upsell.

Mala Murthy: Once we get these members into our fold and as we sell them additional products, we expect to see the revenue accretion from that in the quarters ahead.

Mala Murthy: And I would say I am focused on the execution of the various initiatives that we talked about that will give us that second half ramp, whether it be improved retention, whether it be the fact that we are driving growth in international markets and the growth in the much smaller part of better health, the better sleep part of that business, which is also growing nicely. On the integrated care side, I would say I'm pleased with the strong enrollment that we started out with.

Mala Murthy: Yes.

Speaker Change: Thank you for your question.

Mala Murthy: The next question is from the line of Jo Anderson with <unk>. Your line is now open.

Elizabeth Hammell Anderson: Thank you and thanks for taking my questions.

Mala Murthy: We talk about chronic care program enrollment metric I understand goes up year over year, but it actually declined a little over 3% sequentially typically we see a pick up from Q4 the Q.

Mala Murthy: Due to new contract starts and enrollment increase of new color calendar year. So can you provide some color there and then what are your expectations around that metric.

Mala Murthy: Obviously, you know, this enrollment ramps through the year, and we are certainly working through that. And that is going to drive our revenue growth and our profit, and our margin expansion on the integrated care side as we go. So, the answer to your question in terms of what we are evaluating and assessing is that we are executing, we are, you know, focused on driving our plans for this year, and we continue to assess how the various parts of our business are doing and, you know, whether they are driving both the top line and the bottom line we see. Beyond that, I would say there isn't really more to comment on at this time.

Mala Murthy: And more broadly anything you can share how you're focused on improving the positioning of the business and going to care about that.

Mala Murthy: And market it seems to be getting very competitive.

Speaker Change: Yeah. So look I would say I expect the enrollment to ramp through the year that is typically always the case in a traditional year end. This year would be no different now the one thing I would also say is remember we had talked about the marketing cause.

Mala Murthy: Hum in the last earnings call, we had talked about a $20 million of revenue impact for this year I would expect most of the impact of that marketing pause to be in the second and third quarters.

Mala Murthy: On the second question you had about membership, here's what I would say. We certainly are pleased with the 2 million plus member ads that we had in the quarter. Remember, the benefit we have of the membership ads is always the fact that it is the underpinning of our land and expand strategy. So, it gives us fertile ground to continue to penetrate, cross sell, and upsell once we get these members into our fold, and as we sell additional products, we expect to see the revenue accretion from that in the quarter.

Mala Murthy: But despite that I would expect for our chronic care program enrollments to ramp up through the year or just like in prior years.

Mala Murthy: Lisa do you want to handle the jelly.

Speaker Change: Gillian just question on competitive.

Mala Murthy: Sure when you when you look at what are our customers.

Mala Murthy: Or is that our clients are looking for.

Mala Murthy: We are you know, we're happy with where we are in the selling season.

Mala Murthy: Having productive conversations with both new and existing accounts as Mala mentioned in her earlier remarks for the quarter two thirds of our existing clients.

Operator: Next question. The next question is from the line of Jailendra Singh with Truist. Your line is now open.

Jailendra P. Singh: Thank you, and thanks for taking my questions. I wanted to ask about the chronic care program enrollment metric. I understand it was up year over year, but it actually declined a little over 3% sequentially. Typically, we see a pickup from Q4 to Q1 with new contract starts and enrollment increases and a new calendar year. So can you provide some color there, Mala? And then what are your expectations around that metric as the year progresses? And more broadly, anything you can share on how you're focused on improving the positioning of your business in the chronic care longer term market, which seems to be getting very competitive.

Jailendra P. Singh: Two thirds of our growth.

Jailendra P. Singh: Growth in bookings came from existing clients and one third came from new clients.

Mala Murthy: Want to make sure that we highlight that we're happy with the growth in bookings not just in our domestic business, but also in our international business and what are what are clients looking for our clients are looking for value. They are looking for a scalable reputable vendor that they can partner with.

Jailendra P. Singh: That has a strong balance sheet that they can continue to partner with to drive value for them and for their consumers and that Hasnt changed and I think that is feeding into R. R.

Jailendra P. Singh: Our conversations with respect to our bookings.

Mala Murthy: Yeah, so look, I would say I expect enrollment to ramp up through the year. That is typically always the case in a traditional year, and this year would be no different. Now, the one thing I would also say is, remember, we talked about the marketing cause in the last earnings call. We talked about $20 million of revenue impact for this year. I would expect most of the impact of that marketing cause to be in the second and third quarters. But despite that, I would expect our chronic care program enrollment to ramp up through the year, just like in prior years. Um, Lisa, do you want to handle Jailendra's question on competitors?

Lisa Gill: And then Jay Linda just finishing up on your question around the chronic care enrollment look this is a function of the fact that typically when we start off the year.

Mala Murthy: We onboard a number of lives and we also at the same time in Q1 is typically the time, we would also see.

Lisa Gill: Enrollees come on hand, enrollees rolled off and the net impact of that is what you are seeing I would expect as we.

Lisa Gill: As we ramp up the year.

Mala Murthy: Despite the marketing pause I would expect that to continue to go on into the rest of the year.

Mala Murthy: Yeah.

Speaker Change: Thank you for your question next question is from the line of Jessica <unk> with Piper Sandler Your line is now open.

Lisa Gill: Yeah, Hi.

Lisa Gill: Hi, Michael and thank you so much for the question and congrats on the good quarter and guide am I kind of I wanted to ask about the three year outlook that you all and issued on the fourth quarter call and then reiterated today for the low to mid single digit annual consolidated revenue growth mid single integrated care low single better help them at that target achievable on an organic basis.

Lisa: Sure. When you look at what our customers and our clients are looking for, we're happy with where we are in the selling season. We're having productive conversations with both new and existing accounts. As Mala mentioned in her earlier remarks for the quarter, two-thirds of our existing clients, two-thirds of our growth in bookings, came from existing clients, and one-third came from new clients. I want to make sure that we highlight that we're happy with the growth in bookings, not just in our domestic business but also in our international business.

Lisa: And just maybe from an integrated care perspective should we think about that growth continuing to be led by chronic care and does it anticipate any new product launches just hoping for color around around that three year guide. Thank you.

Speaker Change: Yeah, Thanks, Jess for the question.

Lisa: And what are our clients looking for? Our clients are looking for value. They're looking for a scalable, reputable vendor that they can partner with that has a strong balance sheet that they can continue to partner with to drive value for them and for their consumers. And that hasn't changed, and I think that is feeding into our conversations with respect to our bookings.

Lisa: Look when we put that guide outlook out there in February.

Lisa: We had a thought about the building blocks to those numbers, but that trajectory both on the integrated care side and the better health side. So let me sort of comment on it one by one.

Lisa: On the integrated care side I would say as we had stated previously I think of it as a combination of low single digit growth on a much more well penetrated telehealth side and I would say mid to high single digit growth in chronic care and chronic care. So yes, we do expect chronic.

Mala Murthy: And then, Jailendra, just finishing up on your question around chronic care enrollment. Look, this is a function of the fact that typically when we start off the year, you know, we onboard a number of lives, and also, at the same time, in Q1, is typically the time we would also see, you know, enrollees come on and enrollees roll off. And the net impact of that is what you're seeing. I would expect, as we ramp up the year, despite the marketing pause, that to continue to go on into the rest of the year.

Mala Murthy: Her momentum to help us achieve the overall mid single digit revenue growth for integrated care.

Mala Murthy: On the better help side from a revenue growth perspective, we had said low single digit.

Mala Murthy: Look here's what I would say on the better health side.

Mala Murthy: A second half ramp that we have talked about the initiatives that we have going to help us achieve that second half ramp again, it's whether it'd be retention international continued momentum on better sleep. These are the inputs into the low single digit revenue growth.

Operator: Thank you for your question. The next question is from the line of Jessica Tassan with Piper Sandler. Your line is now open.

Jessica Elizabeth Tassan: Hi Mala. Thank you so much for the question, and congrats on the good quarter and guide. I kind of, I wanted to ask about the three-year outlook that you all issued on the fourth quarter call and then reiterated today. So the low to mid-single digit annual consolidated revenue growth, mid-single integrated care, low-single better help. Is that target achievable on an organic basis? And, maybe, from an integrated care perspective, should we think about that growth continuing to be led by chronic care? Does it anticipate any new product launches? I'm just hoping for color around that three-year guide. Thank you. Yeah Thank you.

Jessica Elizabeth Tassan: For better health and I would say we will continue to.

Jessica Elizabeth Tassan: To execute against it and we will continue to monitor it again, assuming that we don't have something very very unfavorable happen from a cost per acquisition perspective, which will impact our advertising yields so assuming that we see.

Mala Murthy: P as in a reasonable range I would say the building blocks that will help us grow in the second half will continue to be contributors into the low single digit revenue growth for better health.

Jessica Elizabeth Tassan: When it comes to margins.

Mala Murthy: Yeah, yeah. Thanks, Jeff, for the question. Look, when we put that guide Outlook out there in February, we had thought about the building block to those numbers, that trajectory, both on the integrated care side and the better health side. So let me sort of comment on it one by one.

Speaker Change: I would say the bell.

Mala Murthy: They'll cost initiative program that we have that will help us with opex leverage.

Mala Murthy: Along with the revenue growth that we will see on the top line, particularly on the chronic care side will certainly be contributors into our margin expansion that we have put out there. So what I would say in summary is we have thought of the building blocks that go into the law.

Mala Murthy: On the integrated care side, I would say, as we had stated previously, think of it as a combination of low single-digit growth on the much more well-penetrated telehealth side, and I would say mid to high single-digit growth in chronic care. So yes, we do expect chronic care momentum to help us achieve the overall mid-single-digit revenue growth for integrated care. On the BetterHelp side, from a revenue growth perspective, we had said low single digits. Look, here's what I would say on the BetterHelp side.

Mala Murthy: Long term outlook and we will continue to assess.

Mala Murthy: How they perform and as I said, you know this year and especially in the second half better help will give us a lot more information on that.

Speaker Change: Thank you for your question.

Mala Murthy: Next question is from the line of Sean Dodge with RBC. Your line is now open.

Speaker Change: Yes, thanks, good afternoon.

Mala Murthy: Molly you mentioned alright in better health with the new leadership team, having seen some improvement in subscriber retention.

Mala Murthy: Can you give us a sense of how long you are retaining better help users now on average how much has that changed over the last couple of years and then how much room.

Mala Murthy: The second half ramp that we have talked about, the initiatives that we have going to help us achieve that second half ramp, again, whether it be retention, international, continued momentum on better sleep, these are the inputs into the low single-digit revenue growth for BetterHelp. And I would say we will continue to execute against it, and we will continue to monitor it, again, assuming that we don't have something very, very unfavorable happen from a cost per acquisition perspective, which will impact our advertising yield.

Mala Murthy: And what kind of levers do you have to continue to drive improvements in that what can you do to lengthen that.

Mala Murthy: Yeah.

Mala Murthy: So we haven't given out.

Mala Murthy: Kpis metrics etcetera, specifically on retention, Sean So I don't want to go into specific retention metrics.

Speaker Change: What I will say is the following.

Mala Murthy: We are looking we are seeing improved member retention.

Mala Murthy: Primarily because of the innovation that we're driving in the platform in our user experience.

Mala Murthy: So, assuming that we see CPAs in a reasonable range, I would say the building blocks that will help us grow in the second half will continue to be contributors to low single-digit revenue growth for BetterHelp. When it comes to margins, I would say the cost initiative programs that we have that will help us with OPEX leverage, along with the revenue growth that we will see on the top line, particularly on the chronic care side, will certainly be contributors to our margin expansion that we have put out there.

Mala Murthy: Frankly with the help of AI models that are continually improving our matching of consumers with their various needs with provider. So it's never one thing that is driving this improvement in retention. It is many things that are driving this improvement in retention.

Mala Murthy: And I would say that.

Mala Murthy: That you.

Mala Murthy: When I talk about the new leadership at better health one of the important things to highlight is.

Mala Murthy: We are looking now at pressing on more than one lever and the better health business.

Mala Murthy: So, in summary, we have thought of the building blocks that go into the long-term outlook, and we will continue to assess how they perform. And as I said, this year, and especially in the second half, better help will give us a lot more information. Thank you for your question. The next question is from the line of Sean Dodge with RBC. Your line is now open. Yeah, thanks. Good opinion. Mala, you mentioned

Sean Dodge: We are looking to beyond the traditional focus on CAC.

Sean Dodge: As we've talked about we're looking at additional geographies how.

Sean Dodge: How can we continue to innovate in the user experience.

Sean Dodge: In some instances and we have talked about this in the past.

Sean Dodge: We're looking at you know small surgical targeted pricing changes all of which in my view are things that will improve on our revenue growth and it's the innovation that is helping on our member improved member retention the user retention.

Operator: Thank you for your question. The next question is from the line of Sean Dodge with RBC. Your line is now open.

Sean Dodge: So we haven't given out KPIs, metrics, etc. specifically on retention, Sean, so I don't want to go into specific retention metrics. What I will say is the following. We are looking, and we are seeing improved member retention, primarily because of the innovation that we are driving in the platform, in our user experience, and frankly, with the help of AI models that are continually improving our matching of consumers with their various needs to providers. So it's never just one thing that is driving this improvement in retention. It is many things that are driving this improvement in retention. And I would say that,

Speaker Change: <unk> is there anything you would like to add to that yeah. I guess, the only thing I would add is historically a better help we've been very focused on the innovation on patient acquisition or what I would tell you is as we are balancing spending time on increasing the value of that number and I would say there is not one.

Sean Dodge: Specific thing other than being very innovative and testing out little things that are driving values. So that our return on their advertising dollars increase.

Sean Dodge: Mhm.

Speaker Change: Thank you for your question.

Sean Dodge: The next question is from the line of Allen Lutz with Bank of America. Your line is now open.

Speaker Change: Good afternoon, and thanks for taking the question another one on better help while I have you considered at all moving from just cash pay participating in health plan networks as a way to drive growth.

Mala Murthy: When I talk about the new leadership at BetterHelp, one of the important things to highlight is we are looking now at pressing on more than one lever in the BetterHelp business. We are looking beyond the traditional focus on CAC, as we've talked about; we're looking at additional geographies, and how can we continue to innovate in the user experience. In some instances, and we have talked about this in the past, we're looking at small surgical targeted pricing changes.

Speaker Change: Is that something that you've considered and can you kind of talk about the pros and cons of making a move like that thanks.

Mala Murthy:

Mala Murthy: So.

Mala Murthy: I would say look we assess various initiatives to continually.

Mala Murthy: Innovate to drive growth, while at both on the topline and the bottom line.

Mala Murthy:

Mala Murthy: At this point in time with the scale that better help has.

Mala Murthy: All of which, in my view, are things that will improve our revenue growth, and it's the innovation that is helping with our improved member retention, and user retention. Laser, is there anything you would like to add to that? Yeah, I guess the only thing I would add is

Laser: A billion in revenue.

Laser: Is by far one of the largest DTC players and look there are other competitors in the market who have done tried DTC moved away to be to be.

Laser: Yeah, I guess the only thing I would add is historically at BetterHelp, we've been very focused on innovation in patient acquisition. And what I would tell you is that we are balancing spending time on increasing the value of that member. And I would say there's not one specific thing, other than being very innovative and testing out little things that are driving value so that our return on our advertising dollars increases. Thank you for your question. The next question is from the line of Alan Lutz with Bank of America. Your line is now open.

Laser: We have built scale and DTC and I would say, we will continue to focus on DTC, having said that I would also say.

Allen Lutz: We are looking for ways to improve and accelerate our growth in different ways.

Allen Lutz: Don't want to comment much more on specifics at this point.

Allen Lutz: To the extent that there is anything relevant to update we will absolutely do so.

Allen Lutz: But we are looking at various ways to to drive top line to accelerate our topline growth and better health.

Allen Lutz: Thank you for your question next question is from the line of Sarah James with Cantor Fitzgerald. Your line is now.

Laser: Okay.

Allen Lutz: Thank you Mala I was hoping you could help us a little bit with the pacing of this year I'm, specifically thinking of the items that you have control over a like some of the savings initiatives to get to that run rate of 43 at the end of the year and then.

Operator: I would say, look; we assess various initiatives to continually innovate to drive growth, both on the top line and the bottom line. Unknown Speaker

Allen Lutz: At this point in time, with the scale that BetterHelp has, you know, over a billion in revenue, it is by far one of the largest DTC players. And look, there are other competitors in the market who have done DTC, tried DTC, and moved away from B2B. We have built scale in DTC, and I would say we will continue to focus on DTC. Having said that, I would also say we are looking for ways to improve and accelerate our growth in different ways.

Allen Lutz: The advertising spend.

Allen Lutz: Can you help us pace through how the savings initiatives are going to play out and then on the AD spend is there any pull forward of that into two Q versus your normal cadence.

Allen Lutz: Are you thinking about because of the increased efficiency just lower overall need for AD spend for the year.

Allen Lutz: You know, I don't want to comment much more on specifics at this point. To the extent that there is anything relevant to update, we will absolutely do so. But we are looking at various ways to drive the top line and accelerate our top line growth.

Speaker Change: Yeah. Thanks, Sara for the question.

Allen Lutz: So from a pacing perspective.

Allen Lutz: We would be looking for the cost initiatives and if you think about what those what are underpinning those cost initiatives things like offshoring things like automation.

Operator: Thank you for your question. The next question is from the line of Sarah James with Cancer Fitzgerald. Your line is now open.

Operator: Savings from our third party supplier spend.

Sarah James: Thank you. Mala, I was hoping you could help us a little bit with the pacing of this year. So specifically thinking of the items that you have control over, like some of the savings initiatives to get to that run rate of 43 at the end of the year, and then the advertising spend. Can you help us pace through how the savings initiatives are going to play out? And then on the ad spend, is there any pull forward of that into 2Q versus your normal cadence? And are you thinking about, because of increased efficiency, just a lower overall need for ad spend for the year? Yeah. Thanks, Sarah, for the question.

Mala Murthy: Several of those are initiatives that are you know evenly.

Sarah James: Even you paced through the year now obviously, if you think about something like offshoring.

Speaker Change: And as we offshore.

Mala Murthy: We'll get the incremental impact of a full impact of the offshoring as we go later into the year.

Mala Murthy: But I would say to you several of the others like third party supplier spend et cetera, you will see sort of evenly paced through the year on your question on AD spend the way I would think about it is as follows.

Speaker Change: When we.

Mala Murthy: Yeah, thanks, Sarah, for the question. So from a pacing perspective, we would be looking for cost initiatives, and if you think about what those are, what are underpinning those cost initiatives, things like offshoring, things like automation. You know, savings from our third-party supplier spend. Several of those are initiatives that are, you know, evenly paced through the year. Now, obviously, if you think about something like offshoring, and as we offshore, you know, you will get the incremental impact, the full impact of offshoring as we go later into the year.

Mala Murthy: In Q1, and especially early in Q1, we.

Mala Murthy: We did see pressure on our advertising yield we did see pressure on our cost per acquisition.

Mala Murthy: And we did pull back on our AD.

Mala Murthy: AD spend.

Mala Murthy: As we sort of rolled through Q1, and I would say as we.

Mala Murthy: As we ramp later into Q1 and into Q2.

Mala Murthy: We are seeing more stable AD spend a yield on our ad spend.

Mala Murthy: You know when I say stable, it's the CPA still remain elevated relative to the back.

Mala Murthy: But I would say to you, several of the others, like third-party supplier spend, et cetera, you will see, you know, sort of evenly paced through the year. On your question about ad spend, the way I would think about it is as follows. When we, in Q1, and especially early in Q1, we did see pressure on our advertising yield. We did see pressure on our cost per acquisition.

Mala Murthy: Back half of the similar to the back half of last year.

Mala Murthy: But I would say to you that they are you know they have stabilized relative to the early part of Q1.

Mala Murthy: Having said that you know I am not satisfied with our better health segment margins in the first half in the first quarter.

Mala Murthy: And so one of the things we are assessing is.

Mala Murthy: How do we manage the AD spend in Q2, so that we are getting the balance of topline and bottom line that we are seeking.

Mala Murthy: And we did pull back on our ad spend as we sort of rolled through Q1. And I would say as we went later into Q1 and into Q2, we are seeing more stable ad spend and yield on our ad spend. When I say stable, it's the CPAs still remain elevated relative to the back half of the year, similar to the back half of last year. But I would say to you that they are, they have stabilized relative to the early part of Q1.

Mala Murthy: And we've said this before that it's something that is very dynamic right because we manage the better health business based on Rois, we want to make sure that the marginal return on every dollar of spend is getting to the efficiencies we speak and sort of we you know we toggle that.

Mala Murthy: To get to the balance of topline and bottom line.

Mala Murthy: Having said that, you know, I am not satisfied with our BetterHelp segment margins in the first quarter. And so one of the things we are assessing is how we manage the ad spend in Q2 so that we are getting the balance of the top line and the bottom line that we are seeing. And, you know, we've said this before, that is something that is very dynamic, right, because we manage the better health business based on ROIs.

Mala Murthy: If I think about the second half I would say we are looking to.

Mala Murthy: Pull back in Q4, as we typically do.

Mala Murthy: And we would be looking to.

Mala Murthy: Spend a little bit more on AD spend relative to the second quarter provided again that we see the you know we.

Mala Murthy: Get to the efficiency as we speak.

Mala Murthy: We want to make sure that the marginal return on every dollar of spend is getting to the efficiencies we speak of, and sort of we, you know, we toggle that to get to the balance of the top line and the bottom line. If I think about the second half, I would say we are looking to pull back in Q4, as we typically do, and we would be looking to spend a little bit more on ad spend relative to the second quarter, provided, again, that we see the, you know, we get to the efficiencies we speak of, we seek.

Mala Murthy: <unk>.

Mala Murthy: And then the last point I would make is remember international typically.

Mala Murthy: Is slightly more efficient from an AD yield perspective so.

Mala Murthy: You know as we rollout international a group in the second half I would expect to see that.

Mala Murthy: And on international.

Mala Murthy: Market being more efficient.

Mala Murthy: Yes.

Speaker Change: Thank you for your question.

Mala Murthy: The next question is from the line of Kevin Caliendo with UBS. Your line is now open.

Mala Murthy: And then the last point I would make is, remember, international is typically slightly more efficient from an ad yield perspective, so, you know, as we roll out international in the second half, I would expect to see that spend on international markets being more. Thank you for your question. The next question is from the line of Kevin Caliendo with UBS. Your line is now open.

Mala Murthy: Thank you Mara this is Dylan on for Kevin Caliendo.

Kevin Caliendo: Earlier this week one of your competitors announced that they were winding down their telehealth business could you maybe speak to whether or not the guidance today contemplates any tailwind from a competitive perspective.

Mala Murthy:

Mala Murthy: Please Eric would you like to address that sure. So clearly there's been some noise in the marketplace and we're really not going to comment on.

Kevin Caliendo: On the specifics and we would refer you to that partner.

Operator: The next question is from the line of Kevin Caliendo with UBS. Your line is now open.

Kevin Caliendo: Ours that made the comment, but what I do want to highlight is we have a very strong relationship partnership and we value the relationship that we have with United healthcare and we foresee that strong relationship continuing.

Kevin Caliendo: Please, sir, would you like to address that? Sure, Mala. So, clearly, there's...

Laser: So, clearly, there's been some noise in the marketplace, and we're really not going to comment on the specifics, and we would refer you to that partner of ours that made that comment. But what I do want to highlight is we have a very strong partnership, and we value the relationship that we have with UnitedHealthcare.

Laser: Yeah.

Speaker Change: Thank you for your question.

Laser: The next question is from the line of George Hill with Deutsche Bank. Your line is now open.

Laser: Yeah.

Speaker Change: Guys. Thanks for taking the question well I don't like to kind of come back to leases topic, which is I guess can you talk about the degree to which the current management team feels empowered to make change.

Operator: Thank you for your question. The next question is from the line of George Hill with Deutsche Bank. Yeah, good afternoon, guys. And thanks for taking the question. Mala, I'd like to kind of come back to Lisa's topic, which is, I guess, can you.

George Robert Hill: At the company as it relates to margins or growth or strategic direction.

George Robert Hill: And then because I know, we're trying to keep people to one question. If I can sneak a second one just if there's any way you can kind of quantify the success youre seeing in better health and what metrics you guys are looking at internally I think we find that helpful. Thank you.

George Robert Hill: Next question is from the line of George Hill with Deutsche Bank. Your line is now open. Yeah.

George Robert Hill: Yeah.

George Robert Hill: Hum.

Mala Murthy: Your question on whether the leadership team is empowered to act. I would say absolutely, unhesitatingly, a big yes.

George Robert Hill: Your question on whether the leadership team is empowered to act I would say absolutely unhesitatingly, a big yes.

Mala Murthy: As I said in our prepared remarks, we are not waiting. We have a plan to deliver, we have investments to execute, and that is absolutely our focus. We are also reiterating our longer-term outlook. That is certainly going to require us to, as a leadership team, as we do every single year, look at our strategy, look at various aspects of that strategy, and think about how we want to stack our investments against those, what's working, and what's not working. Again, that is part of what we do every single year, and we will absolutely continue to do so.

Mala Murthy: As I said in our prepared remarks, we are not waiting we have.

Mala Murthy: Our plan to deliver we have investments to execute.

Mala Murthy: And that is absolutely our focus.

Mala Murthy: We are also reiterating our longer term outlook.

Mala Murthy: That is certainly going to require us to as a leadership team as we do every single year.

Mala Murthy: Look at our strategy look at various aspects of that strategy and think about how do we want to stack our investments against those what's working what's not working again that is part of what we do every single year.

Mala Murthy: We will absolutely continue to drive that so the answer to your question is we are I'm empowered to you know to drive this business forward.

Mala Murthy: So the answer to your question is, we are, I'm empowered to, you know, drive this business forward. And we as a leadership team, as I said in our prepared remarks, are all in, we are leaning in, and we are focusing on driving this business forward. In terms of better help metrics, the things that we typically will look at from an internal operating perspective are we will look at, obviously, the CAC and where it is.

Mala Murthy: And we as a leadership team as I said in our prepared remarks are all in we are leaning in and we are focusing on.

Mala Murthy: On driving this business forward.

Mala Murthy: In terms of better health metrics.

Mala Murthy: Things that we typically will look at from an internal operating perspective is we will look at obviously the attack and where it is.

Mala Murthy: We will look at the ROI of our ad spend. We will look at retention, churn, and the lifetime value of the CAC that we are placing. And we will also look at the users that we are attracting to the platform. So, that is, those are things that we look at, and besides that, we look at a number of other things that inform the user experience as well as the provider experience, the provider NPS, the user NPS, all of which, by the way, continue to remain very strong because of the strong experience that people have on the platform. So those are the typical metrics that we would use. Thank you for your question.

Mala Murthy: We will look at the Rois of our AD spend we will look at retention charm.

Mala Murthy: The lifetime value of the pack that we are placing them and we will also look at the.

Mala Murthy: Hum.

Mala Murthy: So the users that we are attracting to the to the platform. So we also so that is those are things that we look at them. Besides that'd be looked at a number of other things that inform the user experience as well as the provider experience the provider NPS the user at the NPS all of which by.

Mala Murthy: The way continue to remain very strong because of the the strong experience that people have on the platform. So those are the typical metrics that we would be looking at.

Mala Murthy: Thank you for your question.

Mala Murthy: The next question is from the line of Ryan Daniels with William Blair. Your line is now open.

Mala Murthy: Hey, this is Jack <unk> on for Ryan Daniels. Thanks for taking the question I think in your prepared remarks, you mentioned reallocating some of the dollars in the second half as the international penetration ramps up so first did I get that right and then two can you just talk a bit more about what are you planning to reallocate. Those dollars was it just just reallocating dollars to ramp up the international portion or is there something else.

Operator: Next question is from the line of Ryan Daniels with William Blair. Your line is now open. Hey, this is

Ryan Scott Daniels: Next question is from the line of Ryan Daniels with William Blair. Hey, this is Jack.

Jack: Yeah, so, you know, we've been talking on the last two calls about the fact that we do expect international interest in better health to ramp up where we are placing our ad spend dollars internationally, and better health is in the markets that we already have a presence in, you know, those are largely English-speaking markets like the UK, Canada, Australia. So these are the markets where we would be putting our ad spend dollars. Thank you for your question. The next question is from the line of Elizabeth Anderson with Evercore. Your line is now open.

Elizabeth Hammell Anderson: Curious if you can dive deeper into this thing.

Jack: Yeah.

Elizabeth Hammell Anderson: You know we've been talking over the last two calls about the fact that we do expect international in better health.

Elizabeth Hammell Anderson: Two ramp.

Elizabeth Hammell Anderson: Where we are placing our AD spend dollars internationally and better health is in the markets that we already have a presence in.

Elizabeth Hammell Anderson: Those are largely English speaking markets like UK, Canada, Australia. So these are the markets, where we would be putting our AD spend dollars then.

Jack: Okay.

Elizabeth Hammell Anderson: Thank you for your question.

Jack: Next question is from the line of Elizabeth Anderson with Evercore. Your line is now open.

Elizabeth Hammell Anderson: Hi, guys. Thanks, so much for the question Oh, My God, you May think about.

Operator: Hi guys. Thanks.

Elizabeth Hammell Anderson: Yeah, great question, Lisa. So I think about the pricing lever we have on both sides in a couple of different ways. First, if you think about our integrated care side and think about chronic care and the momentum that we are seeing in chronic care, we've spoken about this dynamic in the past couple of calls. Firstly, we are seeing nice momentum in chronic care bookings. And if you think about the momentum you're seeing in chronic care bookings, part of what's driving that is the fact that we are selling more chronic care bundles.

Elizabeth Hammell Anderson: The longer term growth I appreciate your commentary of it was sort of all the changes in our international focus et cetera, how do we think about the component that pricing paint players in both the integrated care outlook as well as better help thanks.

Speaker Change: Yeah great.

Speaker Change: Great question, So I think about the pricing lever we have.

Elizabeth Hammell Anderson: On both sides in a in a couple of different ways.

Elizabeth Hammell Anderson: First if you think about our integrated care side and think about chronic care and the momentum that we are seeing in chronic care.

Elizabeth Hammell Anderson: We've spoken about this dynamic in the past couple of calls Firstly, we are seeing nice momentum in chronic care bookings and if you think about the momentum you're seeing in chronic care bookings.

Elizabeth Hammell Anderson: Part of what's driving that is the fact that we are selling more chronic care bundle.

Elizabeth Hammell Anderson: And if you think about the pricing.

Elizabeth Hammell Anderson: And if you think about the pricing that, you know, with these bundles, it is accretive from a revenue perspective. And that is certainly something that, you know, as we increasingly gain traction on our land and expand, the fact that we've added over 2 million members in the first quarter. Again, that gives us fertile ground for us to cross-sell more of our chronic care products into that population. The fact that chronic care, at the end of the day, is still relatively underpenetrated, right? If you think of our overall 90-plus million base, it is still 16% of our overall telehealth base.

Elizabeth Hammell Anderson: With these bundles.

Elizabeth Hammell Anderson: It is accretive from a on a per client basis from a revenue perspective.

Elizabeth Hammell Anderson: And that is certainly something that you know as we increasingly.

Elizabeth Hammell Anderson: Any traction on our land and expand the fact that we've added over 2 million members in the first quarter again that gives us fertile ground for us to cross sell more of our chronic care products into that population. The fact that chronic care at the end of the day, it's still relatively underpenetrated right. If you think of our overall.

Elizabeth Hammell Anderson: 90, plus million base. It is still 16% of our overall chronic care off our overall telehealth base.

Mala Murthy: And so it's things like that that will allow us to get more revenue accretion, and that certainly is something that we are focused on. On the better health side, you know, when I think about pricing, I would say it really is us thinking more broadly about how we can do more of targeted surgical pricing, you know, as we think about the different, whether it be better health and better sleep. And when I say targeted and surgical, it could be by geography.

Elizabeth Hammell Anderson: And so it's things like that that will allow us to get more revenue.

Mala Murthy: Revenue accretion and that certainly is something that we are focused on on the better health side.

Mala Murthy: You know when I think about pricing I would say it really is us thinking more broadly.

Mala Murthy: About how we can do more of targeted surgical pricing.

Mala Murthy: You know as we think about the different whether it would be better health and better sleep.

Mala Murthy: And when I say targeted surgical it could be a job.

Mala Murthy: By geography.

Mala Murthy: You know, it could be in other ways. And, by the way, that is something that we are doing constantly, continuously, right? This is a business that is dynamic in multiple ways, including, Thank you for your question. Next question is from the line of Daniel Grosslight with Citi. Hi, Mala. Thanks for taking the question. There's noise out in the market.

Mala Murthy: It could be in other ways and by the way that is something that we are doing constantly continuously right. This is a business that is dynamic in multiple ways, including in pricing.

Daniel Grosslight: Thank you for your question. Our next question is from the line of Daniel Gross flight with Citi. Your line is now open.

Daniel Grosslight: Hi, Thanks for taking the question Hey, there's noise out in the market questioning the cost and efficacy of some digital diabetes management programs I know, it's it's still pretty early in the selling season for you guys, but I was curious if that reported as having any impact on what youre seeing out there.

Daniel Grosslight: In the market.

Daniel Grosslight: And maybe if you could comment a little bit on where you're currently seeing the greatest uptake from a new sales perspective in terms of.

Operator: Thank you for your question. The next question is from the line of Daniel Grosslight with Citi.

Daniel Grosslight: Indications that'd be great. Thank you.

Daniel Grosslight: Yeah, thanks, Daniel, for the question. Let me start and then I will turn it over to Lisa for more comments. Look, if I think about the momentum that we are seeing in the market, the things that we are seeing traction on are a few. The first is, obviously, I've talked about our land and expand. The second is when we talk to our clients about the breadth of our products and solutions.

Lisa Gill: Yeah. Thanks, Andrew for the question, let me start and then I will turn it over to laser for more comments.

Daniel Grosslight: If I think about the momentum that we are seeing in the market.

Daniel Grosslight: The the things that we are.

Daniel Grosslight: <unk> traction on is a few the first is obviously I've talked about our land and expand on.

Daniel Grosslight: The second is when we talk to our clients about both the breadth of our products and solutions and second the fact that we are able to show value and ROI that is certainly resonating in the marketplace and the <unk>.

Daniel Grosslight: And second, the fact that we are able to show value and ROI, that is certainly resonating in the market. And last is, as I've said before, you know, the strength of our balance sheet relative to many of the other competitors in our in our market. And the strength of the balance sheet certainly is compelling if you think about our ability to bring innovation into our products into all our products, including chronic. So those are broadly the trends that we are seeing in the market as we sell. Let me turn it over to Laser to address your specific question.

Laser: Last is as I've said before you know the strength of our balance sheet relative to many of the other competitors in our in our markets and the strength of the balance sheet. Certainly is compelling if you think about our ability to bring innovation into our into our products at all.

Daniel Grosslight: Other products, including chronic care. So those are broadly the trends that we're seeing in the market as we sell them. Let me turn it over to laser to address your specific question. Yes. So with respect to that specific study I would say, we haven't seen any impact from that study on our business.

Mala Murthy: So with respect to that specific study, I would say we haven't seen any impact from that study on our business. What I would tell you is just some caveats to keep in mind. The first is that the report was a review of limited selected secondary research, and the company did not conduct any original testing or any primary analysis of patient data.

Mala Murthy: What I would tell you is just some caveat to keep in mind.

Mala Murthy: The first is that report with a review of limited selected secondary research and it and.

Mala Murthy: We are the party did not conduct any original testing or any primary analysis of patient data and I just want to highlight that based on our studies and those of third parties.

Laser: And I just want to highlight that, based on our studies and those of third parties, we believe that our chronic care programs provide a clear ROI for our customers. Our programs have demonstrated meaningful reductions in A1C over a sustained period of time, but it's more than just A1Cs. We also have shown improvements in blood pressure and in weight, and the whole concept of value is one that we are having good conversations with our clients about.

Laser: We believe that our chronic care programs provide a clear ROI for our customers our programs have demonstrated meaningful reductions in <unk> over a sustained period of time, but it's more than just a one six we also have shown improvements in blood pressure and in weight.

Laser: And the whole concept of value is one that we are having good conversations with our clients about our members in our diabetes programs also demonstrate a higher adherence to their diabetes related drugs and so it's really important that you understand what's baked in there in the.

Laser: Our members in our diabetes programs also demonstrate higher adherence to their diabetes-related drugs. And so it's really important that you understand what's based on the research, what's included. But what I would tell you is we aren't seeing an impact, but we are having good conversations with our clients related to the ROI and the value of our products.

Laser: Our research what's included but what I would tell you is we are seeing an impact, but we are having.

Speaker Change: Good conversations with our clients related to the ROI and the value of our products, yeah, and just to wrap up on that Danielle what I would say is look we are we continue to see strength and momentum in chronic care.

Mala Murthy: And just to wrap up on that, Daniel, what I would say is, look, we continue to see strength and momentum in chronic care. And I would say, as I think about our guidance for this year, integrated care is off to a solid start. I expect integrated care, both from a revenue growth perspective, as well as a margin expansion perspective, as indicated in our guidance, to continue its momentum. I would say, certainly, if you think about the better health this year. We have had a couple of challenging quarters and, you know, we have the set of drivers that are driving the back half of the year ramp. So, I would say, certainly on the integrated care side, we are, you know, we are continuing to drive, get traction, especially on our chronic care book.

Mala Murthy: I would say as I think about our guidance this year.

Mala Murthy: Integrated care is off to a solid start I expect our integrated care both from a revenue growth perspective, as well as a margin expansion perspective as indicated in our guidance to continue its momentum.

Mala Murthy: I would say certainly if you think about the better health business.

Mala Murthy: You know we have had a couple of challenging quarters and we have the set of drivers that are driving the back half of the your ramp so I would say certainly on the integrated care side, we are we.

Mala Murthy: We are continuing to drive get traction, especially on our chronic care book.

Mala Murthy: Yes.

Operator: Thank you for your question. There are no additional questions waiting at this time. That will conclude the conference call. Thank you for your participation. You may now disconnect your line.

Operator: Thank you for your question there are no additional questions waiting at this time that will conclude the conference call. Thank you for your participation you may now disconnect your lines.

Q1 2024 Teladoc Health Inc Earnings Call

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