advantages, and we continue to invest and expand our services and geographic footprint globally. As the first comprehensive virtual healthcare provider at scale, we have pioneered solutions and created what we believe are collectively, the telehealth industry’s first and only offerings of their kind.

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Comprehensive Suite of Virtual Healthcare Clinical Services

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We believe that we are the first and only company to provide a comprehensive and integrated virtual healthcare solution covering a full spectrum of clinical conditions – from non-critical, episodic care to chronic, complicated cases – as well as a wide range of services, such as telehealth solutions, expert medical services, behavioral health solutions, guidance and support, and platform & program services.

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Our proprietary platform enables patients and our providers (Providers) to have an integrated, smart user experience, through mobile, web, and phone based accessed points. Our virtual health assistant leverages natural language processing, patient and group specific information, clinical guidelines, and learning algorithms to make finding the right virtual health service even easier for our Members at their moment of need. We have seen increasing adoption of multiple products by our Clients. Our analytics driven member engagement capabilities deliver industry leading utilization and return on investment for our Clients.

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Global Footprint Spanning Clients, Medical Operations and Members

We have a successful track record of acquiring and integrating companies with common purpose, complementary capabilities and access to new markets. We believe we have the only global footprint spanning a diverse set of client channels, medical operations and Members. Combining our suite of international clinical capabilities with our technology and operational scale uniquely equips us to meet the needs of U.S. multinational employers that serve more than one third of their employees who live abroad.

We have 17 offices globally servicing patients from more than 175 countries and can deliver care in more than 40 languages.

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Unmatched Breadth of Solutions for Clients Across All Channels Served

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We deliver a comprehensive set of solutions to a diverse Client population through a highly efficient and effective distribution network wherein we reach consumers on a direct B2B basis through our Clients and channel partners as well on a D2C basis by marketing our solution directly to potential paid Members.

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On a direct B2B basis, we sell to our Clients who in turn buy our solutions on behalf of their beneficiaries. In our various sales channels, a range of third-parties, including health plans, financial institutions, brokers, agents, benefits consultants and resellers, sell our solutions to various end markets around the world. Notably, many of our health plan Clients also act as channel partners because they resell our solutions to their Administrative Service Only (ASO) accounts and other customers. Similarly, our financial services Clients act as channel partners, embedding our solutions into a range of insurance, credit card and other financial products.

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In the hospital and health systems market, we sell our solutions directly to provider entities who leverage our platform to deliver virtual healthcare to both new and existing patients. We have a growing presence in D2C markets, where we primarily focus on general telehealth visits and behavioral health. We believe the breadth of our distribution strategy allows us to directly reach consumers and Clients of nearly every size and in nearly every market.

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Comprehensive Engagement Model that Drives Utilization

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We believe that our ability to drive behavior change on a global scale to deliver the highest utilization of virtual healthcare services in the industry is a key competitive differentiator for Teladoc Health. We utilize a combination of engagement science, our Surround Sound capabilities as well as our deep knowledge and expertise of various populations to increase the adoption of our virtual care services.

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Our Engagement Science is a unique combination of the application of predictive analytics and physician supply atmodeling, our deep experience with all population demographics and expertise in applying this knowledge to our Client populations on a global scale. With our proprietary Engagement Science, we target Members using behavioral triggers, advanced predictive modeling and demographic/firmographic insights. This increases efficiency and the timeimpact of need, provide consumers access to medical opinions from leading global experts, and offer health plans and employers attractive, cost-effective healthcare alternatives for their beneficiaries.

Growing Healthcare Access Crisis for Consumers

Consumersour communications by reaching the right Member, with the right personalized message, in the United Statesright micro moments of their day-to-day lives. We were the first to implement sophisticated behavioral analytics and predictive modeling to drive utilization across our full portfolio of clinical services which are increasingly challengedespecially critical for more complex health conditions.

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We believe that our Surround Sound capabilities are unique in the breadth and scale of media mix, analytics and targeting techniques that we actively deploy across our diverse client populations on a global scale. We use these capabilities, plus our Engagement Science, to obtain accessdrive awareness and utilization of Teladoc Health services through innovative media strategies designed to affordable healthcare at appropriate sitesreach Members in their homes, on the go and in their moments of care when care is most needed.  Accordingneed. Our Surround Sound capabilities and strategies are continuously being evaluated, analyzed and evolved to a 2017 Merritt Hawkins study, the average lead time to see a primary care physician across various metro areas was 29 days. meet ever-shifting consumer behaviors.

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We also believe issues around access are projectedunique in our ability to get worse. A 2017 study from IHS Markit preparedsuccessfully service our clients with Medicaid and Medicare Advantage populations, at scale. With a deep knowledge of CMS and DHS regulatory requirements, we have developed processes, capabilities, and assets that allow us to support the business needs of our clients and engage with these populations at large. In addition, our engagement approach is tailored to the differences and nuances of these two distinct consumer bases. Messaging and media mix are bespoke for these audiences, driving awareness and utilization of Teladoc Health benefits through channels and mediums most relevant to them, with messaging specifically crafted to address the Associationdistinct health needs and behaviors of American Medical Colleges found that physician demand continues to grow faster than supply, resulting in a projected total physician shortfall of up to 104,900 physicians by 2030, including a shortage of approximately 43,100 primary care physicians. We believe this projection is supported by the 2016 Survey of America’s Physicians, in which 80.6% of physicians describe themselves as either over-extended or at full capacity. Expected population growth and aging, and the projected gap between supply and demand for access to healthcare services, will place additional pressure on an already overburdened healthcare system that lacks physician capacity and diagnoses-appropriate access points.these programs.

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This access crisis has resulted in U.S. consumers either seeking care at inappropriate, more costly settings such as hospital emergency rooms, or foregoing needed care entirely. A 2015 survey from the American College of Emergency Physicians found that almost 50% of physicians polled stated that demands for care coordination including emergency department visits are increasing due to increased difficulty in finding or arranging timely follow-up with primary care physicians and/or specialists. In the same survey, 70% of physicians polled also noted that they believe their emergency department is not adequately prepared for potentially substantial increases in patient volume.

In addition to challenges finding care, consumersour proactive engagement techniques, we also face challenges accessingprovide our Clients with on-line access to our Teladoc Health Engagement Center for client specific, fully customized engagement collateral on a self-service basis. We believe that we are the highest-quality care. Owingonly partner globally that provides our business-to-business-to-consumer Clients across all market channels with the breadth and dynamic customization of our proprietary online portal. The Teladoc Health Engagement Center has experienced strong Client adoption, with growth of more than 18% in 2019 compared to reasons ranging from complexity of symptoms, the unusual nature of disease, or physician expertise, medical diagnoses2018.

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Highly Scalable and Secure API-Driven Technology Platform

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We are often incorrect. A 2017 study by the Mayo Clinic published in Journal of Evaluation in Clinical Practice showed that among a sample of cases that had been referred for second opinions, in 12% of cases the final diagnoses matched the primary diagnoses, in 66% of cases the final diagnoses refined the primary diagnoses, and in 21% of cases the final diagnoses were materially different than the primary diagnoses. Reducing unnecessary treatment related to misdiagnosis has a significant impact on the quality and cost of care a patient receives.

Healthcare Cost Burden and Lack of Viable Options for Health Plans and Employers

The U.S. healthcare system is burdened by significant waste and extreme variations intackling access, cost and quality of care. A study published in The Journal of the American Medical Association estimates that approximately $734 billion, or 27%, of all healthcare spending in 2011 was wasted due to factors such as the provision of unnecessary services, inefficient delivery of care and inflated prices. When consumers are forced to seek care at inappropriate and more costly sites of care, those cost inefficiencies impact not only the consumer, but also the health plans and employers that ultimately bear all or a portion of these costs.

The costs and associated burdens on health plans, employers and consumers are only expected to increase. Centerschallenges for Medicare and Medicaid Services, or CMS, estimates U.S. national health expenditures reached $3.3 trillion, or approximately 17.9% of the U.S. GDP in 2016, and will reach approximately 19.9% of GDP by 2025. A survey from Milliman in 2017 noted that healthcare costs for an average American family of four exceeded $26,900 in 2017,  a 4.3% increase over 2016. A 2017 survey by the National Business Group on Health indicated that employers bear on average 70% of their employees’ healthcare costs and CMS forecasted U.S. employers spent approximately $660 billion on healthcare in 2015. Despite the significant amount of dollars spent, U.S. healthcare outcomes remain inferior relative to those of many other countries.

The unsustainable levels of spending on healthcare and extreme inefficiencies in the system have driven an increased focus by employers and health plans to control healthcare expenditures. Governments, private insurance companies and self-insured employers, are implementing meaningful cost containment measures, including shifting financial responsibility to patientsour Clients through higher co-pays and deductibles and delivering healthcare through alternative, more cost-effective methods. According to a 2017 survey by America’s Health Insurance Plans (AHIP), as of January

exchange.

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Our platform’s APIs power external connectivity and deep integration with a wide range of payors, third party applications and other interfaces which uniquely positions us to be a central partner meeting the unique needs of the rapidly emerging, technology powered healthcare industry.

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We believe that we have the only platform that incorporates the core functionality required to offer a full spectrum of virtual healthcare services on a single system. Our platform features predictive modeling, automated complex routing, queuing and scheduling.

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Consumers benefit from our ability to respond quicklycustomize their experience to evolving market needsmeet their unique needs. They can manage their own electronic medical records, (EMRs). We also provide access to a secure message center, provider finder, image upload capability and enable real-time sharing capabilities with innovative solutions,providers that include visit scheduling, a single sign on and full interoperability with native iOS and Android apps.

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Our Providers benefit from a dedicated, easy to use mobile app, EMR and visit queue, proprietary telehealth guidelines, e prescribing and a range of other features and functions such as mobile applications, biometric devices, mobile geofencingauto complete symptoms, diagnoses and at‑home testing,billing codes.

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To meet the growing needs of hospitals and health systems, as well as multi-national insurers, our proprietary licensed platform enables Clients to enhancefully integrate private instances of our solutionplatform alongside their traditional modes of delivering healthcare to their patients. Leveraging the flexibility and support our leadership position. We believe our highly scalablecustomization available on the platform, provides usmost of these implementations incorporate deep integration with significant growth opportunities within our existing membershipthe hospital or health system’s EMR platform for scheduling and client bases and allows us to grow with low capital expenditure requirements.bi-directional clinical data sharing.

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High-Quality Clinical Capabilities Tailored to TelehealthVirtual Care

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We deliver high-quality clinical care and advice in a virtual setting to our Members through the unique combination of our proprietary guidelines, breadth and depth of clinical quality data, analytics, oversight as well as through our in-house and third-party medical professionals (the Teladoc Health Medical Network).

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The Medical Group is composed of staff clinicians, our telehealth provider network and our Global Expert Panel. Overseeing the Medical Group we have a Quality and Care and Patient Safety sub-committee of our Board of Directors, chaired by Senator Bill Frist, M.D. We also have a Medical Advisory Board with a global network.

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With the Teladoc Health Telehealth Practice, we believe that by directly recruiting, credentialing, training and contracting with our Providers we have built our clinical capabilities in a manner that supports the operational complexity of and commitment to clinical quality required in telehealth.delivery of care in a virtual setting. We provide expert medical services through a combination of our Teladoc Health Expert Panel, as well as in house health professionals. Our physician Providers are board‑certified with an averageGlobal Expert Panel is composed of 20 yearsa network of experienceover 50,000 clinicians around the world whose specialties span over 450 sub-specialties and are credentialed through an NCQA‑certified process. The NCQA’s accreditation process involves a comprehensive on‑site and off‑site review by a team of physicians and managed care experts that evaluates more than 60 quality‑related healthcare standards, including quality management and improvement and utilization management. The resultsaffiliated with some of the evaluationmost prestigious medical facilities in the world. 

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To improve the clinical quality our patients receive, we apply analytics to the anonymized data points generated in our millions of visits with patients, these data sets and insights are reviewed byapplied to enhancing our Providers ability to deliver quality care through tools such as our Provider dashboards, as well as serving a foundation for clinical innovation, collaborating with leaders in the NCQA’s National Review Oversight Committee priorspace, focused on the advancement of virtual care delivery and practices. 

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We established the healthcare industry’s first Patient Safety Organization (PSO) dedicated to their assigning an accreditation level. The NCQA’s requirements are developedvirtual care with the inputmission of conducting quality and support of health plans, providers, purchasers, unionssafety initiatives with and consumer groups. The NCQA’s accreditation process is not telehealth specific; rather, since its formation in 1990, the NCQA established, and consistently updates, its quality standards and performance measures for a broad range of healthcare entities by building consensus around important health care quality issues. In determining its quality standards and performance measures, the NCQA works with large employers, policymakers, doctors, patients and health plans to determine areas of focus and how to promote improvement within them. Health plans in every state, the District of Columbia and Puerto Rico are NCQA accredited. According to the NCQA, these certified plans cover 109 million Americans, or 70.5% of all Americans enrolled in health plans.

Our clinical capabilities are designed specifically for telehealth. For example, our Members have the option to share a record of every visit and their EMR with their existing primary care physicians. In circumstances where a Member reports that they do not have a primary care physician, the Teladoc Provider educates the Member on the importance of establishing this relationship. Prior to every visit, the Provider reviews the Member’s proprietary EMR and certifies to this review by completing a multi‑step checklist. During and following the visit, the Provider may reference our over 100 proprietary Evidence Based clinical guidelines and other telehealth‑specific content. In addition, Members and Providers remain connected following visits. Members receive personalized notes, patient education materials and are able to ask questions of our clinical team via the Teladoc Message Center. Approximately 10% of all physician visits are reviewed by our clinical quality assurance staff to ensure adherence to appropriate treatment and prescription patterns. We believe our track record of zero medical malpractice claims is a testament to our Providers’ clinical quality.

To deliver virtual care spanning the comprehensive suite of clinical services that Teladoc Health offers, we have pioneered the development of a rangenew clinical specialty, the Virtualist, which is in the early stages of third‑parties including brokers, agents, benefits consultants and resellers, whom we referdevelopment. We have partnered with Thomas Jefferson University to offer a fellowship focused on the training of future leaders in virtual care. Additionally, as channel partners, sell our solution to various end markets. Notably, manypart of our health plan Clients also actsuccessful antibiotic prescribing stewardship program, we have undertaken a five-year, grant-funded research study together with the University of Southern California (USC) Schaeffer Center for Health Policy & Economics and Northwestern University, to lead the first-ever, large-scale study to assess antibiotic prescribing practices in telehealth. This project is funded through a grant from the Department of Health and Human Services' Agency for Healthcare Research and Quality and as channel partners because they resell our solutionpart of the White House’s National Action Plan for Combating Antibiotic-Resistant Bacteria (CARB). This study is expected to their administrative service only or ASO accountsset a new precedent in medical literature by adding specific standards for telehealth and other customers, we also market our behavioral services directly to consumers through digital advertising campaigns. We believe the breadth of our distribution strategy allows us to directly reach consumers and also employers of nearly every size and in nearly every market, which are capable of purchasing our solution for a large number of beneficiaries, rather than attempting to sell our solution one consumer at a time.virtual care.

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Our Growth Strategies

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The following are our key growth strategies.

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   Expand Our ComprehensiveEnable A Virtual Care Delivery PlatformFirst Strategy for Consumer Healthcare Access

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Teladoc Health is creating a new paradigmvirtual front door for howconsumers to access the healthcare system. As we drive the world to a “Virtual First” mindset, we believe only Teladoc Health has the enterprise scale, technical capabilities, clinical depth, and consumer engagement expertise to achieve the vision. We refer to Teladoc Health’s integrated offering as our comprehensive Virtual Healthcare Delivery Platform.

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Teladoc Health’s Virtual Healthcare Delivery Platform is changing consumer behavior to where consumers access healthcare.virtual healthcare as their first point of entry into the healthcare system for a wide range of their healthcare needs. We are creating a new virtual front door, providing simple access to powerful healthcare solutions for consumers. We are delivering a single solution leveraging our comprehensive clinical expertise, to address the complete spectrum of conditions from non-critical, episodic care to chronic, complicated cases. Our missionThe Virtual First model is built on our integrated Virtual Healthcare Delivery Platform, combining smart technologies and AI, rich data exchange, Analytics and scalability to become the centralstreamline care and trusted source for our Clients and Members to address the broadest array of healthcare needs, on their terms, anytime, anywhere. We refer to Teladoc’s integrated offering as our comprehensive Virtual Care Delivery Platform.drive better outcomes. Our Virtual CareHealthcare Delivery Platform matches the expectations of today’s digital consumer with a new kind of healthcare experience, leveraging expansive digital clinical services, deep integration with the broader healthcare ecosystem, powerful data & analytics, device & wearables integration and ubiquitous entry points, all of them wrapped inexperience.

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Expand our Surround Sound marketing to drive behavior change and engagement. Our suite of clinical services ranges from high volume, lower acuity offerings such as general medical, dermatology, behavioral health, tobacco cessation, and sexual health to lower volume, higher acuity offerings for Expert Second Opinions, Treatment Decision Support, Critical Care support, Specialty Pharmacy cost containment, and Oncology Insights with IBM Watson. address unmet needs

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We believe that our Virtual CareHealthcare Delivery Platform addresses significant unmet needs. Accordingneeds and we intend to continue to expand our solutions across use cases and additional care settings.

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In its annual survey, the 2012 white paper fromNational Business Group on Health asked 147 large employers representing 15 million lives for their perspectives on the rapidly-changing healthcare environment and the impact on healthcare costs, plan design trends, and employer initiatives. The survey indicates that employers expect healthcare costs to increase – an average of 5% in 2020 – continuing to outpace worker earnings and the Consumer Price Index. Top drivers include high-cost claimants, specialty pharmacy, and specific conditions such as musculoskeletal and cancer. Behavioral health costs, and notably, inappropriate and inefficient use of the healthcare system are other key factors.

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The same study identified that the majority of employers’ report that their top new initiative for the year ahead is expanded implementation of virtual care. Teladoc Health’s portfolio of higher acuity offerings are well positioned to meet these needs.

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As it relates to mental health – a costly medical issue affecting one in five American adults – the U.S. Department of Health and Human Services estimates that approximately 4696.5 million adultsAmericans live in the U.S. sufferareas where there are shortages of mental health providers. In 2019 we commissioned IPSO MORI to perform an international study into workplace mental health, which showed that 82% of employees who have had a mental health diagnosis have kept their difficulties hidden from workplace management. Over half of employees (55%) agreed more should be done in their workplace to improve mental illnesshealth, with more than 11 million adults reporting an unmet need fora third (38%) saying they would be more productive at work if there was better mental healthcare. Compounding this unmet need, the shortage of psychiatristshealth support. To improve access to high-quality behavioral healthcare and behavioral health resources has become acute nationwide. According to a 2014 Merritt Hawkins report, psychiatrists are essentially aging out of the workforce, with over 70% of psychiatrists 50 years of age or older. Thenavigation, Teladoc provider network underpinning the Virtual Care Delivery Platform addresses the challenges of the current healthcare environment by offering our Clients & Members 24/7/265, on-demand access to

over 3,000 board-certified physiciansHealth offers three care offerings to support the many different ways mental health challenges present themselves: for our B2B Clients, Behavioral Health Care provides access to ongoing treatment from licensed mental health professionals, Behavioral Health Navigator, available in multiple countries, enables high-touch review of diagnosis and treatment plans. We also offer D2C access to behavioral health professionals who treat a wide range of conditions such as anxiety and cases. With the addition of the Best Doctors global network, consisting of 50,000+ medical experts in more than 450 medical specialties, wedepression through our Better Help offering.

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We are able to offer solutions to our Members globally for a range of critical, life-threatening cases such as cancer, musculoskeletal conditions, inflammatory disorders, heart conditions, chronic pain, and many other chronic, complex, and critical medical issues. Finally, we also offer direct-to-Member access to behavioral health professionals who treat conditions such as anxiety and depression.  By bringing theseour global provider networks together under our Virtual CareHealthcare Delivery Platform, we believe we have created an unrivaled offering that will enable the continued expansion of our product portfolio and solve the biggest challenges of our Clients and Members.

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We also continually explore ancillary opportunities to broaden our business. We believe our services have wide applicability across new use cases, including Virtual Primary Care, home care, post discharge, wellness/screening and new areas in chronic care. During 2019 we undertook a partnership with Vida, a leader in digital chronic condition management solutions for employers and health plans. Vida incorporates personalized digital therapeutic programs combined with health coaching and therapy to support individuals in managing and reversing conditions such as pre-diabetes, diabetes, hypertension, and obesity, and numerous others. Our partnership will deliver on more integrated, clinically robust solutions that benefit Teladoc Health’s customers and members. We will continue to respond quickly to evolving market needs with innovative solutions, including mobile applications, nutrition and wellness, biometric devices and at-home testing.

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Increase Engagement with Our Members by Driving Expanded Access & Enhanced Touch Points

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We believe there is significant opportunity within our existing membershipMembership base to increase engagement by continually driving awareness of and loyalty tousage of our solution.solutions. We believe our Virtual CareHealthcare Delivery Platform can become the single sourceprimary entry point for on-demand, virtual carehealthcare for our Members.eligible individuals around the world. We will continually refine and enhance our user experience, which is a critical driver of new and repeat engagement and we will continue validating our Member satisfaction with surveys and other proactive tools.

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Our mobile app is foundational for Teladoc Health as we have redefined virtual healthcare delivery and are providing our Members with a better way to navigate their individual care. Our Members benefit from a single, patient-centered point of access to our Virtual Healthcare Delivery Platform. As we expand the range of products and services available to our Members, we are investing in a seamless, relevant, and personalized mobile experience that provides smart guidance for our Members. For example, our Health Assistant enables Members to express their healthcare need through a user-friendly, AI-supported and guided interface. Members are then presented with the optimal product or pathway to meet their need.

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Our industry leading user interface capabilities and expertise enable unique types of partnerships where our capabilities are delivered to our partners with their brands, logos, and workflows on mobile and web platforms. Examples of these partnerships include CVS/Minute Clinic and United Healthcare, our single largest client deployment in Teladoc Health’s history. These integrated member experience solutions drive higher member engagement, convenience and utilization.

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We are also building robust data repositories to strengthen our predictive models and multi-channel marketing strategies to provide a more complete picture of our Members, enhancing our ability to lead targeted and purposeful campaigns.

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We will continue to invest heavily in marketing technologies that allow us to increase Member touch-points. In addition, we will continue to actively engage Clients in benefit design, worksite marketing and executive sponsorship strategies to drive awareness about our solution.

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Expand Our Membership with New andPenetration Amongst Existing Clients

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We believe that we offer a highly differentiated suite of solutions for a broad range of market segments,channels, spanning the spectrum of traditional healthcare system participants such as employers, health plans and health systems as well as global financial services businesses and other organizations that have extended their investment in our industry. We intend to increase our membership by adding additional Members from both existing Clients, which we refer to as whitespace, and from new Clients. We plan to execute this strategy by further penetrating existing relationships and by pursuing new relationships through our distribution channels and an expanded sales team.relationships. Within existing accounts, we believe our current membershipMembership represents only a fraction of the potential Members available to us. Our existing health plan Clients and self‑insuredself-insured Clients associated with these health plans currently purchase our solution for only a small percentage of their beneficiaries in the aggregate, and we estimate this provides us the opportunity to grow our membershipMembership base by more than 5075 million individuals in the United States by expanding our penetration within our existing Clients alone. Similarly,

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Within the health plan market, a key area for growth is in increasing penetration within Government sponsored programs, such as Medicaid, Medicare Advantage, and Exchange populations. Virtual healthcare is well positioned to address the cost and access challenges in many of these markets, and we have 291 Fortune 1000 Clients, representing a significant opportunity for new Client growthexpect Medicare Advantage plans to accelerate the adoption of virtual healthcare with large employers. the expansion of telehealth coverage in the 2020 plan year under the Bipartisan Budget Act of 2018.

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A key focus for us in 2018 will beis to cross-sell and upsell these Clientsoffer our full suite of services. Weservices to all of our new and existing Clients across all channels. As a result, we are investing heavilycontinuing to invest in new marketing technologies and support staff to aid our sales force in penetratingto expand existing accounts,Client relationships, support new service implementations and generate lead generation,for potential new Client generation and implementations. We further believe that as market leader, we have a strong, established brand and are uniquely positioned to capitalize on the B2C channel in the future.Clients.

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Leverage Existing SalesDistribution Channels and Penetrate NewExpand Penetration of Global Markets

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We have developed a highly effective and efficient global distribution network. Our international operations are headquartered in Barcelona, Spain with satellite locations in countries covering Europe, South America and Asia. With these locations, we are able to provide 24x7 international services to our Members worldwide, ensuring that they are conveniently helped by our physicians from whatever country where they are located. When medically necessary, our doctors can help Members navigate the local health systems to obtain the best healthcare for their situation.

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In our core, traditional markets we are targeting large employers and health plans while simultaneously committing incremental sales and marketing

growing. We have also established a track record of integrating these acquisitions to deliver incremental value to our Clients and Members. For example, in 2019 we began offering to U.S. clients our new Teladoc Medical Experts service, which was commercialized from our acquisition of Best Doctors and Advance Medical. In 2019 we acquired Medicin Direct, a leading telehealth player in France. This acquisition combines the breadth of virtual care services of Teladoc Health with the strong, established local medical operations of MedecinDirect, enabling us to capitalize on positive market conditions and bring the benefits of virtual care to more individuals across France. In 2019 we also made a strategic investment in Vida Health, a personalized virtual care platform for physical and behavioral health. Our investment in Vida Health enables us to offer targeted virtual solutions to people with multiple chronic conditions.

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In January 2020 we announced a definitive agreement to acquire InTouch, Technologies, Inc., the leading provider of enterprise solutions for hospitals and health systems. The transaction is anticipated to close by the end of the second quarter of 2020. We will continue to evaluate and pursue acquisition opportunities that are complementary to our business.business and virtual healthcare strategy.

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Technology and Operations

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Our core integrated technology platform supports rapid and efficient access to, and evaluation of, information from a variety of healthcare network participants. It has a user friendlyuser-friendly interface designed to empower Members and dependents to remotely access healthcare whenever and wherever eachan individual chooses (via mobile devices, the Internet, video and phone).

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Our enterprise scale platform is architected for sharing clinical and non clinicalnon-clinical data in real time among the Teladoc Health constituents, which include: Members, Providers, provider network operations centers staff, nurses, SureScripts (for electronic medication prescription writing, routing and fulfillment) and health plans for real time Member eligibility verification, , financial responsibility calculations, claims processing, clinical summaries and clinical alerts.

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The Teladoc ProviderHealth telehealth provider network leverages our core technology platform for managing custom visit queues that automatically and instantly route requested visits to the appropriate Providers based upon proprietary algorithms. Providers use our Internet based application or iOsiOS app for viewing their visit queue, scheduling visits and following the proprietary Teladoc Health workflow for reviewing Members’ medical history and symptoms, documenting the completed visits, e Prescribing, if appropriate, and sending applicable medical content with follow up instructions to the Member via a secure message center.

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We use data and analytics to predict demand patterns by geography and we recruit and manage our Provider network to meet the demands of our members.Members. Our complex algorithms enable us to effectively manage/allocate supply and onboard Providers to meet demand while maintaining one hour guaranteed response times, with a median response time of less than ten minutes.

RESTful API’s enables our Clients and Members to access our solution using a custom or existing website or mobile app. For example, a Teladoc healthHealth plan Client can offer its Members the ability to access our solution through their existing Member portal. Members can also register for Teladoc Health, complete their medical history, select a pharmacy and request a visit without having to access the Teladoc Health Member site. All of these functions are provided via the Client’s website or mobile app that completes system calls to the Teladoc Health API to process the requests.

The following graphic displays our robust technology architecture that supports our proprietary platforms that service our lines of business:

Clients and Members

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Our Clients consist of (i) employers, including 291over 40% of Fortune 1000500 companies, (ii) health plans and (iii) health systems and other entities. As of December 31, 2017,2019, we had approximately 10,000have over thousands of Clients and our services reached over 23.236.7 million Members. The following is a selection of our Clients:

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Within existing accounts, we believe our current membershipMembership represents only a fraction of the potential Members available to us. For example, our existing health plan Clients and self‑insuredself-insured Clients associated with these health plans currently purchase our solution for only a small percentage of their beneficiaries in aggregate, reflecting a significant opportunity for membershipMembership growth. We believe there are in excess of 50approximately 75 million potential Members within these existing Clients alone.

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Research and Development

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Our ability to compete depends, in large part, on our continuous commitment to rapidly introduce new services, technologies, features and functionality. Our product development team which as of December 31, 2017, consisted of 115 employees, is responsible for the design, development, testing and certification of our solution. In addition, we utilize certain third‑partythird-party development services to perform application development and design services. We focus our efforts on developing new products and further enhancing the usability, functionality, reliability, performance and flexibility of our solution.

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Competition

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We view as our competitors those companies that currently (or in the future will) (i) develop and market telehealth technology (devices and systems) or (ii) provide telehealth, such as the delivery of on‑demandon-demand access to healthcare. In the provision of telehealth, competition focuses on, among other factors, experience in operation, customer service, quality of technology and know‑howknow-how and reputation. Competitors in the telehealth and expert medical services market include MDLive, Inc., Doctors on Demand, Inc., American Well Corporation and Grand Rounds, Inc., among other smallersmall industry participants.

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Teladoc Physicians,Health Medical Group, P.A.

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We contract for the services of our providers’telehealth provider network through a services through the Services Agreementagreement with Teladoc Health Medical Group, P.A.,formerly Teladoc Physicians, P.A. or Teladoc PA, and, therefore, our telehealth providers are not our employees.P.A.. Under the Services Agreement,services agreement, we have agreed to serve, on an exclusive basis, as manager and administrator of Teladoc PA’s non‑medicalHealth Medical Group, P.A.’s non-medical functions and services related to the provision of the telehealth services by physiciansproviders employed by or under contract with Teladoc PA.Health Medical Group, PA.. The non-medical functions and services we provide under the services agreement primarily include member management services, such as maintaining network operations centers for our Members to request a visit with Teladoc PAHealth Medical Group, P.A.’s providers, member billing and collection administration, and maintenance and storage of member medical records. Teladoc Health Medical Group, P.A. has agreed to provide our members,Members, through its physicians,providers, access to telehealth services and recommended treatment 24 hours per day, 365 days per year. The Services Agreementservices agreement also requires Teladoc PAHealth Medical Group, P.A. to maintain the state licensure and other credentialing requirements of its physicians. The non‑medical functions and services we provide under the Services Agreement primarily include member management services such as maintaining network operations centers for our members to request a visit with Teladoc PA’s physicians (our providers), member billing and collection administration and maintenance and storage of member medical records.providers. Under the Services Agreement,services agreement, Teladoc PAHealth Medical Group, P.A. currently pays us an access fee of $25,000$65,000 per month for network operations center and medical records maintenance, a fixed fee of $65,000approximately $353,000 and $778,000, respectively per month for our provision of management and administrative services and marketing expense and a license fee of $10,000 per month for the non‑exclusivenon-exclusive use of the Teladoc Health trade name. The Services Agreementservices agreement has a 20‑year20-year term and expires in February 2025 unless earlier terminated upon mutual agreement of the parties or unilaterally by a party following the commencement of bankruptcy or liquidation

proceeds by the non‑terminatingnon-terminating party, a material breach of the Services

2018. The complaint asserts violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 based on allegedly false or misleading statements and omissions with respect to, among other things, the alleged misconduct of one of our previous executive officers. The complaint seeks certification as a class action and unspecified compensatory damages plus interest and attorneys’ fees. We believe that the claims against us and our officers are without merit, and we and our named officers intend to defend ourselves vigorously, including filing a motion to dismiss the complaint, which motion was filed on September 13, 2019.

In addition, on June 21, 2019, a stockholder derivative lawsuit (Kreutter v. Gorevic, et al.) was filed in the SDNY against certain of our current and former directors and officers. The derivative lawsuit alleges that the named directors and officers breached their fiduciary duties to us in connection with factual assertions substantially similar to those in the purported securities class action complaint described above. We believe that the claims set forth in this stockholder derivative lawsuit are without merit.

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On May 14, 2018, a purported class action complaint (Thomas v. Best Doctors, Inc.) was filed in the United States District Court for the District of Massachusetts against our wholly owned subsidiary, Best Doctors, Inc. The complaint alleges that on or about May 16, 2017, Best Doctors violated the U.S. Telephone Consumer Protection Act (TCPA) by sending unsolicited facsimiles to plaintiff and certain other recipients without the recipients’ prior express invitation or permission. The lawsuit seeks statutory damages for each violation, subject to trebling under the TCPA, and injunctive relief. We will vigorously defend the lawsuit and any potential loss is currently deemed to be immaterial.

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Seasonality

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We typically experience the strongest increases in consecutive quarterly revenue during the fourth and first quarters of each year, which coincides with traditional annual benefit enrollment seasons. In particular, as a result of many Clients’ introduction of new services at the very end of a calendarthe current year, or the start of each calendar year, the majoritya concentration of our new Client contracts have an effective date of January 1. Therefore, while Membership increases, utilization is dampened until service delivery ramps up over the course of the year. Additionally, as a result of national seasonal cold and flu trends, we typically experience our highest level of visit fees during the first and fourth quarters of each year when compared to other quarters of the year. Conversely, the second quarter of the year has historically been the period of

Some of these actions have resulted in litigation and the suspension or modification of our telehealth operations in certain states. With respect to expert second-opinionmedical services, we believe we are correct in the view that they do not constitute the practice of medicine in any jurisdiction in which we provide them. However, the extent to which a U.S. state or non-U.S. jurisdiction considers particular actions or relationships to constitute practicing medicine is subject to change and to evolving interpretations by (in the case of U.S. states) medical boards and state attorneys general, among others, and (in the case of non-U.S. jurisdictions) the relevant regulatory and legal authorities, each with broad discretion. Accordingly, we must monitor our compliance with law in every jurisdiction in which we operate, on an ongoing basis, and we cannot provide assurance that our activities and arrangements, if challenged, will be found to be in compliance with the law. Additionally, it is possible that the laws and rules governing the practice of medicine, including remote care,healthcare, in one or more jurisdictions may change in a manner-deleteriousmanner deleterious to our business. If a successful legal challenge or an adverse change in the relevant laws were to occur, and we were unable to adapt our business model accordingly, our operations in the affected jurisdictions would be disrupted, which could have a material adverse effect on our business, financial condition and results of operations.

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In our U.S. telehealth business, we are dependent on our relationships with affiliated professional entities, which we do not own, to provide physician services, and our business would be adversely affected if those relationships were disrupted.

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There is a risk that U.S. state authorities in some jurisdictions may find that our contractual relationships with our physicians providing telehealth violate laws prohibiting the corporate practice of medicine. These laws generally prohibit the practice of medicine by lay persons or entities and are intended to prevent unlicensed persons or entities from interfering with or inappropriately influencing thea physician’s professional judgment. The extent to which each state considers particular actions or contractual relationships to constitute improper influence of professional judgment varies across the states and is subject to change and to evolving interpretations by state boards of medicine and state attorneys general, among others. As such, we must monitor our compliance with laws in every jurisdiction in which we operate on an ongoing basis and we cannot guarantee that subsequent interpretation of the corporate practice of medicine laws will not circumscribe our business operations. State corporate practice of medicine doctrines also often impose penalties on physicians themselves for aiding the corporate practice of medicine, which could discourage physicians from participating in our network of providers.

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These additional monetary expenditures may increase future overhead, which could have a material adverse effect on our results of operations.

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We have identified what we believe are the areas of government regulation that, if changed, would be costly to us. These include: rules governing the practice of medicine by physicians; licensure standards for doctors and behavioral health professionals; laws limiting the corporate practice of medicine; cybersecurity and privacy laws; laws and rules relating to the distinction between independent contractors and employees; and tax and other laws encouraging employer‑sponsoredemployer-sponsored health insurance and group benefits. There could be laws and regulations applicable to our business that we have not identified or that, if changed, may be costly to us, and we cannot predict all the ways in which implementation of such laws and regulations may affect us.

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In the jurisdictions in which we operate, we believe we are in compliance with all applicable laws, but, due to the uncertain regulatory environment, certain jurisdictions may determine that we are in violation of their laws. In the event that we must remedy such violations, we may be required to modify our services and products in a manner that undermines our solution’s attractiveness to our clients, membersClients, Members or providers or experts, we may become subject to fines or other penalties or, if we determine that the requirements to operate in compliance in such jurisdictions are overly burdensome, we may elect to terminate our operations in such places. In each case, our revenue may decline, and our business, financial condition and results of operations could be materially adversely affected.

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Additionally, the introduction of new services may require us to comply with additional, yet undetermined, laws and regulations. Compliance may require obtaining appropriate licenses or certificates, increasing our security measures and expending additional resources to monitor developments in applicable rules and ensure compliance. The failure to adequately comply with these future laws and regulations may delay or possibly prevent some of our products or services from being offered to clientsClients and members,Members, which could have a material adverse effect on our business, financial condition and results of operations.

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be awarded in litigation proceedings. Such settlements often contain additional compliance and reporting requirements as part of a consent decree, settlement agreement or corporate integrity agreement. Given the significant size of actual and potential settlements, it is expected that the government will continue to devote substantial resources to investigating healthcare providers’ compliance with the healthcare reimbursement rules and fraud and abuse laws.

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The laws, regulations and standards governing the provision of healthcare services may change significantly in the future. We cannot assure you that any new or changed healthcare laws, regulations or standards will not materially adversely affect our business. We cannot assure you that a review of our business by judicial, law enforcement, regulatory or accreditation authorities will not result in a determination that could adversely affect our operations.

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Our international operations pose certain risks to our business that may be different from risks associated with our domestic operations.

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Our international business is subject to risks resulting from differing legal and regulatory requirements, political, social and economic conditions and unforeseeable developments in a variety of jurisdictions. We have employees in eight countries,17 offices in the United States, Canada, Spainglobally and Australia and clientsClients across more than 100175 countries worldwide. We earned approximately 8%20% of revenue internationally in 2017.2019. Our international operations following are subject to particular risks in addition to those faced by our domestic operations, including:

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movements in exchange rates may cause our revenue and expenses to fluctuate, impacting our profitability and cash flows. Future business operations and opportunities, including any continued expansion of our business outside the United States, may further increase the risk that cash flows resulting from these activities may be adversely affected by changes in currency exchange rates. In the event we are unable to offset these risks, there may be a material adverse impact on our business and operations. In appropriate circumstances where we are unable to naturally offset our exposure to these currency risks, we may enter into derivative transactions to reduce such exposures. Even where we implement hedging strategies to mitigate foreign currency risk, these strategies might not eliminate our exposure to foreign exchange rate fluctuations and involve costs and risks of their own, such as ongoing management time and expertise, external costs to implement the strategies and potential accounting implications. Nevertheless, exchange rate fluctuations may either increase or decrease our revenues and expenses as reported in U.S. dollars. Moreover, foreign governments may restrict transfers of cash out of the country and control exchange rates. There can be no assurance that we will be able to repatriate our earnings, and at exchange rates that are beneficial to us, which could have a material adverse effect on our business, financial condition and results of operations.

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Our business is subject to complex and evolving foreign laws and regulations regarding privacy, data protection and other matters relating to information collection.

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There are numerous foreign laws, regulations and directives regarding privacy and the collection, storage, transmission, use, processing, disclosure and protection of personally identifiable information (“PII”) and other personal or customer data, the scope of which is continually evolving and subject to differing interpretations. We must comply with such laws, regulations and directives and we may be subject to significant consequences, including penalties and fines, for our failure to comply. For example, the European Commission has enactedas of May 25, 2018, the General Data Protection Regulation (“GDPR”) replaced the Data Protection Directive with respect to the processing of personal data in the European Union. The GDPR imposes several stringent requirements for controllers and processors of personal data, including, for example, higher standards for obtaining consent from individuals to process their personal data, more robust disclosures to individuals and a strengthened individual data rights regime, shortened timelines for data breach notifications, limitations on retention and secondary use of information, increased requirements pertaining to health data and pseudonymized (i.e., key-coded) data and additional obligations when we contract with third-party processors in connection with the processing of personal data. The GDPR provides that becomes effective in May 2018EU member states may make their own further laws and will supersede current European Unionregulations limiting the processing of genetic, biometric or health data, which could limit our ability to use and share personal data or could cause our costs to increase and could harm our business and financial condition. Failure to comply with the requirements of GDPR and the applicable national data protection legislation, impose more stringent European Unionlaws of the EU member states may result in fines of up to €20,000,000 or up to 4% of the total worldwide annual turnover of the preceding financial year, whichever is higher, and other administrative penalties. To comply with the new data protection requirementsrules imposed by GDPR we may be required to put in place additional mechanisms ensuring compliance. In addition, privacy laws are developing quickly in other jurisdictions where we operate, which impose similar accountability, transparency and provide for severe penalties for breach, which couldsecurity obligations. This may be imposed directly ononerous and adversely affect our European subsidiaries. business, financial condition, results of operations and prospects.

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In addition, recent legal developments in Europe have created complexity and compliance uncertainty regarding certain transfers of information from Europethe European Union to the United States. We cannot be certain of the legitimacy of previously authorized data export mechanisms, including

privacy, data-retention or data-protection-related laws, regulations, orders or industry self-regulatory principles could result in proceedings or actions against us by governmental entities or others, a loss of customer confidence, damage to our brand and reputation, and a loss of customers, any of which could have an adverse effect on our business. In addition, various federal, state and foreign legislative or regulatory bodies may enact new or additional laws and regulations concerning privacy, data-retention and data-protection issues, including laws or regulations mandating disclosure to domestic or international law enforcement bodies, which could adversely impact our business, our brand or our reputation with customers. For example, some countries have adopted laws mandating that PII regarding customers in their country be maintained solely in their country. Having to maintain local data centers and redesign product, service and business operations to limit PII processing to within individual countries could increase our operating costs significantly.

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As we expand our international operations, we will increasingly face political, legal and compliance, operational, regulatory, economic and other risks that we do not face or are more significant than in our domestic operations. Our exposure to these risks is expected to increase.

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As we expand our international operations, we will increasingly face political, legal and compliance, operational, regulatory, economic and other risks that we do not face or that are more significant than in our domestic operations. These risks vary widely by country and include varying regional and geopolitical business conditions and demands, government intervention and censorship, discriminatory regulation, nationalization or expropriation of assets and pricing constraints. Our international products need to meet country-specific client and member preferences as well as country-specific legal requirements, including those related to licensing, telehealth, privacy, data storage, location, protection and security. Our ability to conduct telehealth services internationally is subject to the applicable laws governing remote healthcare and the practice of medicine in such location, and the interpretation of these laws is evolving and vary significantly from country to county and are enforced by governmental, judicial and regulatory authorities with broad discretion. We cannot, however, be certain that our interpretation of such laws and regulations is correct in how we structure our operations, our arrangements with physicians, services agreements and customer arrangements

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Our international operations increase our exposure to, and require us to devote significant management resources to implement controls and systems to comply with, the privacy and data protection laws of non-U.S. jurisdictions and the anti-bribery, anti-corruption and anti-money laundering laws of the United States (including the FCPA) and the United Kingdom (including the Bribery Act) and similar laws in other jurisdictions. Implementing our compliance policies, internal controls and other systems upon our expansion into new countries and geographies may require the investment of considerable management time and management, financial and other resources over a number of years before any significant revenues or profits are generated. Violations of these laws and regulations could result in fines, criminal sanctions against us, our officers or employees, restrictions or outright prohibitions on the conduct of our business, and significant brand and reputational harm. We must regularly reassess the size, capability and location of our global infrastructure and make appropriate changes, and must have effective change management processes and internal controls in place to address changes in our business and operations. Our success depends, in part, on our ability to anticipate these risks and manage these difficulties, and the failure to do so could have a material adverse effect on our business, operating results, financial position, brand, reputation and/or long-term growth.

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Our international operations require us to overcome logistical and other challenges based on differing languages, cultures, legal and regulatory schemes and time zones. Our international operations encounter labor laws, customs and employee relationships that can be difficult, less flexible than in our domestic operations and expensive to modify or terminate. In some countries we are required to, or choose to, operate with local business partners, which requires us to manage our partner relationships and may reduce our operational flexibility and ability to quickly respond to business challenges.

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December 31, 2017,2019, we had an accumulated deficit of $311.6$507.5 million. These losses and accumulated deficit reflect the substantial investments we made to acquire new clients,Clients, build our proprietary network of healthcare providers and develop our technology platform. We intend to continue scaling our business to increase our client, memberClient, Member and provider bases, broaden the scope of services we offer and expand our applications of technology through which membersMembers can access our services. Accordingly, we anticipate that cost of revenue and operating expenses will increase substantially in the foreseeable future. These efforts may prove more expensive than we currently anticipate, and we may not succeed in increasing our revenue sufficiently to offset these higher expenses. We cannot assure you that we will achieve profitability in the future or that, if we do become profitable, we will be able to sustain or increase profitability. Our prior losses, combined with our expected future losses, have had and will continue to have an adverse effect on our stockholders’ equity and working capital. As a result of these factors, we may need to raise additional capital through debt or equity financings in order to fund our operations, and such capital may not be available on reasonable terms, if at all.

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The impact of recent healthcare reform legislation and other changes in the healthcare industry and in healthcare spending on us is currently unknown, but may adversely affect our business, financial condition and results of operations.

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Our revenue is dependent on the healthcare industry and could be affected by changes in healthcare spending and policy. The healthcare industry is subject to changing political, regulatory and other influences. The Patient Protection and Affordable Care Act or PPACA made major changes in how healthcare is delivered and reimbursed, and increased access to health insurance benefits to the uninsured and underinsured population of the United States.

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The PPACA, among other things, increased the number of individuals with Medicaid and private insurance coverage, implemented reimbursement policies that tie payment to quality, facilitated the creation of accountable care organizations that may use capitation and other alternative payment methodologies, strengthened enforcement of fraud and abuse laws and encouraged the use of information technology.

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Such changes in the regulatory environment may also result in changes to our payor mix that may affect our operations and revenue.

In addition, certain provisions of the PPACA authorize voluntary demonstration projects, which include the development of bundling payments for acute, inpatient hospital services, physician services and postacute services for episodes of hospital care. Further, the PPACA may adversely affect payors by increasing medical costs generally, which could have an effect on the industry and potentially impact our business and revenue as payors seek to offset these increases by reducing costs in other areas. The full impact of these changes on us cannot be determined at this time.

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We expect that additional state and federal healthcare reform measures will be adopted in the future, any of which could limit the amounts that federal and state governments and other third‑partythird-party payors will pay for healthcare products and services, which could adversely affect our business, financial condition and results of operations.

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A significant portion of our revenue comes from a limited number of clients,Clients, the loss of which would have a material adverse effect on our business, financial condition and results of operations.

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Historically, we have relied on a limited number of clientsClients for a substantial portion of our total revenue. For the year ended December 31, 2019, 2018 and 2017, 2016 and 2015, no clientClient represented more than 10% of our total revenue. For the years ended December 31, 2017, 20162019, 2018 and 2015,2017, our top ten clientsClients by revenue accounted for 16.0%13.3%, 23.9%13.0% and 22.9%16.0% of our total revenue, respectively. We also rely on our reputation and recommendations from key clientsClients in order to promote our solution to potential new clients.Clients. The loss of any of our key clients,Clients, or a failure of some of them to renew or expand their subscriptions,relationships with us, could have a significant impact on the growth rate of our revenue, reputation and our ability to obtain new

utilization of, our solution, as well as on our ability to demonstrate the value of telehealth to employers, health plans, government agencies and other purchasers of healthcare for beneficiaries. Negative publicity concerning our solution or the telehealth market as a whole could limit market acceptenceacceptance of our solution. If our clientsClients and membersMembers do not perceive the benefits of our solution, or if our solution does not drive member engagement, then our market may not develop at all, or it may develop more slowly than we expect. Similarly, individual and healthcare industry concerns or negative publicity regarding patient confidentiality and privacy in the context of telehealth could limit market acceptance of our healthcare services. If any of these events occurs, it could have a material adverse effect on our business, financial condition or results of operations.

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If the number of individuals covered by our employer, health plan and other clientsClients decreases, or the number of applications or services to which they subscribe decreases, our revenue will likely decrease.

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Under most of our client contracts, we base our fees on the number of individuals to whom our clientsClients provide benefits and the number of applications or services subscribed to by our clients.Clients. Many factors may lead to a decrease in the number of individuals covered by our clientsClients and the number of applications or services subscribed to by our clients,Clients, including, but not limited to, the following:

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If the number of individuals covered by our employer, health plan and other clientsClients decreases, or the number of applications or services to which they subscribe decreases, for any reason, our revenue will likely decrease.

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Our growth depends in part on the success of our strategic relationships with third parties.

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In order to grow our business, we anticipate that we will continue to depend on our relationships with third parties, including our partner organizations and technology and content providers. For example, we partner with a number of price transparency, health savings account, or HSA and other benefits platforms to deliver our solution to their consumers. Identifying partners, and negotiating and documenting relationships with them, requires significant time and resources. Our competitors may be effective in providing incentives to third parties to favor their products or services or to prevent or reduce subscriptions to, or utilization of, our products and services. In addition, acquisitions of our partners by our competitors could result in a decrease in the number of our current and potential clients,Clients, as our partners may no longer facilitate the adoption of our applications by potential clients.Clients. If we are unsuccessful in establishing or maintaining our relationships with third parties, our ability to compete in the marketplace or to grow our revenue could be impaired and our results of operations may suffer. Even if we are successful, we cannot assure you that these relationships will result in increased client use of our applications or increased revenue.

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secure new cost‑effectivecost-effective provider contracts may result in a loss of or inability to grow our membershipMembership base, higher costs, healthcare provider network disruptions, less attractive service for our clientsClients and/or difficulty in meeting regulatory or accreditation requirements, any of which could have a material adverse effect on our business, financial condition and results of operations.

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We may not grow at the rates we historically have achieved or at all, even if our key metrics may indicate growth, which could have a material adverse effect on the market price of our common stock.

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We have experienced significant growth in the last five years. Future revenues may not grow at these same rates or may decline. Our future growth will depend, in part, on our ability to grow our revenue from existing clients,Clients, to complete sales to potential future clients,Clients, to expand our clientClient and memberMember bases, to develop new products and services and to expand internationally. We can provide no assurances that we will be successful in executing on these growth strategies or that, even if our key metrics would indicate future growth, we will continue to grow our revenue or to generate net income. Our ability to execute on our existing sales pipeline, create additional sales pipelines, and expand our clientClient base depends on, among other things, the attractiveness of our services relative to those offered by our competitors, our ability to demonstrate the value of our existing and future services, and our ability to attract and retain a sufficient number of qualified sales and marketing leadership and support personnel. In addition, our existing clientsClients may be slower to adopt our services than we currently anticipate, which could adversely affect our results of operations and growth prospects.

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We may become subject to medical liability claims, which could cause us to incur significant expenses and may require us to pay significant damages if not covered by insurance.

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Our business entails the risk of medical liability claims against both our providers and us. Although we and Teladoc Physicians,Health Medical Group, P.A. carry insurance covering medical malpractice claims in amounts that we believe are appropriate in light of the risks attendant to our business, successful medical liability claims could result in substantial damage awards that exceed the limits of our and Teladoc Physicians,Health Medical Group, P.A.’s insurance coverage. Teladoc Physicians,Health Medical Group, P.A. carries professional liability insurance for itself and each of its healthcare professionals (our providers), and we separately carry a general insurance policy, which covers medical malpractice claims. In addition, professional liability insurance is expensive and insurance premiums may increase significantly in the future, particularly as we expand our services. As a result, adequate professional liability insurance may not be available to our providers or to us in the future at acceptable costs or at all.

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Any claims made against us that are not fully covered by insurance could be costly to defend against, result in substantial damage awards against us and divert the attention of our management and our providers from our operations, which could have a material adverse effect on our business, financial condition and results of operations. In addition, any claims may adversely affect our business or reputation.

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Rapid technological change in our industry presents us with significant risks and challenges.

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The telehealth market is characterized by rapid technological change, changing consumer requirements, short product lifecycles and evolving industry standards. Our success will depend on our ability to enhance our solution with

example, away from high‑deductiblehigh-deductible health plans, or the emergence of new technologies as more competitors enter our market, could result in our telehealth solution being less desirable or relevant.

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For example, we currently derive the majority of our revenue from sales to clientsClients that purchase healthcare for their employees (either via insurance or self‑fundedself-funded benefit plans). A large part of the demand for our solution depends on the need of these employers to manage the costs of healthcare services that they pay on behalf of their employees. Some experts have predicted that future healthcare reform will encourage employer‑sponsoredemployer-sponsored health insurance to become significantly less prevalent as employees migrate to obtaining their own insurance over the state‑sponsoredstate-sponsored insurance marketplaces. Were this to occur, there is no guarantee that we would be able to compensate for the loss in revenue from employers by increasing sales of our solution to health insurance companies or to individuals or government agencies. In such a case, our results of operations would be adversely affected.

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If healthcare benefits trends shift or entirely new technologies are developed that replace existing solutions, our existing or future solutions could be rendered obsolete and our business could be adversely affected. In addition, we may experience difficulties with software development, industry standards, design or marketing that could delay or prevent our development, introduction or implementation of new applications and enhancements.

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If our new applications and services are not adopted by our clients,Clients, or if we fail to innovate and develop new applications and services that are adopted by our clients,Clients, our revenue and results of operations will be adversely affected.

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To date, we have derived a substantial majority of our revenue from sales of our primary care telehealth and expert second-opinion solutions,medical service, and our longer‑termlonger-term results of operations and continued growth will depend on our ability successfully to develop and market new applications and services that our clientsClients want and are willing to purchase. In addition, we have invested, and will continue to invest, significant resources in research and development to enhance our existing solution and introduce new high‑qualityhigh-quality applications and services. If existing clientsClients are not willing to make additional payments for such new applications, or if new clientsClients and membersMembers do not value such new applications, it could have a material adverse effect on our business, financial condition and results of operations. If we are unable to predict user preferences or if our industry changes, or if we are unable to modify our solution and services on a timely basis, we may lose clients.Clients. Our results of operations would also suffer if our innovations are not responsive to the needs of our clients,Clients, appropriately timed with market opportunity or effectively brought to market.

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We rely on data center providers, Internet infrastructure, bandwidth providers, third‑partythird-party computer hardware and software, other third parties and our own systems for providing services to our clientsClients and members,Members, and any failure or interruption in the services provided by these third parties or our own systems could expose us to litigation and negatively impact our relationships with clients,Clients, adversely affecting our brand and our business.

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We serve all of our clientsClients and membersMembers leveraging a multi cloud architecture using three vendors: AWS, Microsoft Azure, and Salesforce Force.com. This architecture provides redundancy and cost savings, and reduces our reliance on one single vendor. The actual instances are geographically diverse to insulate our applications from seven geographically dispersedlocal failures, and have an additional layer of redundancy provided by company managed data centers. While we control and have access to our servers, we do not control the operation of these facilities. The cloud vendors and the owners of our data center facilities have no obligation to renew their agreements with us on commercially reasonable terms, or at all. If we are unable to renew these agreements on commercially reasonable terms, or if one of our cloud vendors or data center operators is acquired, we may be required to transfer our servers and other infrastructure to a new vendor or a new data center facilities,facility, and we may incur significant costs

Additionally, if our cloud or data centers vendors are unable to keep up with our growing needs for capacity, this could have an adverse effect on our business. For example, a rapid expansion of our business could affect the service levels at our cloud vendors or data centers or cause such cloud systems or data centers and systems to fail. Any changes in third‑partythird-party service levels at our cloud vendors or data centers or any disruptions or other performance problems with our solution could adversely affect our reputation and may damage our clientsClients and members’Members’ stored files or result in lengthy interruptions in our services. Interruptions in our services may reduce our revenue, cause us to issue refunds to clientsClients for prepaid and unused subscriptions, subject us to potential liability or adversely affect client renewal rates.

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In addition, our ability to deliver our Internet‑basedInternet-based services depends on the development and maintenance of the infrastructure of the Internet by third parties. This includes maintenance of a reliable network backbone with the necessary speed, data capacity, bandwidth capacity and security. Our services are designed to operate without interruption in accordance with our service level commitments. However, we have experienced and expect that we may experience future interruptions and delays in services and availability from time to time. In the event of a catastrophic event with respect to one or more of our systems, we may experience an extended period of system unavailability, which could negatively impact our relationship with clientsClients and members.Members. To operate without interruption, both we and our service providers must guard against:

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We also rely on computer hardware purchased or leased and software licensed from third parties in order to offer our services, including software from Dell Computer, Microsoft, Apple and Redhat Corporation, and routers and network equipment from Cisco and Hewlett‑PackardHewlett-Packard Company. These licenses are generally commercially available on varying terms. However, it is possible that this hardware and software may not continue to be available on commercially reasonable terms, or at all. Any loss of the right to use any of this hardware or software could result in delays in the provisioning of our services until equivalent technology is either developed by us, or, if available, is identified, obtained and integrated.

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We exercise limited control over third‑partythird-party vendors, which increases our vulnerability to problems with technology and information services they provide. Interruptions in our network access and services may in connection with third‑partythird-party technology and information services reduce our revenue, cause us to issue refunds to clientsClients for prepaid and unused subscription services, subject us to potential liability or adversely affect client renewal rates. Although we maintain a security and privacy damages insurance policy, the coverage under our policies may not be adequate to compensate us for all losses that may occur related to the services provided by our third‑partythird-party vendors. In addition, we may not be able to continue to obtain adequate insurance coverage at an acceptable cost, if at all.

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If our security measures fail or are breached and unauthorized access to a client's data is obtained, our services may be perceived as insecure, we may incur significant liabilities, our reputation may be harmed, and we could lose sales and clients.Clients.

databases, power outages, hardware failures, telecommunication failures, user errors, or catastrophic events. Information security risks have generally increased in recent years because of the proliferation of new technologies and the increased sophistication and activities of perpetrators of cyber-attacks. As cyber threats continue to evolve, we may be required to expend additional resources to further enhance our information security measures and/or to investigate and remediate any information security vulnerabilities. If our security measures fail or are breached, it could result in unauthorized persons accessing sensitive client or member data (including PHI), a loss of or damage to our data, an inability to access data sources, or process data or provide our services to our clients.Clients. Such failures or breaches of our security measures, or our inability to effectively resolve such failures or breaches in a timely manner, could severely damage our reputation, adversely affect client, memberClient, Member or investor confidence in us, and reduce the demand for our services from existing and potential clients.Clients. In addition, we could face litigation, damages for contract breach, monetary penalties, or regulatory actions for violation of applicable laws or regulations, and incur significant costs for remedial measures to prevent future occurrences and mitigate past violations. Although we maintain insurance covering certain security and privacy damages and claim expenses, we may not carry insurance or maintain coverage sufficient to compensate for all liability and in any event, insurance coverage would not address the reputational damage that could result from a security incident.

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We may experience cyber-security and other breach incidents that remain undetected for an extended period. Because techniques used to obtain unauthorized access or to sabotage systems change frequently and generally are not recognized until launched, we may be unable to anticipate these techniques or to implement adequate preventive measures. If an actual or perceived breach of our security occurs, or if we are unable to effectively resolve such breaches in a timely manner, the market perception of the effectiveness of our security measures could be harmed and we could lose sales, clientsClients and members,Members, which could have a material adverse effect on our business, operations, and financial results.

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We could incur substantial costs as a result of any claim of infringement of another party’s intellectual property rights.

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In recent years, there has been significant litigation in the United States involving patents and other intellectual property rights. Companies in the Internet and technology industries are increasingly bringing and becoming subject to suits alleging infringement of proprietary rights, particularly patent rights, and our competitors and other third parties may hold patents or have pending patent applications, which could be related to our business. These risks have been amplified by the increase in third parties, which we refer to as non‑practicingnon-practicing entities, whose sole primary business is to assert such claims. Regardless of the merits of any other intellectual property litigation, we may be required to expend significant management time and financial resources on the defense of such claims, and any adverse outcome of any such claim or the above referenced review could have a material adverse effect on our business, financial condition or results of operations. We expect that we may receive in the future notices that claim we or our clientsClients using our solution have misappropriated or misused other parties’ intellectual property rights, particularly as the number of competitors in our market grows and the functionality of applications amongst competitors overlaps. Our existing or any future litigation, whether or not successful, could be extremely costly to defend, divert our management’s time, attention and resources, damage our reputation and brand and substantially harm our business.

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In addition, in most instances, we have agreed to indemnify our clientsClients against certain third‑partythird-party claims, which may include claims that our solution infringes the intellectual property rights of such third parties. Our business could be adversely affected by any significant disputes between us and our clientsClients as to the applicability or scope of our