Teladoc Health, Inc. (TDOC) Earnings Call Transcript & Summary

Good afternoon, and welcome. My name is Lisa Gill and I head healthcare services here at JPMorgan. It is with great pleasure this afternoon that I have with us Teladoc Health. Presenting for Teladoc Health is CEO, Chuck Divita. Post Chuck's presentation, we will have a little fireside chat here, okay? So, Chuck?

Great. Thanks, and good afternoon, everyone. Hopefully, you can hear okay with this mic. As Lisa said, I'm Chuck Divita, the CEO of Teladoc Health. Really appreciate the opportunity to be here and also for you attending the session. I'm going to provide a company overview and talk about our 2 main segments. Also how we see the role we play in terms of addressing some of the key challenges in health care. I'm going to talk about a bit our 2025, our priorities we set in early 2025, and the progress we've made there, as well as our areas of focus in 2026, and I'm going to give a few examples of what we've got going on. And then I'll wrap with some closing comments, and then we'll move to Q&A. And I have to do the slides, too. Okay. As you may know, the company has really been a pioneer in terms of the adoption and scaling of virtual care. Really over the 20-year period that the company has been around and really established a leading global position in what we do. We deliver and we orchestrate care across virtual care, chronic condition management, and mental health. And we leverage technology pretty importantly in how we deliver that. We have a diversified distribution model in terms of how we go to market. We serve health plans and payers, employers, institutions and consumers. And we operate at substantial scale with respect to our part of the sector, both in the U.S. and a significant and growing international position. We believe that our leadership position, our breadth of products and services, as well as our build to impact client impacts and value are really the things that differentiate us in the marketplace. As you can see on the slide, we generated $2.5 billion of revenues on a trailing 12-month basis, that's a -- as of the third quarter '25, the last quarter that we reported, and just over $270 million in adjusted EBITDA. Really, since I've joined the company, which was about 18 months ago, we've really been focused on innovation and leveraging the assets and capabilities that we have from this leadership position that the company has created and really sharpening our focus on execution. Our largest segment is what we call Integrated Care. This is where you'd see the largest breadth of services that we provide. And we really have developed a really leading position in terms of over 100 million people in the United States have access to 1 or more of our products and services. We have 12,000 clients installed. And as the name suggests, we really take an integrated approach in terms of patient care and helping people with their physical health and their mental well-being. And we do this in 3 primary ways. First is what we call virtual care. So we provide longitudinal care as well as episodic care including through our flagship 24/7 offering, that's an important access point for millions of people in terms of the ability to access care. And one we think we can reset the bar as well, and I'm going to touch on that more later. We also help people manage their chronic conditions with a particular focus on cardiometabolic health in diabetes, hypertension, weight and obesity. And we have over 1 million people enrolled in those programs today. And we also are a significant player in virtual mental health, both in terms of content, but also therapy, psychiatry because we believe that mental health is a fundamental part of overall health and we conducted 1 million visits last year in the Integrated Care segment alone. And we really leverage purpose-built technology to do this, and I'll just give some examples. We have something called our Prism care delivery platform, which we've made some enhancements over the last year, and this is really the platform and how we can do an integrated approach to care across those various things. And I'll give you an example of how we leverage that a little bit later. And we also have developed and invested significantly in our data platform, which we call Pulse. And that's -- if you think about the level of data that we have as a leader, we have device data and a variety of different data points, both ours as well as data that we intake. And then we're able to apply artificial intelligence against that data set, in terms of how we engage and activate and the insights it provides. And that platform is really what's going to be fielding that for us going forward. And we have proprietary devices as well. We serve the hospital and health system market, where we have devices that I'll show you a little bit later that sit in the acute care setting and other health care settings. And we also have proprietary connected devices that help us manage people with chronic conditions. So technology plays a pretty important role in what we do. In addition to the U.S., like I said, we have a significant international position in Integrated Care. And what distinguishes there is we have an ability to tailor what we do to the unique markets that we serve. As you know, health care varies and it's different in terms of how it's delivered and funded and so forth in different countries. I won't repeat the data that you see on the slide in terms of the financials, but we generate revenues in this segment in 2 main ways. One is through subscription-based model, so think about per member, per enrollee, those kinds of things, and visit-based arrangements. And think about more like getting paid when you do something, right? And we've seen a migration over a period of time, certainly in recent years, moving from these subscription models more towards visit-based economics. And if you think about it, that's kind of the rest of the U.S. health care system is a fee-for-service system. So while that's had an impact on us, we've leaned into that change, and I'll give you an example a little bit later to show how we have focused on revenues from a perspective of generating via visits and the level of services that we do. So in integrated care, we're executing across a number of levers to drive the performance in that segment. Our other segment is something called BetterHelp, and you may be familiar with them, but it's the largest virtual therapy business globally. We've had the opportunity to serve over 5,000 people -- or excuse me, 5 million people in 100 different countries. And think about this segment more of a pure-play mental health offering, but with a very strong consumer orientation. We have very strong brand awareness and a Net Promoter Score of over 70. We have a large, diverse and quality therapist network to be able to deliver services over 30,000, and we're able to match people with a therapist over 90% of the time in under 48 hours. And we think that's really critical to obviously timely access to care in mental health, but also in the kinds of outcomes that we could deliver and we think that really distinguishes us. This is a business that we also continue to expand internationally. Over 20% of the revenues of this segment now are coming from non-U.S. markets. But it's also a business that's been under pressure in recent years, really since 2023. And predominantly in the U.S., where we have a currently a direct-to-consumer cash pay model, and that's been a challenging environment and it continues to be. And that's why when I joined, like I said, 18 months ago, we made the strategic decision to take BetterHelp into the insurance covered benefit space. And we think that's an important initiative for a variety of reasons, but including 1 user conversion, BetterHelp has 4 million people roughly a year start the registration process to use BetterHelp. It's a massive funnel. But less than 20% convert and become active paying users. And while there's various reasons for that delta, the predominant reason is cost because we're asking someone to pay out of pocket. So the ability to access your insurance we believe is going to help with user conversion. The second is in retention. So giving people the ability to use the platform, both on a cash pay and an insurance model. And then third, we believe we're going to see more sessions per user because people if they need more therapy, it's not making a financial decision as much as they are with insurance. So it's an important initiative. It's early. It's going to take us some time to ramp up insurance to sort of overcome the challenges and the cash pay model, but an important initiative, and we are seeing really good early progress, and I'll touch more on that later. So we're heads down on a number of initiatives to really stabilize BetterHelp and more realize its potential as -- with the leadership position it has globally. When you step back though, we -- and you all know this very well because you're at a health care conference and you're interested in health care. The challenges in health care are immense. If you think about affordability of health care, medical cost inflation, the prevalence of chronic disease, unmet mental health need and the pressure on providers. And it's really impacting all stakeholders and in some cases, unprecedented in terms of what impact it's having with health plans and with employers. And we believe as the leader, we have an opportunity to really lean into these challenges with our solutions and drive impact for our clients, certainly impact the -- and improve the cost of care. Help people manage their conditions, which is a huge issue globally, but also in the United States, of course, and help people with their mental challenges as well as extend provider capacity. And so that's really how we're looking at this company strategically in terms of how we drive value going forward. And really why in early 2025, we really refocused the company around 4 key strategic priorities, and let me just hit these quickly. So the first is enhancing our U.S. Integrated Care business really through our services, our clinical impact as well as innovation. The second is to leverage that scaled mental health position. We're a major player in virtual mental health both in Integrated Care, and of course, with BetterHelp. The third is to generate and grow the value of the asset we have with our international position. And fourth is around operational excellence in terms of business performance and operating efficiency. And I believe we've made pretty significant progress across each of those over the last year, and it's really what's been guiding our investments and actions. So examples, in Integrated Care in the U.S., we have really focused on product innovation, and we have new products coming out for 2026 across virtual care, chronic condition management and mental health, new offerings for 2026 that we're bringing to market. We've also innovated in technology. I mentioned some of those platforms earlier. And we've expanded our ability in preventative care with the acquisition of a company called Catapult Health that really extends our ability to meet people where they are and help them diagnose conditions and get them the care that they need. In mental health, we've made big moves there, moving BetterHelp into insurance with a credible path to scale and grow that. We've grown internationally. We have these new localized models that we've developed. We're now in 7 countries with local language, local therapists to drive value from an international perspective. And we also developed a new product called Wellbound that leverages the strengths of our Integrated Care business and BetterHelp to be able to serve the employee assistance program market with a new EAP offering. In International, we delivered double-digit growth, and we've developed and expanded what we call hybrid care models. I'll have an example of that a little bit later. And we also acquired a company called Telecare that expanded our position in the Australian market. And in operational excellence, we've done a number of things to streamline the company. We've been able to also add talent as well over the course of the year, and been able to hit our productivity and our cost savings goals as well. In addition, we were able to really upgrade our game in terms of operational excellence and how we deliver for clients, including we received ISO 9001 Certification for key U.S. processes. So a lot of things and accomplishments to build on as we enter 2026. So I want to just share a few examples of what I mean by that, maybe put a little bit more detail on what -- where we're headed. This morning, I'm not sure what time zone, but sometime earlier today, we announced the launch of our new 24/7 offering. And we're really excited about bringing this to market. You may -- if you track the company, you may have heard me talk about the need to make visits more impactful, more impactful for patients, more impactful for clients and certainly more impactful to us as a business. And this new offering expands the scope of services that we can provide in 24/7 care, which is important. We also have the ability with that Prism platform that I mentioned earlier to surface actionable information right at the point of care, for example, identifying and bringing to the care providers attention a potential gap in care and bringing that to the members, the patient's attention and seeing if we can address that care gap and we're seeing good uptake there. That's important for quality, but it's also important if you're a health plan, closing those care gaps is critical. We also have the ability now to bring specialty to our care provider in a real-time basis, 30 specialties. So our care provider that's got that member and trying to address that particular situation, accessing a specialist to confirm and strengthen and develop the care plan as well as avoid unnecessary referrals, which is a challenge, and it knows does it cost money and you can see the cost savings there, but the patient has to wait and we'll have to -- have to see the specialists. And we're clogging up our specialist practices with unnecessary referrals. So we think that's a really important development. And we're also able to identify and connect the patient with other services that they may be eligible for and benefit from Teladoc, as well as connect them with inpatient care if that's what's needed. So if you think about this offering where we have millions and millions of visits each year, making those visits have more impact. And as part of a broader Integrated Care strategy, it also ties back to what I said earlier about that migration from subscriptions to visit based model. So now these visits become more valuable, more impactful, we can meet more needs and we can also activate additional strategies and use cases. So that's new, and we're excited to roll that out in 2026. The next thing I wanted to hit on was chronic care. And I'm sure you know all these statistics, but chronic care is -- chronic additions are a major issue, certainly globally, but definitely in the United States. When you look at the prevalence of hypertension, diabetes, weight, obesity, well over $1 trillion a year spent on chronic disease and a significant portion on cardiometabolic-related diseases and complications. And as a clinical organization looking to drive integrated more holistic care, the ability to help support people with chronic conditions that is fundamental to the value proposition. So we have, like I said, over 1 million people enrolled in these programs. I think what's distinguished us here is that we can -- we were focused on 1 cohort or 1 condition, we're looking across a client's population so that we can drive the maximum amount of impact and do it at the scale that we do. And we're excited about the new things that we're bringing to market for 2026. We have new AI-enabled stratification models that can look at that information, that data and identify trends and other things. And then importantly, trigger an additional clinical intervention, if you think about high risk or rising risk populations, that's where things go wrong. And so we're excited about the ability to leverage the data we have and the insights to create those actions. We've also got new connected devices coming online, new features and enhancements to our programs. We're excited about that. And importantly, the ability to bring other care providers to the table. So if you think about someone that's got a chronic condition and a complication, their levels aren't under control, the ability to bring other care providers, including the ability to interact with their care provider. All of this is aimed at driving better outcomes for people and ROI for our clients. And we think with the -- certainly, the proliferation of point solutions that are out there, our ability to show up for members more holistically and help them with their health across all of those aspects, including mental health, we think going to be differentiators for us. The third example I wanted to use was the hybrid care model I mentioned earlier that we're doing in our international markets. And again, this is the ability for us to bring virtual services into a physical setting. And so we are leveraging our proprietary devices to do this as well and meet local needs. For example, in Canada, we're using that hybrid model to bring emergency services and primary care to rural and remote communities. And that's really a lifeblood really rather than having to drive 5 hours if you're in some rural parts of Canada, to get care, and it helps the system stay engaged there for access to quality care. In France, a variety of different settings, primary care and specialty care in a hybrid model. And in Australia, we're doing this in the similar ways, also doing some work in elder care. So I think these hybrid models have a lot of promise. They've certainly been a part of the growth story for our international business, and we're excited about being able to expand these solutions, both in the current markets we're in as well as new markets. And then the last example I'll use is BetterHelp. I touched on this earlier in terms of the move to the insurance, but let me just provide a few more comments. We really accelerated this effort with a tuck-in acquisition that we completed at the end of April in 2025. And 2 months later, we were in market in our first state with BetterHelp insurance. That was Virginia. And as of year-end, that's increased to 12 states plus D.C. And we're going to continue to roll this out over the course of 2026. We're also growing our credential therapists. So we're over 3,000 at the end of 2025, in terms of license credential therapists to serve the insurance network. We're also adding new in-network arrangements. We continue to expand that with payers. We're over 120 million people that will have access to BetterHelp once we scale that. And we're methodically rolling this out because we want to make sure we've got that strong user experience that I mentioned earlier as well as to be able to meet the demand. I mean BetterHelp has got a massive brand awareness and a massive funnel. And we want to make sure that as we offer insurance that we're able to meet the demand with the network. While it's early in the journey. And certainly, like I said, we'll take time to roll out and overcome some of the challenges that we've got in the direct-to-consumer model. We're encouraged by the early results we're seeing, both in terms of the execution of scaling, which I think has been quite remarkable, but also metrics like user conversion, sessions per user and other metrics. So it gives us a lot of -- a lot of excitement in terms of where we can ultimately take insurance as part of BetterHelp. And we're heads down, again, focused on rolling that thing out over the course of 2026. All these initiatives are really enabled by our sound financial position. We had over $700 million in cash on the balance sheet at the end of 9/30 into the third quarter. And that was after paying off $500 million of converts that were due. We do have $1 billion of converts out there coming due in middle 2027, but we believe with our cash position, our free cash flow generation and our business model that we'll have a good range of options to both address the converts as well as have an appropriate go-forward capital structure for us. And of course, we'll continue to execute across all of the performance levers at the bottom to drive results. So I think in closing, we're going to continue to lean into our market position and -- with our solutions, with these key health care challenges. We enter 2026 with, I think, a more innovation-led product portfolio, excited about our international prospects and what we're doing there, and certainly encouraged by what we're doing and the progress in BetterHelp insurance as well as what we're doing in terms of operational excellence and driving business performance and efficiencies. So I feel like we've got a good execution year ahead of us, and I'm excited about where we're headed. And I think with that, maybe Lisa will go to Q&A.

Sounds great. Thanks, Chuck, and thanks for all the highlights. I think if we think back to a year ago or so, you talked about the strategic review. You highlighted the unique assets and positioning. And I think you highlighted some of these in the presentation, enhancing the Integrated Care, advancing the model on the insurance side, in the mental health side, international operational excellence, et cetera. Where do you think you are on that journey as far as getting to where you ultimately want to be?

Yes. Well, you're never done. But look, we recognize we're a show-me story. And that's why I thought it was important to highlight what we said and the priorities we set and then describe what we've been doing, and the impact it's going to have in terms of our go-forward model. So I think from my point of view, over the last 18 months, it's really been around assessing our strengths, looking at our market position, the assets we have, are they fulfilling the promise that I think they have or not, what investments we need to make, et cetera. So I think we've made a good run at that. Now I think as we head into 2026, and I mentioned, it's really an execution year in terms of bringing those products to market, being able to demonstrate to clients that differential value. Like I said, it's an unprecedented time in health care. I know others in the room know that, but I can't remember a time in my time in health care, and I was in the payer world before I was in this role, where you've seen the kinds of challenges across every line of business, right? Usually, it might be Medicare or Medicaid, this is in commercial and ACA, Affordable Care Act. So I think we're well along on that, but I think now it's around execution to really unlock that value for our clients.

And how do I think about the setup going into '26 in the context of your longer term goals. I know you haven't given specific guidance yet. And I'm not asking you to, but just thinking about it...

And I won't. Look, I think -- I'm looking forward to provide an additional business update on our fourth quarter call. I think when you look at 2026, and it's kind of a similar environment that we've talked about in our last earnings call, but 2026 has got its own set of headwinds and tailwinds. From a tailwinds perspective, I like what we're doing in terms of the growth we've had in visit-based revenues, like the international growth we have. And so there's a number of things that we're doing that I think are -- and our client base needs help, right, with some of these challenges. So I think there are some tailwinds there. But from a headwinds perspective, we've got this mix thing that continues to impact us, of course. And there's a lot of uncertainty in health care. And I think that extends the buying cycle and it extends the kinds of conversations that you have. So I think both of those are going to be in play in Integrated Care. And then in BetterHelp, it's -- we've got those challenges in the consumer market. And now we're about scaling that insurance model and scaling that international. So 2026, I think I would just say it's got its own series of headwinds and tailwinds, and the team is -- we're organized to go after it.

You talked about BetterHelp, 12 states plus D.C. now having insurance coverage. How should we think about the rollout of the rest of the states? Is it you look where the population is, is it more of you look where the relationship is with the managed care company? How do I think about how that rolls out?

I mean, it's all of the above. I mean, we -- certainly, our starting point is what position does BetterHelp have already in those markets in terms of the consumer flow. The second is do we have the therapist network, credential therapist network capacity to be able to meet demand and then, of course, the in-network contracts that are going to come into play there. And we've been very methodical. And as you say, from 1 state to 12 states, we're adding states. I'm not going to say what number it is, but we're adding, continue to add states every month. So I think my best comment on it is we're going to roll it out over the course of '26. But I think we're going to make material progress every quarter along the way. So that by the end of the year we should be in a much more broader sense on a national basis.

AI is something that everyone talks about these days. And I think 1 of the bigger themes at our conference this year -- can you talk about how Teladoc uses AI within your health care platform and the future opportunities that you see?

Yes. I mean it's -- first of all, it's an exciting time with the proliferation of AI and it's so fast moving, right? I mean you can't get -- not look at the news because there's another announcement or something coming out. And we've been pretty extensive users of artificial intelligence, certainly in the machine learning category, if you will, to effectuate a number of different things. So it's pretty widespread in many ways of what we do. And even -- we don't talk about it much, but like in BetterHelp, they're using AI in terms of the questionnaire and the intake to make it smarter and more relevant. So there's a lot of places we're using AI to help our clinicians get ready for a visit, to pull information and summarize and raise trends and get -- arm them so that as they're delivering care, they're armed with that information, using it to -- AI scribe to document things, our tech areas using AI to help code and -- so there's a lot of places where it's showing up in the business. I think we're going to see in 2026 even more proliferation of that, I think, in health care and certainly, we've got tremendous focus on that. One other example, and again, I've referred back to our hospital and health system capabilities, but these are devices that sit in rooms, in hospitals in many cases, and we're using AI to look for things like fall risk, or elopement risk, looking at worker safety, extending nursing capacity. So I believe that you're going to see AI show up across almost every aspect of health care. What we're going to do is we're going to stay focused on some core principles with that though. We focus on patient safety. Our clinicians are going to be the 1 making the care shots calling care, but we do want to benefit from this proliferation of AI.

When I think about the Integrated Care business, and I always ask you this question in October. But as we sit here in January, maybe an update around the selling season. As we think about how it played out for the rest of the selling season this year, can you maybe just not -- I know you're not ready to give a number, but maybe talk more around what people are looking for, if there's anything different in the marketplace that you're seeing today.

Yes. I think it's very similar to what I've spoken about the last few quarters. The employer market, we've had a lot of interest and a lot of uptake and sort of consistent with what we're thinking. And they're facing a number of challenges. I mean if you monitor and follow any of the cost trend and rate increases and other things that employers are having, it's pretty significant. So they're focused on a lot of the same things that I touched on, but they might have different issues they're going after. But that's progressed well. I think the health plans, there's been a lot of uncertainty there as they figure out and they will figure it out but how they -- what strategies they're going to employ, what markets they're going to be in or not. And that's kind of -- I called that several quarters ago, and it's continued on. And I think that -- that market will -- I think it will improve as they deploy their strategies and so forth. So I think the selling season has been in line with what I talked about, and I'm excited about these new offerings for 2026. We entered 2025 similarly to the product portfolio we had before. So these are several new moves that I think at least give us an opportunity to talk to clients in new ways in terms of how we can add value.

And do you see an opportunity? Is it more of an upsell? Or is it new clients because of the new products that you're bringing to the market?

I think we're going to see both. I think certainly something that's been largely and broadly adopted like virtual care, right? The ability to distinguish what we do in the ways that I set, I think, are going to be noteworthy of people and may cause them to move. But of course, we're the market leader, so we've got the predominance of it already. I think there will be upsell opportunities because there's additional value that this can bring and these other services as well. So I think it's going to be a little bit of both. But what I'm focused on right now is like what do our clients need most from us. And I think if we deliver that, we're going to see it both with current clients and potential new clients.

You touched on the transition from the subscription model over to a fee-for-service model. Can you talk about that evolution and what it makes -- when we think about it from a financial standpoint, what it looks like over time?

Yes. If you think back to kind of back in the day virtual care, prepandemic, if you will, much of that was around -- much of that adoption was around access and convenience. And since it was relatively new, both the customer and companies like Teladoc needed some predictability in that. And so there were subscription models, PMPM models, if you will, that both parties could say, "Okay, I know what I'm paying for and I know what I have to deliver. And then, of course, the pandemic had, and you've had this really broad adoption. And then since then, it's been more about like, well, why is it being paid for any differently than the rest of the way I'm paying for health care. So this -- it's not unforeseen that you would see this migration. And we've seen more of it in recent years. Now more than 50% in 2025 of our revenues that come from virtual care are in visit-based arrangements. So mathematically, we're past 50%, and you should see the annual year-over-year impact vary, but we've still got some more innings to go. And I don't know where it's going to settle out because there's still plenty of clients that like the PMPM model. They like the predictability. And as we add new services, make that model may be more attractive. In terms of the economics, it varies. It clearly has been and can be pressure on gross margin as you move away from subscriptions and visits but it depends. You can have subscription models. But if you have a lot of visits, that eats into your gross margin. If you don't have a lot of visits, you have more gross margin, but you weren't adding value. So I think that we've approached it is, it does have an impact on gross margin. And that's what we've been very focused and effective at taking costs out around technology and development, administrative costs, certainly share-based compensation to offset that margin pressure. But it's still going to be a headwind, if you will, but I think a moderating 1 given the percentage I mentioned.

Again, going back to the presentation, you several times throughout the presentation talked about the opportunity to make visits more impactful. And the product enhancements that you've been working on to deliver this promise. You mentioned Prism and Pulse during your presentation, which seem to help enable you to have the ability to make visits more impactful. Maybe talk a little bit more about each of those and what they're actually doing.

Yes. Prism is, if you think about the various services we provide, there's different systems and workflows that go with virtual care, chronic addition management, mental health. And previously, maybe you had to integrate -- literally integrate all that to be able to unlock the value across them. What we've done with Prism and leverage some different technology is that we put what we call a sidecar in front of the care provider, whether they're a coach or a nurse or a physician or whatever, that we can surface things that are relevant for that member in that particular visit, and then they can take action on it. It's also where we've put our ambient scribe technology in there where that -- so that sidecar can be used for a variety of reasons, but it really helps enable the integrated care. Pulse is all around the data fabric and the data platform and being able to take all -- benefit from all this information that we have and other getting HIE information and other things and then apply, whether it's AI or other kind of reporting against it to drive the actions we're doing. So both are important, but they relate to each other for all different reasons, yes.

You've had very strong membership in '25, adding 8.5 million members and bringing the total to about 103 million people on your platform, growing 10% over '24. How should I think about the opportunity going forward? I mean, the U.S. population is about 330 million. You've got about 1/3 of the U.S. population on your platform. Is membership growth -- is there still a big opportunity?

Look, I think there's an opportunity, but I don't look at as much around that our growth profile and our outlook is going to be dependent upon 102 becomes 110. Of course, I want it to become 110. But it may be less than 102. But are they using the services? Are we selling more products and services and are people benefiting from what we do? So it's an important lever, but it's not the only lever. Really, it's about activating the usage and for the membership to see value in what we do and trust in what we do and for our clients to adopt more services from us. So we are certainly always looking to grow membership. But when you think about where we are in health care, the Affordable Care Act subsidies expired at least so far, unless something changed today in Washington. And so things like that can affect membership, they can affect it positively or negatively. Ultimately, there's a base of individuals that can benefit from our services, and that's how we look at it.

It's interesting. I don't know if you saw the file today, but they dropped that from CMS. Membership is only down 4%. I guess everybody thinks the subsidies are coming. No, it's kind of...

That's a good point, and we'll see. But I'll tell you from my prior life, what I think is happening, those numbers, they tell part of the story. But I do believe a lot of sign-ups were happening potentially thinking subsidies will be expanding -- so I don't know what the cancellations are going to look. So I think the health plans and all of the -- we'll have to see that.

I'll have to wait and see, but it's interesting to see the numbers today.

It did. I was surprised -- it is good as it is.

Yes, I know. I was too. Can we spend a few minutes on chronic care. How do you think about the competitive backdrop and your positioning in chronic care? And what can really accelerate that growth?

Yes. Look, it's a highly competitive space, and there's a number of solutions out there, depending on which part of chronic care we're talking about. I think our unique position and being a leader in it is and being a clinical organization with providers and the ability to show up and help these individuals with their care beyond just digital health tools and knowledge, I think is impactful. Our clients are ultimately looking for quality outcomes, but also ROI. And if you can understand, identify and engage populations that -- where it's not going well, their sugar is not under control, their hypertension is not under control, what else is going on. You look at the comorbidities of somebody with diabetes. COPD and CKD, there's other things going on that are impacting the care. So for us to be able to identify that with all of our data and then have a clinical intervention to help those people understand what's really going on, I do believe that's going to distinguish us in this chronic care space. There's a lot of competition, there's a lot of solutions out there, but I believe our position is strong because we can show up in a different way.

We touched on the rollout of insurance coverage on BetterHelp. But as we think about this shift and we think about the shift away from cash pay and potentially to insurance, how do we think about the margin impact on BetterHelp?

I think -- well, it's going to change. I mean, I think we've seen enough of what the difference is in terms of insurance-based models, whether it's mental health or otherwise. So there will be a change. BetterHelp currently, the cash pay model has a high gross margin, but a high customer acquisition cost and a high turnover. It's just the nature of the consumer model. So as we are able to convert more users, have an ability to retain them longer, and I believe more sessions because I don't think the therapy need stops when the cash stops, I think you're going to be able to see better lifetime value even though the margins may be a little bit compressed. And I think we're going to have more efficient ad spend as a result of it because we have to spend a lot of -- we're still going to advertise a lot because we want to activate the consumer. That's still key in a virtual business, but I believe we're going to have more efficiency in the ad spend. So I think overall, it's going to fluctuate here until we get the things scaled. But I do believe that the margin profile will be a solid, sustainable margin in the future.

Just given that the number of acquisitions you've completed in the last year, how are you thinking about your M&A strategy from here? Do you have all the pieces of the pie that you need? Are there things you'd like to add?

I don't think we ever have it. I mean, health care is big, it's complex. The needs are out there. It doesn't have to always be M&A. It can be partnerships and commercial relationships and all that. That's why I think it was very clear to establish some clear priorities so that we can stay at those and say, okay, if that's what we're going after, do we have what we need, and it creates some discipline in M&A in terms of where you want to focus because there's endless things you could focus on. Catapult is an example. We look at our virtual care offering. And we said hey, would it be great if we had an ability to do more preventative care and in a virtual way to where we can send a kit to someone's home, they can do a simple blood draw, do a screening and we're seeing remarkable results. 50% of the people that do that virtual checkup have a chronic condition anywhere from, let's say, 40%, 30% to 50%, depending on the condition, didn't know it. They weren't aware that they had a condition. So you think about the ability to meet people where they are and get them into a care plan. So there's places like that, that I think we can extend what we do. UpLift was a very strategic acquisition in terms of BetterHelp. So I think you're going to see more interest from us, but also disciplined in terms of where we go.

All right. We're out of time, but just 1 last question. Any update on your process for your CFO search?

Thanks for asking. Yes, as I mentioned on the call, we've got a large search firm assisting with us. The process is going well. A lot of interest in the position, a lot of interesting candidates, not ready to announce anything yet, but I think it's progressing along. It's an important position, but we want the right fit for this business in terms of what we need going forward.

Great. Thanks very much, everyone.

Thanks everyone.