American Well Corporation Reports 12% Revenue Growth to $66.8 Million in Q1 2025

American Well Corporation reported its financial results for the first quarter of 2025, revealing a revenue increase of 12% to $66.8 million, compared to $59.5 million in the same period last year. The growth was primarily driven by a rise in subscription revenue, which increased by $7.3 million due to the timing of revenue recognition from several strategic customers. However, the company experienced a decline in visit revenue, which fell by $6.1 million following the divestiture of its telepsychiatry business, partially offset by a $2.1 million increase in virtual primary care and special program visits.

The company significantly reduced its operating expenses, which totaled $97.2 million, down 28% from $134.6 million in the prior year. This reduction was attributed to a decrease in costs across various categories, including a 51% drop in sales and marketing expenses and a 29% decrease in general and administrative costs. The company reported a loss from operations of $30.4 million, a substantial improvement from the $75.0 million loss recorded in the same quarter of 2024. The net loss attributable to American Well Corporation was $18.7 million, compared to a net loss of $72.1 million in the previous year.

In terms of operational metrics, American Well reported approximately 1.3 million virtual care visits in the first quarter of 2025, down from 1.7 million in the same quarter of 2024. The company attributed this decline to the divestiture of its telepsychiatry business, which had previously contributed to visit volumes. The company continues to focus on expanding its digital care offerings, with a particular emphasis on its Amwell Converge platform, which integrates various care modalities.

Strategically, American Well completed the divestiture of its telepsychiatry business, which was deemed no longer aligned with its profitability and growth objectives. The divestiture resulted in a gain of $10.7 million and is expected to allow the company to concentrate resources on its core platform and strategic customers. The company also made a minority investment of $1 million in Aingelz, Inc., aimed at supporting artificial intelligence development.

Looking ahead, American Well anticipates continued challenges in the digital care market, including competition and regulatory changes. The company expects to maintain its focus on improving operational efficiency and expanding its market share. With cash and cash equivalents totaling $222.4 million as of March 31, 2025, the company believes it has sufficient liquidity to support its growth initiatives over the next 12 months. However, it acknowledges the potential need for additional financing in the future to support its strategic objectives.