Talkspace, Inc. (NASDAQ: TALK), today reported first quarter
2023 financial results.
|
|
Three Months |
|
Period Ended March 31, 2023 (Unaudited) |
|
Results |
|
|
Variance from PriorYear % |
|
(In thousands unless otherwise
noted) |
|
|
|
|
|
|
Number of B2B eligible lives at period end (in millions)2 |
|
|
98 |
|
|
|
28 |
% |
Number of completed B2B
sessions |
|
|
171.7 |
|
|
|
90 |
% |
Number of B2C active members
at period end |
|
|
15.1 |
|
|
|
(32 |
)% |
|
|
|
|
|
|
|
Total revenue |
|
$ |
33,336 |
|
|
|
11 |
% |
Gross profit |
|
$ |
16,748 |
|
|
|
11 |
% |
Gross margin % |
|
|
50.2% |
|
|
0.4 |
pts |
Operating expenses |
|
$ |
25,787 |
|
|
|
(29 |
)% |
Net loss |
|
$ |
(8,758 |
) |
|
|
57 |
% |
Adjusted EBITDA1 |
|
$ |
(6,430 |
) |
|
|
65 |
% |
Cash and cash equivalents at
period end |
|
$ |
125,083 |
|
|
|
(32 |
)% |
|
|
|
|
|
|
|
|
|
(1) Adjusted EBITDA is a non-GAAP
financial measure. For a definition of the measure and a
reconciliation to the most directly comparable GAAP measure, see
“Reconciliation of Non-GAAP Results to GAAP Results.”
(2) Does not include ~14M lives added
after March 31st, 2023; Total covered lives were 112M as of May
2nd, 2023.
Dr. Jon Cohen, CEO of Talkspace, said, “We continue to
experience strong momentum in our payor business, as we expand our
relationship with commercial partners and further activate our
member base. We further increased the size and efficiency of our
clinical network, as we continue to build a holistic suite of
products to provide high-quality care to a broad range of
customers. We believe we have a tremendous opportunity in front of
us, and we remain confident in our ability to deliver profitable
growth.”
Jennifer Fulk, CFO of Talkspace said, “Our revenue growth
accelerated significantly in the first quarter, with the
business-to-business (“B2B”) categories contributing 70% of revenue
in the period. We continued our work to optimize our cost structure
to drive operating leverage, narrowing our losses while growing
revenue as we advance toward our goal of reaching break-even
profitability.”
First Quarter 2023 Key Performance Metrics
- Revenue increased 11% over the prior-year period to $33.3
million, driven by a 71% increase in the B2B revenue categories
year-over-year, partially offset by a 40% year-over-year consumer
revenue decline.
- Gross profit increased 11% over the prior-year period to $16.7
million, and gross margin expanded to 50.2% year-over-year, driven
by higher network productivity.
- Operating expenses were $25.8 million, down 29% year-over-year,
driven by a reduction across all our operating cost
categories.
- Net Loss was $(8.8) million, an improvement from $(20.4)
million in the first quarter of 2022, primarily driven by lower
operating expenses and an increase in revenues.
Financial Outlook
The following guidance is based on current market conditions and
expectations and what the Company knows today.
For the Fiscal Year 2023, Talkspace expects:
- Revenue to be in the range of $130 million to $135
million, improved from $125 million to $135 million
- Adjusted EBITDA loss to be in the range of $(21) million to
$(24) million, improved from $(28) million to $(32)
million
The Company now expects to reach break-even Adjusted EBITDA by
the end of the first quarter of 2024, one quarter earlier than
initially guided, with a cash balance of over $95 million.
Conference Call, Presentation Slides,
and Webcast Details
The conference call will be available via audio webcast at
investors.talkspace.com and can also accessed by dialing (888)
330-2391 for U.S. participants, or +1 (240) 789-2702 for
international participants, and referencing participant code
2348878. A replay will be available shortly after the call’s
completion and remain available for approximately 90 days.
About Talkspace
Talkspace (Nasdaq: TALK) is a leading virtual behavioral
healthcare company committed to helping people lead healthier,
happier lives through access to high-quality mental healthcare. At
Talkspace, we believe that mental healthcare is core to overall
healthcare and should be available to everyone.
Talkspace pioneered the ability to text with a licensed
therapist from anywhere and now offers a comprehensive suite of
mental health services from self-guided products to individual and
couples therapy, in addition to psychiatric treatment and
medication management. With Talkspace’s core psychotherapy
offering, members are matched with one of thousands of licensed
providers across all 50 states and can choose from a variety of
subscription plans including live video, text or audio chat
sessions and/or asynchronous text messaging.
All care offered at Talkspace is delivered through an
easy-to-use, fully-encrypted web and mobile platform that meets
HIPAA, federal, and state regulatory requirements. Talkspace covers
approximately 112 million lives as of May 2, 2023, through our
partnerships with employers, health plans, and paid benefits
programs.
For more information, visit www.talkspace.com.
Forward Looking Statements
This press release contains certain forward-looking statements
within the meaning of the Private Securities Litigation Reform Act
of 1995, as amended. All statements contained in this press release
that do not relate to matters of historical fact should be
considered forward-looking, including statements regarding our
financial condition, anticipated financial performance, achieving
profitability, business strategy and plans, market opportunity and
expansion and objectives of our management for future operations.
These forward-looking statements generally are identified by the
words “anticipate,” “believe,” “contemplate,” “continue,” “could,”
“estimate,” “expect,” “forecast”, “future”, “intend,” “may,”
“might”, “opportunity”, “plan,” “possible”, “potential,” “predict,”
“project,” “should,” “strategy”, “strive”, “target,” “will,” or
“would”, the negative of these words or other similar terms or
expressions. The absence of these words does not mean that a
statement is not forward-looking. 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 important
factors could cause actual future events to differ materially from
the forward-looking statements in this press release, including but
not limited to factors and the other risks and uncertainties
described under the caption “Risk Factors” in our Annual Report on
Form 10-K for the year ended December 31, 2022 filed with the
Securities and Exchange Commission (“SEC”) on March 10, 2023, and
our other documents filed 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 we 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 unless required to do
so under applicable law. We do not give any assurance that we will
achieve our expectations.
Contacts
For Investors:Sloane & Co.Neal Nagarajan(301)
273-5662nnagarajan@sloanepr.com
For Media:SKDKJohn Kim(310) 997-5963jkim@skdknick.com
|
Talkspace, Inc. |
Condensed Consolidated Statements of
Operations |
Unaudited |
|
|
|
Three Months Ended March 31, |
|
|
|
|
|
|
2023 |
|
|
2022 (1) |
|
|
% Change |
|
(in thousands, except
percentages, share and per share data) |
|
|
|
|
|
|
|
|
|
Revenue: |
|
|
|
|
|
|
|
|
|
Payor revenue |
|
$ |
14,811 |
|
|
$ |
8,110 |
|
|
|
82.6 |
|
DTE revenue |
|
|
8,676 |
|
|
|
5,661 |
|
|
|
53.3 |
|
Total B2B revenue |
|
|
23,487 |
|
|
|
13,771 |
|
|
|
70.6 |
|
Consumer revenue |
|
|
9,849 |
|
|
|
16,379 |
|
|
|
(39.9 |
) |
Total
revenue |
|
|
33,336 |
|
|
|
30,150 |
|
|
|
10.6 |
|
Cost of
revenues |
|
|
16,588 |
|
|
|
15,129 |
|
|
|
9.6 |
|
Gross
profit |
|
|
16,748 |
|
|
|
15,021 |
|
|
|
11.5 |
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
Research and development, net |
|
|
5,353 |
|
|
|
5,035 |
|
|
|
6.3 |
|
Clinical operations, net |
|
|
1,601 |
|
|
|
1,776 |
|
|
|
(9.9 |
) |
Sales and marketing |
|
|
13,469 |
|
|
|
21,408 |
|
|
|
(37.1 |
) |
General and administrative |
|
|
5,364 |
|
|
|
8,010 |
|
|
|
(33.0 |
) |
Total
operating expenses |
|
|
25,787 |
|
|
|
36,229 |
|
|
|
(28.8 |
) |
Operating loss |
|
|
(9,039 |
) |
|
|
(21,208 |
) |
|
|
57.4 |
|
Financial income, net |
|
|
(424 |
) |
|
|
(869 |
) |
|
|
(51.2 |
) |
Loss
before taxes on income |
|
|
(8,615 |
) |
|
|
(20,339 |
) |
|
|
57.6 |
|
Taxes on
income |
|
|
143 |
|
|
|
21 |
|
|
|
581.0 |
|
Net
loss |
|
$ |
(8,758 |
) |
|
$ |
(20,360 |
) |
|
|
57.0 |
|
Net loss
per share: |
|
|
|
|
|
|
|
|
|
Basic
and Diluted |
|
$ |
(0.05 |
) |
|
$ |
(0.13 |
) |
|
|
61.5 |
|
Weighted average
number of common shares: |
|
|
|
|
|
|
|
|
Basic
and Diluted |
|
|
161,797,781 |
|
|
|
154,083,443 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) For the three months ended March 31, 2022, payor
revenue has been reclassified to include post-session member
revenue related to MBH which was previously included within
consumer revenue.
|
Talkspace, Inc. |
Condensed Consolidated Balance Sheets |
|
|
|
March 31, 2023 |
|
|
December 31, 2022 |
|
(in thousands) |
|
(Unaudited) |
|
|
|
|
ASSETS |
|
|
|
|
|
|
CURRENT ASSETS: |
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
125,083 |
|
|
$ |
138,545 |
|
Accounts receivable |
|
|
12,460 |
|
|
|
9,640 |
|
Other current assets |
|
|
3,813 |
|
|
|
4,372 |
|
Total current assets |
|
|
141,356 |
|
|
|
152,557 |
|
Property and equipment,
net |
|
|
563 |
|
|
|
677 |
|
Intangible assets, net |
|
|
2,343 |
|
|
|
2,529 |
|
Other assets |
|
|
518 |
|
|
|
491 |
|
Total assets |
|
$ |
144,780 |
|
|
$ |
156,254 |
|
LIABILITIES AND STOCKHOLDERS’
EQUITY |
|
|
|
|
|
|
CURRENT LIABILITIES: |
|
|
|
|
|
|
Accounts payable |
|
$ |
7,674 |
|
|
$ |
6,461 |
|
Deferred revenues |
|
|
4,123 |
|
|
|
4,355 |
|
Accrued expenses and other
current liabilities |
|
|
9,800 |
|
|
|
16,502 |
|
Total current
liabilities |
|
|
21,597 |
|
|
|
27,318 |
|
Warrant liabilities |
|
|
1,128 |
|
|
|
939 |
|
Other liabilities |
|
|
418 |
|
|
|
461 |
|
Total liabilities |
|
|
23,143 |
|
|
|
28,718 |
|
Commitments and
contingencies |
|
|
|
|
|
|
STOCKHOLDERS’ EQUITY: |
|
|
|
|
|
|
Common stock |
|
|
16 |
|
|
|
16 |
|
Additional paid-in capital |
|
|
381,581 |
|
|
|
378,722 |
|
Accumulated deficit |
|
|
(259,960 |
) |
|
|
(251,202 |
) |
Total stockholders’
equity |
|
|
121,637 |
|
|
|
127,536 |
|
Total liabilities and
stockholders’ equity |
|
$ |
144,780 |
|
|
$ |
156,254 |
|
|
|
|
|
|
|
|
|
|
Talkspace, Inc. |
Condensed Consolidated Statements of Cash
Flows |
Unaudited |
|
|
|
Three Months Ended March 31, |
|
|
|
2023 |
|
|
2022 |
|
(in thousands) |
|
|
|
|
|
|
Cash flows from operating activities: |
|
|
|
|
|
|
Net loss |
|
$ |
(8,758 |
) |
|
$ |
(20,360 |
) |
Adjustments to reconcile net loss to net cash used in operating
activities: |
|
|
|
|
|
|
Depreciation and amortization |
|
|
306 |
|
|
|
429 |
|
Stock-based compensation |
|
|
2,303 |
|
|
|
2,368 |
|
Remeasurement of warrant liabilities |
|
|
189 |
|
|
|
(875 |
) |
Increase
in accounts receivable |
|
|
(2,820 |
) |
|
|
(800 |
) |
Decrease
in other current assets |
|
|
559 |
|
|
|
4,923 |
|
Increase
in accounts payable |
|
|
1,213 |
|
|
|
2,061 |
|
Decrease
in deferred revenues |
|
|
(232 |
) |
|
|
(1,160 |
) |
Decrease
in accrued expenses and other current liabilities |
|
|
(6,702 |
) |
|
|
(1,837 |
) |
(Decrease) increase in other long-term liabilities |
|
|
(95 |
) |
|
|
105 |
|
Net cash
used in operating activities |
|
|
(14,037 |
) |
|
|
(15,146 |
) |
Cash flows from investing activities: |
|
|
|
|
|
|
Purchase
of property and equipment |
|
|
(9 |
) |
|
|
(88 |
) |
Proceeds
from sale of property and equipment |
|
|
28 |
|
|
|
— |
|
Net cash
provided by (used in) investing activities |
|
|
19 |
|
|
|
(88 |
) |
Cash flows from financing activities: |
|
|
|
|
|
|
Proceeds
from exercise of stock options |
|
|
621 |
|
|
|
2,063 |
|
Payments
for employee taxes withheld related to vested stock-based
awards |
|
|
(65 |
) |
|
|
(558 |
) |
Net cash
provided by financing activities |
|
|
556 |
|
|
|
1,505 |
|
Net
decrease in cash and cash equivalents |
|
|
(13,462 |
) |
|
|
(13,729 |
) |
Cash and
cash equivalents at the beginning of the period |
|
|
138,545 |
|
|
|
198,256 |
|
Cash and
cash equivalents at the end of the period |
|
$ |
125,083 |
|
|
$ |
184,527 |
|
|
|
|
|
|
|
|
|
|
Non-GAAP Financial Measures
In addition to our financial results determined in accordance
with GAAP, we believe adjusted EBITDA, a non-GAAP measure, is
useful in evaluating our operating performance, and our management
uses it as a key performance measure to assess our operating
performance. Because adjusted EBITDA facilitates internal
comparisons of our historical operating performance on a more
consistent basis, we use this measure for business planning
purposes and in evaluating acquisition opportunities. We also use
adjusted EBITDA to evaluate our ongoing operations and for internal
planning and forecasting purposes. We believe that this non-GAAP
financial measure, when taken together with the corresponding GAAP
financial measures, provides meaningful supplemental information
regarding our performance by excluding certain items that may not
be indicative of our business, results of operations or outlook. We
believe that the use of adjusted EBITDA is helpful to our investors
as it is a metric used by management in assessing the health of our
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.
Some of the limitations of adjusted EBITDA include (i) adjusted
EBITDA does not necessarily 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 requirements. In evaluating
adjusted EBITDA, you should be aware that in the future we will
incur expenses similar to the adjustments described herein. Our
presentation of adjusted EBITDA should not be construed as an
inference that our future results will be unaffected by these
expenses or any unusual or non-recurring items. Our 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 we calculate the measure, limiting its usefulness as
a comparative measure. Adjusted EBITDA should not be considered as
an alternative to loss before income taxes, net loss, loss per
share, or any other performance measures derived in accordance with
U.S. GAAP. When evaluating our performance, you should consider
adjusted EBITDA alongside other financial performance measures,
including our net loss and other GAAP results.
A reconciliation is provided below for adjusted EBITDA to net
loss, the most directly comparable financial measure stated in
accordance with GAAP. Investors are encouraged to review our
financial statements prepared in accordance with GAAP and the
reconciliation of our non-GAAP financial measure to its most
directly comparable GAAP financial measure, and not to rely on any
single financial measure to evaluate our business. We do not
provide a forward-looking reconciliation Adjusted EBITDA guidance
as the amount and significance of the reconciling items required to
develop meaningful comparable GAAP financial measures cannot be
estimated at this time without unreasonable efforts. These
reconciling items could be meaningful.
Adjusted EBITDA
We calculate adjusted EBITDA as net loss adjusted to exclude (i)
depreciation and amortization, (ii) interest and other expenses
(income), net, (iii) tax benefit and expense, and (iv) stock-based
compensation expense.
|
Talkspace, Inc. |
Reconciliation of Non-GAAP Results to GAAP
Results |
Unaudited |
|
|
|
Three Months Ended March 31, |
|
|
|
2023 |
|
|
2022 |
|
(in thousands) |
|
|
|
|
|
|
Net loss |
|
$ |
(8,758 |
) |
|
$ |
(20,360 |
) |
Add: |
|
|
|
|
|
|
Depreciation and amortization |
|
|
306 |
|
|
|
429 |
|
Financial income, net (1) |
|
|
(424 |
) |
|
|
(869 |
) |
Taxes on
income |
|
|
143 |
|
|
|
21 |
|
Stock-based compensation |
|
|
2,303 |
|
|
|
2,368 |
|
Adjusted
EBITDA |
|
$ |
(6,430 |
) |
|
$ |
(18,411 |
) |
|
|
|
|
|
|
|
|
|
(1) For the three months ended March 31, 2023, financial
income, net, primarily consisted of $0.6 million of interest income
from our money market accounts offset by $0.2 million in losses
resulting from the remeasurement of warrant liabilities. For the
three months ended March 31, 2022, financial income net, primarily
consisted of $0.9 million in gains resulting from the remeasurement
of warrant liabilities.
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