Company Quick10K Filing
Livongo Health
Price19.39 EPS-0
Shares94 P/E-54
MCap1,831 P/FCF-118
Net Debt-400 EBIT-34
TEV1,432 TEV/EBIT-42
TTM 2019-09-30, in MM, except price, ratios
10-Q 2020-06-30 Filed 2020-08-10
10-Q 2020-03-31 Filed 2020-05-07
10-K 2019-12-31 Filed 2020-03-24
S-1 2019-12-09 Public Filing
10-Q 2019-09-30 Filed 2019-11-08
10-Q 2019-06-30 Filed 2019-09-05
S-1 2019-06-28 Public Filing
8-K 2020-08-05 Earnings, Exhibits
8-K 2020-08-05 Other Events, Exhibits
8-K 2020-08-05 Enter Agreement, Exhibits
8-K 2020-07-07 Earnings, Exhibits
8-K 2020-06-01
8-K 2020-05-19
8-K 2020-05-06
8-K 2020-04-07
8-K 2020-03-23
8-K 2020-03-02
8-K 2019-11-06
8-K 2019-10-07
8-K 2019-09-05

LVGO 10Q Quarterly Report

Part I - Financial Information
Item 1. Financial Statements.
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
Item 3. Qualitative and Quantitative Disclosures About Market Risk
Item 4. Controls and Procedures
Part II - Other Information
Item 1. Legal Proceedings
Item 1A. Risk Factors
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Item 3. Defaults Upon Senior Securities
Item 4. Mine Safety Disclosures
Item 5. Other Information
Item 6. Exhibits
EX-4.3 lvgo2020063010qex43.htm
EX-31.1 lvgo2020063010qex311ng.htm
EX-31.2 lvgo2020063010qex312ng.htm
EX-32.1 lvgo2020063010qex321ng.htm
EX-32.2 lvgo2020063010qex322ng.htm

Livongo Health Earnings 2020-06-30

Balance SheetIncome StatementCash Flow
0.60.40.30.1-0.0-0.22018201820192020
Assets, Equity
0.10.10.0-0.0-0.1-0.12018201820192020
Rev, G Profit, Net Income
0.40.30.20.10.0-0.12018201820192020
Ops, Inv, Fin

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Index to Financial Statements
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
___________________________________________
FORM 10-Q
_________________________________________
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2020
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ________ to ________

Commission File Number: 001-38983
___________________________________________
Livongo Health, Inc.
(Exact name of Registrant as specified in its charter)
___________________________________________
Delaware26-3542036
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer
Identification Number)
150 West Evelyn Avenue, Suite 150
Mountain View, California 94041
(866) 435-5643
(Address, including zip code, and telephone number, including area code, of Registrant’s principal executive offices)
___________________________________________
Securities registered pursuant to Section 12(b) of the Act:
Title of each class        Trading Symbol(s)Name of each exchange on which registered
Common Stock, $0.001 par valueLVGOThe Nasdaq Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.     Yes  No  

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes      No  

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer Accelerated filer 
Non-accelerated filerSmaller reporting company 
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes      No  

As of July 31, 2020, the registrant had approximately 100,308,000 shares of common stock, $0.001 par value per share, outstanding.


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NOTE REGARDING FORWARD-LOOKING STATEMENTS
As used in this Quarterly Report on Form 10-Q, references to “Livongo,” “we,” “us,” “our,” “the Company,” and similar references refer to Livongo Health, Inc. and its consolidated subsidiaries, except as expressly indicated or as the context otherwise requires.
This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act, that are based on our management's beliefs and assumptions and on information currently available to our management. Forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified. All statements other than present and historical facts and conditions contained in this report, including statements regarding our future results of operations and financial position, business strategy, plans and our objectives for future operations, are forward-looking statements. In some cases, you can identify forward-looking statements because they contain words such as “may,” “will,” “should,” “expects,” “plans,” “anticipates,” “could,” “intends,” “target,” “projects,” “contemplates,” “believes,” “estimates,” “predicts,” “potential” or “continue” or the negative of these words or other similar terms or expressions that concern our expectations, strategy, plans, or intentions. Actual events or results may differ from those expressed in these forward-looking statements, and these differences may be material and adverse. Forward-looking statements contained in this Quarterly Report on Form 10-Q include, but are not limited to, statements about:
the merger with Teladoc Health, Inc., including expected timing, completion and effects of the merger;
our ability to retain clients and sell additional solutions to new and existing clients;
our ability to attract and enroll new members;
the growth and success of our partners and reseller relationships;
our ability to estimate the size of our target market;
uncertainty in the healthcare regulatory environment;
our future financial performance, including trends in revenue, costs of revenue, gross profit or gross margin, operating expenses, paying users, and free cash flow;
our ability to achieve or maintain profitability;
the demand for our solutions or for chronic condition management in general;
our ability to compete successfully in competitive markets;
our ability to respond to rapid technological changes;
our expectations and management of future growth;
our ability to develop new solutions, or enhancements to our existing solutions, and bring them to market in a timely manner;
our ability to offer high-quality coaching and monitoring;
our ability to attract and retain key personnel and highly qualified personnel;
our ability to protect our brand;
our ability to expand payor relationships;
our ability to maintain, protect, and enhance our intellectual property;
restrictions and penalties as a result of privacy and data protection laws;
our expectations about the impact of natural disasters and public health epidemics, such as COVID-19, on our business, results of operations and financial condition;
the potential impact of the COVID-19 pandemic on the financial markets in general and on our business in particular;
our ability to successfully identify, acquire, and integrate companies and assets;
the increased expenses associated with being a public company;
our anticipated uses of net proceeds from our initial public offering and issuance of convertible senior notes; and
the future trading prices of our common stock.
We have based the forward-looking statements contained in this Quarterly Report on Form 10-Q primarily on our current expectations and projections about future events and trends that we believe may affect our business, financial condition, results of operations, prospects, business strategy and financial needs. The outcome of the events described in these forward-looking statements is subject to risks, uncertainties, assumptions and other factors described in the section titled “Risk Factors” and elsewhere in this Quarterly Report on Form 10-Q, in our Annual Report on Form 10-K for the year ended December 31, 2019 and in our other filings with the Securities and Exchange Commission, or the SEC. Moreover, we operate in a very competitive and rapidly changing environment. New risks and uncertainties emerge from time to time and it is not possible for us to predict all risks and uncertainties that could have an impact on the forward-looking statements contained in this Quarterly Report on Form 10-Q. We cannot assure you that the results, events and circumstances reflected in the forward-looking statements will be achieved or occur, and actual results, events or circumstances could differ materially from those described in the forward-looking statements. In light of the significant uncertainties in these forward-looking statements, you should not regard these
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statements as a representation or warranty by us or any other person that we will achieve our objectives and plans in any specified time frame or at all.
The forward-looking statements made in this Quarterly Report on Form 10-Q relate only to events as of the date on which the statements are made. We undertake no obligation to update any forward-looking statements made in this Quarterly Report on Form 10-Q to reflect events or circumstances after the date of this Quarterly Report on Form 10-Q or to reflect new information or the occurrence of unanticipated events, except as required by law. We may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements and you should not place undue reliance on our forward-looking statements. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures, or investments we may make.
In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based upon information available to us as of the date of this Quarterly Report on Form 10-Q, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain and investors are cautioned not to unduly rely upon these statements.

 


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PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS.
LIVONGO HEALTH, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except per share data)
(unaudited)
June 30, 2020December 31, 2019
ASSETS
Current assets:
Cash and cash equivalents$685,953  $241,738  
Short-term investments
150,000  150,000  
Accounts receivable, net of allowance for doubtful accounts of $2,774 and $1,245 as of June 30, 2020 and December 31, 2019, respectively
59,237  40,875  
Inventories17,616  28,983  
Deferred costs, current27,137  16,051  
Prepaid expenses and other current assets11,318  9,860  
Total current assets951,261  487,507  
Property and equipment, net16,209  10,354  
Operating lease right-of-use assets16,253    
Restricted cash, noncurrent1,270  1,270  
Goodwill35,801  35,801  
Intangible assets, net15,081  16,469  
Deferred costs, noncurrent12,843  5,700  
Other noncurrent assets569  3,460  
TOTAL ASSETS$1,049,287  $560,561  
LIABILITIES, REDEEMABLE CONVERTIBLE PREFERRED STOCK, AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable$6,401  $8,362  
Accrued expenses and other current liabilities35,684  27,801  
Deferred revenue, current5,420  3,945  
Advance payments from partner, current354  1,767  
Total current liabilities47,859  41,875  
Operating lease liabilities, noncurrent15,758    
Deferred revenue, noncurrent1,561  654  
Advance payment from partner, noncurrent9,142  7,754  
Convertible senior notes, net 396,446    
Other noncurrent liabilities397  2,914  
TOTAL LIABILITIES471,163  53,197  
Commitments and contingencies (Note 9)
Stockholders’ equity:
Preferred stock, par value of $0.001 per share; 100,000 shares authorized as of June 30, 2020 and December 31, 2019, respectively; zero shares issued and outstanding as of June 30, 2020 and December 31, 2019, respectively
    
Common stock, par value of $0.001 per share; 900,000 shares authorized as of June 30, 2020 and December 31, 2019, respectively; 99,412 and 95,301 shares issued and outstanding as of June 30, 2020 and December 31, 2019, respectively
100  95  
Additional paid-in capital749,349  671,467  
Accumulated deficit(171,325) (164,198) 
TOTAL STOCKHOLDERS’ EQUITY578,124  507,364  
TOTAL LIABILITIES, REDEEMABLE CONVERTIBLE PREFERRED STOCK, AND STOCKHOLDERS’ EQUITY$1,049,287  $560,561  
The accompanying notes are an integral part of these condensed consolidated financial statements.
4

Table of Contents
Index to Financial Statements
LIVONGO HEALTH, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
(unaudited)
Three Months Ended June 30,Six Months Ended June 30,
2020201920202019
Revenue$91,923  $40,915  $160,745  $72,982  
Cost of revenue21,466  11,964  39,572  21,827  
Gross profit70,457  28,951  121,173  51,155  
Operating expenses:
Research and development15,809  10,291  29,806  19,285  
Sales and marketing32,881  17,833  60,535  32,476  
General and administrative22,027  13,702  37,874  27,816  
Change in fair value of contingent consideration2  282  86  956  
Total operating expenses70,719  42,108  128,301  80,533  
Loss from operations(262) (13,157) (7,128) (29,378) 
Interest income1,099  183  2,476  641  
Interest expense(2,283)   (2,320)   
Other (expense) income, net(36) 2  (62) 6  
Loss before provision for income taxes(1,482) (12,972) (7,034) (28,731) 
Provision for (benefit from) income taxes72  5  93  (1,383) 
Net loss$(1,554) $(12,977) $(7,127) $(27,348) 
Accretion of redeemable convertible preferred stock  (42)   (83) 
Net loss attributable to common stockholders$(1,554) $(13,019) $(7,127) $(27,431) 
Net loss per share attributable to common stockholders, basic and diluted
$(0.02) $(0.69) $(0.07) $(1.48) 
Weighted-average shares used in computing net loss per share attributable to common stockholders, basic and diluted
97,896  18,916  96,719  18,564  
The accompanying notes are an integral part of these condensed consolidated financial statements.
5

Table of Contents
Index to Financial Statements
LIVONGO HEALTH, INC.
CONDENSED CONSOLIDATED STATEMENTS OF REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY (DEFICIT)
(in thousands)
(unaudited)
Redeemable
Convertible Preferred
Stock
Common StockAdditional
Paid-in
Capital
Accumulated
Deficit
Total
Stockholders’ Equity (Deficit)
SharesAmountSharesAmount
Balance as of March 31, 2020  $  97,293  $97  $670,962  $(169,771) $501,288  
Issuance of common stock upon exercise of stock options—  —  1,590  2  2,122  —  2,124  
Issuance of common stock upon release of stock awards—  —  556  —  —  —    
Tax withholding on releasing of stock awards—  —  (118) —  (6,198) —  (6,198) 
Issuance of common stock ESPP Purchase—  —  91  1  2,154  —  2,155  
Equity component of the convertible senior notes—  —  —  —  144,106  —  144,106  
Equity component of the issuance costs—  —  —  —  (4,036) —  (4,036) 
Purchase of capped call related to convertible senior notes—  —  —  —  (69,850) —  (69,850) 
Stock-based compensation expense—  —  —  —  10,089  —  10,089  
Net loss—  —  —  —  (1,554) (1,554) 
Balance as of June 30, 2020  $  99,412  $100  $749,349  $(171,325) $578,124  
Balance as of March 31, 201958,615  $236,970  19,618  $20  $27,586  $(123,299) $(95,693) 
Accretion of redeemable convertible preferred stock—  42  —  —  (42) —  (42) 
Issuance of common stock upon exercise of stock options—  —  1,272  1  1,128  —  1,129  
Stock-based compensation expense—  —  —  —  4,654  —  4,654  
Net loss—  —  —  —  —  (12,977) (12,977) 
Balance as of June 30, 201958,615  $237,012  20,890  $21  $33,326  $(136,276) $(102,929) 
The accompanying notes are an integral part of these condensed consolidated financial statements.

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Table of Contents
Index to Financial Statements
LIVONGO HEALTH, INC.
CONDENSED CONSOLIDATED STATEMENTS OF REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY (DEFICIT)
(in thousands)
(unaudited)
 Redeemable
Convertible
Preferred
Stock
Common StockAdditional
Paid-in
Capital
Accumulated
Deficit
Total
Stockholders’
Equity (Deficit)
 SharesAmountSharesAmount
Balance as of December 31, 2019  $  95,301  $95  $671,467  $(164,198) $507,364  
Issuance of common stock upon exercise of stock options—  —  2,837  3  3,843  —  3,846  
Issuance of common stock upon release of stock awards—  —  1,676  1  (1) —    
Tax withholding on releasing of stock awards—  —  (493) —  (16,762) —  (16,762) 
Issuance of common stock ESPP Purchase—  —  91  1  2,154  —  2,155  
Equity component of the convertible senior notes—  —  —  —  144,106  —  144,106  
Equity component of the issuance costs—  —  —  —  (4,036) —  (4,036) 
Purchase of capped call related to convertible senior notes—  —  —  —  (69,850) —  (69,850) 
Stock-based compensation expense—  —  —  —  18,428  —  18,428  
Net loss—  —  —  (7,127) (7,127) 
Balance as of June 30, 2020  $  99,412  $100  $749,349  $(171,325) $578,124  
Balance as of December 31, 201858,615  $236,929  17,691  $18  $21,789  $(113,613) $(91,806) 
Cumulative effect adjustment from adoption of ASC 606
—  —  —  —  —  4,685  4,685  
Accretion of redeemable convertible preferred stock—  83  —  —  (83) —  (83) 
Issuance of common stock upon exercise of stock options—  —  3,199  2  1,441  —  1,443  
Issuance of restricted stock awards—  —  —  1  (1) —    
Issuance of common stock upon vesting of restricted stock units—  —  —  —  —  —    
Stock-based compensation expense—  —  —  —  10,180  —  10,180  
Net loss—  —  —  —  (27,348) (27,348) 
Balance as of June 30, 201958,615  $237,012  20,890  $21  $33,326  $(136,276) $(102,929) 
The accompanying notes are an integral part of these condensed consolidated financial statements.
7

Table of Contents
Index to Financial Statements
LIVONGO HEALTH, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
Six Months Ended June 30,
20202019
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss$(7,127) $(27,348) 
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization expense2,619  1,450  
Amortization of intangible assets1,388  1,193  
Non-cash operating lease cost2,199    
Amortization of debt discount and debt issuance cost1,922    
Change in fair value of contingent consideration86  956  
Allowance for doubtful accounts1,644  511  
Stock-based compensation expense17,938  9,963  
Deferred income taxes  (1,396) 
Changes in operating assets and liabilities, net of impact of acquisitions:
Accounts receivable, net(20,006) (17,637) 
Inventories11,367  (4,901) 
Deferred costs(18,035) (7,781) 
Prepaid expenses and other assets(667) (205) 
Accounts payable(2,626) 2,257  
Accrued expenses and other liabilities3,399  (48) 
Operating lease liabilities(83)   
Deferred revenue2,382  653  
Advance payments from partner  2,372  
Net cash used in operating activities(3,600) (39,961) 
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of property and equipment(4,476) (628) 
Capitalized internal-use software costs(2,780) (2,378) 
Change in escrow deposit2,100  1,750  
Investment in certificate of deposit(50,000)   
Proceeds from maturity of certificate of deposit50,000    
Acquisitions, net of cash acquired  (27,435) 
Net cash used in investing activities(5,156) (28,691) 
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from exercise of stock options, net of repurchases3,846  1,443  
Proceeds from issuance of common stock under employee stock purchase plan2,154    
Payment of deferred offering costs(286) (1,559) 
Payment of deferred acquisition-related contingent consideration(1,356) (1,316) 
Proceeds from issuance of convertible notes, net of transaction costs of $14,775
535,225    
Payment of capped calls related to issuance of convertible senior notes