Amwell Extends Military Health Contract Amid Budget Constraints

Amwell, a leading telehealth provider, has secured a one-year extension of its contract with the Defense Health Agency (DHA) to support virtual care for the military health system. However, the renewed agreement comes with significant changes that have prompted the company to revise its financial outlook for 2025.

Contract Extension and Scope Reduction

The extended contract, originally worth up to $180 million when first awarded in 2023, will continue to support Amwell's platform for scheduled virtual visits across the Department of Defense (DOD), including the Military Entrance Processing Command and the Coast Guard. CEO Ido Schoenberg reported that virtual visits have nearly tripled compared to the military's legacy system since the implementation of Amwell's platform.

Despite this success, the new contract excludes Amwell's behavioral health and automated care programs. Schoenberg attributed this reduction in scope to "budget restrictions being broadly enforced by the Department of Defense," following spending cuts enacted by the Trump administration across federal agencies.

Financial Implications and Revised Guidance

The contract modification has led Amwell to adjust its financial projections for the year. The company now expects revenue between $245 million and $250 million for 2025, down from its previous forecast of $250 million to $260 million.

In response to these changes and recent cost-cutting measures, including workforce streamlining, Amwell has also narrowed its guidance for adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA). The company now anticipates an adjusted EBITDA loss of $50 million to $45 million for 2025, an improvement from the earlier projected loss range of $55 million to $45 million.

Q2 2025 Financial Performance

Amwell's second-quarter results for 2025 showed signs of improvement despite ongoing challenges:

• Net loss decreased to $19.5 million, compared to a $50.6 million loss in the same period last year.
• Revenue increased by approximately 13% year-over-year, reaching $70.9 million.

The company maintains its goal of achieving positive cash flow from operations in 2026, citing cost reduction strategies and the integration of artificial intelligence technologies as key factors in this pursuit.