Reading about Livongo $LVGO. Interesting company. Pioneering a new category in healthcare, called Applied Health Signals, to transform the management of chronic conditions. Sharing some interesting observations gleaned from various public sources -
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In 2019, announced a partnership with Amazon to leverage a HIPAA-compliant Amazon
Alexa to power a voice-enabled cellular blood glucose monitoring system, allowing members to easily interact with us via the most natural & personalized communication channel - their voice
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In Nov 2019, approx. 20% of Fortune 500 companies were customers. In Mar 2020, approx. 30% are customers. The company signed up 50 Fortune 500 companies as customers in 4 months. Thats literally 1 every 2 days
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Not surprisingly, customer acquisition is accelerating. In Q1 2020, Livongo added 105K members. In one quarter, they acquired as many customers as they did in all of 2019 and as many customers they acquired in 2017 + 2018 combined
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Looks like customer experience is good. DBNER is 100%. Customer retention post 1 year is increasing. Handful of clients had the experience and outcomes so good, that they're paying for the insulin if the member uses Livongo
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The company is slowly expanding beyond its core of Diabetes. Revenues have started flowing from other segments like hypertension, pre-diabetes and weight management, and behavioral health
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The company seems to have found a sweet spot - huge TAM, strong value proposition based on platform and continually generated data, strong partnerships, unique customer value proposition, and an opportunity to optimize the complex and inefficient healthcare costs
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There are 31MM diabetics in the US. 500K are diagnosed every year. Hypertension and weight management is a healthcare crisis. Behavioral health will become more prominent in future
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The company has no plans to go International currently. As and when that happens, it will open up another level of growth and scale for the company. Company has been acquisitive nonetheless - made 2 acquisitions in the last 2 years
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The subscription model seems to be working. You pay as you go, end of every month. 90% of revenues now are subscription based. DBNER is 90+%. That gives strong visibility into recurring and future contract revenue
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$LVGO 2020 revenue guidance is 80% year over year growth. Strong likelihood that company will do much higher than that. Company was adjusted EBITDA positive in Q1 2020.
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Stock is not cheap, but growth and quality always comes at a price. Currently trading at 26x TTM EV / revenue
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