Livongo Reports Third Quarter 2020 Financial Results
- Third quarter total revenue of
$106.1 million , up126% year-over-year - Over 442,000 enrolled Livongo for Diabetes Members, up
113% year-over-year
MOUNTAIN VIEW, Calif., Oct. 28, 2020 (GLOBE NEWSWIRE) -- Livongo Health, Inc. (NASDAQ: LVGO), the leading Applied Health Signals company empowering people with chronic conditions to live better and healthier lives, today announced financial results for its third quarter ended September 30, 2020.
“Livongo delivered another quarter of greater than
“We remain very confident in Livongo’s continued growth, and we believe that joining with Teladoc Health (NYSE: TDOC) will build on Livongo’s success and dramatically accelerate our mission of empowering people with chronic conditions to live better and healthier lives,” said Glen Tullman, Founder and Executive Chairman of Livongo. “Many of our Members and Clients have expressed excitement for our pending combination with Teladoc Health because it offers them, for the first time, a truly comprehensive consumer centered virtual care solution.”
Third Quarter Fiscal 2020 Financial Highlights:
- Revenue: Total revenue for the quarter was
$106.1 million , up126% year-over-year, driven by the continued adoption of our Applied Health Signals platform. - Gross Margin: GAAP gross margin of
75.6% and non-GAAP gross margin of76.3% . - Net Loss and Non-GAAP Net Income: GAAP net loss of
$25.5 million , and GAAP net loss per share attributable to common stockholders of ($0.26) on a diluted basis; and non-GAAP net income of$19.2 million , and non-GAAP net income per share attributable to common stockholders of$0.16 on a diluted basis. - Adjusted EBITDA:
$20.7 million in the third quarter of 2020. - Livongo for Diabetes Members: Over 442,000 as of September 30, 2020, up
113% year-over-year. - Livongo Clients: 1,402 Clients as of September 30, 2020, up
71% year-over-year. - Estimated Value of Agreements (EVA):
$145.9 million up from$85.5 million in the third quarter of 2019, representing71% growth year-over-year. EVA consists of the estimated value of agreements signed in the quarter with new Clients or expansions entered into with existing Clients.
“We believe the future of health is about keeping people healthy at home and being able to do so at scale,” said Livongo President Dr. Jennifer Schneider, M.D., M.S. “This includes meeting individuals where they are in their health journey in order to understand their status, determining their care needs, and recommending a next-best action. We call this consumer centered virtual care, which is enabled by connected devices and powered by data science. By combining Livongo’s advanced offerings and underlying data science platform with Teladoc’s telehealth, we can offer advantages that align with the move towards consumer centered virtual care.”
“Livongo delivered another strong performance in the third quarter, with Revenue, Member growth, and EVA all coming in better than expected,” said Lee Shapiro, Livongo Chief Financial Officer. “Revenue for the third quarter was driven by higher than expected enrollment, enabled by the investments we have made in our data science capabilities.”
Additional information on Livongo's reported results is included in the financial tables below.
Conference Call
Given the pending transaction with Teladoc Health, Livongo is not hosting a conference call in conjunction with its third quarter 2020 earnings release.
Non-GAAP Financial Measures and Key Metrics
Reconciliations of non-GAAP financial measures to the most directly comparable financial results as determined in accordance with GAAP are included at the end of this press release following the accompanying financial data. We believe that these non-GAAP financial measures, when taken together with the corresponding GAAP financial measures, provide meaningful supplemental information regarding our performance by excluding certain items that may not be indicative of our business, results of operations, or outlook. However, non-GAAP financial information is presented for supplemental informational purposes only, has limitations as an analytical tool and should not be considered in isolation or as a substitute for financial information presented in accordance with GAAP. In addition, other companies, including companies in our industry, may calculate similarly-titled non-GAAP measures differently or may use other measures to evaluate their performance, all of which could reduce the usefulness of our non-GAAP financial measures as tools for comparison. We compensate for these limitations by analyzing current and future results on a GAAP basis as well as a non-GAAP basis and by providing specific information regarding the GAAP items excluded from these non-GAAP financial measures.
For a description of these non-GAAP financial measures, including the reasons management uses each measure, please see the section of the tables titled "About Non-GAAP Financial Measures."
In addition, we calculate and present certain key business metrics that we believe are useful in evaluating our business. For a description of these key metrics, including the reasons management uses each measure, please see the section of the tables titled "Key Metrics."
About Livongo
Livongo empowers people with chronic conditions to live better and healthier lives, beginning with diabetes and now including hypertension, weight management, diabetes prevention, and behavioral health. Livongo pioneered the category of Applied Health Signals to offer Members clinically-based insights that focus on the whole person and make it easier to stay healthy. Using its AI+AI engine, Livongo's team of data scientists aggregate and interpret substantial amounts of health data and information to create actionable, personalized and timely health signals delivered to Livongo Members exactly when and where they need them. The Livongo approach delivers better clinical and financial outcomes while creating a different and better experience for people with chronic conditions. For more information, visit: www.livongo.com or engage with Livongo on LinkedIn or Twitter.
Cautionary Note Regarding Forward-Looking Statements
This communication contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements generally include statements regarding the potential transaction between Teladoc Health, Inc. (“Teladoc”) and Livongo Health, Inc. (“Livongo”), including any statements regarding the expected timetable for completing the potential transaction, the ability to complete the potential transaction, the expected benefits of the potential transaction (including anticipated synergies, projected financial information and future opportunities) and any other statements regarding Teladoc’s and Livongo’s future expectations, beliefs, plans, objectives, results of operations, financial condition and cash flows, or future events or performance. These statements are often, but not always, made through the use of words or phrases such as “anticipate,” “intend,” “plan,” “believe,” “project,” “estimate,” “expect,” “may,” “should,” “will” and similar expressions. All such forward-looking statements are based on current expectations of Teladoc’s and Livongo’s management and therefore involve estimates and assumptions that are subject to risks, uncertainties and other factors that could cause actual results to differ materially from the results expressed in the statements. Key factors that could cause actual results to differ materially from those projected in the forward-looking statements include the ability to obtain the requisite Teladoc and Livongo stockholder approvals; uncertainties as to the timing to consummate the potential transaction; the risk that a condition to closing the potential transaction may not be satisfied; the risk that the anticipated U.S. federal income tax treatment of the transaction is not obtained; litigation relating to the potential transaction that have been or could be instituted against Teladoc, Livongo or their respective directors; the effects of disruption to Teladoc’s or Livongo’s respective businesses; restrictions during the pendency of the potential transaction that may impact Teladoc’s or Livongo’s ability to pursue certain business opportunities or strategic transactions; the effect of this communication on Teladoc’s or Livongo’s stock prices; transaction costs; Teladoc’s ability to achieve the benefits from the proposed transaction; Teladoc’s ability to effectively integrate acquired operations into its own operations; the ability of Teladoc or Livongo to retain and hire key personnel; unknown liabilities; and the diversion of management time on transaction-related issues. Other important factors that could cause actual results to differ materially from those in the forward-looking statements include the effects of industry, market, economic, political or regulatory conditions outside of Teladoc’s or Livongo’s control (including public health crises, such as pandemics and epidemics); changes in laws and regulations applicable to Teladoc’s business model; changes in market conditions and receptivity to Teladoc’s services and offerings; results of litigation; the loss of one or more key clients of Teladoc (including potential adverse reactions or changes to business relationships resulting from the announcement or completion of the potential transaction); changes to Teladoc’s abilities to recruit and retain qualified providers into its network; the impact of the COVID-19 pandemic on the parties’ business and general economic conditions; risks regarding Livongo’s ability to retain clients and sell additional solutions to new and existing clients; Livongo’s ability to attract and enroll new members; the growth and success of Livongo’s partners and reseller relationships; Livongo’s ability to estimate the size of its target market; uncertainty in the healthcare regulatory environment; and the factors set forth under the heading “Risk Factors” of Teladoc’s Annual Report and Livongo’s Annual Report, in each case on Form 10-K, and in subsequent filings with the U.S. Securities and Exchange Commission (the “SEC”). These risks, as well as other risks associated with the potential transaction, are more fully discussed in the joint proxy statement/prospectus filed with the SEC in connection with the proposed transaction. Other unpredictable or unknown factors not discussed in this communication could also have material adverse effects on forward-looking statements. Neither Teladoc nor Livongo assumes any obligation to update any forward-looking statements, except as required by law. Readers are cautioned not to place undue reliance on these forward-looking statements that speak only as of the date hereof.
No Offer or Solicitation
This communication does not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote or approval, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No offer of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended.
Important Information for Investors and Stockholders
In connection with the potential transaction, Teladoc has filed a registration statement on Form S-4 (File No. 333-248568) with the SEC containing a prospectus of Teladoc that also constitutes a definitive joint proxy statement of each of Teladoc and Livongo. The registration statement, as amended, was declared effective by the SEC on September 15, 2020. Each of Teladoc and Livongo commenced mailing copies of the definitive joint proxy statement/prospectus to stockholders of Teladoc and Livongo, respectively, on or about September 15, 2020. Teladoc and Livongo may also file other documents with the SEC regarding the potential transaction. This communication is not a substitute for the joint proxy statement/prospectus or registration statement or for any other document that Teladoc or Livongo have filed or may file with the SEC in connection with the potential transaction. INVESTORS AND SECURITY HOLDERS OF TELADOC AND LIVONGO ARE URGED TO READ THE JOINT PROXY STATEMENT/PROSPECTUS AND OTHER DOCUMENTS THAT ARE FILED OR WILL BE FILED WITH THE SEC, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO THESE DOCUMENTS, CAREFULLY AND IN THEIR ENTIRETY BECAUSE THEY CONTAIN IMPORTANT INFORMATION. Investors and security holders will be able to obtain free copies of the joint proxy statement/prospectus and other documents filed with the SEC by Teladoc or Livongo through the website maintained by the SEC at http://www.sec.gov. Copies of the documents filed with the SEC by Teladoc will be available free of charge on Teladoc’s website at https://ir.teladochealth.com and copies of the documents filed with the SEC by Livongo will be available free of charge on Livongo’s website at https://ir.livongo.com/. Additionally, copies may be obtained by contacting the investor relations departments of Teladoc or Livongo.
Teladoc and Livongo and certain of their respective directors, certain of their respective executive officers and other members of management and employees may be considered participants in the solicitation of proxies with respect to the potential transaction under the rules of the SEC. Information about the directors and executive officers of Teladoc is set forth in its proxy statement for its 2020 annual meeting of stockholders, which was filed with the SEC on April 14, 2020. Information about the directors and executive officers of Livongo is set forth in its Annual Report on Form 10-K for the year ended December 31, 2019, which was filed with the SEC on March 24, 2020, and its proxy statement for its 2020 annual meeting of stockholders, which was filed with the SEC on April 6, 2020. These documents can be obtained free of charge from the sources indicated above. Additional information regarding the interests of such participants in the solicitation of proxies in respect of the potential transaction are included in the registration statement and joint proxy statement/prospectus and other relevant materials filed with the SEC.
The term “Livongo” and such terms as “the company,” “the corporation,” “our,” “we,” “us” and “its” may refer to Livongo Health, Inc., one or more of its consolidated subsidiaries, or to all of them taken as a whole. All of these terms are used for convenience only and are not intended as a precise description of any of the separate companies, each of which manages its own affairs.
Investor Contact:
Jason Plagman
Investor-relations@livongo.com
785-550-6048
Media Contact:
John Hallock
press@livongo.com
617-615-7712
LIVONGO HEALTH, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except per share data)
(unaudited)
| September 30, 2020 | December 31, 2019 | ||||||
| ASSETS | |||||||
| Current assets: | |||||||
| Cash and cash equivalents | $ | 644,398 | $ | 241,738 | |||
| Short-term investments | 152,500 | 150,000 | |||||
| Accounts receivable, net of allowance for doubtful accounts of | 78,479 | 40,875 | |||||
| Inventories | 22,513 | 28,983 | |||||
| Deferred costs, current | 30,269 | 16,051 | |||||
| Prepaid expenses and other current assets | 16,888 | 9,860 | |||||
| Total current assets | 945,047 | 487,507 | |||||
| Property and equipment, net | 19,321 | 10,354 | |||||
| Operating lease right-of-use assets | 15,342 | — | |||||
| Restricted cash, noncurrent | 1,270 | 1,270 | |||||
| Goodwill | 35,801 | 35,801 | |||||
| Intangible assets, net | 14,390 | 16,469 | |||||
| Deferred costs, noncurrent | 12,141 | 5,700 | |||||
| Other noncurrent assets | 650 | 3,460 | |||||
| TOTAL ASSETS | $ | 1,043,962 | $ | 560,561 | |||
| LIABILITIES, REDEEMABLE CONVERTIBLE PREFERRED STOCK, AND STOCKHOLDERS’ EQUITY | |||||||
| Current liabilities: | |||||||
| Accounts payable | $ | 15,582 | $ | 8,362 | |||
| Accrued expenses and other current liabilities | 37,059 | 27,801 | |||||
| Deferred revenue, current | 6,785 | 3,945 | |||||
| Advance payments from partner, current | 1,722 | 1,767 | |||||
| Total current liabilities | 61,148 | 41,875 | |||||
| Operating lease liabilities, noncurrent | 15,383 | — | |||||
| Deferred revenue, noncurrent | 1,781 | 654 | |||||
| Advance payment from partner, noncurrent | 7,624 | 7,754 | |||||
| Convertible senior notes, net | 402,935 | — | |||||
| Other noncurrent liabilities | 1,128 | 2,914 | |||||
| TOTAL LIABILITIES | 489,999 | 53,197 | |||||
| Commitments and contingencies | |||||||
| Redeemable convertible preferred stock, par value of | — | — | |||||
| Stockholders’ equity: | |||||||
| Preferred stock, par value of | — | — | |||||
| Common stock, par value of | 102 | 95 | |||||
| Additional paid-in capital | 750,726 | 671,467 | |||||
| Accumulated deficit | (196,865 | ) | (164,198 | ) | |||
| TOTAL STOCKHOLDERS’ EQUITY | 553,963 | 507,364 | |||||
| TOTAL LIABILITIES, REDEEMABLE CONVERTIBLE PREFERRED STOCK, AND STOCKHOLDERS’ EQUITY | $ | 1,043,962 | $ | 560,561 | |||
LIVONGO HEALTH, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(unaudited)
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
| 2020 | 2019 | 2020 | 2019 | ||||||||||||
| Revenue | $ | 106,104 | $ | 46,860 | $ | 266,850 | $ | 119,842 | |||||||
| Cost of revenue(1)(2) | 25,922 | 11,448 | 65,496 | 33,275 | |||||||||||
| Gross profit | 80,182 | 35,412 | 201,354 | 86,567 | |||||||||||
| Operating expenses: | |||||||||||||||
| Research and development(1)(3) | 18,907 | 17,794 | 48,713 | 37,079 | |||||||||||
| Sales and marketing(1)(2) | 37,188 | 23,923 | 97,724 | 56,399 | |||||||||||
| General and administrative(1)(3) | 45,674 | 14,182 | 83,547 | 41,998 | |||||||||||
| Change in fair value of contingent consideration | (2,220 | ) | 55 | (2,134 | ) | 1,011 | |||||||||
| Total operating expenses | 99,549 | 55,954 | 227,850 | 136,487 | |||||||||||
| Loss from operations | (19,367 | ) | (20,542 | ) | (26,496 | ) | (49,920 | ) | |||||||
| Interest income | 1,517 | 1,418 | 3,993 | 2,059 | |||||||||||
| Interest expense | (7,689 | ) | — | (10,009 | ) | — | |||||||||
| Other expense, net | (38 | ) | (9 | ) | (99 | ) |
LVGO
NASDAQ:LVGOLVGO RankingsLVGO Latest NewsLVGO Stock DataAbout LVGOLivongo Health, Inc. engages in the development and operation of consumer digital health platform. It offers Livongo for Diabetes, Livongo for Hypertension, Livongo for Prediabetes and Weight Management, and Livongo for Behavioral Health by myStrength. The company was founded by Kimon Angelides and Glen E. Tullman on October 16, 2008 and is headquartered in Mountain View, CA.
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