Company: AMWL
Filing Date: 2025-02-12
Form Type: 10-K
Source: 0000950170-25-019024
Chunk: 241

Company: American Well Corp
Filing Date: 2025-02-12
Form: 10-K
Item: Item 7
Chunk 241
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 market consolidation, we have retained the majority of our historically significant clients and with the Amwell Converge™ platform have been able to strengthen and expand our strategic clients during the year. The increase was offset with a decrease in visit revenue of $3.0 million due to a decline in visit volume and lower utilization in specialty care, and a decrease in other revenue of $4.8 million 

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primarily related to a decrease in marketing and services revenue due to timing of services provided to various strategic customers each year.

For the year ended December 31, 2023, subscription revenue declined $8.6 million due to customer churn during re-platforming, partially offset by growth in our existing strategic clients. While our aggregated number of health systems clients declined during re-platforming, we have retained the majority of our historically significant clients and with the Amwell Converge™ platform have been able to strengthen and expand our strategic clients during the year. Visit revenue decreased $4.9 million due to a decline in visit volume and lower utilization in specialty care. Other revenue decreased by $4.7 million primarily related to a decrease in hardware and services revenue.

Costs of Revenue, Excluding Depreciation and Amortization of Intangible Assets 

For the year ended December 31, 2024, the decrease in cost of revenue was primarily driven by a decrease in marketing services provided for customers of $3.2 million, and a decrease in employee and provider costs of $3.6 million, driven by headcount reduction and lower visit volume. Consulting spend also decreased by $2.1 million. The Company's cost savings measures continue to have a positive impact on gross margin.

For the year ended December 31, 2023, the increase in cost of revenue was primarily due to an increase of $4.5 million in employee-related costs such as salary and benefits for the fulfilment of professional service obligations. Third party software costs also increased $3.0 million. These increases were partially offset by a decrease in hardware costs of $2.4 million due to the decline in hardware revenue and a decline in provider related costs of $1.3 million due to a decrease in visits. The decrease in gross margin contribution is a result of a shift in revenue mix.

Research and Development Expenses 

For the year ended December 31, 2024, the decrease in research and development expense was primarily driven by a decrease of $12 million in consulting spend as the peak development of the Amwell Converge™