Amwell considers divestitures | Dive into healthcare

Diving brief:

• Amwell plans to divest some non-core assets as the telehealth provider seeks to narrow its business and improve its financial performance, executives said Tuesday during a third-quarter earnings conference call.
• The company is considering selling existing assets that could be more easily separated from the rest of the business without creating problems for customers, executives said. “These are distinct assets that have a certain customer profile that we could, in fact, close,” said Mark Hirschhorn, CFO and COO of Amwell.
• Amwell already sold its virtual psychiatric care business to fellow telehealth provider Avel eCare for about $21 million earlier this year.

Dive overview:

The potential divestitures come as the company’s stock price has fallen in recent years from highs reached during 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 provider is working to achieve positive operating cash flow in 2026 and ultimately return to profitable growth, executives said.

As part of Amwell’s efforts to break even, the company is focusing on its core virtual care platform and ensuring efficiency in its operations, CEO Ido Schoenberg said during an earnings conference call Tuesday. This includes implementing artificial intelligence for tasks such as assisting with patient intake or the adequacy and integration of clinical programs, he said.

Amwell will also work to divert resources away from non-core assets. For example, the company has a “long list” of existing products, such as automated programs for hospitals or hospital care products, Schoenberg said.

“These are good products, safe, reliable and reliable, and we plan to continue using them, but we are going to spend less, much less, to develop these market segments,” he said.

Overall, Amwell reported third-quarter revenue of $56.3 million, down 8% year over year. The telehealth company reported a net loss of $31.9 million, compared to a loss of $44 million in the year-ago period.

The company also reduced its guidance for 2025. Amwell expects revenue for the year to be between $245 million and $248 million, down from a previous forecast of $245 million to $250 million.

The telehealth company had lowered its revenue outlook last quarter after the Defense Health Agency extended a contract with Amwell without deploying 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 to range from a loss of $45 million to $42 million, compared to a previous forecast of a loss of $50 million to $45 million.