GlobeNewswire Inc | Oct 27, 2021 04:05PM EDT

October 27, 2021

-- Third quarter revenue grows 81% year-over-year to $522 million, updating 2021 revenue outlook to $2,015 million to $2,025 million. -- Total third quarter visits top 3.9 million 37% higher than Q3 2020. -- Significant new agreements with CVS Health and Centene to provide Teladoc Healths Primary360 to deliver greater care access and health engagement. -- Teladoc Health ranked 1st in consumer satisfaction by J.D. Power 2021 U.S. Telehealth Satisfaction Study.

PURCHASE, NY, Oct. 27, 2021 (GLOBE NEWSWIRE) -- TeladocHealth, Inc. (NYSE:TDOC), the global leader in whole-person virtual care, today reported financial results for the quarter ended September 30, 2021.

Our strong performance in the third quarter reflects our continued success in leading the transformation of healthcare delivery and expanding access for all, said Jason Gorevic, chief executive officer at Teladoc Health. By leveraging our unique combination of data, analytics, technology and dedicated healthcare professionals, we are driving growth across our business. The third quarter was notable in expanding relationships with a number of leading national health plans with the successful launch of our Primary360 offering which reimagines the primary care model and delivers increased access and engagement to members.

As we look ahead to the rest of 2021 and into 2022, we are confident in our ability to innovate, anticipate and solve for the evolving whole-person health needs of consumers and healthcare professionals globally," Gorevic added.

Financial Results for the Third Quarter and Nine Months Ended September 30, 2021

Revenue ($ thousands, unaudited) QuarterEnded Year over NineMonthsEnded Year over Year Year September30, Growth September30, Growth 2021 2020 2021 2020 Access Fees RevenueU.S. $ 413,594 $ 194,622 113 % $ 1,161,084 $ 454,582 155 %International 37,989 31,997 19 % 112,699 91,261 23 %Total 451,583 226,619 99 % 1,273,783 545,843 133 % Visit Fee RevenueU.S. 59,863 50,948 18 % 173,399 152,944 13 %International 116 96 22 % 368 705 (48 ) %Total 59,979 51,044 18 % 173,767 153,649 13 % Other U.S. 9,583 10,299 (7 ) % 29,617 10,299 188 %International 513 850 (40 ) % 1,305 850 54 %Total 10,096 11,149 (9 ) % 30,922 11,149 177 % Total Revenue $ 521,658 $ 288,812 81 % $ 1,478,472 $ 710,641 108 %

n/m Not meaningful

Membership and Visit Fee Only Access (millions) QuarterEnded September30, Growth 2021 2020 U.S. Paid Membership 52.5 51.5 2 % U.S. Visit Fee Only Access 23.6 21.8 8 % Chronic Care Enrollment 0.725 - n /m

Visits (thousands) Year over Year QuarterEnded Year NineMonthsEnded over Year September30, Growth September30, Growth 2021 2020 2021 2020 U.S. Visits 3,354 2,390 40 % 9,114 6,306 45 %International 531 445 19 % 1,475 1,330 11 %VisitsTotal Visits 3,885 2,835 37 % 10,589 7,636 39 % Utilization 23.7 % 16.5 % 713 pt 21.6 % 15.4 % 620 pt Platform-Enabled 969 986 (2 ) % 3,078 986 212 %Sessions* Total Visits &Sessions 4,854 3,821 27 % 13,667 8,622 59 %Provided &Enabled

* Platform-Enabled Sessions are a unique instance in which our licensed software platform has facilitated a virtual voice or video encounter between a care provider and our clients patient, or between care providers. We believe platform-enabled sessions are an indicator of the value our clients derive from the platform they license from us in order to facilitate virtual care.

-- Net loss was $(84.3) million for the third quarter of 2021 compared to $(35.9) million for the third quarter of 2020. Net loss was $(417.8) million for the first nine months of 2021 compared to $(91.2) million for the first nine months of 2020. The third quarter and first nine months of 2021 include stock-based compensation expense of $71.7 million and $241.0 million, respectively, representing increases of $50.8 million and $179.8 million, respectively, from the third quarter and first nine months of 2020, substantially reflecting higher expense associated with Livongo stock awards that continue to vest after the merger. Net loss also includes amortization of acquired intangibles of $45.1 million and $133.8 million, respectively, for the third quarter and first nine months of 2021, representing increases of $35.0 million and $109.2 million, respectively, from the third quarter and first nine months of 2020, substantially reflecting higher amortization of acquired intangible assets from the Livongo and InTouch Health acquisitions. Net loss also includes loss on extinguishment of debt of $0.8 million and $43.7 million, respectively, for the third quarter and first nine months of 2021, a decrease of $0.4 million and an increase of $34.7 million, respectively, from the third quarter and first nine months of 2020, primarily reflecting the exchange of convertible senior notes in the first nine months of 2021. Net loss also includes non-cash income tax expense of $3.6 million and $93.9 million, respectively, for the third quarter and first nine months of 2021, substantially reflecting the recording of a valuation allowance on stock compensation benefits associated with the Livongo merger recorded in the first quarter of 2021. -- Net loss per basic and diluted share was $(0.53) for the third quarter of 2021 compared to $(0.43) for the third quarter of 2020. Net loss per basic and diluted share was $(2.68) and $(1.17) for the first nine months of 2021 and 2020, respectively. Net loss per basic and diluted share includes stock-based compensation expense of $0.45 per share and $0.25 per share for the third quarter of 2021 and 2020, respectively, and $1.55 per share and $0.79 per share for the first nine months of 2021 and 2020, respectively. Net loss per basic and diluted share also includes amortization of acquired intangible assets of $0.28 per share and $0.12 per share for the third quarter of 2021 and 2020, respectively, and $0.86 per share and $0.32 per share for the first nine months of 2021 and 2020, respectively. Net loss per basic and diluted share also includes loss on extinguishment of debt of $0.01 per share for the third quarter of both 2021 and 2020, and $0.28 per share and $0.12 per share for the first nine months of 2021 and 2020, respectively. In addition, net loss per basic and diluted share includes the non-cash income tax charge (benefit) referred to above of $0.02 per share and $(0.03) per share for the third quarter of 2021 and 2020, respectively, and $0.60 per share for the first nine months of 2021 as compared to a benefit of $(0.07) per share in the first nine months of 2020. The number of weighted-average shares outstanding was 159.4 million and 155.9 million for the third quarter and first nine months of 2021, respectively, up from 83.6 million and 77.8 million for the third quarter and first nine months of 2020, substantially reflecting the impact of the Livongo and InTouch Health acquisitions. -- GAAP Gross margin, which includes depreciation and amortization, was 67.1 percent for the third quarter of 2021 and 63.3 percent for the third quarter of 2020. For the first nine months of 2021 and 2020, GAAP Gross margin was 67.3 percent and 61.7 percent, respectively. -- Adjusted Gross margin was 67.6 percent for the third quarter of 2021 compared to 63.7 percent for the third quarter of 2020. For the first nine months of 2021 and 2020, Adjusted Gross margin was 67.9 percent and 62.3 percent, respectively. -- EBITDA was a loss of $(8.7) million for the third quarter of 2021 compared to a loss $(6.8) million for the third quarter of 2020. EBITDA was a loss of $(72.3) million and $(15.4) million, respectively, for the first nine months of 2021 and 2020. EBITDA includes stock-based compensation expense of $71.7 million and $241.0 million for the third quarter and first nine months of 2021, respectively, representing increases of $50.8 million and $179.8 million from the third quarter and first nine months of 2020, respectively, substantially reflecting higher expense associated with Livongo stock awards that continue to vest after the merger. EBITDA also includes acquisition, integration and transformation costs of $4.3 million and $22.1 million for the third quarter and first nine months of 2021, respectively, representing decreases of $21.1 million and $8.6 million from the third quarter and first nine months of 2020, respectively. -- Adjusted EBITDA was $67.4 million for the third quarter of 2021 compared to $39.5 million for the third quarter of 2020. Adjusted EBITDA was $190.8 million for the first nine months of 2021 compared to $76.5 million for the first nine months of 2020.

A reconciliation of generally accepted accounting principles (GAAP) in the United States to non-GAAP results has been provided in this press release in the accompanying tables. An explanation of these measures is also included below under the heading Non-GAAP Financial Measures.

Financial OutlookTeladoc Health provides guidance based on current market conditions and expectations. Given the uncertainty of the expected path of the COVID-19 pandemic as well as the broader economic impact, our updated guidance is based on what we know today. As this is an evolving situation, circumstances are likely to change, but we believe our guidance ranges provide a reasonable baseline for 2021 financial performance.

For the fourth-quarter 2021, we expect:

-- Total revenue to be in the range of $536 million to $546 million. -- EBITDA to be in the range of $(8) million to $(3) million. -- Adjusted EBITDA to be in the range of $69 million to $74 million. -- Net loss per share, based on 160 million weighted average shares outstanding, to be between $(0.73) and $(0.53). -- Total U.S. paid membership to be in the range of 52.5 million to 53.5 million members and visit fee only access to be available to approximately 23 million to 24 million individuals. -- Total visits to be between 3.9 million and 4.1 million.

For the full-year 2021, we expect:

-- Total revenue to be in the range of $2,015 million to $2,025 million. -- EBITDA to be in the range of $(80) million to $(75) million. -- Adjusted EBITDA to be in the range of $260 million to $265 million, including an estimated $20 million in lower expenses primarily related to Livongo devices as a result of the merger. -- Net loss per share, based on 157 million weighted average shares outstanding, to be between $(3.40) and $(3.20). -- Total U.S. paid membership to be in the range of 52.5 million to 53.5 million members and visit fee only access to be available to approximately 23 million to 24 million individuals. -- Total visits to be between 14.5 million and 14.7 million.

Quarterly Conference Call

The third quarter 2021 earnings conference call and webcast will be held Wednesday, October 27, 2021 at 4:30 p.m. E.T. The conference call can be accessed by dialing 1-833-968-2101 for U.S. participants, or 1-236-714-2089 for international participants, and referencing Conference ID Number: 3489052; or via a live audio webcast available online at http://ir.teladoc.com/news-and-events/events-and-presentations/. A webcast replay will be available for on-demand listening shortly after the completion of the call at the same web link, and will remain available for approximately 90 days.

About Teladoc Health

Teladoc Health empowers all people everywhere to live their healthiest lives by transforming the healthcare experience. As the world leader in whole-person virtual care, Teladoc Health uses proprietary health signals and personalized interactions to drive better health outcomes across the full continuum of care, at every stage in a persons health journey. Ranked best in KLAS for Virtual Care Platforms in 2020 and #1 among direct-to-consumer telehealth providers in the J.D. Power 2021 U.S. Telehealth Satisfaction Study, Teladoc Health leverages more than a decade of expertise and data-driven insights to meet the growing virtual care needs of consumers and healthcare professionals. For more information, please visit www.teladochealth.comor follow@TeladocHealthon Twitter.

Cautionary Note Regarding Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by words such as: anticipate, intend, plan, believe, project, estimate, expect, may, should, will and similar references to future periods. Examples of forward-looking statements include, among others, statements we make regarding future revenues, future earnings, future numbers of members or clients, litigation outcomes, regulatory developments, market developments, new products and growth strategies, and the effects of any of the foregoing on our future results of operations or financial condition.

Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are based only on our current beliefs, expectations and assumptions regarding the future of our business, future plans and strategies, projections, anticipated events and trends, the economy and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of our control. Our actual results and financial condition may differ materially from those indicated in the forward-looking statements. Important factors that could cause our actual results and financial condition to differ materially from those indicated in the forward-looking statements include, among others, the following: (i) changes in laws and regulations applicable to our business model; (ii) changes in market conditions and receptivity to our services and offerings; (iii) results of litigation; (iv) the loss of one or more key clients; (v) changes to our abilities to recruit and retain qualified providers into our network; and (vi) the impact of the COVID-19 pandemic on our operations, demand for our services and general economic conditions, as well as orders, directives and legislative action by local, state, federal and foreign governments in response to the spread of COVID-19. For a detailed discussion of the risk factors that could affect our actual results, please refer to the risk factors identified in our SEC reports, including, but not limited to, our Annual Report on Form 10-K and Quarterly Reports on Form 10-Q, as filed with the SEC.

Any forward-looking statement made by us in this press release is based only on information currently available to us and speaks only as of the date on which it is made. We undertake no obligation to publicly update any forward-looking statement, whether written or oral, that may be made from time to time, whether as a result of new information, future developments or otherwise.

TELADOC HEALTH, INC.CONSOLIDATED BALANCE SHEETS(In thousands, except share and per share data, unaudited) September30, December31, 2021 2020 Assets Current assets: Cash and cash equivalents $ 823,828 $ 733,324 Short-term investments 2,538 53,245 Accounts receivable, net of allowance 178,072 169,281 of $11,277 and $6,412, respectivelyInventories 56,937 56,498 Prepaid expenses and other current 95,941 47,259 assetsTotal current assets 1,157,316 1,059,607 Property and equipment, net 27,027 28,551 Goodwill 14,470,399 14,581,255 Intangible assets, net 1,932,012 2,020,864 Operating lease - right-of-use assets 47,935 46,647 Other assets 17,890 18,357 Total assets $ 17,652,579 $ 17,755,281 Liabilities and stockholders? equity Current liabilities: Accounts payable $ 34,655 $ 46,030 Accrued expenses and other current 106,252 83,657 liabilitiesAccrued compensation 75,891 94,593 Deferred revenue-current 72,865 52,356 Advances from financing companies 12,442 13,453 Current portion of long-term debt 0 42,560 Total current liabilities 302,105 332,649 Other liabilities 1,328 1,616 Operating lease liabilities, net of 42,729 43,142 current portionDeferred revenue, net of current 4,075 2,449 portionAdvances from financing companies, net 9,561 9,926 of current portionDeferred taxes 93,824 102,103 Convertible senior notes, net 1,211,375 1,379,592 Commitments and contingencies Stockholders? equity: Common stock, $0.001 par value;300,000,000 shares authorized as ofSeptember 30, 2021 and December 31,2020; 160,013,751 shares and 160 150 150,281,099 shares issued andoutstanding as of September 30, 2021and December 31, 2020, respectivelyAdditional paid-in capital 17,399,023 16,857,797 Accumulated deficit (1,410,469 ) (992,661 )Accumulated other comprehensive (loss) (1,132 ) 18,518 gainTotal stockholders? equity 15,987,582 15,883,804 Total liabilities and stockholders? $ 17,652,579 $ 17,755,281 equity

TELADOC HEALTH, INC.CONSOLIDATED STATEMENTS OF OPERATIONS(In thousands, except share and per share data, unaudited) Quarter Ended September30, NineMonthsEndedSeptember30, 2021 2020 2021 2020Revenue $ 521,658 $ 288,812 $ 1,478,472 $ 710,641 Expenses: Cost of revenue(exclusive ofdepreciation andamortization, 169,041 104,725 475,273 267,887 which is shownseparatelybelow)Operating expenses:Advertising and 111,078 52,302 303,738 132,395 marketingSales 62,602 23,483 191,251 60,110 Technology and 80,250 29,958 239,017 72,244 developmentAcquisition,integration and 4,340 25,395 22,084 30,686 transformationcostsGeneral and 103,016 59,742 319,404 162,699 administrativeDepreciation and 51,907 12,932 151,907 32,535 amortizationTotal expenses 582,234 308,537 1,702,674 758,556 Loss from (60,576 ) (19,725 ) (224,202 ) (47,915 )operationsLoss onextinguishment 850 1,227 43,728 8,978 of debtOther expense 376 252 (5,493 ) 827 (income), netInterest 18,895 16,970 61,493 38,849 expense, netNet loss before (80,697 ) (38,174 ) (323,930 ) (96,569 )taxesIncome taxexpense 3,643 (2,290 ) 93,878 (5,400 )(benefit)Net loss $ (84,340 ) $ (35,884 ) $ (417,808 ) $ (91,169 ) Net loss pershare, basic and $ (0.53 ) $ (0.43 ) $ (2.68 ) $ (1.17 )diluted Weighted-averageshares used tocompute basic 159,435,165 83,607,902 155,926,680 77,821,073 and diluted netloss per share

TELADOC HEALTH, INC.CONSOLIDATED STATEMENTS OF CASH FLOWS(In thousands, unaudited) NineMonthsEndedSeptember30, 2021 2020Cash flows provided by operating activities:Net loss $ (417,808 ) $ (91,169 )Adjustments to reconcile net loss to net cash provided by operating activities:Depreciation and amortization 151,907 32,535 Depreciation of rental equipment 2,500 851 Amortization of right-of-use assets 8,185 4,643 Allowance for doubtful accounts 11,353 2,320 Stock-based compensation 240,971 61,151 Deferred income taxes 91,414 (4,096 )Accretion of interest 46,843 29,459 Loss on extinguishment of debt 40,631 8,978 Gain on sale of investment (5,901 ) 0 Other, net 38 216 Changes in operating assets and liabilities:Accounts receivable (19,407 ) (16,450 )Prepaid expenses and other current (34,566 ) (5,906 )assetsInventory (2,661 ) (2,392 )Other assets (3,432 ) 140 Accounts payable (11,115 ) 6,584 Accrued expenses and other current 15,880 17,269 liabilitiesAccrued compensation (17,352 ) 9,329 Deferred revenue 20,002 15,348 Operating lease liabilities (8,202 ) (4,360 )Other liabilities 1,502 (3,025 )Net cash provided by operating 110,782 61,425 activitiesCash flows used in investing activities: Capital expenditures (5,611 ) (2,872 )Capitalized software development costs (35,402 ) (14,515 )Proceeds from marketable securities 50,000 0 Proceeds from the sale of investment 10,901 0 Acquisitions of business, net of cash (75,944 ) (159,663 )acquiredOther, net 3,150 0 Net cash used in investing activities (52,906 ) (177,050 )Cash flows provided by financing activities:Net proceeds from the exercise of stock 22,956 40,627 optionsProceeds from issuance of 2027 Notes 0 1,000,000 Payment of issuance costs of 2027 Notes 0 (24,070 )Repurchase of 2022 Notes (139 ) (228,153 )Proceeds from advances from financing 10,677 1,924 companiesPayment against advances from financing (12,053 ) (4,427 )companiesProceeds from employee stock purchase 13,996 2,473 planCash received for withholding taxes on 3,109 326 stock-based compensation, netOther, net (4,224 ) 0 Net cash provided by financing 34,322 788,700 activitiesNet increase in cash and cash 92,198 673,075 equivalentsForeign exchange difference (1,694 ) (129 )Cash and cash equivalents at beginning 733,324 514,353 of the periodCash and cash equivalents at end of the $ 823,828 $ 1,187,299 period Income taxes paid $ 3,114 $ 786 Interest paid $ 7,973 $ 5,612

Stock-based Compensation Summary

Total compensation costs for stock-based awards were recorded as follows (in thousands):

QuarterEnded NineMonthsEnded September30, September30, 2021 2020 2021 2020Cost ofrevenue(exclusive ofdepreciation $ 2,162 $ 128 $ 6,310 $ 128 andamortization,which is shownseparately)Advertising 5,244 1,644 15,141 4,447 and marketingSales 17,518 3,275 57,638 9,465 Technology and 22,910 2,622 77,335 7,285 developmentGeneral and 23,867 13,239 84,547 39,826 administrativeTotalstock-based $ 71,701 $ 20,908 $ 240,971 $ 61,151 compensationexpense (1)

(1)Excluding the amount capitalized related to internal software development projects.

Non-GAAP Financial Measures:

To supplement our financial information presented in accordance with GAAP, we use adjusted gross profit, adjusted gross margin, EBITDA and adjusted EBITDA, which are non-GAAP financial measures, to clarify and enhance an understanding of past performance. We believe that the presentation of these financial measures enhances an investors understanding of our financial performance. We further believe that these financial measures are useful financial metrics to assess our operating performance from period-to-period by excluding certain items that we believe are not representative of our core business. We use certain financial measures for business planning purposes and in measuring our performance relative to that of our competitors. We utilize adjusted EBITDA as the primary measure of our performance.

Adjusted gross profit is our total revenue minus our total cost of revenue (exclusive of depreciation and amortization, which is shown separately) and adjusted gross margin is adjusted gross profit as a percentage of our total revenue. We believe that these measures provide investors meaningful information to understand our results of operations and the ability to analyze financial and business trends on a period-to-period basis.

EBITDA consists of net loss before interest; other expense (income), net, including foreign exchange gain or loss; taxes; depreciation and amortization; and loss on extinguishment of debt. Adjusted EBITDA consists of net loss before interest; other expense (income), net, including foreign exchange gain or loss; taxes; depreciation and amortization; loss on extinguishment of debt; stock-based compensation; and acquisition, integration and transformation costs. We believe that making such adjustments provides investors meaningful information to understand our results of operations and the ability to analyze financial and business trends on a period-to-period basis.

We believe the above financial measures are commonly used by investors to evaluate our performance and that of our competitors. However, our use of the terms adjusted gross profit, adjusted gross margin, EBITDA and adjusted EBITDA may vary from that of others in our industry. None of adjusted gross profit, adjusted gross margin, EBITDA nor adjusted EBITDA should be considered as an alternative to net loss before taxes, net loss, net loss per share or any other performance measures derived in accordance with GAAP.

Adjusted gross profit, adjusted gross margin, EBITDA and adjusted EBITDA have important limitations as analytical tools and you should not consider them in isolation or as a substitute for analysis of our results as reported under GAAP. Some of these limitations are:

-- Adjusted gross margin has been and will continue to be affected by a number of factors, including the fees we charge our clients, the number of visits and cases we complete, the costs paid to providers and medical experts, as well as the costs of our provider network operations center; -- Adjusted gross margin does not reflect the significant depreciation and amortization to cost of revenue; -- EBITDA and adjusted EBITDA do not reflect the significant interest expense on our debt; -- EBITDA and adjusted EBITDA eliminate the impact of income taxes on our results of operations; -- EBITDA and adjusted EBITDA do not reflect the loss on extinguishment of debt; -- EBITDA and adjusted EBITDA do not reflect other expense (income), net; -- Adjusted EBITDA does not reflect the significant acquisition, integration and transformation costs. Acquisition, integration and transformation costs include investment banking, financing, legal, accounting, consultancy, integration, fair value changes related to contingent consideration and certain other transaction costs related to mergers and acquisitions. It also includes costs related to certain business transformation initiatives focused on integrating and optimizing various operations and systems, including upgrading our customer relationship management (CRM) and enterprise resource planning (ERP) systems. These transformation cost adjustments made to our results do not represent normal, operating expenses necessary to operate the business but rather, incremental costs incurred in connection with our acquisition and integration activities; -- Adjusted EBITDA does not reflect the significant non-cash stock compensation expense which should be viewed as a component of recurring operating costs; and -- other companies in our industry may calculate adjusted gross profit, adjusted gross margin, EBITDA and adjusted EBITDA differently than we do, limiting the usefulness of these measures as comparative measures.

In addition, although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, and adjusted gross profit, adjusted gross margin, EBITDA and adjusted EBITDA do not reflect any expenditures for such replacements.

We compensate for these limitations by using adjusted gross profit, adjusted gross margin, EBITDA and adjusted EBITDA along with other comparative tools, together with GAAP measurements, to assist in the evaluation of operating performance. Such GAAP measurements include net loss, net loss per share and other performance measures.

In evaluating these financial measures, you should be aware that in the future we may incur expenses similar to those eliminated in this presentation. Our presentation of adjusted gross profit, adjusted gross margin, EBITDA and adjusted EBITDA should not be construed as an inference that our future results will be unaffected by unusual or nonrecurring items.

We have not reconciled EBITDA or adjusted EBITDA guidance to GAAP net loss because we do not provide guidance on the individual reconciling items between EBITDA and adjusted EBITDA and GAAP net loss. This is due to the uncertainty as to timing, and the potential variability, of the individual reconciling items such as the tax impact of share-based compensation, the effect of which may be significant. Accordingly, a reconciliation of the non-GAAP financial measure guidance to the corresponding GAAP measure is not available without unreasonable effort.

The following is a reconciliation of gross profit and gross margin, the most directly comparable GAAP financial measures, to adjusted gross profit and adjusted gross margin, respectively:

Reconciliation of GAAP Gross Profit to Adjusted Gross Profit and Adjusted GrossMargin(In thousands, unaudited) Quarter Ended NineMonthsEnded September30, September30, 2021 2020 2021 2020 Revenue $ 521,658 $ 288,812 $ 1,478,472 $ 710,641 Cost ofrevenue(exclusive ofdepreciationand (169,041 ) (104,725 ) (475,273 ) (267,887 ) amortization,which isshownseparatelybelow)Depreciationandamortization (2,545 ) (1,149 ) (8,233 ) (4,078 ) of intangibleassetsGross Profit 350,072 182,938 994,966 438,676 Depreciationandamortization 2,545 1,149 8,233 4,078 of intangibleassetsAdjusted $ 352,617 $ 184,087 $ 1,003,199 $ 442,754 gross profit Gross margin 67.1 % 63.3 % 67.3 % 61.7 %Adjusted 67.6 % 63.7 % 67.9 % 62.3 %gross margin

The following is a reconciliation of Net Loss, the most directly comparable GAAP financial measure, to EBITDA and adjusted EBITDA:

Reconciliation of GAAP Net Loss to EBITDA and Adjusted EBITDA(In thousands, unaudited) Quarter Ended NineMonthsEnded September30, September30, 2021 2020 2021 2020Net loss $ (84,340 ) $ (35,884 ) $ (417,808 ) $ (91,169 )Add: Loss onextinguishment 850 1,227 43,728 8,978 of debtOther expense 376 252 (5,493 ) 827 (income), netInterest 18,895 16,970 61,493 38,849 expense, netIncome taxexpense 3,643 (2,290 ) 93,878 (5,400 )(benefit)Depreciationand 51,907 12,932 151,907 32,535 amortizationEBITDA (8,669 ) (6,793 ) (72,295 ) (15,380 )Stock-based 71,701 20,908 240,971 61,151 compensationAcquisition,integrationand 4,340 25,395 22,084 30,686 transformationcostsAdjusted $ 67,372 $ 39,510 $ 190,760 $ 76,457 EBITDA

Investors:Patrick Feeley914-265-7925IR@teladochealth.com

Media:Chris Stenrud860-491-8821pr@teladochealth.com