Amwell raises 2024 adjusted earnings forecast, narrows Q2 net loss

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Brief description of the dive:

Amwell raised its adjusted earnings forecast for 2024 as the telemedicine provider works to cut costs and rein in expenses.
The company now expects adjusted earnings before interest, taxes, depreciation, and amortization to be a loss of $150 million to $145 million. Previously, it had estimated adjusted EBITDA losses of $160 million to $155 million.
Amwell also narrowed its net loss in the second quarter. The virtual care provider reported a loss of $49.9 million, down from $92.5 million in the same period last year.

Diving Insight:

Amwell’s share price has collapsed since the company went public in 2020, around the height of the pandemic as virtual care boomed.

This spring, the telemedicine provider received a warning from the New York Stock Exchange that it could be delisted for failing to meet minimum share price standards. Amwell recently implemented a reverse stock split, consolidating a number of shares in an effort to boost its share price.

Still, the company aims to break even in 2026 on an adjusted EBITDA basis. Amwell also made progress in cutting costs and righting the size of its operations in the second quarter, executives said on an earnings conference call Wednesday.

“Our headcount is down across the business, down half from year-end,” said Robert Shepardson, Amwell’s chief financial officer. “And that’s a key factor in our improved outlook.”

The company has faced adversity and increased R&D costs to migrate customers to Converge, a new telemedicine platform that aims to consolidate Amwell’s offerings and integrate third-party tools.

However, R&D spending fell nearly 20% year over year to $20.8 million in the second quarter. Amwell saw 1.5 million visits during the period, with about 70% of those coming on the new Converge platform, similar to the first quarter.

Another major Amwell initiative, a contract with the Defense Department’s Health Administration to replace the military’s telemedicine system, is also well on its way, said CEO Ido Schoenberg. The company’s self-medication behavioral health product is available at five designated locations, he said.

Amwell reported revenue of $62.8 million in the second quarter, roughly flat from a year earlier. The vendor also reiterated its full-year revenue guidance, expecting revenue of $259 million to $269 million in 2024.