Talkspace, Inc. Q4 FY2024 earnings call

• Revenue increased 23% YOY to $47.4 million, with adjusted EBITDA at $2.4 million for third consecutive profitable quarter. • Payor segment grew 45% YOY, total covered lives nearly 160 million (+40% YOY), total sessions 316,000 (+38% YOY). • Progress on being in-network for Medicare beneficiaries; expanded into Medicare Advantage and partnered with Wisdo for seniors. • Launched Talkspace for active military personnel and their dependents. • Direct to Enterprise segment revenue $9.4 million, up 17% YOY, driven by teens initiatives and new partnerships. • Partnered with Amazon Health Services for easier discovery of Talkspace.

For the third quarter, revenue was $47.4 million, up 23% YOY. Payor segment: revenue $32 million, up 45% YOY, accounting for the largest revenue category. Sessions completed by payor members were 316,000, up 38% YOY. Direct to Enterprise segment: revenue $9.4 million, up 17% YOY. Consumer segment: revenue $6 million, down 30% YOY due to focus on Payor growth.

• Reaffirmed 2024 financial guidance: revenue $185-195 million, adjusted EBITDA $4-8 million. • 2025 focus on unlocking opportunity with ~200 million covered lives, including progress with Medicare and military segments. • Substantially all revenue growth in payor Q2/Q3 came from existing covered lives, with 2025 to see re-acceleration from new segments.

Q: Question about Amazon partnership and activation rate.

A: Jon Cohen discussed positive early results of Amazon partnership, Ian Harris mentioned it's a marketing channel driving brand awareness and high intent.

Q: Question on EBITDA guidance and revenue trajectory.

A: Ian Harris explained revenue growth in 2024 from existing covered lives, with 2025 to see re-acceleration from new segments like Medicare and military.

Q: Question on B2C business trajectory.

A: Jon Cohen stated B2C is not cannibalized, with natural decrease in B2C due to increased eligible lives under insurance.

Q: Question on customer acquisition costs and marketing.

A: Ian Harris discussed data-driven marketing and nimble operation, Jon Cohen mentioned different acquisition costs per segment.

Q: Question on DTE segment pipeline and payor value-based care.

A: Jon Cohen talked about variable DTE segments and mentioned early stage value-based contracts in payor with metrics like time to initial evaluation.