Earlier this year, the market was abuzz with rumors that digital health information site WebMD (NASDAQ:WBMD) was out looking for a potential buyer. Analysts were speculating that Walgreens (NASDAQ:WBA) or insurance provider United Health (NYSE:UNH) could be ideal suitors. But WebMD has denied such prospects and continues to improve its offerings instead.
WebMD's second quarter revenues grew 13% over the year to $167.6 million, ahead of the Street's target of $166 million. EPS of $0.39 was also ahead of the market's projected EPS of $0.38.
By segment, revenues from advertising and sponsorship grew 13% over the year to $131.7 million, driven by an increase in biopharma customer count and a 17% growth in revenues from biopharma and medical devices. Health Service revenues at $28.6 million recorded an 8% increase over the year and the information services segment grew 27% to $7.2 million.
During the quarter, WebMD recorded a growth of 11% to an average of 7.7 million global physician sessions monthly on Medscape. Medscape had 656,000 US physicians at the end of the quarter who were active on an annual basis. Out of this, an average of 403,000 US physicians were active on a monthly basis. However, the number of unique users who visited the WebMD Health Network per month fell 6% over the year to 199 million. These users generated 4.23 billion page views, a 3% increase over the year.
For the full year, WebMD projected revenues of $695 million-$708 million with advertising and sponsorship in the $559 million-$570 million range, health service revenues at $109 million-$110 million and revenues from information services at $27 million-$28 million. WebMD expects to end the year with an EPS of $1.78-$1.90.
It expects to end the third quarter with revenues of $168 million-$171 million and an adjusted EBITDA of $50.5 million-$52.5 million. The market was looking for revenues of $169.3 million for the quarter and $703.3 million for the year. It expected WebMD to end the year with an EPS of $1.84.
WebMD's Content and Engagement Focus
Earlier in the year, news reports suggested that either Walgreens or United Healthcare were looking to buy WebMD. WebMD has denied such reports and is instead continuing to remain focused on improving user engagement. It has been collaborating with Walgreens and last year had tied up with them to deliver a wellness coaching program on its website. But a sale does not appear to be on the cards.
During the quarter, it expanded its promotion and content to drive deeper engagement with physicians. To improve patient care, WebMD's Medscape is helping healthcare professionals navigate the changes happening within their practices and within the medical profession through community forms, special events, medical education, publications and events.
Within content enhancement, it published journals like the Medscape Residents Salary and Debt Report and the Medscape Vaccine Acceptance Report. WebMD's high quality of on-demand medical education has been recognized by the industry and was recently awarded a six-year renewal of the ACCME accreditation through joint accreditation for inter-professional continuing medical education, thus becoming the only digital platform to have received this joint accreditation. Additionally, WebMD is also investing in video and social experience so that users can find it easier to discover, share, and interact with its content across the web.
As part of user engagement enhancement, WebMD is implementing a new response of site design that will improve page load times while ensuring that it continues to take complicated topics and presents them in a simplified way. It is also building tools for consumers that solve real problems, including providing additional transparency. Early last quarter, it began testing WebMD Rx in six markets, which is a tool that enables consumers and physicians to better understand the cost of medications and help consumers save money on prescription drugs at pharmacy retailers.
Recently, WebMD also had a series of leadership team changes. Last month, its CEO David Schlanger left the company and was replaced by its President Steven Zatz. The move was followed by a change in the CFO as well. CFO Peter Anevski was replaced by Blake DeSimone.
WebMD's stock is trading at $50.32 with a market capitalization of $1.86 billion. It touched a 52-week high of $67.55 in May this year. It has recovered from the 52-week low of $40.51 it was trading at back in October of last year.