Talkspace, a leading behavioral healthcare company enabled by a
purpose-built technology platform, today provided business and
financial updates for the first quarter ended March 31,
2021. Net revenue was $27.2 million in the first
quarter of 2021, growing 144.2% from the first quarter of 2020.
Total active members grew more than 110% over the same period. As
of May 1, 2021, Talkspace’s B to B business reached over 55 million
eligible lives.
Oren Frank, Co-founder and CEO of Talkspace, said, “In the first
quarter of 2021 we built on the momentum established in 2020. We
focused on enterprise growth, continued to build our consumer brand
and further scaled our business to deliver strong operating
results.”
“Our first quarter growth affirms our belief that both
individuals and employers’ attitudes towards mental health are
shifting as Americans continue to seek care in record numbers. We
remain committed to our mission of expanding access to care,
leading innovation and disruption in the behavioral health delivery
system by leveraging our purpose-built technology to achieve
improved clinical outcomes.”
First Quarter 2021 Highlights
- Net revenue of $27.2 million during the first quarter of 2021,
compared to $11.1 million for the first quarter of 2020.
- Reaffirm net revenue guidance of $125 million for the full year
2021.
- Executed on B2B growth strategy, adding a combined 32 million
eligible lives between April 1, 2020 and March 31, 2021. Enterprise
clients increased to over 90 as of March 31, 2021, from 25 clients
as of March 31, 2020.
- Continued expansion of B2C subscriber base. Active members
increased to approximately 35,000 as of March 31, 2021, compared to
approximately 22,000 active members as of March 31, 2020.
- Received two multi-year grant awards from the National
Institute of Mental Health to research strategies for enhancing
digital behavioral healthcare.
The following table summarizes the Company’s performance during
the first quarter of 2021, compared to the same prior-year period
(amounts in thousands, except percentages):
|
Quarter Ended March 31, |
Period-Over-Period |
|
|
2021 |
|
|
2020 |
|
Growth |
Number of B2B eligible lives at period end |
|
41,821 |
|
|
9,569 |
|
337.0% |
|
Total number of active members at period end |
|
60.3 |
|
|
28.6 |
|
110.8% |
|
|
|
Net revenue |
$27,157 |
|
$11,120 |
|
144.2% |
|
Gross profit |
|
17,343 |
|
|
5,710 |
|
203.7% |
|
Gross margin % |
|
63.9% |
|
|
51.3% |
|
12.6% |
|
Operating expenses |
|
29,900 |
|
|
13,637 |
|
119.3% |
|
Net loss |
|
(12,738) |
|
|
(7,900) |
|
(61.2%) |
|
Adjusted EBITDA1 |
|
($10,582) |
|
|
($7,508) |
|
(40.9%) |
|
1 Non-GAAP Financial Measure
Key Business
Metrics
Active Members: We consider members “active” (i)
in the case of our B2C members, commencing on the date such member
initiates contact with a provider on our platform until the term of
their monthly, quarterly or bi-annual subscription plan expires,
unless terminated early, and (ii) in the case of our B2B members,
if such members have engaged on our platform during the preceding
25 days, such as sending a text, video or audio message to, or
participating in a video call with, a provider, completing a
satisfaction or progress report survey or signing up for our
platform.
B2B Eligible Lives: Talkspace considers B2B lives “eligible” if
such persons are eligible to receive treatment on the Talkspace
platform, in the case of its enterprise clients, for free when
their employer is under an active contract with Talkspace, or, in
the case of health plan clients, at an agreed upon reimbursement
rate through insurance under an employee assistance program or
other network behavioral health paid benefit program.
Non-GAAP Financial Measures
In addition to Talkspace’s financial results determined in
accordance with GAAP, management believes adjusted EBITDA, a
non-GAAP measure, is useful in evaluating Talkspace’s operating
performance. Talkspace uses adjusted EBITDA to evaluate its ongoing
operations and for internal planning and forecasting purposes.
Talkspace believes that this non-GAAP financial measure, when taken
together with the corresponding GAAP financial measures, provides
meaningful supplemental information regarding its performance by
excluding certain items that may not be indicative of its business,
results of operations or outlook. Talkspace believes that the use
of adjusted EBITDA is helpful to its investors as it is a metric
used by management in assessing the health of its business and our
operating performance. However, non-GAAP financial information is
presented for supplemental informational purposes only, has
limitations as an analytical tool and should not be considered in
isolation or as a substitute for financial information presented in
accordance with GAAP. In addition, other companies, including
companies in Talkspace’s industry, may calculate similarly titled
non-GAAP measures differently or may use other measures to evaluate
their performance, all of which could reduce the usefulness of its
non-GAAP financial measure as a tool for comparison. A
reconciliation is provided below for this non-GAAP financial
measure to net loss, the most directly comparable financial measure
stated in accordance with GAAP. Investors are encouraged to review
Talkspace’s GAAP financial measure and the reconciliation of its
non-GAAP financial measure to its most directly comparable GAAP
financial measure, and not to rely on any single financial measure
to evaluate its business.
Adjusted EBITDA
Adjusted EBITDA is a key performance measure that Talkspace’s
management uses to assess its operating performance. Because
adjusted EBITDA facilitates internal comparisons of Talkspace’s
historical operating performance on a more consistent basis,
management uses this measure for business planning purposes and in
evaluating acquisition opportunities.
Talkspace calculates adjusted EBITDA as net loss adjusted to
exclude (i) interest and other expenses (income), net, (ii) tax
benefit and expense, (iii) depreciation and amortization (iv)
stock-based compensation expense and (v) business combination and
other financing expenses.
The following table presents a reconciliation of adjusted EBITDA
from the most comparable GAAP measure, net loss, for the three
months ended March 31, 2021 and 2020:
|
|
|
Three months ended March 31, |
(in thousands) |
2021 |
|
2020 |
|
Net
loss |
$(12,738) |
|
$(7,900) |
|
Add: |
|
|
|
|
Depreciation and
amortization |
462 |
|
18 |
|
Financial expenses (income),
net |
173 |
|
(30) |
|
Taxes on
income |
8 |
|
3 |
|
|
|
|
|
|
Stock-based
compensation |
1,513 |
|
401 |
|
Adjusted
EBITDA |
$(10,582) |
|
$(7,508) |
|
Some of the limitations of adjusted EBITDA include (i) adjusted
EBITDA does not properly reflect capital commitments to be paid in
the future and (ii) although depreciation and amortization are
non-cash charges, the underlying assets may need to be replaced and
adjusted EBITDA does not reflect these capital expenditures.
Talkspace’s adjusted EBITDA may not be comparable to similarly
titled measures of other companies because they may not calculate
adjusted EBITDA in the same manner as management calculates the
measure, limiting its usefulness as a comparative measure. In
evaluating adjusted EBITDA, you should be aware that in the future
Talkspace will incur expenses similar to the adjustments described
herein. Talkspace’s presentation of adjusted EBITDA should not be
construed as an inference that its future results will be
unaffected by these expenses or any unusual or non-recurring items.
Adjusted EBITDA should not be considered as an alternative to loss
before benefit from income taxes, net loss, earnings per share, or
any other performance measures derived in accordance with U.S.
GAAP. When evaluating Talkspace’s performance, you should consider
adjusted EBITDA alongside other financial performance measures,
including its net loss and other GAAP results.
About Talkspace
Talkspace is a leading healthcare company enabled by a
purpose-built technology platform. As a digital healthcare company,
all care is delivered through an easy-to-use and fully encrypted
web and mobile platform, consistent with HIPAA and other state
regulatory requirements.
Today, the need for care feels more urgent than ever, and when
seeking treatment, whether it's psychiatric, adolescent, or couples
therapy, Talkspace offers treatment options for almost every need.
With Talkspace, members can send their dedicated therapists text,
video, and voice messages anytime, from anywhere, and engage in
live video sessions. As of May 2021, over 2 million people have
used Talkspace, and over 55 million lives were covered for
Talkspace through insurance and employee assistance programs or
other network behavioral health paid benefit programs.
On January 13, 2021, Talkspace announced that it entered into a
definitive merger agreement with Hudson Executive Investment Corp.
(NASDAQ: HEC, HECCU, HECCW). The parties are working towards a
close in Q2 2021.
Contacts
For Media:SKDKJohn Kim310-997-5963jkim@skdknick.com
For Investors:Westwicke, an ICR CompanyBob East / Jordan
Kohnstam443-213-0500TalkspaceIR@westwicke.com
Additional Information and Where to Find It
This press release relates to a proposed transaction between
Talkspace and Hudson Executive Investment Corp. (“HEIC”). This
press release does not constitute an offer to sell or exchange, or
the solicitation of an offer to buy or exchange, any securities,
nor shall there be any sale of securities in any jurisdiction in
which such offer, sale or exchange would be unlawful prior to
registration or qualification under the securities laws of any such
jurisdiction. HEIC has filed a registration statement on Form S-4
with the SEC, which will include a document that serves as a
prospectus and proxy statement of HEIC, referred to as a proxy
statement/prospectus. A proxy statement/prospectus will be sent to
all HEIC shareholders. HEIC also will file other documents
regarding the proposed transaction with the SEC. Before making any
voting decision, investors and security holders of HEIC are urged
to read the registration statement and the related proxy
statement/prospectus (including all amendments and supplements
thereto) and all other relevant documents filed or that will be
filed with the SEC in connection with the proposed transaction as
they become available because they will contain important
information about the proposed transaction.
Investors and security holders will be able to obtain free
copies of the registration statement, the proxy
statement/prospectus and all other relevant documents filed or that
will be filed with the SEC by HEIC through the website maintained
by the SEC at www.sec.gov.
The documents filed by HEIC with the SEC also may be obtained
free of charge at HEIC'S website at
https://hudsoninvestcorp.com/investors or upon written request to
Hudson Executive Investment Corp., 570 Lexington Avenue, 35th
Floor, New York, NY 10022.
Participants in Solicitation
HEIC and its directors and executive officers may be deemed to
be participants in the solicitation of proxies from HEIC's
shareholders in connection with the proposed transaction. A list of
the names of such directors and executive officers and information
regarding their interests in the business combination will be
contained in the proxy statement/prospectus when available. You may
obtain free copies of these documents as described in the preceding
paragraph.
Forward Looking Statements
This press release contains certain forward-looking statements
within the meaning of the federal securities laws with respect to
the proposed transaction between Talkspace and HEIC, including
statements regarding the anticipated benefits of the transaction,
the anticipated timing of the transaction, the services offered by
Talkspace and the markets in which it operates, and future
financial condition and performance of Talkspace and expected
financial impacts of the transaction (including future revenue, pro
forma enterprise value and cash balance), the satisfaction of
closing conditions to the transaction, the PIPE transaction, and
the level of redemptions of HEIC's public shareholders. These
forward-looking statements generally are identified by the words
"believe," "project," "expect," "anticipate," "estimate," "intend,"
"strategy," "future," "opportunity," "plan," "may," "should,"
"will," "would," "will be," "will continue," "will likely result,"
and similar expressions. Forward-looking statements are
predictions, projections and other statements about future events
that are based on current expectations and assumptions and, as a
result, are subject to risks and uncertainties. Many factors could
cause actual future events to differ materially from the
forward-looking statements in this press release, including but not
limited to: (i) the risk that the transaction may not be completed
in a timely manner or at all, which may adversely affect the price
of HEIC's securities, (ii) the risk that the transaction may not be
completed by HEIC's business combination deadline and the potential
failure to obtain an extension of the business combination deadline
if sought by HEIC, (iii) the failure to satisfy the conditions to
the consummation of the transaction, including the approval of the
merger agreement by the shareholders of HEIC, the satisfaction of
the minimum trust account amount following redemptions by HEIC's
public shareholders and the receipt of certain governmental and
regulatory approvals, (iv) the lack of a third party valuation in
determining whether or not to pursue the business combination, (v)
the occurrence of any event, change, or other circumstance that
could give rise to the termination of the merger agreement, (vi)
the effect of the announcement or pendency of the transaction on
Talkspace's business relationships, performance, and business
generally, (vii) risks that the proposed transaction disrupts
current plans and operations of Talkspace, (viii) the outcome of
any legal proceedings that may be instituted against Talkspace or
against HEIC related to the merger agreement or the proposed
transaction, (ix) the ability to maintain the listing of HEIC's
securities on The Nasdaq Stock Market, (x) the price of HEIC's
securities may be volatile due to a variety of factors, including
changes in the competitive and highly regulated industries in which
HEIC plans to operate, variations in performance across
competitors, changes in laws and regulations affecting HEIC's
business and changes in the combined capital structure, (xi) the
ability to implement business plans, forecasts, and other
expectations after the completion of the proposed business
combination, and identify and realize additional opportunities, and
(xii) the risk of downturns in the highly competitive telehealth
and teletherapy markets. The foregoing list of factors is not
exhaustive. You should carefully consider the foregoing factors and
the other risks and uncertainties described in the "Risk Factors"
section of HEIC's Registration Statement on Form S-4 discussed
above and other documents filed by HEIC from time to time with the
SEC. These filings identify and address other important risks and
uncertainties that could cause actual events and results to differ
materially from those contained in the forward-looking statements.
Forward-looking statements speak only as of the date they are made.
Readers are cautioned not to put undue reliance on forward-looking
statements, and Talkspace and HEIC assume no obligation and do not
intend to update or revise these forward-looking statements,
whether as a result of new information, future events, or
otherwise. Neither Talkspace nor HEIC gives any assurance that
either Talkspace or HEIC will achieve its expectations.
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