In first report since IPO, Amwell sees revenue up 80% year over year

Dive Brief:

  • In its first earnings since going public, Amwell reported $62.6 million in revenue for the third quarter, up 80% year over year from $34.7 million.
  • Amwell, which issued an IPO late September with a $100 million investment from Google, was particularly bolstered by $28.5 million in revenue from visits, up almost 300% from just $7.2 million last year. Subscription growth was also notable, with revenue of $25.8 million, up more than 17% from $22 million in the third quarter of 2019.
  • Total visits in the quarter were more than 1.4 million, up 455% on a year-over-year basis. Amwell executives chalked that growth up to new provider customers on a call with investors aftermarket Thursday. However, that’s down sequentially by about a third, from roughly 2 million visits in the second quarter.

Dive Insight:

Telehealth companies have seen exponential growth in 2020, spurred by COVID-19 tailwinds, resulting in a flurry of investor interest, M&A and high-profile public offerings. It’s uncertain how much of that momentum will continue, as research suggests telehealth volume began declining in May and June as providers resumed non-emergent treatments and services, and state lockdowns eased.

However, virtual care utilization has remained significantly higher than pre-COVID-19 levels, and COVID-19 cases are surging across the U.S., which could result in higher telehealth volumes as 2020 draws to a close.

“While visit volumes are lower than the numbers we’ve seen in March and April, they’re still much higher than before COVID,” Amwell CEO Ido Schoenberg said. Year to date, Amwell has run about 4 million visits.

Last year, Amwell’s own internally staffed medical group, Amwell Medical Group, made up a majority of all visits, at about 62%. But in the third quarter, its provider customers’ own doctors accounted for a majority of 73%, hinting at much broader acceptance of telehealth as a legitimate care pathway, Schoenberg said.

Total active providers on Amwell’s platform were up 930% compared to a year ago, at 62,000.

CFO Keith Richards on the call said he expected to see that trend continue, as more hospitals and health systems move to a hybrid model of care, combining physical and virtual. As that shift continues, Amwell, which has more than 2,000 hospital and 55 health plan partners, will likely pivot to more of a technology provider, and less so a services provider, executives said, noting they expect revenue from subscriptions to Amwell’s technology to grow faster than services.

That rationale is part of Google’s partnership with Boston-based Amwell, announced in August. The two companies plan to co-develop new virtual care capabilities through Amwell using Google Cloud’s artificial intelligence and machine learning expertise.

Including the $100 million investment from Google, Amwell raised about $922 million in its September IPO.

Amwell rival Teladoc posted its third quarter results late OctoberThe New York-based vendor posted revenue of almost $289 million, and reported 2.84 million visits in the quarter. The two companies are currently embroiled in a legal battle over patent infringement. Neither company has yet turned a profit, with Teladoc reporting a net loss in the third quarter of $35.9 million, and Amwell posting a loss of $64.6 million.

For the full year, Amwell expects revenue of between $235 million and $239 million, and an adjusted EBITDA loss of $105 million to $110 million.