Talkspace(TALK) - 2024 Q2 - Quarterly Results

Talkspace Second Quarter 2024 Financial Results The company reported strong Q2 2024 revenue growth driven by its Payor segment, significantly improved profitability, and announced a new share repurchase program Financial & Operational Highlights Talkspace reported strong Q2 2024 results with a 29% year-over-year revenue increase and its second consecutive quarter of positive Adjusted EBITDA Key Financial & Operational Metrics | Metric | Q2 2024 | YoY Change | | :--- | :--- | :--- | | Total Revenue | $46.1M | +29% | | Payor Revenue | $29.9M | +62% | | Net Loss | $(0.5)M | +90% (Improvement) | | Adjusted EBITDA | $1.2M | +130% (Improvement) | | Eligible Lives | 145.3M | +33% | | Completed Payor Sessions | 298.6K | +49% | - The company's strong performance is attributed to continued business execution, expansion of covered lives to over 145 million, and the launch of its Medicare offering in 12 states[2] - Gross margin declined to 45.5% from 50.0% in the prior-year period, which was driven by a revenue mix shift towards the fast-growing Payor segment[4] - The Consumer revenue segment continued to decline, showing a 28% year-over-year decrease, which partially offset the growth in Payor and Direct to Enterprise (DTE) channels[4] Business Updates The company reaffirmed its full-year 2024 financial guidance and announced an additional $25 million share repurchase program Fiscal Year 2024 Guidance | Fiscal Year 2024 Guidance | Range | | :--- | :--- | | Revenue | $185M - $195M | | Adjusted EBITDA | $4M - $8M | - The company repurchased $8.0 million of common stock during the second quarter of 2024[7] - On August 1, 2024, the Board approved an additional $25 million share repurchase program, bringing the total available for repurchase to $32 million over the next 24 months[7] Financial Statements The financial statements detail revenue growth, a narrowed net loss, a stable balance sheet, and improved operating cash flow for the period Condensed Consolidated Statements of Operations The company's Q2 2024 revenue grew 29.2% YoY, leading to a significant 89.9% improvement in net loss Q2 2024 Statement of Operations | (In thousands) | Three Months Ended June 30, 2024 | Three Months Ended June 30, 2023 | YoY Change | | :--- | :--- | :--- | :--- | | Total Revenue | $46,058 | $35,645 | +29.2% | | Payor revenue | $29,945 | $18,539 | +61.5% | | DTE revenue | $9,628 | $8,039 | +19.8% | | Consumer revenue | $6,485 | $9,067 | -28.5% | | Gross Profit | $20,951 | $17,812 | +17.6% | | Operating Loss | $(3,486) | $(6,408) | +45.6% (Improvement) | | Net Loss | $(474) | $(4,704) | +89.9% (Improvement) | | Net Loss Per Share | $(0.00) | $(0.03) | +90.0% (Improvement) | Condensed Consolidated Balance Sheets The balance sheet as of June 30, 2024 shows total assets of $133.8 million and a strong cash position of $114.9 million Balance Sheet Summary | (In thousands) | June 30, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Cash and cash equivalents | $114,913 | $123,908 | | Total current assets | $128,769 | $139,800 | | Total assets | $133,790 | $142,221 | | Total current liabilities | $17,779 | $21,648 | | Total liabilities | $19,746 | $23,575 | | Total stockholders' equity | $114,044 | $118,646 | Condensed Consolidated Statements of Cash Flows For the first six months of 2024, the company generated positive cash from operations, a significant turnaround from the prior year Cash Flow Summary | (In thousands) | Six Months Ended June 30, 2024 | Six Months Ended June 30, 2023 | | :--- | :--- | :--- | | Net cash provided by (used in) operating activities | $1,418 | $(13,748) | | Net cash (used in) provided by investing activities | $(2,150) | $18 | | Net cash (used in) provided by financing activities | $(8,263) | $1,289 | | Net decrease in cash and cash equivalents | $(8,995) | $(12,441) | | Cash and cash equivalents at end of period | $114,913 | $126,104 | Non-GAAP Financial Measures The company reported positive Q2 2024 Adjusted EBITDA of $1.2 million, a significant improvement from a loss in the prior-year period - Adjusted EBITDA is calculated as net loss adjusted for depreciation and amortization, interest and other expenses (income), taxes, stock-based compensation, and certain non-recurring expenses[23] Reconciliation to Adjusted EBITDA | Reconciliation to Adjusted EBITDA (In thousands) | Three Months Ended June 30, 2024 | Three Months Ended June 30, 2023 | | :--- | :--- | :--- | | Net loss | $(474) | $(4,704) | | Stock-based compensation | $3,107 | $2,129 | | Non-recurring expenses | $1,338 | $— | | Other adjustments | $(2,792) | $(1,402) | | Adjusted EBITDA | $1,179 | $(3,977) | Company Information & Forward-Looking Statements Talkspace is a leading virtual behavioral healthcare provider whose services are accessible to over 151 million Americans - Talkspace provides a comprehensive suite of mental health services, including therapy for individuals, teens, and couples, as well as psychiatric treatment and medication management[10] - More than 151 million Americans have access to Talkspace through various insurance plans, employee assistance programs, and partnerships[11] - The press release contains forward-looking statements subject to risks and uncertainties, and readers are cautioned not to place undue reliance on them[12]