Teladoc’s Behavioral Health Business BetterHelp ‘Decelerated’ After Period of Hyper-Growth

Teladoc’s direct-to-consumer behavioral health service, BetterHelp, has ‘decelerated’ coming off multiple years of hypergrowth. The organization is now focusing on balancing top-line growth, bottom-line growth, and cash flow.

“After scaling rapidly to surpass a billion dollars of revenue last year. We have since taken a more balanced approach to growth and margin at BetterHelp,” Mala Murthy, chief financial officer of Teladoc, said during the company’s Q3 earnings call Tuesday. “This means we’ll continue to prioritize profitable growth that meets or exceeds our return requirements.”

BetterHelp revenue increased by a modest 8% year over year to $286 million in the third quarter, a decline of 2% sequentially, which was in line with the company’s guidance. The number of average monthly users increased by 5% year over year, and the adjusted EBITDA was $26 million, a 133% yearly increase.


Teladoc said the results reflect a more stable advertising environment compared to prior years and a sustained growth margin improvement. Historically, the BetterHelp segment faced stiff advertising competition from smaller digital behavioral health startups. This in turn, leads to it costing more to convert advertisements to customer yield.


Teladoc said it has a leg up when it comes to the competition in the space.

“If you look at [BetterHelp], which is the largest player in the DTC virtual mental health space, by far, we are also the largest advertiser of virtual mental health,” Murthy said. “Unlike many of our smaller peers, our scale enables us to drive and earn strong returns on our spending and that gives us a real advantage.

“There’s only so much incremental ad spend and customer acquisitions you can drive in any short period of time. There’s just a natural growth to that every year as the market shifts more and more towards virtual and the channels themselves grow. So that does limit the amount a DTC business can profitably grow year after year.”

Teladoc purchased BetterHelp in 2015 for $17.2 million. In 2022 it raked in over $1 billion in revenue.

While the organization is focused on more steady growth, it is looking to improve the productivity and efficiency of its staff.

“We are taking steps and initiatives to improve therapists’ productivity, whether it be group therapy, more digital interactions,” Murthy said.

In Q2, the company highlighted artificial intelligence initiatives to help boost future efficiencies, including optimizing member-therapist matching.

Teladoc’s overall revenue grew by 8% year-over-year to $600.2 million. Its integrated care segment made up $347.4 million.

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