Dive Brief:
- Amwell raised its 2026 adjusted earnings guidance this week after narrowing its losses in the first quarter.
- The health technology and telehealth firm now expects an adjusted earnings loss of $12 million to $16 million in 2026. Amwell previously expected an adjusted EBITDA loss between $18 million and $24 million.
- The telehealth vendor’s first-quarter results, which beat investor expectations on earnings and revenue, gives Amwell “increased confidence” that it will achieve positive cash flow from operations in the fourth quarter, a long-term goal for Amwell, CFO Mark Hirschhorn said on an earnings call Tuesday.
Dive Insight:
Amwell recorded a net loss in the quarter of $10.3 million, compared with an $18.4 million loss during the prior-year period, according to financial results released this week. Revenue in the quarter reached $54.9 million, down about 18% year over year.
Revenue from subscriptions — a focus for Amwell as it tries to shift to more predictable, recurring revenue — was $24.9 million in the first quarter, a decrease of about 23% from the previous year. However, renewals and retention were higher than expected, giving the telehealth firm “greater confidence in the stability of our subscription base going forward,” Hirschhorn said.
Overall, the outperformance in the first quarter was driven by strong visit volumes in urgent care and clinical programs, alongside continued discipline around costs, he said.
The results come as Amwell has refocused on offering a single platform where customers can consolidate virtual care and digital health programs, divesting other assets like its virtual psychiatric care business.
The company also touted contract renewals during the earnings call. Major payer Elevance Health has renewed with Amwell for three years, CEO Dr. Ido Schoenberg said.
The telehealth vendor’s contract with the Defense Health Agency — a major deal for Amwell — is also up for renewal soon. The company first notched the contract to replace the military’s telehealth product in 2023.
The deal was extended last summer, but it cut out deployments for behavioral health programs due to budget restrictions at the Department of Defense — hitting Amwell’s top line last year.
The next renewal should be “very straightforward,” taking place at the end of the second quarter or early in the third quarter, Hirschhorn said on the earnings call. The opportunity to expand the deal to add those services again would come after the renewal of the base contract this summer.
“The decision, of course, lies with the customer, and we hope they will expand at some point, but we don’t have any specific information as to the if and when at this point,” Schoenberg said.
