Dive Brief:
- Amwell has reduced its headcount by about 10% since the end of 2023 as the telehealth vendor worked to rein in expenses, executives said on a fourth quarter earnings call on Wednesday.
- The company posted a $679.2 million net loss for the full year, compared with losses of $272.1 million in 2022. Revenue declined nearly 7% to $259 million last year.
- Nevertheless, leadership has “high conviction” about a path to profitability in the next few years, as Amwell completes migrations to its new Converge platform and deploys a contract with the Department of Defense’s Health Agency in partnership with technology firm Leidos, chairman and CEO Ido Schoenberg said on a call with investors.
Dive Insight:
Amwell reported net losses throughout last year, racking up non-cash goodwill impairment charges linked to sustained decreases in its share price and market capitalization. The charges totaled $436.5 million in 2023.
The vendor faced headwinds as it transitioned customers from its legacy system to Converge, a new telehealth platform that aims to consolidate its offerings and include third-party tools.
But leadership believes the company is coming out the other side poised for growth, CFO Robert Shepardson said on the call. Total visits reached 1.6 million in the fourth quarter, with 52% taking place on Converge.
Amwell wrapped up migrations for some large payer clients at the end of the year, so visits on the new platform approached nearly 70% at the end of last month, he said.
Completed migrations and a lessened need for research and development spending contributed to the recent headcount reductions across the company, according to Schoenberg.
“Everything we do with Converge is dramatically more efficient. The deployment cycles are shorter, the support is easier. It's a very, very modern and very reliable platform,” he said. “The support tickets are a fraction of what they were in legacy.”
In the fourth quarter, Amwell beat Wall Street expectations on revenue and earnings per share, bringing in $70.7 million and posting a $50 million net loss. In the prior-year period, the company scooped up $79.2 million in revenue at a $61.6 million loss.
The company expects revenue between $259 million to $269 million in 2024, and Amwell plans to break even on an adjusted earnings before interest, taxes, depreciation and amortization basis in 2026.
