[Financial Performance Overview](index=1&type=section&id=Financial%20Performance%20Overview) [Second Quarter 2025 Financial Highlights](index=1&type=section&id=Second%20Quarter%202025%20Financial%20Highlights) Talkspace achieved strong Q2 2025 top-line growth with total revenue increasing 18% to **$54.3M**, driven by a 35% rise in Payor revenue, leading to a narrower net loss and a 94% increase in Adjusted EBITDA to **$2.3M** Q2 2025 Key Financial Metrics (vs. Q2 2024) | Metric | Q2 2025 | % YoY Change | | :--- | :--- | :--- | | Total Revenue | $54.3M | 18% | | Payor Revenue | $40.5M | 35% | | Consumer Revenue | $4.4M | (32)% | | Net Loss | $(0.5)M | (14)% | | Adjusted EBITDA | $2.3M | 94% | Q2 2025 Key Operational Metrics (vs. Q2 2024) | Metric | Q2 2025 | % YoY Change | | :--- | :--- | :--- | | Completed Payor Sessions | 385.1 thousand | 29% | | Unique Active Payor Members | 111.2 thousand | 25% | - The company repurchased **$1.4M** of its shares during the second quarter of 2025[1](index=1&type=chunk) [Management Commentary](index=1&type=section&id=Management%20Commentary) CEO Dr. Jon Cohen attributed positive Q2 operational momentum to H1 technology and marketing investments, resulting in 10% sequential growth in unique active payor members and completed payor sessions, providing strong H2 2025 visibility - Management highlighted positive momentum from technology and marketing investments made in H1 2025[2](index=2&type=chunk) - The company achieved **10%** sequential growth in unique active payor members and completed payor sessions, indicating a strong trajectory for the second half of the year[2](index=2&type=chunk) [Financial Guidance](index=2&type=section&id=Financial%20Guidance) [Full Year 2025 Outlook](index=2&type=section&id=Full%20Year%202025%20Outlook) Talkspace reaffirmed its full-year 2025 financial guidance, expecting total revenue between **$220M** and **$235M** and Adjusted EBITDA between **$14M** and **$20M** Full Year 2025 Guidance | Metric | Guidance Range | | :--- | :--- | | Revenue | $220M - $235M | | Adjusted EBITDA | $14M - $20M | [Consolidated Financial Statements](index=5&type=section&id=Consolidated%20Financial%20Statements) [Condensed Consolidated Statements of Operations](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) In Q2 2025, total revenue grew **17.9%** year-over-year to **$54.3M**, primarily from a **35.3%** increase in Payor revenue, while operating loss significantly reduced by **48.7%** to **$(1.8)M** Revenue Breakdown (Q2 2025 vs Q2 2024) | Revenue Stream | Q2 2025 ($ thousands) | Q2 2024 ($ thousands) | % Change | | :--- | :--- | :--- | :--- | | Payor revenue | 40,501 | 29,945 | 35.3% | | DTE revenue | 9,403 | 9,628 | (2.3)% | | Consumer revenue | 4,406 | 6,485 | (32.1)% | | **Total revenue** | **54,310** | **46,058** | **17.9%** | Profitability Metrics (Q2 2025 vs Q2 2024) | Metric ($ thousands) | Q2 2025 | Q2 2024 | % Change | | :--- | :--- | :--- | :--- | | Loss from operations | (1,790) | (3,486) | 48.7% | | Net loss | (541) | (474) | (14.1)% | [Condensed Consolidated Balance Sheets](index=7&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of June 30, 2025, Talkspace maintained a strong liquidity position with **$54.3M** in cash and **$48.4M** in marketable securities, resulting in **$132.8M** in total assets and **$112.9M** in stockholders' equity Key Balance Sheet Items (in thousands) | Account | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $54,342 | $76,692 | | Total current assets | $120,667 | $130,182 | | Total assets | $132,786 | $138,677 | | Total liabilities | $19,845 | $21,282 | | Total stockholders' equity | $112,941 | $117,395 | [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For H1 2025, net cash used in operating activities was **$1.6M**, with investing activities using **$11.4M** and financing activities using **$9.4M** (including **$8.4M** in stock repurchases), leading to a **$22.4M** net decrease in cash Cash Flow Summary - Six Months Ended June 30 (in thousands) | Cash Flow Activity | 2025 | 2024 | | :--- | :--- | :--- | | Net cash (used in) provided by operating activities | $(1,590) | $1,418 | | Net cash used in investing activities | $(11,386) | $(2,150) | | Net cash used in financing activities | $(9,374) | $(8,263) | | **Net decrease in cash** | **$(22,350)** | **$(8,995)** | - The company repurchased **$8.4M** of common stock for retirement during the first six months of 2025[19](index=19&type=chunk) [Non-GAAP Financial Measures and Reconciliation](index=9&type=section&id=Non-GAAP%20Financial%20Measures%20and%20Reconciliation) [Definition and Use of Non-GAAP Measures](index=9&type=section&id=Definition%20and%20Use%20of%20Non-GAAP%20Measures) Adjusted EBITDA serves as a key non-GAAP metric for assessing operating performance and business planning, providing supplemental information by excluding non-core items, despite its inherent limitations - Adjusted EBITDA is a key performance measure used by management for evaluating operating performance and for business planning purposes[20](index=20&type=chunk) - The company defines Adjusted EBITDA as net loss excluding depreciation and amortization, stock-based compensation, net financial income, income tax, and certain non-recurring expenses[24](index=24&type=chunk) [Reconciliation of Net Loss to Adjusted EBITDA](index=10&type=section&id=Reconciliation%20of%20Net%20Loss%20to%20Adjusted%20EBITDA) In Q2 2025, Talkspace reconciled a GAAP net loss of **$(0.54)M** to an Adjusted EBITDA of **$2.28M**, primarily by adjusting for **$2.36M** in stock-based compensation and **$1.0M** in non-recurring expenses Reconciliation of Net Loss to Adjusted EBITDA (Q2 2025 vs Q2 2024, in thousands) | Line Item | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | **Net loss** | **$ (541)** | **$ (474)** | | Depreciation and amortization | 718 | 220 | | Stock-based compensation | 2,355 | 3,107 | | Financial income, net | (1,325) | (3,044) | | Income tax expense | 76 | 32 | | Non-recurring expenses | 999 | 1,338 | | **Adjusted EBITDA** | **$ 2,282** | **$ 1,179** | - Non-recurring expenses for Q2 2025 primarily consisted of severance costs, one-time legal fees, and other one-time expenses[26](index=26&type=chunk) [Other Information](index=3&type=section&id=Other%20Information) [Conference Call and Webcast Information](index=3&type=section&id=Conference%20Call%20and%20Webcast%20Information) The Q2 2025 earnings conference call and webcast were held on August 5, 2025, at 8:30 a.m. E.T., with a replay available for approximately 90 days - The earnings conference call was held on August 5, 2025, at 8:30 a.m. E.T., with a replay available for 90 days[5](index=5&type=chunk) [About Talkspace](index=3&type=section&id=About%20Talkspace) Talkspace is a leading virtual behavioral healthcare provider, offering therapy and psychiatric treatment via a secure, HIPAA-compliant platform accessible through various partnerships - Talkspace offers a comprehensive suite of virtual mental health services, including therapy and psychiatric treatment, through a fully-encrypted web and mobile platform[6](index=6&type=chunk)[7](index=7&type=chunk)[8](index=8&type=chunk) [Forward-Looking Statements](index=4&type=section&id=Forward-Looking%20Statements) This press release contains forward-looking statements regarding the company's financial condition and future performance, which are subject to risks and uncertainties, and readers should refer to SEC filings for detailed risk factors - The report contains forward-looking statements that are subject to risks and uncertainties, and actual results may differ materially. The company directs readers to its SEC filings, such as the Form 10-K, for a full list of risk factors[9](index=9&type=chunk)

Core Insights - Talkspace, Inc. reported a total revenue growth of 18% year-over-year to $54.3 million in Q2 2025, primarily driven by a 35% increase in Payor revenue, despite a 32% decline in Consumer revenue [1][6][12] - The company experienced a net loss of $0.5 million, which is relatively flat compared to the same quarter in 2024, while adjusted EBITDA improved to $2.3 million, up from $1.2 million in Q2 2024 [1][6][12] - The number of completed Payor sessions increased by 29% year-over-year, and unique active Payor members grew by 25% [3][6] Financial Performance - Total revenue for the first half of 2025 reached $106.5 million, reflecting a 16% increase from $91.5 million in the same period of 2024 [3][6] - Costs and operating expenses rose by 13% year-over-year to $56.1 million, mainly due to increased costs associated with revenue generation [6][14] - Cash and cash equivalents at the end of the period stood at $54.3 million, with short-term marketable securities amounting to $48.4 million [3][19] Key Metrics - The number of completed Payor sessions during Q2 2025 was 385.1 thousand, while the number of unique active Payor members was 111.2 thousand [3][6] - Adjusted EBITDA for the first half of 2025 was $4.2 million, a significant increase of 117% compared to $1.9 million in the same period of 2024 [3][6][28] - The company repurchased $1.4 million worth of shares during the quarter [1] Guidance - For the full year 2025, Talkspace expects revenue to be in the range of $220 million to $235 million and adjusted EBITDA to be between $14 million and $20 million [12][7]

Core Insights - Talkspace, a leading behavioral healthcare company, will release its Q2 2025 results on August 5, 2025, before market open [1] - A conference call to discuss the results will take place at 8:30 AM ET on the same day [1] Company Overview - Talkspace is a prominent virtual behavioral healthcare provider focused on improving mental health access and quality [3] - The company offers a range of mental health services, including therapy for individuals, teens, couples, psychiatric treatment, and medication management [4] - Talkspace's platform is fully encrypted and compliant with HIPAA and other regulatory requirements, ensuring secure access to care [5] Accessibility and Reach - Over 179 million Americans can access Talkspace services through various channels, including health insurance plans and employer-sponsored programs [5]

Group 1 - Talkspace is the largest in-network provider of virtual mental health services in the US, covering almost 200 million lives through major health insurers, employers, and EAP partnerships [1] - Users on the Talkspace platform can access therapy through real-time video [1]

Financial Data and Key Metrics Changes - The company held its Annual General Meeting on June 18, 2025, but specific financial data and key metrics changes were not disclosed during the meeting [1][2][3]. Business Line Data and Key Metrics Changes - No specific data or key metrics changes for various business lines were provided in the meeting [1][2][3]. Market Data and Key Metrics Changes - There were no updates on market data or key metrics changes mentioned during the meeting [1][2][3]. Company Strategy and Development Direction and Industry Competition - The meeting focused on procedural matters such as the election of directors and the appointment of auditors, with no detailed discussion on company strategy or industry competition [1][2][3]. Management Comments on Operating Environment and Future Outlook - Management did not provide comments on the operating environment or future outlook during the meeting [1][2][3]. Other Important Information - The meeting included the election of directors and the ratification of independent auditors for the fiscal year ending December 31, 2025, as well as an advisory vote on executive compensation [1][2][3][4][5][6][16]. Summary of Q&A Session - There was no Q&A session recorded in the meeting, as it primarily focused on voting and procedural matters [1][2][3].

Financial Performance - Total revenue increased by $6.8 million, or 14.9%, to $52.2 million for the three months ended March 31, 2025, compared to $45.4 million for the same period in 2024[85]. - Payor revenue rose by $9.3 million, or 32.7%, to $37.8 million, while Consumer revenue decreased by $2.2 million, or 32.0%, to $4.8 million[85]. - Gross profit increased by $1.6 million, or 7.1%, to $23.3 million, with a gross margin of 44.6% for the three months ended March 31, 2025[87][88]. - The company reported a net income of $318,000 for the three months ended March 31, 2025, compared to a net loss of $1.5 million in the same period of 2024[84]. - Adjusted EBITDA for the three months ended March 31, 2025, was $1,955 thousand, up from $774 thousand in the same period of 2024, reflecting improved operating performance[99]. Customer Metrics - For the three months ended March 31, 2025, the company completed 350,000 Payor sessions, a 23.1% increase from 284,200 sessions in the same period of 2024[64]. - The number of health plan customers increased to 31 from 23, while the number of enterprise customers decreased to 173 from 195[69]. - The company had over 6,900 Consumer active members as of March 31, 2025, down from 11,100 in the same period of 2024[64]. Expenses and Cash Flow - Operating expenses rose by $1.0 million, or 4.1%, to $24.4 million, with significant increases in clinical operations expenses by 26.8% and sales and marketing expenses by 7.5%[89][91][92]. - Research and development expenses decreased by $0.4 million, or 11.2%, to $3.3 million, primarily due to reduced employee-related costs[90]. - Net cash used in operating activities decreased to $1,239 thousand for the three months ended March 31, 2025, compared to $3,391 thousand for the same period in 2024, indicating improved cash flow from operations[107]. - Net cash used in investing activities increased to $9,019 thousand for the three months ended March 31, 2025, primarily due to purchases of marketable securities and increased capitalized software development costs[109]. Capital and Funding - As of March 31, 2025, the company had $60.1 million in cash and cash equivalents and $48.3 million in marketable securities, down from $76.7 million and $41.1 million respectively as of December 31, 2024[100]. - The company had no debt as of March 31, 2025, and anticipates being able to fund its cash needs for at least the next 12 months using available cash[102]. - The company may require additional capital in the future for technological advancements, competitive dynamics, and potential acquisitions[102]. - Future capital requirements will depend on growth rate, contract renewals, and investments in product development and marketing activities[101]. Share Repurchase - The company repurchased 2,519,170 shares of its common stock for a total of $7.0 million during the three months ended March 31, 2025, with $22.1 million remaining under the Share Repurchase Program[104]. Legal and Risk Disclosures - The company did not have any material legal proceedings or significant long-term liabilities as of March 31, 2025[111]. - There were no material changes to market risk disclosures for the three months ended March 31, 2025, compared to the previous Annual Report[125]. Forward-Looking Statements - The company emphasizes that forward-looking statements are predictions based on current expectations and projections, which may be affected by various risks and uncertainties[122]. - Actual future results may differ materially from expectations, and the company cautions against undue reliance on forward-looking statements[123].

Group 1 - The stock market is rebounding sharply from post-tariff lows, leading to stretched valuation multiples [1] - Investors are advised to focus on careful stock-picking to identify value-oriented stocks, particularly in the small/mid-cap space [1] - Value stocks that also offer growth potential are considered a bonus for investors [1] Group 2 - Gary Alexander has extensive experience in covering technology companies and has worked in Silicon Valley, providing insights into current industry themes [1] - He has been a contributor on Seeking Alpha since 2017 and has been quoted in various web publications [1] - His articles are syndicated to popular trading apps like Robinhood, indicating a broad reach and influence [1]

Financial Data and Key Metrics Changes - The company reported total revenue of $52.2 million for Q1 2025, representing a 15% increase compared to Q1 2024 [22] - EBITDA increased by 153% year-over-year, reaching $2 million for the quarter [6][27] - The gross profit for the quarter was $23.3 million, up 7% from the previous year, with a gross margin of 44.6% [25] Business Line Data and Key Metrics Changes - The payer business revenue grew by 33% year-over-year, with payer sessions totaling approximately 350,000, an increase of 23% [22] - Direct to Enterprise (DTE) revenue was $9.6 million, down 3% year-over-year, while consumer revenue declined by over $2 million [25] - Unique payer members completing a session grew 17% year-over-year, reaching over 101,000 [22] Market Data and Key Metrics Changes - The company now covers nearly 200 million lives, a growth of over 40% year-over-year [23] - The Medicare population showed strong patient outcomes, with 84% of members demonstrating clinical improvement [12] Company Strategy and Development Direction - The company is focused on driving engagement within the population that has access to Talkspace through insurance plans [7] - Initiatives to enhance customer experience include real-time benefits verification and an easy button for EAP members to switch to insurance coverage [9][10] - The company is committed to expanding its psychiatry offerings and has reconfigured a dedicated team for this purpose [13] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the trajectory for 2025, expecting continued demand for affordable in-network care [21] - The company is not directly affected by tariffs and has shifted its core business to an insured patient base, reducing reliance on out-of-pocket spending [20] - Management noted that marketing investments are expected to yield benefits in the latter half of the year [60] Other Important Information - The company has launched AI applications to enhance client onboarding and clinical assessments, including a risk assessment tool with over 90% accuracy [18] - A partnership with BART Technologies aims to address teen mental health by providing access to Talkspace through their platform [17] Q&A Session Summary Question: How will the positive clinical data for Medicare Advantage be used to market to other MA plans? - Management noted significant interest from MA plans and the potential for developing deeper relationships with specific plans in the future [34] Question: What is the marketing budget for Medicare? - The company is taking a portfolio approach to marketing, adjusting budgets based on data-driven insights [38] Question: How broadly is the easy button for EAP to insurance switching rolled out? - The rollout is ongoing, plan by plan, and is having a significant positive impact on user engagement [43] Question: How has data retention changed with technology enhancements? - Session velocity metrics are up 5% year-over-year, indicating positive retention trends [49] Question: What portion of 2025 revenue guidance is expected from Medicare and military? - The company does not break out specific revenue sources but is optimistic about growth from these segments [47] Question: Can you discuss the Bark partnership and its economics? - The partnership allows easy access to Talkspace for Bark users, with the app preloaded on Bark phones [70] Question: How is the Talkcast feature being utilized? - The feature has generated 6,000 podcasts, with therapists deciding on their distribution to members [75] Question: What is the financial difference between EAP and insurance patients? - EAP sessions are fee-for-service, similar to insurance coverage, but insurance typically offers higher-priced sessions [82]

Financial Data and Key Metrics Changes - The company reported total revenue of $52.2 million for Q1 2025, representing a 15% increase compared to Q1 2024 [19] - EBITDA increased by 153% year-over-year, reaching $2 million for the quarter [5][23] - The gross profit for the quarter was $23.3 million, up 7% from the previous year, with a gross margin of 44.6% [21][22] - GAAP net income improved to $300,000 from a loss of $1.5 million a year ago [22] Business Line Data and Key Metrics Changes - The payer business revenue grew by 33% year-over-year, with payer sessions totaling approximately 350,000, an increase of 23% [19][20] - Direct to Enterprise (DTE) revenue for the quarter was $9.6 million, down 3% year-over-year [21] - Consumer revenue declined by over $2 million compared to the same quarter in 2024, as most new members utilized insurance coverage [21] Market Data and Key Metrics Changes - The company now covers nearly 200 million lives, a growth of over 40% year-over-year [20] - The Medicare population showed strong patient outcomes, with 84% of members demonstrating clinical improvement [10] Company Strategy and Development Direction - The company is focused on enhancing engagement among members with insurance coverage, aiming to optimize the user experience through technological improvements [6][8] - A new psychiatry offering was launched, targeting individuals aged 18 and older, which has seen increased demand [11][12] - The company is actively pursuing partnerships, such as with BART Technologies, to expand its reach into the teen mental health market [14] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's trajectory for 2025, expecting continued demand for affordable in-network care [19] - The company is not directly affected by tariffs and has shifted its strategy to focus on an insured patient base, reducing reliance on out-of-pocket spending [18] - The management highlighted the importance of maintaining high-quality care and positive outcomes as a key differentiator in the market [8] Other Important Information - The company has implemented AI initiatives to enhance client engagement and streamline clinical assessments [15][16] - The balance sheet remains strong, with $108 million in cash and cash equivalents at the end of Q1 [23] Q&A Session Summary Question: How will the positive clinical data for Medicare Advantage be used to market to other plans? - Management noted significant interest from MA plans and the potential for developing deeper relationships with specific plans in the future [29][30] Question: What is the marketing budget for the year? - The company is taking a portfolio approach to marketing, adjusting budgets based on data-driven insights and ROI [32][34] Question: How broadly is the easy button for switching between EAP and insurance coverage rolled out? - The rollout is ongoing, plan by plan, and has shown a significant positive impact on user engagement [36][38] Question: How has data retention changed with technology enhancements? - Management indicated that session velocity metrics are up 5% year-over-year, and they are seeing positive impacts from marketing investments [44] Question: Can you discuss the economics of the Bark partnership? - The partnership allows easy access to Talkspace for Bark users, with the app preloaded on Bark phones, enhancing referral opportunities [62][64] Question: What are the metrics used to measure quality in the Medicare population? - The company measures quality through service quality, clinical quality, client experience, productivity, and documentation [84][88] Question: Are there any impacts from behavioral health funding cuts? - Management stated that cuts have primarily affected in-person therapy and believe it may create opportunities for virtual models [91][92]

1Q 2025 Total revenue grew 15% year-over-year to $52.2 million driven by 33% year-over-year growth in Payor revenue 1Q 2025 Share repurchases of $7.0 million Exhibit 99.1 1Q 2025 Net income of $0.3 million and adjusted EBITDA1 of $2.0 million Talkspace Announces First Quarter 2025 Results Financial Guidance | | | Three Months Ended March 31, 2025 | | | --- | --- | --- | --- | | Unaudited | | Results | % Variance from Prior Year | | (In thousands unless otherwise noted) | | | | | Number of completed Payor se ...