Amwell Considers Asset Divestitures Amid Financial Restructuring

Amwell, a leading telehealth vendor, is exploring potential divestitures of non-core assets as part of its strategy to streamline operations and improve financial performance. The company's executives revealed these plans during a third-quarter earnings call, signaling a shift in focus towards core virtual care offerings and operational efficiency.

Divestiture Strategy and Financial Outlook

Amwell CFO and COO Mark Hirschhorn indicated that the company is considering selling legacy assets that can be easily separated from the main business without disrupting customer services. "These are distinct assets that have a certain profile of clients that we could, in fact, cordon off," Hirschhorn stated during the call.

This move follows Amwell's earlier divestiture of its virtual psychiatric care business to Avel eCare for approximately $21 million earlier this year. The company aims to achieve positive cash flow from operations by 2026 and return to profitable growth, a goal that has become increasingly urgent as Amwell's stock price has declined significantly since the telehealth boom of 2020.

Financial Performance and Revised Guidance

Amwell reported third-quarter revenue of $56.3 million, an 8% decrease year-over-year. The company posted a net loss of $31.9 million, an improvement from the $44 million loss in the same period last year. In light of these results, Amwell has narrowed its 2025 guidance:

• Revenue expectations are now between $245 million to $248 million, down from the previous outlook of $245 million to $250 million.
• Adjusted EBITDA loss is projected to be between $45 million to $42 million, an improvement from the earlier forecast of $50 million to $45 million loss.

The revised guidance takes into account factors such as the Defense Health Agency's contract extension without deployments for behavioral health and automated care programs, due to budget constraints at the Department of Defense.

Strategic Focus on Core Platform and AI Integration

CEO Ido Schoenberg emphasized the company's renewed focus on its core virtual care platform and operational efficiency. Amwell plans to implement artificial intelligence for various tasks, including patient intake assistance and clinical program matching and onboarding.

Schoenberg also mentioned a "long list" of legacy products, such as automated programs for hospitals and inpatient care products, which will receive significantly less investment in growth. "These are good products that are secure and reliable and dependable, and we plan to continue and use them, but we are going to spend less, significantly less, in growing these market segments," he explained.

As Amwell navigates these strategic changes, the telehealth industry continues to evolve post-pandemic, with companies reassessing their portfolios and focusing on sustainable growth in a more competitive landscape.