- Chronic disease-focused digital health company Livongo on Monday said its revenue climbed 137% in the fourth quarter from a year prior, exceeding expectations, as it added clients and expanded agreements with key partners CVS and Express Scripts.
- In addition to seeing an uptick in new members to its central diabetes program, the company said on a conference call its hypertension, pre-diabetes and weight management indications are gaining traction, with 35% of the value of new agreements in the quarter coming from conditions other than diabetes.
- The company forecast 2020 revenue growth of 65% to 71% over the prior year, or up to $290 million.
Livongo management is out to show skeptical investors it can sustain rapid financial growth is sustainable. Since its IPO last July, the digital health company’s stock has had a volatile run and was hovering around its initial price of $28 per share before dropping around 6% Tuesday morning.
On Monday’s earnings call, CFO Lee Shapiro emphasized that the company’s recurring subscription revenue model guides its outlook. The CFO said he was confident reaffirming a forecast for profitability in 2021 on an adjusted EBITDA basis.
For 2020, adjusted EBITDA is expected to be a loss in the range of $20 million to $22 million. Livongo reported adjusted EBITDA of $1.6 million in the fourth quarter, compared to a loss of $10.2 million in the same period the year before. On a GAAP basis, the fourth-quarter net loss was $6 million, or 6 cents a share.
Livongo finished the year with 222,700 diabetes members, up 96% from a year earlier, and 804 total clients, up 95% year over year. It closed 2019 with 48,000 members using its pre-diabetes and hypertension applications.
On the call, CEO Zane Burke said the company’s reach in the self-insured market now extends to 30% of the Fortune 500 companies. It added nine health plans to its roster last year. Livongo is also focused on expansion into the fully insured and government markets, where key agreements in 2019 included Blue Cross Blue Shield of Kansas City and the New Jersey state and school employees’ health plan.
Both CVS and Express Scripts now offer the company’s hypertension and pre-diabetes services, and Livongo is Express Scripts’ preferred provider for its digital health formulary. Livongo has also partnered with Dexcom to allow streaming data from its members G6 continuous glucose monitors to its data engine.
Livongo said it continues to document improved clinical outcomes for members using its programs and ended the year with 34 abstracts in peer-reviewed publications and another 16 papers and abstracts in the pipeline. In the fourth quarter, it reported study findings that showed members using its hypertension and diabetes applications on an integrated platform saw clinically significant blood pressure reduction after only four weeks and additional improvement after 12 weeks.
Livongo’s competitors in digital chronic disease management include Omada Health, which has a partnership with Abbott, and Virta Health.