LifeStance Health (LFST) - 2024 Q2 - Quarterly Results

Financial Performance and Outlook LifeStance reported strong Q2 2024 results with significant revenue growth and improved profitability, leading to raised full-year guidance and positive cash flow generation Second Quarter 2024 Highlights LifeStance reported strong second-quarter 2024 results, with revenue increasing 20% year-over-year to $312.3 million. This growth was driven by a 14% increase in the clinician base and a 15% rise in visit volumes. The company significantly improved profitability, with net loss narrowing to $23.3 million from $45.5 million, and Adjusted EBITDA more than doubling to $28.6 million Q2 2024 Key Financial Metrics (vs. Q2 2023) | Metric | Q2 2024 | Q2 2023 | Change | | :--- | :--- | :--- | :--- | | Total Revenue | $312.3M | $259.6M | +20% | | Net Loss | ($23.3M) | ($45.5M) | +49% | | Adjusted EBITDA | $28.6M | $14.1M | +103% | | Center Margin | $97.8M | $73.0M | +34% | Q2 2024 Key Operating Metrics (vs. Q2 2023) | Metric | Q2 2024 | Change (YoY) | | :--- | :--- | :--- | | Clinician Base | 6,984 | +14% | | Visit Volumes | 2.0 million | +15% | - The improvement in Adjusted EBITDA margin to 9.2% was attributed to higher Total Revenue per visit, lower center costs as a percentage of revenue, and operating leverage from revenue growing faster than G&A expenses[3] Full Year 2024 Outlook The company has raised its full-year 2024 guidance for revenue, Center Margin, and Adjusted EBITDA, reflecting confidence in its operational execution and financial performance. It also provided specific guidance for the third quarter of 2024 and reiterated its expectation to generate positive Free Cash Flow for the full year Updated Full Year 2024 Guidance | Metric | New Guidance | | :--- | :--- | | Total Revenue | $1.2B - $1.242B | | Center Margin | $363M - $383M | | Adjusted EBITDA | $90M - $100M | - The company reiterates its expectation to generate positive Free Cash Flow for the full year 2024[2][5] Third Quarter 2024 Guidance | Metric | Q3 2024 Guidance | | :--- | :--- | | Total Revenue | $290M - $310M | | Center Margin | $83M - $95M | | Adjusted EBITDA | $15M - $21M | Balance Sheet and Cash Flow LifeStance demonstrated improved liquidity, generating $22.2 million in cash flow from operations in the first half of 2024, with $44.1 million generated in the second quarter alone. The company ended Q2 with a cash balance of $87.0 million and net long-term debt of $279.5 million - For the six months ended June 30, 2024, LifeStance generated $22.2 million in cash flow from operations, a significant improvement from an $8.3 million use of cash in the prior-year period[4][15] Key Balance Sheet and Cash Position (as of June 30, 2024) | Item | Amount (in millions) | | :--- | :--- | | Cash | $87.0 | | Net Long-Term Debt | $279.5 | Consolidated Financial Statements (Unaudited) The unaudited financial statements detail the company's balance sheet, income, and cash flow, showing improved liquidity and reduced net loss for the first half of 2024 Consolidated Balance Sheets As of June 30, 2024, LifeStance's Total Assets stood at $2.12 billion, a slight increase from $2.11 billion at year-end 2023. Total Liabilities were $689.3 million. Notable changes include an increase in cash and patient accounts receivable, offset by decreases in property and equipment and intangible assets Balance Sheet Summary (in thousands) | Account | June 30, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Total Current Assets | $277,748 | $225,731 | | Cash and cash equivalents | $86,969 | $78,824 | | Patient accounts receivable, net | $167,220 | $125,405 | | Total Assets | $2,119,351 | $2,109,969 | | Total Liabilities | $689,324 | $681,039 | | Long-term debt, net | $279,459 | $280,285 | | Total Stockholders' Equity | $1,430,027 | $1,428,930 | Consolidated Statements of Operations and Comprehensive Loss For the second quarter of 2024, the company recorded revenue of $312.3 million and a Net Loss of $23.3 million, or ($0.06) per share. This compares favorably to a Net Loss of $45.5 million, or ($0.13) per share, in the same period last year. For the first six months, revenue was $612.8 million with a Net Loss of $44.4 million Statement of Operations - Three Months Ended June 30 (in thousands, except per share data) | Metric | 2024 | 2023 | | :--- | :--- | :--- | | Total Revenue | $312,331 | $259,578 | | Loss from Operations | $(15,947) | $(48,413) | | Net Loss | $(23,277) | $(45,478) | | Net Loss Per Share | $(0.06) | $(0.13) | Statement of Operations - Six Months Ended June 30 (in thousands, except per share data) | Metric | 2024 | 2023 | | :--- | :--- | :--- | | Total Revenue | $612,768 | $512,167 | | Loss from Operations | $(32,719) | $(82,506) | | Net Loss | $(44,374) | $(79,720) | | Net Loss Per Share | $(0.12) | $(0.22) | Consolidated Statements of Cash Flows For the first six months of 2024, Net cash provided by (used in) operating activities was $22.2 million, a stark contrast to the $8.3 million used in the prior-year period. Cash used in investing activities was significantly reduced to $10.2 million from $39.1 million, primarily due to the absence of acquisition spending. The company ended the period with an $8.1 million Net increase (decrease) in cash Cash Flow Summary - Six Months Ended June 30 (in thousands) | Activity | 2024 | 2023 | | :--- | :--- | :--- | | Net cash provided by (used in) operating activities | $22,222 | $(8,324) | | Net cash used in investing activities | $(10,214) | $(39,130) | | Net cash (used in) provided by financing activities | $(3,863) | $18,438 | | Net increase (decrease) in cash | $8,145 | $(29,016) | Reconciliation of GAAP to Non-GAAP Financial Measures This section reconciles GAAP results to non-GAAP measures like Center Margin and Adjusted EBITDA, highlighting improved operational profitability Reconciliation of Loss from Operations to Center Margin Center Margin, a non-GAAP metric, increased 34% to $97.8 million in Q2 2024 from $73.0 million in Q2 2023. For the first six months, Center Margin grew to $192.5 million. This measure is derived by taking Loss from Operations and adding back Depreciation and Amortization and General and Administrative expenses Reconciliation to Center Margin (in thousands) | Description | Three Months Ended June 30, 2024 | Three Months Ended June 30, 2023 | | :--- | :--- | :--- | | Loss from operations | $(15,947) | $(48,413) | | Plus: Depreciation and amortization | 18,600 | 19,530 | | Plus: General and administrative expenses | 95,153 | 101,854 | | Center Margin | $97,806 | $72,971 | Reconciliation of Net Loss to Adjusted EBITDA Adjusted EBITDA for Q2 2024 was $28.6 million, a significant increase from $14.1 million in the prior-year quarter. The calculation adjusts Net Loss for items such as interest, taxes, depreciation, amortization, Stock-based compensation expense ($24.6 million), and other non-recurring costs like litigation and strategic initiatives Reconciliation to Adjusted EBITDA (in thousands) | Description | Three Months Ended June 30, 2024 | Three Months Ended June 30, 2023 | | :--- | :--- | :--- | | Net loss | $(23,277) | $(45,478) | | Adjustments (Interest, Tax, D&A, etc.) | 27,134 | 18,107 | | Stock-based compensation expense | 24,550 | 33,078 | | Other Adjustments | 198 | 8,358 | | Adjusted EBITDA | $28,605 | $14,065 | Company Information and Disclosures This section outlines LifeStance's mental healthcare services, forward-looking statement risks, and the company's use of non-GAAP financial measures About LifeStance Health Group, Inc. Founded in 2017, LifeStance is one of the largest U.S. providers of outpatient mental healthcare for all ages, offering both virtual and in-person services. The company's mission is to improve access to trusted, affordable, and personalized mental healthcare. It operates with nearly 7,000 clinicians across 33 states and over 550 centers - LifeStance is a major provider of outpatient mental health care, employing nearly 7,000 clinicians in 33 states and over 550 centers[7] Forward-Looking Statements This press release includes forward-looking statements concerning future performance, including financial guidance, business plans, and operating results. These statements are not guarantees of future performance and are subject to numerous risks and uncertainties, such as the ability to manage growth, retain clinicians, and navigate a heavily regulated industry - The report contains forward-looking statements regarding guidance, financial position, and business plans, which are subject to risks and uncertainties detailed in SEC filings[8][9] Non-GAAP Financial Information The company utilizes non-GAAP financial measures, including Center Margin, Adjusted EBITDA, and Free Cash Flow, to supplement its GAAP results and provide a better understanding of its operating performance. The company notes that reconciliations for forward-looking guidance are not provided due to the unreasonable effort required to estimate the necessary adjustments - Management uses non-GAAP measures like Center Margin, Adjusted EBITDA, and Free Cash Flow to evaluate operating performance[10] - Reconciliation for forward-looking guidance on Center Margin, Adjusted EBITDA, and Free Cash Flow is not provided, as the company cannot estimate the required variables without unreasonable effort[11]