Talkspace, Inc. (“Talkspace” or the “Company”) (NASDAQ: TALK),
today reported second quarter 2024 financial results.
|
|
Three Months |
|
Six Months |
|
|
|
June 30, 2024 (Unaudited) |
|
Results |
|
% Variance from Prior Year |
|
Results |
|
% Variance from Prior Year |
(In
thousands unless otherwise noted) |
|
|
|
|
|
|
|
|
Number of eligible lives at period end (in millions) |
|
|
145.3 |
|
|
33 |
% |
|
|
145.3 |
|
|
33 |
% |
Number of completed Payor sessions |
|
|
298.6 |
|
|
49 |
% |
|
|
582.8 |
|
|
57 |
% |
Number of Consumer active members at period end |
|
|
10.7 |
|
|
(22 |
)% |
|
|
10.7 |
|
|
(22 |
)% |
|
|
|
|
|
|
|
|
|
Total revenue |
|
$ |
46,058 |
|
|
29 |
% |
|
$ |
91,474 |
|
|
33 |
% |
Gross profit |
|
$ |
20,951 |
|
|
18 |
% |
|
$ |
42,682 |
|
|
24 |
% |
Gross margin % |
|
|
45.5% |
|
|
|
|
|
46.7% |
|
|
|
Operating expenses |
|
$ |
24,437 |
|
|
1 |
% |
|
$ |
47,847 |
|
|
(4 |
)% |
Net
loss |
|
$ |
(474 |
) |
|
90 |
% |
|
$ |
(1,940 |
) |
|
86 |
% |
Adjusted EBITDA1 |
|
$ |
1,179 |
|
|
130 |
% |
|
$ |
1,953 |
|
|
119 |
% |
Cash and cash equivalents at period end |
|
$ |
114,913 |
|
|
— |
|
|
$ |
114,913 |
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
Adjusted EBITDA is a non-GAAP financial measure. For a definition
of the measure and a reconciliation to the most direct comparable
GAAP measure, see “Reconciliation of Non-GAAP Results to GAAP
Results.” |
|
“Our robust second quarter performance reflects
continued business execution, resulting in 29% revenue growth and
our second consecutive quarter of Adjusted EBITDA profitability. We
expanded our covered lives to over 145 million, launched our
Medicare offering in 12 states, and made strides in optimizing our
marketing efforts,” said Dr. Jon Cohen, CEO of Talkspace.
Dr. Cohen added, “This positive momentum stems
from our ongoing commitment to enhancing both provider experience
and patient journey, while focusing on product quality - key
differentiators for Talkspace. I’m encouraged by our results, which
underscore our dedication to making high-quality mental health care
more accessible.”
Second Quarter 2024 Key Performance Metrics
- Revenue increased 29% over the prior-year period to $46.1
million, driven by a 62% year-over-year increase in Payor revenue
and a 20% year-over-year increase in Direct to Enterprise (“DTE”)
revenue; partially offset by a 28% year-over-year Consumer revenue
decline.
- Gross profit increased 18% over the prior-year period to $21
million, and gross margin declined to 45.5% from 50% in the
prior-year period, driven by a shift in revenue mix towards
Payor.
- Operating expenses were $24.4 million, an increase of 1%
year-over-year, driven primarily by higher general and
administrative expenses.
- Net loss was $(0.5) million, an improvement from $(4.7) million
net loss in the second quarter of 2023, primarily driven by an
increase in revenues, partially offset by an increase in cost of
revenues.
- Adjusted EBITDA was $1.2 million, an improvement from $(4.0)
million in the second quarter of 2023, primarily driven by an
increase in revenues, partially offset by an increase in cost of
revenues.
Financial Guidance
Talkspace continues to expect fiscal year 2024
revenue to be in the range of $185 million to $195 million, growth
of 23-30%, and adjusted EBITDA to be in the range of $4 million to
$8 million.
Share Repurchase Program
During the second quarter of 2024, Talkspace
repurchased $8.0 million of common stock under its initial share
repurchase program. On August 1, 2024 the Company’s Board of
Directors approved an additional share repurchase program
authorizing the Company to repurchase up to twenty-five million
dollars ($25 million) over the next 24 months. With the new
authorization, the Company may repurchase, in aggregate, up to
thirty-two million dollars ($32 million) of its outstanding shares
of common stock during the remainder of the programs. The Company
may repurchase the shares periodically through various methods in
compliance with applicable state and federal securities laws. The
timing of purchases and the target number of shares will be
determined by Management at its discretion based on an evaluation
of the Company’s stock price, market conditions and other corporate
considerations. Such repurchases will be funded from cash on hand.
The repurchase program may be modified, suspended, or discontinued
at any time at the Company’s discretion without prior notice.
Conference Call, Presentation Slides,
and Webcast Details
The Second Quarter 2024 earnings conference call
and webcast will be held Tuesday, August 6, 2024, at 8:30 a.m. E.T.
The conference call will be available via audio webcast at
investors.talkspace.com and can also be 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 provider 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 health 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, including therapy for individuals,
teens, and couples, as well as psychiatric treatment and medication
management (18+). With Talkspace’s core therapy offerings, members
are matched with one of thousands of licensed therapists within
days and can engage in live video, audio, or chat sessions, and/or
unlimited asynchronous text messaging sessions.
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. More
than 151 million Americans have access to Talkspace through their
health insurance plans, employee assistance programs, our
partnerships with leading healthcare companies, or as a free
benefit through their employer, school, or government agency.
For more information, visit
www.talkspace.com.
For Investors:ICR
WestwickeTalkspaceIR@westwicke.com
For Media:John KimSKDK(310)
997-5963jkim@skdknick.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 most recent Annual Report on Form 10-K filed with
the Securities and Exchange Commission (“SEC”) on March 13, 2024,
subsequent quarterly reports on Form 10-Q 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.
Talkspace, Inc.Condensed Consolidated
Statements of Operations |
|
|
|
Three Months Ended June 30, |
|
|
|
|
|
Six Months Ended June 30, |
|
|
|
|
|
|
2024 |
|
|
2023 |
|
|
% Change |
|
|
2024 |
|
|
2023 |
|
|
% Change |
|
(in
thousands, except percentages, share and per share data) |
|
Unaudited |
|
|
Unaudited |
|
|
|
|
|
Unaudited |
|
|
Unaudited |
|
|
|
|
Revenue: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Payor revenue |
|
$ |
29,945 |
|
|
$ |
18,539 |
|
|
|
61.5 |
|
|
$ |
58,453 |
|
|
$ |
33,350 |
|
|
|
75.3 |
|
DTE revenue |
|
|
9,628 |
|
|
|
8,039 |
|
|
|
19.8 |
|
|
|
19,541 |
|
|
|
16,715 |
|
|
|
16.9 |
|
Consumer revenue |
|
|
6,485 |
|
|
|
9,067 |
|
|
|
(28.5 |
) |
|
|
13,480 |
|
|
|
18,916 |
|
|
|
(28.7 |
) |
Total revenue |
|
|
46,058 |
|
|
|
35,645 |
|
|
|
29.2 |
|
|
|
91,474 |
|
|
|
68,981 |
|
|
|
32.6 |
|
Cost of revenues |
|
|
25,107 |
|
|
|
17,833 |
|
|
|
40.8 |
|
|
|
48,792 |
|
|
|
34,421 |
|
|
|
41.8 |
|
Gross profit |
|
|
20,951 |
|
|
|
17,812 |
|
|
|
17.6 |
|
|
|
42,682 |
|
|
|
34,560 |
|
|
|
23.5 |
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Research and development |
|
|
2,163 |
|
|
|
4,171 |
|
|
|
(48.1 |
) |
|
|
5,902 |
|
|
|
9,524 |
|
|
|
(38.0 |
) |
Clinical operations, net |
|
|
1,661 |
|
|
|
1,675 |
|
|
|
(0.8 |
) |
|
|
3,125 |
|
|
|
3,276 |
|
|
|
(4.6 |
) |
Sales and marketing |
|
|
13,269 |
|
|
|
13,045 |
|
|
|
1.7 |
|
|
|
26,278 |
|
|
|
26,514 |
|
|
|
(0.9 |
) |
General and administrative |
|
|
7,344 |
|
|
|
5,329 |
|
|
|
37.8 |
|
|
|
12,542 |
|
|
|
10,693 |
|
|
|
17.3 |
|
Total operating expenses |
|
|
24,437 |
|
|
|
24,220 |
|
|
|
0.9 |
|
|
|
47,847 |
|
|
|
50,007 |
|
|
|
(4.3 |
) |
Operating loss |
|
|
(3,486 |
) |
|
|
(6,408 |
) |
|
|
45.6 |
|
|
|
(5,165 |
) |
|
|
(15,447 |
) |
|
|
66.6 |
|
Financial (income), net |
|
|
(3,044 |
) |
|
|
(1,712 |
) |
|
|
77.8 |
|
|
|
(3,422 |
) |
|
|
(2,136 |
) |
|
|
60.2 |
|
Loss before taxes on income |
|
|
(442 |
) |
|
|
(4,696 |
) |
|
|
90.6 |
|
|
|
(1,743 |
) |
|
|
(13,311 |
) |
|
|
86.9 |
|
Taxes on income |
|
|
32 |
|
|
|
8 |
|
|
|
300.0 |
|
|
|
197 |
|
|
|
151 |
|
|
|
30.5 |
|
Net
loss |
|
$ |
(474 |
) |
|
$ |
(4,704 |
) |
|
|
89.9 |
|
|
$ |
(1,940 |
) |
|
$ |
(13,462 |
) |
|
|
85.6 |
|
Net
loss per share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and Diluted |
|
$ |
(0.00 |
) |
|
$ |
(0.03 |
) |
|
|
90.0 |
|
|
$ |
(0.01 |
) |
|
$ |
(0.08 |
) |
|
|
87.5 |
|
Weighted average number of common shares: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and Diluted |
|
|
169,148,522 |
|
|
|
164,195,697 |
|
|
|
|
|
|
168,997,734 |
|
|
|
163,003,363 |
|
|
|
|
Talkspace, Inc.Condensed Consolidated
Balance Sheets |
|
|
|
|
|
|
|
|
|
|
|
June 30, 2024 |
|
|
December 31, 2023 |
|
(in
thousands) |
|
Unaudited |
|
|
|
|
ASSETS |
|
|
|
|
|
|
CURRENT ASSETS: |
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
114,913 |
|
|
$ |
123,908 |
|
Accounts receivable, net |
|
|
11,554 |
|
|
|
10,174 |
|
Other current assets |
|
|
2,302 |
|
|
|
5,718 |
|
Total current assets |
|
|
128,769 |
|
|
|
139,800 |
|
Other long-term assets |
|
|
5,021 |
|
|
|
2,421 |
|
Total assets |
|
$ |
133,790 |
|
|
$ |
142,221 |
|
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
|
|
|
CURRENT LIABILITIES: |
|
|
|
|
|
|
Accounts payable |
|
$ |
7,733 |
|
|
$ |
6,111 |
|
Deferred revenues |
|
|
2,733 |
|
|
|
3,069 |
|
Accrued expenses and other current liabilities |
|
|
7,313 |
|
|
|
12,468 |
|
Total current liabilities |
|
|
17,779 |
|
|
|
21,648 |
|
Warrant liabilities |
|
|
1,332 |
|
|
|
1,842 |
|
Other liabilities |
|
|
635 |
|
|
|
85 |
|
Total liabilities |
|
|
19,746 |
|
|
|
23,575 |
|
STOCKHOLDERS’ EQUITY: |
|
|
|
|
|
|
Common stock |
|
|
16 |
|
|
|
16 |
|
Additional paid-in capital |
|
|
386,352 |
|
|
|
389,014 |
|
Accumulated deficit |
|
|
(272,324 |
) |
|
|
(270,384 |
) |
Total stockholders’ equity |
|
|
114,044 |
|
|
|
118,646 |
|
Total liabilities and stockholders’ equity |
|
$ |
133,790 |
|
|
$ |
142,221 |
|
Talkspace, Inc.Condensed Consolidated
Statements of Cash Flows |
|
|
|
Six Months Ended June 30, |
|
|
|
2024 |
|
|
2023 |
|
(in
thousands) |
|
Unaudited |
|
|
Unaudited |
|
Cash flows from operating activities: |
|
|
|
|
|
|
Net
loss |
|
$ |
(1,940 |
) |
|
$ |
(13,462 |
) |
Adjustments to reconcile net loss to net cash used in operating
activities: |
|
|
|
|
|
|
Depreciation and amortization |
|
|
421 |
|
|
|
608 |
|
Stock-based compensation |
|
|
5,359 |
|
|
|
4,432 |
|
Remeasurement of warrant liabilities |
|
|
(510 |
) |
|
|
(119 |
) |
(Increase) decrease in accounts receivable |
|
|
(1,380 |
) |
|
|
1,220 |
|
Decrease in other current assets |
|
|
3,416 |
|
|
|
1,452 |
|
Increase (decrease) in accounts payable |
|
|
1,622 |
|
|
|
(977 |
) |
Decrease in deferred revenues |
|
|
(336 |
) |
|
|
(672 |
) |
Decrease in accrued expenses and other current liabilities |
|
|
(5,155 |
) |
|
|
(6,058 |
) |
Other |
|
|
(79 |
) |
|
|
(172 |
) |
Net
cash provided by (used in) operating activities |
|
|
1,418 |
|
|
|
(13,748 |
) |
Cash flows from investing activities: |
|
|
|
|
|
|
Capitalized internal-use software costs |
|
|
(2,110 |
) |
|
|
— |
|
Purchase of computer and equipment |
|
|
(40 |
) |
|
|
(10 |
) |
Other |
|
|
— |
|
|
|
28 |
|
Net
cash (used in) provided by investing activities |
|
|
(2,150 |
) |
|
|
18 |
|
Cash flows from financing activities: |
|
|
|
|
|
|
Proceeds from exercise of stock options |
|
|
1,584 |
|
|
|
1,490 |
|
Payments for employee taxes withheld related to vested stock-based
awards |
|
|
(1,843 |
) |
|
|
(201 |
) |
Repurchase and cancellation of common stock |
|
|
(8,004 |
) |
|
|
— |
|
Net
cash (used in) provided by financing activities |
|
|
(8,263 |
) |
|
|
1,289 |
|
Net
decrease in cash and cash equivalents |
|
|
(8,995 |
) |
|
|
(12,441 |
) |
Cash and cash equivalents at the beginning of the period |
|
|
123,908 |
|
|
|
138,545 |
|
Cash and cash equivalents at the end of the period |
|
$ |
114,913 |
|
|
$ |
126,104 |
|
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 of 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, (iv) stock-based compensation expense, and (v) certain
non-recurring expenses, where applicable.
Talkspace, Inc.Reconciliation of Non-GAAP
Results to GAAP Results |
|
|
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
|
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
(in
thousands) |
|
Unaudited |
|
|
Unaudited |
|
|
Unaudited |
|
|
Unaudited |
|
Net loss |
|
$ |
(474 |
) |
|
$ |
(4,704 |
) |
|
$ |
(1,940 |
) |
|
$ |
(13,462 |
) |
Add: |
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
|
220 |
|
|
|
302 |
|
|
|
421 |
|
|
|
608 |
|
Financial (income), net (1) |
|
|
(3,044 |
) |
|
|
(1,712 |
) |
|
|
(3,422 |
) |
|
|
(2,136 |
) |
Taxes on income |
|
|
32 |
|
|
|
8 |
|
|
|
197 |
|
|
|
151 |
|
Stock-based compensation |
|
|
3,107 |
|
|
|
2,129 |
|
|
|
5,359 |
|
|
|
4,432 |
|
Non-recurring expenses (2) |
|
|
1,338 |
|
|
|
— |
|
|
|
1,338 |
|
|
|
— |
|
Adjusted EBITDA |
|
$ |
1,179 |
|
|
$ |
(3,977 |
) |
|
$ |
1,953 |
|
|
$ |
(10,407 |
) |
|
(1)
For the three months ended June 30, 2024 and 2023, financial
(income), net, primarily consisted of $1.5 million (for both
periods) of interest income from our money market accounts, and
$1.7 million and $0.3 million, respectively, in unrealized gains
resulting from the remeasurement of warrant liabilities. For the
six months ended June 30, 2024 and 2023, financial (income), net,
primarily consisted of $3.1 million and $2.1 million, respectively,
of interest income from our money market accounts and $0.5 million
and $0.1 million, respectively, in unrealized gains resulting from
the remeasurement of warrant liabilities.(2) For the three and six
months ended June 30, 2024, non-recurring expenses, primarily
consisted of severance costs related to the departure of key
executives of Talkspace and other related costs. |
|
A photo accompanying this announcement is available at
https://www.globenewswire.com/NewsRoom/AttachmentNg/74a7505e-f12a-4d68-a3ff-716ecd785f0f
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