One Medical Announces Results for Third Quarter 2020

November 10, 2020 at 4:05 PM EST
  • Third Quarter 2020 Ending Membership Count of 511,000, a 29% Increase Year-Over-Year
  • Third Quarter 2020 Net Revenue of $101.7 Million, a 46% Increase Year-Over-Year
  • Ending Third Quarter 2020 Cash and Short-term Marketable Securities of $682.3 Million
  • Provides Q4 2020 and Full Year 2020 Guidance

SAN FRANCISCO, Nov. 10, 2020 (GLOBE NEWSWIRE) -- 1Life Healthcare, Inc. (One Medical) (Nasdaq: ONEM) today announced financial results for the third quarter ended September 30, 2020.

“We are pleased to have reached new heights in performance this quarter--with our membership surpassing half of a million members and quarterly total net revenue exceeding $100 million for the first time,” said Amir Dan Rubin, Chair & CEO of One Medical. “We are further seeing how One Medical’s human-centered and technology-powered model is delivering impacts for multiple key stakeholders, advancing our efforts to transform healthcare at scale.”

Financial Highlights for the Third Quarter 2020

All comparisons, unless otherwise noted, are to the three months ended September 30, 2019.

  • Membership count as of quarter-end was 511,000 compared to 397,000, a 29% increase.
  • Net Revenue was $101.7 million compared to $69.6 million, a 46% increase.
  • Care Margin was $42.9 million, or 42% of total net revenue; Loss from Operations was $10.8 million, or 11% of total net revenue.
  • Adjusted EBITDA was positive $3.5 million, or 3% of total net revenue; Net Loss was $16.4 million, or 16% of total net revenue.
  • Cash and Short-term Marketable Securities as of quarter-end were $682.3 million.

Financial Outlook

One Medical provides forward-looking guidance on membership count, total net revenue, care margin, and adjusted EBITDA. Care margin and adjusted EBITDA are non-GAAP measures.

For the fourth quarter of 2020, we expect:

  • Ending Membership count in the range of 530,000 to 540,000;
  • Total Net Revenue in the range of $104 million to $109 million;
  • Care Margin in the range of $37 million to $42 million; and
  • Adjusted EBITDA in the range of a loss of $4 million to positive $1 million.

For the full year of 2020, we expect:

  • Total Net Revenue in the range of $362 million to $367 million;
  • Care Margin in the range of $132 million to $137 million; and
  • Adjusted EBITDA in the range of a loss of $29 million to a loss of $24 million.

Management has not reconciled forward-looking non-GAAP care margin and adjusted EBITDA to their most directly comparable GAAP measures of loss from operations and net loss, respectively. This is because we cannot predict with reasonable certainty the ultimate outcome of certain GAAP components of such reconciliations, including market-related assumptions that are not within our control, or others that may arise, without unreasonable effort. For these reasons, we are unable to assess the probable significance of the unavailable information, which could materially impact the amount of the future directly comparable GAAP measures. See below for additional important disclosures regarding our non-GAAP financial measures.

Quarterly Conference Call Details

The company will host a conference call to review the results today, Tuesday, November 10, 2020 at 1:30 p.m. (PT) / 4:30 p.m. (ET) to discuss its financial results. A live audio webcast will be available online at The conference call can also be accessed by dialing 1-800-258-1651 for U.S. participants, or 1-612-979-9928 for international participants, and referencing conference ID 2117769. A replay of the call will be available via webcast for on-demand listening shortly after the completion of the call, at the same web link, and will remain available for approximately 90 days.

Key Metrics and Non-GAAP Financial Measures

Members: A member is a person who has paid for membership themselves or an employee or dependent whose membership has been paid for by an enterprise client for at least one year in a market where we have an office and who has registered with us. Members help drive membership revenue, partnership revenue and patient service revenue. We may offer trial memberships to enterprise clients, particularly for new services, and we offer access to One Medical Now, our 24/7 virtual care platform, to enterprise clients. The fees generated from these services are included in our Membership Revenue, although we do not include these covered employees as members. Our number of members depends, in part, on our ability to successfully market our services directly to consumers and to employers that are not yet enterprise clients and our activation rate within existing clients. While growth in the number of members is an important indicator of expected revenue growth, it also informs our management of the areas of our business that will require further investment to support expected future member growth. Member numbers as of the end of each period are rounded to the thousands.

Reconciliations of non-GAAP financial measures to the most directly comparable financial results as determined in accordance with GAAP are included at the end of this press release following the accompanying financial data. We believe that these non-GAAP financial measures, when taken together with the corresponding GAAP financial measures, provide meaningful supplemental information regarding our performance by excluding certain items that may not be indicative of our business, results of operations, or outlook. However, non-GAAP financial information is presented for supplemental informational purposes only, has limitations as an analytical tool and should not be considered in isolation or as a substitute for financial information presented in accordance with GAAP. In addition, other companies, including companies in our industry, may calculate similarly-titled non-GAAP measures differently or may use other measures to evaluate their performance, all of which could reduce the usefulness of our non-GAAP financial measures as tools for comparison.

Care Margin: we define care margin as loss from operations excluding depreciation and amortization, stock-based compensation, general and administrative expense and sales and marketing expense. We consider care margin to be an important measure to monitor our performance, specific to the direct costs of delivering care. We believe this margin is useful to measure whether we are controlling our direct expenses included in the provision of care sufficiently and whether we are effectively pricing our services. We have provided below a reconciliation of historical care margin to loss from operations, its most directly comparable GAAP financial measure.

Adjusted EBITDA: we define adjusted EBITDA as net income (loss) excluding interest income, interest expense, depreciation and amortization, stock-based compensation, change in the fair value of our redeemable convertible preferred stock warrant liability and provision (benefit) for income taxes. We report adjusted EBITDA because it is an important measure upon which our management assesses and believes investors should assess our operating performance. We consider adjusted EBITDA to be an important measure because it helps illustrate underlying trends in our business and our historical operating performance on a more consistent basis. We have provided below a reconciliation of historical adjusted EBITDA to net loss, its most directly comparable GAAP financial measure.

Available Information

One Medical intends to use its Company website (including its Investor Relations website) as well as its Facebook, Twitter and LinkedIn accounts as a means of disclosing material non-public information and for complying with its disclosure obligations under Regulation FD.

Forward-Looking Statements

This press release contains forward-looking statements about us and our industry that involve substantial risks and uncertainties and are based on our beliefs and assumptions and on information currently available to us. All statements other than statements of historical facts contained in this press release, including statements regarding our future results of operations, financial condition, business strategy and plans and objectives of management for future operations, are forward-looking statements. In some cases, you can identify forward-looking statements because they contain words such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” “should,” “will,” or “would,” or the negative of these words or other similar terms or expressions.

Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Forward-looking statements represent our beliefs and assumptions only as of the date of this press release.  These statements, and related risks, uncertainties, factors and assumptions, include, but are not limited to: the strength of the One Medical brand; member satisfaction with our services and support; the effects of the COVID-19 pandemic and related self-isolation and quarantine measures on our business, revenue, future growth and results of operations; anticipated membership growth and revenue potential from our members; our ability to retain members; our ability to successfully introduce and drive adoption of new products; changes in the pricing we offer our members; our relationships with our health network partners and enterprise clients and any changes to, accommodations in or terminations of our contracts with the health network partners or enterprise clients; our ability to improve cost of care and margins, including timing and expenses of new office openings and entry into new geographic markets; changes in laws or regulations; our involvement in litigation, including medical malpractice claims and consumer class actions; any governmental investigations or inquiries into or challenges to our relationships with the One Medical PCs under the administrative services agreements; our strategic plan; our financial outlook; our focus areas for investment and our investments; and our overall business trajectory.  These risks are not exhaustive. Except as required by law, we assume no obligation to update these forward-looking statements, or to update the reasons actual results could differ materially from those anticipated in the forward-looking statements, even if new information becomes available in the future. Further information on factors that could cause actual results to differ materially from the results anticipated by our forward-looking statements is included in the reports we have filed or will file with the Securities and Exchange Commission, including our Quarterly Report on Form 10-Q for the quarter ended September 30, 2020. These filings, when available, are available on the investor relations section of our website at and on the SEC’s website at

About One Medical

One Medical is a membership-based and technology-powered primary care platform with seamless digital health and inviting in-office care, convenient to where people work, shop, live, and click. Our vision is to delight millions of members with better health and better care while reducing costs. Our mission is to transform health care for all through our human-centered, technology-powered model.

Headquartered in San Francisco, 1Life Healthcare, Inc. is the administrative and managerial services company for the affiliated One Medical physician owned professional corporations that deliver medical services in-office and virtually. 1Life and the One Medical entities do business under the “One Medical” brand.

Investor Contacts:
Rose Salzwedel, One Medical
Director of Investor Relations 

Media Contact:
Kristina Skinner, One Medical
Director of External Communications 

(Amounts in thousands, except share and per share amounts)
  Three Months Ended  Nine Months Ended 
  September 30,  September 30, 
Net revenue $101,667  $69,629  $258,423  $198,872 
Operating expenses:                
Cost of care, exclusive of depreciation and amortization shown separately below  58,781   41,420   163,780   118,586 
Sales and marketing (1)  7,914   12,464   28,847   28,830 
General and administrative (1)  40,059   27,778   118,236   77,167 
Depreciation and amortization  5,735   3,645   16,123   9,440 
Total operating expenses  112,489   85,307   326,986   234,023 
Loss from operations  (10,822)  (15,678)  (68,563)  (35,151)
Other income (expense), net:                
Interest income  235   1,087   1,635   3,676 
Interest expense  (5,647)  (107)  (7,676)  (393)
Change in fair value of redeemable convertible preferred stock warrant liability     (890)  (6,560)  (2,226)
Total other income (expense), net  (5,412)  90   (12,601)  1,057 
Loss before income taxes  (16,234)  (15,588)  (81,164)  (34,094)
Provision for income taxes  181   57   109   83 
Net loss  (16,415)  (15,645)  (81,273)  (34,177)
Less: Net loss attributable to noncontrolling interest     (388)  (704)  (1,049)
Net loss attributable to 1Life Healthcare, Inc. stockholders $(16,415) $(15,257) $(80,569) $(33,128)
Net loss per share attributable to 1Life Healthcare, Inc. stockholders — basic and diluted $(0.13) $(0.82) $(0.71) $(1.80)
Weighted average common shares outstanding — basic and
  128,557,071   18,539,935   113,253,219   18,371,298 
(1) Includes stock-based compensation, as follows:                
  Three Months Ended  Nine Months Ended 
  September 30,  September 30, 
Sales and marketing $575  $345  $1,843  $807 
General and administrative  8,060   3,441   25,480   9,323 
Total $8,635  $3,786  $27,323  $10,130 
Components of Net Revenue:                
  Three Months Ended  Nine Months Ended 
  September 30,  September 30, 
Net revenue:                
Net patient service revenue $40,244  $35,382  $98,257  $103,810 
Partnership revenue  43,917   20,809   107,365   57,027 
Total net patient service and partnership revenue  84,161   56,191   205,622   160,837 
Membership revenue  17,326   13,438   50,221   38,035 
Grant income  180   -   2,580   - 
Net revenue $101,667  $69,629  $258,423  $198,872 

Statements of Operations Data as a Percentage of Net Revenue:

  Three Months Ended  Nine Months Ended 
  September 30,  September 30, 
  2020 2019 2020 2019
  (unaudited) (unaudited) (unaudited) (unaudited)
Net revenue  100%  100%  100%  100%
Operating expenses:                
Cost of care, exclusive of depreciation and amortization shown separately below  58%  59%  63%  60%
Sales and marketing (1)  8%  18%  11%  14%
General and administrative (1)  39%  40%  46%  39%
Depreciation and amortization  6%  5%  6%  5%
Total operating expenses  111%  123%  127%  118%
Loss from operations  (11)%  (23)%  (27)%  (18)%
Other income (expense), net:                
Interest income  0%  2%  1%  2%
Interest expense  (6)%  (0)%  (3)%  (0)%
Change in fair value of redeemable convertible preferred stock warrant liability  0%  (1)%  (3)%  (1)%
Total other income (expense), net  (5)%  0%  (5)%  1%
Loss before income taxes  (16)%  (22)%  (31)%  (17)%
Provision for income taxes  0%  0%  0%  0%
Net loss  (16)%  (22)%  (31)%  (17)%
Less: Net loss attributable to noncontrolling interest  0%  (1)%  (0)%  (1)%
Net loss attributable to 1Life Healthcare, Inc. stockholders  (16)%  (22)%  (31)%  (17)%

(1)   Includes stock-based compensation, as follows:

  Three Months Ended  Nine Months Ended 
  September 30,  September 30, 
  2020  2019  2020  2019 
  (unaudited)  (unaudited)  (unaudited)  (unaudited) 
Sales and marketing  1%  0%  1%  0%
General and administrative  8%  5%  10%  5%
Total  8%  5%  11%  5%

Components of Net Revenue:

  Three Months Ended  Nine Months Ended 
  September 30,  September 30, 
  2020  2019  2020  2019 
  (unaudited)  (unaudited)  (unaudited)  (unaudited) 
Net revenue:                
Net patient service revenue  40%  51%  38%  52%
Partnership revenue  43%  30%  42%  29%
Total net patient service and partnership revenue  83%  81%  80%  81%
Membership revenue  17%  19%  19%  19%
Grant income  0%  0%  1%  0%
Net revenue  100%  100%  100%  100%

*Percentages may not sum due to rounding.

(Amounts in thousands, except share and per share amounts)
  September 30, December 31,
  2020 2019
Current assets:        
Cash and cash equivalents $161,468  $27,390 
Short-term marketable securities  520,839   119,146 
Accounts receivable, net  52,960   33,601 
Inventories  4,588   3,192 
Prepaid expenses and other current assets  18,936   16,708 
Total current assets  758,791   200,037 
Restricted cash  2,014   1,922 
Property and equipment, net  119,098   90,716 
Right-of-use assets  131,861   108,046 
Intangible assets, net     23 
Goodwill  21,301   21,301 
Other assets  5,240   8,249 
Total assets $1,038,305  $430,294 
Liabilities, Redeemable Convertible Preferred Stock and Equity (Deficit)        
Current liabilities:        
Accounts payable $9,182  $13,853 
Accrued expenses  36,938   24,863 
Deferred revenue, current  35,624   27,024 
Operating lease liabilities, current  15,962   12,575 
Notes payable, current     3,282 
Other current liabilities  4,872   1,884 
Total current liabilities  102,578   83,481 
Operating lease liabilities, non-current  146,746   120,497 
Convertible senior notes  237,888    
Redeemable convertible preferred stock warrant liability     7,220 
Deferred revenue, non-current  7,590    
Other non-current liabilities  5,889   639 
Total liabilities  500,691   211,837 
Commitments and contingencies        
Redeemable convertible preferred stock (Series A, B, C, D, E, F, G, H and I), $0.001 par value; 0 and 89,338,425 shares authorized as of September 30, 2020 and December 31, 2019, respectively; 0 and 86,251,669 shares issued and outstanding as of September 30, 2020 and December 31, 2019, respectively; aggregate liquidation preference of $0 and $405,585 as of September 30, 2020 and December 31, 2019, respectively     402,488 
Equity (deficit):        
Common stock, $0.001 par value, 1,000,000,000 and 150,000,000 shares authorized as of September 30, 2020 and December 31, 2019, respectively; 132,545,706 and 18,951,416 shares issued and outstanding as of September 30, 2020 and December 31, 2019, respectively  133   19 
Additional paid-in capital  899,093   93,945 
Accumulated deficit  (361,637)  (281,068)
Accumulated other comprehensive income  25   38 
Total stockholders' equity (deficit) attributable to 1Life Healthcare, Inc. stockholders  537,614   (187,066)
Noncontrolling interest     3,035 
Total equity (deficit)  537,614   (184,031)
Total liabilities, redeemable convertible preferred stock and equity (deficit) $1,038,305  $430,294 

(Amounts in thousands)
  Nine Months Ended
  September 30,
  2020 2019
Cash flows from operating activities:        
Net loss $(81,273) $(34,177)
Adjustments to reconcile net loss to net cash used in operating activities:        
Provision for bad debts  128   - 
Depreciation and amortization  16,123   9,440 
Amortization of debt discount and issuance costs  4,402   69 
Accretion of discounts and amortization of premiums on short-term marketable securities, net  (787)  (2,769)
Change in fair value of redeemable convertible preferred stock warrant liability  6,560   2,226 
Reduction of operating lease right-of-use assets  10,039   7,487 
Stock-based compensation  27,323   10,130 
Other non-cash items  (11)  68 
Changes in operating assets and liabilities:        
Accounts receivable, net  (20,255)  (15,776)
Inventories  (1,396)  765 
Prepaid expenses and other current assets  3,530   (2,366)
Other assets  (637)  (1,454)
Accounts payable  (2,189)  444 
Accrued expenses  16,416   1,883 
Deferred revenue  16,190   2,931 
Operating lease liabilities  (8,503)  (5,694)
Other liabilities  8,353   2,695 
Net cash used in operating activities  (5,987)  (24,098)
Cash flows from investing activities:        
Purchases of property and equipment, net  (51,494)  (37,621)
Purchases of short-term marketable securities  (657,211)  (208,496)
Maturities of short-term marketable securities  256,315   266,750 
VIE deconsolidation  (810)  - 
Net cash (used in) provided by investing activities  (453,200)  20,633 
Cash flows from financing activities:        
Proceeds from issuance of convertible senior notes  316,250   - 
Payment of convertible senior notes issuance costs  (9,374)  - 
Proceeds from initial public offering  281,750   - 
Payment of underwriting discount and commissions, and offering costs  (21,322)  - 
Proceeds from the exercise of stock options  25,754   1,949 
Proceeds from employee stock purchase plan  3,533   - 
Proceeds from the exercise of redeemable convertible preferred and common stock warrants  110   - 
Repayment of notes payable  (3,300)  (3,300)
Payment of principal portion of finance lease liability  (44)  (2)
Net cash provided by (used in) financing activities  593,357   (1,353)
Net increase (decrease) in cash, cash equivalents and restricted cash  134,170   (4,818)
Cash, cash equivalents and restricted cash at beginning of period  29,329   38,656 
Cash, cash equivalents and restricted cash at end of period $163,499  $33,838 
Supplemental disclosure of cash flow information:        
Cash paid for interest $86  $345 
Supplemental disclosure of non-cash investing and financing activities:        
Purchases of property and equipment included in accounts payable and accrued expenses $3,594  $4,243 
Reimbursement of secondary offering costs in prepaid expenses and other current assets $784  $- 
Unpaid deferred offering costs $-  $844 

Select Metrics (As of Period End)
 September 30, June 30, March 31, December 31, September 30, June 30, March 31, December 31,
 2020 2020 2020 2019 2019 2019 2019 2018
Members511,000 475,000 455,000 422,000 397,000 379,000 364,000 346,000
Offices103 96 92 83 77 71 71 71

  Three Months Ended  Nine Months Ended 
  September 30,  September 30, 
  2020  2019  2020  2019 
  (in thousands)  (in thousands) 
Loss from operations $(10,822) $(15,678) $(68,563) $(35,151)
Sales and marketing  7,914   12,464   28,847   28,830 
General and administrative  40,059   27,778   118,236   77,167 
Depreciation and amortization  5,735   3,645   16,123   9,440 
Care margin $42,886  $28,209  $94,643  $80,286 
Care margin as a percentage of net revenue  42%  41%  37%  40%

  Three Months Ended  Nine Months Ended 
  September 30,  September 30, 
  2020 2019 2020 2019
  (in thousands)  (in thousands) 
Net loss $(16,415) $(15,645) $(81,273) $(34,177)
Interest income  (235)  (1,087)  (1,635)  (3,676)
Interest expense  5,647   107   7,676   393 
Depreciation and amortization  5,735   3,645   16,123   9,440 
Stock-based compensation  8,635   3,786   27,323   10,130 
Change in fair value of redeemable convertible preferred stock warrant liability  -   890   6,560   2,226 
Provision for income taxes  181   57   109   83 
Adjusted EBITDA $3,548  $(8,247) $(25,117) $(15,581)