Teladoc tumbles on revenue forecast cut as BetterHelp demand shifts hurt

While the pandemic-driven boom in virtual healthcare services helped propel Teladoc's growth in the last few years, BetterHelp has faced headwinds, with high customer acquisition and advertising costs pressuring its performance.

Teladoc said it expects 2026 advertising spending to be less than its earlier estimates, as it focuses on meeting the business's overall margin objectives, although it might have a negative impact on cash pay user acquisition.

The company expects 2026 BetterHelp revenue to decline 19.0% to 12.7%, compared with its previous estimate of a 6.50% to 1% decline.

Teladoc shares fell more than 26% on Thursday, a day after the virtual healthcare provider trimmed its annual revenue forecast and flagged challenges at its mental health services unit BetterHelp.

BetterHelp, Teladoc's direct-to-consumer mental health business, has been a key focus for investors as the company shifts to offer insurance-covered services on the platform.

The company said demand for insurance-covered services among customers exceeded expectations and outpaced available provider capacity, limiting the number of sessions it could offer and restricting its revenue growth.

"Pressure on cash pay revenue accelerated further in late May and into June, beyond the assumptions underlying our prior outlook," said Chief Executive Officer Chuck Divita, although insurance revenue in the BetterHelp segment nearly hit the high end of Teladoc's expectations.

Challenges at BetterHelp, however, may cloud the timeline for more material earnings improvement, said J.P. Morgan analyst Lisa Gill.