TALKW

• Delivered record revenue of $59.4 million and adjusted EBITDA of $5 million. - Active payer members saw an 8% sequential growth and 29% year-over-year growth, while payer sessions increased by 12% sequentially and 37% year-over-year. - Enhanced marketing efficiency by targeting specific new audiences such as the military and their dependents, and leveraging AI-driven tactics. - Entered into networks with several new Blues plans and secured a competitive takeaway of a large national EAP. - Made progress in embedding within payer partner ecosystems, managed and curated a network of around 6,000 clinicians. - Brand awareness improved with over 35% of people recognizing the Talkspace name. - Psychiatry initial session volume rose by 46% during the quarter, and the psychiatry provider network grew nearly 50% from Q2. - Acquired Wisdo Health, a clinically proven AI-powered social health platform. - Achieved significant progress in integrating AI into all aspects of the business, including multiple initiatives to enhance the customer member journey and launching proprietary risk algorithms. - Developed a behavioral health-specific large language model that outperformed current AI chatbot agents in alpha testing.

• Narrowed the full-year 2025 guidance ranges. Now, revenue is expected to be between $226 million and $230 million, representing a year-over-year growth of 20% to 23%, down from the prior range of $220 million to $235 million. - Adjusted EBITDA is anticipated to be between $14 million and $16 million, compared to the prior range of $14 million to $20 million. - Strategic investments in marketing and technology are yielding results, laying the foundation for sustainable growth.

In the third quarter, total net revenue was $59.4 million. Payer revenue stood at $45.5 million, accounting for approximately 76.6% of the total revenue. Direct-to-enterprise revenue was $9.3 million, making up about 15.7% of the total revenue. Consumer revenue was $4.6 million, representing roughly 7.7% of the total revenue. Payer revenue grew 42% year-over-year and 12% sequentially to reach $45.5 million. Direct-to-enterprise revenue was $9.3 million, which was down 1% year-over-year and 2% sequentially. Consumer revenue was $4.6 million, an increase from $4.4 million in the previous quarter but a decrease from $6 million a year earlier.

• Actual results may deviate significantly from expectations due to numerous risks and uncertainties, including factors outlined in Talkspace's most recent SEC reports and earnings press release.

Q: How will large language models be integrated into the Talkspace app and how will they be monetized?

A: They will be integrated into the network with clinical oversight. There are multiple monetization opportunities such as targeting large populations, consumers, and employers. Stay tuned for the market launch in early 2026, with different impacts for each entity depending on how it is commercialized.

Q: Could you talk about some of the changes you've made to the matching algorithms driving the strong retention?

A: We get people on board and inform them we'll schedule an appointment for them. Subsequently, we find an appropriate match in some cases rather than matching right away. Another aspect is that our ability to schedule people for multiple sessions or their desired time slots has significantly improved, with a multitude of small adjustments having a compounding positive effect.

Q: Are you comfortable with the number of credential therapists in your network?

A: Yes, we are comfortable. We constantly prune, add, and plan around various variables. Some hiring ahead of demand affected gross margins in Q3, but we feel good about the overall health of the network.

Q: How should we think about the run rate of marketing spend going forward?

A: Marketing spend was slightly down sequentially but up year-over-year. We expect Q4 to be similar to Q3, and next year expects over 20% top line growth, which will require some marketing support.

Q: How much do you attribute to the core commercial population versus Medicare population in the growth of active members utilization?

A: Significant growth continues on the commercial side, but growth in Medicare and military initiatives is also occurring, all progressing at similar paces, with the commercial payer orbit significantly contributing to registrations and sessions.

Q: How can the Wisdo Health acquisition help open up more of the Medicare opportunity?

A: Wisdo's group coaching is expected to bring a significant boost to the Medicare population, especially for those dealing with loneliness. The Novo Nordisk announcement is a positive for Wisdo's go-to-market strategy.

Q: Are there opportunities for Talkspace as partnering with other companies in terms of providing clinical oversight?

A: Yes, there are potential licensing and other opportunities as Talkspace has a distinct advantage with its provider network and knowledge of mental health journeys.

Q: Is the new user sign-up still occurring and what are the factors driving payer revenue growth?

A: Yes, new user sign-ups are still happening. Factors include high visibility into cohort curves, supply capacity planning, efficient marketing with good return on investment, and collaboration with payer partners for seamless integrations.

Q: When will Medicare start to meaningfully impact results?

A: It is still a work in progress, with Wisdo expected to have an impact. Refinement of the strategy continues state by state and subpopulation by subpopulation, so stay tuned for Q4 and 2026.

Q: Have you seen financial impact on an administrative level from AI applications?

A: Yes, AI has had a significant impact on the patient journey. For example, 30% more people are likely to book a third session within 30 days when providers use smart insights, and 21% more are likely after listening to the talkcast. AI is also used on the corporate side to ensure operating leverage.