Dive Brief:
Amwell narrowed its losses on growing revenue in the first quarter as the telehealth vendor continued to roll out products as part of a contract with the Department of Defense.
The company posted a net loss of $18.4 million, down from $73.4 million in the prior-year period. Amwell reported revenue of $66.8 million, compared with $59.5 million in the first quarter last year.
The telehealth firm has deployed scheduled virtual visits across the Military Health System, executives said in an earnings call Thursday. However, rollouts for its automated and digital behavioral health programs will take place in the third quarter instead of the second due to leadership changes at the Defense Health Agency, leaders said.
Dive Insight:
Amwell has been working to right its financial ship after years of losses and a threat to its listing status last year.
The vendor was warned by the New York Stock Exchange last April that it could be delisted because its stock price was trading below the minimum standard. Last summer, Amwell implemented a reverse stock split to consolidate the number of existing shares and boost its stock price.
The company is now looking to reach positive cash flow by 2026, a goal the company made “significant progress” toward in the first quarter, CEO Ido Schoenberg said on the earnings call.
One major project for Amwell is its defense contract. The company, along with technology firm Leidos, first received a deal worth up to $180 million in late 2023 to replace the military’s telehealth product with Amwell’s.
Software revenue grew over 30% year over year due to strategic deployments, including the go-live across the Military Health System, “the most significant growth initiative in our company’s history,” CFO and COO Mark Hirschhorn said on the call.
Analysts peppered Amwell with questions about the defense contract’s renewal, given the deal is scheduled to last only through July. But executives said they were confident the deal would be extended in the coming months. Service members can already access scheduled virtual visits through Amwell, and the company believes the government and Leidos are happy with results, Schoenberg said.
“The audience for our project is huge. It’s 9.6 million people in the military, including the men and women in uniform and their families,” he said.
Amwell’s earnings call comes as economic uncertainty and tariffs have weighed on the bottom lines of other companies in the healthcare sector, including medical technology firms.
Amwell likely won’t face significant challenges from tariffs though, as hardware is now a small part of their business, Schoenberg said. The economic uncertainty could be a boon, as customers could view Amwell products as a way to grow efficiency and revenue, he added.
“People are uncertain, and people are worried when they think about their financial viability going forward. That includes many of our customers,” he said. “The encouraging part is that they see us as part of the solution to this issue.”
