Amwell Announces Results for Fourth Quarter and Full Year 2022

BOSTON–(BUSINESS WIRE)–Amwell® (NYSE: AMWL), a leader in digital healthcare enablement, today announced financial results for the fourth quarter and full year ended December 31, 2022.

Fourth Quarter 2022 Highlights:

Recorded total revenue of $79.2 million in the fourth quarter of 2022, representing 9% growth compared to $72.8 million in the fourth quarter of 2021

Achieved subscription revenue of $30.7 million

Recorded AMG Visit revenue of $35.1 million

Reported gross margin of 42.4% compared to 39.9% in the fourth quarter of 2021

Net loss was ($61.6) million compared to ($70.6) million in the third quarter of 2022

Adjusted EBITDA of ($43.4) million compared to ($41.9) million in the third quarter of 2022

Total active providers rose 11% to approximately 107,000 compared to 96,000 in the fourth quarter of 2021

Total visits were 1.7 million, 10% higher than the fourth quarter of 2021

Visits on Converge represented 28% of total visits for the fourth quarter of 2022

“In Q4, we successfully capped off an important and strategic year for Amwell. We completed the core elements of Converge, our software platform designed to empower the future of hybrid care as envisioned by the most innovative healthcare organizations today,” Said Dr. Ido Schoenberg, Chairman and CEO of Amwell. “Client migrations continued on pace, and we further strengthened our relationships with our most strategic clients. Our solution is resonating in the market and our value proposition extends to payers and providers of all sizes.”

Schoenberg continued, “On many levels, it was an incredible year. We rallied as a company and executed well, putting many of the transition-related challenges behind us, while building on our track record as the enabling partner for hybrid care. We have integrated unique and valuable behavioral health and automated care programs into our platform, and are working closely with our clients and partners to leverage the value generated from Converge across their organizations.”

Full Year 2022 Financial Highlights:

All comparisons, unless otherwise noted, are to the full year ended December 31, 2021.

Total visits were up 10% to ~6.5 million, compared to ~5.9 million

AMG visits grew to ~1.6 million or 11% higher than last year

Total Revenue grew 10% to $277.2 million, compared to $252.8 million

Subscription revenue grew 12% to $120.9 million, compared to $108.3 million

Visit revenue grew 7% to $124.3 million, compared to $116.6 million

Average contract value increased 13% from $356,000 to $401,000 for Heath Systems and 19% from $723,000 to $862,000 for Health Plans

AMG Revenue per visit was $76 compared to $79

Gross margin increased to 42.1%, compared to 41.3%

Net loss was $272.1 million, compared to $176.8 million

Adjusted EBITDA was ($175.3) million, compared to ($122.7) million

Cash and short-term securities as of December 31, 2022 were approximately $538.5 million

Financial Outlook

The Company is providing the initial outlook for 2023 and expects:

Revenue between $275 and $285 million

AMG visits between 1.45 and 1.65 million

Adjusted EBITDA between ($150) and ($160) million

Quarterly Conference Call Details

The company will host a conference call to review the results today, Wednesday February 22, 2023 at 5:00 p.m. E.T. to discuss its financial results. The call can be accessed via a line audio webcast at https://investors.amwell.com or by dialing 1-888-510-2008 for U.S. participants, or 1-646-960-0306 for international participants, referencing conference ID #7830032. A replay of the call will be available via webcast for on-demand listening shortly after the completion of the call, at the same web link, and will remain available for approximately 90 days.

About Amwell

Amwell is a leading digital care delivery enablement platform in the United States and globally, connecting and enabling providers, insurers, patients, and innovators to deliver greater access to more affordable, higher quality care. Amwell believes that digital care delivery will transform healthcare. The Company offers a single, comprehensive platform to support all digital health needs from urgent to acute and post-acute care, as well as chronic care management and healthy living. With over a decade of experience, Amwell powers the digital care of more than 55 health plans, which collectively represent more than 90 million covered lives, and many of the nation’s largest health systems, representing over 2,000 hospitals, have access to Amwell solutions. For more information, please visit https://business.amwell.com/.

American Well, Amwell, Converge, Conversa, SilverCloud and Carepoints are registered trademarks or trademarks of American Well Corporation in the United States and other countries. All other trademarks used herein are the property of their respective owners.

Forward-Looking Statements

This press release contains forward-looking statements about us and our industry that involve substantial risks and uncertainties and are based on our beliefs and assumptions and on information currently available to us. All statements other than statements of historical facts contained in this press release, including statements regarding our future results of operations, financial condition, business strategy and plans and objectives of management for future operations, are forward-looking statements. In some cases, you can identify forward-looking statements because they contain words such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “should,” “will,” or “would,” or the negative of these words or other similar terms or expressions.

Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Forward-looking statements represent our beliefs and assumptions only as of the date of this release. These statements, and related risks, uncertainties, factors and assumptions, include, but are not limited to: weak growth and increased volatility in the telehealth market; inability to adapt to rapid technological changes; increased competition from existing and potential new participants in the healthcare industry; changes in healthcare laws, regulations or trends and our ability to operate in the heavily regulated healthcare industry; our ability to comply with federal and state privacy regulations; the significant liability that could result from a cybersecurity breach; and other factors described under ‘Risk Factors’ in our most recent form 10-K filed with the SEC. These risks are not exhaustive. Except as required by law, we assume no obligation to update these forward-looking statements, or to update the reasons actual results could differ materially from those anticipated in the forward-looking statements, even if new information becomes available in the future. Further information on factors that could cause actual results to differ materially from the results anticipated by our forward-looking statements is included in the reports we have filed or will file with the Securities and Exchange Commission. These filings, when available, are available on the investor relations section of our website at investors.amwell.com and on the SEC’s website at www.sec.gov.

 

AMERICAN WELL CORPORATION

CONSOLIDATED BALANCE SHEETS

(In thousands, except share and per share amounts)

 

 

 

As of December 31,

 

 

 

2022

 

 

2021

 

Assets

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

538,546

 

 

$

746,416

 

Accounts receivable ($2,597 and $2,054, from related parties and net of

allowances of $1,884 and $1,809, respectively)

 

 

58,372

 

 

 

51,375

 

Inventories

 

 

8,737

 

 

 

7,530

 

Deferred contract acquisition costs

 

 

1,394

 

 

 

1,697

 

Prepaid expenses and other current assets

 

 

19,567

 

 

 

20,278

 

Total current assets

 

 

626,616

 

 

 

827,296

 

Restricted cash

 

 

795

 

 

 

795

 

Property and equipment, net

 

 

1,012

 

 

 

2,235

 

Goodwill

 

 

435,279

 

 

 

442,761

 

Intangibles assets, net

 

 

134,980

 

 

 

152,409

 

Operating lease right-of-use asset

 

 

13,509

 

 

 

16,422

 

Deferred contract acquisition costs, net of current portion

 

 

3,394

 

 

 

2,028

 

Other assets

 

 

1,972

 

 

 

1,722

 

Investment in minority owned joint venture

 

 

 

 

 

168

 

Total assets

 

$

1,217,557

 

 

$

1,445,836

 

Liabilities and Stockholders’ Equity

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Accounts payable

 

$

7,236

 

 

$

12,156

 

Accrued expenses and other current liabilities

 

 

54,258

 

 

 

58,711

 

Operating lease liability, current

 

 

3,057

 

 

 

1,918

 

Deferred revenue ($1,665 and $1,860 from related parties, respectively)

 

 

49,505

 

 

 

68,841

 

Total current liabilities

 

 

114,056

 

 

 

141,626

 

Other long-term liabilities

 

 

1,574

 

 

 

5,136

 

Contingent consideration liabilities, net of current portion

 

 

 

 

 

16,450

 

Operating lease liability, net of current portion

 

 

11,787

 

 

 

14,694

 

Deferred revenue, net of current portion ($10 and $22 from related

parties, respectively)

 

 

6,289

 

 

 

7,055

 

Total liabilities

 

 

133,706

 

 

 

184,961

 

Commitments and contingencies

 

 

 

 

 

 

Stockholders’ equity:

 

 

 

 

 

 

Preferred stock, $0.01 par value; 100,000,000 shares authorized, no shares

issued or outstanding as of December 31, 2022 and as of December 31, 2021

 

 

 

 

 

 

Common stock, $0.01 par value; 1,000,000,000 Class A shares authorized, 244,193,727

and 229,402,453 shares issued and outstanding, respectively; 100,000,000 Class B shares

authorized, 27,390,397 and 26,913,579 shares issued and outstanding, respectively;

200,000,000 Class C shares authorized 5,555,555 issued and outstanding as of

December 31, 2022 and as of December 31, 2021

 

 

2,766

 

 

 

2,620

 

Additional paid-in capital

 

 

2,160,108

 

 

 

2,054,275

 

Accumulated other comprehensive income (loss)

 

 

(16,969

)

 

 

(6,353

)

Accumulated deficit

 

 

(1,082,028

)

 

 

(811,284

)

Total American Well Corporation stockholders’ equity

 

 

1,063,877

 

 

 

1,239,258

 

Non-controlling interest

 

 

19,974

 

 

 

21,617

 

Total stockholders’ equity

 

 

1,083,851

 

 

 

1,260,875

 

Total liabilities and stockholders’ equity

 

$

1,217,557

 

 

$

1,445,836

 

 

AMERICAN WELL CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(In thousands, except share and per share amounts)

 

 

 

Years Ended December 31,

 

 

 

2022

 

 

2021

 

 

2020

 

Revenue

 

 

 

 

 

 

 

 

 

($4,544, $12,045 and $60,839 from related parties, respectively)

 

$

277,190

 

 

$

252,789

 

 

$

245,265

 

Costs and operating expenses:

 

 

 

 

 

 

 

 

 

Costs of revenue, excluding depreciation and amortization of intangible assets

 

 

160,422

 

 

 

148,474

 

 

 

156,790

 

Research and development

 

 

138,487

 

 

 

106,594

 

 

 

84,412

 

Sales and marketing

 

 

81,628

 

 

 

66,154

 

 

 

55,095

 

General and administrative

 

 

146,353

 

 

 

94,624

 

 

 

166,246

 

Depreciation and amortization expense

 

 

26,153

 

 

 

16,089

 

 

 

10,153

 

Total costs and operating expenses

 

 

553,043

 

 

 

431,935

 

 

 

472,696

 

Loss from operations

 

 

(275,853

)

 

 

(179,146

)

 

 

(227,431

)

Interest income and other income (expense), net

 

 

6,123

 

 

 

120

 

 

 

1,632

 

Loss before benefit (expense) from income taxes and loss from

equity method investment

 

 

(269,730

)

 

 

(179,026

)

 

 

(225,799

)

(Expense) benefit from income taxes

 

 

(64

)

 

 

5,376

 

 

 

(639

)

Loss from equity method investment

 

 

(2,278

)

 

 

(3,132

)

 

 

(2,188

)

Net loss

 

 

(272,072

)

 

 

(176,782

)

 

 

(228,626

)

Net loss attributable to non-controlling interest

 

 

(1,643

)

 

 

(448

)

 

 

(4,194

)

Net loss attributable to American Well Corporation

 

$

(270,429

)

 

$

(176,334

)

 

$

(224,432

)

Net loss per share attributable to common stockholders,

basic and diluted

 

$

(0.99

)

 

$

(0.69

)

 

$

(2.27

)

Weighted-average common shares outstanding, basic and diluted

 

 

274,249,749

 

 

 

254,068,942

 

 

 

99,044,312

 

Net loss

 

$

(272,072

)

 

$

(176,782

)

 

$

(228,626

)

Other comprehensive income (loss), net of tax:

 

 

 

 

 

 

 

 

 

Unrealized loss on available-for-sale investments

 

 

 

 

 

(85

)

 

 

(365

)

Foreign currency translation

 

 

(10,616

)

 

 

(6,565

)

 

 

412

 

Comprehensive loss

 

 

(282,688

)

 

 

(183,432

)

 

 

(228,579

)

Less: Comprehensive loss attributable to non-controlling interest

 

 

(1,643

)

 

 

(448

)

 

 

(4,194

)

Comprehensive loss attributable to American Well Corporation

 

$

(281,045

)

 

$

(182,984

)

 

$

(224,385

)

 

AMERICAN WELL CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands, except share and per share amounts)

 

 

 

Years Ended December 31,

 

 

 

2022

 

 

2021

 

 

2020

 

Cash flows from operating activities:

 

 

 

 

 

 

 

 

 

Net loss

 

$

(272,072

)

 

$

(176,782

)

 

$

(228,626

)

Adjustments to reconcile net loss to net cash used in operating activities:

 

 

 

 

 

 

 

 

 

Depreciation and amortization expense

 

 

26,167

 

 

 

16,089

 

 

 

10,153

 

Provisions for credit losses

 

 

806

 

 

 

714

 

 

 

1,646

 

Amortization of deferred contract acquisition costs

 

 

1,684

 

 

 

1,971

 

 

 

1,410

 

Amortization of deferred contract fulfillment costs

 

 

620

 

 

 

737

 

 

 

852

 

Noncash compensation costs incurred by selling shareholders

 

 

11,139

 

 

 

2,753

 

 

 

 

Stock-based compensation expense

 

 

67,675

 

 

 

43,809

 

 

 

118,358

 

Loss on equity method investment

 

 

2,278

 

 

 

3,132

 

 

 

2,188

 

Deferred income taxes

 

 

(2,524

)

 

 

(6,245

)

 

 

 

Changes in operating assets and liabilities, net of acquisition:

 

 

 

 

 

 

 

 

 

Accounts receivable

 

 

(8,140

)

 

 

(512

)

 

 

(14,212

)

Inventories

 

 

(1,207

)

 

 

1,598

 

 

 

(6,024

)

Deferred contract acquisition costs

 

 

(2,771

)

 

 

(2,235

)

 

 

(2,102

)

Prepaid expenses and other current assets

 

 

(161

)

 

 

(5,775

)

 

 

(5,990

)

Other assets

 

 

(235

)

 

 

117

 

 

 

122

 

Accounts payable

 

 

(4,780

)

 

 

5,546

 

 

 

(707

)

Accrued expenses and other current liabilities

 

 

8,962

 

 

 

(380

)

 

 

12,887

 

Other long-term liabilities

 

 

(25

)

 

 

(16,705

)

 

 

(245

)

Deferred revenue

 

 

(19,739

)

 

 

(9,369

)

 

 

(2,174

)

Net cash used in operating activities

 

 

(192,323

)

 

 

(141,537

)

 

 

(112,464

)

Cash flows from investing activities:

 

 

 

 

 

 

 

 

 

Purchases of property and equipment

 

 

(292

)

 

 

(559

)

 

 

(3,318

)

Capitalized software development costs

 

 

(10,155

)

 

 

 

 

 

 

Investment in less than majority owned joint venture

 

 

(1,960

)

 

 

(2,548

)

 

 

(2,940

)

Purchases of investments

 

 

(499,223

)

 

 

 

 

 

(159,608

)

Proceeds from sales and maturities of investments

 

 

500,000

 

 

 

100,000

 

 

 

99,109

 

Acquisitions of business, net of cash acquired

 

 

 

 

 

(156,526

)

 

 

 

Net cash used in investing activities

 

 

(11,630

)

 

 

(59,633

)

 

 

(66,757

)

Cash flows from financing activities:

 

 

 

 

 

 

 

 

 

Proceeds from issuance of Series C convertible preferred

stock, net of issuance costs

 

 

 

 

 

 

 

 

146,014

 

Proceeds from exercise of common stock options

 

 

5,740

 

 

 

20,806

 

 

 

5,932

 

Proceeds from employee stock purchase plan

 

 

2,503

 

 

 

1,599

 

 

 

 

Payments for the purchase of treasury stock

 

 

(360

)

 

 

(15,038

)

 

 

(37,568

)

Proceeds from Section 16(b) disgorgement

 

 

295

 

 

 

 

 

 

 

Payment of contingent consideration

 

 

(11,790

)

 

 

 

 

 

 

Proceeds from issuance of common stock in initial public offering, net of underwriting costs and commissions

 

 

 

 

 

 

 

 

772,931

 

Proceeds from the issuance of common stock to Google, net of issuance costs

 

 

 

 

 

 

 

 

99,100

 

Payment of deferred offering costs

 

 

 

 

 

(1,613

)

 

 

(3,293

)

Net cash (used in) provided by financing activities

 

 

(3,612

)

 

 

5,754

 

 

 

983,116

 

Effect of exchange rates changes on cash, cash equivalents, and restricted cash

 

 

(305

)

 

 

(84

)

 

 

 

Net (decrease) increase in cash, cash equivalents, and restricted cash

 

 

(207,870

)

 

 

(195,500

)

 

 

803,895

 

Cash, cash equivalents, and restricted cash at beginning of period

 

 

747,211

 

 

 

942,711

 

 

 

138,816

 

Cash, cash equivalents, and restricted cash at end of period

 

$

539,341

 

 

$

747,211

 

 

$

942,711

 

Cash, cash equivalents, and restricted cash at end of period:

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

 

538,546

 

 

 

746,416

 

 

 

941,616

 

Restricted cash

 

 

795

 

 

 

795

 

 

 

1,095

 

Total cash, cash equivalents, and restricted cash at end of period

 

$

539,341

 

 

$

747,211

 

 

$

942,711

 

Supplemental disclosure of cash flow information:

 

 

 

 

 

 

 

 

 

Cash paid for income taxes

 

$

1,723

 

 

$

1,587

 

 

$

713

 

Supplemental disclosure of non-cash investing and financing

activities:

 

 

 

 

 

 

 

 

 

Issuance of common stock in acquisitions

 

$

 

 

$

144,107

 

 

$

 

Issuance of common stock in settlement of earnout

 

$

17,243

 

 

$

 

 

$

 

Receivable related to exercise of common stock options

 

$

 

 

$

74

 

 

$

 

Common stock issuance costs in accrued expenses

 

$

 

 

$

 

 

$

1,613

 

Non-GAAP Financial Measures:

To supplement our financial information presented in accordance with generally accepted accounting principles in the United States, of US GAAP, we use adjusted EBITDA, which is a non-U.S GAAP financial measure to clarify and enhance an understanding of past performance. We believe that the presentation of adjusted EBITDA enhances an investor’s understanding of our financial performance. We further believe that adjusted EBITDA is a useful financial metric to assess our operating performance from period-to-period by excluding certain items that we believe are not representative of our core business. We use certain financial measures for business planning purposes and in measuring our performance relative to that of our competitors. We utilize adjusted EBITDA as the primary measure of our performance.

We calculate adjusted EBITDA as net loss adjusted to exclude (i) interest income and other income, net, (ii) tax benefit and expense, (iii) depreciation and amortization, (iv) stock-based compensation expense, (v) public offering expenses, (vi) acquisition-related expenses, (vii) litigation expenses related to the defense of our patents in the patent infringement claim filed by Teladoc and (viii) other items affecting our results that we do not view as representative of our ongoing operations, including noncash compensation costs incurred by selling shareholders and adjustments made to the contingent consideration.

We believe adjusted EBITDA is a commonly used by investors to evaluate our performance and that of our competitors. However, our use of the term adjusted EBITDA may vary from that of others in our industry. Adjusted EBITDA should not be considered as an alternative to net loss before taxes, net loss, loss per share or any other performance measures derived in accordance with U.S. GAAP as measures of performance.

Adjusted EBITDA has important limitations as an analytical tool and you should not consider it in isolation or as a substitute for analysis of our results as reported under U.S. GAAP. Some of the limitations of adjusted EBITDA include (i) adjusted EBITDA does not properly reflect capital commitments to be paid in the future, and (ii) although depreciation and amortization are non-cash charges, the underlying assets may need to be replaced and adjusted EBITDA does not reflect these capital expenditures. Our public offering expenses, including legal, accounting and other professional expenses, reflect cash expenditures and we expect such expenditures to recur from time to time. Our adjusted EBITDA may not be comparable to similarly titled measures of other companies because they may not calculate adjusted EBITDA in the same manner as we calculate the measure, limiting its usefulness as a comparative measure.

In evaluating adjusted EBITDA, you should be aware that in the future we will incur expenses similar to the adjustments in this presentation. Our presentation of adjusted EBITDA should not be construed as an inference that our future results will be unaffected by these expenses or any unusual or non-recurring items. Adjusted EBITDA should not be considered as an alternative to loss before benefit from income taxes, net loss, earnings per share, or any other performance measures derived in accordance with U.S. GAAP. When evaluating our performance, you should consider adjusted EBITDA alongside other financial performance measures, including our net loss and other GAAP results.

Other than with respect to GAAP Revenue, the Company only provides guidance on a non-GAAP basis. The Company does not provide a reconciliation of forward-looking Adjusted EBITDA (non-GAAP) to GAAP net income (loss), due to the inherent difficulty in forecasting and quantifying certain amounts that are necessary for such reconciliation because other deductions used to calculate projected net income (loss) vary dramatically based on actual events, the Company is not able to forecast on a GAAP basis with reasonable certainty all deductions needed in order to provide a GAAP calculation of projected net income (loss) at this time. The amount of these deductions may be material and, therefore, could result in projected GAAP net income (loss) being materially less than projected Adjusted EBITDA (non-GAAP).

The following table presents a reconciliation of adjusted EBITDA from the most comparable GAAP measure, net loss, for the years ended December 31, 2022, 2021 and 2020:

 

 

Years Ended December 31,

 

(in thousands)

 

2022

 

 

2021

 

 

2020

 

Net loss

 

$

(272,072

)

 

$

(176,782

)

 

$

(228,626

)

Add:

 

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

26,153

 

 

 

16,089

 

 

 

10,153

 

Interest and other income, net

 

 

(6,123

)

 

 

(120

)

 

 

(1,632

)

(Expense) benefit from income taxes

 

 

64

 

 

 

(5,376

)

 

 

639

 

Stock-based compensation

 

 

69,144

 

 

 

43,809

 

 

 

118,358

 

Public offering expenses(2)

 

 

 

 

 

1,223

 

 

 

2,039

 

Acquisition-related (income) expenses

 

 

 

 

 

7,289

 

 

 

(48

)

Noncash expenses and contingent consideration adjustments(3)

 

 

12,153

 

 

 

(10,987

)

 

 

 

Capitalized software development costs

 

 

(10,155

)

 

 

 

 

 

 

COVID-19-related expenses(1)

 

 

 

 

 

 

 

 

6,076

 

Litigation expense(4)

 

 

5,575

 

 

 

2,182

 

 

 

352

 

Adjusted EBITDA

 

$

(175,261

)

 

$

(122,673

)

 

$

(92,689

)

(1)

COVID-19-related expenses include non-recurring provider bonus payments, emergency hosting licensing fees and non-medical provider temporary labor costs related to on-boarding non-AMG providers incurred in response to the initial outbreak of the COVID-19 virus as Amwell attempted to scale quickly to meet unusually high patient and non-AMG provider demand.

(2)

Public offering expenses include non-recurring expenses incurred in relation to our initial public offering for the year ended December 31, 2020, and our secondary offering for the year ended December 31, 2021.

(3)

Noncash expenses and contingent consideration adjustments include, noncash compensation costs incurred by selling shareholders and adjustments made to the contingent consideration.

(4)

Litigation expense relates to legal costs related to the Teladoc litigation which was dismissed pursuant to a confidential settlement between the parties in 2022.

 

Contacts

Investors:
Sue Dooley

sue.dooley@amwell.com