Teladoc (TDOC) Q1 2026 Earnings Transcript

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DATE

April 29, 2026, 5 p.m. ET

CALL PARTICIPANTS

• Chief Executive Officer — Chuck Divita
• Chief Financial Officer — Michael Minchak

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RISKS

• BetterHelp’s U.S. direct-to-consumer cash-pay business is under "mounting pressure," explicitly cited as a negative market dynamic.
• Management acknowledges "continued pressure on the direct-to-consumer cash-pay business," resulting in a 9% decline in BetterHelp revenue and a decline in average paying users.
• Subscription-to-visit mix shift continues to create "near-term changes" and "headwinds" affecting revenue, expected to moderate only later in the year.

TAKEAWAYS

• Consolidated revenue -- $614 million, above the midpoint of guidance.
• Adjusted EBITDA -- $58 million, with a 9.5% margin.
• Net loss per share -- $0.36, including $0.50 of amortization of intangible assets, $0.08 of stock-based compensation, and $0.07 in restructuring costs per share.
• Free cash flow -- Net outflow of $26 million; ended with $751 million in cash and cash equivalents.
• Net debt metrics -- Net debt to trailing adjusted EBITDA below 0.9x; gross debt at 3.6x trailing adjusted EBITDA.
• Integrated Care revenue -- $395 million, up 1.5%, with 170 basis points of growth from acquisitions; high single-digit visit revenue increase offset by lower subscription revenue.
• International Integrated Care revenue -- Grew double digits, including 30% growth from hybrid care models.
• U.S. Integrated Care membership -- 101.2 million members, above guidance range.
• Chronic Care enrollment -- 1.2 million, up approximately 1% sequentially and 4% year over year, mainly from increased adoption of multi-condition bundles.
• Integrated Care adjusted EBITDA -- $56 million, up 12%, margin improved by 130 basis points to 14.2%.
• BetterHelp revenue -- $218 million, down 9%, due to pressure in direct-to-consumer cash-pay; partially offset by $13 million in insurance-based revenue, up $6 million sequentially.
• BetterHelp average paying users -- 361 thousand, down 9%, reflecting a mid-teens decline in the U.S., and high single-digit international growth.
• BetterHelp adjusted EBITDA -- $2 million (0.9% margin), down from 3.2% prior year, due to lower cash-pay revenue and insurance rollout investments, partly offset by 12% lower advertising and marketing expense.
• Insurance rollout at BetterHelp -- Live in 30 states and Washington, D.C.; over 6 thousand providers credentialed and enrolled; insurance-covered contracted lives increased to over 150 million, up 30 million since year-end 2025.
• Insurance user engagement -- Insurance-covered users are averaging approximately 20% more sessions in the first 90 days than cash-pay users; funnel conversion is stronger with covered users.
• BetterHelp insurance revenues -- Over 14 thousand insurance-covered sessions per week, an annualized run rate above $75 million; projected to exit 2026 with $125 million or more in run rate.
• Operational efficiency initiatives -- Over 300 thousand clinical notes generated with AI-assisted documentation since launch, saving more than 4 million minutes, and used by more than 2 thousand therapists in over 30 thousand insurance sessions.
• 2026 guidance — consolidated revenue -- Projected at $2.48 billion to $2.58 billion; adjusted EBITDA $267 million to $306 million; free cash flow $130 million to $170 million; net loss per share $1.05 to $0.75; stock-based compensation expense expected below $55 million (over 30% decrease versus 2025).
• Integrated Care guidance -- Full-year revenue growth 0.8%-3.5%, including 65 basis points from acquisitions and 60 basis points from FX; adjusted EBITDA margin 15.1%-16.1% (midpoint up 45 basis points over 2025).
• BetterHelp guidance -- 2026 revenue minus 6.5% to minus 1% versus 2025; insurance revenue $90 million to $105 million (an increase of $15 million from prior expectations); exit run rate of at least $125 million in insurance revenue for Q4.
• Capital structure plans -- Plans to address 2027 convertible notes in two phases: paying down a substantial portion with available cash and new debt before year-end, then paying off the remainder at maturity.
• Membership mix shift -- By year-end, 70% of memberships expected to be in visit-based arrangements, reversing the previous 70% subscription-weighted mix.
• Chronic Care bundles -- Bundled products now represent about 70% of chronic care offerings.

SUMMARY

Teladoc Health (NYSE:TDOC) reported fiscal first-quarter 2026 results (period ended March 31, 2026) with consolidated revenue and adjusted EBITDA above guidance midpoints, driven by Integrated Care and insurance-driven growth at BetterHelp. Management stated that insurance-covered sessions at BetterHelp reached an annualized run rate above $75 million, with plans to exit 2026 at or above $125 million, a substantial increase fueled by expanded state footprint and provider enrollment. International markets delivered double-digit growth in Integrated Care and high single-digit growth in BetterHelp users, highlighting ongoing geographic diversification. Operational improvements, including extensive deployment of AI in clinical documentation, are driving measurable cost savings and therapist productivity gains. Capital allocation plans are in place to address 2027 convertible notes, balancing paydown with new traditional term debt and preserving the company’s financial flexibility.

• BetterHelp showed an 800 basis point improvement in revenue performance in states with active insurance coverage versus cash-pay-only markets, as cited by management.
• Stock-based compensation expense is projected to decline over 30% from 2025, and over 70% since 2023, reflecting ongoing efforts to manage costs.
• Guidance for Integrated Care EBITDA margins and full-year revenue growth includes explicit contributions from foreign exchange and prior acquisitions, with management noting moderation in prior headwinds from the subscription-to-visit revenue shift.
• Management stated, "Insurance is a major catalyst for the turnaround and growth of BetterHelp in the U.S., and international growth is also contributing."

INDUSTRY GLOSSARY

• Integrated Care: Teladoc segment delivering a full suite of virtual healthcare including primary, mental health, and chronic condition management, combining episodic and longitudinal services.
• BetterHelp: Direct-to-consumer mental health platform owned by Teladoc Health, offering virtual therapy services through both cash pay and insurance-covered models.
• Chronic Care bundles: Subscription packages that combine multiple chronic condition programs into a single integrated offering for clients seeking a comprehensive solution.
• Visit-based arrangements: Revenue contracts where Teladoc is paid per clinical encounter rather than per-member, per-month subscriptions, reflecting an industry move towards fee-for-service models.

Full Conference Call Transcript

Chuck Divita, Chief Executive Officer. During the call, we will also discuss our outlook, and our prepared remarks will be followed by a question-and-answer session. Please note that we will be discussing certain non-GAAP financial measures that we believe are important in evaluating our performance. Details on the relationship between these non-GAAP measures and the most comparable GAAP measures, and reconciliations thereof, can be found in the press release posted on our website. Also, please note that certain statements made during this call will be forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995.

Such forward-looking statements are subject to risks, uncertainties, and other factors that could cause our actual results to differ materially from those expressed or implied on this call. For additional information, please refer to our cautionary statement in our press release and our filings with the SEC, all of which are available on our website. I would now like to turn the call over to Chuck.

Chuck Divita: Thanks, Mike. I am pleased with our performance for the quarter, with consolidated revenue and adjusted EBITDA both exceeding the midpoint of our guidance ranges, reflecting solid performance in Integrated Care and progress we are making in scaling insurance at BetterHelp. Let me start with some comments on the market environment, as it shapes everything we will discuss today and the actions we are taking to move the business forward. The U.S. market served by our Integrated Care segment has meaningfully evolved in recent years, creating both challenges and new opportunities to build upon our scaled platform.

We have established a market-leading position by delivering at national scale and by expanding services over time to address episodic and longitudinal care needs, improve the health of people living with chronic conditions, and support mental health. We see our ability to provide more comprehensive care at scale positioning us well for the opportunities ahead. One of the more significant market shifts has been client preference moving from subscription-based access toward visit-based arrangements that are more in line with the fee-for-service construct of the U.S. healthcare system.

While this shift has created some near-term changes to our model, we have embraced it as an opportunity to expand our role and the impact we can have through each visit and interaction with Teladoc Health, Inc. For example, earlier this year, we significantly enhanced our flagship 24/7 care offering, broadening the conditions we can address, bringing specialist support to our treating clinicians, adding real-time prescription benefit checks, and expanding our ability to connect patients to additional in-network care as needed. Multiple health plans have added the enhanced offering already, and we expect more to follow suit.

Together with other virtual care services, we expect to see a moderation in the revenue headwinds we have experienced because of the migration of subscriptions to visits, and to exit the year with this moving to a net tailwind. The market for chronic care programs has also evolved, including the proliferation of point solutions that add more fragmentation. Chronic disease affects more than half of American adults and remains a major challenge for patients, health plans, employers, and the U.S. healthcare system. Clients are increasingly looking for a more comprehensive approach supporting people with chronic conditions, a shift that plays well to our strengths.

Over the past several quarters, we have taken deliberate actions to strengthen our position, deepen our clinical model, and drive innovation in our products and capabilities. We see advancements in artificial intelligence as an important catalyst and opportunity for us to lean into these market changes. While we have been using AI and adjacent technologies for some time, we are excited about the potential to leverage it more extensively in our business and advance how we deliver outcomes and results for our clients and the people we serve.

This is why we have invested over the past year in our data infrastructure to power AI through our new Pulse Intelligence engine, as well as enhancements to our Prism care delivery platform used by our providers. By doing so, we are turning our extensive data and AI-driven insights into action as we engage with patients and support their needs. Combined with our deep clinical expertise, our range of services, and trusted relationships with clients, we can deploy AI responsibly and effectively in a virtual-native healthcare setting.

To bring all of this together for the market, we are actively developing new products for release later this year that leverage the full breadth of our clinical services and our AI-enabled capabilities in a comprehensive solution. We believe this new approach will further build on the strengths of our well-established platform, create clear market differentiation, and support sustainable growth. I look forward to providing a further update on this product innovation initiative on our second quarter call. Mental health also represents an important market, and we see strong demand for our services given the extensive unmet need.

Mental health conditions impact over 60 million adults in the U.S., with half of those not receiving treatment and over a third of the U.S. population living in areas with a shortage of mental health professionals. Because of this, the virtual care modality has become an essential access point, and our services are an important avenue for people seeking help and support. Within Integrated Care alone, we generated nearly $140 million in annual revenue for mental health services in 2025 and saw further traction and growth in 2026. Our ability to deliver comprehensive services across virtual care, chronic conditions, and mental health to support overall health is valued by our clients and is strategically important to our Integrated Care business.

The mental health market is also important to BetterHelp, which has built a leading global position in direct-to-consumer virtual therapy. Its high brand awareness, scaled platform, and large and diverse therapist network come together to deliver an exceptional patient experience and achieve positive clinical outcomes. Having served over 6 million people since inception, BetterHelp also represents an important marketplace for mental health professionals to be matched with patients, over 90% of the time in less than 48 hours. However, with mounting pressure on BetterHelp’s U.S. direct-to-consumer cash-pay business, we took decisive action to enter the insurance market and move toward a more durable and balanced model.

In support, we made the highly strategic acquisition of Uplift last year, securing important capabilities, talent, and a baseline of insurance contracts. The integration has gone very well, and the insurance rollout is progressing ahead of our expectations. We are live in 30 states and Washington, D.C., and have credentialed and enrolled over 6 thousand providers. We have also grown insurance contracted lives to over 150 million, a 30 million increase since year-end 2025. Early engagement data is encouraging, with insurance-covered users averaging approximately 20% more sessions than cash-pay users in their first 90 days, suggesting benefits coverage is helping remove cost barriers.

Funnel conversion is also stronger with covered users who enter insurance information during onboarding compared to those moving through a cash-pay-only flow. This is particularly important given BetterHelp’s large inbound demand funnel and the opportunity to convert a greater share of interested users into active ones, resulting in improved customer acquisition efficiency over time. We are beginning to see meaningful separation in performance between markets where insurance has been active for an extended period compared to cash-only markets. For example, in states where insurance was live by 2025, we are seeing a nearly 800 basis point improvement in revenue performance compared to cash-pay-only markets, an indication that insurance access is improving activation and helping stabilize underlying trends as markets scale.

As a result of this momentum, BetterHelp’s total insurance-covered sessions are now running at over 14 thousand per week, representing an annualized revenue run rate of over $75 million, and we now expect to exit 2026 with a run rate of $125 million or more. This further illustrates the real progress we are making in the insurance rollout and in creating a stronger position in the U.S. for BetterHelp. Markets outside the U.S. also represent an important growth opportunity for BetterHelp, contributing to solid growth in user trends and benefiting from more favorable customer acquisition costs on average.

Our localized country launches in 2025 are delivering solid end-market growth, and we look to target one to two new markets for launch in 2026. Finally, operational excellence remains a key area of focus across both business segments, including operating efficiency and effectiveness. We have elevated execution and operating discipline with a clear focus on our cost structure. AI is playing a role here as well as we continue to deploy new capabilities across our business. For example, within BetterHelp, new AI-assisted clinical documentation is reducing administrative burden so therapists can focus more on delivering care.

Since launch, we have generated over 300 thousand notes with strong therapist satisfaction, and more than 2 thousand therapists have used it across 30 thousand sessions in our insurance workflows alone. This technology is saving about 15 minutes per session, adding up to more than 4 million minutes so far. We will continue to look for ways to leverage AI and continue to focus on our cost structure more broadly. Our strategic priorities are aimed squarely at building a stronger business, supported by our financial strength and approach to capital allocation.

This includes making both organic and inorganic investments that are well aligned with our needs and market opportunities, and ensuring a strong balance sheet and financial profile, which is also important to our clients. As I mentioned on the last earnings call, we intend to address our 2027 convertible notes in two phases to meaningfully lower our gross debt position: first, by paying down a substantial portion with available cash and securing new traditional term debt, potentially before year-end; and then paying off the remainder with cash at maturity in 2027.

We believe this appropriately aligns with the cash flow profile and needs of the business, and we will continue to evaluate our capital with a focus on financial strength and long-term shareholder value. Now let me cover our results for the first quarter. Consolidated revenue was $614 million and adjusted EBITDA was $58 million, representing a 9.5% margin. Net loss per share was $0.36 and includes the following pretax per share amounts: amortization of intangible assets of $0.50, stock-based compensation of $0.08, and restructuring costs of $0.07 per share. Consistent with historical seasonality, free cash flow for the quarter was a net outflow of $26 million, ending with $751 million in cash and cash equivalents on the balance sheet.

Net debt to trailing adjusted EBITDA was under 0.9x and 3.6x on a gross debt basis. Turning to segment results, first quarter Integrated Care revenue was $395 million, an increase of 1.5% over the prior year and toward the upper end of our guidance range. Acquisitions contributed approximately 170 basis points to year-over-year growth, with a high single-digit increase in visit revenue largely offset by lower subscription revenues in the quarter. International revenues again grew double digits over the prior year, including a 30% increase from our hybrid care models that provide virtual services in physical settings. U.S. Integrated Care membership finished the quarter at 101.2 million members, above the high end of our guidance range.

We have retained our full-year outlook, which contemplates moderation over the course of the year as health plans deal with potential changes to their underlying enrollment levels. Chronic care program enrollment was 1.2 million at quarter end, up approximately 1% sequentially and 4% year over year, driven largely by increased adoption of multi-condition bundles by clients seeking a more integrated and comprehensive approach. First quarter Integrated Care adjusted EBITDA was $56 million, up 12% over the prior year period and representing a 14.2% margin, slightly above the high end of our guidance range and up approximately 130 basis points from 2025.

Strong adjusted EBITDA performance was driven by the revenue upside I mentioned earlier, as well as disciplined cost management, which more than offset mix-related gross margin pressure from the shift to visit-based arrangements. BetterHelp’s first quarter revenue was $218 million, 9% lower than the prior year period, reflecting continued pressure on the direct-to-consumer cash-pay business. This was offset to some extent by $13 million in insurance-based revenue, which was up $6 million sequentially and at the high end of our expectations. Average paying users declined 9% from the prior year’s quarter to 361 thousand, reflecting a mid-teens decline in the U.S., partially offset by high single-digit growth in non-U.S. markets.

BetterHelp’s adjusted EBITDA for the quarter was $2 million, a 0.9% margin and down from 3.2% in the prior year. Lower cash-pay revenue and the timing of investments to support the stronger insurance rollout drove a lower margin result, offset somewhat by 12% lower advertising and marketing expense versus first quarter 2025—an intentional move as we balance funnel activation and brand awareness to support both cash pay and insurance. Now turning to guidance. For 2026, we expect consolidated revenue of $2.48 billion to $2.58 billion, adjusted EBITDA of $267 million to $306 million, and free cash flow of $130 million to $170 million, with the midpoint of each of these ranges unchanged from our prior outlook.

We now expect full-year stock-based compensation expense to be below $55 million, which would represent a decline of over 30% from 2025 and down over 70% since 2023. We project net loss per share of $1.05 to $0.75. Note that our cash flow and net loss per share guidance ranges do not include any potential impact from changes in our current debt structure, as our remaining convertible notes do not mature until June 2027 and we are still evaluating options to address the notes. For the second quarter, we expect consolidated revenue in the range of $597 million to $626 million and adjusted EBITDA in the range of $55 million to $67 million.

For Integrated Care, we expect full-year revenue growth of 0.8% to 3.5%, with the range narrowing slightly and the midpoint unchanged. This range includes roughly 65 basis points of inorganic growth from prior acquisitions and approximately 60 basis points of benefit from FX. We expect international revenue growth in the high single digits on an organic constant currency basis, and high single-digit growth in visit revenues to be largely offset by lower subscription revenue. As I mentioned earlier, we expect this dynamic to further moderate in 2026 and to exit the year as a tailwind to growth.

Our full-year Integrated Care adjusted EBITDA margin guidance of 15.1% to 16.1% is unchanged, which at the midpoint reflects an increase of 45 basis points over 2025. Margin improvement is expected to be driven by ongoing cost savings and productivity initiatives, largely offsetting mix pressure from the subscription-to-visit shift. For the second quarter, we are guiding to Integrated Care revenue down 1.75% to up 1.75% year over year, which includes roughly 70 basis points of contribution from prior acquisitions.

The sequential comparison versus the first quarter of 2026 is impacted by timing factors, including client revenue we expected to recognize in the second quarter that was recognized in the first quarter, the deferral of certain new contract implementations now expected to go live later in 2026, and a reduced FX outlook. Adjusted EBITDA margin is expected to be in the range of 14.7% to 16% in the second quarter, representing a year-over-year increase of approximately 65 basis points at the midpoint.

Looking out to the second half of the year for Integrated Care, we expect growth to benefit from contract implementations and strong visit revenue growth due in part to our enhanced 24/7 care offering as well as targeted enhancements to our visit funnel conversion. In addition, adjusted EBITDA is expected to benefit from continued execution on cost savings and productivity initiatives. Moving to BetterHelp, we are narrowing our 2026 revenue guidance range to down 6.5% to down 1% versus 2025, with the midpoint unchanged.

This now contemplates full-year insurance revenue in the range of $90 million to $105 million, a $15 million increase from our prior expectation, and an anticipated exit run rate of at least $125 million in the fourth quarter. Cash-pay revenue reflects a continued challenging consumer backdrop, together with the impact of continued scaling of insurance and disciplined advertising and marketing spending. Our guidance for adjusted EBITDA margin of 3% to 4.6% is unchanged versus our prior range. This reflects mix impacts and investments to support the scaling of insurance, partially offset by the lower level of expected ad spending. For the second quarter, we are guiding to BetterHelp revenue down 11.75% to down 5.25% year over year.

At the midpoint, this reflects modest sequential growth—an early milestone reflecting progress toward stabilizing the business. This contemplates insurance revenue in the range of $18 million to $22 million in the quarter, up over 50% sequentially at the midpoint. We expect an adjusted EBITDA margin of minus 0.5% to plus 1.5%, down on a year-over-year basis due to lower cash-pay revenue, mix impacts on gross margin, and continued investments to scale insurance, partially offset by lower ad spend.

Looking at the balance of the year for BetterHelp, we expect continued sequential revenue growth in the third and fourth quarters, driven by higher insurance revenues and growth in non-U.S. markets, and similar seasonality with respect to adjusted EBITDA, with the fourth quarter being the highest due to lower ad spend as a result of holiday ad pricing dynamics. In closing, we are pleased with our first quarter performance and remain on track with our outlook. We are confident in the actions we are taking and encouraged by the progress across our key priorities. Our team remains highly focused on disciplined execution, and we will continue to prioritize actions to drive long-term shareholder value.

With that, we will now open the call for questions.

Operator: We will now begin the question-and-answer session. We ask that you limit yourself to one question. If you would like to ask a question, please press star then one. To withdraw your question at any time, please press star then one again. We will pause just for a moment to compile the roster. Your line is open.

David Harrison Roman: Good afternoon, Chuck, and thank you for taking the question. Maybe I will pick up on something you made in your last remarks around stabilizing the business reflected in your second quarter guidance for Integrated Care. Can you talk a little bit more about the return to growth you are contemplating and whether you think that is now on a sustainable trajectory? And then on BetterHelp, what are you looking for in calling a turn in the growth trajectory in that business?

Chuck Divita: Thanks, David. On Integrated Care, I will ask Mike to talk about some of the puts and takes in the first quarter and the second quarter guidance. In terms of how we look at the rest of the year, there are a few things to point out. We have talked for a while about the mix shift from subscriptions to visits. Just a few years ago, roughly 70% of memberships were in subscription-based models and 30% in visit-based models. As we exit 2026, that will flip to about 70% of memberships in visit-based arrangements.

As we see that dynamic play out, including with some of the new product innovations I mentioned earlier, we expect that to move to a net tailwind. You will start to see that a bit in the third quarter and more in the fourth quarter. In the second quarter, it is still a net headwind, and you are seeing that in the numbers. Let me ask Mike to comment on the first quarter and second quarter guidance, and then I will come back on BetterHelp.

Michael Minchak: Thanks, Chuck. In the first quarter, we had a nice beat versus the midpoint of the guidance range. About a third of that was due to timing and nonrecurring factors, with the remainder due to good execution across the business. On timing, we had a pull-forward from an earlier booking that benefited the first quarter and does not recur in the second quarter. We also had a few contract implementations we anticipated in the second quarter that are now expected to occur in the second half. A third factor is slightly lower FX impact relative to what we had previously assumed for the second quarter.

If you adjust for those factors, which in total were a few million dollars, the sequential progression from the first to the second quarter would look more consistent. We also indicated last quarter that the first-half versus second-half revenue split for Integrated Care in 2026 would be slightly more weighted to the second half relative to 2025, although generally consistent with the average split over the past few years. We still expect that to be the case.

Chuck Divita: One additional thing on Integrated Care: it is about driving greater value for our clients, and we have been very focused on product innovation. You have seen some of that roll out, and I am excited about the work we have going on for new comprehensive solutions to roll out later in the year, really to lean into our core strengths and show up more comprehensively for our clients. The combination of the mix change and new product innovations is how we will drive growth in Integrated Care, as well as our growing international position. In BetterHelp, the insurance entry point is going very well. We are excited about how that is scaling.

As we progress through the year, we expect continued growth and moderation in some of the pressure points. In states that have been live since the third quarter of last year, we are seeing lifts in revenue, and we are seeing early signs that insurance availability is taking down cost barriers and driving more sessions. Insurance is a major catalyst for the turnaround and growth of BetterHelp in the U.S., and international growth is also contributing. We feel confident that our outlook and guidance reflect these dynamics.

Sarah Elizabeth James: I was hoping you could unpack the Integrated Care revenue guide. What are you assuming for ACA subsidy-related disenrollment as we go through the year? Was it as big of an impact on 1Q as expected? And as you think about tightening the guide, what are you assuming for retention or visit utilization going forward?

Chuck Divita: Thank you for the question. The ACA market is still working its way through, and health plans generally expect to see continued moderation in enrollment as payments are due, and we have reflected that in our guidance. I was surprised to see a little bit higher enrollment in the first quarter, but we kept our guidance moderating through the year for that reason. As I mentioned last quarter, we did not expect a material impact on our revenues or visits from ACA-related enrollment shifts due to our mix.

As we go through the year, the mix shift to visit arrangements—we expect to end the year with about 70% of membership in visit arrangements—combined with growing visit revenues, will start to take hold more in the third quarter and even more in the fourth quarter as we go into 2027.

Daniel R. Grosslight: I want to go back to the BetterHelp insurance rollout. It seems to be going a bit better than expectations. With a few quarters under your belt, what have been the biggest drivers of upside, and what have been some surprises on the downside? Has conversion and cannibalization progressed as anticipated? And given the success of insurance and continued weakness in DTC, does that change the calculus on retaining the DTC business?

Chuck Divita: We have executed well against the thesis we had when we acquired Uplift and decided to move BetterHelp into insurance. When I joined, that was one of the main priorities to turn the business around. The team has done an exceptional job rolling out states methodically but with urgency. As consumers see insurance coverage is available, it is driving higher funnel conversion; once on the platform, covered users are having more sessions than cash-pay users. In markets that have been live longer, we are seeing the revenue needle move, which speaks to cannibalization netting positively. A key challenge in insurance has been ensuring we have the right therapist capacity to meet demand.

We have credentialed and enrolled over 6 thousand providers, and BetterHelp has a large network of over 30 thousand in its consumer cash-pay business, so we are urgently activating that to meet coverage needs. As for retaining DTC, our starting point is different given our substantial consumer market position and the significant unmet need. We do not plan to turn off that consumer channel now; however, we expect continued growth in insurance in 2026 and 2027 and ultimately see insurance surpassing consumer in the U.S. We will revisit the mix at the appropriate time, but for now offering both cash pay and insurance is the right approach.

Jailendra P. Singh: I want to ask about the Chronic Care business. Would you describe the world as behind given the momentum you seem to be seeing there and some stabilization? It is early in the selling season, but can you share early reads on the selling season, RFP trends, demand environment, or the types of offerings seeing the most interest?

Chuck Divita: On the selling season, it is early, and we are focused on building the pipeline. Clients are facing rising medical costs and other issues and are looking to consolidate and reduce the number of point solutions, which aligns with the scope of services we bring. In chronic care specifically, bundled products now represent about 70% of what we are doing, reflecting demand for integrated solutions. We have exciting innovations underway, taking a more population-oriented view that leverages our breadth of clinical services, data, and AI to help clients consolidate services and drive stronger outcomes. Regarding GLP-1s and weight management, the market has evolved with changes in capacity, pricing, and modalities.

We approach this from a clinical point of view focused on patient care and outcomes, not prescribing per se. Our wraparound services and ability to prescribe when appropriate resonate with clients. We have arrangements with partners such as Gift Health and Lilly, and our product portfolio is well positioned. Ultimately, the product innovation I mentioned will go broader than weight management.

Analyst: On the Integrated Care side, there has been a lot of work to monetize the members added over the past few years. Beyond the mix shift into visit-based revenues, where else are you seeing good traction on initiatives you have been rolling out? And what are the next steps as you get deeper into the year to continue to drive revenue growth in the back half?

Chuck Divita: The virtual care part of our business is very important. In addition to the mix changes, our new enhanced 24/7 care offering broadens the services we can provide, helps address issues in-visit that might previously have required a specialist referral, and serves as a connection point to additional services. For example, ensuring a care provider is aware that someone is eligible for one of our chronic care programs and making them aware if appropriate. We have connected this with our Catapult acquisition so that in those moments we can link members to other services we have.

We are using our scaled, integrated platform to find activation points where historically we might not have connected the dots or where patients were not aware. The innovation we are driving beyond 24/7 care will make a real difference. Chronic care has become a highly competitive, crowded space with a lot of point-solution fatigue. The fact that we can show up and do multiple things for the patient and demonstrate the combined value to the client is how we will drive growth in chronic care.

Charles Rhyee: You said that in the states where you launched the insurance product you are seeing stabilization of the business. Historically, a lot of people did not convert in the funnel because of cost. It sounds like insurance is helping. Are you seeing any cannibalization of people who might have gone down the cash-pay path now going through insurance? Has this been additive overall in the states launched so far?

Chuck Divita: I appreciate the question. It is still relatively early, though we have more maturity in some states. Net of some cannibalization, we are seeing about an 800 basis point improvement in revenue performance.

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