Teladoc Health’s acquisition of Livongo continues to haunt its balance sheets as the Purchase, New York-based company posted significant losses in the first half of 2022.
Teladoc said it posted a net loss of $3.1 billion in the second quarter of 2022 and a $9.7 billion loss for the first half of the year. The losses are primarily due to a non-cash goodwill impairment charge related to the Livongo acquisition that totaled $9.6 billion in the first half of 2022.
The company acquired Livongo for $18 billion in October 2020. The merger hasn’t lived up to Teladoc’s expectations and major insurers have dropped Livongo as its preferred digital health tool for chronic care conditions.
Teladoc’s revenue increased 18% from $503.1 million in the second quarter of last year to $592.4 million this year. For the first six months of the year, revenue increased 21% from $956 million to $1.1 billion.
However, the company said broader economic factors and an unexpected slowdown in its deals pipeline remain challenges. It expects future revenue projections to be near the lower end of its annual estimates.
On the second quarter earnings call, Teladoc CEO Jason Gorevic said that increased advertising costs would slow their total spending in the fourth quarter of this year.
“We’re not shutting off advertising completely,” Gorevic said. “But it is a reduction because of greater expense per advertising impression. Therefore, we want to make sure we’re making good economic decisions.”
Teladoc also tamped down its membership gain expectations. The company currently serves 56.6 million paid members, which is a 9% increase from last year, but it reversed initial estimates that membership gains would be weighted toward the second half of the year. The company said it anticipates no more than one million new members by the end of the year.
In after-hours trading, Teladoc’s stock was trading at $36.21 per share, down 16% from its closing price on Wednesday of $43.24. After its April earnings, the company’s stock fell 40% and had its biggest single-day selloff since the company went public in 2015.
In June, Teladoc was hit with an investor lawsuit after its share prices sank.