Amwell Announces Results for Third Quarter 2022
Amwell Announces Results for Third Quarter 2022
November 7, 2022
BOSTON--(BUSINESS WIRE)-- Amwell ® (NYSE: AMWL), a leader in digital healthcare enablement, today announced financial results for the third quarter ended September 30, 2022.
Amwell Third Quarter 2022 Highlights:
- Recorded Total Revenue of $69.2 million in the third quarter of 2022, representing 11% growth compared to $62.2 million in the third quarter of 2021.
- Achieved subscription revenue of $31.9 million, representing growth of 19% compared to the third quarter of 2021.
- Recorded AMG Visit revenue of $28.8 million.
- Reported gross margin of 40%.
- Net loss was ($70.6) million compared to ($69.7) million in Q2 of 2022.
- Improved adjusted EBITDA of ($41.9) million compared to ($42.8) million in Q2 of 2022.
- Total active providers rose 23% to 98,500 compared to 80,000 in the third quarter of 2021.
- Total visits were 1.4 million, similar to the third quarter of 2021.
- Cash and short-term securities as of quarter-end were approximately $582 million.
“Q3 was another important quarter for our company, and we are executing well through a transition time,” said Dr. Ido Schoenberg, Chairman and co-Chief Executive Officer of Amwell. “Feedback is excellent on Converge™, our digital care delivery enablement platform. We made great progress with customer migrations this quarter and we are honored that so many, including large, strategic customers, are trusting Amwell as their technology partner for years to come.”
Financial Outlook
The Company believes revenues will be within its original guidance range, set at the first of the year, and is refining its guidance as follows:
- Clear visibility to achieving revenue in the lower end of previously provided range of $275 and $285 million.
- AMG visits between 1.4 and 1.5 million.
- A new Adjusted EBITDA range of between ($180) million and ($190) million, $10 million better than the prior range of ($190) million and ($200) million.
Quarterly Conference Call Details
The company will host a conference call to review the results today, Monday November 7, 2022 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 digital health solutions for over 2,000 hospitals and 55 health plan partners with over 36,000 employers, covering over 80 million lives. For more information, please visit https://business.amwell.com/.
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.
AMERICAN WELL CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share amounts)
(unaudited)
| September 30, 2022 | December 31, 2021 | |
|---|---|---|
| Assets | ||
| Current assets: | ||
| Cash and cash equivalents | $332,601 | $746,416 |
| Investments | 249,008 | - |
| Accounts receivable ($164 and $2,054, from related parties and net of allowances of $1,568 and $1,809, respectively) | 45,730 | 51,375 |
| Inventories | 7,969 | 7,530 |
| Deferred contract acquisition costs | 1,338 | 1,697 |
| Prepaid expenses and other current assets | 20,598 | 20,278 |
| Total current assets | 657,244 | 827,296 |
| Restricted cash | 795 | 795 |
| Property and equipment, net | 1,079 | 2,235 |
| Goodwill | 425,196 | 442,761 |
| Intangible assets, net | 127,291 | 152,409 |
| Operating lease right-of-use asset | 14,412 | 16,422 |
| Deferred contract acquisition costs, net of current portion | 3,064 | 2,028 |
| Other assets | 1,920 | 1,722 |
| Investment in minority owned joint venture | 773 | 168 |
| Total assets | $1,231,774 | $1,445,836 |
| Liabilities and Stockholders' Equity | ||
| Current liabilities: | ||
| Accounts payable | $6,175 | $12,156 |
| Accrued expenses and other current liabilities | 45,181 | 58,711 |
| Operating lease liability, current | 3,623 | 1,918 |
| Deferred revenue ($338 and $1,860 from related parties, respectively) | 50,151 | 68,841 |
| Total current liabilities | 105,130 | 141,626 |
| Other long-term liabilities | 2,673 | 5,136 |
| Contingent consideration liabilities, net of current portion | - | 16,450 |
| Operating lease liability, net of current portion | 12,208 | 14,694 |
| Deferred revenue, net of current portion ($13 and $22 from related parties, respectively) | 6,914 | 7,055 |
| Total liabilities | 126,925 | 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 September 30, 2022 and as of December 31, 2021 | - | - |
| Common stock, $0.01 par value; 1,000,000,000 Class A shares authorized, 242,304,366 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 September 30, 2022 and as of December 31, 2021 | 2,753 | 2,620 |
| Additional paid-in capital | 2,133,614 | 2,054,275 |
| Accumulated other comprehensive loss | (31,056) | (6,353) |
| Accumulated deficit | (1,020,865) | (811,284) |
| Total American Well Corporation stockholders' equity | 1,084,446 | 1,239,258 |
| Non-controlling interest | 20,403 | 21,617 |
| Total stockholders' equity | 1,104,849 | 1,260,875 |
| Total liabilities and stockholders' equity | $1,231,774 | $1,445,836 |
AMERICAN WELL CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(in thousands, except share and per share amounts)
(unaudited)
| Three Months Ended September 30, | Nine Months Ended September 30, | |||
|---|---|---|---|---|
| 2022 | 2021 | 2022 | 2021 | |
| Revenue ($729, $698, $3,106 and $11,005 from related parties, respectively) | $69,209 | $62,223 | $197,957 | $180,039 |
| Costs and operating expenses: | ||||
| Costs of revenue, excluding depreciation and amortization of intangible assets | 41,507 | 35,184 | $114,769 | 104,778 |
| Research and development | 36,254 | 27,399 | $110,802 | 72,817 |
| Sales and marketing | 18,493 | 16,370 | $58,368 | 44,891 |
| General and administrative | 37,682 | 34,380 | $105,309 | 79,946 |
| Depreciation and amortization expense | 6,397 | 4,340 | $19,719 | 9,330 |
| Total costs and operating expenses | 140,333 | 117,673 | 408,967 | 311,762 |
| Loss from operations | (71,124) | (55,450) | (211,010) | (131,723) |
| Interest income and other (expense) income, net | 1,237 | (382) | $2,109 | (97) |
| Loss before expense from income taxes and loss from equity method investment | (69,887) | (55,832) | (208,901) | (131,820) |
| Benefit (Expense) from income taxes | (95) | 5,454 | $ (224) | 5,042 |
| Loss from equity method investment | (593) | (554) | $ (1,355) | (2,095) |
| Net loss | (70,575) | (50,932) | (210,480) | (128,873) |
| Net loss attributable to non-controlling interest | (491) | 562 | $ (1,214) | (332) |
| Net loss attributable to American Well Corporation | $(70,084) | $(51,494) | $(209,266) | $(128,541) |
| Net loss per share attributable to common stockholders, basic and diluted | $(0.25) | $(0.20) | $(0.77) | $(0.51) |
| Weighted-average common shares outstanding, basic and diluted | 277,389,730 | 257,283,961 | 272,846,985 | 250,115,414 |
| Other comprehensive loss, net of tax: | ||||
| Unrealized gain (loss) on available-for-sale investments | 1,002 | 0 | (360) | (85) |
| Foreign currency translation | (11,213) | (2,377) | (24,343) | (2,449) |
| Comprehensive loss | (80,786) | (53,309) | (235,183) | (131,407) |
| Less: Comprehensive (loss) income attributable to non-controlling interest | (491) | 562 | (1,214) | (332) |
| Comprehensive loss attributable to American Well Corporation | $(80,295) | $(53,871) | $(233,969) | $(131,075) |
AMERICAN WELL CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands, except share and per share amounts) (unaudited)
| Nine Months Ended September 30. | ||
|---|---|---|
| 2022 | 2021 | |
| Cash flows from operating activities: | ||
| Net loss | $ (210,480) | $ (128,873) |
| Adjustments to reconcile net loss to net cash used in operating activities: | ||
| Depreciation and amortization expense | 19,543 | 9,330 |
| Provisions for credit losses | 63 | 401 |
| Amortization of deferred contract acquisition costs | 1,295 | 1,254 |
| Amortization of deferred contract fulfillment costs | 452 | 535 |
| Accretion of contingent consideration | - | 600 |
| Noncash compensation costs incurred by selling shareholders | 5,923 | 717 |
| Stock-based compensation expense | 48,419 | 31,756 |
| Loss on equity method investment | 1,355 | 2,095 |
| Deferred income taxes | (1,390) | (4,184) |
| Changes in operating assets and liabilities, net of acquisition: | ||
| Accounts receivable | 4,796 | 11,325 |
| Inventories | (439) | 28 |
| Deferred contract acquisition costs | (2,035) | (1,053) |
| Prepaid expenses and other current assets | (924) | 946 |
| Other assets | (276) | 319 |
| Accounts payable | (5,797) | (1,332) |
| Accrued expenses and other current liabilities | 1,166 | (1,564) |
| Other long-term liabilities | (25) | (1,784) |
| Deferred revenue | (18,023) | (17,130) |
| Net cash used in operating activities | (156,377) | (96,614) |
| Cash flows from investing activities: | ||
| Purchases of property and equipment | (2) | (221) |
| Investment in less than majority owned joint venture | (1,960) | (2,548) |
| Purchases of investments | (499,223) | - |
| Proceeds from sales and maturities of investments | 249,855 | 100,000 |
| Acquisitions of business, net of cash acquired | - | (156,526) |
| Net cash used in and provided by investing activities | (251,330) | (59,295) |
| Cash flows from financing activities: | ||
| Proceeds from exercise of common stock options | 5,323 | 18,539 |
| Proceeds from employee stock purchase plan | 2,503 | 1,599 |
| Payments for the purchase of treasury stock | (360) | (13,988) |
| Payment of deferred offering costs | - | (1,613) |
| Proceeds from Section 16(b) disgorgement | 295 | - |
| Payment of contingent consideration | (11,790) | - |
| Net cash used in and provided by financing activities | (4,029) | 4,537 |
| Effect of exchange rates changes on cash, cash equivalents, and restricted cash | (2,079) | (142) |
| Net decrease in cash, cash equivalents, and restricted cash | (413,815) | (151,514) |
| Cash, cash equivalents, and restricted cash at beginning of period | 747,211 | 942,711 |
| Cash, cash equivalents, and restricted cash at end of period | $ 333,396 | $ 791,197 |
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 present adjusted EBITDA as net loss adjusted to exclude specific items not representative of our ongoing operations, including noncash compensation costs incurred by selling shareholders and adjustments made to the contingent consideration. Our calculation of adjusted EBITDA should not be considered as an alternative to net loss before taxes, net loss, or other performance measures derived in accordance with U.S. GAAP.