The visit revenues comes with high costs leaving the company with meager 44% gross margins. The total subscription revenues didn't even top R&D expenses of $33.8 million during the quarter. With millions of patients in these plans and systems, Amwell isn't obtaining a large value for these highly important customers. The subscription revenues come from Health Plans only paying an average contract value of $723K and Health Systems paying just $356K now. Amwell generated the largest portion of revenues from visit revenue of $31.2 million based on $80 per AMG visit. Going back to Q4'21, subscription revenues were only $30.1 million, up only 14% from the prior year.

The company just doesn't collect much money for providing this service, especially in comparison to the cost. We are transforming care delivery from in-office to integrated in-person, virtual and automated care modalities.ДЄmwell has a promising business concept of connecting healthcare providers and patients with tools to realize better health care experiences and outcomes. To define the fundamental infrastructure that connects providers, payers, patients and innovators and enable them to deliver on the promise of greater access to affordable high-quality care. The company offers up the following mission statement: A big problem with Amwell is that the business model has the costs as if the company was collecting $100 fees for every doctor visit on the platform.

The problem with Amwell and competitor Teladoc Health ( TDOC) is that a lot of the business is reliant on minimal subscriptions and monthly fees for access to the telehealth platforms. The stock once surged over $40 after going public right before the covid boosts and Amwell now trades below $4 with the stock valuation hardly above the massive $750 million cash balance. While telehealth advancements drastically improved healthcare during COVID-19 lockdowns and mass fears, telehealth providers such as Amwell didn't exactly benefit financially. My investment thesis is still more Neutral on the telehealth provider due to ongoing larger operating losses, but the technology remains promising. Amwell ( NYSE: AMWL) is still struggling to build out the business model, but the market shouldn't lose interest. The market has appeared to lose interest in telehealth stocks and that's likely a mistake.

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