When we — in Q1, and especially early in Q1, we did see pressure on our advertising yield. We did see pressure on our cost per acquisition. And we did pull back on our ad spend as we sort of rolled through Q1. And I would say as we went later into Q1 and into Q2, we are seeing more stable ad spend — yield on our ad spend. When I say stable, it’s the CPAs still remain elevated relative to the back half of the — similar to the back half of last year. But I would say to you that they are, you know, they have stabilized relative to the early part of Q1. Having said that, I am not satisfied with our BetterHelp segment margins in the first half — in the first quarter. And so one of the things we are assessing is how do we manage the ad spend in Q2, so that we are getting the balance of top line and bottom line that we are seeking.
And we have said this before. That is something that is very dynamic, right? Because we manage the BetterHelp business based on ROIs. We want to make sure that the marginal return on every dollar of spend is getting to the efficiencies we speak. And sort of we, you know, we toggle that to get to the balance of top line and bottom line. If I think about the second half, I would say, we are looking to pull back in Q4 as we typically do. And we would be looking to spend a little bit more on ad spend relative to the second quarter, provided, again, that we see the — we get to the efficiencies we seek. And then the last point I would make is, remember, International typically is slightly more efficient from an ad-yield perspective. So as we roll out International in the second half, I would expect to see that spend on International markets being more efficient.
Operator: Thank you for your question. Next question is from the line of Kevin Caliendo with UBS. Your line is now open.
Unidentified Analyst: Thank you, Mala. This is [Dylan] (ph) on for Kevin Caliendo. Earlier this week, one of your competitors announced that they were winding down their telehealth business. Could you maybe speak to whether or not the guidance today contemplates any tailwinds from a competitive perspective?
Mala Murthy: Laizer, would you like to address that?
Laizer Kornwasser: Sure, Mala. So clearly, there’s been some noise in the marketplace, and we’re really not going to comment on the specifics. And we would refer you to that partner of ours that made that comment. But what I do want to highlight is we have a very strong relationship partnership. And we value the relationship that we have with UnitedHealthcare, and we foresee that strong relationship continuing.
Operator: Thank you for your question. Next question is from the line of George Hill with Deutsche Bank. Your line is now open.
George Hill: Yeah. Good afternoon, guys, and thanks for taking the question. Mala, I do like to kind of come back to Lisa’s topic, which is, I guess, can you talk about the degree to which the current management team kind of feels empowered to make change at the company as it either relates to margins or growth or strategic direction? And then, because, I know we’re trying to keep people to one question, if I can sneak in a second one. I just — if there’s any way you can kind of quantify the success you’re seeing in BetterHelp and what metrics you guys are looking at internally, I think we find that helpful. Thank you.
Mala Murthy: Yeah. Your question on whether the leadership team is empowered to act? I would say absolutely unhesitatingly, a big yes. As I said in our prepared remarks, we are not waiting. We have a plan to deliver. We have investments to execute, and that is absolutely our focus. We are also reiterating our longer-term outlook that is certainly going to require us to, as a leadership team, as we do every single year, look at our strategy, look at various aspects of that strategy, and think about how do we want to stack our investments against those, what’s working, what’s not working. Again, that is part of what we do every single year. And we will absolutely continue to drive that. So the answer to your question is we are — I am empowered to drive this business forward.
And we, as a leadership team, as I said in our prepared remarks, are all in. We are leaning in and we are focusing on driving this business forward. In terms of BetterHelp metrics, the things that we typically will look at from an internal operating perspective is, we will look at, obviously, the CAC and where it is. We will look at the ROIs of our ad spend. We will look at retention, churn, the lifetime value of the CAC that we are placing, and we will also look at the users that we are attracting to the platform. So we also — so that is — those are things that we look at. And besides that, we look at a number of other things that inform the user experience as well as the provider experience, the provider NPS, the user NPS, all of which, by the way, continue to remain very strong because of the strong experience that people have on the platform.
So those are the typical metrics that we would be looking at.
Operator: Thank you for your question. Next question is from the line of Ryan Daniels with William Blair. Your line is now open.
Unidentified Analyst: Hey, this is [Zack] (ph) for Ryan Daniels. Thanks for taking the question. I think in your prepared remarks you mentioned reallocating some of the dollars in the second half as the international penetration ramps up. So first, did I get that right? And then two, can you just talk a bit more about where you plan to reallocate these dollars? Was it just reallocating dollars to ramp up the international portion? Or is there something else? Just curious if you can dive deeper into this. Thanks.
Mala Murthy: Yeah. So, we’ve been talking over the last two calls about the fact that we do expect International in BetterHelp to ramp the — where we are placing our ad spend dollars internationally in BetterHelp is in the markets that we already have a presence in. Those are largely English-speaking markets like UK, Canada, Australia. So these are the markets where we would be putting our ad spend dollars in.
Operator: Thank you for your question. Next question is from the line of Elizabeth Anderson with Evercore. Your line is now open.
Elizabeth Anderson: Hi, guys. Thanks so much for the question. Mala, can we think about the longer-term growth? I appreciate your commentary. But with sort of other changes in the International focus, et cetera, how do we think about the component that pricing plays in both the Integrated Care outlook as well as BetterHelp? Thanks.
Mala Murthy: Yeah. Great question, Elizabeth. So I think about the pricing lever we have on both sides in a couple of different ways. First, if you think about our Integrated Care side and think about Chronic Care and the momentum that we are seeing in Chronic Care. We’ve spoken about this dynamic in the past couple of calls. Firstly, we are seeing nice momentum in Chronic Care bookings. And if you think about the momentum we are seeing in Chronic Care bookings, part of what’s driving that is the fact that we are selling more Chronic Care bundles. And if you think about the pricing that with these bundles. It is accretive from a — on a per-client basis from a revenue perspective. And that is certainly something that as we increasingly gain traction on our land and expand, the fact that we have added over two million members in the first quarter.
Again, that gives us fertile ground for us to cross-sell more of our Chronic Care products into that population. The fact that Chronic Care at the end of the day is still relatively underpenetrated, right? If you think of our overall 90-plus million base, it is still 16% of our overall Chronic Care — of our overall telehealth base. And so, if things like that, that will allow us to get more revenue accretion. And that certainly is something that we are focused on. On the BetterHelp side, you know, when I think about pricing, I would say it really is us thinking more broadly about how we can do more of targeted surgical pricing. You know, as we think about the different — whether it’d be BetterHelp and BetterSleep. And when I say targeted and surgical, it could be by geography, it could be in other ways.
And by the way, that is something that we are doing constantly, continuously, right? This is a business that is dynamic in multiple ways, including in pricing.
Operator: Thank you for your question. Next question is from the line of Daniel Grosslight with Citi. Your line is now open.
Daniel Grosslight: Hi, Mala. Thanks for taking the question. There’s noise out in the market questioning the cost and efficacy of some digital diabetes management programs. I know it’s still pretty early in the selling season for you guys. But I was curious if that report is having any impact on what you’re seeing out there in the market. And maybe if you can comment a little bit on where you’re currently seeing the greatest uptick from a new sales perspective in terms of indications, that would be great. Thank you.
Mala Murthy: Yeah. Thanks, Daniel, for the question. Let me start and then I will turn it over to Laizer for more comments. Look, if I think about the momentum that we are seeing in the market, the things that we are seeing traction on is a few. The first is, obviously I’ve talked about our land and expand. The second is, when we talk to our clients about both the breadth of our products and solutions. And second, the fact that we are able to show value and ROI. That is certainly resonating in the marketplace. And the last is, as I’ve said before, the strength of our balance sheet relative to many of the other competitors in our market. And the strength of the balance sheet certainly is compelling if you think about our ability to bring innovation into our products, into all our products, including Chronic Care. So those are broadly the trends that we are seeing in the market as we sell. Let me turn it over to Laizer to address your specific question.
Laizer Kornwasser: Yeah. So with respect to that specific study, I would say, we haven’t seen any impact from that study on our business. What I will tell you is just some caveats to keep in mind. The first is that the report was a review of limited selected secondary research, and the party did not conduct any original testing or any primary analysis of patient data. And I just want to highlight that based on our studies and those of third parties, we believe that our Chronic Care programs provide a clear ROI for our customers. Our programs have demonstrated meaningful reductions in A1C over a sustained period of time. But it’s more than just A1Cs, we also have shown improvements in blood pressure and in weight. And the whole concept of value is one that we are having good conversations with our clients about.
Our members in our diabetes programs also demonstrate a higher adherence to their diabetes-related drugs. And so, it’s really important that you understand what’s based in the research, what’s included. But what I would tell you is, we aren’t seeing an impact, but we are having good conversations with our clients related to the ROI and the value of our products.
Mala Murthy: Yeah. And, just to wrap up on that, Daniel, what I would say is, look, we are — we continue to see strength and momentum in Chronic Care. I would say, as I think about our guidance this year, Integrated Care is off to a solid start. I expect Integrated Care both from a revenue growth perspective as well as a margin expansion perspective, as indicated in our guidance, to continue its momentum. I would say certainly, if you think about the BetterHelp business, we have had a couple of challenging quarters and we have the set of drivers that are driving the back half of the year ramp. So I would say, certainly, on the Integrated Care side, we are continuing to drive, get traction, especially on our Chronic Care book.
Operator: Thank you for your question. There are no additional questions waiting at this time. That will conclude the conference call. Thank you for your participation. You may now disconnect your lines.
