American Well (AMWL) investor relations material

Business evolution and strategic focus

• Over the past two years, the company shifted focus almost exclusively to payer and government markets, reallocating resources for optimal ROI and aiming for cash flow break-even by Q4 and profitable growth in 2027.

• National scale enables partnerships with major health plans and government entities, offering technology-enabled care platforms and integrated clinical programs.

• Expansion into behavioral health and other clinical programs is planned, especially with government contracts like the DHA renewal.

• ROI-based selling is central, with empirical evidence supporting cost savings and willingness to put fees at risk based on program outcomes.

• The company has reduced its workforce from 1,200 to around 500 while maintaining top-line revenue, emphasizing efficiency and disciplined spending.

Financial performance and outlook

• Q1 saw subscription and visit revenues exceed expectations, driven by new clinical programs and improved payer retention.

• Higher-value clinical programs led to increased revenue per visit, with these trends seen as sustainable due to growing member engagement.

• Adjusted EBITDA improved due to a mix of revenue growth, cost-cutting, and AI-driven efficiencies, with further cost optimization expected by Q3.

• Over 95% revenue visibility for the year, with confidence in achieving break-even by year-end, contingent on successful DHA renewal.

• Margin profile is expected to shift upward as the business transitions to more licensed software and subscription revenue, targeting 50-55% gross margins with further increases as government contracts scale.

Government and payer opportunities

• The DHA contract renewal is imminent, with potential for direct contracting and expanded service scope.

• Pipeline of government opportunities is multiples larger than current DHA revenue, with some contracts expected to be significantly larger and material to 2027 results.

• Rural Health Transformation Program and other state initiatives could drive substantial multi-year revenue growth.

• Health plan partnerships, such as with Elevance, have been renewed with improved unit economics and expanded clinical offerings, serving as a template for other payers.

• The company is re-engaging with multiple payers, leveraging recent successes to rebuild market credibility.