Teladoc Health, Inc. (TDOC) Q4 2025 Earnings Report, Transcript and Summary

Good afternoon. Thank you for attending today's Teladoc Health Q4 2025 Earnings Conference Call. My name is Tamia, and I will be your moderator for today's call. [Operator Instructions] I would now like to pass the conference over to your host, Michael Minchak, Head of Investor Relations. Please proceed.

Thank you, and good afternoon. Today, after the market closed, we issued a press release announcing our fourth quarter 2025 financial results. This press release and the accompanying slide presentation are available in the Investor Relations section of the teladochealth.com website. On the call to discuss the results will be Chuck Divita, Chief Executive Officer. During this call, we will also discuss our outlook, and our prepared remarks will be followed by a question-and-answer session. Please note that we will be discussing certain non-GAAP financial measures that we believe are important in evaluating our performance. Details on the relationship between these non-GAAP measures to the most comparable GAAP measures and reconciliations thereof can be found in the press release that is posted on our website. Also, please note that certain statements made during this call will be forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are subject to risks, uncertainties and other factors that could cause our actual results to differ materially from those expressed or implied on this call. For additional information, please refer to our cautionary statement in our press release and our filings with the SEC, all of which are available on our website. I would now like to turn the call over to Chuck.

Thanks, Mike. Our financial performance reflects a solid finish to 2025 as well as progress we've made across our strategic priorities. Fourth quarter results were generally in line with our previously discussed expectations, including consolidated revenue and adjusted EBITDA both modestly above the midpoint of our guidance ranges. Consolidated revenue was $642 million, slightly higher than the prior year period, and adjusted EBITDA was $84 million, representing a 13% margin for the quarter. Net loss per share was $0.14, which included amortization of intangible assets of $0.52 per share pretax and stock-based compensation of $0.09 per share pretax. For the full year, consolidated revenue of $2.53 billion was 1.5% lower than the prior year, and adjusted EBITDA was $281 million, representing an 11.1% margin. Net loss per share of $1.14 included the following pretax amounts, amortization of intangible assets of $1.99 per share, stock-based compensation expense of $0.46 per share, a noncash goodwill impairment charge of $0.41 per share and restructuring costs of $0.11 per share. These items were partially offset by discrete tax benefits totaling $0.20 per share. Full year free cash flow was $167 million, and we ended 2025 with $781 million in cash and cash equivalents on the balance sheet after retiring $550 million in convertible debt at maturity in June. Net debt to trailing fourth quarter adjusted EBITDA was under 0.8x at year-end. Turning to segment results. Fourth quarter Integrated Care revenue of $409 million grew 4.7% over the prior year's quarter and came in near the upper end of our guidance range, benefiting from both performance-based revenue and U.S. virtual care visit volume related to a strong flu season. The acquisitions of Catapult Health and TeleCare contributed approximately 260 basis points to year-over-year growth and international delivered double-digit constant currency revenue growth. Chronic Care program enrollment was $1.19 million at quarter end, increasing 2% sequentially versus the third quarter. U.S. integrated care membership finished the quarter at 101.8 million members. Fourth quarter Integrated Care adjusted EBITDA was $65 million, up 23% over the prior year period and representing a 16% margin for the quarter. For the full year, Integrated Care segment revenue increased 3.3% to $1.58 billion, with acquisitions contributing approximately 210 basis points to segment revenue growth. U.S. Virtual care visit revenue grew double digits year-over-year, more than offset by a lower subscription revenue due to the shift towards visit-based arrangements we've spoken about previously. International revenue grew mid-teens on a constant currency basis for the full year. Adjusted EBITDA increased 2.7% over 2024 to $239 million, representing a 15.1% margin, about 10 basis points lower than 2024. Excluding the impact of M&A, adjusted EBITDA margin would have been up approximately 20 basis points year-over-year. Shifting to better health. Fourth quarter revenue was $233 million, 6.7% lower than fourth quarter of 2024. Average paying users for the quarter declined 6% year-over-year to 375,000 with a low double-digit increase in non-U.S. users, partially offsetting a low double-digit decline in U.S. users. Segment results also included approximately $7 million in insurance-based revenue, in line with our expectation. In the fourth quarter, BetterHelp adjusted EBITDA increased to $18 million, up from $4 million in the third quarter. The adjusted EBITDA margin was 7.9% compared to 1.6% in the third quarter and was driven primarily by seasonal pullback in ad spend due in part to higher ad prices during the holiday season. For the full year, BetterHelp revenue was $950 million, a decline of 9% from the prior year. This included insurance revenue of $13 million, in line with our expectation of $12 million to $14 million. Adjusted EBITDA of $42 million represented a margin of 4.4% compared to 7.5% in the prior year period. This year-over-year decline was driven by lower overall revenue and investments to scale the insurance offering, partially offset by a 7% reduction in advertising and marketing spend compared to the prior year. With that overview of our results, I would like to shift the focus to 2026, our priorities and where we see opportunities going forward. First, a critical area of focus for us is advancing our position in the U.S. markets served within our Integrated Care segment. While we have a well-established leadership position, we see opportunities to broaden our impact on patient care and client value and in turn, business growth and performance. We're going after this opportunity through product and capability innovation and the strength of our care model across virtual care, chronic condition management and mental health. For example, we recently launched our enhanced 24/7 care offering, the next generation of our flagship virtual care service. By leaning into the shift from subscriptions to visit-driven value, this new offering creates broader engagement points by expanding the range of conditions we can address, supporting our care providers with real-time access to specialists and placing more information at the point of care to address care gaps and other needs. We're also advancing innovations in our chronic care programs to support and improve the health of people living with chronic conditions. The human toll and the cost of chronic illness are major issues facing the health care system, and we intend to deepen our role in this area. In 2026, we're leveraging our extensive data in new AI-enabled stratification capabilities together with additional targeted clinical interventions to address the needs of rising and high-risk members, including coordination with primary and specialty care when appropriate and manage care more holistically. These AI models align and efficiently activate care teams for personalized action. In addition, we are rolling out new connected devices, in-home testing and other features to support our comprehensive approach, and we intend to build on these advancements in our product development pipeline going forward. And as part of our care model, we can also extend our various services for new and impactful use cases to support our clients. For example, as part of a broader implementation, a large Blue Plan is utilizing Catapult Health's virtual checkup program to engage Medicare Advantage members to ensure they complete their annual wellness visit. An example of how we can further leverage the potential of our virtual care assets and capabilities, meet people where they are and connect them with the care and support they need. As a virtual native, clinically focused organization, technology is central to delivering integrated patient care at scale and the investments over the past year further support our innovation agenda. These include enhancements to our Prism care delivery platform to surface actionable and personalized information across our care teams and efficiently deploy AI tools to support their important work. And seeing the significant opportunities to leverage AI, more extensively in our business, we made important investments over the last year in our new Pulse data and AI platform. Pulse brings together and unifies our extensive data, provides context, applies intelligence and most importantly, connects AI-driven insights to activation and orchestration in support of patient care. All of these and other innovations are aimed squarely at driving engagement, clinical outcomes and client value in direct support of our growth opportunities in Integrated Care. In 2026, we also remain highly focused on leveraging our scaled position in virtual mental health services and have several initiatives underway to advance our position. This includes the launch of Wellbound, our new employee assistance program offering that combines strengths across Integrated Care and BetterHelp as well as rapidly scaling BetterHelp's insurance coverage offering. We are making considerable progress, and we are now live in 20 states plus Washington, D.C. and have more than 4,500 credentialed and enrolled providers at this point. Additional network arrangements have also been secured bringing covered lives to more than 120 million. Early trends are encouraging, including strong growth in insurance sessions, which now exceed 1,200 sessions on average per day, an annualized revenue run rate of over $40 million, which further informs our approach to 2026 for both the consumer cash pay and emerging insurance market and reflected in the guidance that I'll cover later. We will continue a methodical expansion throughout the year, further scaling provider capacity and payer network coverage while prioritizing and ensuring strong user experience. And with BetterHelp's broad reach and brand recognition, there are millions of potential users that start the registration process at BetterHelp each year. In addition to improving conversion by expanding payment options with insurance, we also remain focused on growing our acquisition funnel through greater awareness. As an example, we are excited that BetterHelp has been named the exclusive online therapy provider for AARP, which advocates for 125 million Americans, 50-plus and older with an expected launch over the next 60 days. In addition, BetterHelp has partnered with Walmart to join their Better Care Services initiative, which launched earlier in the year. BetterHelp's international expansion also continues to be an important growth driver. Non-U.S. revenue represented nearly 24% of total segment revenue in 2025, with continued growth in our English-speaking offering and further boosted by localized launches in France, Germany, the Netherlands, Spain and Austria. With solid performance in these localized markets, we expect to expand the model into additional countries in 2026. We are actively executing the turnaround of BetterHelp through these initiatives, and look forward to demonstrating the underlying potential of the business as we progress through 2026. Our third priority is driving value creation in Integrated Care through our international offerings, which combine a global reach with a strong understanding of the unique characteristics of each individual market. This includes deepening and expanding long-standing partnerships with existing clients, growth with public health systems and expansion of hybrid care models that bring virtual services into physical care settings to meet local needs, including emergency services, primary care and specialty care across several countries, including Canada, France and Australia. Finally, our fourth strategic priority is operational excellence. Over the past year, we've sharpened our strategic focus, driven cost and productivity initiatives and accelerated innovation. We also achieved ISO 9001 certification for key U.S. integrated care processes, reflecting the level of operating rigor across the company. In 2026, we had one of the most successful implementation seasons in our history from a volume and performance standpoint, another important validation of the team's relentless and ongoing focus on execution. I also want to take this opportunity to further comment on the role of technology and artificial intelligence advancements in shaping the future of care at Teladoc Health. Firmly grounded in clinical care and patient safety, we are excited about the opportunity to responsibly apply AI to improve outcomes, simplify the experience for members and clinicians and reduce friction across the health care journey. Care is at the heart of our innovation agenda with our technology experts working alongside health care professionals to develop, evaluate and align with evidence-based standards and support high-quality care experiences. Our responsible AI framework ensures that innovations undergo rigorous review to preserve safety, accuracy and trust. With an extensive, diverse and well-established client base of over 12,000 organizations, our partners and patients look to us to deliver quality experiences that perform and endure. We've been building the infrastructure, expertise and partnerships for decades, and our models improve with every touch point, creating smarter systems at scale. As I mentioned earlier, Teladoc Health Pulse, our data and AI intelligence platform, serves as the backbone of our AI initiatives by unifying unique multidimensional data from patients, care providers and partners. It provides context for the data and the ability to apply AI to this contextualized data to support a wide range of value-accretive activations across the patient experience, clinical and care team support and the operations of our business. In addition to the gains we've already made, we intend to further scale the benefits of Pulse through 2026, including in our product innovations and initiatives to drive greater efficiency and performance of our business. With that as a backdrop, let me provide a few examples of how AI enhances many of the moments that define high-quality care for us. In our chronic condition and cardiometabolic programs, AI transforms connected device signals, member reported data and other data sources into dynamic health insights. These insights help us personalize outreach, identify changes in health earlier and support healthier decisions related to sleep, nutrition, activity and stress. This improves engagement and overall health and helps prevent members from progressing to higher risk. In clinical settings, AI helps connect members to the right provider, supports clinicians with ambient generated documentation and informs next best actions for our members. These tools enhance consistency, reduce administrative burden and free clinicians to focus on questions and matters that require judgment and human connection. They do not replace clinical teams, they extend their reach and effectiveness. Pulse enables us to empower care teams with a more complete picture of a person's health and sharper insights that help them understand and predict patient needs, guide targeted interactions and connect the right care at the right time. It is helping us move faster and smarter, transforming the way we work and our ability to drive better health outcomes. And in our hospital and health systems offerings, our AI-enabled Clarity solution uses computer vision and audio analysis to identify patients' safety risk and signs of behavior escalation. This helps care teams intervene earlier, protect staff and patients and expand capacity. These capabilities have become increasingly important as health systems balance safety needs with ongoing workforce constraints. In mental health, including BetterHelp, AI is improving intake and matching while also reducing therapists' administrative workload, for example, by automating clinical documentation and enabling clinicians to spend more time on patient care and improving overall efficiency. At the same time, therapy remains grounded in a human relationship where AI assists, it is applied transparently, responsibly and with a clear governance framework that prioritizes quality, privacy and trust. We believe this is the path to stronger engagement, sustained ROI for our clients and a better whole person experience for the people we serve. This approach positions Teladoc Health to continue leading the evolution of virtual care and to help our clients bring forward the next generation of AI-enabled health care in a safe, integrated, compliant and clinically grounded way. Stepping back, the macro challenges across the health care industry remains significant, and our clients are focused on affordability and rising medical costs, the prevalence of chronic disease, unmet mental health needs and other needs. And as a strong partner and leader in virtual care, we believe we're well positioned to drive outcomes, leverage advancements in technology and deepen our impact, and the work we are doing across our strategic priorities further enhances that position. We entered 2026 on a stronger foundation and renewed underlying momentum driven by new innovations in Integrated Care products and capabilities, strong progress towards scaling BetterHelp Insurance, growth in international markets and continued focus on execution and business fundamentals. Moving now to 2026 guidance. We expect full year consolidated revenue to be in the range of $2.47 billion to $2.59 billion, approximately leveled with 2025 at the midpoint. Consolidated adjusted EBITDA is expected to be in the range of $266 million to $308 million, representing 2% year-over-year growth at the midpoint. Full year free cash flow is expected to be between $130 million to $170 million and reflect working capital build related to BetterHelp's significant growth in insurance in 2026 as well as lower net interest income on cash and cash equivalents due to the paydown of the 2025 convertible and lower assumed interest rates on cash balances generally. We project full year stock-based compensation expense to be below $60 million in 2026, representing a year-over-year decline of at least $20 million versus 2025 and down more than 70% versus 2023 levels demonstrating significant progress over time and an important area of focus for us. For the first quarter, we expect consolidated revenue in the range of $598 million to $620 million, and adjusted EBITDA in the range of $50 million to $62 million. For the Integrated Care segment, we expect full year 2026 revenue to grow in the range of 0.4% to 3.9% over 2025. The midpoint includes approximately 60 basis points of tailwind from our recent acquisitions. As we've spoken about previously, segment revenues continue to be impacted by the migration of U.S. virtual care subscriptions towards visit oriented models which are more reflective of the U.S. health care fee-for-service construct. However, with visit revenue now comprising more than half of U.S. Virtual Care revenue, we expect the impact of this shift on our top line to moderate going forward relative to prior years and as we move towards the later stages of this transition. And over the long term, we expect to see visit revenue growth outpaced the decline in subscription revenue with Virtual Care being a net positive contributor to growth. We are guiding to a full year adjusted EBITDA margin of 15.1% to 16.1% for Integrated Care, which represents an increase of approximately 45 basis points over 2025 at the midpoint. This increase reflects the net impact of gross margin changes resulting from subscription to visit-based revenue and mix-related impacts more than offset by lower operating expenses due to ongoing cost savings and efficiency related initiatives. Our guidance also currently reflects an expected $5 million to $7 million headwind from tariffs in 2026, up from a $3 million headwind in 2025, an area we will continue to monitor for further developments. We expect U.S. integrated care members to end the year in the range of 97 million to 100 million members, modestly down versus 2025 levels due to reductions in the enrollment at certain health plan clients related to government programs, including the impact of expiration of the enhanced subsidies on Affordable Care Act business. We are guiding to first quarter Integrated Care revenue down 1.2% to up 2.0% versus the prior year period. This includes 155 basis points of growth from the Catapult and Telecare acquisitions at the midpoint. Adjusted EBITDA margin is expected to be in the range of 12.5% to 14%, up approximately 30 basis points at the midpoint. Factors impacting the first quarter year-over-year comp reflected the prior year's quarter including recognition of favorable performance on risk-based deals in Chronic Care, the year-over-year headwind from the previously discussed client contract loss in the second quarter of 2025, and lower expected infectious disease visit volume in the first quarter of 2026 compared to the prior year's quarter due to a timing variation in the flu season. From a cadence standpoint, we'd expect the first half versus second half revenue split in 2026 to be slightly more weighted to the second half relative to 2025, given these factors, although generally consistent with the average split over the past 5 years for Integrated Care. Moving to the BetterHelp segment. we are guiding 2026 revenue down 7% to down 0.5% versus 2025, reflecting a moderating rate of decline versus both 2025 and 2024 at the midpoint of our guidance. With the traction we expect in our insurance offering, we are focused on scaling it through the year and in turn, moderating the level of advertising and marketing expenditure we expect in 2026. Our guidance also reflects continued growth in non-U.S. markets as well as factors such as the macro backdrop, demand levels, customer acquisition costs and churn rates. With respect to insurance, we expect to generate revenue of $75 million to $90 million in 2026, with a steady sequential ramp and exiting the year at an annualized revenue run rate of more than $100 million. As I mentioned earlier, insurance sessions continue to grow at a strong pace, and we expect session growth to continue as we progress through the year driven by several factors, including strong underlying demand for mental health services, together with BetterHelp's planned rollout of new states, increasing payer coverage, adding credentialed providers and growing the insurance user base in existing states. We also launched insurance-covered psychiatry services in February as well as new enhancements such as new scheduling features and instant therapist matching. We expect continued headwinds in U.S. direct-to-consumer cash pay driven both by a challenging consumer backdrop and our intentional decision to further rationalize the level of ad spend given our progress in insurance, an opportunity to refocus investments on scaling this rollout. This outlook contemplates direct-to-consumer revenue in total being down 14% to down 9% year-over-year, inclusive of potential cannibalization from our U.S. insurance rollout. We expect to see double-digit growth in non-U.S. markets with contribution from both the legacy English-speaking offering as well as newer localized market launches. For the first quarter, we are guiding to BetterHelp segment revenue down 11.25% to down 7% year-over-year. This outlook contemplates insurance revenue of $10 million to $13 million in the first quarter, up from $7 million in the fourth quarter of 2025 as well as the timing and impact of advertising and marketing spend actions. We are targeting sequential quarterly revenue improvement for the BetterHelp segment, beginning with the second quarter and continuing through the balance of 2026. We are guiding to an adjusted EBITDA margin of 3% to 4.6% for the full year and 0.75% to 2.75% in the first quarter. Key factors impacting margin include revenue mix, reduced advertising and marketing spend, which we expect to be down by a mid- to high-single-digit percent versus 2025 and investments to enable the successful scaling of the insurance offering. Similar to prior years, we expect to deliver the highest adjusted EBITDA margin in the fourth quarter. As we ramp and mature our insurance position over time, we expect to see improvements in lifetime value, customer acquisition costs and operating leverage as we stabilize and grow the revenue base and offset changes in gross margin from this revenue mix. One final note with respect to guidance, the ranges we have provided at this time for free cash flow and net loss per share do not assume any specific changes in our current debt structure as our remaining convertible notes don't mature until June 2027. However, as we previously discussed, we continue to evaluate various options with respect to our long-term financing needs. Subject to market conditions and absent any other significant developments, our current expectation is that we will address the 2027 convertible notes in 2 phases. The first would be to pay off a substantial portion through a combination of existing balance sheet cash and new traditional term loan debt and do so potentially before year-end. And then second, we would retire the remaining balance at maturity with existing cash at that time. After addressing the 2027 converts, we expect our resulting gross debt position on a go-forward basis to be significantly below the current level and appropriately aligned with our financial profile and needs. We will provide further updates as necessary. In closing, as we move into 2026, we have clear priorities and the foundation to support our growth and performance initiatives. We are focused on execution and acceleration as we progress through the year and strengthening the underlying drivers of long-term performance and business value. With that, let us open it up for questions. Operator?

[Operator Instructions] The first question comes from David Roman with Goldman Sachs.

I wanted just to maybe see if you could help us wrap a lot of the moving parts together here. I think it's now been 1.5 years of you in the seat as CEO. As you reflect on the guidance here for 2026, it does include another year of relatively challenging organic revenue growth and year-over-year trends in adjusted EBITDA. So where do you think we are in sort of the journey of stabilizing the business? And what is it going to take to get back to more consistent year-over-year revenue growth? And is there a path even growing this business at, call it, a low to mid-single-digit rate?

Yes. Thanks for the question. I think first on integrated care, which I think is primarily what you're asking about, as I mentioned in my prepared remarks, and you know we've talked about previously, this headwind from subscriptions to visits has continued to be a factor. We've had strong underlying growth in visit revenues, but not enough to offset that headwind that's come in subscription revenue. We do see that -- now that we have over 50% of the Virtual Care revenues coming from visits, we do see that moderating and ultimately visit growth being a driver of growth. And that's been a factor out there that we've spoken about. In Chronic Care, we continue to see opportunities in terms of both the bundled products we have there and the level of recruitables. But more importantly, what we've been building over the last year in terms of the clinical foundations, I mentioned the data and AI capabilities and our ability to really drive stronger ROI across populations for our clients. And in turn, that's going to drive growth for us. So we entered 2025 with a very similar product portfolio that we had in 2024. And now with these enhancements and the foundations that we've been building, we think there's a bigger opportunity for us to go after. So yes, I do believe there's growth potential in the business. I do acknowledge the headwind that we've had from the subscription, the visit mix changes. That's been well talked about outside. And the underlying growth in visits, I think, will be a factor for us going forward. In BetterHelp, it's really about the insurance scaling. We were excited to enter the market mid last year. We've been scaling it pretty materially over that time period. And as I mentioned also in my prepared remarks and in the guidance, we're going to see some significant growth in 2026 from that. So I think getting BetterHelp turned around and really leaning into the market opportunity in integrated care, particularly in the U.S. coupled with the growth we're seeing internationally, I think, is how I would answer that.

the next question comes from Richard Close with Canaccord.

Yes. Maybe just a follow-up to that, Chuck, in terms of Chronic Care enrollment. Just curious in terms of how cross-sell is going. If you can just talk about the trends there through the most recent selling season, and the new products that you're talking about, are they gaining traction? Or just the level of demand interest currently in the new offerings?

Yes. Well, first of all, our ability to manage across conditions is a selling factor and our ability to do that without multiple integrations in one offering. And that's -- we've had some really good success with that in terms of bundling products and crossing populations. We're seeing continued good interest in our weight programs and our bundled products. So all of that. I think going forward, in addition to the things that I mentioned in my earlier response, it's really about going after the population health more strongly and more broadly. And we are uniquely positioned with the clinical model that we have and that we've been building pretty materially over the last year to be able to go after those populations, provide a range of services, really identify where things are falling through the cracks and develop the right levels of clinical interventions for high-risk and rising risk populations. Those are the things that drive the medical costs and there are also things that drive the human costs. So our operating model and our value proposition and, in turn, our product portfolio is going to lean into that. And that's really where we're going to see the longer-term growth of this company. Clearly, we're out there competing on a day-to-day basis with the product portfolio we have and the competitive environment we have. But ultimately, our ability to lean into this clinical model that we've built is what's going to drive stronger growth going forward.

The following comes from Daniel Grosslight with Citi.

We have one just about the ramp in BetterHelp EBITDA this year. The guide implies a bit of a steeper ramp than prior years. The first quarter EBITDA in BetterHelp is around 11% of full year, in the past, it's been closer due to high teens. Can you just walk us through the cadence of BetterHelp adjusted EBITDA margin improvement this year? What's driving that steeper ramp and kind of the levers that get you to the bottom and top of that full year guidance range?

Yes. There's some moving parts in BetterHelp. Obviously, the level of advertising spend, the most material mover there. And we also have some investments we're making, obviously to scale insurance, really the fundamental drivers of the EBITDA margin. Of course, as you've seen in the past, we do expect the fourth quarter EBITDA margin to be the strongest as we pull back ad spend with respect to the holiday season. But Mike, I don't know if you want to comment further on the ramp.

Yes. I would just say, obviously, with the investments that we're making to scale the insurance, that's obviously one of the factors that's impacting the first half of the year. So that's, I think, one of -- another factor.

And the levers that get you to the bottom and top end of the range?

The next question comes from Sarah James with Cantor Fitzgerald.

[indiscernible] question if we're still live on the line here.

Okay. I don't know if you heard that last question, but I thought it was great. The levers that get you to the high end versus the low end of your 2026 guidance?

I apologize. Can you repeat the question? It broke up a little bit on our end. I apologize if you could restate that.

Yes, no problem. Can you walk us through the primary assumptions that differentiate the high end versus the low end of your 2026 guidance range?

Are you talking about -- at a segment level?

I would love if you could do the whole company touching on those segments.

Okay. Yes. So I think, first of all, I'll make some comments and then Mike can weigh in. We see the guidance ranges in BetterHelp being wider because of the changes we're making there, both in terms of the variability in the consumer market as well as the ramp in insurance. So that's really a driver of the variability you see on the low and the high in Integrated Care, it's a little bit tighter. But obviously, as our business moves more and more to visit-based arrangements, there's some variability there as well as the ramp of Chronic Care enrollment, those kinds of factors and what we see with respect to some seasonality in our visits. So that's the predominant variation around the range. But Mike, anything else you want to add to that?

No, I think that covers all.

The next question comes from Jailendra Singh with Truist.

Maybe it is a little early to talk about it, but with the 2026 selling season effectively closed, what is the early feedback from 2027 RSP discussions? Are health plans still in the state of its strategic uncertainty? Or is there a clear strength towards unbundling Virtual Care and Chronic Care from broader insurance package? Trying to understand if that health plan headwind you have been talking about might start to ease it a little bit more in the next few quarters or few years?

Yes. I appreciate the question. I would say the -- it's mixed in the sense that the macro environment that we've spoken about and has been facing, and I know you're well aware of in facing the health plans, those things just continue to sort themselves out. And clearly, with the -- what happens with the expiration of the enhanced subsidy is ultimately in their books of business, some of the things that are going on at a federal level. Those things are out there. I would say when I say it's mix, we're having much stronger renewed conversations with health plans, and I would characterize more strategic conversations with health plan specifically about how our suite of services and a vision on what we're building can really uniquely help them in the things that are challenging them the most. And we -- I mentioned in my prepared remarks, what we've done with Catapult as an example, for a large blue plan in terms of their Medicare Advantage population, we need those populations to get their annual wellness visits. It's important to their health, and it's also important to the economics of the health plan. So I think there's a stronger and a renewed interest to really dig in and evaluate how our unique solutions can help them. Another example with our enhanced 24/7 care offering. That's -- it's not your normal 24/7 care. There's a number of features there that are beneficial to all of our clients, but certainly beneficial to health plans in terms of the ability to avoid unnecessary specialist referrals, the ability to navigate patients to the next best action to close care gaps, to address a broader range of services. So those are really resonating in those conversations, and I think they're going to give us a lot of opportunities to lean in with our unique set of solutions.

The following question comes from Jessica Tassan with Piper Sandler.

Just given some of the early experience with the insurance paid BetterHelp members, could you just describe kind of how those numbers are behaving? How long are they remaining on the cash pay BetterHelp? When are they converting to insurance paid? And then just as they move into insurance, what is their utilization and retention look like?

Yes. Well, I'll make some directional comments. Obviously, it's still a bit early, right, to draw any definitive conclusions on that. But everything we're seeing that we're looking to accomplish, we're seeing it in the trends in terms of conversion, usage, number of sessions, the interest level in using their insurance. All of those things are consistent with our expectations. And obviously, in our more mature markets, which is still very, very early, but in our more mature markets, we're really seeing that play out pretty consistently. And as I mentioned earlier, the growth in sessions has been pretty significant since we started this, and it's not just in terms of acquired users with insurance, but it's the utilization of services of those acquired users. So all of those things are directionally supportive of what we're looking to accomplish. Obviously, we want to see it play out longer, but we like what we're seeing so far, and that's why we've really been focused on scaling insurance and really yielding the benefits of the funnel and the platform that we have.

The next question comes from Sean Dodge with BMO Capital.

Yes. Maybe just staying on BetterHelp. Chuck, you mentioned the success you've had recently driving growth by scaling it internationally. I know international pricing is a little different than here in the U.S., but so our customer acquisition cost. So I guess just anything you can share on the margin profile of BetterHelp in the U.S. versus BetterHelp international. Is the mix shift that's happening there, is that responsible for some of this BetterHelp margin pressure you're guiding to? Or is that -- is kind of the mix impact you're talking about on BetterHelp margins. Is that more from the insurance side?

Yes. It's not only the insurance side, but there is a different profile internationally, although we get to the bottom line margins that we're looking to accomplish there. So there's a little bit of that. And now as you know, and I mentioned, international has been growing nicely, and it's now over 24% of the revenues of BetterHelp in the consumer. And with these localized models as well as our English-speaking offerings, seeing nice growth there. If you think about in a lot of those international markets, there's an access issue. And I think with our consumer experience and the ability to resonate locally, there's a lot of interest. Mental health is not just a U.S. issue. So I think that's going on as well as, obviously, the growth in insurance. It does have a different margin profile, but we do believe over time is going to have a different economic construct when you think about customer acquisition costs, lifetime value, efficiency of our ad spend. And I think that's predominantly what you're seeing in the margin profile.

The following comes from Elizabeth Anderson with Evercore. You may proceed.

This is Ayush on for Elizabeth. You noted previously that competition from insurance enabled providers has sort of pressured the U.S. cash pay business. As you expand your own insurance footprint, are you guys seeing that competitive dynamic begin to kind of moderate in those markets? And then in the states where insurance has been like the longest, are you seeing any meaningful differences in engagement patterns compared to cash pay users?

Yes. Yes. I appreciate the questions. The -- there's a number of things going on in Virtual Mental Health. First of all, I would say pre-pandemic, I would say there was not as much probably appreciation of recognition of the challenge that we're out there. And I think post-pandemic, unfortunately, we've seen the payers and everyone really understand and focus on mental health and take a number of actions to expand access there. And also Virtual Care post-pandemic is one of the areas of virtual care that's sustained high levels because, obviously, you don't necessarily need to be in person for those kinds of sessions to occur. So all that's been going on. The underlying unmet need is still there. The demand is there. And so I think that's a factor in our growth and the session growth that we're seeing, and you see that with other parties as well. So I think even though we were a bit later joining the insurance market, we do believe there's going to be strong underlying demand, of course, with BetterHelp's position and funnel and experience we should be able to see that going there. In terms of the behaviors, as I mentioned earlier, it's a little bit hard to draw definitive conclusions. But we are seeing good data in terms of when we show insurance, people selecting to use insurance, the number of sessions that we're seeing. So I think the patterns are, at this point, consistent with what we expected. And I think that underlying demand for mental health services is going to continue to bode well for our insurance uptake.

The next question comes from George Hill with Deutsche Bank.

I'll say one quick one and one kind of more developed one. The first one is, does the AARP relationship have any significant economic drag to it just because I know AARP tends to extract pretty significant like price concessions to work with them to have that relationship. And then on the topic of moderating the BetterHelp marketing spend. My understanding is the correlation of the revenue to that business with the marketing spend has historically been pretty high. So I guess like how do we think about the risk of pulling back on the marketing spend in BetterHelp and the idea that, that leads to accelerating revenue erosion?

Yes. I appreciate the question. In terms of AARP, I will get into details on it, but what we're doing with AARP, we have reflected in the guidance that we have out there and we're excited about it. The ability to be the exclusive mental health care to an organization like AARP and bringing that really 2 leading brands between AARP and BetterHelp to address mental health and really we see it as an opportunity to grow the awareness and adoption within that population and obviously, new opportunities in terms of the funnel. The cash pay component of that, people will be able to avail themselves to a discount in the first month of the cash pay and also insurance seems there won't be a discount there. But standard benefits and cost sharing will apply there, but people will be able to access their insurance as we scale that. And we're also able to, in addition to offering this normal services we have, we're going to have virtual mental health webinars, workshops led by our licensed clinicians, with topics that really resonate with that population. And they also get 3 months free of better sleep to help them with sleep and relaxation and stress. So we're excited about AARP. We haven't necessarily -- we're not quite sure what the ultimate demand generation is going to be there. But we've built it into our guidance, what we're expecting with respect to AARP, including our arrangement with them. What was your second question, again?

I'm sorry, Chuck. It was just on the -- yes, ad spend, the risk of ad spend, yes.

Yes, I appreciate that. Sorry. there is a high correlation between advertising spend and the direct-to-consumer pay model, and we'll continue to see that correlation we believe we have an opportunity to make that ad spend more efficient. First of all, we have international growth opportunities that are out there and they have a bit of a different expenditure pattern on what it takes to secure that membership. And we also see that there's a number of initiatives to sort of improve the conversion of members. So get more efficiency out of the ad spend, we've broadened our channels, how we -- what levers we pull. So there will be a significant correlation to your point, it is going to be down versus 2025 and 2025 was down versus 2024. But we feel like we've got the right mix of focusing the resources on scaling insurance while also making sure we're activating the top of the funnel.

The next question comes from Brian Tanquilut with Jefferies.

Sorry to pound the table more on BetterHelp. But just as I think about the push into the insurance side of the business, how are you thinking about the KPIs to manage to? And what second looks like when we think of percent of sessions, reimbursed, payer plan coverage breadth, the reimbursement rates to now selection performance, things like that. Just how do we think about those KPIs as we try to think through our models?

Yes. I'll make some comments and then Mike can jump in. So clearly, it's -- we're looking at things like conversion, right, user acquisition. We're looking at the number of sessions that a user -- that a person needs. And we expect that since the -- one of the barriers you will, with respect is cost. And with kind of removing that barrier or moderating that barrier, it's going to be more about therapy decisions as opposed to economic decisions. So we expect to see that. We do expect to not have to maybe spend as much money to reacquire users when people need therapy. So the customer acquisition component of it. We do expect to see some, obviously, gross margin differences in that book of business going forward, but also lower cost to acquire those members and be able to achieve the margins we are. We're also looking at therapist capacity. How many sessions -- how many therapists are on the platform, how many sessions they're able to pursue. I mean, that's one of the benefits of BetterHelp and with this massive therapist network. And we're able to, with the demand we have, fill up their calendars. And as you know, these virtual therapists, they've got to secure patients for their own business model. So our ability to kind of bring that demand and match it up with the therapist is going to be key. And then obviously, there will be some operating expenses as we administer insurance. And to your point, contracted rates with payers for the services we have, and we think we're bringing a lot of value to the table and we should be able to secure the rates we need. So it's those kinds of KPIs. It's not unique in the sense that we have a pretty considerable B2B business in Virtual Care in our Integrated Care business. So we have a good understanding of what those levers look like.

The following is from Allen Lutz with Bank of America.

Chuck, I want to ask another question on the BetterHelp assumptions for 2026. You had $13 million of revenue in 2025 from insurance. How should we think about the visibility into that $75 million to $90 million? Is that just based on you're in a specific region of the country and that equates to that $13 million. And then the size of the addressable market that you're moving into over the course of 2026 correlates pretty directly to that $75 million to $90 million? Or are there other variables we should think about there?

Yes. In terms of 2025, recall that the acquisition of Uplift brought a certain level of revenues and book of business with them. We were able to acquire a solid base of payer contracts, some capabilities and, of course, some talent. And then as a result of the integration, be able to start launching markets with BetterHelp, starting obviously with Virginia. So the revenues in 2025, we're largely uplift insurance revenues. And so what we're seeing now is a significant ramping of BetterHelp's revenues. And that's why in my prepared remarks, I wanted to share that we're up over 1,200 sessions on average per day, and again, starting from 0 with BetterHelp, not too long ago. And that's been a nice growth week over week over week, and even on that basis at an annualized run rate of over $40 million. So as we roll out new markets, as we have more sessions, more users on the platform for longer, we're seeing that play out in the data, and that's what gives us confidence in the ramp, not only based on state rollout, but also based on utilization and access and awareness. And of course, we're always continuing to add payer contracts as well. And that's really what you're going to see the sequential ramp through the year and why we shared on the last point in the prepared remarks about the exit rate as being around $100 million run rate.

The following comes from Stan Berenshteyn with Wells Fargo.

I guess I'll volunteer myself to ask an Integrated Care question here. So you ended the year with about 102 million members. You're guiding 2026, I think at the midpoint, down 3 million, give or take. Can you comment on the drivers here? How should we think about the timing? It seems at least some of this decrease is going to happen after Q1? And should we expect that dynamic to impact chronic care enrollment at all?

Yes. I think on the latter part, no, we don't expect that. We still have a massive membership base to cross-sell into with Chronic Care. I think what you're -- what we're seeing and what we tried to anticipate in our guidance on that particular number was really the dynamics in the marketplace. We've got strong retention, and so none of that is really related to client loss. It's really the enrollment we are expecting. And the reality of it is, with respect to the Affordable Care Act subsides going away, the health plans to quite yet know what the ending enrollment is, even though we're in 2026 already. We believe there was a lot of people that signed up that we're expecting or assuming that the subsidies might continue and they might disenroll. So we're just trying to factor in what we're thinking there, obviously, the Medicaid situation and ultimately, though, it's less important about the raw enrollment membership council, though that's -- it's a factor. But as we move more towards visit-oriented economics, it's really about visits and utilization. And what we see in some of these membership declines we've assumed that the level of utilization in some of those areas aren't as penetrated as others. So we're not necessarily seeing that as a significant headwind at the end of the day from a revenue generation standpoint, but we did want to share our thinking on the raw number.

The next question comes from Ryan MacDonald with Needham & Co.

I wanted to ask about incremental opportunities for BetterHelp, especially since as you continue to scale the insurance initiative here. Obviously, CMS had announced the access program that's going to be launching later this year, actually covers multiple areas that I think Teladoc could take advantage of in terms of not only mental health but also in diabetes care. Just curious how you view this opportunity given the recently announced reimbursement rates and if it's an attractive opportunity you view for the business to invest towards in 2026.

Yes. I would say, first of all, on BetterHelp. I think we are predominantly focused right now on mostly commercial business. And we've got a number of levers there. I mentioned earlier that we've launched psychiatry in there. So there's a number of levers we have on the BetterHelp side. With respect to ad to access program, it's something that we're continuing to evaluate, certainly aligns with the value prop of our program. And it also -- we frankly like seeing more attention to chronic illness and in particular, even some underserved populations and rural populations. So we're continuing to evaluate it. There's some implications of those programs in terms of the reimbursement levels and other things. So again, it's something that we're going to continue to evaluate. But longer term, I do think it's really good that the country is focusing more on Chronic Care. And frankly, I think our programs play pretty well into that.

The next question comes from Jeff Garro with Stephens.

I'll ask another one on Integrated Care business development. I was hoping you give some comments breaking down demand between the health plan versus employer channels, particularly given some of the challenges for the health plans and the exchange and MA markets and how that all will impact your go-to-market strategy into the next selling season?

Yes. Thank you. So we ended 2025 on a solid footing. We had really good demand and results in the employer channels. And we had good interest in the health plan channels, notwithstanding the challenges I've talked about. So we had some nice wins and some expansions as well as some headwinds and all that. I think for purposes, as we enter 2026, a lot of the dynamics are still in play, a lot of need and interest in the employer markets. But I think even more in the health plan channel, as I mentioned earlier, having more strategic conversations about how we can move the needle on their medical costs. And it varies in terms of the population, it varies in terms of lines of business, in terms of what the drivers are to their economics. But because of our position and the suite of services we have and frankly, the investments and the innovations we've done over the last year, we're in a much stronger position to lean into those strategies. They -- there are some health plans that have brick-and-mortar primary care strategies. We think we can complement those. There are others that are heavily focused in particular lines of business. And so we're really just leaning into where our opportunities are to serve those health plans, move the needle on the populations that they're responsible for and ultimately drive cost outcomes and ROI for them. So I think we're in a good position, notwithstanding some of those macro headwinds that are still out there.

The following comes from Scott Schoenhaus with KeyBanc. This concludes today's conference call. Thank you for your participation. You may now disconnect your lines.