Teladoc Looking to ‘Big and Binary’ Deals for Global Growth
The leaders of Teladoc Health Inc. expect the virtual care market leader to continue to grow globally in the coming years – although they were circumspect last week about putting any numbers on their projections.
The Purchase, New York-based Teladoc has paying members in more than 100 countries and provides its telehealth services in 26 languages. Like many of its peers, the company has seen massive growth due to the COVID-19 pandemic – including outside the United States, where its number of sessions has grown more than fivefold in the past two years. Through the first nine months of 2021, revenues from the company’s more than two dozen global offices rose about 23% to more than $114 million. (By comparison, U.S. revenues through Sept. 30 were about $1.36 billion.)
Speaking Nov. 18 at his team’s investor day presentation, Teladoc CEO Jason Gorevic said the company expects to keep growing its global numbers – he pointed out that chronic care management is drawing particular interest from prospects – but that most of the upside from that isn’t being built into its financial forecasts. Forecasting potential sales to big national health systems, he said, is a recipe for trouble when it comes to communicating growth prospects and earnings guidance.
“They’re big and they’re binary. We don’t build in any assumptions about giant sales to nationalized health care systems,” Gorevic said. “That does not mean we’re not going after them and that we don’t expect to be able to land some of them […] We always forecast based on what we know, not what we hope. So we try not to build that into at least a short- or medium-term forecast.”
Teladoc has used several acquisitions to help build its overseas business since 2017 and also has contracted with communications giant Telefonica to serve that company’s employees in Spain and Brazil. The company now also has operations in the United Kingdom, France, Australia, China and Hungary, among others, and at the end of 2020 employed about a third of its workforce at international locations. But CFO Mala Murthy said Nov. 18 investors and market watchers shouldn’t expect Teladoc to aspire to plant its flag at dozens of spots across the planet.
“You can go very quickly sideways if you splinter your investments across a vast swath of countries,” she said. “We are focusing on a few big-bet countries and are methodically going to grow into those – whether it be through the national health systems or something like Telefonica, where we’re very pleased with the growth.”
Shares of Teladoc (Ticker: TDOC) closed Nov. 22 trading at about $109. Over the past six months, they have lost about 25% of their value and are now back near where they began 2020.
