PART I Financial Statements (Unaudited) Unaudited H1 2025 financial statements show increased revenue, reduced net loss, and decreased cash from investing and financing activities Condensed Consolidated Balance Sheets Total assets decreased to $132.8 million by June 30, 2025, driven by reduced cash, with liabilities and equity also declining Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2025 (Unaudited) | December 31, 2024 | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | $54,342 | $76,692 | | Marketable securities | $48,427 | $41,118 | | Accounts receivable, net | $15,422 | $9,643 | | Total current assets | $120,667 | $130,182 | | Total assets | $132,786 | $138,677 | | Liabilities & Equity | | | | Total current liabilities | $18,540 | $19,023 | | Total liabilities | $19,845 | $21,282 | | Total stockholders' equity | $112,941 | $117,395 | Condensed Consolidated Statements of Operations The company reported increased revenue for Q2 and H1 2025, alongside a significantly reduced net loss for the six-month period Statement of Operations Summary (in thousands) | Metric | Q2 2025 | Q2 2024 | Six Months 2025 | Six Months 2024 | | :--- | :--- | :--- | :--- | :--- | | Revenue | $54,310 | $46,058 | $106,492 | $91,474 | | Loss from operations | $(1,790) | $(3,486) | $(2,875) | $(5,165) | | Net loss | $(541) | $(474) | $(223) | $(1,940) | | Net loss per share (Basic & Diluted) | $(0.00) | $(0.00) | $(0.00) | $(0.01) | Condensed Consolidated Statements of Cash Flows H1 2025 saw net cash used in operating activities, increased usage in investing and financing, resulting in a $22.4 million net decrease in cash Cash Flow Summary for 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 and cash equivalents | $(22,350) | $(8,995) | | Cash and cash equivalents at end of period | $54,342 | $114,913 | Notes to Unaudited Condensed Consolidated Financial Statements Notes detail business operations, revenue sources by channel (Payor, DTE, Consumer), capital management including share repurchases, and consolidation of VIEs - The company operates as a single reportable segment, providing virtual behavioral healthcare services. The CEO, as the chief operating decision maker, reviews consolidated results to assess performance and allocate resources3031 Revenue by Source for Six Months Ended June 30 (in thousands) | Revenue Source | 2025 | 2024 | | :--- | :--- | :--- | | Payor | $78,343 | $58,453 | | DTE | $18,986 | $19,541 | | Consumer | $9,163 | $13,480 | | Total revenue | $106,492 | $91,474 | - The Board of Directors authorized a share repurchase program, initially for $15.0 million and later increased by an additional $25.0 million. In the first six months of 2025, the company repurchased 3,060,438 shares for $8.4 million5354 Management's Discussion and Analysis of Financial Condition and Results of Operations Management attributes H1 2025 revenue growth to the Payor segment, leading to a narrowed operating loss and improved Adjusted EBITDA, while maintaining strong liquidity Key Business Metrics | Metric | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Number of completed Payor sessions (thousands) | 735.1 | 582.8 | | Number of health plan customers | 31 | 24 | | Number of enterprise customers | 165 | 187 | | Number of Consumer active members (thousands) | 6.6 | 10.7 | - The increase in revenue for the first six months of 2025 was primarily due to a $19.8 million (34.0%) increase in Payor revenue, driven by more completed sessions. This was partially offset by a $4.3 million (32.0%) decrease in Consumer revenue, reflecting a strategic shift in marketing focus towards Payor members96 - General and administrative expenses decreased by $1.6 million (12.8%) for the six months ended June 30, 2025, mainly due to lower severance payments compared to 2024 when certain key executives departed101 Adjusted EBITDA Reconciliation (in thousands) | Line Item | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net loss | $(223) | $(1,940) | | Depreciation and amortization | 1,368 | 421 | | Stock-based compensation | 4,688 | 5,359 | | Financial income, net | (2,851) | (3,422) | | Income tax expense | 199 | 197 | | Non-recurring expenses | 1,057 | 1,338 | | Adjusted EBITDA | $4,238 | $1,953 | Quantitative and Qualitative Disclosures About Market Risk No material changes occurred in market risk disclosures during the six months ended June 30, 2025, compared to the prior annual report - There were no material changes to the information regarding quantitative and qualitative disclosures about market risk during the six months ended June 30, 2025136 Controls and Procedures Management concluded that disclosure controls and procedures were effective as of June 30, 2025, with no material changes to internal control over financial reporting - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of June 30, 2025137 - No material changes to the company's internal control over financial reporting occurred during the second quarter of 2025138 PART II. OTHER INFORMATION Legal Proceedings As of June 30, 2025, the company reports no material pending legal proceedings, consistent with financial statement notes - The Company has no material pending legal proceedings as of June 30, 2025141 Risk Factors No material changes occurred to the risk factors previously disclosed in the company's Annual Report on Form 10-K for 2024 - During the six months ended June 30, 2025, there were no material changes to the risk factors detailed in the Company's Annual Report on Form 10-K for the year ended December 31, 2024142 Unregistered Sales of Equity Securities and Use of Proceeds This section details share repurchase activity for Q2 2025, with all repurchases in April, leaving $20.6 million available under the program Share Repurchases for Q2 2025 | Period | Total Shares Purchased | Average Price Paid Per Share | Approx. Dollar Value Remaining (in thousands) | | :--- | :--- | :--- | :--- | | April 1 - 30 | 541,268 | $2.62 | $20,632 | | May 1 - 31 | — | — | — | | June 1 - 30 | — | — | — | | Total | 541,268 | $2.62 | $20,632 | Defaults Upon Senior Securities The company reports no defaults upon senior securities - None145 Mine Safety Disclosures This item is not applicable to the company - Not applicable146 Other Information No directors or officers adopted, modified, or terminated Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during Q2 2025 - No directors or officers adopted, modified, or terminated a "Rule 10b5-1 trading arrangement" or a "non-Rule 10b5-1 trading arrangement" during the three months ended June 30, 2025147 Exhibits The report includes various exhibits, notably CEO and CFO certifications and Inline XBRL data files - Exhibits filed with the report include CEO and CFO certifications (31.1, 31.2, 32.1, 32.2) and Inline XBRL documents (101.INS, 101.SCH, 104)150
Talkspace(TALK) - 2025 Q2 - Quarterly Report