Teladoc Health (TDOC -1.70%), a leader in telehealth services, released its fourth-quarter earnings on Feb. 26. The company reported revenue of $640.5 million, just above the $639 million that analysts had expected, but 3% lower than the same quarter last year. Its net loss per share was $0.28, worse than the loss of $0.26 per share that analysts had anticipated.

Source: Analysts' estimates for the quarter provided by FactSet.

Understanding Teladoc Health

Teladoc Health is a premier provider of virtual healthcare services. It blends traditional medical care with advanced telehealth services, primarily focusing on integrated care. Its offerings span wellness programs to specialized medical advice, targeting both individual consumers and businesses.

Its integrated care model has been showing some growth, but its direct-to-consumer BetterHelp segment faces headwinds. The company generates most of its revenue through access fees. Yet its performance varies across segments, with international markets showing better growth than domestic ones.

Quarter Highlights and Challenges

During Q4, Teladoc Health posted revenue of $640.5 million, narrowly beating estimates, but down 3% compared to Q4 2023. Its BetterHelp segment experienced a 10% revenue slide due to decreased demand in the direct mental health services market.

The integrated care segment, however, showed resilience with a 2% revenue increase to $390.7 million, supported by 5% U.S. membership growth to 93.8 million. Notably, international revenue increased by 10% to $105.1 million, reflecting Teladoc's global market traction.

However, the company's gross margin slipped to 65.7% from 68.8% in Q4 2023. Adjusted EBITDA also declined across segments, with BetterHelp's contribution reducing by 63% to $21.7 million.

Forward Outlook and Strategy

For 2025, Teladoc Health forecasts revenue of between $2.468 billion and $2.576 billion, compared to $2.570 billion in 2024. The adjusted EBITDA forecast range of between $278 million and $319 million is largely below the $310.7 million it booked in 2024.

Moving forward, Teladoc aims to fortify its market position by refining cost structures and enhancing efficiency. It intends to stabilize BetterHelp, focus on international market growth, and capitalize on the strategic acquisition of Catapult Health, which will expand its at-home wellness offerings.