Teladoc Health (TDOC) Q4 2024 Earnings Call Transcript

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Teladoc Health (NYSE: TDOC)
Q4 2024 Earnings Call
Feb 26, 2025, 4:30 p.m. ET

Contents:

• Prepared Remarks
• Questions and Answers
• Call Participants

Prepared Remarks:

Operator

Good afternoon, and thank you, all, for attending the Teladoc Health Q4 2024 earnings call. My name is Bricha, and I will be your moderator for today. [Operator instructions] I would now like to pass the conference over to your host, Michael Minchak, vice president, investor relations at Teladoc Health. Thank you.

You may proceed.

Michael Michak -- Head of Investor Relations

Thank you, and good afternoon. Today, after the market closed, we issued a press release announcing our full year and fourth quarter 2024 financial results. This press release and the accompanying slide presentation are available on the investor relations section of the teladochealth.com website. On this call to discuss the results are: Chuck Divita, chief executive officer; and Mala Murthy, chief financial officer.

During this call, we will also discuss our outlook, and our prepared remarks will be followed by a question-and-answer session. Please note that we will be discussing certain non-GAAP financial measures that we believe are important in evaluating Teladoc Health's performance. Details on the relationship between these non-GAAP measures to the most comparable GAAP measures and reconciliations thereof can be found in the press release that is posted on our website. Also, please note that certain statements made during this call will be forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995.

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Such forward-looking statements are subject to risks, uncertainties and other factors that could cause the actual results for Teladoc Health to differ materially from those expressed or implied on this call. For additional information, please refer to our cautionary statement in our press release and our filings with the SEC, all of which are available on our website. I would now like to turn the call over to Chuck.

Chuck Divita -- Chief Executive Officer

Thanks, Mike. We reported a solid finish to 2024 and continue to make progress on our strategic priorities. Mala will comment more on our results and initial 2025 guidance in a moment. As we close out the year and look forward, I would also like to provide some updates on the business and areas of focus.

As you know, we operate in a complex and dynamic healthcare market, which continues to be impacted by macro factors such as medical cost inflation, disease prevalence, mental health challenges, pressures on healthcare providers and regulatory matters, among others. We believe virtually enabled care can play an important and constructive role in supporting the needs of our customers in this regard, and that we are uniquely positioned given our scale, experience and range of products and services. To strengthen our ability to pursue opportunities in this environment and navigate through respective challenges, we've taken several actions over the past several months to streamline the organization, deepen market focus, and advance important initiatives. These changes are well aligned with our priorities, have driven significant cost savings and created additional capacity to invest.

With respect to integrated care, we're building on these and other efforts to enhance our competitive position and pursue important growth factors focused on four strategic priorities. First is net growth in customers and membership and the engagement and usage of our services. In 2024, we added over 4 million members in the U.S. and grew underlying visit volumes by 6%, a key metric as the market continues to move toward visit oriented arrangements.

And we recently implemented new technology at the point of care to support additional services for our customers. We see this as an important element of our value proposition and differentiation going forward. We also grew chronic care management enrollment by 4% in 2024, and we see opportunities to further innovate in this space as well, including through our recently announced agreement to acquire Catapult Health. More on that in a moment.

From a selling season perspective, we saw some nice wins to close out the year, including the strongest year of bookings since 2020 in our employer channel and the important addition of TRICARE in the government space. We've also had some key client expansions with respect to chronic care programs, including weight management, which is seeing continued interest in the market. Of note, one of our largest customers added our solution for 2025 and we expect the enrollment to ramp over the year. As we mentioned in the third quarter call, we are seeing pressures in the health plan channel given some of the broader challenges.

With that said, we expect to have opportunities during 2025 across our various channels, and we will remain focused on managing through these uncertainties as well, both of which are reflected in the guidance ranges that Mala will cover. I'm pleased to report that we had a very successful implementation season with over 800 new clients launched on January 1st. This was a critical priority given earlier challenges, and I'm proud of how the team collaborated and delivered for our customers. Another important priority is deepening our impact on patient care and outcomes.

For example, in addition to the point-of-care technology I mentioned earlier, we're also excited about a new capability we'll be bringing to market soon that provides the ability for external ecosystem partners to efficiently integrate with us to support longitudinal care needs and other strategies of our customers. We're also focused on driving greater impact through our suite of products and we're looking forward to jointly leveraging the capabilities of Catapult, including an initial focus on patients with chronic conditions. And with Catapult's approach to preventative care, including convenient testing, screening and nurse lead engagement model, as well as an impressive Net Promoter Score of 80, we see opportunities to further complement our solution set. From a revenue growth perspective, we intend to leverage our scale distribution to offer Catapult services into our customer base.

And for Catapult's patients that are also eligible for our other services, we'll be creating a seamless enrollment pathway for our chronic care management and additional entry points for services such as mental health and primary care based on patient needs and preferences. As context, roughly half of the people engaged by Catapult have one or more chronic conditions. Many indicate challenges with depression and anxiety and nearly one-third share that they don't have an established primary care relationship. Our products and services align very well with these needs.

Through these and other initiatives, we're looking to extend our clinical care capabilities and ultimately to further participate in the value we can create for customers. Another important priority is expanding our international integrated care business. I recently had the opportunity to meet with our international team and hear from some key clients as well. I was highly impressed with our team and how they are building strong and sustainable positions in their respective markets.

And their efforts drove another strong year in 2024, delivering mid-teens revenue growth and continuing to expand markets and services. For example, in France, we're partnering with the public health system to provide virtual psychiatry services in places with the scarcity of providers. And in Canada, we are combining virtual services with the proprietary devices and software of our hospital and health system solutions to serve needs across several provinces. These are great examples of organizational collaboration and differentiation in the market.

Finally, a priority of increased access to virtual mental health services through our scale position. In addition to BetterHelp, we also have a scaled B2B mental health offering in integrated care, where we offer digital tools, coaching, therapy and psychiatry services. We completed nearly 1 million visits in 2024, a 10% increase from 2023. Over 60% of our membership base in the U.S.

has access to our mental health offering and at an enterprise level, B2B mental health generated approximately $150 million in revenues in 2024. We will continue to assess synergies across our mental health offerings going forward. Moving now to the BetterHelp segment specifically. The business continues to be the largest of its kind, serving an unmet need in a way that resonates with consumers as evidenced by its high consumer Net Promoter Score above 70.

And in January of 2025, we surpassed a historical milestone but having served over 5 million people across dozens of countries. With that said, the business continues to operate in a challenging environment, which impacted financial performance in 2024 and our expectations for 2025. We remain highly focused on stabilizing results and returning to a long-term growth posture. And we aim to do this through four key priorities.

The first is growing the user base and levels of engagement. During 2024, BetterHelp served over 1 million unique paying users, supported by a broad and diverse therapist network. We were encouraged to see sequential growth in average paying users in the fourth quarter versus the third quarter but we have not yet reached the level of stability we are striving for. We also have a priority on advancing our value proposition through new features and enhancements.

This includes ways to improve affordability and accessibility such as a pilot we launched in the third quarter of 2024 to test a weekly pricing model. Initial results were positive, and the model was subsequently expanded and now widely available. We'll continue to monitor performance on key measures such as conversion rates, retention and net user growth. We're also pursuing new features and other offerings, including furthering international expansion through new localized country models with respect to language content and therapists.

This includes a recent launch in France and additional markets in Europe over the course of 2025. And international was again a bright spot for BetterHelp in 2024, accounting for approximately 20% of segment revenues. Finally, BetterHelp's initiative to provide consumers with an ability to access their mental health benefits coverage continues to progress. Operational capabilities are now in place, and initial network discussions with select health plans have begun.

As shared previously, we don't expect any material contribution during 2025 in this area, and we'll also continue to explore additional ways to accelerate our progress, consistent with our broader mental health strategy. In closing, I'm gratified by the way we finished 2024 and how the organization is aligning around our strategic priorities, which are focused on delivering long-term sustainable growth. While there is more work ahead, we are operating with appropriate urgency and a strong commitment to driving performance across our business. With that, I'll turn it over to Mala.

Mala Murthy -- Chief Financial Officer

Thank you, Chuck, and good afternoon, everyone. Fourth quarter results were generally in line with our previously discussed expectations. Consolidated revenue was $640 million and adjusted EBITDA of $75 million represented an 11.7% margin. Net loss per share was $0.28.

Full year 2024 consolidated revenue of $2.6 billion decreased 1% versus 2023, while adjusted EBITDA of $311 million represented a 12.1% margin. Net loss per share of $5.87 included a noncash goodwill impairment charge of $4.63 per share pre-tax, amortization of acquired intangibles of $1.35 per share pre-tax and stock-based compensation expense of $0.86 per share pre-tax. Full year free cash flow was $170 million and we closed 2024 with nearly $1.3 billion in cash and cash equivalents on the balance sheet. Turning to segment results.

Fourth quarter integrated care revenue increased 2% year over year to $391 million, above the midpoint of our guidance range, driven by virtual care visits, chronic care and international. We added 4.2 million U.S. integrated care members versus the prior-year period and ended the fourth quarter with 93.8 million members, up 5% year over year. chronic care program enrollment was just over 1.2 million at quarter end, growing by 4% versus the prior-year period.

Fourth quarter integrated care adjusted EBITDA was $53 million, representing a 13.6% margin. This was near the upper end of our guidance range and down 95 basis points versus the prior-year period. Recall that based on upside in the third quarter, we discussed incremental investments in the fourth quarter to advance our key priorities, which drove a headwind to adjusted EBITDA margin. For the full year, integrated care segment revenue increased 4% to $1.5 billion.

Revenue benefited from double-digit growth in U.S. virtual care visit revenue, with volume up by 6% year over year, a mid-teens increase in our international business and growth in chronic care. Integrated care adjusted EBITDA grew 21% over 2023, driven by revenue growth, as well as cost and productivity initiatives. Adjusted EBITDA margin increased by about 215 basis points versus 2023, landing in the upper half of the initial guidance range we had provided last February.

Shifting to BetterHelp. Fourth quarter revenue was $250 million, down 9.5% versus the prior-year period, reflecting a modestly lower rate of decline versus the third quarter. Fourth quarter average monthly paying users grew by 2,000 users over the third quarter to 400,000, marking the first sequential increase since the second quarter of 2023, and driven by continued international growth and a net benefit from the weekly pricing model. Fourth quarter BetterHelp adjusted EBITDA increased to $22 million from $15 million in the third quarter, and adjusted EBITDA margin of 8.7%, compared to 5.9% in the third quarter.

This was consistent with commentary on our third quarter call regarding a much smaller sequential step-up in fourth quarter adjusted EBITDA. For the full year, BetterHelp revenue was $1 billion, a decline of 8% versus the prior year, while adjusted EBITDA of $78 million represented a margin of 7.5%. Now turning to guidance. We expect full year 2025 consolidated revenue to be in the range of $2.47 billion to $2.58 billion.

Consolidated adjusted EBITDA is expected to be in the range of $278 million to $319 million. We expect full year free cash flow of $190 million to $220 million, which represents year-over-year growth of 12% to 30%, driven mainly by net working capital benefits. We project stock-based compensation expense of $120 million to $130 million in 2025, down by about $20 million at the midpoint versus 2024, and 38% lower versus 2023 levels. For the first quarter, we expect consolidated revenue in the range of $608 million to $629 million, and adjusted EBITDA in the range of $47 million to $59 million.

Looking at the segments. For integrated care, we expect 2025 revenue to be flat to up 3% year over year on an as-reported basis. This assumes 0.5% to 3.5% constant currency growth and a roughly 50-basis-point headwind from foreign exchange. Constant currency growth includes about 200 basis points of contribution from the Catapult acquisition, which is expected to close at the end of February.

We are guiding to an adjusted EBITDA margin of 14.8%, plus or minus 50 basis points, inclusive of a roughly 40-basis-point headwind from the Catapult acquisition, which we expect to be dilutive to adjusted EBITDA margin in 2025. Excluding Catapult, our adjusted EBITDA margin guidance for 2025 would be roughly flat year over year at the midpoint. And this is consistent with our preliminary 2025 outlook where we said we endeavor to maintain adjusted EBITDA margin in line with 2024 levels. FX is neutral to integrated care adjusted EBITDA margin.

There are several factors that are impacting the first quarter and quarterly cadence. First, we expect a slightly greater sequential revenue decline in the first quarter versus prior years. While typical seasonality is driven in part by enrollment dynamics within our chronic care business, two additional factors are contributing to a lower 2025 starting point. The first is the selling season, which we had previously discussed.

And the second is an FX headwind due to currency movements since our October earnings call. Next, while we continue to expect increased membership to drive visit growth over time, based on recent trends, we now expect a more extended visit ramp at TRICARE, as it takes time for the contractors to implement the new program, impacting what is typically a strong quarter for visit volumes. In addition, we have some key expansions in our chronic care business in 2025, with enrollment expected to grow over the course of the year. However, tempering this benefit is an incremental impact from attrition as we were informed by a client earlier this month, our plans to transition a portion of their business during the second quarter.

Finally, we expect a full quarter of contribution from Catapult Health beginning in the second quarter, while the fourth quarter is typically their seasonally strongest of the year. Taken together, these factors are expected to lead to a first half, second half revenue split in 2025. That would be slightly more back half weighted relative to 2024. From an adjusted EBITDA standpoint, the expected ramp in chronic care enrollment and TRICARE visits will have a more significant positive impact on adjusted EBITDA in the second half while we also will be comping against some discrete benefits in the second and third quarter of 2024.

We are guiding to first quarter integrated care revenue down 0.5% to up 2% versus the prior-year period on an as-reported basis. A year-over-year tailwind from Catapult and an FX headwind largely offset. Adjusted EBITDA margin is expected to be in the range of 11.25% to 12.75% with Catapult about 20 basis points dilutive to the adjusted EBITDA margin and an immaterial FX impact. Moving to the BetterHelp segment.

We are guiding to 2025 revenue down 3.75% to down 9.75% versus 2024 on an as-reported basis. This assumes a decline of 3% to 9% on a constant-currency basis and a roughly 75-basis-point foreign exchange headwind. Based on what's currently known, we are comfortable near the midpoint while the wider range reflects uncertainties given the early stage of the year, including traction from growth initiatives, as well as the macro backdrop, demand levels, customer acquisition costs and churn rate. We are guiding to an adjusted EBITDA margin of 6.25% to 7.75%.

Excluding an FX headwind of roughly 50 basis points, adjusted EBITDA margin would be generally flat to the midpoint versus 2024. For the first quarter, we are guiding the BetterHelp segment revenue down 9% to 13.5% year over year on an as-reported basis. This assumes that 8.25% to 12.75% decline on a constant-currency basis and a 75-basis-point FX headwind. We expect an adjusted EBITDA margin of 2% to 4.25% with a roughly 60-basis-point headwind from foreign exchange in the first quarter.

Higher conversion rates related to the weekly offer has led to a year-over-year improvement in customer acquisition cost, and we expect it to remain at current levels over the balance of the year. While churn is higher, we expect the weekly offer to remain a net positive. We are also assuming an increase in users and revenue as we roll out our localized offering to additional markets in Europe, although we are being methodical as we learn and refine our approach in each market. As a result of these factors, we are targeting modest sequential revenue improvement beginning with the second quarter and continuing through the balance of the year.

And as year-over-year comps ease as we progress through 2025, we are targeting BetterHelp fourth quarter revenue to be relatively flat on a year-over-year basis. I'll now provide an update on our cost savings and productivity initiatives. We continue to execute against our previously discussed program and are exceeding those targets modestly. This is helping fund investments in the business to position the company for long-term success.

We remain focused on managing to an appropriate level of performance and are committed to taking additional actions accordingly. As we continue to evaluate opportunities for further efficiencies, our focus will be on optimizing technology and development and G&A costs, as well as lowering stock-based compensation expense. Finally, we closed the year with $1.3 billion in cash on our balance sheet and our business is generating solid free cash flow, which we believe provides us a high degree of financial flexibility. As it relates to our capital allocation priorities, first and foremost, we intend to maintain a strong balance sheet.

This is a key area of client interest, ensuring continuity and demonstrating an ability to invest in innovation. We continue to expect to retire our convertible bonds due in June 2025 with cash. We are evaluating our long-term financing and believe we have options as we look ahead to the June 2027 maturity. Second, we will focus on investing in the business to support our strategy, both on an organic and inorganic basis.

As we further expand our capabilities, we can leverage our large customer base and scale distribution platform, further executing on our land-and-expand strategy. And third, share buybacks remain a potential use of excess cash. With that, I will turn the call back to Chuck.

Chuck Divita -- Chief Executive Officer

Thanks, Mala. To wrap up, we are continuing to make progress against the key strategic priorities that we have laid out, although there is more work ahead. Despite some likely near-term headwinds from macro and other factors, we are focused on execution and delivering on our commitments to all stakeholders. I am confident that the actions we're taking this year will provide a strong foundation for us to deliver improved performance over the longer term.

We look forward to sharing more in the coming months. With that, we will open it up for questions. Operator?

Questions & Answers:

Operator

Thank you, Chuck. [Operator instructions] Your first question comes from Lisa Gill with J.P. Morgan. Please go ahead.

Lisa Gill -- Analyst

Thanks very much and thank you for all the detail. Chuck, I want to go back to a comment that you made when you were talking about net customer growth and talked about some of your contracting being more focused on visits. Can you talk about how contracts have changed, if at all, in 2025? And it looks like at the midpoint you're adding about 8% growth in integrated members based on the guidance that you're giving. What are you seeing as far as utilization trends? And the flu season started much later than we've seen in the last couple of years, but historically, the flu has been good for Teladoc.

So just curious like what you've seen more recently on the overall utilization trend?

Chuck Divita -- Chief Executive Officer

Yeah. Thanks. And I'll make some comments and then certainly, Mala, if you want to jump in. So a few things that I would say, as many years ago in this space, I think there was a lot of PMPM models because it was sort of new to the buyer and new to organizations such as ourselves.

And so, that provided a level of predictability and there's still a predominance of that out there. But as you know, the rest of the healthcare system primarily works on a visit basis on a utilization basis. So you've seen over time now that virtual visit space has matured, more and more interest in moving more toward the rest of the delivery system looks like. So that's not a new trend that's been going on for a while.

And that continue. So that's why we highlight the importance of the visit volumes because ultimately, that's a driver of revenue, but it's also a signal of the level of engagement that we have. And as we add those members that you mentioned, we should and we expect as we have, see increases in visit volumes which we have seen pretty steadily. And I think that's important.

It's also important because those visits are more than just a visit for that particular event, their engagement points. And I think part of our strategy is how do we activate those engagement points more holistically. One last thing I would say before asking Mala to comment. I was very proud of the way that our team responded to the surges this year.

When you think about the volumes that we experienced, which are massively larger than others, when you think about the holiday season, and making sure that we could match providers with patients throughout all of that, nail our SLAs and do it at scale, I think, is pretty remarkable. But maybe, Mala, if you want to comment more on the flu season and other matters.

Mala Murthy -- Chief Financial Officer

Yeah. So I would say, Lisa, just addressing your broader question on trends. As we spoke about at J.P. Morgan with you, there certainly is a shift we have been seeing over time.

To be crystal clear, it isn't as this is a shift on mass across all of our clients. We have plenty of clients who are still in the traditional structure of access fee, plus a visit fee. But certainly we are seeing some amount of interest and migration toward the fee arrangements. And I'd characterize this as the shift has been happening for a time.

We continue to expect it to continue gradually over time as say we are in the middle innings in this. As it relates to the flu season and sort of utilization trends, to the point that Chuck made, this is why the strategic pillars we talked about at J.P. Morgan really are important, right, making every visit count more, driving more value with every visit. Chuck in his prepared remarks talked about investments we have made and capabilities we have added to do exactly that, right, to drive the value in the business.

Our utilization trends have remained generally stable but that is absolutely a point of focus for us from an investment standpoint, both that, as well as driving increased enrollment, which is the other way we accrete revenue. In terms of flu, I would say the following. I'd comment more, not just on flu but overall visit volumes and revenue. We talked about 6% growth last year in our visit volume.

That actually translated from a visit revenue perspective to high single-digit revenue growth. And we felt the benefit of the visit mix as a part of that kind of visit revenue growth. I would expect that momentum to continue this year, both in the first quarter, but also as we go through the rest of the year.

Operator

Thank you. Your next question comes from Jessica Tassan with Piper Sandler. Please go ahead.

Jessica Tassan -- Analyst

Hi, guys. Thanks, again, for the detail. I just had a question on the BetterHelp efforts to expand payer coverage. I guess, can you just give us a little bit of qualitative detail around what -- today, what behavioral health offerings exist within the integrated care segment? And then, just what incremental capabilities or network access would an employer or a payer be gaining by bringing BetterHelp in network.

If you could just kind of qualitatively describe the nature and difference between those two offerings. Thanks.

Chuck Divita -- Chief Executive Officer

Yeah. Happy to. And on the B2B side, on the integrated care side, as I mentioned, we have a scaled mental health position there and it's been growing nicely. About 60% of our installed base has access to our services, which is you have digital tools, we have coaching, we have psychiatry, and a range of services.

And as I mentioned, around $150 million in aggregate on B2B revenues. So that's scaling well. I think, when you step back from this issue, mental health has actually been one of the most widely adopted in the virtual care setting post the pandemic and continues to have a lot of secular trends around that, and we see that continuing. I think, when you get into the network contracting, there's two pieces.

One is getting a network and meeting those requirements and so forth. And the other is actually utilization. It's one thing to be a network that you need to actually have a brand that resonate and people use your services. And that's what BetterHelp really brings.

They not only do they have a strong consumer brand and well-known brand but massive amounts of volume. And so, you've seen post-pandemic a lot of players were able to get into network arrangements and so forth but some are struggling to get the volumes because you have to activate the membership. And so, I think both are important, getting a network but also having the brand and the ability to market your services and meet the need. And I think that's where people are seeing an interest in BetterHelp.

I mean, the ability for it to match patients with providers, 95% within 48 hours, a diverse Airbus network. So there's a lot that brings to the table, notwithstanding the challenges that it takes to get into that space.

Jessica Tassan -- Analyst

Thank you.

Operator

Thank you. Your next question comes from David Roman with Goldman Sachs. Please go ahead.

David Roman -- Analyst

Thank you, and good afternoon, everybody. Maybe you could help us break down a little bit beyond the guidance, just some of the operational factors as you look at 2025 compared to 2024, can you maybe walk through how some of the key business dynamics are evolving on a year-over-year basis by segment. And then, as you consider the factors in the BetterHelp side, we understand the weekly pay model, I think, and then the evolution of the business model. But how are you going to sort of land the plane on what a sustainable direction is in that business as you look forward?

Mala Murthy -- Chief Financial Officer

Yeah. Let me address those questions in order and Chuck chime in, please. So let me start with integrated care. As I think about revenue growth for integrated care, we have essentially on a constant-currency basis, guided up 0.5% to 3.5% revenue growth on a year-over-year basis.

The way I think about the drivers and the components of that are as follows: number one, international within that growing in the low double digits on a constant-currency basis. So that's one. Second, in the U.S., if I think about our B2B business, there are certain things that are informing that growth. Number one, we have assumed 10 months of Catapult we expect to close that transaction shortly.

So that is number one. The second is, as we just talked about, we are seeing visit revenue growth as I just talked about showing nice momentum. And I expect TRICARE as we ramp through the year to add to that visit momentum as well. We did talk about an extended ramp for TRICARE.

That said, we should expect to see TRICARE momentum in the back half of the year. So that is number two. Number three, as always, chronic care enrollment ramp through the year. So certainly, a slower start in Q1 because of the selling season challenges and dynamics we talked about in the October earnings call and Chuck talked about that in his prepared remarks.

But enrollment in chronic care happens through the year, and so that will contribute as we go through the year. And included within that is the traction that we are seeing from weight management. I would say, the couple of headwinds offsetting all of these are: first, we have talked about the foreign exchange dynamics overall from a revenue growth standpoint. And then, the second, I would say, is we -- as we said in our prepared remarks, are incorporating in our guidance the impact of a client loss that we were informed about earlier this month.

So those are the different puts and takes that essentially are informing our overall revenue growth momentum. From an adjusted EBITDA standpoint, I would say, in integrated care, we typically will see adjusted EBITDA margins ramp as we go through the year as revenue ramps, especially in chronic care. Now keep in mind, adjusted EBITDA margins are impacted seasonally by stronger visit volumes in 1Q and 4Q. But absent that, it is sort of advancing through the year.

The only other thing I would say for adjusted EBITDA margins is, we are comping benefit from Q2 and Q3 of 2024, for different reasons that we have spoken about in those quarters. So it's just something to keep in mind on that. Now turning to BetterHelp, I would say, what we have talked about consistently internally for BetterHelp and externally is, we are looking for stabilization as we go through the year. What does that mean? It means a few things.

One, we have to keep monitoring the customer acquisition cost landscape. We are assuming that it stays relatively stable in our guidance. But the reason we have provided a relatively wide guidance is because we have learned in the last 18 months to two years that this can be very volatile and can change quickly. So that is sort of customer acquisition trends are an important driver.

The second is we have talked about our international efforts and our international growth. That is an important contributor to our growth -- revenue growth this year. And we have talked about within international growth we are making efforts at localizing our product and platform experience. We have, for example, launched a localized experience in France, early days yet, going well thus far, but we need to monitor how that does.

And we have plans to localize in other countries. We don't want to be public with which countries but we do have plans. So I would say international growth and efforts remain an important initiative for BetterHelp. What we've also talked about is just continuing to improve the core platform and user experience across the board and in the U.S.

This is a product and a platform with high NPS. We need to continue to invest in it and nurture it. And so, making sure that the core experience is good and continues to be good. It is an important driver for us.

So I would say to you, it is all of those things we are making efforts on driving benefit coverage. We have always said we do not expect it to be a material revenue growth driver in 2025. We expect it to be material in the years ahead as we ramp up in future years. So that's a little bit of a longer answer to your question on the dynamics across the different segments.

David Roman -- Analyst

I appreciate all the detail. Thanks for letting me sneak a multi-part one in here.

Operator

Thank you. We now have Sean Dodge with RBC. Please go ahead.

Sean Dodge -- Analyst

Yeah. Thanks. Maybe just staying on BetterHelp. Chuck, as you mentioned, it's encouraging to see the paying user number stabilize but it looks like the average revenue per user declined sequentially.

Is that just a function of the rollout of the weekly membership offering you mentioned? Or is it growth in international? Is that price lower than in the U.S. or maybe doesn't have to do with the elevated churn Mala mentioned. Just trying to understand why revenue per user is down and maybe the extent we should expect that to continue or not?

Mala Murthy -- Chief Financial Officer

Yeah. Maybe I'll handle this. So it's driven by a couple of things. First, just to be very clear, right now, the weekly pricing is really no different on a -- versus the monthly.

In that, our weekly is essentially our monthly pricing divided by four, that's what it is. Now I will tell you based on the traction that we are seeing with our weekly offer in better conversion, we are absolutely going to experiment with different pricing contracts on the weekly. And that is something that is on docket for us to look into for 2025. But so far, any change that you see in our average revenue per user on a monthly basis is really not driven by weekly being different from monthly.

What you said, Sean, is absolutely right. We have talked about the fact that our international headline price is lower, and I would also say to you, this is where the fact that we are in international markets and we do take international taxes on our revenue does matter to our overall revenue per user because it's a contra revenue, it's an offset to our revenue. Again, this is something that was -- that has been factored into our overall international economics. But that is the reason why you're seeing the ARPU or revenue per user going down.

And thirdly, as international goals has been growing, you will see that impact.

Sean Dodge -- Analyst

OK. That's great. Thanks for the detail, Mala.

Operator

Thank you. We have Richard Close with Canaccord Genuity. Please go ahead.

Richard Close -- Analyst

Yeah. Thanks for the question. Maybe a follow-up on the international BetterHelp. Mala, if you could remind us what that was last year? And then, follow-up for Chuck.

If you can just talk about the health plan channel, you said it's slow. Obviously, there's some issues there. Does it have anything to do with your product set? Or how are you thinking about that channel evolving this year?

Chuck Divita -- Chief Executive Officer

Yeah. Let me start with the last part first. So I think there's a few things going on. Obviously, everyone on the call is familiar with all the dynamics in the health plan marketplace that they're navigating through.

And they will. These are sophisticated organizations, and they're adept at doing that. But if you're a player in the Affordable Care Act, you've got the subsidies ending at -- enhanced subsidies at the end of 2025. If you're heavy in Medicaid, you've got some questions going back and forth around that Medicaid expansion.

If you're in the commercial business, you've got some inflationary trends working their ways through the system. So there's a variety of things that the health plans are working through. We continue to have business with health plans. We've grown business with health plans, the people have expanded.

But I do think it's reasonable to think as they work through their strategies and how they're going to play those strategies going forward, that that creates some level of headwind in terms of whether it's belt tightening or focusing on other strategies. I will say this though, the secular tailwinds around unfortunately, the medical cost inflation, the disease prevalence, the reason why I highlighted all those things in my prepared remarks is because those haven't gone away. And that's why we're making a lot of the investments we are in terms of how do we activate our engagement points differently and support of those strategies, how do we make our chronic care management programs even more impactful in terms of cost of care and so forth. So I don't think it's necessary -- I mean, our products -- companies like us always have to innovate our products, but we continue to resonate in the market.

Having said that, I do think that we've got this near-term and a headwind that I think is reasonable for us to sort of navigate through. Mala, do you want to cover the BetterHelp?

Mala Murthy -- Chief Financial Officer

Yeah. So international for BetterHelp was 20% of the segment's revenues in 2024 and that's up from mid-teens in 2023.

Richard Close -- Analyst

Thank you.

Operator

Thank you. We have Daniel Grosslight with Citi on the line now.

Daniel Grosslight -- Analyst

Hi. Thanks for taking the question. As we think about chronic care growth for this year, can you rank which programs are growing the fastest? And with respect to the weight loss program, it sounds like you've had nice traction there for this year. We've heard from some employers a little trepidation adding in utilization management to GLPs as that could put rebates at risk.

Can you also just speak to how you work with PBMs and employers to help control GLP-1 costs without necessarily impacting rebate dollars? Thank you.

Chuck Divita -- Chief Executive Officer

Yeah, a couple of things. What we're seeing the most traction right now is our bundled services where we have a variety of things that we can offer for set price and then we activate those members. Certainly, weight management is on the mind and a source of interest and a source of growth for us. I think, the challenge with the GLP-1s, and you've mentioned it, is there's a lot of -- well, first of all, employers are trying to figure out their strategy.

So there's not a sort of monolithic view of how they're approaching that. But generally speaking, if those GLP-1s are out there, there are significant rebate dollars. And I think the PBMs are looking at that as well. And I think employers are working with their PBMs as to how to address this issue.

And I think that's something that we are just going to have to work through. I think, the rebate question in my mind is, if I'm an employer and those rebates are their dollars, they're not the PBMs dollars. And I think the employer should have the ability to design programs that are best for their employees and their dependents and not be sort of held hostage in terms of rebates. Now that's up to individual employers and how they want to approach that.

But from my perspective, as a former health plan person, the rebates are the employers, not the PBMs.

Operator

Thank you. We now have Jailendra Singh with Truist. Please go ahead when you're ready.

Jailendra Singh -- Analyst

Thank you. This is Jailendra Singh from Truist. Thanks for taking my question. I actually wanted to follow up on your comment around the client planning to transition a portion of their business in second quarter.

Can you provide any more color there in terms of drivers behind that change? Was it a health plan? And what offerings were they using. Any color on membership revenue would be helpful. And how do you feel about the confidence in -- it looks like you still work with them on other offerings, but just curious help us your confidence in retaining that client for other offerings?

Chuck Divita -- Chief Executive Officer

Yeah. Look, I'm not going to comment on specific clients in that regard. But I will say a lot of the comments that I've already made in terms of the macro factors are in play here. It was in the health plan channel.

We continue to do some business with this particular entity and I think it's just a sign of the times in terms of some of the pressures that health plans are under in and some are making decisions in certain ways like that. But again, I'll go back to what I said. We continue to have significant business with health plans. We've expanded our services with health plans, the conversations that we're having now and that we are participating in, they're really looking for new types of solutions and how can we better support their strategies in a variety of ways.

So I feel very comfortable that we've got a strong offering, including the investments that we've been making in terms of how we can create more value for customers.

Jailendra Singh -- Analyst

Great. Thanks, Chuck.

Operator

Thank you. We now have a question from George Hill with Deutsche Bank.

George Hill -- Analyst

Hey, good evening, guys, and thanks for taking the question. My question is on BetterHelp. But if you look at the full year guidance, it looks like there's significant discretionary cost cuts that will have to come out of the business to hit your EBITDA targets. So I guess, I would just love to hear you talk about like as costs come down as the business kind of comes down a little bit, is there more -- like, I guess, is there more -- should we see more like pressure on the gross margin line or in the discretionary cost base? And I would love to hear you talk about where costs come out of that business?

Mala Murthy -- Chief Financial Officer

Yeah. What I would first give context on the BetterHelp businesses, and we have said this before, George. This is a business that runs from a fixed opex and infrastructure point of view, relatively lean. It's a largely variable margin business.

And I would say, if I think about the key expense items in that P&L. It really is around advertising and marketing spend because that is an important driver of user acquisition, the yield on that and the efficiency on that are important as we think about the bottom line, the adjusted EBITDA margin for that business. One thing that we are looking to do, as we have now talked about for a while is balancing top-line growth with bottom-line growth. And what that means is we are certainly going to be even paced.

And I want to say -- if I think about the A&M as we go through the year, it will not be as hockey stick as it has been in certain years past. You actually saw that impact in Q4 of this year. Q4 adjusted EBITDA in BetterHelp was largely in line with our expectations because we wanted to invest in international markets, that is an area of growth for us, that is an area where we are going to be acquiring users and new users. So we made those investments in the fourth quarter in the BetterHelp business.

That said, though, I will say we expect to be relatively judicious and prudent on how we are going to spend advertising and marketing in the BetterHelp business. But in 2025 and even going beyond, and that is certainly going to be a key factor in the overall BetterHelp adjusted EBITDA margin in 2025. But I'll remind you, this is largely a variable margin business, and it will continue to be so.

George Hill -- Analyst

OK. And if I could have a quick follow-up is just the gap between the EBITDA guidance and the cash flow guidance to cash on hand. Are there any other big moving pieces there?

Mala Murthy -- Chief Financial Officer

Yeah. It's a good question. So the difference between the two is the following. There are two important pieces.

Besides the growth in -- if you think about our adjusted EBITDA growth, we look at it internally in terms of what are the actual segments delivering. And then, we also look at our internal compensation in terms of what it takes to drive those results. We certainly are picking up from a cash flow perspective, some year-over-year benefit in 2025 relative to 2024 in terms of compensation -- cash-based compensation. And look, that is based on our results for 2024, and that has a consequence on our overall compensation.

The second is we are driving and focusing on working capital improvement, collections, DSOs, etc. So you see those two things essentially resulting in the cash flow dynamic that you see.

George Hill -- Analyst

Helpful. Thank you.

Operator

Thank you, George. We now have the next question from Charles Rhyee with TD Cowen.

Charles Rhyee -- Analyst

Yeah. Thanks for taking the question. Maybe just asking about sort of TRICARE and sort of like how should we think about the offering into the TRICARE membership and talk a little bit how more specifically you plan to market directly to this population? What kind of requirements does that require in terms of either investments or the investments you've already made? Because you made the comment earlier that customer acquisition cost has been moderating or falling. And certainly, that's a function, I think, marketing spend versus sort of the conversion of that dollars into paying members at least on the BetterHelp side.

Just trying to think through the different avenues -- sorry, it's really kind of two questions. It's really sort of what are you doing sort of better conversion? And how are you kind of implying that as we think about TRICARE generally in the business?

Chuck Divita -- Chief Executive Officer

Yeah. I wouldn't necessarily single out TRICARE. I think, our strategies around activating visits are pretty consistent. And obviously, with the brand that Teladoc has and the reach we have in terms of our marketing campaigns, we think we've got that covered.

So I don't want to talk about specific tactics on a particular account, but I will say it's a pretty broad-based approach and been effective at generating visit volume.

Charles Rhyee -- Analyst

And if I could just add one quick follow-up. If we think about the new visit type of model contract versus your existing old contracts on a like-for-like basis, is that similar profitability and similar revenue to you from the old access model?

Mala Murthy -- Chief Financial Officer

So that's a slightly nuanced question. I would say the following. Typically, when we have these conversations with our clients in transitioning from the traditional model to visit the model, we are looking to structure the pricing such that -- it is gross margin neutral over time. It may not be so right at the outset from the point of transition, but typically, when we have these conversations, it will be in the context of the expand part of land and expand.

So Charles, what will happen is we will talk about revenue-accretive product that we will now be selling into the population or other factors that will essentially allow us in most instances, to essentially be gross margin neutral or gross profit dollar accretive. But it really does depend on a case-by-case basis.

Charles Rhyee -- Analyst

Got it. That's helpful. Thank you.

Operator

Thank you. We now have Michael Cherny with Leerink Partners.

Michael Cherny -- Analyst

Afternoon. Thanks for taking my question. Maybe if I can just go back to George's a bit on the dynamics, on the cost side. And Mala, I know you mentioned numerous times, the idea of balancing growth for profitable growth.

I know you don't have a long-term guidance of it, but how should we think whether it's exiting the year or what may it be about the long-term opportunity for you to generate profit dollars through revenue contribution versus profit dollars versus through discretionary cost cuts. So what should the philosophical model look like going forward?

Mala Murthy -- Chief Financial Officer

Yeah. It's a great question. So here's what I would say. And let me start with BetterHelp.

I'm assuming your question is for BetterHelp or is it broader than that? I'll address it for both segments. So look, for BetterHelp, I would say, it really all comes down to us being able to see the sequential progression in the business and stabilization in the business as we go through the year because what matters for a variable margin business like BetterHelp is revenue growth. And so, we need to see that improvement and lower and lower decline with every quarter as we roll through the year. So that is what we are looking to see as we think about the longer term for BetterHelp.

Now I will say that model and the comments I made is certainly going to be different when we think about benefit coverage that has different unit economics, that have different margins, etc. And so, we will address that when that becomes material, which it isn't in 2025. On the integrated care side, it really is about two things. One is it is about driving revenue growth because what we have always said is the integrated care segment is the one that has operating leverage.

So the more revenue growth and gross profit dollars you drive, the more leverage you drive. And the way we are looking to drive revenue growth and gross profit dollar growth is certainly by all the strategic things, the priorities that Chuck mentioned in his prepared remarks, right? It is driving member engagement and greater utilization and enrollment. It is driving greater value in every visit and making it more impactful because that allows us to sit down with our clients and certainly earn a greater share of their spend wallet. So things like that that is going to drive greater top-line growth.

We will continue to drive productivity in our cost of goods sold, and we will continue to drive productivity in our opex items, specifically, I would say, around technology and development and G&A. And then, we have shown some really nice discipline in stock-based comp, and I expect that to continue as well. So hopefully, that gives you some color on how we think about us progressing on driving profit. But it's a combination of top-line growth and driving and maintaining discipline on our cost structure.

Michael Cherny -- Analyst

Thanks, Mala.

Operator

[Operator signoff]

Duration: 0 minutes

Call participants:

Michael Michak -- Head of Investor Relations

Chuck Divita -- Chief Executive Officer

Mala Murthy -- Chief Financial Officer

Lisa Gill -- Analyst

Jessica Tassan -- Analyst

David Roman -- Analyst

Sean Dodge -- Analyst

Richard Close -- Analyst

Daniel Grosslight -- Analyst

Jailendra Singh -- Analyst

George Hill -- Analyst

Charles Rhyee -- Analyst

Michael Cherny -- Analyst

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