Amwell® announces results for first quarter 2021
Boston--(business wire)--amwell®, (nyse: amwl) (the "company") a national telehealth leader, today announced financial results for the first quarter ended march 31, 2021. “our first quarter results represent a strong start to the year and demonstrate continued momentum across our business. as telehealth evolved from a complimentary service to a fundamental enabler of mainstream healthcare, we too have advanced our innovation and investment strategy: our next generation platform converge is designed to enable healthcare’s most trusted players to carry out digitally empowered, full-spectrum, unified online and in-person care. at its core, we believe converge offers exceptional usability, reliability, scalability and flexibility. with its modular open architecture and longitudinal capabilities, we believe converge will simplify innovative collaboration across the ecosystem. we expect converge to expand our market opportunity and enhance our own efficiencies over time. we also expect it to accelerate innovators’ ability to impact clinical and financial outcomes by creating a faster path to implement new technologies and services in a single integrated platform,” said dr. ido schoenberg, chairman and co-ceo. first quarter 2021 financial highlights: all comparisons, unless otherwise noted, are to the three months ended march 31, 2020. total active providers grew to ~81,000, compared to ~24,000 last year and ~72,000 last quarter total visits were ~1.6 million, compared to ~725,000 amwell medical group (“amg”) visits were 20% of total visits, compared to 50% of total visits amwell medical group (“amg”) visits were 20% of total visits, compared to 50% of total visits total visits since inception surpassed 10 million in the first quarter with 5.9 million added in 2020 total revenue was $57.6 million, compared to $53.7 million subscription revenue was $24.6 million, compared to $21.8 million visit revenue was $27.8 million, compared to $26.5 million subscription revenue was $24.6 million, compared to $21.8 million visit revenue was $27.8 million, compared to $26.5 million gross margin was 38.0%, compared to 38.5% net loss was $39.8 million, compared to $25.2 million adjusted ebitda was $(26.4) million, compared to $(17.7) million, as a result of increased r&d investment in the converge technology platform financial outlook for 2021, the company reiterates their previous outlook of: revenue between $260 and $270 million amg visit volume between 1.5 and 1.7 million adjusted ebitda between ($157) million and ($147) million quarterly conference call details the company will host a conference call to review the results today, wednesday, may 12, 2021 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 1-833-979-2840 for u.s. participants, or 1-263-384-2051 for international participants, referencing conference id #4793448. 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 telehealth 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 telehealth 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 telehealth solutions for over 2,000 hospitals and over 55 health plan partners with over 36,000 employers, covering over 80 million lives. for more information please visit https://business.amwell.com/. american well, amwell, converge and amwell medical group 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. condensed consolidated balance sheets (in thousands, except share and per share amounts) (unaudited) march 31, 2021 december 31, 2020 assets current assets: cash and cash equivalents $ 896,382 $ 941,616 investments 99,997 99,963 restricted cash 795 1,095 accounts receivable ($1,182 and $12,053, from related parties and net of allowances of $1,514 and $1,556, respectively) 37,679 45,296 inventories 9,366 9,128 deferred contract acquisition costs 2,205 2,134 prepaid expenses and other current assets 14,882 14,055 total current assets 1,061,306 1,113,287 property and equipment, net 3,383 3,836 goodwill 193,877 193,877 intangible assets, net 53,600 55,528 operating lease right-of-use asset 4,999 6,609 deferred contract acquisition costs, net of current portion 1,124 1,327 other assets 1,391 1,430 investment in minority owned joint venture 2,481 752 total assets $ 1,322,161 $ 1,376,646 liabilities, convertible preferred stock and stockholders’ deficit current liabilities: accounts payable $ 6,797 $ 5,797 accrued expenses and other current liabilities 23,386 42,135 operating lease liability, current 4,931 6,357 deferred revenue ($3,176 and $14,421 from related parties, respectively) 63,202 66,693 total current liabilities 98,316 120,982 other long-term liabilities 45 64 operating lease liability, net of current portion 970 1,296 deferred revenue, net of current portion ($32 and $486 from related parties, respectively) 7,455 8,107 total liabilities 106,786 130,449 commitments and contingencies stockholders’ deficit: preferred stock — — common stock 2,396 2,357 treasury stock — (37,568 ) additional paid-in capital 1,860,123 1,841,405 accumulated other comprehensive income 279 297 accumulated deficit (668,871 ) (582,359 ) total american well corporation stockholders’ equity 1,193,927 1,224,132 non-controlling interest 21,448 22,065 total stockholders’ equity 1,215,375 1,246,197 total liabilities, preferred stock and stockholders’ equity $ 1,322,161 $ 1,376,646 condensed consolidated statements of operations and comprehensive loss (in thousands, except share and per share amounts) (unaudited) three months ended march 31, 2021 2020 revenue ($8,845 and $13,248 from related parties, respectively) $ 57,599 $ 53,714 costs and operating expenses: costs of revenue, excluding depreciation and amortization of intangible assets 35,705 33,027 research and development 23,040 14,936 sales and marketing 13,732 13,874 general and administrative 21,354 15,342 depreciation and amortization expense 2,506 2,286 total costs and operating expenses 96,337 79,465 loss from operations (38,738 ) (25,751 ) interest income and other income (expense), net 61 847 loss before expense from income taxes and loss from equity method investment (38,677 ) (24,904 ) expense from income taxes (309 ) — loss from equity method investment (819 ) (320 ) net loss (39,805 ) (25,224 ) net loss attributable to non-controlling interest (617 ) (843 ) net loss attributable to american well corporation $ (39,188 ) $ (24,381 ) net loss per share attributable to common stockholders, basic and diluted $ (0.16 ) $ (0.58 ) weighted-average common shares outstanding, basic and diluted 243,544,647 42,383,251 net loss $ (39,805 ) $ (25,224 ) other comprehensive income (loss), net of tax: unrealized gain on available-for-sale investments 34 43 foreign currency translation (52 ) (171 ) comprehensive loss (39,823 ) (25,352 ) less: comprehensive loss attributable to non-controlling interest (617 ) (843 ) comprehensive loss attributable to american well corporation $ (39,206 ) $ (24,509 ) condensed consolidated statements of cash flows (in thousands, except share and per share amounts) (unaudited) three months ended march 31, 2021 2020 cash flows from operating activities: net loss $ (39,805 ) $ (25,224 ) adjustments to reconcile net loss to net cash used in operating activities: depreciation and amortization expense 2,506 2,286 provisions for doubtful accounts 260 165 amortization of deferred contract acquisition costs 335 271 amortization of deferred contract fulfillment costs 173 168 stock-based compensation expense 8,642 4,458 loss on equity method investment 819 320 changes in operating assets and liabilities, net of acquisition: accounts receivable 7,357 (1,710 ) inventories (238 ) (612 ) deferred contract acquisition costs (203 ) (458 ) prepaid expenses and other current assets (167 ) (2,401 ) other assets 39 (355 ) accounts payable 1,023 (45 ) accrued expenses and other current liabilities (17,666 ) (4,922 ) other long-term liabilities (19 ) (254 ) deferred revenue (4,195 ) (3,780 ) net cash used in operating activities (41,139 ) (32,093 ) cash flows from investing activities: purchases of property and equipment (148 ) (1,254 ) investment in less than majority owned joint venture (2,548 ) (2,940 ) purchases of investments — (29,777 ) proceeds from sales and maturities of investments — 39,611 net cash (used in) provided by investing activities (2,696 ) 5,640 cash flows from financing activities: proceeds from issuance of series c convertible preferred stock, net of issuance costs — 12,564 proceeds from exercise of common stock options 9,297 2 payments for the purchase of treasury stock (9,383 ) — payment of deferred offering costs (1,613 ) — net cash (used in) provided by financing activities (1,699 ) 12,566 net decrease in cash, cash equivalents, and restricted cash (45,534 ) (13,887 ) cash, cash equivalents, and restricted cash at beginning of period 942,711 138,816 cash, cash equivalents, and restricted cash at end of period $ 897,177 $ 124,929 cash, cash equivalents, and restricted cash at end of period: cash and cash equivalents 896,382 123,834 restricted cash 795 1,095 total cash, cash equivalents, and restricted cash at end of period $ 897,177 $ 124,929 supplemental disclosure of cash flow information: cash paid for income taxes $ 741 $ — supplemental disclosure of non-cash investing and financing activities: additions to property and equipment included in accrued expenses and accounts payable $ 23 $ — exercises of common stock $ 833 $ — repurchase of common stock $ 388 $ — common stock issuance costs $ — $ 143 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 metrics 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 income and 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 direct and incremental expenses associated with the covid-19 pandemic. 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 ipo and acquisition-related expenses, including legal, accounting and other professional expenses, reflect cash expenditures and we expect such expenditures for acquisitions 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 (such as covid expenses and acquisition related expenses) 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 three months ended march 31, 2021 and 2020: three months ended march 31, (in thousands) 2021 2020 net loss $ (39,805 ) $ (25,224 ) add: depreciation and amortization 2,506 2,286 interest income and other income (expense), net (61 ) (847 ) expense from income taxes 309 — stock-based compensation 8,642 4,458 public offering expenses 1,223 151 acquisition-related income — 17 covid-19-related expenses(1) — 1,413 litigation expense 739 — adjusted ebitda $ (26,447 ) $ (17,746 ) (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 three months ended march 31, 2020 and our secondary offering for the three months ended march 31, 2021.
