Talkspace(US:TALK)2025-11-06 13:57Revenue Growth - For the three months ended September 30, 2025, total revenue increased by $12.0 million, or 25.3%, primarily due to a 42.1% increase in Payor revenue[97] - For the nine months ended September 30, 2025, total revenue increased by $27.0 million, or 19.4%, primarily due to a 36.9% increase in Payor revenue[98] - Revenue for the three months ended September 30, 2025 increased by 35.4% to $34.7 million compared to $25.7 million for the same period in 2024, driven by a shift towards Payor revenue mix[101] Customer Metrics - The number of completed Payor sessions increased by 36.6% for the three months ended September 30, 2025, driven by a 29.1% increase in active Payor members and a 30.8% increase in the number of health plan customers[97] - As of September 30, 2025, the number of health plan customers increased to 34 from 26 in the previous year, while the number of enterprise customers decreased to 163 from 189[81] - Consumer active members decreased by 25.9% for the three months ended September 30, 2025, due to the company's strategic decision to focus marketing efforts on attracting Payor members[97] Financial Performance - The company reported a net income of $3.3 million for the three months ended September 30, 2025, compared to a net income of $1.9 million for the same period in 2024, representing a 73.5% increase[96] - Financial income, net decreased by 36.6% to $1.1 million for the three months ended September 30, 2025, and by 23.3% to $3.9 million for the nine months ended September 30, 2025, due to reduced interest income from marketable securities[109][110] Expenses - The cost of revenue, excluding depreciation and amortization, increased by 35.4% for the three months ended September 30, 2025, reflecting the growth in the number of sessions and provider network[96] - Cost of revenue for the nine months ended September 30, 2025 increased by 27.2% to $94.4 million from $74.2 million in the prior year, primarily due to increased therapist hours from more Payor sessions[101] - Research and development expenses decreased by 22.4% for the three months ended September 30, 2025, compared to the same period in 2024[96] - Research and development expenses decreased by 22.4% to $1.8 million for the three months ended September 30, 2025, and by 10.7% to $7.2 million for the nine months ended September 30, 2025, mainly due to reduced employee-related costs[102][103] - Sales and marketing expenses increased by 7.7% to $13.2 million for the three months ended September 30, 2025, and by 7.5% to $41.4 million for the nine months ended September 30, 2025, driven by higher direct marketing costs[105][106] - General and administrative expenses decreased by 9.3% to $16.0 million for the nine months ended September 30, 2025, primarily due to lower severance payments related to executive departures[107] Cash and Liquidity - As of September 30, 2025, the company had $43.7 million in cash and cash equivalents, down from $76.7 million as of December 31, 2024, and $52.1 million in marketable securities[119] - Net cash provided by operating activities was $3.2 million for the nine months ended September 30, 2025, a decrease from $7.6 million in the prior year, primarily due to timing of customer payments[126] - The company anticipates being able to fund its cash needs for at least the next 12 months using available cash and cash equivalents, but may require additional capital for future growth initiatives[121] Share Repurchase and Debt - The company repurchased 3,516,677 shares for $8.8 million during the three months ended September 30, 2025, and 6,577,115 shares for $17.2 million during the nine months ended September 30, 2025[123] - As of September 30, 2025, the company had no short-term or long-term debt, or significant long-term liabilities, with only a non-material long-term operating lease for office space in New York, NY[130] Legal and Compliance - There were no material legal proceedings, claims, or litigation as of September 30, 2025, and the company has not incurred any material costs related to indemnifications to date[131][132] - The company does not invest in any off-balance sheet vehicles that provide liquidity, capital resources, market or credit risk support, or expose it to any liabilities not reflected in its financial statements[134] - The company has not incurred any material costs as a result of indemnifications related to breaches of customer data or third-party intellectual property rights[132] Accounting and Risk - There were no material changes to critical accounting policies and estimates during the nine months ended September 30, 2025 compared to the previous fiscal year[137] - There were no material changes to market risk disclosures during the nine months ended September 30, 2025 compared to the previous fiscal year[144] - The company’s forward-looking statements include expectations about future results of operations, financial position, and market growth, but are subject to known and unknown risks and uncertainties[140][141] Insurance - The company maintains director and officer liability insurance coverage to recover a portion of any future amounts paid related to indemnification obligations[133]