Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2021 | Jul. 28, 2021 | |
Document and Entity Information | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Jun. 30, 2021 | |
Entity File Number | 001-37477 | |
Entity Registrant Name | TELADOC HEALTH, INC. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 04-3705970 | |
Entity Address, Address Line One | 2 Manhattanville Road | |
Entity Address, Address Line Two | Suite 203 | |
Entity Address, City or Town | Purchase | |
Entity Address, State or Province | NY | |
Entity Address, Postal Zip Code | 10577 | |
City Area Code | 203 | |
Local Phone Number | 635-2002 | |
Title of 12(b) Security | Common Stock, par value $0.001 per share | |
Trading Symbol | TDOC | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Central Index Key | 0001477449 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 159,248,228 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 |
Current assets: | ||
Cash and cash equivalents | $ 783,724 | $ 733,324 |
Short-term investments | 2,538 | 53,245 |
Accounts receivable, net of allowance of $10,952 and $6,412, respectively | 179,436 | 169,281 |
Inventories | 56,990 | 56,498 |
Prepaid expenses and other current assets | 82,149 | 47,259 |
Total current assets | 1,104,837 | 1,059,607 |
Property and equipment, net | 28,184 | 28,551 |
Goodwill | 14,454,712 | 14,581,255 |
Intangible assets, net | 1,963,172 | 2,020,864 |
Operating lease - right-of-use assets | 41,880 | 46,647 |
Other assets | 18,334 | 18,357 |
Total assets | 17,611,119 | 17,755,281 |
Current liabilities: | ||
Accounts payable | 42,077 | 46,030 |
Accrued expenses and other current liabilities | 91,609 | 83,657 |
Accrued compensation | 59,629 | 94,593 |
Deferred revenue-current | 69,293 | 52,356 |
Advances from financing companies | 13,619 | 13,453 |
Current portion of long-term debt | 0 | 42,560 |
Total current liabilities | 276,227 | 332,649 |
Other liabilities | 1,346 | 1,616 |
Operating lease liabilities, net of current portion | 36,493 | 43,142 |
Deferred revenue, net of current portion | 3,501 | 2,449 |
Advances from financing companies, net of current portion | 9,561 | 9,926 |
Deferred taxes | 81,882 | 102,103 |
Convertible senior notes, net | 1,201,039 | 1,379,592 |
Commitments and contingencies | ||
Stockholders' equity: | ||
Common stock, $0.001 par value; 300,000,000 shares authorized as of June 30, 2021 and December 31, 2020; 159,462,979 shares and 150,281,099 shares issued and outstanding as of June 30, 2021 and December 31, 2020, respectively | 159 | 150 |
Additional paid-in capital | 17,314,749 | 16,857,797 |
Accumulated deficit | (1,326,129) | (992,661) |
Accumulated other comprehensive gain | 12,291 | 18,518 |
Total stockholders' equity | 16,001,070 | 15,883,804 |
Total liabilities and stockholders' equity | $ 17,611,119 | $ 17,755,281 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 |
Consolidated Balance Sheets | ||
Allowance of Accounts receivable | $ 10,952 | $ 6,412 |
Common stock par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 300,000,000 | 300,000,000 |
Common stock, shares issued | 159,462,979 | 150,281,099 |
Common stock, shares outstanding | 159,462,979 | 150,281,099 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Consolidated Statements of Operations and Comprehensive Loss | ||||
Revenue | $ 503,139 | $ 241,030 | $ 956,814 | $ 421,829 |
Expenses: | ||||
Cost of revenue (exclusive of depreciation and amortization, which is shown separately below) | 160,273 | 90,780 | 306,232 | 163,162 |
Operating expenses: | ||||
Advertising and marketing | 103,221 | 47,578 | 192,660 | 80,093 |
Sales | 63,856 | 18,687 | 128,649 | 36,627 |
Technology and development | 80,759 | 23,029 | 158,767 | 42,286 |
Acquisition, integration and transformation related costs | 11,421 | 1,627 | 17,744 | 5,291 |
General and administrative | 111,216 | 56,615 | 216,388 | 102,957 |
Depreciation and amortization | 51,341 | 9,893 | 100,000 | 19,603 |
Total expenses | 582,087 | 248,209 | 1,120,440 | 450,019 |
Loss from operations | (78,948) | (7,179) | (163,626) | (28,190) |
Loss on extinguishment of debt | 31,419 | 7,751 | 42,878 | 7,751 |
Other income (expense), net | (217) | (111) | (5,869) | 574 |
Interest expense, net | 20,473 | 13,262 | 42,598 | 21,880 |
Net loss before taxes | (130,623) | (28,081) | (243,233) | (58,395) |
Income tax expense (benefit) | 3,196 | (2,399) | 90,235 | (3,110) |
Net loss | (133,819) | (25,682) | (333,468) | (55,285) |
Other comprehensive gain (loss), net of tax: | ||||
Cumulative translation adjustment | 7,265 | 12,880 | (6,227) | (4,674) |
Comprehensive loss | $ (126,554) | $ (12,802) | $ (339,695) | $ (59,959) |
Net loss per share, basic and diluted | $ (0.86) | $ (0.34) | $ (2.16) | $ (0.74) |
Weighted-average shares used to compute basic and diluted net loss per share | 156,055,090 | 76,512,870 | 154,187,739 | 74,919,194 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) | Common Stock2022 Notes | Common Stock2025 Notes | Common Stock2027 Notes | Common Stock | Additional Paid-In Capital2022 Notes | Additional Paid-In Capital2025 Notes | Additional Paid-In Capital2027 Notes | Additional Paid-In Capital | Accumulated Deficit2022 Notes | Accumulated Deficit2025 Notes | Accumulated Deficit2027 Notes | Accumulated Deficit | Accumulated Other Comprehensive Loss2022 Notes | Accumulated Other Comprehensive Loss2025 Notes | Accumulated Other Comprehensive Loss2027 Notes | Accumulated Other Comprehensive Loss | 2022 Notes | 2025 Notes | 2027 Notes | Total |
Balance as of beginning of the period at Dec. 31, 2019 | $ 73,000 | $ 1,538,716,000 | $ (507,525,000) | $ (17,239,000) | $ 1,014,025,000 | |||||||||||||||
Balance as of beginning of the period (in shares) at Dec. 31, 2019 | 72,761,941 | |||||||||||||||||||
Stockholders' Equity (Deficit) | ||||||||||||||||||||
Exercise of stock options | $ 0 | 14,830,000 | 0 | 0 | 14,830,000 | |||||||||||||||
Exercise of stock options (in shares) | 671,279 | |||||||||||||||||||
Issuance of common stock upon vesting of restricted stock units | $ 1,000 | (1,000) | 0 | 0 | 0 | |||||||||||||||
Issuance of common stock upon vesting of restricted stock units (in shares) | 642,411 | |||||||||||||||||||
Issuance of common stock for Notes | $ 0 | $ 58,000 | $ 0 | $ 0 | $ 58,000 | |||||||||||||||
Issuance of common stock for Notes (in shares) | 655 | |||||||||||||||||||
Stock-based compensation | $ 0 | 18,421,000 | 0 | 0 | 18,421,000 | |||||||||||||||
Other comprehensive loss, net of tax | 0 | 0 | 0 | (17,554,000) | (17,554,000) | |||||||||||||||
Net loss | 0 | 0 | (29,603,000) | 0 | (29,603,000) | |||||||||||||||
Balance as of end of the period at Mar. 31, 2020 | $ 74,000 | 1,572,024,000 | (537,128,000) | (34,793,000) | 1,000,177,000 | |||||||||||||||
Balance as of end of the period (in shares) at Mar. 31, 2020 | 74,076,286 | |||||||||||||||||||
Balance as of beginning of the period at Dec. 31, 2019 | $ 73,000 | 1,538,716,000 | (507,525,000) | (17,239,000) | 1,014,025,000 | |||||||||||||||
Balance as of beginning of the period (in shares) at Dec. 31, 2019 | 72,761,941 | |||||||||||||||||||
Stockholders' Equity (Deficit) | ||||||||||||||||||||
Net loss | (55,285,000) | |||||||||||||||||||
Balance as of end of the period at Jun. 30, 2020 | $ 79,000 | 1,879,573,000 | (562,810,000) | (21,913,000) | 1,294,929,000 | |||||||||||||||
Balance as of end of the period (in shares) at Jun. 30, 2020 | 79,099,433 | |||||||||||||||||||
Balance as of beginning of the period at Mar. 31, 2020 | $ 74,000 | 1,572,024,000 | (537,128,000) | (34,793,000) | 1,000,177,000 | |||||||||||||||
Balance as of beginning of the period (in shares) at Mar. 31, 2020 | 74,076,286 | |||||||||||||||||||
Stockholders' Equity (Deficit) | ||||||||||||||||||||
Exercise of stock options | $ 1,000 | 18,682,000 | 0 | 0 | 18,683,000 | |||||||||||||||
Exercise of stock options (in shares) | 927,684 | |||||||||||||||||||
Issuance of common stock upon vesting of restricted stock units | $ 0 | 0 | 0 | 0 | 0 | |||||||||||||||
Issuance of common stock upon vesting of restricted stock units (in shares) | 109,768 | |||||||||||||||||||
Issuance of common stock for Notes | $ 4,000 | 693,802,000 | 0 | 0 | 693,806,000 | |||||||||||||||
Issuance of common stock for Notes (in shares) | (3,949,794) | |||||||||||||||||||
Issuance of stock under employee stock purchase plan | $ 0 | 2,473,000 | 0 | 0 | 2,473,000 | |||||||||||||||
Issuance of stock under employee stock purchase plan (in shares) | 35,901 | |||||||||||||||||||
Retirement of shares related to acquisition (in shares) | 0 | |||||||||||||||||||
Equity portion of extinguishment of Notes | $ 0 | (715,151,000) | 0 | 0 | (715,151,000) | |||||||||||||||
Equity of Notes, net of issuance costs | $ 0 | $ 285,601,000 | $ 0 | $ 0 | $ 285,601,000 | |||||||||||||||
Stock-based compensation | $ 0 | 22,142,000 | 0 | 0 | 22,142,000 | |||||||||||||||
Other comprehensive loss, net of tax | 0 | 0 | 0 | 12,880,000 | 12,880,000 | |||||||||||||||
Net loss | 0 | 0 | (25,682,000) | 0 | (25,682,000) | |||||||||||||||
Balance as of end of the period at Jun. 30, 2020 | $ 79,000 | 1,879,573,000 | (562,810,000) | (21,913,000) | 1,294,929,000 | |||||||||||||||
Balance as of end of the period (in shares) at Jun. 30, 2020 | 79,099,433 | |||||||||||||||||||
Balance as of beginning of the period at Dec. 31, 2020 | $ 150,000 | 16,857,797,000 | (992,661,000) | 18,518,000 | 15,883,804,000 | |||||||||||||||
Balance as of beginning of the period (in shares) at Dec. 31, 2020 | 150,281,099 | |||||||||||||||||||
Stockholders' Equity (Deficit) | ||||||||||||||||||||
Exercise of stock options | $ 1,000 | 11,907,000 | 0 | 0 | 11,908,000 | |||||||||||||||
Exercise of stock options (in shares) | 1,238,112 | |||||||||||||||||||
Issuance of common stock upon vesting of restricted stock units | $ 1,000 | (1,000) | 0 | 0 | 0 | |||||||||||||||
Issuance of common stock upon vesting of restricted stock units (in shares) | 976,999 | |||||||||||||||||||
Issuance of common stock for Notes | $ 1,000 | $ 1,000 | 270,111,000 | $ 288,485,000 | 0 | $ 0 | 0 | $ 0 | 270,112,000 | $ 288,486,000 | ||||||||||
Issuance of common stock for Notes (in shares) | 1,058,373 | 1,056,861 | ||||||||||||||||||
Retirement of shares related to acquisition | $ 0 | (40,329,000) | 0 | 0 | (40,329,000) | |||||||||||||||
Retirement of shares related to acquisition (in shares) | (205,280) | |||||||||||||||||||
Equity portion of extinguishment of Notes | $ 0 | $ 0 | $ (224,081,000) | (237,261,000) | $ 0 | 0 | $ 0 | 0 | $ (224,081,000) | (237,261,000) | ||||||||||
Stock-based compensation | $ 0 | 90,000,000 | 0 | 0 | 90,000,000 | |||||||||||||||
Other comprehensive loss, net of tax | 0 | 0 | 0 | (13,492,000) | (13,492,000) | |||||||||||||||
Net loss | 0 | 0 | (199,649,000) | 0 | (199,649,000) | |||||||||||||||
Balance as of end of the period at Mar. 31, 2021 | $ 154,000 | 17,016,628,000 | (1,192,310,000) | 5,026,000 | 15,829,498,000 | |||||||||||||||
Balance as of end of the period (in shares) at Mar. 31, 2021 | 154,406,164 | |||||||||||||||||||
Balance as of beginning of the period at Dec. 31, 2020 | $ 150,000 | 16,857,797,000 | (992,661,000) | 18,518,000 | 15,883,804,000 | |||||||||||||||
Balance as of beginning of the period (in shares) at Dec. 31, 2020 | 150,281,099 | |||||||||||||||||||
Stockholders' Equity (Deficit) | ||||||||||||||||||||
Net loss | (333,468,000) | |||||||||||||||||||
Balance as of end of the period at Jun. 30, 2021 | $ 159,000 | 17,314,749,000 | (1,326,129,000) | 12,291,000 | 16,001,070,000 | |||||||||||||||
Balance as of end of the period (in shares) at Jun. 30, 2021 | 159,462,978 | |||||||||||||||||||
Balance as of beginning of the period at Mar. 31, 2021 | $ 154,000 | 17,016,628,000 | (1,192,310,000) | 5,026,000 | 15,829,498,000 | |||||||||||||||
Balance as of beginning of the period (in shares) at Mar. 31, 2021 | 154,406,164 | |||||||||||||||||||
Stockholders' Equity (Deficit) | ||||||||||||||||||||
Exercise of stock options | $ 1,000 | 5,872,000 | 0 | 0 | 5,873,000 | |||||||||||||||
Exercise of stock options (in shares) | 668,942 | |||||||||||||||||||
Issuance of common stock upon vesting of restricted stock units | $ 0 | 0 | 0 | 0 | 0 | |||||||||||||||
Issuance of common stock upon vesting of restricted stock units (in shares) | 278,206 | |||||||||||||||||||
Issuance of common stock for Notes | $ 4,000 | $ 617,161,000 | $ 0 | $ 0 | $ 617,165,000 | |||||||||||||||
Issuance of common stock for Notes (in shares) | 4,027,578 | |||||||||||||||||||
Issuance of stock under employee stock purchase plan | $ 0 | 10,539,000 | 0 | 0 | 10,539,000 | |||||||||||||||
Issuance of stock under employee stock purchase plan (in shares) | 82,088 | |||||||||||||||||||
Equity portion of extinguishment of Notes | $ 0 | (421,167,000) | 0 | 0 | (421,167,000) | |||||||||||||||
Stock-based compensation | 0 | 85,716,000 | 0 | 0 | 85,716,000 | |||||||||||||||
Other comprehensive loss, net of tax | 0 | 0 | 0 | 7,265,000 | 7,265,000 | |||||||||||||||
Net loss | 0 | 0 | (133,819,000) | 0 | (133,819,000) | |||||||||||||||
Balance as of end of the period at Jun. 30, 2021 | $ 159,000 | $ 17,314,749,000 | $ (1,326,129,000) | $ 12,291,000 | $ 16,001,070,000 | |||||||||||||||
Balance as of end of the period (in shares) at Jun. 30, 2021 | 159,462,978 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2021 | Jun. 30, 2020 | |
Cash flows used in operating activities: | ||
Net loss | $ (333,468) | $ (55,285) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 100,000 | 19,603 |
Amortization of right-of-use assets and depreciation of rental equipment | 7,521 | 3,052 |
Allowance for doubtful accounts | 7,534 | 2,290 |
Stock-based compensation | 169,270 | 40,243 |
Deferred income taxes | 83,823 | (3,457) |
Accretion of interest | 32,566 | 16,576 |
Loss on extinguishment of debt | 39,782 | 7,751 |
Gain on sale of investment | (5,901) | 0 |
Other, net | 38 | 214 |
Changes in operating assets and liabilities: | ||
Accounts receivable | (16,573) | (24,773) |
Prepaid expenses and other current assets | (26,758) | 1,595 |
Inventory | (2,234) | 0 |
Other assets | 1,919 | 36 |
Accounts payable | (4,741) | 1,844 |
Accrued expenses and other current liabilities | 5,380 | 37,555 |
Accrued compensation | (35,606) | (1,818) |
Deferred revenue | 17,205 | (12,347) |
Operating lease liabilities | (5,833) | (2,788) |
Other liabilities | 267 | (1,061) |
Net cash provided by operating activities | 34,191 | 29,230 |
Cash flows used in investing activities: | ||
Capital expenditures | (4,405) | (1,641) |
Capitalized software development costs | (21,508) | (6,449) |
Proceeds from marketable securities | 50,000 | 0 |
Proceeds from the sale of investment | 10,901 | |
Acquisitions of business, net of cash acquired | (56,336) | (13,500) |
Other, net | 3,150 | 0 |
Net cash used in investing activities | (18,198) | (21,590) |
Cash flows provided by financing activities: | ||
Net proceeds from the exercise of stock options | 17,781 | 33,513 |
Proceeds from advances from financing companies | 7,924 | 0 |
Payment from customers against advances from financing companies | (8,122) | 0 |
Proceeds from employee stock purchase plan | 11,031 | 2,473 |
Cash received for withholding taxes on stock-based compensation, net | 5,159 | 4,492 |
Other, net | (98) | 0 |
Net cash provided by financing activities | 33,538 | 788,278 |
Net increase in cash and cash equivalents | 49,531 | 795,918 |
Foreign exchange difference | 869 | (1,428) |
Cash and cash equivalents at beginning of the period | 733,324 | 514,353 |
Cash and cash equivalents at end of the period | 783,724 | 1,308,843 |
Income taxes paid | 52 | 59 |
Interest paid | 7,972 | 5,609 |
2027 Notes | ||
Cash flows provided by financing activities: | ||
Proceeds from issuance of Notes | 0 | 1,000,000 |
Payment of issuance costs of Notes | 0 | (24,070) |
2022 Notes | ||
Cash flows provided by financing activities: | ||
Repurchase of 2022 Notes | $ (137) | $ (228,130) |
Organization and Description of
Organization and Description of Business | 6 Months Ended |
Jun. 30, 2021 | |
Organization and Description of Business | |
Organization and Description of Business | Note 1. Organization and Description of Business Teladoc, Inc. was incorporated in the State of Texas in June 2002 and changed its state of incorporation to the State of Delaware in October 2008. Effective August 10, 2018, Teladoc, Inc. changed its corporate name to Teladoc Health, Inc. Unless the context otherwise requires, Teladoc Health, Inc., together with its subsidiaries, is referred to herein as “Teladoc Health” or the “Company”. The Company’s principal executive office is located in Purchase, New York. Teladoc Health is the global leader in providing virtual healthcare services with a focus on high quality, lower costs, and improved outcomes around the world. On January 4, 2021, the Company completed the acquisition of the UK-based telemedicine provider Consultant Connect Limited (“Consultant Connect”). Consultant Connect provides a platform that specializes in facilitating healthcare professional-to-professional advice and guidance in the United Kingdom. On October 30, 2020, the Company completed the merger with Livongo Health, Inc. (“Livongo”), a transformational opportunity to improve the delivery, access and experience of healthcare for consumers around the world. Livongo is pioneering a new category in healthcare, called Applied Health Signals, which is transforming the management of chronic conditions. On July 1, 2020, the Company completed the acquisition of InTouch Technologies, Inc. (“InTouch”), a leading provider of enterprise telehealth solutions for hospitals and health systems. |
Basis of Presentation and Princ
Basis of Presentation and Principles of Consolidation | 6 Months Ended |
Jun. 30, 2021 | |
Basis Of Presentation And Principles Of Consolidation | |
Basis of Presentation and Principles of Consolidation | Note 2. Basis of Presentation and Principles of Consolidation The accompanying unaudited consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”). The consolidated financial statements include the results of Teladoc Health, as well as three professional associations, thirteen professional corporations and a service Teladoc Health Medical Group, P.A., formerly Teladoc Physicians, P.A. is party to several Services Agreements by and among it and the professional associations and professional corporations pursuant to which each professional association and professional corporation provides services to Teladoc Health Medical Group, P.A. Each professional association and professional corporation is established pursuant to the requirements of its respective domestic jurisdiction governing the corporate practice of medicine. The Company holds a variable interest in the Association which contracts with physicians and other health professionals in order to provide services to the Company. The Association is considered a variable interest entity (“VIE”) since it does not have sufficient equity to finance its activities without additional subordinated financial support. An enterprise having a controlling financial interest in a VIE must consolidate the VIE if it has both power and benefits—that is, it has (1) the power to direct the activities of a VIE that most significantly impacts the VIE’s economic performance (power) and (2) the obligation to absorb losses of the VIE that potentially could be significant to the VIE or the right to receive benefits from the VIE that potentially could be significant to the VIE (benefits). The Company has the power and rights to control all activities of the Association and funds and absorbs all losses of the VIE and appropriately consolidates the Association. Total revenue and net income (loss) for the VIE were $53.9 million and $(1.0) million, and $57.7 million and $0.9 million, for the quarters ended June 30, 2021 and 2020, respectively. Total revenue and net income (loss) for the VIE were $105.7 million and $(3.1) million, and $100.2 million and $0.8 million, for the six months ended June 30, 2021 and 2020, respectively. The VIE’s total assets, all of which were current, were $21.7 million and $28.7 million at June 30, 2021 and December 31, 2020, respectively. Total liabilities, all of which were current for the VIE, were $61.8 million and $65.8 million at June 30, 2021 and December 31, 2020, respectively. The VIE’s total stockholders’ deficit was $40.2 million and $37.1 million at June 30, 2021 and December 31, 2020, respectively. Business Combinations The Company accounts for its business combinations using the acquisition method of accounting. The purchase price is attributed to the fair value of the assets acquired and liabilities assumed. Transaction costs directly attributable to the acquisition are expensed as incurred. Identifiable assets and liabilities acquired or assumed are measured separately at their fair values as of the acquisition date. The excess of the purchase price of acquisition over the fair value of the identifiable net assets of the acquiree is recorded as goodwill. The results of businesses acquired in a business combination are included in the Company’s consolidated financial statements from the date of acquisition. When the Company issues stock-based or cash awards to an acquired company’s shareholders, the Company evaluates whether the awards are consideration or compensation for post-acquisition services. The evaluation includes, among other things, whether the vesting of the awards is contingent on the continued employment of the acquired company’s stockholders beyond the acquisition date. If continued employment is required for vesting, the awards are treated as compensation for post-acquisition services and recognized as expense over the requisite service period. Determining the fair value of assets acquired and liabilities assumed requires management to use significant judgment and estimates, including the selection of valuation methodologies, estimates of future revenue and cash flows, discount rates and selection of comparable companies. The estimates and assumptions used to determine the fair values and useful lives of identified intangible assets could change due to numerous factors, including market conditions, technological developments, economic conditions and competition. In connection with determination of fair values, the Company may engage a third-party valuation specialist to assist with the valuation of intangible and certain tangible assets acquired and certain assumed obligations. Acquisition-related transaction costs incurred by the Company are not included as a component of consideration transferred but are accounted for as an operating expense in the period in which the costs are incurred. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. The Company bases its estimates on historical experience, current business factors, and various other assumptions that the Company believes are necessary to form a basis for making judgments about the carrying values of assets and liabilities, the recorded amounts of revenue and expenses, and the disclosure of contingent assets and liabilities. The Company is subject to uncertainties such as the impact of future events, economic and political factors, and changes in the Company’s business environment; therefore, actual results could differ from these estimates. Accordingly, the accounting estimates used in the preparation of the Company’s consolidated financial statements will change as new events occur, as more experience is acquired, as additional information is obtained and as the Company’s operating environment evolves. The Company believes that estimates used in the preparation of these consolidated financial statements are reasonable; however, actual results could differ materially from these estimates. Changes in estimates are made when circumstances warrant. Such changes in estimates and refinements in estimation methodologies are reflected in reported results of operations; if material, the effects of changes in estimates are disclosed in the notes to the consolidated financial statements. Significant estimates and assumptions by management affect areas including the allowance for doubtful accounts, the carrying value of long-lived assets (including goodwill and intangible assets), capitalization and amortization of software development costs, the finalization of purchase accounting adjustments, Client performance guarantees, the calculation of a contingent liability in connection with an acquisition earn-out, the provision for income taxes and related deferred tax accounts, revenue recognition, contingencies, and other items as described in the Summary of Significant Accounting policies in this Quarterly Report and in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020 (the “2020 Form 10-K”). Recently Issued Accounting Pronouncements In August 2020, the Financial Accounting Standards Board (“FASB”) issued ASU 2020-06—"Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity.” ASU 2020-06 simplifies the accounting for convertible instruments by eliminating the conversion option separation model for convertible debt that can be settled in cash and by eliminating the measurement model for beneficial conversion features. Convertible instruments that continue to be subject to separation models are (1) those with conversion options that are required to be accounted for as bifurcated derivatives and (2) convertible debt instruments issued with substantial premiums for which the premiums are recorded as paid-in capital. This ASU also requires entities to use the if-converted method for all convertible instruments in the diluted earnings per share calculation and include the effect of share settlement for instruments that may be settled in cash or shares, except for certain liability-classified share-based payment awards. This standard becomes effective for the Company on January 1, 2022 and may be early adopted during an interim period of 2021. The Company will adopt the standard on January 1, 2022 and is currently evaluating the impact of ASU 2020-06 on its consolidated financial statements. Summary of Significant Accounting Policies The following sections reflect updates to the summary of significant accounting policies described in the 2020 Form 10-K. In addition, on an ongoing basis, the Company will continue to closely monitor for any significant impact to its estimates and assumptions as a result of the COVID-19 pandemic, especially on the allowance for doubtful accounts. Acquisition, Integration and Transformation Costs Acquisition, integration and transformation costs include investment banking, financing, legal, accounting, consultancy, integration, fair value changes related to contingent consideration and certain other transaction costs related to mergers and acquisitions. It also includes costs related to certain business transformation initiatives focused on integrating and optimizing various operations and systems, including enhancing our customer relationship management (CRM) and enterprise resource planning (ERP) systems, incurred in connection with our acquisition and integration activities. General and Administrative Costs General and Administrative costs consist of all operating expenses not included in the other operating expense categories and now include legal and regulatory costs for all current and historical periods presented. Other (Income) Expense, Net Other (income) expense, net includes the impact of foreign currency remeasurement, realized and unrealized gains on investment securities and all other non-operating items not included in other financial statement lines. |
Revenue, Deferred Revenue, Defe
Revenue, Deferred Revenue, Deferred Costs and Other | 6 Months Ended |
Jun. 30, 2021 | |
Revenue, Deferred Revenue, Deferred Costs and Other | |
Revenue, Deferred Revenue, Deferred Costs and Other | Note 3. Revenue, Deferred Revenue, Deferred Costs and Other The Company generates access fees from Clients accessing its professional provider network, hosted virtual healthcare platform and chronic care management platforms. Visit fee revenue is generated for general medical, expert medical service and other specialty visits. In addition, other revenue is primarily associated with virtual healthcare device equipment included with its hosted virtual healthcare platform. Access revenue accounted for 86% of our revenue for both the quarter and six months ended June 30, 2021 and 76% of our revenue for both the quarter and six months ended June 30, 2020, respectively. The following table presents the Company’s revenues disaggregated by revenue source (in thousands): Quarter Ended Six Months Ended June 30, June 30, 2021 2020 2021 2020 Access Fees Revenue U.S. $ 396,622 $ 152,021 $ 747,490 $ 259,960 International 37,422 30,150 74,710 59,264 Total 434,044 182,171 822,200 319,224 Visit Fee Revenue U.S. 59,196 58,512 113,536 101,996 International 130 347 252 609 Total 59,326 58,859 113,788 102,605 Other U.S. 9,363 0 20,034 0 International 406 0 792 0 Total 9,769 0 20,826 0 Total Revenues $ 503,139 $ 241,030 $ 956,814 $ 421,829 Deferred Revenue Deferred revenue represents billed, but unrecognized revenue, and is comprised of fees received in advance of the delivery or completion of the services and amounts received in instances when revenue recognition criteria have not been met. Deferred revenue associated with upfront payments for a device is amortized ratably over the expected Member enrollment period. Deferred revenue that will be recognized during the succeeding twelve-month period is recorded as current deferred revenue and the remaining portion is recorded as noncurrent deferred revenue. For certain services, payment is required for future months before the service is delivered to the Member. The Company records deferred revenue when cash payments are received in advance of the Company’s performance obligation to provide services. Deferred revenue, current plus long-term, was $72.8 million at June 30, 2021 and $26.2 million at June 30, 2020. The net increase of $18.0 million and $11.3 million in the deferred revenue balance for the six months ended June 30, 2021 and 2020, respectively, is primarily driven by InTouch and Livongo as well as the direct-to-consumer behavioral health product and cash payments received or due in advance of satisfying the Company’s performance obligations, offset by revenue recognized that were included in the deferred revenue balance at the beginning of the period. The Company anticipates that it will satisfy most of its performance obligation associated with the deferred revenue within the prospective fiscal year. Revenue recognized during the quarters ended June 30, 2021 and 2020 that was included in deferred revenue at the beginning of the periods was $46.6 million and $12.4 million, respectively. Revenue recognized during the six months ended June 30, 2021 and 2020 that was included in deferred revenue at the beginning of the periods was $45.5 million and $11.2 million, respectively. We expect to recognize $52.8 million and $8.5 million of revenue in 2021 and 2022 , respectively, related to future performance obligations that are unsatisfied or partially unsatisfied as of June 30, 2021. Deferred Costs and Other Deferred costs and other, which are classified as a component of Prepaid expenses and other current assets or Other assets depending on term, consist of the following as of June 30, 2021 (in thousands): As of As of June 30, December 31, 2021 2020 Deferred costs and other, current 16,658 3,468 Deferred costs and other, noncurrent 7,913 2,179 Total deferred costs and other $ 24,571 $ 5,647 Deferred costs and other activity are as follows (in thousands): Deferred Costs and Other Beginning balance as of December 31, 2020 $ 5,647 Additions 25,539 Cost of revenue recognized (6,615) Ending balance as of June 30, 2021 $ 24,571 |
Business Acquisitions
Business Acquisitions | 6 Months Ended |
Jun. 30, 2021 | |
Business Acquisitions | |
Business Acquisitions | Note 4. Business Acquisitions On January 4, 2021, the Company completed the acquisition of the UK-based telemedicine provider Consultant Connect for a cash consideration of $56.3 million, net of cash acquired. Consultant Connect provides a platform that specializes in facilitating healthcare professional-to-professional advice and guidance in the United Kingdom. As part of purchase accounting, the Company recognized intangibles related to customer relationships, technology and the brand of $9.8 million, $1.9 million, and $0.6 million, respectively; and goodwill of $47.3 million. The acquisition was considered a stock acquisition for tax purposes and accordingly, the goodwill resulting from this acquisition is not tax deductible. On October 30, 2020, the Company completed the acquisition of Livongo through a merger in which Livongo became a wholly-owned subsidiary of the Company. Upon completion of the merger, each share of Livongo’s common stock converted into the right to receive 0.5920 shares of Teladoc Health’s common stock and $4.24 in cash, without interest. In addition, in connection with the closing of the merger, Livongo paid a special cash dividend equal to $7.09 per share of Livongo’s common stock to shareholders of Livongo as of a record date of October 29, 2020. The total initial consideration calculated on upon deal closing was $13,938.0 million consisting of $401.0 million of net cash, $555.4 million related to the conversion feature of the Livongo Notes guaranteed by the Company and 60.4 million shares of Teladoc Health’s common stock valued at approximately $12,981.6 million on October 30, 2020. The acquisition was considered a stock acquisition for tax purposes and accordingly, the goodwill resulting from this acquisition is not tax deductible. The total acquisition related costs were $59.0 million and included transaction costs for investment bankers, other professional fees and income taxes for accelerated grants and were recognized in the Company’s consolidated statement of operations in acquisition, integration and transformation costs. In the first quarter of 2021, the Company identified 205,279 of additional shares of Teladoc Health common stock that were included as part of the merger consideration (“Excess Shares”) and 85,481 of additional shares of Teladoc Health common stock that were not withheld from the merger consideration for withholding tax purposes (“Withholding Shares”). In addition, the Company identified $5.6 million of merger- related cash payments related to the Excess Shares (“Cash Overpayments”). The Company has recovered and cancelled all 205,279 of the Excess Shares and expects to recover the Cash Overpayments in the form of cash. The Company expects to apply the cash value of the Withholding Shares to offset future employment tax obligations of the Company. As a result, the total adjusted consideration was $13,876.9 million consisting of $380.2 million of net cash, $555.4 million related to the conversion feature of the Livongo Notes guaranteed by the Company and 60.2 million shares of Teladoc Health’s common stock valued at approximately $12,941.3 million. The Company does not expect to incur any material charges or expenses related to the recovery of the Withholding Shares and the Cash Overpayments. Accordingly, the Company recorded, in the first quarter of fiscal year 2021, an increase to receivables in current other assets of $20.8 million, a decrease to consolidated stockholders’ equity of $40.3 million and a decrease to goodwill of $61.1 million. On July 1, 2020, the Company completed the acquisition of InTouch through a merger in which InTouch became a wholly-owned subsidiary of the Company. The preliminary aggregate merger consideration paid was $1,078.5 million, net of cash acquired of $1.1 million, which was comprised of 4.6 million shares of Teladoc’s common stock valued at $918.8 million on July 1, 2020, and $160.7 million of cash. InTouch is a leading provider of enterprise telehealth solutions for hospitals and health systems. The acquisition was considered a stock acquisition for tax purposes and accordingly, the goodwill resulting from this acquisition is not tax deductible. The total acquisition related costs were $12.5 million and included transaction costs for investment bankers and other professional fees and were recognized in the Company’s consolidated statement of operations in acquisition, integration and transformation costs. The acquisitions described above were accounted for using the acquisition method of accounting, which requires, among other things, the assets acquired and the liabilities assumed be recognized at their fair values as of the acquisition date. The results of the acquisitions were included within the consolidated financial statements commencing on the aforementioned acquisition dates. The following table summarizes the fair value estimates of the assets acquired and liabilities assumed for the Livongo and InTouch acquisitions. The Company, with the assistance of a third-party valuation expert, estimated the fair value of the acquired tangible and intangible assets with significant estimates such as revenue projections. The allocation of the consideration transferred to the assets acquired and the liabilities assumed for the Livongo merger remains preliminary and therefore can be revised as a result of additional information obtained due to the finalization of the valuation inputs and assumptions as well as completing the assessment of the tax attributes of the business combination. As discussed further in Note 15, the Company recognized a non-cash income tax charge during the six months ended June 30, 2021, substantially reflecting the recording of a valuation allowance on stock compensation benefits associated with the Livongo merger. Additional adjustments that could have a material impact on the Company’s results of operations and financial position may be recorded within the measurement period, which will not exceed one year from the acquisition date. Identifiable assets acquired and liabilities assumed (in thousands): Livongo InTouch Purchase price, net of cash acquired $ 13,876,931 $ 1,069,759 Less: Accounts receivable 80,084 16,986 Short term investment 52,500 0 Inventory 24,299 8,492 Property and equipment, net 8,952 11,366 Right of use assets 15,056 4,965 Other assets 17,337 2,541 Client relationships 1,050,000 164,580 Technology 300,000 29,190 Trademarks 250,000 32,630 Advances from financing companies 0 (26,012) Accounts payable (119,302) (5,589) Deferred revenue (997) (20,729) Convertible notes (453,417) 0 Deferred taxes (32,984) (30,102) Lease liabilities (18,834) (5,495) Other liabilities (40,343) (13,042) Goodwill $ 12,744,580 $ 899,978 The amount allocated to goodwill reflects the benefits Teladoc Health expects to realize from the growth of the respective acquisitions’ operations, cost savings, and various synergies. The Company’s pro forma revenue and net loss for the quarters ended June 30, 2021 and 2020 and for the six months ended June 30, 2021 and 2020 below have been prepared as if Livongo and InTouch had been purchased on January 1, 2020. The Company made some pro-forma adjustments related to deferred revenue, deferred costs, amortization of intangible assets, interest expense, stock-based compensation, acquisition costs and transaction expenses. Unaudited Pro Forma Unaudited Pro Forma Quarters Ended Six Months Ended June 30, June 30, (in thousands) 2021 2020 2021 2020 Revenue $ 502,536 $ 357,302 $ 954,736 $ 627,723 Net loss $ (121,308) $ (98,952) $ (215,536) $ (699,488) The unaudited pro forma financial information above is not necessarily indicative of what the Company’s consolidated results actually would have been if the acquisitions had been completed at the beginning of the respective periods. In addition, the unaudited pro forma information above does not attempt to project the Company’s future results. The Company recorded approximately $162.1 million of revenue, net of deferred revenue acquisition related fair value adjustments and $(56.9) million of net loss in total from Livongo and InTouch for the quarter ended June 30, 2021. The Company recorded approximately $308.9 million of revenue, net of deferred revenue acquisition related fair value adjustments and $(125.5) million of net loss in total from Livongo and InTouch for the six months ended June 30, 2021. |
Inventories
Inventories | 6 Months Ended |
Jun. 30, 2021 | |
Inventories | |
Inventories | Note 5. Inventories Inventories consisted of the following (in thousands): As of June 30, As of December 31, 2021 2020 Raw materials and purchased parts $ 22,720 $ 19,591 Work in process 875 1,431 Finished goods 33,395 35,476 Total inventories $ 56,990 $ 56,498 |
Intangible Assets, Net
Intangible Assets, Net | 6 Months Ended |
Jun. 30, 2021 | |
Intangible Assets, Net | |
Intangible Assets, Net | Note 6. Intangible Assets, Net Intangible assets, net consist of the following (in thousands): Weighted Average Remaining Useful Accumulated Net Carrying Useful Life Life Gross Value Amortization Value (Years) June 30, 2021 Client relationships 2 to 20 years $ 1,468,151 $ (149,380) $ 1,318,771 15.0 Non-compete agreements 1.5 to 5 years 5,046 (5,046) (0) 0 Trademarks 3 to 15 years 326,997 (30,644) 296,353 10.0 Patents 3 years 200 (200) 0 0 Capitalized software development costs 3 to 5 years 81,178 (31,272) 49,906 2.7 Technology 5 to 7 years 339,150 (41,008) 298,142 6.1 Intangible assets, net $ 2,220,722 $ (257,550) $ 1,963,172 12.6 December 31, 2020 Client relationships 2 to 20 years $ 1,460,648 $ (100,844) $ 1,359,804 15.4 Non-compete agreements 1.5 to 5 years 5,097 (4,872) 225 0.4 Trademarks 3 to 15 years 326,786 (15,576) 311,210 10.5 Patents 3 years 200 (200) 0 0 Capitalized software development costs 3 to 5 years 52,518 (24,771) 27,747 2.8 Technology 5 to 7 years 338,150 (16,272) 321,878 6.6 Intangible assets, net $ 2,183,399 $ (162,535) $ 2,020,864 13.1 Amortization expense for intangible assets net of foreign currency remeasurement for intangible assets was $49.1 million and $9.0 million for the quarters ended June 30, 2021 and 2020, respectively. Amortization expense, net of foreign currency remeasurement for intangible assets was $95.7 million and $17.9 million for the six months ended June 30, 2021 and 2020, respectively. |
Goodwill
Goodwill | 6 Months Ended |
Jun. 30, 2021 | |
Goodwill | |
Goodwill | Note 7. Goodwill Goodwill consists of the following (in thousands): Six Months Ended Year Ended June 30, December 31, 2021 2020 Beginning balance $ 14,581,255 $ 746,079 Additions associated with acquisitions 47,328 13,812,198 Purchase consideration adjustment (see Note 4) (61,108) 0 Deferred tax adjustment (see Note 15) (106,532) 0 Cumulative translation adjustment (6,231) 22,978 Goodwill $ 14,454,712 $ 14,581,255 |
Accrued Expenses and Other Curr
Accrued Expenses and Other Current Liabilities | 6 Months Ended |
Jun. 30, 2021 | |
Accrued Expenses and Other Current Liabilities | |
Accrued Expenses and Other Current Liabilities | Note 8. Accrued Expenses and Other Current Liabilities Accrued expenses and other current liabilities consist of the following (in thousands): As of June 30, As of December 31, 2021 2020 Professional fees $ 3,214 $ 4,717 Consulting fees/provider fees 19,218 23,167 Client performance guarantees 7,151 7,215 Legal fees 3,419 2,419 Interest payable 1,488 2,049 Income tax payable 6,182 1,627 Insurance 6,170 3,139 Marketing 7,173 2,815 Operating lease liabilities - current 12,996 11,438 Earnout 4,186 4,514 Other 20,412 20,557 Total $ 91,609 $ 83,657 |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended |
Jun. 30, 2021 | |
Fair Value Measurements | |
Fair Value Measurements | Note 9. Fair Value Measurements The carrying value of the Company’s cash equivalents, short-term investments, accounts receivable, accounts payable, and accrued liabilities approximates fair value due to their short-term nature. The Company measures its financial assets and liabilities at fair value at each reporting period using a fair value hierarchy that requires it to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. A financial instrument’s classification within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. Three levels of inputs may be used to measure fair value: Level 1—Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets. Level 2—Include other inputs that are directly or indirectly observable in the marketplace. Level 3—Unobservable inputs that are supported by little or no market activity. The Company measures its cash equivalents at fair value on a recurring basis. The Company classifies its cash equivalents within Level 1 because they are valued using observable inputs that reflect quoted prices for identical assets in active markets and quoted prices directly in active markets. The Company’s investments in equity securities without readily determinable fair values are accounted for under the measurement alternative of the FASB ASU No. 2016-01, Recognition and Measurement of Financial Assets and Financial Liabilities, with any changes to fair value recognized within other (income) expense, net each reporting period. Under the measurement alternative, equity investments without readily determinable fair values are carried at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for identical or similar securities of the same issuer; value is generally determined based on a market approach as of the transaction date. The Company measures its short-term investments at fair value on a recurring basis and classifies such as Level 2. They are valued using observable inputs that reflect quoted prices directly or indirectly in active markets. The short-term investments amortized cost approximates fair value. The Company measured its contingent consideration at fair value on a recurring basis and classified such as Level 3. The Company estimates the fair value of contingent consideration as the present value of the expected contingent payments, determined using the weighted probability of the possible payments. The following tables present information about the Company’s assets and liabilities that are measured at fair value on a recurring basis using the above input categories (in thousands): June 30, 2021 Level 1 Level 2 Level 3 Total Cash and cash equivalents $ 783,724 $ 0 $ 0 $ 783,724 Short-term investments $ 0 $ 2,538 $ 0 $ 2,538 Contingent liability $ 0 $ 0 $ 4,186 $ 4,186 December 31, 2020 Level 1 Level 2 Level 3 Total Cash and cash equivalents $ 733,324 $ 0 $ 0 $ 733,324 Short-term investments $ 0 $ 53,245 $ 0 $ 53,245 Equity securities without readily determinable fair values $ 0 $ 5,000 $ 0 $ 5,000 Contingent liability $ 0 $ 0 $ 4,514 $ 4,514 There were no transfers between The change in fair value of the Company’s equity securities without readily determinable fair values was as follows: Fair value and historical cost basis at December 31, 2020 $ 5,000 Upward adjustment due to observable price change in identical securities 5,901 Sale of investment (10,901) Fair value at June 30, 2021 $ 0 The change in fair value of the Company’s contingent liability is recorded in acquisition, integration and transformation costs in the consolidated statements of operations. The contingent liability is based on future revenue and profitability expectations. The following table reconciles the beginning and ending balance of the Company’s Level 3 contingent liability (in thousands): Fair value at December 31, 2020 $ 4,514 Payments (187) Change in fair value (6) Currency translation adjustment (135) Fair value at June 30, 2021 $ 4,186 |
Leasing Operations
Leasing Operations | 6 Months Ended |
Jun. 30, 2021 | |
Leasing Operations | |
Leasing Operations | Note 10. Leasing Operations The Company has operating leases for facilities, hosting co-location facilities and certain equipment under non-cancelable leases in the United States and various international locations. The leases have remaining lease terms of 1 to 7 years, with options to extend the lease term from 1 to 5 years. At the inception of an arrangement, the Company determines whether the arrangement is or contains a lease based on the arrangement covering the right to use property, plant or equipment for a stated period of time. For new and amended leases beginning in 2020 and after, the Company will separately allocate the lease (e.g., fixed lease payments for right-to-use land, building, etc.) and non-lease components (e.g., common area maintenance) for its leases. Operating Leases The Company leases office space under non-cancelable operating leases in the United States and various international locations. As of June 30, 2021, the future minimum lease payments under non-cancelable operating leases are as follows (in thousands): As of Operating Leases: June 30, 2021 2021 $ 9,810 2022 14,130 2023 12,051 2024 8,529 2025 5,318 2026 5,440 Total future minimum payments $ 55,278 The Company rents its systems to certain qualified customers under arrangements that qualify as either sales-type lease or operating lease arrangements. Leases have terms that generally range from two |
Convertible Senior Notes
Convertible Senior Notes | 6 Months Ended |
Jun. 30, 2021 | |
Convertible Senior Notes | |
Convertible Senior Notes | Note 11. Convertible Senior Notes Outstanding Convertible Senior Notes As of June 30, 2021, the Company had three series of convertible senior notes outstanding. The issuances of such notes originally consisted of (i) $1 billion aggregate principal amount of 1.25% convertible senior notes due 2027 (the “2027 Notes”), issued on May 19, 2020 for net proceeds to the Company of $975.9 million after deducting offering costs of approximately $24.1 million, (ii) $287.5 million aggregate principal amount of 1.375% convertible senior notes due 2025 (the “2025 Notes”), issued on May 8, 2018 for net proceeds to the Company of $279.1 million after deducting offering costs of approximately $8.4 million, and (iii) $550.0 million aggregate principal amount of 0.875% convertible senior notes due 2025 that were issued by Livongo on June 4, 2020 for which the Company has agreed to guarantee Livongo’s obligations (the “Livongo Notes;” and together with the 2027 Notes, the 2025 Notes and the 2022 Notes (as defined below), the “Notes”). On June 27, 2017, the Company issued, at par value, $275 million aggregate principal amount of 3% convertible senior notes due 2022 (the “2022 Notes”), which were redeemed during the quarter ended March 31, 2021 as described below. The following table presents certain terms of the Notes: 2027 Notes 2025 Notes Livongo Notes Interest Rate Per Year 1.25 % 1.375 % 0.875 % Fair Value as of June 30, 2021 (in millions) $ 1,107.0 $ 19.0 $ 843.6 Maturity Date June 1, 2027 May 15, 2025 June 1, 2025 Optional Redemption Date June 5, 2024 May 22, 2022 June 5, 2023 Conversion Date December 1, 2026 November 15, 2024 March 1, 2025 Conversion Rate Per $1,000 Principal Amount as of June 30, 2021 4.1258 18.6621 13.94 Remaining Contractual Life as of June 30, 2021 5.9 years 3.9 years 3.9 years All of the Notes are unsecured obligations of the Company and rank senior in right of payment to the Company’s indebtedness that is expressly subordinated in right of payment to such Notes; equal in right of payment to the Company’s liabilities that are not so subordinated; effectively junior in right of payment to any of the Company’s secured indebtedness to the extent of the value of the assets securing such indebtedness; and structurally junior to all indebtedness and other liabilities incurred by the Company’s subsidiaries. Holders may convert all or any portion of their Notes in integral multiples of $1,000 principal amount, at their option, at any time prior to the close of business on the business day immediately preceding the applicable conversion date only under the following circumstances: ● during any quarter (and only during such quarter), if the last reported sale price of the shares of Company’s common stock for at least 20 trading days (whether or not consecutive) during a period of 30 consecutive trading days ending on the last trading day of the immediately preceding quarter is greater than or equal to 130% of the conversion price for the applicable Notes on each applicable trading day; ● during the five business day period after any ten consecutive trading day period (or five consecutive trading day period in the case of the Livongo Notes) in which the trading price was less than 98% of the product of the last reported sale price of Company’s common stock and the conversion rate for the applicable Notes on each such trading day; ● upon the occurrence of specified corporate events described under the applicable indenture; or ● if the Company calls the applicable Notes for redemption, at any time until the close of business on the second business day immediately preceding the redemption date. On or after the applicable conversion date, until the close of business on the second scheduled trading day immediately preceding the maturity date, holders may convert all or any portion of such Notes, regardless of the foregoing circumstances. The 2027 Notes and the 2025 Notes are convertible into shares of the Company’s common stock at the applicable conversion rate shown in the table above. The Livongo Notes are convertible at the applicable conversion rate shown in the table above into “units of reference property,” each of which is comprised of 0.5920 of a share of the Company’s common stock and $4.24 in cash, without interest. Upon conversion, the Company will pay or deliver, as the case may be, cash, shares of the Company’s common stock (or units of reference property, in the case of the Livongo Notes) or a combination thereof, at the Company’s election. If the Company elects to satisfy the conversion obligation solely in cash or through payment and delivery, as the case may be, of a combination of cash and shares of the Company’s common stock or units of reference property, the amount of cash and shares of the Company’s common stock or units of reference property, if any, due upon conversion will be based on a daily conversion value calculated on a proportionate basis for each trading day in a 25 consecutive trading days observation period (or 40 days in the case of the Livongo Notes). The Company may redeem for cash all or part of the Notes, at its option, on or after the applicable optional redemption date shown in the table above (and prior to the 41st scheduled trading day immediately preceding the maturity date in the case of the Livongo Notes) if the last reported sale price of its common stock exceeds 130% of the conversion price then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading days ending on, and including, the trading day immediately preceding the date on which the Company provides notice of the redemption. The redemption price will be the principal amount of the Notes to be redeemed, plus accrued and unpaid interest, if any. In addition, calling any 2027 Note or 2025 Note for redemption on or after the applicable optional redemption date will constitute a make-whole fundamental change with respect to that Note, in which case the conversion rate applicable to the conversion of that Note, if it is converted in connection with the redemption, will be increased in certain circumstances as described in the applicable indenture. If Livongo undergoes a fundamental change (as defined in the applicable indenture) at any time prior to the maturity date, holders will have the right, at their option, to require Livongo to repurchase for cash all or any portion of their Livongo Notes at a fundamental change repurchase price equal to 100% of the principal amount of the Livongo Notes to be repurchased, plus accrued and unpaid interest to, but excluding, the fundamental change repurchase date. In accounting for the issuance of the 2027 Notes, 2025 Notes and the 2022 Notes, the Company separated the Notes into liability and equity components. The carrying amount of the liability component was calculated by measuring the fair value of a similar liability that does not have an associated convertible feature. The carrying amount of the equity component representing the conversion option was determined by deducting the fair value of the liability component from the par value of the applicable Notes as a whole. The excess of the principal amount of the liability component over its carrying amount, referred to as the debt discount, is amortized to interest expense from the issuance date to the applicable maturity date. The equity component is not re-measured as long as it continues to meet the conditions for equity classification. The equity component related to the 2027 Notes, 2025 Notes and 2022 Notes was $286 million, $91.4 million and $62.4 million, respectively, net of issuance costs which were recorded in additional paid-in capital on the accompanying condensed consolidated balance sheet. The Company carries the liability component of the Livongo Notes at face value less unamortized debt discount on its condensed consolidated balance sheets and provides the fair value for disclosure purposes only. The Company has reserved an aggregate of 8.8 million shares of common stock for the Notes. In accounting for the transaction costs related to the issuance of the 2027 Notes, 2025 Notes and 2022 Notes, the Company allocated the total costs incurred to the liability and equity components of the Notes based on their relative values. Transaction costs attributable to the liability component are being amortized to interest expense over the seven-year term of the Notes (or five The liability components of the Notes consist of the following (in thousands): As of June 30, As of December 31, 2027 Notes 2021 2020 Principal $ 1,000,000 $ 1,000,000 Less: Debt discount, net (1) (269,694) (287,916) Net carrying amount $ 730,306 $ 712,084 2025 Notes Principal $ 6,098 $ 276,788 Less: Debt discount, net (1) (1,538) (65,923) Net carrying amount $ 4,560 $ 210,865 Livongo Notes Principal $ 550,000 $ 550,000 Less: Debt discount, net (1) (83,827) (93,357) Net carrying amount $ 466,173 $ 456,643 2022 Notes Principal $ 0 $ 46,762 Less: Debt discount, net (1) 0 (4,202) Net carrying amount $ 0 $ 42,560 (1) Included in the accompanying consolidated balance sheet within convertible senior notes and amortized to interest expense over the expected life of the Notes using the effective interest rate method. The Company estimates the fair value of its Notes utilizing market quotations for debt that have quoted prices in active markets. Since the Notes do not trade on a daily basis in an active market, the fair value estimates are based on market observable inputs based on borrowing rates currently available for debt with similar terms and average maturities. The following table sets forth total interest expense recognized related to the Notes (and in the case of the Livongo Notes, subsequent to the acquisition of Livongo) (in thousands): Quarters Ended Six Months Ended June 30, June 30, 2027 Notes: 2021 2020 2021 2020 Contractual interest expense $ 3,125 $ 1,493 $ 6,250 $ 1,493 Amortization of debt discount 9,163 4,033 18,222 4,033 Total $ 12,288 $ 5,526 $ 24,472 $ 5,526 Effective interest rate of the liability component 3.4 % 3.4 % 3.4 % 3.4 % Quarters Ended Six Months Ended June 30, June 30, 2025 Notes: 2021 2020 2021 2020 Contractual interest expense $ 255 $ 989 $ 1,068 $ 1,977 Amortization of debt discount 1,778 3,142 4,498 6,218 Total $ 2,033 $ 4,131 $ 5,566 $ 8,195 Effective interest rate of the liability component 7.8 % 7.9 % 7.8 % 7.9 % Quarters Ended Six Months Ended June 30, June 30, Livongo Notes: 2021 2021 Contractual interest expense $ 1,203 $ 2,406 Amortization of debt discount 4,796 9,530 Total $ 5,999 $ 11,936 Effective interest rate of the liability component 5.2 % 5.2 % Quarters Ended Six Months Ended June 30, June 30, 2022 Notes: 2021 2020 2021 2020 Contractual interest expense $ (164) $ 1,286 $ (60) $ 3,349 Amortization of debt discount 0 2,521 316 6,281 Total $ (164) $ 3,807 $ 256 $ 9,630 Effective interest rate of the liability component 3.0 % 10.0 % 3.0 % 10.0 % Exchanges of Convertible Senior Notes Due 2025 In June 2021, the Company entered into privately negotiated agreements with certain holders of the 2025 Notes to exchange approximately $206.4 million aggregate principal amount of 2025 Notes for an aggregate of approximately 3.9 million shares of the Company’s common stock in private placement transactions pursuant to Section 4(a)(2) of the Securities Act. In addition, certain holders of the 2025 Notes converted their 2025 Notes in exchange for approximately 1.2 million shares of the Company’s common stock during the six months ended June 30, 2021. As a result of the exchanges and conversions, the Company recorded a charge associated with the loss on extinguishment of debt net of transaction fees of $31.4 million and $39.5 million during the quarter and six months ended June 30, 2021, respectively. Redemption of Convertible Senior Notes Due 2022 In March 2021, the Company completed a redemption of all of the then outstanding 2022 Notes in exchange for approximately $0.1 million in cash (including accrued and unpaid interest). Prior to that redemption, certain holders of the 2022 Notes converted their 2022 Notes in exchange for 1.1 million shares of the Company’s common stock during the quarter ended March 31, 2021. As a result of the redemption and conversions, the Company recorded a charge associated with the loss on extinguishment of debt of $3.4 million during the quarter ended March 31, 2021. |
Advances from Financing Compani
Advances from Financing Companies | 6 Months Ended |
Jun. 30, 2021 | |
Advances from Financing Companies | |
Advances from Financing Companies | Note 12. Advances from Financing Companies The Company utilizes a third-party financing company to provide certain Clients with a rental option. The principal portion of these up-front payments are reported as advances from financing companies in the accompanying consolidated balance sheet. Interest rates applicable to the outstanding advances as of June 30, 2021 ranged from 3.35 % to 8.25%. Client lease payments to third party financing companies will reduce the advances from financing companies as of June 30, 2021 by year as follows (in thousands): As of June 30, 2021 2021 $ 7,367 2022 10,732 2023 4,528 2024 553 $ 23,180 |
Legal Matters
Legal Matters | 6 Months Ended |
Jun. 30, 2021 | |
Legal Matters | |
Legal Matters | Note 13. Legal Matters From time to time, Teladoc Health is involved in various litigation matters arising in the normal course of business, including the matters described below. The Company consults with legal counsel on those issues related to litigation and seeks input from other experts and advisors with respect to such matters. Estimating the probable losses or a range of probable losses resulting from litigation, government actions and other legal proceedings is inherently difficult and requires an extensive degree of judgment, particularly where the matters involve indeterminate claims for monetary damages, may involve discretionary amounts, present novel legal theories, are in the early stages of the proceedings, or are subject to appeal. Whether any losses, damages or remedies ultimately resulting from such matters could reasonably have a material effect on our business, financial condition, results of operations, or cash flows will depend on a number of variables, including, for example, the timing and amount of such losses or damages (if any) and the structure and type of any such remedies. As of the date of these financial statements, Teladoc Health’s management does not expect any litigation matter to have a material adverse impact on its business, financial condition, results of operations or cash flows. 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 the Company’s 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 (the “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. The Company will vigorously defend the lawsuit and any potential loss is currently deemed to be immaterial. On December 12, 2018, a purported securities class action complaint (Reiner v. Teladoc Health, Inc., et.al.) was filed in the United States District Court for the Southern District of New York (the “SDNY”) against the Company and certain of the Company’s officers and a former officer. The complaint is brought on behalf of a purported class consisting of all persons or entities who purchased or otherwise acquired shares of the Company’s common stock during the period March 3, 2016 through December 5, 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 the Company’s previous executive officers. The complaint seeks certification as a class action and unspecified compensatory damages plus interest and attorneys’ fees. On November 30, 2020, the SDNY granted the Company’s motion to dismiss the complaint, but granted the plaintiff the opportunity to refile, which refiling was made on December 30, 2020. The Company believes that the claims against the Company and its officers continue to be without merit, and the Company and its named officers intend to defend the Company vigorously, including filing a motion to dismiss the amended complaint. In addition, on June 21, 2019, a stockholder derivative lawsuit (Kreutter v. Gorevic, et al.) was filed in the SDNY against certain current and former directors and officers of the Company. The derivative lawsuit alleges that the named directors and officers breached their fiduciary duties to the Company in connection with factual assertions substantially similar to those in the purported securities class action complaint described above. The Company believes that the claims set forth in this stockholder derivative lawsuit are without merit and the Company’s motion to dismiss the lawsuit is pending before the SDNY. |
Common Stock and Stockholders'
Common Stock and Stockholders' Equity | 6 Months Ended |
Jun. 30, 2021 | |
Common Stock and Stockholders'Equity | |
Common Stock and Stockholders' Equity | Note 14. Common Stock and Stockholders’ Equity Capitalization Effective October 30, 2020, the authorized number of shares of the Company’s common stock was increased from 150,000,000 to 300,000,000 shares. Warrants The Company had no warrants outstanding as of June 30, 2021 or December 31, 2020. Stock Plans The Company’s 2015 Incentive Award Plan, 2017 Employment Inducement Incentive Award Plan and Livongo Acquisition Incentive Award Plan (collectively, the “Plans”) provide for the issuance of incentive and non-statutory options and other equity-based awards to its employees and non-employee service providers. In connection with the closing of the Livongo merger, the Company assumed the Livongo Health, Inc. 2019 Equity Incentive Plan, the Livongo Health, Inc. Amended and Restated 2014 Stock Incentive Plan and the Livongo Health, Inc. Amended and Restated 2008 Stock Incentive Plan (collectively, the “Assumed Plans”). At the effective time of the Livongo merger on October 30, 2020, each outstanding Livongo equity award issued under the Assumed Plans was converted into a corresponding award with respect to the Company’s common stock, with the number of shares underlying such award adjusted based on the “Equity Award Adjustment Ratio” (as defined below), and remained outstanding in accordance with the terms that were applicable to such award prior to the Livongo merger. The exercise price of each outstanding Livongo stock option was also adjusted based on the Equity Award Adjustment Ratio. The “Equity Award Adjustment Ratio” means the quotient determined by dividing (i) the volume weighted average closing price of Livongo common stock on the four four All stock-based awards to employees are measured based on the grant-date fair value or replacement grant date fair value in relation to the Livongo transaction, and are generally recognized on a straight line basis in the Company’s consolidated statement of operations over the period during which the employee is required to perform services in exchange for the award (generally requiring a four-year vesting period for each stock option and a three-year vesting period for each restricted stock unit (“RSU”)). Stock Options Options issued under the Plans are exercisable for periods not to exceed ten years, and vest and contain such other terms and conditions as specified in the applicable award document. Options to buy common stock are issued under the Plans, with exercise prices equal to the closing price of shares of the Company’s common stock on the New York Stock Exchange on the date of award. The Company had 12,537,677 shares available for grant at June 30, 2021. Activity under the Plans is as follows (in thousands, except share and per share amounts and years): Weighted- Weighted- Average Number of Average Remaining Aggregate Shares Exercise Contractual Intrinsic Outstanding Price Life in Years Value Balance at December 31, 2020 5,826,685 $ 17.19 5.31 $ 1,064,944 Stock option grants 15,672 $ 180.94 N/A Stock options exercised (1,906,565) $ 9.30 N/A $ (383,015) Stock options forfeited (45,406) $ 16.45 N/A Balance at June 30, 2021 3,890,386 $ 21.72 5.91 $ 563,821 Vested or expected to vest at June 30, 2021 3,890,386 $ 21.72 5.91 $ 563,821 Exercisable at June 30, 2021 3,261,942 $ 18.73 5.67 $ 481,348 The total grant-date fair value of stock options granted during the quarters ended June 30, 2021 and 2020 were $2.4 million and $0.2 million, respectively. The total grant-date fair value of stock options granted during the six months ended June 30, 2021 and 2020 were $2.8 million and $0.5 million, respectively. The Company estimates the fair value of stock options granted using the Black Scholes option pricing model. The assumptions used in the Black-Scholes option-pricing model are determined as follows: Volatility. The expected volatility was derived from the historical stock volatilities of the Company’s stock volatility over a period equivalent to the expected term of the stock option grants. Expected Term. The expected term represents the period that the stock-based awards are expected to be outstanding. When establishing the expected term assumption, the Company utilizes historical data. Risk-Free Interest Rate. The risk-free interest rate is based on U.S. Treasury zero-coupon issues with terms similar to the expected term on the options. Dividend Yield. The Company has never declared or paid any cash dividends and does not plan to pay cash dividends in the foreseeable future, and therefore, it used an expected dividend yield of zero. Forfeiture rate. The Company recognizes forfeitures as they occur. The fair value of each option grant was estimated on the date of grant using the Black-Scholes option-pricing model with the following assumptions and fair value per share: Six Months Ended June 30, 2021 2020 Volatility 57.02% - 58.1% 46.1% – 51.0% Expected term (in years) 4.1 4.3 Risk-free interest rate 0.31% - 0.65% 0.27% - 1.64% Dividend yield 0 0 Weighted-average fair value of underlying stock options $ 81.88 $ 49.44 The Company determined that a Monte Carlo valuation model is most suitable for valuation of options for the replaced and replacement awards from the Livongo merger, for the following reasons: ● Options are deeply in-the-money, as such don’t qualify as “plain-vanilla” options. ● With the merger, the exercise pattern of the replaced and replacement options might be different from a regular “plain-vanilla” option that assumes the exercise of the option at the end of the option expiration time. A lattice approach can be used to directly model the effect of different expected periods before exercise on the fair-value-based measure of the option, whereas it is assumed under the Black-Scholes-Merton model that exercise occurs at the end of the option’s expected term. For the quarters ended June 30, 2021 and 2020, the Company recorded compensation expense related to stock options of $27.4 million and $4.2 million, respectively. For the six months ended June 30, 2021 and 2020, the Company recorded compensation expense related to stock options granted of $55.6 million and $8.1 million, respectively. As of June 30, 2021, the Company had $64.8 million in unrecognized compensation cost related to non-vested stock options, which is expected to be recognized over a weighted-average period of approximately 1.0 years. Restricted Stock Units In May 2017, the Company commenced issuing RSUs pursuant to the 2015 Incentive Award Plan and to certain employees and members of the Board of Directors under the 2017 Employment Inducement Incentive Award Plan. The fair value of the RSUs is determined on the date of grant. The Company records compensation expense in the consolidated statement of operations on a straight-line basis over the vesting period for RSUs and on an accelerated tranche by tranche basis for performance-based awards. The vesting period for employees and members of the Board of Directors ranges from one Activity under the RSUs is as follows: Weighted-Average Grant Date RSUs Fair Value Per RSU Balance at December 31, 2020 3,550,595 $ 162.11 Granted 491,823 $ 207.73 Vested and issued (987,004) $ 121.45 Forfeited (523,210) $ 188.55 Balance at June 30, 2021 2,532,204 $ 177.30 Vested and unissued at June 30, 2021 13,755 $ 50.90 Non-vested at June 30, 2021 2,518,449 $ 177.30 The total grant-date fair value of RSUs granted during the quarters ended June 30, 2021 and 2020 were $13.9 million and $3.5 million, respectively. The total grant-date fair value of RSUs granted during the six months ended June 30, 2021 and 2020 were $101.9 million and $43.0 million, respectively. For the quarters ended June 30, 2021 and 2020, the Company recorded stock-based compensation expense related to the RSUs of $51.3 million and $11.3 million, respectively. For the six months ended June 30, 2021 and 2020, the Company recorded stock-based compensation expense related to the RSUs of $102.2 million and $20.7 million, respectively. As of June 30, 2021, the Company had $394.3million in unrecognized compensation cost related to non-vested RSUs, which is expected to be recognized over a weighted-average period of approximately 2.4 years. Performance Stock Units The Company began issuing grants Performance Stock Units (“PSUs”) to employees under the 2015 Incentive Award Plan in 2018. Stock-based compensation costs associated with our PSUs are initially determined using the fair market value of the Company's common stock on the date the awards are approved by the Compensation Committee of the Board of Directors (service inception date). The vesting of these PSUs is subject to certain performance conditions and a service requirement ranging from 1-3 years. Until the performance conditions are met, stock compensation costs associated with these PSUs are re-measured each reporting period based upon the estimated performance attainment on the reporting date. The ultimate number of PSUs that are issued to an employee is the result of the actual performance of the Company at the end of the performance period compared to the performance conditions and can range from 50% to 225% of the initial grant. Stock compensation expense for PSUs is recognized on an accelerated tranche by tranche basis for performance-based awards. Forfeitures are accounted for at the time the occur consistent with Company policy. Activity under the PSUs is as follows: Weighted-Average Grant Date Shares Fair Value Per PSU Balance at December 31, 2020 429,319 $ 76.60 Granted 516,031 $ 131.67 Vested and issued (268,201) $ 74.33 Balance at June 30, 2021 677,149 $ 119.47 Vested and unissued at June 30, 2021 0 $ 0 Non-vested at June 30, 2021 677,149 $ 119.47 No PSUs were granted during the quarter ended June 30, 2021 or 2020. The total grant-date fair value of PSUs granted during the six months ended June 30, 2021 and 2020 were $67.9 million and $13.1 million, respectively. For the quarters ended June 30, 2021 and 2020, the Company recorded stock-based compensation expense related to the PSUs of $5.9 million and $6.2 million, respectively. For the six months ended June 30, 2021 and 2020, the Company recorded stock-based compensation expense related to the PSUs of $13.1 million and $10.9 million, respectively. As of June 30, 2021, the Company had $30.1 million in unrecognized compensation cost related to non-vested PSUs, which is expected to be recognized over a weighted-average period of approximately 2.4 years. Employee Stock Purchase Plan In July 2015, the Company adopted the 2015 Employee Stock Purchase Plan (“ESPP”) in connection with its initial public offering. A total of 926,109 shares of common stock were reserved for issuance under this plan as of June 30, 2021. The Company’s ESPP permits eligible employees to purchase common stock at a discount through payroll deductions during defined offering periods. Under the ESPP, the Company may specify offerings with durations of not more than 27 months and may specify shorter purchase periods within each offering. Each offering will have one or more purchase dates on which shares of its common stock will be purchased for employees participating in the offering. An offering may be terminated under certain circumstances. The price at which the stock is purchased is equal to the lower of 85% of the fair market value of the common stock at the beginning of an offering period or on the date of purchase. During the quarters ended June 30, 2021 and 2020, the Company issued 82,088 shares and 35,901 shares, respectively under the ESPP. As of June 30, 2021, 517,015 shares remained available for issuance. For the quarters ended June 30, 2021 and 2020, the Company recorded stock-based compensation expense related to the ESPP of $1.1 million and $0.5 million, respectively. For the six months ended June 30, 2021 and 2020, the Company recorded stock-based compensation expense related to the ESPP of $3.3 million and $0.9 million, respectively. As of June 30, 2021, the Company had $2.0 million in unrecognized compensation cost related to the ESPP, which is expected to be recognized over a weighted-average period of approximately 0.4 year. Total compensation costs for stock-based awards were recorded as follows (in thousands): Quarter Ended Six Months Ended June 30, June 30, 2021 2020 2021 2020 Cost of revenue (exclusive of depreciation and amortization, which is shown separately) $ 1,786 $ 0 $ 4,148 $ 0 Advertising and marketing 4,815 1,544 9,897 2,803 Sales 18,953 3,271 40,120 6,190 Technology and development 27,699 2,559 54,425 4,663 General and administrative 29,717 14,554 60,680 26,587 Total stock-based compensation expense (1) $ 82,970 $ 21,928 $ 169,270 $ 40,243 (1) Excluding the amount capitalized related to internal software development projects. |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2021 | |
Income Taxes | |
Income Taxes | Note 15. Income Taxes As a result of the Company’s history of net operating losses (“NOL”), the Company had historically provided for a full valuation allowance against its deferred tax assets for assets that are not more-likely-than-not to be realized, which was partially released in the quarter ended December 31, 2020. The Company’s income tax expense for the quarter and six months ended June 30, 2021 was $3.2 million and $90.2 million, respectively. For the quarter ended June 30, 2021, the Company recognized a tax provision related to an increased U.S. valuation allowance since the first quarter, primarily due to the redemption and conversion of debt instruments, as well as discrete charges for a change in a foreign tax rate and the filing of income tax returns. For the six months ended June 30, 2021, the Company recognized a non-cash income tax charge substantially reflecting a discrete non-cash charge for an additional valuation allowance on excess stock compensation benefits associated with the Livongo merger. This was recorded in the first quarter, and was partially offset by tax benefits on current period losses. This discrete charge also resulted in a $106.5 million measurement period reduction to goodwill. The Company’s income tax benefit for the quarter and six months ended June 30, 2020 of $(2.4) million and $(3.1) million, respectively, was primarily related to the amortization of acquired intangibles and stock compensation deductions. |
Basis of Presentation and Pri_2
Basis of Presentation and Principles of Consolidations (Policies) | 6 Months Ended |
Jun. 30, 2021 | |
Basis Of Presentation And Principles Of Consolidation | |
Basis of Presentation and Principles of Consolidation | The accompanying unaudited consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”). The consolidated financial statements include the results of Teladoc Health, as well as three professional associations, thirteen professional corporations and a service Teladoc Health Medical Group, P.A., formerly Teladoc Physicians, P.A. is party to several Services Agreements by and among it and the professional associations and professional corporations pursuant to which each professional association and professional corporation provides services to Teladoc Health Medical Group, P.A. Each professional association and professional corporation is established pursuant to the requirements of its respective domestic jurisdiction governing the corporate practice of medicine. The Company holds a variable interest in the Association which contracts with physicians and other health professionals in order to provide services to the Company. The Association is considered a variable interest entity (“VIE”) since it does not have sufficient equity to finance its activities without additional subordinated financial support. An enterprise having a controlling financial interest in a VIE must consolidate the VIE if it has both power and benefits—that is, it has (1) the power to direct the activities of a VIE that most significantly impacts the VIE’s economic performance (power) and (2) the obligation to absorb losses of the VIE that potentially could be significant to the VIE or the right to receive benefits from the VIE that potentially could be significant to the VIE (benefits). The Company has the power and rights to control all activities of the Association and funds and absorbs all losses of the VIE and appropriately consolidates the Association. Total revenue and net income (loss) for the VIE were $53.9 million and $(1.0) million, and $57.7 million and $0.9 million, for the quarters ended June 30, 2021 and 2020, respectively. Total revenue and net income (loss) for the VIE were $105.7 million and $(3.1) million, and $100.2 million and $0.8 million, for the six months ended June 30, 2021 and 2020, respectively. The VIE’s total assets, all of which were current, were $21.7 million and $28.7 million at June 30, 2021 and December 31, 2020, respectively. Total liabilities, all of which were current for the VIE, were $61.8 million and $65.8 million at June 30, 2021 and December 31, 2020, respectively. The VIE’s total stockholders’ deficit was $40.2 million and $37.1 million at June 30, 2021 and December 31, 2020, respectively. |
Business Combinations | Business Combinations The Company accounts for its business combinations using the acquisition method of accounting. The purchase price is attributed to the fair value of the assets acquired and liabilities assumed. Transaction costs directly attributable to the acquisition are expensed as incurred. Identifiable assets and liabilities acquired or assumed are measured separately at their fair values as of the acquisition date. The excess of the purchase price of acquisition over the fair value of the identifiable net assets of the acquiree is recorded as goodwill. The results of businesses acquired in a business combination are included in the Company’s consolidated financial statements from the date of acquisition. When the Company issues stock-based or cash awards to an acquired company’s shareholders, the Company evaluates whether the awards are consideration or compensation for post-acquisition services. The evaluation includes, among other things, whether the vesting of the awards is contingent on the continued employment of the acquired company’s stockholders beyond the acquisition date. If continued employment is required for vesting, the awards are treated as compensation for post-acquisition services and recognized as expense over the requisite service period. Determining the fair value of assets acquired and liabilities assumed requires management to use significant judgment and estimates, including the selection of valuation methodologies, estimates of future revenue and cash flows, discount rates and selection of comparable companies. The estimates and assumptions used to determine the fair values and useful lives of identified intangible assets could change due to numerous factors, including market conditions, technological developments, economic conditions and competition. In connection with determination of fair values, the Company may engage a third-party valuation specialist to assist with the valuation of intangible and certain tangible assets acquired and certain assumed obligations. Acquisition-related transaction costs incurred by the Company are not included as a component of consideration transferred but are accounted for as an operating expense in the period in which the costs are incurred. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. The Company bases its estimates on historical experience, current business factors, and various other assumptions that the Company believes are necessary to form a basis for making judgments about the carrying values of assets and liabilities, the recorded amounts of revenue and expenses, and the disclosure of contingent assets and liabilities. The Company is subject to uncertainties such as the impact of future events, economic and political factors, and changes in the Company’s business environment; therefore, actual results could differ from these estimates. Accordingly, the accounting estimates used in the preparation of the Company’s consolidated financial statements will change as new events occur, as more experience is acquired, as additional information is obtained and as the Company’s operating environment evolves. The Company believes that estimates used in the preparation of these consolidated financial statements are reasonable; however, actual results could differ materially from these estimates. Changes in estimates are made when circumstances warrant. Such changes in estimates and refinements in estimation methodologies are reflected in reported results of operations; if material, the effects of changes in estimates are disclosed in the notes to the consolidated financial statements. Significant estimates and assumptions by management affect areas including the allowance for doubtful accounts, the carrying value of long-lived assets (including goodwill and intangible assets), capitalization and amortization of software development costs, the finalization of purchase accounting adjustments, Client performance guarantees, the calculation of a contingent liability in connection with an acquisition earn-out, the provision for income taxes and related deferred tax accounts, revenue recognition, contingencies, and other items as described in the Summary of Significant Accounting policies in this Quarterly Report and in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020 (the “2020 Form 10-K”). |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements In August 2020, the Financial Accounting Standards Board (“FASB”) issued ASU 2020-06—"Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity.” ASU 2020-06 simplifies the accounting for convertible instruments by eliminating the conversion option separation model for convertible debt that can be settled in cash and by eliminating the measurement model for beneficial conversion features. Convertible instruments that continue to be subject to separation models are (1) those with conversion options that are required to be accounted for as bifurcated derivatives and (2) convertible debt instruments issued with substantial premiums for which the premiums are recorded as paid-in capital. This ASU also requires entities to use the if-converted method for all convertible instruments in the diluted earnings per share calculation and include the effect of share settlement for instruments that may be settled in cash or shares, except for certain liability-classified share-based payment awards. This standard becomes effective for the Company on January 1, 2022 and may be early adopted during an interim period of 2021. The Company will adopt the standard on January 1, 2022 and is currently evaluating the impact of ASU 2020-06 on its consolidated financial statements. |
Acquisition, Integration and Transformation Costs | Acquisition, Integration and Transformation Costs Acquisition, integration and transformation costs include investment banking, financing, legal, accounting, consultancy, integration, fair value changes related to contingent consideration and certain other transaction costs related to mergers and acquisitions. It also includes costs related to certain business transformation initiatives focused on integrating and optimizing various operations and systems, including enhancing our customer relationship management (CRM) and enterprise resource planning (ERP) systems, incurred in connection with our acquisition and integration activities. |
General and Administrative Costs | General and Administrative Costs General and Administrative costs consist of all operating expenses not included in the other operating expense categories and now include legal and regulatory costs for all current and historical periods presented. |
Other Income (Expense), Net | Other (Income) Expense, Net Other (income) expense, net includes the impact of foreign currency remeasurement, realized and unrealized gains on investment securities and all other non-operating items not included in other financial statement lines. |
Revenue, Deferred Revenue, De_2
Revenue, Deferred Revenue, Deferred Costs and Other (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Revenue, Deferred Revenue, Deferred Costs and Other | |
Schedule of disaggregation of revenue | The following table presents the Company’s revenues disaggregated by revenue source (in thousands): Quarter Ended Six Months Ended June 30, June 30, 2021 2020 2021 2020 Access Fees Revenue U.S. $ 396,622 $ 152,021 $ 747,490 $ 259,960 International 37,422 30,150 74,710 59,264 Total 434,044 182,171 822,200 319,224 Visit Fee Revenue U.S. 59,196 58,512 113,536 101,996 International 130 347 252 609 Total 59,326 58,859 113,788 102,605 Other U.S. 9,363 0 20,034 0 International 406 0 792 0 Total 9,769 0 20,826 0 Total Revenues $ 503,139 $ 241,030 $ 956,814 $ 421,829 |
Schedule of deferred costs and other | Deferred costs and other, which are classified as a component of Prepaid expenses and other current assets or Other assets depending on term, consist of the following as of June 30, 2021 (in thousands): As of As of June 30, December 31, 2021 2020 Deferred costs and other, current 16,658 3,468 Deferred costs and other, noncurrent 7,913 2,179 Total deferred costs and other $ 24,571 $ 5,647 Deferred costs and other activity are as follows (in thousands): Deferred Costs and Other Beginning balance as of December 31, 2020 $ 5,647 Additions 25,539 Cost of revenue recognized (6,615) Ending balance as of June 30, 2021 $ 24,571 |
Business Acquisitions (Tables)
Business Acquisitions (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Business Acquisitions | |
Summary of identifiable assets acquired and liabilities assumed | Identifiable assets acquired and liabilities assumed (in thousands): Livongo InTouch Purchase price, net of cash acquired $ 13,876,931 $ 1,069,759 Less: Accounts receivable 80,084 16,986 Short term investment 52,500 0 Inventory 24,299 8,492 Property and equipment, net 8,952 11,366 Right of use assets 15,056 4,965 Other assets 17,337 2,541 Client relationships 1,050,000 164,580 Technology 300,000 29,190 Trademarks 250,000 32,630 Advances from financing companies 0 (26,012) Accounts payable (119,302) (5,589) Deferred revenue (997) (20,729) Convertible notes (453,417) 0 Deferred taxes (32,984) (30,102) Lease liabilities (18,834) (5,495) Other liabilities (40,343) (13,042) Goodwill $ 12,744,580 $ 899,978 |
Schedule of unaudited pro forma revenue and net loss | Unaudited Pro Forma Unaudited Pro Forma Quarters Ended Six Months Ended June 30, June 30, (in thousands) 2021 2020 2021 2020 Revenue $ 502,536 $ 357,302 $ 954,736 $ 627,723 Net loss $ (121,308) $ (98,952) $ (215,536) $ (699,488) |
Inventories (Tables)
Inventories (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Inventories | |
Schedule of inventories | Inventories consisted of the following (in thousands): As of June 30, As of December 31, 2021 2020 Raw materials and purchased parts $ 22,720 $ 19,591 Work in process 875 1,431 Finished goods 33,395 35,476 Total inventories $ 56,990 $ 56,498 |
Intangible Assets, Net (Tables)
Intangible Assets, Net (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Intangible Assets, Net | |
Schedule of finite lived intangible assets | Intangible assets, net consist of the following (in thousands): Weighted Average Remaining Useful Accumulated Net Carrying Useful Life Life Gross Value Amortization Value (Years) June 30, 2021 Client relationships 2 to 20 years $ 1,468,151 $ (149,380) $ 1,318,771 15.0 Non-compete agreements 1.5 to 5 years 5,046 (5,046) (0) 0 Trademarks 3 to 15 years 326,997 (30,644) 296,353 10.0 Patents 3 years 200 (200) 0 0 Capitalized software development costs 3 to 5 years 81,178 (31,272) 49,906 2.7 Technology 5 to 7 years 339,150 (41,008) 298,142 6.1 Intangible assets, net $ 2,220,722 $ (257,550) $ 1,963,172 12.6 December 31, 2020 Client relationships 2 to 20 years $ 1,460,648 $ (100,844) $ 1,359,804 15.4 Non-compete agreements 1.5 to 5 years 5,097 (4,872) 225 0.4 Trademarks 3 to 15 years 326,786 (15,576) 311,210 10.5 Patents 3 years 200 (200) 0 0 Capitalized software development costs 3 to 5 years 52,518 (24,771) 27,747 2.8 Technology 5 to 7 years 338,150 (16,272) 321,878 6.6 Intangible assets, net $ 2,183,399 $ (162,535) $ 2,020,864 13.1 |
Goodwill (Tables)
Goodwill (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Goodwill | |
Summary of goodwill | Goodwill consists of the following (in thousands): Six Months Ended Year Ended June 30, December 31, 2021 2020 Beginning balance $ 14,581,255 $ 746,079 Additions associated with acquisitions 47,328 13,812,198 Purchase consideration adjustment (see Note 4) (61,108) 0 Deferred tax adjustment (see Note 15) (106,532) 0 Cumulative translation adjustment (6,231) 22,978 Goodwill $ 14,454,712 $ 14,581,255 |
Accrued Expenses and Other Cu_2
Accrued Expenses and Other Current Liabilities (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Accrued Expenses and Other Current Liabilities | |
Schedule of accrued expenses and other current liabilities | Accrued expenses and other current liabilities consist of the following (in thousands): As of June 30, As of December 31, 2021 2020 Professional fees $ 3,214 $ 4,717 Consulting fees/provider fees 19,218 23,167 Client performance guarantees 7,151 7,215 Legal fees 3,419 2,419 Interest payable 1,488 2,049 Income tax payable 6,182 1,627 Insurance 6,170 3,139 Marketing 7,173 2,815 Operating lease liabilities - current 12,996 11,438 Earnout 4,186 4,514 Other 20,412 20,557 Total $ 91,609 $ 83,657 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Fair Value Measurements | |
Schedule assets and liabilities measured at fair value on a recurring basis | The following tables present information about the Company’s assets and liabilities that are measured at fair value on a recurring basis using the above input categories (in thousands): June 30, 2021 Level 1 Level 2 Level 3 Total Cash and cash equivalents $ 783,724 $ 0 $ 0 $ 783,724 Short-term investments $ 0 $ 2,538 $ 0 $ 2,538 Contingent liability $ 0 $ 0 $ 4,186 $ 4,186 December 31, 2020 Level 1 Level 2 Level 3 Total Cash and cash equivalents $ 733,324 $ 0 $ 0 $ 733,324 Short-term investments $ 0 $ 53,245 $ 0 $ 53,245 Equity securities without readily determinable fair values $ 0 $ 5,000 $ 0 $ 5,000 Contingent liability $ 0 $ 0 $ 4,514 $ 4,514 |
Schedule of change in fair value of the Company's equity securities without readily determinable fair values: | The change in fair value of the Company’s equity securities without readily determinable fair values was as follows: Fair value and historical cost basis at December 31, 2020 $ 5,000 Upward adjustment due to observable price change in identical securities 5,901 Sale of investment (10,901) Fair value at June 30, 2021 $ 0 |
Schedule of reconciliation of company's Level 3 liabilities | Fair value at December 31, 2020 $ 4,514 Payments (187) Change in fair value (6) Currency translation adjustment (135) Fair value at June 30, 2021 $ 4,186 |
Leasing Operations (Tables)
Leasing Operations (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Leasing Operations | |
Schedule of future minimum lease payments | As of Operating Leases: June 30, 2021 2021 $ 9,810 2022 14,130 2023 12,051 2024 8,529 2025 5,318 2026 5,440 Total future minimum payments $ 55,278 |
Convertible Senior Notes (Table
Convertible Senior Notes (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Convertible Senior Notes | |
Summary of the Notes | 2027 Notes 2025 Notes Livongo Notes Interest Rate Per Year 1.25 % 1.375 % 0.875 % Fair Value as of June 30, 2021 (in millions) $ 1,107.0 $ 19.0 $ 843.6 Maturity Date June 1, 2027 May 15, 2025 June 1, 2025 Optional Redemption Date June 5, 2024 May 22, 2022 June 5, 2023 Conversion Date December 1, 2026 November 15, 2024 March 1, 2025 Conversion Rate Per $1,000 Principal Amount as of June 30, 2021 4.1258 18.6621 13.94 Remaining Contractual Life as of June 30, 2021 5.9 years 3.9 years 3.9 years The liability components of the Notes consist of the following (in thousands): As of June 30, As of December 31, 2027 Notes 2021 2020 Principal $ 1,000,000 $ 1,000,000 Less: Debt discount, net (1) (269,694) (287,916) Net carrying amount $ 730,306 $ 712,084 2025 Notes Principal $ 6,098 $ 276,788 Less: Debt discount, net (1) (1,538) (65,923) Net carrying amount $ 4,560 $ 210,865 Livongo Notes Principal $ 550,000 $ 550,000 Less: Debt discount, net (1) (83,827) (93,357) Net carrying amount $ 466,173 $ 456,643 2022 Notes Principal $ 0 $ 46,762 Less: Debt discount, net (1) 0 (4,202) Net carrying amount $ 0 $ 42,560 |
Schedule of total interest expense recognized related to the Notes | The following table sets forth total interest expense recognized related to the Notes (and in the case of the Livongo Notes, subsequent to the acquisition of Livongo) (in thousands): Quarters Ended Six Months Ended June 30, June 30, 2027 Notes: 2021 2020 2021 2020 Contractual interest expense $ 3,125 $ 1,493 $ 6,250 $ 1,493 Amortization of debt discount 9,163 4,033 18,222 4,033 Total $ 12,288 $ 5,526 $ 24,472 $ 5,526 Effective interest rate of the liability component 3.4 % 3.4 % 3.4 % 3.4 % Quarters Ended Six Months Ended June 30, June 30, 2025 Notes: 2021 2020 2021 2020 Contractual interest expense $ 255 $ 989 $ 1,068 $ 1,977 Amortization of debt discount 1,778 3,142 4,498 6,218 Total $ 2,033 $ 4,131 $ 5,566 $ 8,195 Effective interest rate of the liability component 7.8 % 7.9 % 7.8 % 7.9 % Quarters Ended Six Months Ended June 30, June 30, Livongo Notes: 2021 2021 Contractual interest expense $ 1,203 $ 2,406 Amortization of debt discount 4,796 9,530 Total $ 5,999 $ 11,936 Effective interest rate of the liability component 5.2 % 5.2 % Quarters Ended Six Months Ended June 30, June 30, 2022 Notes: 2021 2020 2021 2020 Contractual interest expense $ (164) $ 1,286 $ (60) $ 3,349 Amortization of debt discount 0 2,521 316 6,281 Total $ (164) $ 3,807 $ 256 $ 9,630 Effective interest rate of the liability component 3.0 % 10.0 % 3.0 % 10.0 % |
Advances from Financing Compa_2
Advances from Financing Companies (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Advances from Financing Companies | |
Schedule of client lease payments to third party financing companies | Client lease payments to third party financing companies will reduce the advances from financing companies as of June 30, 2021 by year as follows (in thousands): As of June 30, 2021 2021 $ 7,367 2022 10,732 2023 4,528 2024 553 $ 23,180 |
Common Stock and Stockholders_2
Common Stock and Stockholders' Equity (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Common Stock and Stockholders'Equity | |
Summary of stock option activity under the Plan | Activity under the Plans is as follows (in thousands, except share and per share amounts and years): Weighted- Weighted- Average Number of Average Remaining Aggregate Shares Exercise Contractual Intrinsic Outstanding Price Life in Years Value Balance at December 31, 2020 5,826,685 $ 17.19 5.31 $ 1,064,944 Stock option grants 15,672 $ 180.94 N/A Stock options exercised (1,906,565) $ 9.30 N/A $ (383,015) Stock options forfeited (45,406) $ 16.45 N/A Balance at June 30, 2021 3,890,386 $ 21.72 5.91 $ 563,821 Vested or expected to vest at June 30, 2021 3,890,386 $ 21.72 5.91 $ 563,821 Exercisable at June 30, 2021 3,261,942 $ 18.73 5.67 $ 481,348 |
Assumptions used for estimate of fair value of options | Six Months Ended June 30, 2021 2020 Volatility 57.02% - 58.1% 46.1% – 51.0% Expected term (in years) 4.1 4.3 Risk-free interest rate 0.31% - 0.65% 0.27% - 1.64% Dividend yield 0 0 Weighted-average fair value of underlying stock options $ 81.88 $ 49.44 |
Schedule of activity under the RSUs | Activity under the RSUs is as follows: Weighted-Average Grant Date RSUs Fair Value Per RSU Balance at December 31, 2020 3,550,595 $ 162.11 Granted 491,823 $ 207.73 Vested and issued (987,004) $ 121.45 Forfeited (523,210) $ 188.55 Balance at June 30, 2021 2,532,204 $ 177.30 Vested and unissued at June 30, 2021 13,755 $ 50.90 Non-vested at June 30, 2021 2,518,449 $ 177.30 |
Schedule of activity under the PSUs | Activity under the PSUs is as follows: Weighted-Average Grant Date Shares Fair Value Per PSU Balance at December 31, 2020 429,319 $ 76.60 Granted 516,031 $ 131.67 Vested and issued (268,201) $ 74.33 Balance at June 30, 2021 677,149 $ 119.47 Vested and unissued at June 30, 2021 0 $ 0 Non-vested at June 30, 2021 677,149 $ 119.47 |
Components of operating expense charged for compensation cost expense | Total compensation costs for stock-based awards were recorded as follows (in thousands): Quarter Ended Six Months Ended June 30, June 30, 2021 2020 2021 2020 Cost of revenue (exclusive of depreciation and amortization, which is shown separately) $ 1,786 $ 0 $ 4,148 $ 0 Advertising and marketing 4,815 1,544 9,897 2,803 Sales 18,953 3,271 40,120 6,190 Technology and development 27,699 2,559 54,425 4,663 General and administrative 29,717 14,554 60,680 26,587 Total stock-based compensation expense (1) $ 82,970 $ 21,928 $ 169,270 $ 40,243 |
Basis of Presentation and Pri_3
Basis of Presentation and Principles of Consolidation - VIE (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | ||||||
Jun. 30, 2021USD ($) | Mar. 31, 2021USD ($) | Jun. 30, 2020USD ($) | Mar. 31, 2020USD ($) | Jun. 30, 2021USD ($)item | Jun. 30, 2020USD ($) | Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($) | |
Variable interest entity | ||||||||
Number of professional associations consolidated as VIEs | item | 3 | |||||||
Number of professional corporations consolidated as VIEs | item | 13 | |||||||
Number of service corporations consolidated as VIEs | item | 1 | |||||||
Revenue | $ 503,139 | $ 241,030 | $ 956,814 | $ 421,829 | ||||
Net (loss) income | (133,819) | $ (199,649) | (25,682) | $ (29,603) | (333,468) | (55,285) | ||
Assets | 17,611,119 | 17,611,119 | $ 17,755,281 | |||||
(Equity) deficit | (16,001,070) | $ (15,829,498) | (1,294,929) | $ (1,000,177) | (16,001,070) | (1,294,929) | (15,883,804) | $ (1,014,025) |
Primary beneficiary | ||||||||
Variable interest entity | ||||||||
Revenue | 53,900 | 57,700 | 105,700 | 100,200 | ||||
Net (loss) income | (1,000) | $ 900 | (3,100) | $ 800 | ||||
Assets | 21,700 | 21,700 | 28,700 | |||||
Liabilities | 61,800 | 61,800 | 65,800 | |||||
(Equity) deficit | $ 40,200 | $ 40,200 | $ 37,100 |
Revenue, Deferred Revenue, De_3
Revenue, Deferred Revenue, Deferred Costs and Other - Other Disclosures (Details) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Product and Service Concentration Risk | Revenue from Contract with Customer | Access Fees Revenue | ||||
Revenue, Deferred Revenue, Deferred Costs and Other | ||||
Concentration risk (as a percent) | 86.00% | 76.00% | 86.00% | 76.00% |
Revenue, Deferred Revenue, De_4
Revenue, Deferred Revenue, Deferred Costs and Other - Disaggregation and Other (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2020 | |
Revenue | |||||
Revenue | $ 503,139 | $ 241,030 | $ 956,814 | $ 421,829 | |
Accounts receivable, net of allowance for doubtful accounts | 179,436 | 179,436 | $ 169,281 | ||
Deferred revenue | 72,800 | 72,800 | $ 26,200 | ||
Net increase in deferred revenue | 18,000 | 11,300 | |||
Revenue recognized, included in deferred revenue balance at beginning of period | 46,600 | 12,400 | 45,500 | 11,200 | |
Access Fees Revenue | |||||
Revenue | |||||
Revenue | 434,044 | 182,171 | 822,200 | 319,224 | |
Access Fees Revenue | United States | |||||
Revenue | |||||
Revenue | 396,622 | 152,021 | 747,490 | 259,960 | |
Access Fees Revenue | Foreign. | |||||
Revenue | |||||
Revenue | 37,422 | 30,150 | 74,710 | 59,264 | |
Visit Fee Revenue | |||||
Revenue | |||||
Revenue | 59,326 | 58,859 | 113,788 | 102,605 | |
Visit Fee Revenue | United States | |||||
Revenue | |||||
Revenue | 59,196 | 58,512 | 113,536 | 101,996 | |
Visit Fee Revenue | Foreign. | |||||
Revenue | |||||
Revenue | 130 | 347 | 252 | 609 | |
Other | |||||
Revenue | |||||
Revenue | 9,769 | 0 | 20,826 | 0 | |
Other | United States | |||||
Revenue | |||||
Revenue | 9,363 | 0 | 20,034 | 0 | |
Other | Foreign. | |||||
Revenue | |||||
Revenue | $ 406 | $ 0 | $ 792 | $ 0 |
Revenue, Deferred Revenue, De_5
Revenue, Deferred Revenue, Deferred Costs and Other - Revenue Remaining Performance Obligation (Details) $ in Millions | Jun. 30, 2021USD ($) |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-07-01 | |
Future Performance Obligations | |
Revenue recognized, performance obligation | $ 52.8 |
Period of performance obligation | 6 months |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-01-01 | |
Future Performance Obligations | |
Revenue recognized, performance obligation | $ 8.5 |
Period of performance obligation | 1 year |
Revenue, Deferred Revenue, De_6
Revenue, Deferred Revenue, Deferred Costs and Other - Deferred Cost and Other (Details) - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 |
Deferred Device Cost And Other | ||
Deferred costs and other, current | $ 16,658 | $ 3,468 |
Deferred costs and other, noncurrent | 7,913 | 2,179 |
Total Deferred cost and other | $ 24,571 | $ 5,647 |
Revenue, Deferred Revenue, De_7
Revenue, Deferred Revenue, Deferred Costs and Other - Deferred Cost and Other Activity (Details) $ in Thousands | 6 Months Ended |
Jun. 30, 2021USD ($) | |
Change in Deferred Device Cost And Other | |
Beginning balance | $ 5,647 |
Additions | 25,539 |
Cost of revenue recognized | (6,615) |
Ending Balance | $ 24,571 |
Business Acquisitions - Transac
Business Acquisitions - Transactions (Details) $ / shares in Units, $ in Thousands | Jan. 04, 2021USD ($) | Oct. 30, 2020USD ($)$ / sharesshares | Jul. 01, 2020USD ($)shares | Jun. 30, 2021USD ($) | Mar. 31, 2021USD ($)shares | Jun. 30, 2020USD ($) | Jun. 30, 2021USD ($) | Jun. 30, 2020USD ($) | Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($) |
Business acquisition | ||||||||||
Cash paid for acquisition, net | $ 56,336 | $ 13,500 | ||||||||
Goodwill | $ 14,454,712 | 14,454,712 | $ 14,581,255 | $ 746,079 | ||||||
Income tax expense (benefit) | $ 3,196 | $ (2,399) | $ 90,235 | $ (3,110) | ||||||
Consultant Connect | ||||||||||
Business acquisition | ||||||||||
Total consideration | $ 56,300 | |||||||||
Goodwill | 47,300 | |||||||||
Consultant Connect | Client relationships | ||||||||||
Business acquisition | ||||||||||
Finite-lived intangibles | 9,800 | |||||||||
Consultant Connect | Technology | ||||||||||
Business acquisition | ||||||||||
Finite-lived intangibles | 1,900 | |||||||||
Consultant Connect | Brand | ||||||||||
Business acquisition | ||||||||||
Finite-lived intangibles | $ 600 | |||||||||
Livongo Health | ||||||||||
Business acquisition | ||||||||||
Merger, conversion of common shares ratio | 0.5920 | |||||||||
Merger, conversion price (in dollars per share) | $ / shares | $ 4.24 | |||||||||
Merger, special cash dividend | $ / shares | $ 7.09 | |||||||||
Initial consideration | $ 13,938,000 | |||||||||
Total consideration | $ 13,876,900 | |||||||||
Initial cash consideration | 401,000 | |||||||||
Cash paid for acquisition, net | 380,200 | |||||||||
Debt incurred upon acquisition | $ 555,400 | |||||||||
Amount related to conversion feature of the Livongo Notes guaranteed by the Company | $ 555,400 | |||||||||
Initial equity consideration (in shares) | shares | 60,400,000 | |||||||||
Initial equity consideration | $ 12,981,600 | |||||||||
Equity consideration (in shares) | shares | 60,200,000 | |||||||||
Equity consideration | $ 12,941,300 | |||||||||
Acquisition related costs | 59,000 | |||||||||
Excess shares identified | shares | 205,279 | |||||||||
Excess shares not withheld | shares | 85,481 | |||||||||
Merger-related cash payments identified as cash overpayments | $ 5,600 | |||||||||
Excess shares cancelled | shares | 205,279 | |||||||||
Increase to receivables | $ 20,800 | |||||||||
Decrease to stockholders' equity | (40,300) | |||||||||
Decrease to goodwill | $ (61,100) | |||||||||
Goodwill | 12,744,580 | |||||||||
Livongo Health | Client relationships | ||||||||||
Business acquisition | ||||||||||
Finite-lived intangibles | 1,050,000 | |||||||||
Livongo Health | Technology | ||||||||||
Business acquisition | ||||||||||
Finite-lived intangibles | $ 300,000 | |||||||||
InTouch | ||||||||||
Business acquisition | ||||||||||
Initial consideration | $ 1,078,500 | |||||||||
Initial cash consideration | 160,700 | |||||||||
Cash acquired | $ 1,100 | |||||||||
Initial equity consideration (in shares) | shares | 4,600,000 | |||||||||
Initial equity consideration | $ 918,800 | |||||||||
Acquisition related costs | 12,500 | |||||||||
Goodwill | 899,978 | |||||||||
InTouch | Client relationships | ||||||||||
Business acquisition | ||||||||||
Finite-lived intangibles | 164,580 | |||||||||
InTouch | Technology | ||||||||||
Business acquisition | ||||||||||
Finite-lived intangibles | $ 29,190 |
Business Acquisitions - Assets
Business Acquisitions - Assets Acquired, Liabilities Assumed, Pro forma (Details) - USD ($) $ in Thousands | Oct. 30, 2020 | Jul. 01, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 |
Less: | ||||||||
Goodwill | $ 14,454,712 | $ 14,454,712 | $ 14,581,255 | $ 746,079 | ||||
Livongo Health | ||||||||
Identifiable assets acquired and liabilities assumed: | ||||||||
Purchase price, net of cash acquired | $ 13,876,931 | |||||||
Less: | ||||||||
Accounts receivable | 80,084 | |||||||
Short term investment | 52,500 | |||||||
Inventory | 24,299 | |||||||
Property and equipment, net | 8,952 | |||||||
Right of use assets | 15,056 | |||||||
Other assets | 17,337 | |||||||
Advances from financing companies | 0 | |||||||
Accounts payable | (119,302) | |||||||
Deferred revenue | (997) | |||||||
Convertible notes | (453,417) | |||||||
Deferred taxes | (32,984) | |||||||
Lease liabilities | (18,834) | |||||||
Other liabilities | (40,343) | |||||||
Goodwill | 12,744,580 | |||||||
Livongo Health | Client relationships | ||||||||
Less: | ||||||||
Finite-lived intangibles | 1,050,000 | |||||||
Livongo Health | Technology | ||||||||
Less: | ||||||||
Finite-lived intangibles | 300,000 | |||||||
Livongo Health | Trademarks | ||||||||
Less: | ||||||||
Finite-lived intangibles | $ 250,000 | |||||||
InTouch | ||||||||
Identifiable assets acquired and liabilities assumed: | ||||||||
Purchase price, net of cash acquired | $ 1,069,759 | |||||||
Less: | ||||||||
Accounts receivable | 16,986 | |||||||
Short term investment | 0 | |||||||
Inventory | 8,492 | |||||||
Property and equipment, net | 11,366 | |||||||
Right of use assets | 4,965 | |||||||
Other assets | 2,541 | |||||||
Advances from financing companies | (26,012) | |||||||
Accounts payable | (5,589) | |||||||
Deferred revenue | (20,729) | |||||||
Convertible notes | 0 | |||||||
Deferred taxes | (30,102) | |||||||
Lease liabilities | (5,495) | |||||||
Other liabilities | (13,042) | |||||||
Goodwill | 899,978 | |||||||
Pro forma information | ||||||||
Revenue | 502,536 | $ 357,302 | 954,736 | $ 627,723 | ||||
Net loss | (121,308) | $ (98,952) | (215,536) | $ (699,488) | ||||
InTouch | Client relationships | ||||||||
Less: | ||||||||
Finite-lived intangibles | 164,580 | |||||||
InTouch | Technology | ||||||||
Less: | ||||||||
Finite-lived intangibles | 29,190 | |||||||
InTouch | Trademarks | ||||||||
Less: | ||||||||
Finite-lived intangibles | $ 32,630 | |||||||
Livongo and InTouch | ||||||||
Pro forma information | ||||||||
Revenue of acquiree | 162,100 | 308,900 | ||||||
Net loss of acquiree | $ (56,900) | $ (125,500) |
Inventories (Details)
Inventories (Details) - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 |
Inventories | ||
Raw materials and purchased parts | $ 22,720 | $ 19,591 |
Work in process | 875 | 1,431 |
Finished goods | 33,395 | 35,476 |
Total inventories | $ 56,990 | $ 56,498 |
Intangible Assets, Net - Summar
Intangible Assets, Net - Summary (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2020 | |
Intangible assets | |||||
Gross Value | $ 2,220,722 | $ 2,220,722 | $ 2,183,399 | ||
Accumulated Amortization | (257,550) | (257,550) | (162,535) | ||
Net Carrying Value | 1,963,172 | 1,963,172 | $ 2,020,864 | ||
Amortization expense for intangible assets | 49,100 | $ 9,000 | $ 95,700 | $ 17,900 | |
Weighted Average | |||||
Intangible assets | |||||
Weighted Average Remaining Useful Life | 12 years 7 months 6 days | 13 years 1 month 6 days | |||
Client relationships | |||||
Intangible assets | |||||
Gross Value | 1,468,151 | $ 1,468,151 | $ 1,460,648 | ||
Accumulated Amortization | (149,380) | (149,380) | (100,844) | ||
Net Carrying Value | 1,318,771 | $ 1,318,771 | $ 1,359,804 | ||
Client relationships | Minimum | |||||
Intangible assets | |||||
Useful life | 2 years | 2 years | |||
Client relationships | Maximum | |||||
Intangible assets | |||||
Useful life | 20 years | 20 years | |||
Client relationships | Weighted Average | |||||
Intangible assets | |||||
Weighted Average Remaining Useful Life | 15 years | 15 years 4 months 24 days | |||
Non-compete agreements | |||||
Intangible assets | |||||
Gross Value | 5,046 | $ 5,046 | $ 5,097 | ||
Accumulated Amortization | (5,046) | (5,046) | (4,872) | ||
Net Carrying Value | 0 | $ 0 | $ 225 | ||
Non-compete agreements | Minimum | |||||
Intangible assets | |||||
Useful life | 1 year 6 months | 1 year 6 months | |||
Non-compete agreements | Maximum | |||||
Intangible assets | |||||
Useful life | 5 years | 5 years | |||
Non-compete agreements | Weighted Average | |||||
Intangible assets | |||||
Weighted Average Remaining Useful Life | 0 years | 4 months 24 days | |||
Trademarks | |||||
Intangible assets | |||||
Gross Value | 326,997 | $ 326,997 | $ 326,786 | ||
Accumulated Amortization | (30,644) | (30,644) | (15,576) | ||
Net Carrying Value | 296,353 | $ 296,353 | $ 311,210 | ||
Trademarks | Minimum | |||||
Intangible assets | |||||
Useful life | 3 years | 3 years | |||
Trademarks | Maximum | |||||
Intangible assets | |||||
Useful life | 15 years | 15 years | |||
Trademarks | Weighted Average | |||||
Intangible assets | |||||
Weighted Average Remaining Useful Life | 10 years | 10 years 6 months | |||
Patents | |||||
Intangible assets | |||||
Gross Value | 200 | $ 200 | $ 200 | ||
Accumulated Amortization | (200) | $ (200) | (200) | ||
Net Carrying Value | $ 0 | ||||
Useful life | 3 years | 3 years | |||
Patents | Weighted Average | |||||
Intangible assets | |||||
Weighted Average Remaining Useful Life | 0 years | 0 years | |||
Capitalized software development costs | |||||
Intangible assets | |||||
Gross Value | 81,178 | $ 81,178 | $ 52,518 | ||
Accumulated Amortization | (31,272) | (31,272) | (24,771) | ||
Net Carrying Value | 49,906 | $ 49,906 | $ 27,747 | ||
Capitalized software development costs | Minimum | |||||
Intangible assets | |||||
Useful life | 3 years | 3 years | |||
Capitalized software development costs | Maximum | |||||
Intangible assets | |||||
Useful life | 5 years | 5 years | |||
Capitalized software development costs | Weighted Average | |||||
Intangible assets | |||||
Weighted Average Remaining Useful Life | 2 years 8 months 12 days | 2 years 9 months 18 days | |||
Technology | |||||
Intangible assets | |||||
Gross Value | 339,150 | $ 339,150 | $ 338,150 | ||
Accumulated Amortization | (41,008) | (41,008) | (16,272) | ||
Net Carrying Value | $ 298,142 | $ 298,142 | $ 321,878 | ||
Technology | Minimum | |||||
Intangible assets | |||||
Useful life | 5 years | ||||
Technology | Maximum | |||||
Intangible assets | |||||
Useful life | 7 years | ||||
Technology | Weighted Average | |||||
Intangible assets | |||||
Weighted Average Remaining Useful Life | 6 years 1 month 6 days | 6 years 7 months 6 days |
Goodwill (Details)
Goodwill (Details) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Dec. 31, 2020 | |
Goodwill | ||
Beginning balance | $ 14,581,255 | $ 746,079 |
Additions associated with acquisitions | 47,328 | 13,812,198 |
Purchase consideration adjustment | (61,108) | 0 |
Deferred tax adjustment | (106,532) | 0 |
Cumulative translation adjustment | (6,231) | 22,978 |
Goodwill | $ 14,454,712 | $ 14,581,255 |
Accrued Expenses and Other Cu_3
Accrued Expenses and Other Current Liabilities (Details) - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 |
Accrued Expenses and Other Current Liabilities | ||
Professional fees | $ 3,214 | $ 4,717 |
Consulting fees/provider fees | 19,218 | 23,167 |
Client performance guarantees | 7,151 | 7,215 |
Legal fees | 3,419 | 2,419 |
Interest payable | 1,488 | 2,049 |
Income tax payable | 6,182 | 1,627 |
Insurance | 6,170 | 3,139 |
Marketing | 7,173 | 2,815 |
Operating lease liabilities - current | 12,996 | 11,438 |
Earnout | 4,186 | 4,514 |
Other | 20,412 | 20,557 |
Total | $ 91,609 | $ 83,657 |
Fair Value Measurements - Recur
Fair Value Measurements - Recurring (Details) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Dec. 31, 2020 | |
Fair Value | ||
Short-term investments | $ 2,538 | $ 53,245 |
Equity securities without readily determinable fair values | 0 | 5,000 |
Fair Value, Assets, Level 1 to Level 2 Transfers, Amount | 0 | 0 |
Fair Value, Assets, Level 2 to Level 1 Transfers, Amount | 0 | 0 |
Fair Value, Liabilities, Level 1 to Level 2 Transfers, Amount | 0 | |
Fair value assets level 3 net transfers | 0 | 0 |
Fair value liabilities level 3 net transfers | 0 | 0 |
Recurring | ||
Fair Value | ||
Cash and cash equivalents | 783,724 | 733,324 |
Short-term investments | 2,538 | 53,245 |
Equity securities without readily determinable fair values | 5,000 | |
Contingent liability | 4,186 | 4,514 |
Level 1 | Recurring | ||
Fair Value | ||
Cash and cash equivalents | 783,724 | 733,324 |
Short-term investments | 0 | 0 |
Equity securities without readily determinable fair values | 0 | |
Contingent liability | 0 | 0 |
Level 2 | Recurring | ||
Fair Value | ||
Cash and cash equivalents | 0 | 0 |
Short-term investments | 2,538 | 53,245 |
Equity securities without readily determinable fair values | 5,000 | |
Contingent liability | 0 | 0 |
Level 3 | Recurring | ||
Fair Value | ||
Cash and cash equivalents | 0 | 0 |
Short-term investments | 0 | 0 |
Equity securities without readily determinable fair values | 0 | |
Contingent liability | $ 4,186 | $ 4,514 |
Fair Value Measurements - Equit
Fair Value Measurements - Equity Securities (Details) $ in Thousands | 6 Months Ended |
Jun. 30, 2021USD ($) | |
Change in fair value of the Company's equity securities without readily determinable fair values: | |
Fair value and historical cost basis at December 31, 2020 | $ 5,000 |
Upward adjustment due to observable price change in identical securities | 5,901 |
Sale of investment | (10,901) |
Fair value at March 31, 2021 | $ 0 |
Fair Value Measurements - Level
Fair Value Measurements - Level 3 (Details) - Contingent Liability $ in Thousands | 6 Months Ended |
Jun. 30, 2021USD ($) | |
Reconciliation of Level 3 liabilities | |
Fair value at beginning of period | $ 4,514 |
Payments | (187) |
Change in fair value | (6) |
Currency translation adjustment | (135) |
Fair value at end of period | $ 4,186 |
Leasing Operations - Other (Det
Leasing Operations - Other (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2021 | Dec. 31, 2020 | |
Leases and Contractual Obligations | ||
Operating lease - right-of-use assets | $ 41,880 | $ 46,647 |
Options to extend | true | |
Minimum | ||
Leases and Contractual Obligations | ||
Remaining lease terms | 1 year | |
Options to extend lease terms | 1 year | |
Lessor lease term | 2 years | |
Maximum | ||
Leases and Contractual Obligations | ||
Remaining lease terms | 7 years | |
Options to extend lease terms | 5 years | |
Lessor lease term | 5 years |
Leasing Operations - Future Min
Leasing Operations - Future Minimum Lease Payments (Details) $ in Thousands | Jun. 30, 2021USD ($) |
Future minimum lease payments under non cancelable operating leases: | |
2021 | $ 9,810 |
2022 | 14,130 |
2023 | 12,051 |
2024 | 8,529 |
2025 | 5,318 |
2026 | 5,440 |
Total future minimum payments | $ 55,278 |
Convertible Senior Notes - Outs
Convertible Senior Notes - Outstanding Convertible Senior Notes - Issuances (Details) - USD ($) $ in Thousands | May 19, 2020 | May 08, 2018 | Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2020 | Oct. 31, 2020 | Jun. 27, 2017 |
2027 Notes | |||||||
Convertible Senior Notes | |||||||
Face amount | $ 1,000,000 | $ 1,000,000 | $ 1,000,000 | ||||
Interest rate (as a percent) | 1.25% | ||||||
Net proceeds from issuance of Notes | $ 975,900 | 0 | $ 1,000,000 | ||||
Offering costs | $ 24,100 | 0 | $ 24,070 | ||||
2025 Notes | |||||||
Convertible Senior Notes | |||||||
Face amount | $ 287,500 | 6,098 | 276,788 | ||||
Interest rate (as a percent) | 1.375% | ||||||
Net proceeds from issuance of Notes | $ 279,100 | ||||||
Offering costs | $ 8,400 | ||||||
Livongo Notes | |||||||
Convertible Senior Notes | |||||||
Face amount | 550,000 | 550,000 | $ 550,000 | ||||
Interest rate (as a percent) | 0.875% | ||||||
2022 Notes | |||||||
Convertible Senior Notes | |||||||
Face amount | $ 0 | $ 46,762 | $ 275,000 | ||||
Interest rate (as a percent) | 3.00% |
Convertible Senior Notes - Cert
Convertible Senior Notes - Certain terms of the Notes (Details) | 6 Months Ended |
Jun. 30, 2021USD ($)$ / shares | |
2027 Notes | |
Convertible Senior Notes | |
Interest Rate Per Year | 1.25% |
Fair value | $ 1,107,000,000 |
Conversion Rate Per $1,000 Principal Amount | $ / shares | $ 0.00413 |
Remaining contractual life | 5 years 10 months 24 days |
2025 Notes | |
Convertible Senior Notes | |
Interest Rate Per Year | 1.375% |
Fair value | $ 19,000,000 |
Conversion Rate Per $1,000 Principal Amount | $ / shares | $ 0.01866 |
Remaining contractual life | 3 years 10 months 24 days |
Livongo Notes | |
Convertible Senior Notes | |
Interest Rate Per Year | 0.875% |
Fair value | $ 843,600,000 |
Conversion Rate Per $1,000 Principal Amount | $ / shares | $ 0.01394 |
Remaining contractual life | 3 years 10 months 24 days |
Notes | |
Convertible Senior Notes | |
Principal multiple amount used in the conversion of the debt instrument | $ 1,000 |
Convertible Senior Notes - Term
Convertible Senior Notes - Terms (Details) $ / shares in Units, shares in Millions | 6 Months Ended |
Jun. 30, 2021USD ($)D$ / sharesshares | |
2027 Notes | |
Convertible Senior Notes | |
Convertible debt, conversion price (in dollars per share) | $ / shares | $ 0.00413 |
Convertible debt, equity component | $ | $ 286,000,000 |
2025 Notes | |
Convertible Senior Notes | |
Convertible debt, conversion price (in dollars per share) | $ / shares | $ 0.01866 |
Convertible debt, equity component | $ | $ 91,400,000 |
Livongo Notes | |
Convertible Senior Notes | |
Convertible debt, number of consecutive trading days, measurement period | 5 |
Convertible debt, conversion price (in dollars per share) | $ / shares | $ 0.01394 |
Convertible debt, Reference property rate | 0.5920 |
Convertible debt, Reference property , conversion price (in dollars per share) | $ / shares | $ 4.24 |
Trading day observation period used to determine the amount of cash and shares, if any, that are due upon conversion | 40 |
Percentage of principal for repurchase price (as percent) | 100 |
2022 Notes | |
Convertible Senior Notes | |
Convertible debt, equity component | $ | $ 62,400,000 |
Debt term | 5 years 6 months |
Notes | |
Convertible Senior Notes | |
Principal multiple amount used in the conversion of the debt instrument | $ | $ 1,000 |
Convertible debt, threshold, trading days | 20 |
Convertible debt, threshold, consecutive trading days | 30 |
Minimum percentage of common stock price as a percentage of the conversion price | 130.00% |
Convertible debt, number of business days, measurement period | 5 |
Convertible debt, number of consecutive trading days, measurement period | 10 |
Trading price expressed as a percentage of the last reported sales price and conversion rate after the specified consecutive trading day period | 98.00% |
Shares reserved for issuance (in shares) | shares | 8.8 |
Debt term | 7 years |
2027 Notes, 2025 Notes and the 2022 Notes | |
Convertible Senior Notes | |
Trading day observation period used to determine the amount of cash and shares, if any, that are due upon conversion | 25 |
Convertible Senior Notes - Ou_2
Convertible Senior Notes - Outstanding Convertible Senior Notes - Summary (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||||||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2020 | Oct. 31, 2020 | May 19, 2020 | May 08, 2018 | Jun. 27, 2017 | |
2027 Notes | |||||||||
Convertible Senior Notes | |||||||||
Principal | $ 1,000,000 | $ 1,000,000 | $ 1,000,000 | $ 1,000,000 | |||||
Less: Debt discount, net | (269,694) | (269,694) | (287,916) | ||||||
Net carrying amount | 730,306 | 730,306 | 712,084 | ||||||
Interest Expense | |||||||||
Contractual interest expense | 3,125 | $ 1,493 | 6,250 | $ 1,493 | |||||
Amortization of debt discount | 9,163 | 4,033 | 18,222 | 4,033 | |||||
Total | $ 12,288 | $ 5,526 | $ 24,472 | $ 5,526 | |||||
Effective interest rate of the liability component (as a percent) | 3.40% | 3.40% | 3.40% | 3.40% | |||||
2025 Notes | |||||||||
Convertible Senior Notes | |||||||||
Principal | $ 6,098 | $ 6,098 | 276,788 | $ 287,500 | |||||
Less: Debt discount, net | (1,538) | (1,538) | (65,923) | ||||||
Net carrying amount | 4,560 | 4,560 | 210,865 | ||||||
Interest Expense | |||||||||
Contractual interest expense | 255 | $ 989 | 1,068 | $ 1,977 | |||||
Amortization of debt discount | 1,778 | 3,142 | 4,498 | 6,218 | |||||
Total | $ 2,033 | $ 4,131 | $ 5,566 | $ 8,195 | |||||
Effective interest rate of the liability component (as a percent) | 7.80% | 7.90% | 7.80% | 7.90% | |||||
Livongo Notes | |||||||||
Convertible Senior Notes | |||||||||
Principal | $ 550,000 | $ 550,000 | 550,000 | $ 550,000 | |||||
Less: Debt discount, net | (83,827) | (83,827) | (93,357) | ||||||
Net carrying amount | 466,173 | 466,173 | 456,643 | ||||||
Interest Expense | |||||||||
Contractual interest expense | $ 1,203 | $ 2,406 | |||||||
Amortization of debt discount | 4,796 | 9,530 | |||||||
Total | $ 5,999 | $ 11,936 | |||||||
Effective interest rate of the liability component (as a percent) | 5.20% | 5.20% | |||||||
2022 Notes | |||||||||
Convertible Senior Notes | |||||||||
Principal | 0 | 0 | 46,762 | $ 275,000 | |||||
Less: Debt discount, net | 0 | 0 | (4,202) | ||||||
Net carrying amount | 0 | 0 | $ 42,560 | ||||||
Interest Expense | |||||||||
Contractual interest expense | $ 1,286 | $ 3,349 | |||||||
Contractual interest expense | (164) | (60) | |||||||
Amortization of debt discount | 0 | 2,521 | 316 | 6,281 | |||||
Total | $ 3,807 | $ 256 | $ 9,630 | ||||||
Total | $ (164) | ||||||||
Effective interest rate of the liability component (as a percent) | 3.00% | 10.00% | 3.00% | 10.00% |
Convertible Senior Notes - Exch
Convertible Senior Notes - Exchange/Redemption of Convertible Senior Notes Due (Details) - USD ($) $ in Thousands, shares in Millions | 1 Months Ended | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2021 | Mar. 31, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Convertible Senior Notes | |||||||
Loss on extinguishment of debt | $ 31,419 | $ 7,751 | $ 42,878 | $ 7,751 | |||
2025 Notes | |||||||
Convertible Senior Notes | |||||||
Shares issued for conversion/exchange of debt | 3.9 | 1.2 | |||||
Principal amount of debt exchanged for shares of the Company's common stock in private placement transactions | $ 206,400 | 206,400 | $ 206,400 | ||||
Loss on extinguishment of debt | $ 31,400 | $ 39,500 | |||||
2022 Notes | |||||||
Convertible Senior Notes | |||||||
Shares issued for conversion/exchange of debt | 1.1 | ||||||
Cash exchanged, redemption of convertible notes | $ 100 | ||||||
Loss on extinguishment of debt | $ 3,400 |
Advances from Financing Compa_3
Advances from Financing Companies (Details) $ in Thousands | Jun. 30, 2021USD ($) |
2021 | $ 7,367 |
2022 | 10,732 |
2023 | 4,528 |
2024 | 553 |
Total | $ 23,180 |
Minimum | |
Advances from financing companies, interest rate (as a percent) | 3.35% |
Maximum | |
Advances from financing companies, interest rate (as a percent) | 8.25% |
Common Stock and Stockholders_3
Common Stock and Stockholders' Equity - Capitalization (Details) - shares | Jun. 30, 2021 | Dec. 31, 2020 | Oct. 30, 2020 | Oct. 29, 2020 |
Common Stock and Stockholders'Equity | ||||
Number of common stock shares authorized | 300,000,000 | 300,000,000 | 300,000,000 | 150,000,000 |
Common Stock and Stockholders_4
Common Stock and Stockholders' Equity - Warrants (Details) - shares | Jun. 30, 2021 | Dec. 31, 2020 |
Common stock warrants | ||
Warrants | ||
Warrants outstanding (in shares) | 0 | 0 |
Common Stock and Stockholders_5
Common Stock and Stockholders' Equity - Stock Plan and Stock Options (Details) - USD ($) $ / shares in Units, $ in Thousands | Dec. 29, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2020 |
Common Stock and Stockholders' Equity | ||||||
Trading days | 4 days | |||||
Shares available for grant | 12,537,677 | 12,537,677 | ||||
Aggregate Intrinsic Value | ||||||
Grant-date fair value of stock options granted during the period | $ 2,400 | $ 200 | $ 2,800 | $ 500 | ||
Stock options | ||||||
Common Stock and Stockholders' Equity | ||||||
Vesting period | 4 years | |||||
Stock options | Maximum | ||||||
Common Stock and Stockholders' Equity | ||||||
Exercisable period (in years) | 10 years | |||||
RSUs | ||||||
Common Stock and Stockholders' Equity | ||||||
Vesting period | 3 years | |||||
RSUs | Maximum | ||||||
Common Stock and Stockholders' Equity | ||||||
Vesting period | 4 years | |||||
2015 Incentive Award Plan | ||||||
Number of Shares Outstanding | ||||||
Balance, beginning of period (in shares) | 5,826,685 | |||||
Stock option grants and assumed awards (in shares) | 15,672 | |||||
Stock option exercised (in shares) | (1,906,565) | |||||
Stock options forfeited (in shares) | (45,406) | |||||
Balance, end of period (in shares) | 3,890,386 | 3,890,386 | 5,826,685 | |||
Vested or expected to vest at end of period (in shares) | 3,890,386 | 3,890,386 | ||||
Exercisable as of end of period (in shares) | 3,261,942 | 3,261,942 | ||||
Weighted-Average Exercise Price | ||||||
Balance, beginning of period (in dollars per share) | $ 17.19 | |||||
Stock option grants and assumed awards (in dollars per share) | 180.94 | |||||
Stock option exercised (in dollars per share) | 9.30 | |||||
Stock options forfeited (in dollars per share) | 16.45 | |||||
Balance, end of period (in dollars per share) | $ 21.72 | 21.72 | $ 17.19 | |||
Vested or expected to vest at end of period (in dollars per share) | 21.72 | 21.72 | ||||
Exercisable as of end of period (in dollars per share) | $ 18.73 | $ 18.73 | ||||
Weighted-average remaining contractual life in Years | ||||||
Weighted-average remaining contractual life (in years) | 5 years 10 months 28 days | 5 years 3 months 21 days | ||||
Vested or expected to vest at end of period (in years) | 5 years 10 months 28 days | |||||
Exercisable as of end of period (in years) | 5 years 8 months 1 day | |||||
Aggregate Intrinsic Value | ||||||
Aggregate Intrinsic Value | $ 563,821 | $ 563,821 | $ 1,064,944 | |||
Stock options exercised | (383,015) | |||||
Vested or expected to vest at end of period | 563,821 | 563,821 | ||||
Exercisable as of end of period | $ 481,348 | $ 481,348 |
Common Stock and Stockholders_6
Common Stock and Stockholders' Equity - Fair Value Assumptions (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Fair value assumptions | ||||
Risk-free interest rate, maximum | 0.65% | |||
Other disclosures | ||||
Compensation expense | $ 82,970 | $ 21,928 | $ 169,270 | $ 40,243 |
Stock options | ||||
Fair value assumptions | ||||
Volatility, minimum (as a percent) | 57.02% | 46.10% | ||
Volatility, maximum (as a percent) | 58.10% | 51.00% | ||
Expected life (in years) | 4 years 1 month 6 days | 4 years 3 months 18 days | ||
Risk-free interest rate, minimum | 0.31% | 0.27% | ||
Risk-free interest rate, maximum | 1.64% | |||
Dividend yield (as a percent) | 0.00% | 0.00% | ||
Weighted-average fair value of the underlying stock options | $ 81.88 | $ 49.44 | ||
Other disclosures | ||||
Compensation expense | 27,400 | $ 4,200 | $ 55,600 | $ 8,100 |
Unrecognized compensation cost | $ 64,800 | $ 64,800 | ||
Period over which unrecognized compensation cost is expected to be recognized | 1 year |
Common Stock and Stockholders_7
Common Stock and Stockholders' Equity - Restricted Stock Units (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Other disclosures | ||||
Stock-based compensation | $ 82,970 | $ 21,928 | $ 169,270 | $ 40,243 |
RSUs | ||||
Common Stock and Stockholders' Equity | ||||
Vesting period | 3 years | |||
Shares | ||||
Outstanding at beginning of period (in shares) | 3,550,595 | |||
Granted including replacement awards for merger (in shares) | 491,823 | |||
Vested and issued (in shares) | (987,004) | |||
Forfeited (in shares) | (523,210) | |||
Outstanding at end of period (in shares) | 2,532,204 | 2,532,204 | ||
Vested and unissued (in shares) | 13,755 | 13,755 | ||
Nonvested (in shares) | 2,518,449 | 2,518,449 | ||
Weighted-Average Grant Date Fair Value Per Share | ||||
Outstanding at beginning of period (in dollars per share) | $ 162.11 | |||
Granted including replacement awards for merger (in dollars per share) | 207.73 | |||
Vested and issued (in dollars per share) | 121.45 | |||
Forfeited (in dollars per share) | 188.55 | |||
Outstanding at end of period (in dollars per share) | $ 177.30 | 177.30 | ||
Vested and unissued (in dollars per share) | 50.90 | 50.90 | ||
Non-vested (in dollars per share) | $ 177.30 | $ 177.30 | ||
Other disclosures | ||||
Grant date fair value of RSUs granted | $ 13,900 | 3,500 | $ 101,900 | 43,000 |
Stock-based compensation | 51,300 | $ 11,300 | 102,200 | $ 20,700 |
Unrecognized compensation cost related to non vested awards | $ 394,300 | $ 394,300 | ||
Period over which unrecognized compensation cost is expected to be recognized | 2 years 4 months 24 days | |||
Minimum | RSUs | ||||
Common Stock and Stockholders' Equity | ||||
Vesting period | 1 year | |||
Maximum | RSUs | ||||
Common Stock and Stockholders' Equity | ||||
Vesting period | 4 years |
Common Stock and Stockholders_8
Common Stock and Stockholders' Equity - Performance Stock Units (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Other disclosures | ||||
Stock-based compensation | $ 82,970 | $ 21,928 | $ 169,270 | $ 40,243 |
PSUs | ||||
Shares | ||||
Outstanding at beginning of period (in shares) | 429,319 | |||
Granted | 0 | 0 | 516,031 | |
Vested and issued (in shares) | (268,201) | |||
Outstanding at end of period (in shares) | 677,149 | 677,149 | ||
Vested and unissued (in shares) | 0 | 0 | ||
Nonvested (in shares) | 677,149 | 677,149 | ||
Weighted-Average Grant Date Fair Value Per Share | ||||
Outstanding at beginning of period (in dollars per share) | $ 76.60 | |||
Granted (in dollars per share) | 131.67 | |||
Vested and issued (in dollars per share) | 74.33 | |||
Outstanding at end of period (in dollars per share) | $ 119.47 | 119.47 | ||
Vested and unissued (in dollars per share) | 0 | 0 | ||
Non-vested (in dollars per share) | $ 119.47 | $ 119.47 | ||
Other disclosures | ||||
Grant date fair value of PSUs granted | $ 67,900 | 13,100 | ||
Stock-based compensation | $ 5,900 | $ 6,200 | 13,100 | $ 10,900 |
Unrecognized compensation cost related to non vested awards | $ 30,100 | $ 30,100 | ||
Period over which unrecognized compensation cost is expected to be recognized | 2 years 4 months 24 days | |||
PSUs | Minimum | ||||
Common Stock and Stockholders' Equity | ||||
Vesting period | 1 year | |||
Actual performance compared to performance conditions percentage | 50.00% | |||
PSUs | Maximum | ||||
Common Stock and Stockholders' Equity | ||||
Vesting period | 3 years | |||
Actual performance compared to performance conditions percentage | 225.00% |
Common Stock and Stockholders_9
Common Stock and Stockholders' Equity - Employee Stock Purchase Plan (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 6 Months Ended | ||
Jul. 31, 2015 | Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Employee Stock Purchase Plan | |||||
Stock-based compensation | $ 82,970 | $ 21,928 | $ 169,270 | $ 40,243 | |
ESPP | |||||
Employee Stock Purchase Plan | |||||
Shares reserved for issuance under the plan (in shares) | 926,109 | 926,109 | |||
Maximum offering period | 27 months | ||||
Stock purchase price as a percentage of fair value (as a percent) | 85.00% | ||||
Issuance of stock under employee stock purchase plan (in shares) | 82,088 | 35,901 | |||
Remaining shares available for issuance under the plan (in shares) | 517,015 | 517,015 | |||
Stock-based compensation | $ 1,100 | $ 500 | $ 3,300 | $ 900 | |
Unrecognized compensation cost | $ 2,000 | $ 2,000 | |||
Period over which unrecognized compensation cost is expected to be recognized | 4 months 24 days |
Common Stock and Stockholder_10
Common Stock and Stockholders' Equity - Compensation Costs (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Compensation costs charged as an expense | ||||
Stock-based compensation | $ 82,970 | $ 21,928 | $ 169,270 | $ 40,243 |
Cost of revenue (exclusive of depreciation and amortization, which is shown separately) | ||||
Compensation costs charged as an expense | ||||
Stock-based compensation | 1,786 | 0 | 4,148 | 0 |
Advertising and marketing | ||||
Compensation costs charged as an expense | ||||
Stock-based compensation | 4,815 | 1,544 | 9,897 | 2,803 |
Sales | ||||
Compensation costs charged as an expense | ||||
Stock-based compensation | 18,953 | 3,271 | 40,120 | 6,190 |
Technology and development | ||||
Compensation costs charged as an expense | ||||
Stock-based compensation | 27,699 | 2,559 | 54,425 | 4,663 |
General and administrative expenses | ||||
Compensation costs charged as an expense | ||||
Stock-based compensation | $ 29,717 | $ 14,554 | $ 60,680 | $ 26,587 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2020 | |
Income Taxes | |||||
Income tax expense (benefit) | $ 3,196 | $ (2,399) | $ 90,235 | $ (3,110) | |
Measurement period adjustment to goodwill | $ 106,532 | $ 0 |