Teladoc Health Inc shares (NYSE: TDOC) tanked 40% in extended trading on Wednesday after the virtual healthcare company said it took an impairment charge worth $6.60 billion in Q1 and lowered its guidance for the full year.
Teladoc Q1 earnings snapshot
Lost $6.67 billion in fiscal Q1 versus the year-ago figure of $200 million.
Per-share loss of $41.58 was massively wider than last year’s $1.31 only.
Revenue jumped 24.5% year-over-year to $565.4 million in the first quarter.
FactSet consensus was for a slightly higher $569 million in revenue.
Much of the goodwill impairment was related to $18.5 billion acquisition of Livongo. CFO Mala Murthy said in the earnings press release:
The goodwill impairment was triggered by sustained decline in our share price with valuation and size of it driven by factors, including increased discount rate and decreased market multiples for a relevant peer group of high-growth digital healthcare companies, and updates to our forecast cash flows consistent with revised guidance disclosed today.
Guidance and Karen Firestone’s remarks
For the full financial year, Teladoc now forecasts its revenue to fall between $2.4 billion and $2.5 billion. It expects up to $265 million in adjusted EBITDA this year. On CNBC’s “Closing Bell”, Aureus Asset Management’s Karen Firestone said:
It’s a company that had a fantastic business idea for a pandemic but it didn’t come up with a strategy for the post COVID world. So now they’re just losing share again, they’re losing money. No one knows what the growth rate will be, or if there is one.
The stock is now down more than 60% for the year.
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