The word of the year so far in digital health is uncertainty, and the first-quarter earnings season proved to be no exception for several publicly traded companies.
Challenges related to the economy, tariffs and federal regulation from the Trump administration are causing digital health companies to rethink and adjust their strategies for the remainder of 2025. There was a sense of foreboding among many of the companies presenting their first-quarter financials during earnings calls.
Related: Why economic uncertainty is slowing digital health M&A
“There is a palpable pain the market,” said Amwell CEO Ido Schoenberg during an earnings call. "People are uncertain and worried when thinking about their financial viability going forward [and] that includes many of our customers."
Here are five takeaways from an ominous first-quarter earnings season in digital health.
1. Yes, tariffs affect digital health too.
While digital health companies don’t typically manufacture or import hardware, there were still some concerns over tariffs from publicly traded organizations. Telehealth company Amwell has seen a change in the sentiment in the market overall, which creates problems for its health plan, employer and health system customers as well as their relationship with other suppliers, Schoenberg said.
Telehealth provider Teladoc does source certain equipment from various global markets, including its connected devices and equipment used for patient monitoring, said CEO Chuck Divita. The company doesn’t expect a major impact but will be proactive in responding to tariff-related disruptions, he said.
“To offset potential impacts to our business, we're implementing mitigation strategies such as pursuing exemptions, pricing actions and assessing alternative sourcing,” Divita said.
Health Catalyst, a provider of data analytics technology and services, said the uncertainties in the market could cause potential delays in client decisions. But the company did not change its guidance as a result of anticipated tariff-related challenges or potential cuts to Medicaid.
2. There are still some positive vibes.
Despite the macroeconomic challenges, there was some positivity among digital health companies on how they could leverage the uncertain market environment. Eric Lefkofsky, CEO of Precision medicine company Tempus, said that cost cutting among its pharmaceutical customers would be a benefit in the long run.
Waystar, a healthcare payment technology company that recently rolled out artificial intelligence tools for claims appeals and prior authorization, expects increased interest from its provider customers.
“In times of volatility and market stress, Waystar software can be deployed rapidly and efficiently to help providers optimize cash flow, which is essential in challenging economic conditions,” said CEO Matt Hawkins.
3. Companies consider international expansion.
Multiple digital health companies see growth opportunities outside of the United States.
In a letter to shareholders, digital health provider Hims and Hers said it saw openings for international expansion through both organic growth and M&A over the next five years. The company already operates in the United Kingdom.
Teladoc’s Divita said the company expected international growth in multiple segments including its integrated care and BetterHelp segments. Mala Murthy, Teladoc’s chief financial officer, said international growth was a specific area of focus for the company’s BetterHelp unit, which provides online counseling. While international revenue per user tends to be lower than in the U.S., the cost of acquiring new users was also lower, she said.
The company has been finding ways to boost its BetterHelp business for several quarters. In February it acquired home diagnostic company Catapault Health for $65 million to bolster its employer and health insurer businesses.
4. Digital health companies still eager on GLP-1s.
Recent developments around glucagon-like peptide-1 agonist weight loss drugs have made digital health companies enthusiastic and willing partners to pharmaceutical companies Novo Nordisk and Eli Lilly. Both Novo and Lilly are using digital health to offer the branded weight loss drugs at a lower price directly to consumers.
GoodRx, the consumer pricing and digital health company, also sees an opportunity to work with the pharmaceutical companies and offer their branded medications directly on its platform, CEO Wendy Barnes said during an earnings call. She said there are more than 2.5 million consumers searching for GLP-1 discounts on its website every quarter.
Hims & Hers announced a formal partnership with Novo Nordisk on April 29 and will offer its branded medications to its subscribers. But Hims isn’t giving up on compounded GLP-1s, which are cheaper copies of these medications. In its first-quarter earnings call, Hims & Hers CEO Andrew Dudum said the company will still offer compounded weight loss drugs when doctors deem it a clinical necessity.
“We think of it as additive to the ecosystem because, for the most part, these are patients who just cannot use commercial doses or a lot of them have actually tried the commercial dose and then have [stopped taking them] due to the high side-effects rate,” Dudum said.
5. Diverging approaches to insurance.
Companies are embarking on significantly different approaches when it comes to working with payers.
Several mental health companies doubled down on their priorities to work with insurers. Both Talkspace and Teladoc, through its BetteHelp brand, highlighted efforts underway to ink contracts with insurance companies.
Talkspace, for example, has attempted to make it easier for patients receiving care through an employer benefit plan to transition to care covered by insurance. The company is aiming to help patients keep their mental health professional when the plan changes.
Other companies aren’t convinced the efforts to accept insurance are worth the investment. Dudum said he has little interest in Hims & Hers going that route.
“On the insurance side, no, I have very, very low interest in figuring out how to integrate insurance,” Dudum said. “I think there are a few reasons, but mostly it's because it is extremely complicated and extremely inefficient for consumers.”
