Welcome to Teladoc’s First Quarter 2018 Earnings Conference Call and Webcast. At this time, all participants have been placed in a listen-only mode and the floor will be opened for your questions, following management’s prepared remarks. [Operator Instructions]. It is now my pleasure to turn the floor over to Adam Vandervoort, Chief Legal Officer. You may begin.

Thank you, operator, and good afternoon, everyone. We look forward to discussing our first quarter 2018 results with you today. Joining me for Teladoc’s conference call are Jason Gorevic, our Chief Executive Officer; and Mark Hirschhorn, our Chief Operating Officer and Chief Financial Officer. Today, after the market closed, we issued a press release announcing our first quarter 2018 results and filed our Quarterly Report on Form 10-Q. The release and the filing are both available in the Investor Relations section of teladoc.com. As a reminder, Teladoc intends to avail itself of the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. Certain statements made during this call will be forward-looking statements within the meaning of that law. These forward-looking statements are subject to risks, uncertainties and other factors that could cause Teladoc’s actual results to differ materially from those expressed or implied by the forward-looking statements. For additional information on the risks facing Teladoc, please refer to our filings with the SEC. We’ll start today’s call with brief prepared remarks, followed by Q&A. Today’s call will contain certain non-GAAP financial measures that we believe are important in evaluating Teladoc’s performance. For more details on these measures, the most comparable GAAP measures and a reconciliation of the two, please refer to the press release posted earlier today on teladoc.com. I will now turn the call over to Jason.

Thanks, Adam, and thank you to, everyone, on the call for joining us this afternoon. We saw a very strong start to 2018 with continued success across the business and another quarter in which we exceeded our expectations for all of our key metrics. Total revenue was $89.6 million, and up 109% on an absolute basis and 47% on an organic basis. Adjusted EBITDA of a loss of $1.4 million beat our forecasts and compares to a loss of $9.1 million a year ago. We ended the quarter with $20.8 million U.S. paid members, up 41% compared to last year on a pro forma basis. And finally, we conducted 606,000 total visits for the quarter, as 554,000 visits came from our U.S. paid members in the quarter, compared to 385,000 last year. Mark will dive deeper into the financial and operating metrics and will provide more granular data than we have historically given. As we increased our transparency by providing more detailed information on our membership and visit volume, which we hope will allow you to better track our success across the business. With several months of 2018 behind us, I’m pleased to see that the leverage in our model is clearly contributing to our improved financial and operational performance. While we forecasted this leverage for quite a while, we are pleased to see it come to fruition and happy to report that we’re on track to achieve our long-term financial targets. During the quarter, every one of our cash-based operating expense lines increased less than our top line growth. The best example of this is our G&A, which is our single largest operating expense and is declining materially as a percentage of revenue from 34% in the first quarter of 2017 to 27% this quarter, and we expect this…

Thanks, Jason, and good afternoon, everyone. To echo Jason’s sentiment, this quarter represented a strong start to 2018, and I’m very pleased with our results across the Board. During this afternoon’s call, I’ll run through the financial results from the quarter and discuss our expectations for the second quarter and remainder of 2018. Turning to the P&L and starting with the top line, revenue in the first quarter was $89.6 million, a 109% year-over-year increase. On an organic basis, our quarterly revenue grew 47% over the same period in 2017. Revenue from Subscription Access Fees increased 109% in the first quarter coming in at $71.7 million, compared to $34.3 million a year ago. Looking a bit deeper, when we break out subscription fees between U.S. and international, the U.S. accounted for $61 million, or 85% of the total access fees and international generated the remaining $10.7 million. In the first quarter, Subscription Access Fee revenue accounted for 80% of Teladoc’s total revenue. As of March 31, 2018, we had $20.8 million paid members in the U.S. That’s an increase of 41% year-over-year, when compared to the $14.8 million members we had a year ago, after adjusting for $5.4 million Aetna and Amerigroup lives. As a reminder, we’ve refined our definition of members to include just U.S. paid members that are associated with a PEPM or PMPM or paid U.S. membership. And under this refined definition, membership totals will not include visit fee only access. At the end of the first quarter, we had approximately 9.5 million individuals with visit fee only access to our services, including those individuals from the Blue Cross Blue Shield Federal Employee Program and Aetna’s fully insured population. Last quarter, we mentioned an additional $9 million TRICARE visit fee only members that we anticipated going live…

[Operator Instructions] Our first question comes from the line of Lisa Gill of JPMorgan. Please go ahead. Your line is open.

Thank you very much and good afternoon. Jason, let me just start with your comments around the virtual care platform. I think, it really differentiates Teladoc in the marketplace. I want to understand how it’s resonating this selling season? You didn’t have best doctors last year at this point in the selling season. So one, what are you hearing in the early part here or the selling season? And two, what are the opportunities that you see from cross-sell perspective? And then my second question was just your comments around the vertical integration. Maybe if you could just crystallize for us really how you see Teladoc sitting in as we see this incremental vertical integration within the healthcare?

Sure. Thanks, Lisa. Yes, a couple of things on the virtual care platform. We’re seeing that it is truly differentiated in the market and it’s changing the discussions that we’re having with our prospects and clients to be much more holistic, much more strategic and larger opportunities. That is especially true in the Health Plan segment, where we have much more senior level discussions around an enterprise-wide virtual care strategy as opposed to a point solution and there are plenty of point solutions in the market. But really, we are the only ones who can bring this comprehensive platform. Of course, we also see, as you mentioned, the opportunity for cross-sell into our employer clients, where we already have a relationship for Teladoc and we’re bringing in the expert second opinion services and other more advanced services that are addressing the population towards the top of the healthcare pyramid and we’re seeing good traction there. I mentioned in my prepared remarks, we had a health plan who had previously been really more of a Telehealth client engage us to provide expert second opinion services for their complex cases, and that’s just the first of what we see as many opportunities that we expect to close. With respect to the vertical integration and our opportunity there, we’ve had great discussions, as you know, both CVS and Aetna, our clients of ours. We’ve had great discussions with them about how Teladoc can be a part of more of a bricks-and-clicks environment sort of a seamless continuum of care that’s delivered in both the retail setting and in in-person basis, but can bring in a virtual component, in our case, especially a virtual interaction with a specialist you can assist the onsite provider. And also seamlessly, interact with us on a virtual basis and direct the consumer to the right resources that are available to them. So as you think about that becoming a more fluid experience that includes the benefit design, Teladoc plays really well in that environment and we see that being a benefit for us. But really a way that we can help to change the way that health care is delivered.

That’s helpful. I’m just wondering going back to discussion on the selling season. Is there anyway for you or Mark to quantify anything as far as size goes, as far as the opportunity? I know that telemedicine is new and evolving. But is there a number to think about as far as incremental lives you can add to the platform and discussions you’re having anything on the number side just, because we’re analysts?

Yes, so I would say too soon to tell about comparing sort of the magnitude of the pipeline. What I will say is, it’s extremely active, at least, as active probably more so than it was last year many big opportunities such as the ones that I described, especially in the health plan space. We continue to do very well on the provider side and have done extremely well in that market. So I would say, I feel better about where we are now than I did last year. Although I’ll refrain from giving you a number you can plug into – to your model.

Okay. I’ll keep asking for the number. But congratulation on the quarter.

Thanks, Lisa.

Your next question comes from the line of the Ryan Daniels of William Blair. Please go ahead. Your line is open.

Yes. Thanks, guys, for taking the question. Jason, one for you. You mentioned in your prepared comments, you have about 15 months of data indicating that with more products, you see a more engaged workforce and more utilization services. I’m curious number one, if you can talk about how you intend to leverage that for marketing purposes or sales purposes to expand that penetration? And number two, any magnitude of how big of an impact it has as clients add multiple solutions?

Yes. Thanks, Ryan I would say, it is very much a testament to the value of a comprehensive solution that delivers value sort of across the healthcare or along the entire healthcare spectrum. So ranging from acute episodic all the way to more complex and chronic conditions. And what we see is, with each additional product that we add into the mix, the engagement increases on a frequency of visit basis, as well as in terms of the breadth of the population that we serve and who engages with us. So it’s pretty unique to see that you get growth on both of those dimensions. You sort of expect to see one or the other, both is really valuable to us. So in terms of how we’re going to use that, we want to put that information in front of our clients. So they can see the value of a single multi-functional solution as opposed to a bunch of disjointed point solutions that they may go to get in the market. With respect to the magnitude, I think, we’re going to sort of hold at giving qualitative guidance on that. And again, I would reinforce that the benefit is seen with each additional product that we deliver into a population. So it continues to build with each additional product.

Okay, that’s helpful color. And then in regards to the TRICARE, you indicated that as opposed to the April 1 kind of full launches, it’s getting pushed back a little bit towards the end of the quarter Q3 early on, obviously, didn’t impact your guidance. So you must have modest CFO revenue in Q2 soon [ph] for that. But one, can you confirm that? And then number two, any discussion why that is being modestly delayed?

Yes. So we were prepared for the launch. In fact, we got accolades from our partners, on our readiness, as well as the implementation process. The government just took a slightly more measured approach to their roll out plan. So they rolled out the global nurse advice line. They just wanted to take a more step-by-step approach rather than a big bang to rolling out the new components. And the virtual care part is really a new component as opposed to replacement of previous services. So this has nothing – to answer a question maybe that’s on your mind, but you didn’t ask, it has nothing to do with the VA that we’ve heard out from other players in the market. It’s simply just a more methodical approach to rolling out the service. Mark, I don’t know if you want to talk to the expectations with respect to revenue or impact with respect to revenue.

Ryan, we came off a strong quarter, so we’re trending ahead of our expected numbers. But we do take a little bit of a hit as we had a guaranteed amount of revenue to be generated from TRICARE from the date they commenced their contract with us, so go live with us. So each month that gets delayed. Obviously, there’s a shortfall in the projected revenue from that contract.

Okay. So one quick one and I’ll hop off. Did you give a PMPM fee? I may have missed that. I got on a second late?

We did not. I don’t believe we did in the prepared remarks. But for Q1 it was $1, compared to $0.58 for Q1 of 2017, and on a pro forma basis Q1 of 2017 would have been $0.79.

Great. Very helpful. Thanks, guys. Congrats on the strong start to the year.

Thanks, Ryan.

Your next question comes from the line of Charles Rhyee of Cowen. Please go ahead. Your line is open.

Yes. Hey, thanks for the question. Hey, quick question about the visit fee only visits. So 51,000, if I sort of annualize the number, it sounds like you’re looking at maybe about a 2% utilization. Currently that sounds like that’s better than where Aetna was in the old model in terms of utilization, is that the way to think about it?

You’re excluding the FEP lives, Charles, because from a visit fee only access perspective that would have been, yes, those would have been excellent numbers had it just been for the $3.8 million Aetna fully insured members. But you’ve got to add to that a little over $5 million FEP members. And those really went live in February. So again, I think you or most people know what the figures are with regard to expectations on the Aetna fully insured. We’ve spoken throughout the month of March and now it’s April, we’re trending at the levels we would expect to see to remain neutral or slightly above revenues that were generated in 2017 from this population.

So then when I was looking at the Q, right, did you kind of break out the visit fee only revenue, I think, it was about three point something million buyback into the 51,000, it kind of backs into sort of a per visit of $69. Is that – can you talk about the breakdown between FEP versus Atena pricing?

Sure. We decided…

[Multiple Speakers] $150, right?

That’s correct. So about $150 for Atena visits and in the area of $45 for those FEP visits. So you could likely do the waiting and determine where it came out. But that’s where you come out for the first quarter.

Okay. One last housekeeping. Our stock comp for the year, do you have an estimate in the guidance – that’s embedded in the guidance?

We do stock comp. I think that we provided, I think, we gave around 32 – about $32 million.

For this year, okay?

Correct.

Perfect. All right. Thanks, guys. Congrats on the quarter.

Thank you.

Thank you, Charles.

Your next question comes from the line of Sean Wieland of Piper Jaffray. Please go ahead. Your line is open.

Thanks and thanks for the – for all the transparency on the numbers. So just some follow-up to Charles’ question. So what are the – what are kind of the strategies or the levers that you’re employing to accelerate the visit fee only visits? I know that they’re tracking in line, but to drive utilization and to drive growth for those contracts. Can you share with us anything that you’re doing specifically to drive utilization there?

Yes, so we’ve dramatically improved the set of strategies in communications with the Atena’s team regarding collaborative efforts to drive member awareness and engagement. We actually deployed a very talented executive to work with their team at Atena. And we’ve seen much more sort of positive direction and movement from both the Aetna group, as well as our own efforts to deploy the surround sound capability that Stephanie’s team delivers. So that’s been very, very positive. And then on the FEP side, we’re doing quite a bit of work with the FEP team, both A, to provide them with best practices and B, potentially to provide them with additional consumer engagement services on a sort of a retained basis, where they pay us to provide those services for their population. So we’re seeing very, very good movement on both of those. And I have – I’m pleased with where the first quarter turned out and I have pretty high expectations for the remainder of the year.

So can you share with us any insight into what’s factored into your guidance relative to that utilization of visit fee only?

The visit fee only utilization expectation for 2017 – for 2018 will remain below 1%.

Per quarter.

For the year.

Okay. I’m sorry wasn’t it just 2% annualized?

No, it wasn’t. When you’re looking at the figures for the lives that came in throughout the quarter, we ended the quarter with 9.5 million lives. We expect to have 18 million lives by the end of the year. So you should expect to see approximately 1% utilization on that annualized number.

Okay. Super. Thanks so much.

Sure.

Your next question comes from the line of Sean Dodge of Jefferies. Please go ahead. Your line is open.

Yes, thanks. And so maybe staying with utilization for a moment and more specifically on the surround sound roll out. Do you guys have any updated data on the lift you’re seeing in utilization maybe six or 12 months after you’ve implemented client?

Yes, what we generally see and I think we have shown this in some of our investor presentations is that, first year utilization gets up to a strong. But as you would expect from first year not ultimately, the sort of objective utilization. So where we start at about an employer population in the 6% range, it usually steps up into the 8% range for year two and then up around 12 to 14 for year three. So we see the benefit of that over time. Now what we’re also seeing is that, that first year is increasing, because we’re becoming more nimble about engaging the population out of the gate with our surround sound capabilities. So that’s been an improvement really over the last year to where we’re seeing benefit in the first year that a population is with us.

Got it. Okay, thanks. And then Jason, the benefits of cross-selling have come up a couple of times now. Do you have anything on your fingertips to give us a sense of the progress you all been making in cross-selling over the last couple of quarters? Maybe how many clients you’ve cross sold best doctors or behavioral health and two or something like change in average services used per client. How that’s trended over the last few quarters?

We haven’t given any specific numbers about penetration of the multiple products into our book. I would say that, we’re making good progress in bringing our clients up to speed on the value of the full continuum of services that we offer. The first quarter is always a slower quarter in terms of engaging clients for new services even on a cross-sell basis, because they’re just coming out of the open enrollment period and getting through the implementation and introduction of new benefits. So we would expect to see that continue to increase in velocity over the course of the year.

All right. Thank you, again.

Yes.

Your next question comes from the line of Jamie Stockton of Wells Fargo. Please go ahead. Your line is open.

Thanks. Thanks for taking my questions. I guess, maybe the first one, Mark, the dollar PMPM that you’re quoting, I assume that in the calculation there, it seems like you’re setting the international aside and not including that in the numerator, is that right?

That’s correct. It’s only U.S. paid membership, Jamie.

Okay. But in the denominator as far as the member – number is concerned, are you including the international kind of best doctors or is it – or is the international business [Multiple Speakers]…

Yes, right now [Multiple Speakers] visit.

Okay. All right.

Yes, there’s no international members or figures included in that calculation.

Okay, that’s great. And then my other question is around the advertising marketing spend came in a fair amount below what we had expected. It seems like you’re seeing some really nice leverage on that line. Can you talk about, I think, maybe in the last call or two, you’ve referenced that you are seeing more visits that people are requesting over the app. I assume that that’s leading to better engagement levels without you having to put ads in people’s news feeds and whatnot. Can you just talk about any metrics you might have around what kind of engagement you’re able to drive without having to actually spend a lot of money to drive it, because it seems like you’re seeing some good leverage on that line?

I think, we’ve – over the past three quarters, we’ve been experiencing that faster trend away from the traditional means of entering Teledoc, which was through the call center for years. We had projected that there would be a slow and steady trend through the app and through the web and that actually occurred at a faster pace. That helped us preserve our 70% margin, that also kept the price and the costs of customer acquisition down a bit as well, because we’ve shifted to the digital format away from some of the print material. So we’ve benefited from really two-prongs. One is the service side and the other one was the really the CPI. That’s going to continue the fact that we end up having some available dollars. We’ll likely deploy those in areas where either we want to concentrate on clients where we believe we’ve got a greater opportunity to see increased utilization this year or through some of our cross-selling and bringing additional services to clients that were traditionally Teladoc only clients and we’re introducing them to the expert medical opinions and other services from best doctors.

And Jamie, I would add that, we’ve seen improvement in our registration rates over the course of the last year, which once a member has registered with us. We’re able to use significantly less expensive means to remind them of our availability and drive utilization. So there is a benefit to that.

Is there a lot of runway still there or do you feel like you’ve may be crossed really the 50% or I don’t know what the most relevant penetration would be?

No, we are still in the very, very early innings, there is a ton of runway with respect to driving registration.

Okay, thank you.

Thanks Jamie.

Your next question comes from the line of Stephanie Demko of Citi. Please go ahead, your line is open.

Hey guys, thank you for taking my questions and congrats on the quarter.

Thank you, Stephanie.

Could you give us an update on recent turnover in the Chief Revenue Officer role, specifically how you are adding up the sales and product strategy and maybe any thoughts if you planning on refreshing the role?

When we made the acquisition of Best Doctors we were fortunate to bring on a great executive in, Peter McClanahan and so we really – we moved Peter into the role of President, we are very happy to be able to retain him as a member of the leadership team. And to be honest, it was – it would have been duplicative to have a Chief Revenue Officer and the President, Peter really oversees the entire commercial part of the business. And so it was simply a function of putting the two organizations together and having two executives for one position.

Okay, understand and one housekeeping item for me. Could you quantify the utilization uptick you saw from the flu season?

Stephanie, we likely saw a – somewhere between 5% to 10% increase in our projected utilization as a result of the strength in January and February. Flu basically ended towards the end of February, we didn’t see any incremental uplift in March. April has been coming in as projected and that’s why we feel comfortable with our existing range of – on the upwards to $2 million for this year.

Very helpful, thank you guys.

Thank you.

Your next question comes from the line of Sandy Draper of SunTrust. Please go ahead, your line is open.

Thanks so much and I would also echo the congratulations on a solid quarter and good start to the year. Actually it’s on one is on one play cycle that it might turn over things were a little bit light, Best Doctors revenue was up 4% year-over-year, maybe a tiny bit lower than I thought. Mark, do you generally view longer term Best Doctors as a double-digit grower and maybe bringing it all in, it’s going to be tougher and tougher. I’m just trying to get your sense of was there anything, had it performed well to your expectations and how do you doctor Best Doctors going up for the year? Thanks.

Yes, thanks Sandy. We certainly do see Best Doctors, I know we set expectations at the beginning that Best Doctors would generate growth upwards to 15% and hopefully by the run rate in fourth quarter to 20%. The first quarter comparisons to 2017 were a bit strange, because they disposed of a small business in Q1 and there were also some clients that didn’t return back into that if that business will subsequent or prior to and subsequent to the transaction, I think we have a steadier run great. We saw a far less attrition at the end of the year than we had projected, so I think we’ll still end this year with growth that exceeds 15% and I think we’ll bring that, the Best Doctors base business to grow in excess of 20% into 2019, still very comfortable with where they are today.

Okay great. Really helpful commentary, I appreciate it.

Your next question comes from the line of Donald Hooker of KeyBanc. Please go ahead, your line is open.

Okay, good afternoon. One of the – lot of questions of course have been asked already, but just maybe on a more detailed question around sort of free cash flow, thinking about that, kind of a great quarter, but there were couple sort of working capital items that moved around, I don’t typically think of working capital for you guys, but I guess thinking about now or in our first full year of Best Doctors is there anything to think about with respect to working capital there, and how do you think about free cash flow for the for the rest of this – the remaining quarters of the year?

Sure, Don, it’s Mark. I think we burnt a $2 million of cash in this quarter. Working capital requirements as I noted in the past would likely range somewhere between $10 million to $15 million. We started the year with an excess of $120 million in cash, we’ve told everybody we’ll end the year with an excess of $100 million in cash. I think we’ve also told people that we would look to be free cash for positive, we are going to aim for that over the next two years. We haven’t committed to a certain timeframe yet, but as you noted we have pretty light working capital requirements and from quarter-to-quarter I would see us – I’d expect us to be either neutral in cash needs or requiring just a $2 million.

Got you and with regards to hospital health system business, obviously that’s a high growth area for you guys. What are the typical contract terms these days and I know it’s early, but if you had any renewal experiences and how have they gone in terms of pricing?

We’ve got – most of our contracts are multiyear contracts, between two and five years. So the fact is that I don’t think we’ve had a renewal to-date, some of those will come up I believe in 2019 and those contracts range, there could be $50,000 contracts and others that are up to $500,000 and beyond, based on the size of the business.

Okay I figured that and then in the behavioral health revenues, can you disclose that now and I’ll see the floor?

Yes, behavioral health continues to grow dramatically, I know we’ve set expectations for an excess of $50 million for this year. We are on a run rate to exceed $55 million, so they are exceeding our expectation and highlighting the fact that there is still plenty of runway there.

Thank you.

You are welcome.

Your next question comes from the line of Richard Close of Cannacord Genuity. Please go ahead, your line is open.

Great, thank you. Jason, I was wondering if we could dive deeper into some of your remarks, you talked about committing resources organically and inorganically, I believe you mentioned internationally there so, are you suggesting you’re looking outside the U.S. possibly for a platform? And then I’d welcome any perspective you guys have on the two mergers that were announced yesterday on the – in the hospital space for the American Well and Avizia and REACH Health and InTouch and whether you need to do something on the hospital side?

Sure, yes, so with respect to M&A and really sort of investments overall, what we’ve said pretty consistently is that we look for investment opportunity either build, buy or partner with respect to continuing to expand the product portfolio, as well as continuing to expand the markets that we served and our footprint in attractive markets. So that could include everything from new product capabilities that bring us new clinical services, all the way to existing players who are operating in markets where we’re not as strong. So I think that we’ve been pretty consistent about that and we continued to follow that approach with respect to our strategy. On the two recently announced mergers, we are very familiar with Avizia, we have respect for the company, but we almost never run into them in competitive situations. The majority of their business is really centered around hospital-based hardware, which isn’t really aligned with our strategic focus. So, we don’t think that it has a particularly material impact on the competitive landscape. And then with respect to InTouch, sort of the opposite. We’re not really surprised by the announcement, InTouch has been trying for a while to move from a hardware-based business to more of a software orientation and acquired REACH, which is a small software business that’s been working for some time to find a substantial market for its product. Again REACH is another company that we really never see in competitive situations. So, and what we operate in pretty different space than InTouch. So we don’t think that either of them has a particular impact on our success in the hospital and health system market. Obviously we always continue to monitor the competitive landscape and look at how we can continue to expand the value of our Platform-as-a-Service offering which is where we’re going to stay focused, not really with the hardware orientation. Is that helpful, Rich?

Yes, no that is – I also had a question on CVS, I was looking at their website, I guess for a mini clinic there and I was looking to see if there was anything on telehealth, can you give us an update in terms of the relationship with the CVS and expected launch there for you guys?

Yes, so I’m not allowed to give a launch date, we are in active development with CVS of the products. We’re really excited about the prospects for that product, I am working very, very collaboratively with the CVS team. So the relationship is very strong, the vision is there and as I said earlier, I only see opportunity with respect to some of their future as they look to make the acquisition of Aetna.

Okay, thank you.

You next question comes from the line of Mohan Naidu of Oppenheimer. Please go ahead, your line is open.

Thanks for taking my questions. Just I had one question around the visits in Q1. So the flu has been great for you guys in terms of number of visits, but I just want to understand did you guys see strength in new members trying Teladoc versus visits from members who have used Teladoc before and coming back for flu? And also as a follow-up, just on the new members who tried flu, who tried you guys because of the flu, did you see a repeat use from those guys? Thank you.

Yes, thanks Mo. We said on our last call that during the flu season about 50% of our users were new users. That said that’s a good trend and a slight step up from the year before, that was true for the full quarter. It’s too soon to tell about repeat usage, but when we looked back at that for prior years, it wasn’t different for members who used us for the flu than it was for other conditions. So we would expect that to play out over the course of the year.

Alright, thank you very much Jason, that’s all I had.

Okay, thanks Mo.

Your next question comes from the line of Matt Hewitt of Craig-Hallum Capital. Please go ahead, your line is open.

Good afternoon, most of my questions have been answered, maybe just one on the competitive landscape and obviously you just addressed a couple of the more recent news items, but given the deregulation that you’ve seen over the last few years, has there been anything from a competitive landscape that you’ve seen some new dynamics or some new opportunities creep up that may be others are entering or more importantly I guess from your standpoint where you are seeing opportunities to expand maybe farther than you had before? Thank you.

Sure Matt. Look, I think that the big change in the competitive landscape is the expansion of our platform to become a much more holistic virtual care solution. We still see and in fact ATA, the American Telemedicine Association Conference is going on right now and as we look at the landscape there, we feel even more bullish about the prospects for the company in contrast to the multitude of point solutions that are in the market. So it’s always a good thing to get a sort of competitive check at a large show like that and it was really an affirmation of our strategy as we scan the landscape.

Great, thank you.

Sure, thanks.

Your next question comes from the line of Matthew Gillmor of Robert W Baird. Please go ahead, your line is open.

Hey just had one question left as well. I was hoping to get an update on Medicare Advantage and I know there is some discussion on that last call, but it’s been couple more months here and we are waiting I guess on this regulation to be published, but curious if you’ve had additional discussions with MA plans and if you have a better sense for how that model will be constructed in terms of PMPM fees or going towards visit only given the success you’ve had?

Yes, so there’s a lot of discussion going on, in fact I just sat on a panel at a conference talking about connecting care for seniors with a number of other health plans who are engaged in the discussion and thinking about how to serve the MA population. I don’t think there’ll be any material movement in terms of buying behavior until the regs are published by HHS. And so we’re watching and waiting and are ready to provide input and insight if requested, as we’re fortunate to be in a situation where we have more data on the delivery of virtual care than anybody else in the market. So we feel good about where it’s likely to go, but until the regs are published by CMS we’re in a little bit of a wait and see.

Got it, thanks Jason.

Yes, absolutely.

Your next question comes from the line of Glen Santangelo of Deutsche Bank. Please go ahead, your line is open.

Yes, thanks for taking my question. Jason, I just want to follow-up on the comments you made with respect to the selling season, it kind of sounded like you’re kind of about where you want to be, but maybe could you just elaborate maybe a little bit on the tone of those conversations as they may be related to the different types of contracts you can sign and the different models, for example, you’re expecting more visit fee only as we head into 2019 or less or what sort of trend changes should we expect?

Yes, so I feel very get about where we are in the selling season. I like the size and volume of opportunities that we’re seeing, mostly to be perfectly honest, I’m excited about the scope of the opportunities that we’re seeing and it’s the opportunity for us to bring multiple products to bear for our clients, that’s especially true in the health plan space where they tend to be big bites. And then with respect to the fee structure, I think it’s all over the board. The good news is that we have a lot of experience now and data that enables us to align our incentives with our client and we’re seeing all different types of discussions, all of which meet our sort of financial hurdles with respect to pricing.

Okay thank you.

Yes, absolutely.

Your next question comes from the line of Steven Wardell of Chardan Capital Markets. Please go ahead, your line is open.

Hey guys, congrats on the quarter.

Thanks Steve.

So can you tell us a little more about international, you cited some progress internationally? What would you say are your top countries and how would contract – how would go-to-market approaches and contracts differ there?

So, we’re strongest internationally in Canada, the U.K. and Australia and New Zealand. We have some other pockets where we have pockets of strength like the Netherlands for example. The go-to-market strategy in those markets is really in partnership with large financial services organizations and insurance companies and we’ve been very successful, but really with historically somewhat limited product portfolio, so it’s been really focused on expert’s second opinion. In Canada we’ve done more innovation into behavioral health and specialty pharma and that has borne fruit for us. So, we’re excited about what we are hearing from our clients in all those markets is interested in expanding the product portfolio to more closely match what we have in the U.S., which is the full continuum of services ranging from general medical all the way up to expert’s second opinion. So we are actively looking at how we approach that and how we deliver a more fulsome product portfolio.

Great, thank you.

Our last question comes from the line of Richard Close of Cannacord Genuity. Please go ahead, your line is open.

Great, thanks for the follow-up. Mark, I’m just curious, you outperformed in the first quarter and the guidance for the second quarter is ahead of our expectation, I believe consensus as well. Can you walk us through the process of maybe of not raising the annual guidance?

Sure, we just finished the quarter. We haven’t even had the opportunity to look at the month of April. We’ll feel much more comfortable after we’ve closed out six months, potentially July also, so seven, so when we speak to you again in August with the first six months results that’s when we’ll assess the opportunity to increase the range. But we’ve got a nice range there now, if we’re heading towards the higher end we’ll let you know and if we need to raise that we’ll let you know as well. As you know, it’s common for us not to see much significant movement in Q2 and Q3, but if we’ve got visibility into what’s looking like it’s going to come together as a strong Q4, we’ll obviously attempt to the raise in August.

Okay, thank you.

Sure.

This concludes today’s conference call, you may now disconnect.