One of the key highlights of the quarter was Amwell securing a contract with the Defense Health Agency (DHA). The contract, worth up to $180 million, is part of the agency’s digital-first initiative and deploys Amwell’s converged platform. Amwell Chairman and CEO Ido Schoenberg emphasized that this contract not only validates Amwell’s new platform but also expands its reach into the government and public sectors.
Both providers and patients who have used Amwell’s new platform have reported high satisfaction metrics, Schoenberg said on the call, highlighting the positive impact of Amwell’s solutions on net revenues, patient outcomes, care gaps and staff satisfaction through several customer testimonials.
CFO Bob Shepardson provided an overview of the financial results for the third quarter. Total revenue for the quarter was $62 million, with subscription revenue at $28.4 million. Amwell’s gross profit margin stood at 35%, and adjusted EBITDA improved by 15% compared to the previous quarter.
The DHA contract will have a significant impact on Amwell’s future financials. The initial deployment phase is expected to be cash flow accretive, and the full enterprise rollout will significantly expand subscription software revenue. Despite the contract’s impact on adjusted EBITDA guidance for the year, Amwell expects revenues for 2023 to be within the previously provided guidance.
Amwell’s third-quarter results demonstrate the company’s progress in securing major contracts, migrating clients to its new platform and driving growth and efficiency in its operations. Schoenberg highlighted the progress made in Amwell’s growth transformation, with a focus on expanding the pipeline, driving deal velocity, and improving overall efficiency. The company’s new platform supports the digital transformation of the military health system and expands its reach into the government and public sectors.
Amwell’s performance and migration of over 50% of visits to the converged platform position the company for profitability and expansion in the telehealth market.