AMWL American Well Corporation

 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): February 14, 2024

 

 

American Well Corporation

(Exact name of Registrant as Specified in Its Charter)

 

 

Delaware			001-39515	20-5009396
(State or Other Jurisdiction of Incorporation)			(Commission File Number)	(IRS Employer Identification No.)
75 State Street 26th Floor
Boston, Massachusetts				02109
(Address of Principal Executive Offices)				(Zip Code)

 

Registrant’s Telephone Number, Including Area Code: 617 204-3500

 

(Former Name or Former Address, if Changed Since Last Report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Class A Common Stock, $0.01 Par Value		AMWL		New York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

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Item 2.02 Results of Operations and Financial Condition.

On February 14, 2024, American Well Corporation (the "Company") announced its financial results for the fourth quarter and full year ended December 31, 2023. The Company's Earnings Report is furnished as Exhibit 99.1 to this Form 8-K and is incorporated by reference herein.

 

The Company will host a conference call to discuss its financial results today at 5 p.m. ET, Wednesday, Feb.14. The call can be accessed via a live audio webcast at investors.amwell.com or by dialing 1-888-510-2008 for U.S. participants, or 1-646-960-0306 for international participants, referencing conference ID #7830032. A replay will be available via webcast shortly after the completion of the call, at the same web link.

 

The information contained in this Item 2.02 and Exhibit 99.1 attached hereto shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits. The following exhibit is being filed herewith:

99.1		Earnings Report, dated February 14, 2024, issued by American Well Corporation.
104		Cover Page Interactive Data File (embedded within the Inline XBRL document).

 

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

			AMERICAN WELL CORPORATION
Date:	February 14, 2024	By:	/s/ Bradford Gay
			Bradford Gay Senior Vice President & General Counsel

 

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Exhibit 99.1

 

 

 

AMWELL ANNOUNCES RESULTS FOR Fourth QUARTER AND FULL YEAR 2023

 

BOSTON, Feb. 14, 2024 –Amwell® (NYSE: AMWL), a leader in hybrid care enablement, today announced financial results for the fourth quarter and full year ended Dec. 31, 2023.

 

“Fiscal 2023 marked the close of an important year for Amwell as we advanced our goals in the market for enabling digital healthcare. We secured and deployed strategic clients who provide us with important validation for our solution. We successfully migrated more than half our volume onto our new platform, Converge, and the ROI proof points are accumulating,” said Ido Schoenberg, MD, chairman and CEO of Amwell. “Finally, we improved efficiency in our company and put in place the important elements to transform our commercial organization to reaccelerate momentum in our business. With the achievements of 2023, we begin 2024 with high conviction regarding our path to profitability.”

Amwell Fourth Quarter 2023 Highlights:

Full Year 2023 Financial Highlights:

Financial Outlook

The company provided 2024 financial guidance, along with a preliminary view on revenue and adjusted EBITDA for 2025, as well as its objective to attain adjusted EBITDA breakeven.

 

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Amwell will host a conference call to discuss its financial results today at 5 p.m. ET, Wednesday, Feb.14. The call can be accessed via a live audio webcast at investors.amwell.com or by dialing 1-888-510-2008 for U.S. participants, or 1-646-960-0306 for international participants, referencing conference ID #7830032. A replay will be available via webcast shortly after the completion of the call, at the same web link.

Other than with respect to GAAP Revenue, the Company only provides guidance on a non-GAAP basis. The Company does not provide a reconciliation of forward-looking Adjusted EBITDA (non-GAAP) to GAAP net income (loss), due to the inherent difficulty in forecasting and quantifying certain amounts that are necessary for such reconciliation. Because other deductions used to calculate projected net income (loss) vary dramatically based on actual events, the Company is not able to forecast on a GAAP basis with reasonable certainty all deductions needed in order to provide a GAAP calculation of projected net income (loss) at this time. The amount of these deductions may be material and, therefore, could result in projected GAAP net income (loss) being materially less than projected Adjusted EBITDA (non-GAAP).

About Amwell

Amwell provides a leading hybrid care delivery enablement platform in the United States and globally, connecting and enabling providers, payers, patients, and innovators to deliver greater access to more affordable, higher quality care. Amwell believes that hybrid care delivery will transform healthcare. We offer a single, comprehensive platform to support all digital health needs from urgent to acute and post-acute care, as well as chronic care management and healthy living. With nearly two decades of experience, Amwell powers the digital care of more than 50 health plans, which collectively represent more than 100 million covered lives, and many of the nation’s largest health systems. For more information, please visit https://business.amwell.com/.

©2024 American Well Corporation. All rights reserved. Amwell®, SilverCloud®, ConvergeTM, CarepointTM and the Amwell Logo are registered trademarks or trademarks of American Well Corporation.

Forward-Looking Statements

This press release contains forward-looking statements about us and our industry that involve substantial risks and uncertainties and are based on our beliefs and assumptions and on information currently available to us. All statements other than statements of historical facts contained in this press release, including statements regarding our future results of operations, financial condition, business strategy and plans and objectives of management for future operations, are forward-looking statements. In some cases, you can identify forward-looking statements because they contain words such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “should,” “will,” or “would,” or the negative of these words or other similar terms or expressions.

Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Forward-looking statements represent our beliefs and assumptions only as of the date of this release. These statements, and related risks, uncertainties, factors and assumptions, include, but are not limited to: our ability to successfully transition our clients to Converge without significant attrition; our ability to renew and upsell our client base; the election by the Defense Health Agency to deploy our solution across their entire enterprise; the continuation of the DHA relationship beyond July of 2025 with comparable financial terms; weak growth and increased volatility in the telehealth market; our ability to adapt to rapid technological changes; increased competition from existing and potential new participants in the healthcare industry; changes in healthcare laws, regulations or trends and our ability to operate in the heavily regulated healthcare industry; our ability to comply with federal and state privacy regulations; the significant liability that could result from a cybersecurity breach; and other factors described under ‘Risk Factors’ in our most recent form 10-K filed with the SEC. These risks are not exhaustive. Except as required by law, we assume no obligation to update these forward-looking statements, or to update the reasons actual results could differ materially from those

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anticipated in the forward-looking statements, even if new information becomes available in the future. Further information on factors that could cause actual results to differ materially from the results anticipated by our forward-looking statements is included in the reports we have filed or will file with the Securities and Exchange Commission. These filings, when available, are available on the investor relations section of our website at investors.amwell.com and on the SEC’s website at www.sec.gov.

Contacts

Media:

Press@amwell.com

Investors:

Sue Dooley

sue.dooley@amwell.com

 

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AMERICAN WELL CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except share and per share amounts)

 

		As of December 31,
		2023				2022
Assets
Current assets:
Cash and cash equivalents		$	372,038			$	538,546
Accounts receivable ($1,626 and $2,597, from related parties and net of    allowances of $2,291 and $1,884, respectively)			54,146				58,372
Inventories			6,652				8,737
Deferred contract acquisition costs			2,262				1,394
Prepaid expenses and other current assets			14,484				19,567
Total current assets			449,582				626,616
Restricted cash			795				795
Property and equipment, net			572				1,012
Goodwill			—				435,279
Intangibles assets, net			120,248				134,980
Operating lease right-of-use asset			10,453				13,509
Deferred contract acquisition costs, net of current portion			4,792				3,394
Other assets			2,083				1,972
Investment in minority owned joint venture			1,180				—
Total assets		$	589,705			$	1,217,557
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable		$	4,864			$	7,236
Accrued expenses and other current liabilities			38,988				54,258
Operating lease liability, current			3,580				3,057
Deferred revenue ($1,286 and $1,665 from related parties, respectively)			46,365				49,505
Total current liabilities			93,797				114,056
Other long-term liabilities			1,425				1,574
Operating lease liability, net of current portion			8,206				11,787
Deferred revenue, net of current portion ($0 and $10 from related    parties, respectively)			6,091				6,289
Total liabilities			109,519				133,706
Commitments and contingencies
Stockholders’ equity:
Preferred stock, $0.01 par value; 100,000,000 shares authorized, no shares    issued or outstanding as of December 31, 2023 and as of December 31, 2022			—				—
Common stock, $0.01 par value; 1,000,000,000 Class A shares authorized, 255,542,545    and 244,193,727 shares issued and outstanding, respectively; 100,000,000 Class B shares    authorized, 27,390,397 shares issued and outstanding, respectively; 200,000,000 Class C    shares authorized 5,555,555 issued and outstanding as of December 31, 2023 and as of    December 31, 2022			2,879				2,766
Additional paid-in capital			2,234,768				2,160,108
Accumulated other comprehensive income (loss)			(15,650	)			(16,969	)
Accumulated deficit			(1,757,778	)			(1,082,028	)
Total American Well Corporation stockholders’ equity			464,219				1,063,877
Non-controlling interest			15,967				19,974
Total stockholders’ equity			480,186				1,083,851
Total liabilities and stockholders’ equity		$	589,705			$	1,217,557

 

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AMERICAN WELL CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(in thousands, except share and per share amounts)

 

		Three Months Ended December 31				Years Ended December 31,
		2023		2022		2023		2022
Revenue		$ 70,677		$ 79,233		$ 259,047		$ 277,190
Costs and operating expenses:
Costs of revenue, excluding depreciation and    amortization of intangible assets		46,834		45,653		164,287		160,422
Research and development		26,347		27,685		105,827		138,487
Sales and marketing		21,801		23,260		86,460		81,628
General and administrative		24,385		41,044		126,645		146,353
Depreciation and amortization expense		8,265		6,434		31,492		26,153
Goodwill impairment		—		—		436,479		—
Total costs and operating expenses		127,632		144,076		951,190		553,043
Loss from operations		(56,955)		(64,843)		(692,143)		(275,853)
Interest income and other income (expense), net		8,172		4,014		19,422		6,123
Loss before benefit (expense) from income    taxes and loss from equity method    investment		(48,783)		(60,829)		(672,721)		(269,730)
Benefit (expense) from income taxes		(547)		160		(3,860)		(64)
Loss from equity method investment		(713)		(923)		(2,590)		(2,278)
Net loss		(50,043)		(61,592)		(679,171)		(272,072)
Net (loss) income attributable to non-controlling    interest		(1,456)		(429)		(4,007)		(1,643)
Net loss attributable to American Well    Corporation		$ (48,587)		$ (61,163)		$ (675,164)		$ (270,429)
Net loss per share attributable to common    stockholders, basic and diluted		$ (0.17)		$ (0.22)		$ (2.38)		$ (0.99)
Weighted-average common shares outstanding,    basic and diluted		287,993,317		278,412,300		284,256,743		274,249,749

 

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AMERICAN WELL CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands, except share and per share amounts)

 

		Years Ended December 31,
		2023				2022				2021
Cash flows from operating activities:
Net loss		$	(679,171	)		$	(272,072	)		$	(176,782	)
Adjustments to reconcile net loss to net cash used in operating activities:
Goodwill impairment			436,479				—				—
Depreciation and amortization expense			31,512				26,167				16,089
Provisions for credit losses			1,057				806				714
Amortization of deferred contract acquisition costs			2,261				1,684				1,971
Amortization of deferred contract fulfillment costs			432				620				737
Noncash compensation costs incurred by selling shareholders			—				11,139				2,753
Accretion of discounts on debt securities			(10,010	)			—				—
Interest on debt securities			10,010				—				—
Stock-based compensation expense			72,246				67,675				43,809
Loss on equity method investment			2,590				2,278				3,132
Deferred income taxes			(242	)			(2,524	)			(6,245	)
Changes in operating assets and liabilities, net of acquisition:
Accounts receivable			3,248				(8,140	)			(512	)
Inventories			2,085				(1,207	)			1,598
Deferred contract acquisition costs			(4,499	)			(2,771	)			(2,235	)
Prepaid expenses and other current assets			4,694				(161	)			(5,775	)
Other assets			(76	)			(235	)			117
Accounts payable			(2,361	)			(4,780	)			5,546
Accrued expenses and other current liabilities			(15,139	)			8,962				(380	)
Other long-term liabilities			—				(25	)			(16,705	)
Deferred revenue			(3,459	)			(19,739	)			(9,369	)
Net cash used in operating activities			(148,343	)			(192,323	)			(141,537	)
Cash flows from investing activities:
Purchases of property and equipment			(192	)			(292	)			(559	)
Capitalized software development costs			(15,056	)			(10,155	)			—
Investment in less than majority owned joint venture			(3,920	)			(1,960	)			(2,548	)
Purchases of investments			(389,990	)			(499,223	)			—
Proceeds from sales and maturities of investments			389,990				500,000				100,000
Acquisitions of business, net of cash acquired			—				—				(156,526	)
Net cash used in investing activities			(19,168	)			(11,630	)			(59,633	)
Cash flows from financing activities:
Proceeds from exercise of common stock options			569				5,740				20,806
Proceeds from employee stock purchase plan			2,164				2,503				1,599
Payments for the purchase of treasury stock			(586	)			(360	)			(15,038	)
Proceeds from Section 16(b) disgorgement			—				295				—
Payment of contingent consideration			—				(11,790	)			—
Payment of deferred offering costs			—				—				(1,613	)
Net cash provided by (used in) financing activities			2,147				(3,612	)			5,754
Effect of exchange rates changes on cash, cash equivalents, and restricted cash			(1,144	)			(305	)			(84	)
Net (decrease) increase in cash, cash equivalents, and restricted cash			(166,508	)			(207,870	)			(195,500	)
Cash, cash equivalents, and restricted cash at beginning of period			539,341				747,211				942,711
Cash, cash equivalents, and restricted cash at end of period		$	372,833			$	539,341			$	747,211
Cash, cash equivalents, and restricted cash at end of period:
Cash and cash equivalents			372,038				538,546				746,416
Restricted cash			795				795				795
Total cash, cash equivalents, and restricted cash at end of period		$	372,833			$	539,341			$	747,211
Supplemental disclosure of cash flow information:
Cash paid for income taxes		$	5,003			$	1,723			$	1,587
Supplemental disclosure of non-cash investing and financing    activities:
Issuance of common stock in acquisitions		$	—			$	—			$	144,107
Issuance of common stock in settlement of earnout		$	—			$	17,243			$	—
Receivable related to exercise of common stock options		$	—			$	—			$	74

 

 

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Non-GAAP Financial Measures:

 

To supplement our financial information presented in accordance with generally accepted accounting principles in the United States, of US GAAP, we use adjusted EBITDA, which is a non-U.S GAAP financial measure to clarify and enhance an understanding of past performance. We believe that the presentation of adjusted EBITDA enhances an investor’s understanding of our financial performance. We further believe that adjusted EBITDA is a useful financial metric to assess our operating performance from period-to-period by excluding certain items that we believe are not representative of our core business. We use certain financial measures for business planning purposes and in measuring our performance relative to that of our competitors. We utilize adjusted EBITDA as the primary measure of our performance.

We calculate adjusted EBITDA as net loss adjusted to exclude (i) interest income and other income, net, (ii) tax benefit and expense, (iii) depreciation and amortization, (iv) goodwill impairment, (v) stock-based compensation expense, (vi) severance expenses, (vii) capitalized software costs, (viii) litigation expenses related to the defense of our patents in the patent infringement claim filed by Teladoc and (ix) other items affecting our results that we do not view as representative of our ongoing operations, including noncash compensation costs incurred by selling shareholders and adjustments made to the contingent consideration.

We believe adjusted EBITDA is commonly used by investors to evaluate our performance and that of our competitors. However, our use of the term adjusted EBITDA may vary from that of others in our industry. Adjusted EBITDA should not be considered as an alternative to net loss before taxes, net loss, loss per share or any other performance measures derived in accordance with U.S. GAAP as measures of performance.

Adjusted EBITDA has important limitations as an analytical tool, and you should not consider it in isolation or as a substitute for analysis of our results as reported under U.S. GAAP. Some of the limitations of adjusted EBITDA include (i) adjusted EBITDA does not properly reflect capital commitments to be paid in the future, and (ii) although depreciation and amortization are non-cash charges, the underlying assets may need to be replaced and adjusted EBITDA does not reflect these capital expenditures. Our legal, accounting and other professional expenses reflect cash expenditures and we expect such expenditures to recur from time to time. Our adjusted EBITDA may not be comparable to similarly titled measures of other companies because they may not calculate adjusted EBITDA in the same manner as we calculate the measure, limiting its usefulness as a comparative measure.

In evaluating adjusted EBITDA, you should be aware that in the future we will incur expenses similar to the adjustments in this presentation. Our presentation of adjusted EBITDA should not be construed as an inference that our future results will be unaffected by these expenses or any unusual or non-recurring items. Adjusted EBITDA should not be considered as an alternative to loss before benefit from income taxes, net loss, earnings per share, or any other performance measures derived in accordance with U.S. GAAP. When evaluating our performance, you should consider adjusted EBITDA alongside other financial performance measures, including our net loss and other GAAP results.

 

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The following table presents a reconciliation of adjusted EBITDA from the most comparable GAAP measure, net loss, for the three months and year ended December 31, 2023 and 2022 and the three months ended September 30, 2023:

 

		Three Months Ended December 31				Years Ended December 31,				Three Months Ended September 2023
(in thousands)		2023		2022		2023		2022
Net loss		$ (50,043)		$ (61,592)		$ (679,171)		$ (272,072)		$ (137,104)
Add:
Depreciation and amortization		8,265		6,434		31,492		26,153		8,266
Interest and other income, net		(8,172)		(4,014)		(19,422)		(6,123)		(7,978)
Benefit (expense) from income taxes		547		(160)		3,860		64		1,122
Goodwill impairment		—		—		436,479		—		78,894
Stock-based compensation		12,631		20,840		72,040		69,144		16,899
Severance(1)		1,074		—		4,414		—		1,359
Noncash expenses and contingent    consideration adjustments(2)		—		5,227		—		12,153		—
Capitalized software development   costs		(1,220)		(10,155)		(15,056)		(10,155)		—
Litigation expense(3)		—		—		—		5,575		—
Adjusted EBITDA		$ (36,918)		$ (43,420)		$ (165,364)		$ (175,261)		$ (38,542)

 

 

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v3.24.0.1

Document And Entity Information	Feb. 14, 2024
Cover [Abstract]
Document Type	8-K
Amendment Flag	false
Document Period End Date	Feb. 14, 2024
Entity Registrant Name	American Well Corporation
Entity Central Index Key	0001393584
Entity Emerging Growth Company	false
Entity File Number	001-39515
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	20-5009396
Entity Address, Address Line One	75 State Street
Entity Address, Address Line Two	26th Floor
Entity Address, City or Town	Boston
Entity Address, State or Province	MA
Entity Address, Postal Zip Code	02109
City Area Code	617
Local Phone Number	204-3500
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Class A Common Stock, $0.01 Par Value
Trading Symbol	AMWL
Security Exchange Name	NYSE

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