The following is a summary of the American Well Corporation (AMWL) Q1 2024 Earnings Call Transcript:
Financial Performance:
American Well Corporation reported Q1 2024 revenue of $59.5 million, a decrease of 7% year-on-year, largely due to declines in subscription and visit revenue.
Subscription revenue for Q1 was $24.9 million, down 9% from Q4, but it's expected to increase throughout the year, with gains projected by Q4.
Services and Carepoints revenue declined to $3.6 million from $7.7 million last quarter, while AMG visit revenue was $31 million, 4% lower than the previous year.
Gross profit margin for Q4 was 31%, down around 300 basis points from the previous quarter mainly due to one-time costs and lower subscription software and services revenue.
The company expects revenues of $259 million to $269 million for the year 2024, with revenue in 2025 projected to grow by around 30%, mainly driven by go-lives of contracted software backlog.
It is predicted that the company will achieve adjusted EBITDA breakeven by 2026.
Business Progress:
American Well made progress with its Converge platform, migrating approximately 70% of visit volume in Q1, up from 54% in Q4.
With the completion of the Converge platform, R&D investments are expected to reduce, and the company aims to focus on higher-margin software subscriptions.
The company executed a large client expansion with an existing East Coast Blue payer client, exhibiting their competitive edge in the crowded regional market for health insurance.
Successful client renewals were noted from Highmark, Intermountain, El Camino Health, Penn State, and Cleveland Clinic.
Also, the company completed the first milestone in the Defense Health Agency (DHA) project by going live with behavioral health, in line for an enterprise-wide deployment in Q4 of this year.
American Well is embarking on a period of transformation to improve efficiency and effectiveness within the company, highlighted by changes in their go-to-market strategy and sales team.
More details: American Well IR
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