Wednesday, May 29, 2024

Teladoc Health CEO Jason Gorevic departs after stock falls 22% in February -Dlight News

Jason Gorevic, CEO and board member of telehealth platform Teladoc Health, is stepping down after 15 years leading the company, and Mala Murthy, the company’s chief financial officer, is stepping in as acting CEO. 

Gorevic’s departure, effective immediately, comes after the company’s stock plummeted 22% in February. It missed fourth-quarter earnings estimates and projected 2024 revenue to be lower than expected at $630 million to $645 million, a net loss per share of $0.45 to $0.55 cents. 

“We thank Jason for his many achievements and contributions during the 15 years he led Teladoc Health. We wish him success in his future endeavors,” David B. Snow, Jr., chairman of Teladoc Health’s Board of Directors, said in a statement. “We also thank Mala Murthy, a highly capable executive, for assuming the role of chief executive as we seek a permanent replacement. We are confident that this leadership transition will position the company for long-term success and value creation.”

The statement also said that the company has retained an executive search firm to assist in evaluating internal and external candidates to be Gorevic’s permanent successor.

In a letter to Teladoc employees, shared with MobiHealthNews, Murthy said her focus during the transition period would be ensuring the company continues to operate effectively, deliver on its commitments to clients and members and preserve its values and culture. 

THE LARGER TREND

The virtual care company, which has been operational since 2005 and went public in July 2015 under Gorevic’s leadership, has had tumultuous financial periods.

The company’s stock price reached a high of $293.66 per share in February 2021, gradually falling to $14.49, its current stock price as of the date this article was published. 

The virtual care giant faced a class action lawsuit filed in 2022 by shareholder Jeremy Schneider on behalf of parties that purchased Teladoc shares between Feb. 2021 and July 2022 pertaining to Teladoc’s $18.5 billion merger with chronic care platform Livongo. 

The suit alleged its representatives misled investors by downplaying the challenges it faced integrating Livongo. It also claimed the company made misleading statements and “artificially inflated the price of Teladoc’s stock” during those 17 months. 

Subsequently, in 2022, the company reported a historic loss of $13.7 billion, which included $13.4 billion in noncash goodwill impairment charges related to the virtual care company’s Livongo acquisition. 

Still, last year, Teladoc saw its 2023 revenue grow 8% to $2.6 billion, up from $2.4 billion in 2022. Revenue from its direct-to-consumer behavioral health offering, BetterHelp, increased 11% to $1.1 billion. Its integrated care segment – its virtual care business aimed at employers, health plans and health systems – garnered revenue of $1.5 billion.

The company reported a 2023 full-year net loss of $220.4 million or $1.34 per share and an adjusted EBITDA increase of 33% to $328.1 million, its most profitable year to date. Operating cash flow for 2023 increased from $189.3 million to $350 million. 

In the statement announcing Gorevic’s departure, the company reiterated its guidance for the first quarter and full year of 2024.

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