TALKSPACE EQUITY WARRANT(TALKW) - 2024 Q3 - Quarterly Results

Financial & Operational Highlights Talkspace reported strong Q3 2024 results with 23% revenue growth to $47.4 million, achieving GAAP Net Income and positive Adjusted EBITDA Q3 2024 Key Financial and Operational Metrics (Year-over-Year) | Metric | Q3 2024 | YoY Change | | :--- | :--- | :--- | | Total Revenue | $47.4 million | +23% | | Payor Revenue | $32.0 million | +45% | | GAAP Net Income | $1.9 million | From $4.4M Loss | | Adjusted EBITDA | $2.4 million | From $2.8M Loss | | Eligible Lives | 158.1 million | +40% | | Completed Payor Sessions | 316.4 thousand | +38% | | Consumer Active Members | 8.6 thousand | -35% | - Management attributes the strong performance to fortified relationships with key payor partners and a differentiated focus on clinical excellence[3] - The company has expanded its network to serve over 158 million covered lives, with increased access for seniors, teens, and military members, positioning itself as the largest behavioral telehealth network in the U.S[4] Financial Guidance Talkspace reaffirmed full-year 2024 guidance, projecting continued strong revenue growth and sustained Adjusted EBITDA profitability Full Year 2024 Financial Guidance | Metric | Guidance Range | Implied Growth | | :--- | :--- | :--- | | Total Revenue | $185M - $195M | 23% - 30% | | Adjusted EBITDA | $4M - $8M | N/A | Detailed Financial Performance Detailed financials reveal a revenue mix shift towards Payor, reduced operating expenses, leading to positive net income and cash flow from operations Condensed Consolidated Income Statements Q3 2024 vs Q3 2023 Income Statement Highlights (in thousands) | Line Item | Q3 2024 | Q3 2023 | YoY Change | | :--- | :--- | :--- | :--- | | Payor Revenue | $32,039 | $22,112 | +44.9% | | DTE Revenue | $9,370 | $8,002 | +17.1% | | Consumer Revenue | $5,990 | $8,532 | -29.8% | | Total Revenue | $47,399 | $38,646 | +22.6% | | Gross Profit | $21,621 | $18,849 | +14.7% | | Total Operating Expenses | $21,522 | $24,028 | -10.4% | | Net Income (Loss) | $1,874 | $(4,414) | N/A | Condensed Consolidated Balance Sheets Balance Sheet Summary (in thousands) | Account | Sep 30, 2024 | Dec 31, 2023 | | :--- | :--- | :--- | | Cash and cash equivalents | $118,994 | $123,908 | | Total current assets | $131,518 | $139,800 | | Total assets | $138,231 | $142,221 | | Total current liabilities | $19,053 | $21,648 | | Total liabilities | $20,643 | $23,575 | | Total stockholders' equity | $117,588 | $118,646 | Condensed Consolidated Statements of Cash Flows - For the nine months ended September 30, 2024, net cash provided by operating activities was $7.6 million, a significant improvement from a net cash use of $14.9 million in the same period of 2023[21] - Net cash used in financing activities was $8.7 million, primarily due to an $8.0 million repurchase and cancellation of common stock[21] - The company ended the period with $119.0 million in cash and cash equivalents, down from $123.9 million at the beginning of the year[21] Non-GAAP Financial Measures Adjusted EBITDA is presented as a key non-GAAP measure, showing significant improvement to $2.4 million in Q3 2024 from a prior-year loss Definition and Use of Adjusted EBITDA - Adjusted EBITDA is calculated as net income (loss) adjusted for depreciation and amortization, interest and other income/expense, taxes, stock-based compensation, and certain non-recurring expenses[27] - Management uses Adjusted EBITDA as a key performance measure for business planning, evaluating ongoing operations, and assessing potential acquisitions[23] Reconciliation of Net Income (Loss) to Adjusted EBITDA Reconciliation to Adjusted EBITDA (in thousands) | Line Item | Q3 2024 | Q3 2023 | | :--- | :--- | :--- | | Net income (loss) | $1,874 | $(4,414) | | Depreciation and amortization | $231 | $305 | | Financial (income), net | $(1,701) | $(779) | | Taxes on income | $(74) | $14 | | Stock-based compensation | $1,931 | $1,969 | | Non-recurring expenses | $89 | $105 | | Adjusted EBITDA | $2,350 | $(2,800) | Company Information This section provides an overview of Talkspace's virtual behavioral healthcare business and includes a safe harbor statement on forward-looking risks About Talkspace - Talkspace offers a comprehensive suite of virtual mental health services, including therapy for individuals, teens, and couples, as well as psychiatric treatment and medication management for adults[10] - Over 158 million Americans can access Talkspace services through health insurance plans, employee assistance programs, and other partnerships[11] Forward Looking Statements - The report contains forward-looking statements that are subject to numerous risks and uncertainties, including rapid market evolution, technological change, client contract renewals, and changes in healthcare regulations[13]