Teladoc Health is looking to broaden its overseas user base to offset persistently high customer acquisition costs affecting its direct-to-consumer business in the United States.
Teladoc is expanding efforts to sell its BetterHelp virtual therapy subscription services to consumers in Canada, the United Kingdom and other predominantly English-speaking countries, CEO Jason Gorevic said on a call Tuesday with investor analysts.
Read more: Where is direct-to-consumer telehealth headed in 2024?
Teladoc reported $276 million in fourth-quarter revenue for its BetterHelp segment, compared with $277 million in the year-ago period. The company estimated flat to low-single-digit revenue growth for BetterHelp in 2024.
Around 15% of the company’s BetterHelp revenue is international, Gorevic said.
“We think there's a lot of untapped potential outside the U.S. and expect to see these efforts begin to contribute to our financial results more meaningfully as we move through 2024, particularly in the second half of the year,” Gorevic said.
The move comes as Teladoc struggles with the prices of advertising in the U.S. to obtain new customers and increase brand awareness, particularly through social media channels. Gorevic said competitors' spending on digital and social media advertising has contributed to the high costs.
Although fourth-quarter advertising and marketing expenses for Teladoc remained flat year-over-year—$147 million, compared with $146 million in 2022—the company reported $689 million in advertising and marketing costs in 2023, compared with $624 million the previous year.
Teladoc expects the ad cost issue to persist for at least the first half of 2024, Gorevic said.
Other direct-to-consumer telehealth companies have similarly struggled with the high cost of customer acquisition. Some, including Teladoc, are expanding efforts to sell telehealth services to employers, health insurers and health systems. Revenue for Teladoc’s enterprise business increased 8% in the fourth quarter of 2023 to $384 million.
Teladoc posted a net loss in the fourth quarter of $29 million, or 17 cents per share, compared with a net loss of $3.8 billion, or $23.49 per share, in the fourth quarter of 2022, which was largely attributed to charges tied to its 2020 $18 billion acquisition of Livongo. For the year, Teladoc posted a net loss of $220 million, or $1.34 per share, compared with a net loss of $13.7 billion, or $84.60 per share, in 2022.
Teladoc’s stock sank 18% in after-hours trading from its Tuesday close price of $20.49.
