American Well (AMWL) Q3 2024 earnings summary

Executive summary

• Q3 2024 revenue was $61.0 million, flat to down 1% year-over-year, with net loss improving 68% to $44.0 million and adjusted EBITDA at negative $31.0 million, reflecting ongoing cost structure realignment and efficiency initiatives.

• Strategic transformation actions, including headcount reductions and consulting spend, led to $2.9 million in Q3 and $16.8 million in nine-month charges, supporting the path to cash flow positive by 2026.

• The Defense Health Agency contract achieved key milestones, with enterprise-wide deployment on track for year-end 2024 and strong client satisfaction ratings over 90%.

• Growth organization is positioned for higher-margin revenue in 2025, with notable client expansions and renewals in Q3.

• No goodwill impairment in 2024; prior year included a $436.5 million impairment charge.

Financial highlights

• Subscription revenue was $26.2 million in Q3, down $2.2 million due to customer churn during re-platforming; Amwell Medical Group visit revenue was $27.5 million.

• Q3 gross margin was 37%, with full-year gross margin expected to match 2023 levels.

• Completed 1.4 million visits in Q3, down 4.6% year-over-year; average revenue per visit increased 7% to $83.

• Adjusted EBITDA improved to negative $31.0 million from negative $35.0 million last quarter and negative $39.0 million in Q3 2023.

• Ended Q3 with $245 million in cash and marketable securities and no debt.

Outlook and guidance

• Full-year 2024 revenue guidance revised to $247–$252 million, down from $259–$269 million; subscription revenue expected to be flat to 2023.

• Adjusted EBITDA guidance improved to negative $137–$142 million for 2024.

• AMG visits guidance revised to 1.4–1.5 million for 2024.

• Confirms target to achieve cash flow positive in 2026, with visibility into high-quality, subscription-driven growth in 2025.

• Management expects R&D expenses to decrease further in Q4 2024 as platform investment winds down.