Livongo hit public markets in July 2019 and experienced a massive revenue surge of 155% from Q1 2019 to Q1 2020. The California-based company is fueled by AI technology, and strives to provide healthcare solutions for patients with chronic conditions. While their platform serves a myriad of ailments, their diabetes program gets the most hits. Livongo went from 164,000 diabetes members to 328,000 in just a year.
Their client pool is also experiencing a massive uptick, having undergone a 44% quarter-over-quarter increase between Q4 of 2019 and Q1 of this year. Second only to diabetes, their hypertension program is also heavily utilized. These two corners of the healthcare market cost the US an estimated $327 billion and $131 billion each year respectively, making them very smart targets for Livongo’s services.
Like many digital healthcare tech companies this year, Livongo doesn’t expect COVID-19 to hinder business. They are beefing up their virtual services so their customer base can utilize the platform from the comfort of their homes. Tracking and coaching tech can help patients take control of their own health without having to risk the COVID-19 exposure associated with entering healthcare facilities. Livongo adapted to pandemic needs and changes early on and has been able to continue its rapid growth throughout otherwise trying months. Due to their flexibility, they are projected to maintain their upward momentum and continue their growth in upcoming quarters.
To fuel its bright prospects and business growth, Livongo Health announced plans to offer $400 million worth of convertible senior notes to its institutional buyers. Initial purchasers will be given the option to grab an additional $60 million aggregate principal of notes. Global market conditions will determine the exact terms of the offering, and no assurances can be made as to the actual size or timing of the offer.
Accrued interest in Livongo notes will be payable in semiannual arrears, and under certain circumstances, can be converted to shares in Livongo stock or cash. While a portion of the proceeds will go towards paying capped call transactions, proceeds will also be used for business development, sales and marketing, working capital, and a variety of other general corporate expenditures.