4Q 2023 Payor revenue grew 138% year-over-year
4Q 2023 Operating expenses of $23.6 million, down 37% year-over-year
4Q 2023 Net loss of $1.3 million; Adjusted EBITDA1 loss of $0.3 million, an improvement of 97% year-over-year
Provides 2024 guidance with revenue $185-$195 million and adjusted EBITDA1 $4-$8 million
Announces Initial Share Repurchase Program of $15M
NEW YORK, Feb. 22, 2024 (GLOBE NEWSWIRE) — Talkspace, Inc. (NASDAQ:TALK), today reported fourth quarter and full year 2023 financial results.
Three Months
Full Year
Unaudited
Year Ended December 31, 2023
Results
Variance from Prior Year %
Results
Variance from Prior Year %
(In thousands unless otherwise noted)
Number of eligible lives at year end (in millions)
131
42%
131
42%
Number of completed Payor sessions
249.8
95%
850.6
99%
Number of Consumer active members at year end
11.7
(24)%
11.7
(24)%
Total revenue
$42,418
40%
$150,045
25%
Gross profit
$20,971
30%
$74,380
23%
Gross margin %
49.4%
49.6%
Operating expenses
$23,554
(37)%
$97,589
(32)%
Net loss
$(1,306)
93%
$(19,182)
76%
Adjusted EBITDA1
$(306)
97%
$(13,529)
77%
Cash and cash equivalents at year end
$123,908
—
$123,908
—
(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.”
Dr. Jon Cohen, CEO of Talkspace, said, “2023 was a pivotal year for Talkspace, demonstrating our commitment to strategic execution. Our achievements and streamlined strategy have significantly fortified our foundation for 2024. We’re poised for substantial growth in Payor revenue and continue to lead in covered mental healthcare. The opportunities in Direct to Enterprise (“DTE”) are vast, and with our scalable infrastructure, we are set for profitable expansion.”
Jennifer Fulk, CFO of Talkspace, said, “The strategic measures we’ve implemented throughout the past year have significantly strengthened our financial foundation and operational efficiency. Our disciplined approach to cost management and investment in scalable capabilities have not only enhanced our operating leverage but also positioned us well for sustained profitable growth.”
Fourth Quarter 2023 Key Performance Metrics
Revenue increased 40% over the prior-year period to $42.4 million, driven by a 138% year-over-year increase in Payor revenue and a 3% year-over-year increase in DTE revenue; partially offset by a 26% year-over-year consumer revenue decline.
Gross profit increased 30% over the prior-year period to $21.0 million, and gross margin declined to 49.4% from 53.5% year-over-year, driven by a shift in revenue mix towards Payor consistent with our strategic objectives.
Operating expenses were $23.6 million, down 37% year-over-year, driven by a reduction across all of our operating cost categories.
Net loss was $(1.3) million, an improvement from $(18.3) million net loss in the fourth quarter of 2022, primarily driven by lower operating expenses, and an increase in revenue.
Full Year 2023 Key Performance Metrics
Revenue increased 25% over the prior year to $150.0 million, driven by a 123% year-over-year increase in Payor revenue and a 19% year-over-year increase in DTE revenue; partially offset by a 35% year-over-year consumer revenue decline.
Gross profit increased 23% over the prior year to $74.4 million, and gross margin declined to 49.6% from 50.5% year-over-year, driven by a shift in revenue mix towards Payor.
Operating expenses were $97.6 million, down 32% year-over-year, driven by a reduction across all of our operating cost categories.
Net loss was $(19.2) million, an improvement from $(79.7) million net loss in 2022, primarily driven by lower operating expenses, and an increase in revenue.
Financial Guidance
The following guidance is based on current market conditions and expectations and the information available to the Company today:
For 2024 Talkspace expects revenue to be in the range of $185 million to $195 million, and adjusted EBITDA to be in the range of $4 million to $8 million.
Share Repurchase Program
The Company’s Board of Directors has approved an initial share repurchase program authorizing the Company to repurchase up to fifteen million dollars ($15,000,000) of its outstanding shares of common stock over the next twenty-four months. The Company may repurchase the shares periodically through various methods in compliance with applicable state and federal securities laws. The timing of purchases, the target number of shares and the pricing per purchase will be determined by Management at its discretion. 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 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 130 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:
Neal Nagarajan
Sloane & Company
(301) 273-5662
nnagarajan@sloanepr.com
For Media:
John Kim
SKDK
(310) 997-5963
jkim@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 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.
Talkspace, Inc.
Consolidated Statements of Operations
Three Months Ended
December 31,
Year Ended
December 31,
2023
2022
% Change
2023
2022
% Change
(in thousands, except percentages, share and per share data)
Unaudited
Unaudited
Revenue:
Payor revenue
$25,362
$10,665
137.8
$80,823
$36,168
123.5
DTE revenue
8,897
8,615
3.3
33,614
28,241
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