TALKSPACE EQUITY WARRANT(TALKW) - 2025 Q1 - Quarterly Results

Financial Performance Overview This section provides an overview of Talkspace's financial results for Q1 2025 and its full-year 2025 guidance First Quarter 2025 Financial Highlights Talkspace reported strong Q1 2025 results with a 15% year-over-year revenue growth to $52.2 million, primarily driven by a 33% increase in Payor revenue. The company achieved profitability with a net income of $0.3 million, a significant improvement from a $1.5 million net loss in the prior-year period. Adjusted EBITDA also grew substantially by 153% to $2.0 million, and the company executed $7.0 million in share repurchases Q1 2025 Key Financial Metrics | Metric | Q1 2025 Results | % Variance from Prior Year | | :--- | :--- | :--- | | Total Revenue | $52.2 million | 15% | | Gross Profit | $23.3 million | 7% | | Net Income | $0.3 million | N/A (vs. loss) | | Adjusted EBITDA | $2.0 million | 153% | | Payor Sessions Completed | 350.0 thousand | 23% | | Unique Active Payor Members | 101.2 thousand | 17% | - Revenue growth was fueled by a 33% year-over-year increase in Payor revenue, which was partially offset by a 32% decline in Consumer revenue[5] - Gross margin declined to 44.6% from 47.8% in the prior-year period, driven by a shift in revenue mix towards the Payor segment[5] - The company repurchased $7.0 million of its shares during the first quarter of 2025[1] Full Year 2025 Financial Guidance Talkspace reaffirmed its full-year 2025 financial guidance, expecting total revenue to be in the range of $220 million to $235 million and adjusted EBITDA to be between $14 million and $20 million Full Year 2025 Guidance | Metric | Guidance Range | | :--- | :--- | | Revenue | $220 million - $235 million | | Adjusted EBITDA | $14 million - $20 million | Consolidated Financial Statements This section presents the detailed consolidated statements of income, balance sheets, and cash flows for the company Condensed Consolidated Statements of Income For Q1 2025, total revenue increased 14.9% YoY to $52.2 million, driven by a 32.7% rise in Payor revenue. Despite a 22% increase in cost of revenues, the company achieved a net income of $0.3 million, a significant turnaround from a net loss of $1.5 million in Q1 2024. Basic and diluted net income per share was $0.00 Q1 2025 Revenue Breakdown (in thousands) | Revenue Stream | Q1 2025 | Q1 2024 | % Change | | :--- | :--- | :--- | :--- | | Payor revenue | $37,842 | $28,508 | 32.7% | | DTE revenue | $9,583 | $9,913 | (3.3%) | | Consumer revenue | $4,757 | $6,995 | (32.0%) | | Total revenue | $52,182 | $45,416 | 14.9% | Q1 2025 Profitability Metrics (in thousands) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Gross Profit | $23,281 | $21,731 | | Total Operating Expenses | $24,366 | $23,410 | | Loss from Operations | $(1,085) | $(1,679) | | Net Income (Loss) | $318 | $(1,466) | Condensed Consolidated Balance Sheets As of March 31, 2025, Talkspace reported total assets of $134.2 million, a slight decrease from $138.7 million at year-end 2024. The company maintained a strong liquidity position with $60.1 million in cash and cash equivalents and $48.3 million in marketable securities. Total liabilities were $20.8 million, resulting in a healthy stockholders' equity of $113.4 million Key Balance Sheet Items (in thousands) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $60,077 | $76,692 | | Total current assets | $124,119 | $130,182 | | Total assets | $134,245 | $138,677 | | Total current liabilities | $19,119 | $19,023 | | Total liabilities | $20,827 | $21,282 | | Total stockholders' equity | $113,418 | $117,395 | Condensed Consolidated Statements of Cash Flows In Q1 2025, net cash used in operating activities improved to $1.2 million from $3.4 million in Q1 2024. Investing activities used $9.0 million, primarily for purchases of marketable securities. Financing activities used $6.4 million, driven by $6.5 million in common stock repurchases. This resulted in a net decrease in cash of $16.6 million, with the quarter-end cash balance at $60.1 million Summary of Cash Flows (in thousands) | Cash Flow Activity | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | $(1,239) | $(3,391) | | Net cash used in investing activities | $(9,019) | $(385) | | Net cash (used in) provided by financing activities | $(6,357) | $146 | | Net decrease in cash and cash equivalents | $(16,615) | $(3,630) | - The primary use of cash in financing activities was the repurchase of common stock for retirement, amounting to $6.5 million[19] Non-GAAP Financial Measures This section provides a reconciliation of GAAP financial results to non-GAAP measures, specifically Adjusted EBITDA Reconciliation of GAAP Results to Non-GAAP Results The company reconciled its GAAP net income to the non-GAAP measure of adjusted EBITDA. For Q1 2025, a net income of $0.3 million was adjusted for items including depreciation, stock-based compensation, and financial income, resulting in an adjusted EBITDA of $2.0 million. This represents a significant increase from the $0.8 million adjusted EBITDA reported in Q1 2024 Reconciliation of Net Income (Loss) to Adjusted EBITDA (in thousands) | Line Item | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net income (loss) | $318 | $(1,466) | | Depreciation and amortization | $649 | $201 | | Stock-based compensation | $2,333 | $2,252 | | Financial income, net | $(1,526) | $(378) | | Income tax expense | $123 | $165 | | Non-recurring expenses | $58 | $— | | Adjusted EBITDA | $1,955 | $774 | - Adjusted EBITDA is calculated by adjusting net income (loss) to exclude depreciation and amortization, stock-based compensation, net financial income, income tax expense, and certain non-recurring expenses[24] Other Information This section provides background on Talkspace, details on the earnings conference call, and important forward-looking statement disclaimers About Talkspace Talkspace is a leading virtual behavioral healthcare provider that offers a wide range of mental health services, including therapy for individuals, teens, and couples, as well as psychiatric treatment and medication management. Its services are delivered via a secure, HIPAA-compliant platform and are accessible to most Americans through insurance, employee assistance programs, and other partnerships - Talkspace is a virtual behavioral healthcare provider focused on making high-quality mental healthcare accessible[7] - Services include therapy (individual, teen, couple) and psychiatric medication management, delivered through live sessions or asynchronous text messaging on a fully-encrypted platform[8][9] Conference Call Information The company scheduled its first quarter 2025 earnings conference call and webcast for Tuesday, May 6, 2025, at 8:30 a.m. E.T. Access details for the live call and a 90-day replay were provided - The Q1 2025 earnings conference call was scheduled for May 6, 2025, at 8:30 a.m. E.T., with details available for webcast and dial-in participation[6] Forward-Looking Statements This section serves as a legal disclaimer, cautioning that the press release contains forward-looking statements regarding financial performance, strategy, and future operations. These statements are subject to various risks and uncertainties, and readers are advised to consult the company's SEC filings for a comprehensive understanding of these risks - The document contains forward-looking statements based on current expectations that are subject to risks and uncertainties, which could cause actual results to differ materially[10]