Teladoc's mid-2016 acquisition of a digital health startup took a toll on the telehealth company's finances, pushing up losses compared to the previous year.
Its net loss spiked in the third quarter of 2016, during which Teladoc made a $125 million acquisition of HealthiestYou. The company develops patient-engagement apps that provide pricing estimates and look up benefits, among other services. But by the fourth quarter, net losses were about equivalent to the fourth quarter of 2015, at $14.3 million. Full-year net losses were $74.2 million. In 2015, they were $58 million.
Another contributing factor was increased operating expenses, particularly on advertising and marketing and sales. Operating expenses were up 31% over the fourth quarter of 2015, to $38 million, with $9.8 million coming from advertising and marketing and $7.5 million from sales.
Lewisville, Texas-based Teladoc also spent more on technology and development in the fourth quarter, continuing a steady rise that dipped only briefly in the second quarter of 2016.
Meanwhile, fourth-quarter and full-year revenue both rose. Fourth-quarter revenue hit $37.4 million, an increase of 65% compared to the year-before quarter, and full-year revenue was up 60% to $123.2 million.
Membership growth drove much of that increase, as it contributed to greater revenue from subscription access fees. Between the end of 2015 and the end of 2016, membership grew from 12.2 million to 17.5 million.
New clients include Bed, Bath & Beyond, Petco and Owens Corning, as well as health plans, such as Healthnet and Clover.
Some existing clients, such as PepsiCo and Johnson & Johnson, added coverage of Teladoc's behavioral health and dermatology services in 2016. Teladoc did well in behavioral health last year, with revenue of $12 million, more than double 2015 revenue. This “showcases consumers' accelerating acceptance of the telehealth channel for behavioral health visits,” said President and CEO Jason Gorevic. He expects the area to continue to be strong in 2017.
Behavioral health was one of five new services Teladoc added in the last 14 months. Others were dermatology, tobacco cessation, sexual health and a caregiver service. “We will be a little bit more measured over the next several years,” Gorevic said, explaining that the pace at which the company adds new products will likely slow.
