Teladoc CEO: ‘There’s A Lot of Untapped Potential Outside the US’ for BetterHelp Expansion

Teladoc (NYSE: TDOC) is setting its sights on the international market to grow its direct-to-consumer behavioral health business segment, BetterHelp. 

This comes after a revenue dip for BetterHelp in Q4 2023, which the company attributed to a decline in customer-acquisition yield.

Overall, BetterHelp generated $276 million in Q4 revenue, down by $10 million from last quarter. The number of BetterHelp users has also decreased by 34,000 quarter over quarter. 


“With our increased focus on profitable growth as a direct-to-consumer business, BetterHelp’s new member acquisition is gated somewhat by the amount of capital we can deploy at an acceptable rate of return in any given period,” Jason Gorevic, CEO of Teladoc, said on a Tuesday earnings call. “This means BetterHelp’s growth is in part dependent on our ability to efficiently reach new individuals to create awareness for BetterHelp’s services and convert them to members.”

Photo credit: Teladoc

BetterHelp’s EBITDA was up substantially in Q4. The company reported that the segment’s Q4 EBITDA was $58 million, an 11% year-over-year rise in EBITA growth.

Historically, Teladoc has fought to compete with digital health newcomers with fresh capital for customer acquisition. Gorevic noted that no one competitor is currently driving up rates. Instead, the company’s disappointing advertising yield is due to “overall traffic in the ad space.”


Teladoc is also careful to pull back on advertising spend when it is ineffective, instead choosing to “spend that money productively” rather than “chasing growth at the expense of profitability,” according to Gorevic.

He also noted that due to BetterHelp’s size and place in the market, it has a leg up over other digital behavioral health providers.

“BetterHelp’s scale and experience affords us the unique advantage of deploying a large amount of capital efficiently each year while driving strong free cash flow,” Gorevic said. “The good news is given the continued runway for growth and our well-established algorithm for deploying advertising dollars, we believe we can drive steady growth in this business at an attractive margin.”

Photo credit: Teladoc

While customer acquisition may be a pain point for the business segment, the international market could pose new opportunities.

“We’re also increasing our focus on growing BetterHelp outside the U.S. Roughly 15% of BetterHelp’s fiscal year 2023 revenue was generated in international markets, primarily English-speaking countries such as Canada and the U.K.,” Gorevic said. “We’re actively working to expand BetterHelp’s presence internationally. … We think there’s a lot of untapped potential outside the U.S. and expect to see these efforts begin to contribute to our financial results more meaningfully as we move through 2024.” 

The company plans to continue to focus on its cash flow profile and steady growth over the next few years.

“With over $1.1 billion in revenue and our increased focus on bottom line performance,” Gorevic said, “we believe we can efficiently deploy capital to drive new customer acquisition and revenue growth at BetterHelp in the low single-digit range over the next three years with opportunities for modest margin expansion.”

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