Dive Brief:
- Amwell is considering divesting some non-core assets as the telehealth vendor looks to narrow its business focus and improve financial performance, executives said on a third quarter earnings call Tuesday.
- The company is mulling selling legacy assets that could be more easily separated from the rest of the business without creating challenges for customers, executives said. “These are distinct assets that have a certain profile of clients that we could, in fact, cordon off,” said Amwell CFO and COO Mark Hirschhorn.
- Amwell already sold its virtual psychiatric care business to fellow telehealth provider Avel eCare for about $21 million early this year.
Dive Insight:
The potential divestitures come as the firm’s stock price has sunk in recent years compared with highs reached amid the telehealth boom in 2020. Last year, Amwell implemented a reverse stock split to avoid being removed from the New York Stock Exchange for trading below minimum standards.
The telehealth vendor is working to achieve positive cash flow from operations in 2026 and ultimately return to profitable growth, executives said.
As part of Amwell’s push to reach cash flow break-even, the company is focusing on its core virtual care platform and ensuring its operations are efficient, CEO Ido Schoenberg said on an earnings call Tuesday. That includes implementing artificial intelligence for tasks like assisting with patient intake or clinical program matching and onboarding, he said.
Amwell will also move to divert resources away from non-core assets. For example, the company has a “long list” of legacy products, like automated programs for hospitals or inpatient care products, Schoenberg said.
“These are good products that are secure and reliable and dependable, and we plan to continue and use them, but we are going to spend less, significantly less, in growing these market segments,” he said.
Overall, Amwell reported revenue of $56.3 million in the third quarter, falling 8% year over year. The telehealth firm posted a net loss of $31.9 million, compared with a $44 million loss in the prior-year period.
The company also narrowed its 2025 guidance. Amwell expects revenue for the year between $245 million to $248 million, compared with a previous outlook of $245 million to $250 million.
The telehealth firm had lowered its revenue outlook last quarter after the Defense Health Agency extended a contract with Amwell without deployments for behavioral health and automated care programs due to budget constraints at the Department of Defense.
Additionally, Amwell expects adjusted earnings before interest, taxes, depreciation and amortization between a loss of $45 million to $42 million, compared with a previous outlook of a loss of $50 million to $45 million.
