Dive Brief:
- Amwell boosted its adjusted earnings outlook for 2024 as the telehealth vendor works to cut costs and rein in expenses.
- The company now expects adjusted earnings before interest, taxes, depreciation and amortization to be a loss between $150 million and $145 million. It previously estimated adjusted EBITDA losses between $160 million and $155 million.
- Amwell also narrowed its net loss in the second quarter. The virtual care vendor reported a loss of $49.9 million, compared with $92.5 million during the same period last year.
Dive Insight:
Amwell’s stock price has collapsed since it went public in 2020, near the height of the pandemic-era boom in virtual care.
This spring, the telehealth vendor received a warning from the New York Stock Exchange that it could be delisted for failing to meet standards for its minimum share price. Amwell recently implemented a reverse stock split, consolidating the number of shares to boost its stock price.
Still, the company is targeting 2026 to breakeven on an adjusted EBITDA basis. Amwell has also made progress in cutting costs and right-sizing its operations during the second quarter, executives said on an earnings call Wednesday.
“Our headcount is down across the enterprise, mid-teens from where it was at the end of the year,” said Robert Shepardson, Amwell’s chief financial officer. “And that’s really one of the big drivers for our improvement in guidance.”
The company has faced headwinds and heightened research and development costs as it transitions customers to Converge, a new telehealth platform that aims to consolidate Amwell’s offerings and integrate third-party tools.
But R&D spending declined nearly 20% year over year to $20.8 million in the second quarter. Amwell recorded 1.5 million visits during the period, with about 70% of them taking place on the new Converge platform, similar to the first quarter.
Another significant initiative for Amwell, a contract with the Department of Defense’s Health Agency to replace the military’s telehealth system, is also on track, said CEO Ido Schoenberg. The company’s self-guided behavioral health product is live at five designated sites, he said.
During the second quarter, Amwell reported revenue of $62.8 million, roughly flat from the previous year. The vendor also reiterated its full-year revenue guidance, expecting a topline between $259 million to $269 million in 2024.
