Q1 2024 Talkspace Inc Earnings Call

Operator: Thank you for standing by. My name is Benjamin, and I'll be your conference operator today. At this time, I'd like to welcome everyone to Talkspace's First Quarter 2024 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you'd like to ask a question during this time, simply press star 1 on your telephone. If you'd like to withdraw your question, press star 1 again. Thank you. I would like to turn the call over to Jeannine Feyen, Director of Communications.

Thank you for standing by my name is Benjamin and that'll be a conference operator today.

Speaker Change: At this time I'd like to welcome everyone stock space first quarter 2024 earnings conference call.

Benjamin: All lines have been placed on mute to prevent any background noise.

Benjamin: After the Speakers' remarks, there will be a question and answer session.

Benjamin: If you'd like to ask a question. During this time some depressed I wanted your telephone keypad.

Benjamin: If you'd like to withdraw your question Press Star one again.

Speaker Change: Thank you I would like to turn the call over to Jin Yoon Fine director of communications.

Jin Yoon: Please go ahead.

Jeannine Feyen: Good morning, and welcome to Talkspace's earnings conference call for the first quarter of 2024. I hope you've had the opportunity to access the press release to be posted on Talkspace's IR website and the presentation of our earnings results. We'll use the presentation to walk you through today's remarks. Leading today's call are our CEO, Dr. John Cohen, and our CFO, Jennifer Fulk.

Jin Yoon: Good morning, and welcome to tax basis earnings conference call for the first quarter of 2024, I Hope you've had the opportunity to access the press release, we posted on tax basis IR website on the presentation of our earnings results.

Speaker Change: We'll use the presentation to walk you through todays remarks, leading today's call are our CEO, Dr. Jon Cohen, and our CFO Jennifer Park management will offer their prepared remarks, and we'll then take your questions.

Jeannine Feyen: Management will offer their prepared remarks and will then take your questions. Certain measures we'll discuss on this call are expressed on a non-GAAP basis and have been adjusted to exclude the impact of one-off items. Reconciliations of these non-gap measures are included in our earnings release and on our website, Talkspace.com. I also want to remind you that we will be discussing forward-looking information today, which may include forecasts, targets, and other statements regarding our plans, goals, strategic priorities, and anticipated financial results.

Speaker Change: Certain measures we will discuss on this call are expressed on a non-GAAP basis and have been adjusted to exclude the impact of one off items reconciliations of these non-GAAP measures are included in our earnings release and on our website talks base Dot com.

Speaker Change: I also want to remind you that we will be discussing forward looking information today, which may include forecasts targets and other statements regarding our plans goals and strategic priorities and anticipated financial results.

Jeannine Feyen: While these statements represent our best current judgment about future results and performance as of today, our actual results are subject to many risks and uncertainties that could cause actual results to differ materially from what we expect. Important factors that may affect our future results are described in our most recent SEC reports and today's earnings press release. For more information, please review our Safe Harbor disclaimer on slide 4. Now, I will turn it over to Dr. Jon Cohen. Thanks.

Speaker Change: While these statements represent our best current judgment about future results and performance as of today. Our actual results are subject to many risks and uncertainties that could cause actual results to differ materially from what we expect.

Speaker Change: Important factors that may affect our future results are described on our most recent SEC reports and today's earnings press release for more information. Please review our safe Harbor disclaimer on slide two.

Speaker Change: Now I will turn it over to Dr. Jon Cohen.

Jon R. Cohen: Thanks, Jeannine, and thank you all for joining us today. We began 2024 with another strong set of results driven by continued execution across the business. This quarter, we delivered revenue of $45.4 million, up 36% year-over-year, and an adjusted EBITDA of $800,000, which marks our first quarter of profitability in the 13-year history of the company. This is a testament to the focus and dedication of our team.

Jon R. Cohen: Thanks Denise.

Jon R. Cohen: Thank you all for joining us today.

Jon R. Cohen: We began 2024 with another strong set of results driven by continued execution across the business.

Jon R. Cohen: This quarter, we delivered revenue of $45 4 billion.

Jon R. Cohen: Up 36% year over year, and an adjusted EBITDA of $800000, which marks our first quarter of profitability and the 13 year history of the company.

Speaker Change: This is a testament to the focus and dedication of our team.

Jon R. Cohen: The continued momentum on our top line and our continuous rigorous focus on our cost structure provide a strong base to build upon, and we are confident in our ability to maintain profitable growth going forward. Let me describe our progress in the first quarter by strategic priority. First, in our payer category, revenue grew 92% year over year.

Speaker Change: The continued momentum in our topline and our continuous rigorous focus on our cost structure provide a strong base to build upon and we are confident in our ability to maintain profitable growth going forward.

Speaker Change: Let me cover our progress in the first quarter.

Speaker Change: <unk> strategic priority.

Speaker Change: First in our payer category revenue grew 92% year over year. This growth is the result of our focused efforts to expand our covered lives increased capture rates and increased utilization.

Jon R. Cohen: This growth is the result of our focused efforts to expand our covered lives, increase capture rates, and increase utilization. Our expansion into Anthem Commercial Lives, which we announced last November, contributed to our strong revenue growth in the quarter and is progressing as expected. We also continue to see favorable member acquisition metrics from our marketing investments and our product work to enhance both capture rate and utilization. In addition, we have entered into strategic conversations with other payers regarding value-based arrangements. The Talkspace platform was built to continuously improve quality and increase efficacy in the delivery of mental health care. Our ability to measure these parameters and report them is a competitive advantage as we discuss value-based arrangements.

Speaker Change: Our expansion into anthem commercial lives, which we announced last November contributed to our strong revenue growth in the quarter and is progressing as expected.

Speaker Change: We also continued to see favorable member acquisition metrics from our marketing investments and our product work to enhance both capture rate and utilization.

Speaker Change: In addition, we have entered into strategic conversations with other payers regarding value based arrangements.

Speaker Change: The <unk> platform was built to continuously improve quality and increase efficacy and the delivery of mental health care.

Speaker Change: Our ability to measure these parameters and report them as a competitive advantage as we discussed value based arrangements.

Jon R. Cohen: Medicare, as we've mentioned, is a significant opportunity with 65 million lives. We expect to go live in multiple states later this month within traditional Medicare, representing more than 10 million lives on Long Island. The reception from payers has been very positive, and we are in advanced discussions to expand within the Medicare Advantage network. We continue to expect to be in network with Medicare in all 50 states by the end of the year, further cementing our position as the behavioral health company with the most covered lives across the United States. With Medicare, we will continue to lead as the platform advancing affordable behavioral health.

Speaker Change: Medicare as we've mentioned is a significant opportunity with 65 million lives. We expect to go live in multiple states. Later this month within traditional Medicare representing more than 10 million lives at launch with.

Speaker Change: The reception from payers has been very positive and we are in advanced discussions to expand within their Medicare advantage networks.

Speaker Change: We continue to expect to be in network with Medicare and all 50 states by the end of the year further cementing our position as the behavioral health company with the most covered lives across the United States with Medicare We will continue to lead as the platform advancing affordable behavioral health care.

Jon R. Cohen: We've also expanded our brand and referral partnerships significantly in 2024. Notable collaborations include our new partnership with 30 Madison, a specialty telemedicine company operating Keeps, Cove, and Nurex, and an expansion of our provider directories on DocDoc and Healthgrade. Additionally, we launched our Health Collective Marketplace, offering members access to a comprehensive and growing suite of whole health digital providers and services. This platform will provide members with clinically vetted and curated resources and member benefits across the entire health spectrum, with the goal of expanding accessibility to high-quality and holistic care. Some of those first partners include Aura, Evernow, Conceive, and Finite.

Speaker Change: We've also expanded our brand and referral partnerships significantly in 2024. Notable collaborations include our new partnership with 30 Madison, a specialty telemedicine company operating keeps Cove and <unk> added an expansion of our provider directories dropped back.

Speaker Change: At Healthgrades. Additionally.

Speaker Change: Additionally, we launched our health collective marketplace offering members access to a comprehensive and growing suite of whole health digital providers and services. This platform will provide members with clinically vetted and curated resources on member benefits across the entire health spectrum.

Speaker Change: With the goal of expanding accessibility to high quality and holistic care.

Speaker Change: Some of those first partners include aura ever know conceive and stayed on.

Jon R. Cohen: Moving to direct-to-enterprise, we are encouraged by the early progress of our offering in New York City and Baltimore, launched in Q4. Results of the first months of engagement and effectiveness indicate that we are reaching diverse populations as well as previously undisturbed communities. Many thousands of kids have already received help from their Talkspace therapist, and we know that our suicide risk alerts are working as intended. We also know of several instances where therapist intervention for teens in crisis has made a dramatic impact on their lives. We are very proud of the impact we're already having on these students.

Speaker Change: Moving to direct to enterprise, we are encouraged by the early progress of our offering in New York City, and Baltimore launched in Q4 results of the first months around engagement and effectiveness indicate that we are reaching diverse populations as well as previously underserved communities.

Speaker Change: Many thousands of kids have already receive help from their talks based therapies and we know that our suicide risk alerts are working as intended.

Speaker Change: We also know of several currencies were therapist intervention for teens and crisis has made a dramatic impact on their lives. We are very proud of the impact we're already having on these students.

Jon R. Cohen: These two partnerships, the first of their kind, exemplify our commitment to addressing the teen mental health crisis. We believe providing teens with access to quality care through a platform that meets them where they are will drive better outcomes for all. The reception and inbound interest we have received from other public health entities as a result of these initiatives has been high. On the employer side of our DTE category, while we did have a number of renewals and new wins in Q1, we also experienced headwinds with respect to account attrition. This was in part due to businesses continuing to review their budgets in the current inflationary environment as well as increased competition.

Speaker Change: These two partnerships the first of their kind exemplify our commitment to addressing the teen mental health crisis.

Speaker Change: We believe providing teams with access to quality care through a platform that meets them, where they are will drive better outcomes for all the reception and inbound interest we have received from other public health entities. As a result of these initiatives has been high.

Speaker Change: On the employee side of our DTE category, while we did have a number of renewals and new wins in Q1, we also experienced headwinds with respect to account attrition.

Speaker Change: This was in part due to business is continuing to review their budgets in the current inflationary environment as well as an increased competition.

Jon R. Cohen: We believe our ability to demonstrate value for employers is a meaningful differentiator, and last month we released our ROI calculator aimed at doing just that. This independently validated tool provides enterprises with the ability to measure the impact of offering virtual mental health services and validates potential enterprise savings in three areas. Medical Savings, Time Savings with Respect to Employee Commuting, and Absenteeism Savings related to the number of workdays missed by employees due to depression.

Speaker Change: We believe our ability to demonstrate value for employees as a meaningful differentiator and last month, we released our ROI calculator aimed at doing just that.

Speaker Change: This independently validated tool provides enterprises with the ability to measure the impact of offering virtual mental health services and validates potential enterprise savings at three areas.

Speaker Change: Medical savings time savings with respect to employee commute and absenteeism savings related to the number of workdays missed by employees due to depression.

Jon R. Cohen: We are also investing in new technology and digital capabilities to further enhance the offerings and features of our platform for the DTE category, specifically focused on the teen market. I'd like to call out that our platform remains attractive to partners for their members because of the comprehensive nature, including psychiatry and therapy, across all stages of life, including teens, couples, and soon-to-be seniors, with multiple modalities, including text-based therapy and live video and audio, so that their members can use Talkspace from anywhere, anytime, for any need that comes up.

Speaker Change: We are also investing in new technology and digital capabilities to further enhance the offerings and features of our platform for the DTE category, specifically focused on the teens market I'd like to call out that our platform remains attractive to partners for their members because of the comprehensive nature, including psychiatry and therapy across all state.

Speaker Change: <unk> of life, including teens couples seemed to be seniors with multiple modalities, leading with tech space therapy, and live video and audio so that their members can use talk space from anywhere anytime for any need that comes up.

Jon R. Cohen: We are excited about our growing DTE pipeline, particularly when it comes to the teens vertical, and look forward to sharing more throughout the year. Moving to our provider network, we continued to build out our network of providers and ended the quarter with over 5,600 therapists, up 6% sequentially. We continue to see strong demand to join the Talkspace network and believe this is a testament to the investments we continue to make in our platform to enhance the provider experience and deliver exceptional clinical outcomes. These outcomes were recently highlighted in a study published in the Journal of the American Medical Association.

Speaker Change: We are excited about our growing DTE pipeline, particularly when it comes to the teens vertical and look forward to sharing more throughout the year.

Speaker Change: Moving to our provider network, we continue to build out our network of providers and ended the quarter with over 5600 therapists up 6% sequentially.

Speaker Change: We continued to see strong demand to join the top space network and believe this is a testament to the investments we continue to make in our platform to enhance the provider experience and deliver exceptional clinical outcomes.

Speaker Change: These outcomes were recently highlighted in a study published in the journal of the American Medical Association.

Jon R. Cohen: Using machine learning, researchers from Talkspace and Lysen analyzed more than 20 million de-identified messages between therapists and their clients to find that the more supportive, empathetic, and warm the therapist was, the stronger the patient's outcomes and the higher their satisfaction with therapy overall. This supports what we know, that the higher the quality of the relationship with the provider, the better the member's experience and outcomes. We will also continue to focus on the innovation of our platform for the benefit of both our members and providers.

Speaker Change: Using machine learning researchers from talks based on license analyzed more than 20 million de identified messages between therapists and their clients to find that more supportive empathetic and warm the therapist was the stronger the patient outcomes and the higher the satisfaction with therapy overall.

Speaker Change: This supports what we know that the higher the quality of the relationship with the provider the better the members' experience and outcomes.

Speaker Change: We also continue to focus on the innovation of our platform for the benefit of both our members and providers during the quarter, we launched an AI capability that generates a comprehensive succinct summary for the provider of smart note, which reduces the administrative burden on clinicians.

Jon R. Cohen: During the quarter, we launched an AI capability that generates a comprehensive, succinct summary for the provider, a smart note, which reduces the administrative burden on clinicians. The initial response from our providers has been exceptionally positive, and we estimate that it is eliminating up to four hours per week of administrative work for full-time providers, optimizing the time they could spend on therapy with members. The AI team is working on multiple other features to improve the therapist's workflow and enhance their ability to deliver better clinical care.

Speaker Change: The initial response from our providers has been exceptionally positive and we estimate that is eliminating for our full time providers up to four hours per week of administrative work optimizing the time, they could spend that therapy with members.

Speaker Change: The AI team is working on multiple other features to improve the therapist workflow and enhance their ability to deliver better clinical care. While we are committed to continuing to invest in new tools such as these we will of course do so in a clinically led responsible and secure manner that protects the privacy and data.

Jon R. Cohen: While we are committed to continuing to invest in new tools such as these, we will, of course, do so in a clinically-led, responsible, and secure manner that protects the privacy and data integrity of our members. Investments such as these not only expand provider productivity but also improve the member experience and are emblematic of our commitment to innovation and operational excellence. In addition to these new AI initiatives, we will continue to make technology enhancements supporting payer capture rate and utilization and investment in DTE digital capabilities to increase the value proposition of Talkspace's offerings.

Speaker Change: <unk> of our members.

Speaker Change: Investments such as these not only expand provider productivity, but also improve the member experience and are emblematic of our commitment to innovation and operational excellence and.

Speaker Change: In addition to these new AI initiatives, we will continue to make technology enhancements supporting payer capture rate and utilization and investments and DTE digital capabilities to increase the value proposition of top spaces offerings.

Jon R. Cohen: Before I turn the call over to Jennifer, I'd like to note that May is Mental Health Awareness Month, and we join others across the industry to emphasize the importance of self-care and making quality mental health care more accessible. This month, we have unveiled a new brand identity on our corporate and investor website. Our new brand is a bold, design-forward look and feel that captures the company's core beliefs that therapy and mental health support should be a routine, positive part of anyone's life and that everyone deserves access to high-quality mental health services.

Speaker Change: Before I turn the call over to Jennifer I'd like to note that May is mental health awareness month, and we joined others across the industry to underscore the importance of self care and making quality mental health care more accessible.

Speaker Change: This month, we have unveiled our new brand identity on a corporate and Investor website.

Jennifer Fulk: Our new brand as a bold design forward look and feel that captures the companys core beliefs that therapy and mental health support should be a routine positive part of anyone's life and that everyone deserves access to high quality mental health services.

Jon R. Cohen: It is my belief that complete health is both physical and mental health. As everyone should have access to a primary care physician, everyone should have access to a mental health therapist. You will see that our Mental Health Awareness Month campaign encourages people to talk it out through therapy. The campaign features our own members telling their stories of the pivotal and profound insights they gain while working with their Talkspace therapist. You will also see our new TV spot, featuring the relationship between the therapist and the member and highlighting a key differentiating for us, which is that our therapists have, on average, over 10 years of experience. With that, I'll turn the call over to Jennifer.

Jennifer Fulk: It is my belief that complete health is both physical health and mental health as everyone should have access to a primary care physician, everyone should have access to a mental health therapist you.

Speaker Change: You will see that our mental health awareness month campaign encourages people to talk it out through therapy.

Speaker Change: The campaign features our own members telling their stories of the pivotal and profound insights gained while working with their talks with therapists.

Speaker Change: You will also see our new TV spot featuring the relationship with the therapist at member and highlighting a key differentiator for US which is that our therapists have on average over 10 years' experience with that I will turn the call over to Jennifer.

Jennifer Fulk: Thank you, Jon, and good morning, everyone. We are pleased with our first quarter 2024 results, which reflect continued strengthening of financial performance as the result of execution across our company priorities. My comments today will be based primarily on the first quarter results on a year-over-year basis, unless otherwise noted. I will cover highlights from our financial results and then give more details on our outlook.

Jennifer: Thank you John and good morning, everyone. We are pleased with our first quarter 2024 results, which reflect continued strengthening of financial performance is the result of execution across our company priorities.

Jennifer Fulk: Total revenue for the first quarter was $45.4 million, a 36% increase from a year ago. Adjusted EBITDA was approximately $800,000 in the first quarter, marking our first quarter of profitability on this basis. Moving to results by category, payer revenue was $28.5 million, a 92% increase versus the prior year period. Payer sessions completed by behavioral health and EAP members grew 14 percent sequentially and 65 percent year-over-year to 284,000, and Unique Payer Members completing sessions grew sequentially by 9% and year-over-year by 39% to 86,000.

Jennifer: Our comments today will be based primarily on the first quarter results on a year over year basis, unless otherwise noted.

Speaker Change: I will cover highlights from our financial results and then give more details on our outlook.

Speaker Change: Total revenue for the first quarter was $45 4 million or 36% increase from a year ago.

Speaker Change: Adjusted EBITDA was approximately $800000 in the first quarter, marking our first quarter of profitability on this basis.

Speaker Change: Moving to results by category.

Speaker Change: Higher revenue was $28 5 million and.

Speaker Change: 92% increase versus the prior year period.

Speaker Change: Payer sessions completed by behavioral health in EAP members grew 14% sequentially and 65% year over year to 284000.

Speaker Change: And unique payer members completing sessions grew sequentially by 9% and year over year by 39% to 86000.

Jennifer Fulk: As Jon previously highlighted, the first quarter benefited significantly from the December launch of the 18 million incremental covered commercial live. In addition, compared to the same period last year, there was an 11% growth in the same basis capture rate and a 19% improvement in the utilization of sessions per member.

Speaker Change: As John previously highlighted the first quarter benefited significantly from the December launch of the $18 million incremental covered commercial lives.

Speaker Change: In addition, compared to the same period last year, there was an 11% growth in the same basis capture rate.

Speaker Change: And a 19% improvement in the utilization of sessions per member.

Jennifer Fulk: These gains were primarily driven by continued upper funnel marketing and media optimizations, as well as enhancements across the product. In the direct-to-enterprise category, first quarter revenue was $9.9 million, up 14% from last year and 11% sequentially, primarily due to progress in our recent team launches last quarter. As Jon noted, these new launches were partially offset by attrition of legacy accounts. In the consumer category, where members pay out-of-pocket, revenue was $7 million for the first quarter. This was a 14% sequential decline and a 29% year-over-year decrease.

Speaker Change: These gains were primarily driven by continued upper funnel marketing and media optimizations as well as enhancements across the product.

Speaker Change: In the direct to enterprise category first quarter revenue was $9 9 million.

Speaker Change: 14% from last year, and 11% sequentially, primarily due to progress in our recent <unk> launches last quarter.

Speaker Change: As John noted these new launches were partially offset by attrition of legacy accounts.

Speaker Change: In the consumer category remembers pay out of pocket revenue was $7 million for the first quarter.

Speaker Change: This was a 14% sequential decline and a 29% year over year decrease.

Jennifer Fulk: The decline primarily stemmed from a substantial increase in covered lives during the fourth quarter, which allowed more members to qualify for coverage, thereby reducing their need to pay out-of-pocket. This shift has impacted consumer category revenue. It aligns with our strategic focus on increasing coverage, drives higher conversion rates, and creates greater long-term value from payer members. Moving to gross profit, our first quarter gross profit increased 30% versus the prior year to $21.7 million. Gross margin for the first quarter was 47.8%, lower than last year, as expected, due to further net revenue mixed shift towards the payer category, which has lower gross margins than DTE and consumer.

Speaker Change: The decline primarily stemmed from the substantial increase in covered lives during the fourth quarter, which will add more members to qualify for coverage.

Speaker Change: Thereby reducing our need to pay out of pocket.

Speaker Change: While this shift has impacted consumer category of revenues.

Speaker Change: Aligns with our strategic focus on increasing coverage drives higher conversion rates and creates greater long term value from payer members.

Speaker Change: Moving to gross profit our first quarter gross profit increased 30% versus the prior year to $21 7 million.

Speaker Change: Gross margin for the first quarter was 47, 8%.

Speaker Change: Lower than last year as expected due to further net revenue mix shift towards the payer category, which has lower gross margins than DTE and consumer categories.

Jennifer Fulk: Turning to operating expenses, our gap operating expenses for the first quarter were reduced 9% year-over-year to $23.4 million. Excluding stock-based compensation, our Q1 expenses amounted to approximately $21.2 million, reflecting a reduction of $2.3 million compared to the same period last year. Over the past several quarters, we've made significant strides in optimizing our cost structure. This includes enhancing organizational efficiencies across all departments, which has improved our operational agility and reduced overhead costs.

Speaker Change: Turning to operating expenses, our GAAP operating expenses for the first quarter were reduced 9% year over year to $23 4 million.

Speaker Change: Excluding stock based compensation, our Q1 expenses amounted to approximately $21 2 million, reflecting a reduction of $2 3 million compared to the same period last year.

Speaker Change: Over the past several quarters, we've made significant strides in optimizing our cost structure.

Speaker Change: This includes enhancing organizational efficiencies across all departments, which has improved our operational agility and reduced overhead costs.

Jennifer Fulk: Additionally, we have strategically invested in our marketing initiatives to align with our growth objectives, focusing on high ROI activities that enhance brand visibility and member acquisition. We have also invested in scaling our platform capabilities. Enhancing its robustness and scalability to better accommodate growth and expand our service offerings efficiently. These improvements reflect our ongoing commitment to fostering a lean and responsive operational framework supporting sustained growth and operational excellence. Moving to profitability, Gap's Net Loss was $1.5 million, a $7.3 million improvement versus the same period in Europe.

Speaker Change: Additionally, we have strategically invested in our marketing initiatives.

Speaker Change: Align with our growth objectives.

Speaker Change: Christine on high ROI activities that enhance brand visibility and member acquisition.

Speaker Change: We have also invested in scaling our platform capabilities.

Speaker Change: Nancy, it's robustness and scalability to better accommodate growth and expand our service offerings efficiently.

Speaker Change: These improvements reflect our ongoing commitment to fostering a lean and responsive operational framework supporting sustained growth and operational excellence.

Speaker Change: Moving to profitability GAAP net loss was $1 5 million or seven $3 million improvement versus the same period a year ago.

Jennifer Fulk: Adjusted EBITDA was $800,000, an improvement of $7.2 million year over year. Adjusted EBITDA in the first quarter did benefit from a few immaterial, non-operating accounting items. However, excluding these items, we would still have achieved a positive adjusted EBITDA in the quarter. Turning to the balance sheet, we had $120 million in cash and cash equivalents at the end of the first quarter, down $3.6 million sequentially from Q4 and driven primarily by the payment of corporate employee bonuses in 2026.

Jennifer Fulk: Adjusted EBITDA was $800000, an improvement of $7 $2 million year over year.

Jennifer Fulk: Adjusted EBITDA in the first quarter good benefit from the SKU immaterial nonoperating accounting items. However, excluding these items, we would still have achieved a positive adjusted EBITDA in the quarter.

Speaker Change: Turning to the balance sheet.

Jennifer Fulk: Had $120 million in cash and cash equivalents at the end of the first quarter down $3 6 million sequentially from Q4, and driven primarily by the payment of corporate employee bonuses from 2023.

Jennifer Fulk: Finally, we remain confident in the financial guidance we established during our fourth quarter commentary and continue to expect revenue between $185 and $195 million and adjusted EBITDA between $4 and $8 million for the full year. We remain enthusiastic about our payer business as we continue to bring on more covered lives through both commercial blues plans, government, and Medicare. And in DTE, we are encouraged by the ongoing value of our employer pipeline and our potential to expand within the team's vertical, supported by the early positive impact of our initiatives in New York and Baltimore.

Jennifer Fulk: Finally, we remain confident in the financial guidance, we established during our fourth quarter commentary and continue to expect revenue between 185 and $195 million and adjusted EBITDA between four and $8 million for the full year.

Jennifer Fulk: We remain enthusiastic for our payer business as we continue to bring on more covered lives through both commercial blues plans government in Medicare and in DTE. We are encouraged by the ongoing value of our employer pipeline and our potential to expand within the team with vertical.

Jennifer Fulk: Ported by the early positive impact from our initiatives in New York and Baltimore.

Jennifer Fulk: The timing of converting and implementing these prospects into revenue-generating clients remains quite variable quarter to quarter, and as a result, we now expect adjusted EBITDA to be more heavily weighted towards the second half of the year. To summarize, today's discussion reinforces our enthusiasm for the strategic direction of both our PAIR and ZTE categories. The growing demand for affordable, accessible, and high-quality mental health care, coupled with the significant operational advancements we've achieved in recent quarters, bolsters our confidence in the long-term profitability and sustainability of our business. With that, we will open the call to questions.

Jennifer Fulk: The timing of converting and implementing these prospects to revenue generating clients remains quite variable quarter to quarter and as a result, we now expect adjusted EBITDA to be more heavily weighted towards the second half of the year.

Jennifer Fulk: To summarize todays discussion reinforces our enthusiasm for the strategic direction of both our payer and DTE categories.

Jennifer Fulk: The growing demand for affordable accessible and high quality mental health care cut.

Jennifer Fulk: Coupled with the significant operational advancements we've achieved in recent quarters.

Jennifer Fulk: Bolsters, our confidence in the long term profitability and sustainability of our business.

Speaker Change: With that we will open the call for questions.

Operator: Thank you. We will now begin the question and answer session. If you have dialed in and would like to ask a question, please press star 1 on your telephone keypad to raise your hand and join the queue. If you would like to withdraw your question, simply press star 1 again. If you are called upon to ask your question and are listening via loudspeaker on your device, please pick up your handset and ensure that your phone is not on mute when asking your question. Again, press star 1 to join the queue. And your first question comes from the line of Charles Rhyee with TD Cohen.

Speaker Change: Thank you we will now begin the question and answer session. If you have dialed in and we'd like to ask a question. Please press star one on your telephone keypad to raise your hand and joined the queue.

Charles Rhyee: I would like to withdraw your question seemed progressed Darwin again.

Operator: If you are called upon to ask your question and our listening via loud Speaker UE device. Please pickup your handset and ensure that your phone is not on mute when asking a question.

Operator: Again press star one to join the queue and.

Charles Rhyee: And your first question comes from the line of Charles <unk> with TD, calling.

Charles Rhyee: Thank you. Please go ahead, yes. Thank you.

Jon R. Cohen: Yeah, thanks for taking the questions. I wanted to ask about the Medicare opportunity as we think about next year and, perhaps you know, how would you expect that kind of rollout to occur? And then, secondly, how much of this opportunity have you already perhaps contemplated in the long-term guidance that you gave last week?

Charles Rhyee: Yes, thanks for taking the questions.

Speaker Change: I wanted to ask about.

Jon R. Cohen: The Medicare opportunity as we as we think about next year.

Jon R. Cohen: And perhaps.

Speaker Change: Uh huh.

Jon R. Cohen: How would you expect that kind of rollout.

Jon R. Cohen: To occur and then secondly, how much of this opportunity have you already perhaps contemplated in the long term guidance that you gave last quarter.

Jon R. Cohen: So, good morning, Charles. As we stated earlier, we're going to have. 11-ish states that will launch within a very short period of time, and then by the end of the year, we'll have all 50 states. Now, that will be for standard Medicare. We are in, as you heard, fairly deep discussions with Medicare Advantage plans to add on to that. And it's almost split, you know, $32 million, $33 million each for both sides of Medicare. We have a... a strongly developed go-to-market plan for Medicare. As you know, it's new for most people because there really are no significant national providers for the over 65-year-old Medicare group.

Speaker Change: So good morning Charles.

Jon R. Cohen: So as we stated we're going to have.

Jon R. Cohen: Level ish states that a launch.

Jon R. Cohen: Within.

Jon R. Cohen: A very short period of time, and then by the end of the year, we'll have all 50 states so that will be for standard Medicare.

Jon R. Cohen: We are as you heard a fairly deep discussions with Medicare advantage plans to add onto that.

Jon R. Cohen: It's almost split $32 million to $33 million, which both sides of Medicare we have a.

Jon R. Cohen: Yeah.

Jon R. Cohen: Yes.

Jon R. Cohen: The strongly developed go to market plan for Medicare.

Jon R. Cohen: It's new for most people look at there really are no.

Jon R. Cohen: Significant national providers to the over 65 year old or Medicare group.

Jennifer Fulk: So this will be what I like to call a work in progress as we figure out how we will sign up Medicare patients and make them aware of the service. So in terms of the guidance, go ahead. Yeah, I'll touch on that, Charles.

Speaker Change: So this will be.

Jennifer Fulk: I'd like to call a work in progress as we figure out how we will.

Jennifer Fulk: Sign up Medicare patients make them aware of the service.

Jennifer Fulk: So.

Speaker Change: And in terms of the guidance.

Speaker Change: I'll touch on that Charles so.

Jennifer Fulk: So our long-term guidance had several levers. I would describe Medicare expansion and the covered lives that come with it as a component of that. So remember, our long-term guidance was really weighted on both payers, specifically in the long term, payer growth in that same basis capture rate and in utilization within the lives that we have, as well as the direct-to-enterprise category. So those two factors really weigh in, but across those two categories, we had a number of levers, Medicare being one.

Speaker Change: Long term guidance.

Jennifer Fulk: <unk> had several levers I would describe Medicare expansion in the covered lives that come with it as a component of that.

Jennifer Fulk: So remember our long term guidance was really weighted on both payer specifically in the long term payer growth in that same basis capture rate and then utilization within within the lives that we have as well as the direct to enterprise category.

Jennifer Fulk: So those two factors really weigh in but across those two categories. We had it we had a number of levers Medicare being one.

Jon R. Cohen: Okay, I guess the way I was asking the question was more like it, you know, given the sort of, you know, the opportunity here, and I look at the guide, it seems like maybe perhaps you haven't put that much in for Medicare per se. Would that be a fair assumption?

Speaker Change: Okay, I guess the way I was asking the question was more like it.

Jon R. Cohen: Even given sort of the opportunity here and there.

Jon R. Cohen: Look at the guide it seems like maybe perhaps you haven't put that much in for Medicare per se would that be a fair assumption.

Jon R. Cohen: Yeah, I think that would be a fair assumption. I mean, we're adding, you know, millions of lives with a fairly large opportunity given 25% of Medicare patients are either depressed or lonely and have a diagnosable medical, you know, mental health issue. So we know the opportunity is great. I like to compare this to schools when we first got into really providing services to teens. It took us a little bit of time to figure out the go-to-market strategy, but we figured it out. And I think the same thing is going to happen with Medicare.

Speaker Change: Yes, I think that would be that would be a fair assumption.

Jon R. Cohen: Yes, we're adding.

Jon R. Cohen: Millions of lives.

Jon R. Cohen: I think you've heard me talk about a fairly large opportunity given 25% of Medicare patients are.

Jon R. Cohen: Either depressed or lowly ore and have a diagnosis will medical mental health issue.

Jon R. Cohen: So we know the opportunity is large.

Jon R. Cohen: To compare this to the schools, where we first got into the really providing services to teens. It took us a little bit of time to figure out the go to market strategy, but but we figured it out and I think the same thing is going to happen with Medicare.

Jennifer Fulk: Great, and just a clarification, Jennifer, you talked about Justin Bidaud being a little bit more back half weighted. Is that, and then is that a relation to sort of as you're ramping up New York City and Baltimore, just the timing timing effect? Yeah, it's really...

Jon R. Cohen: Great and just a clarification clarification, Jennifer you talked about.

Jennifer Fulk: And EBITDA being a little bit more back half weighted is that a.

Jennifer Fulk: And then is that a relation to sort of as you're ramping up New York City and Baltimore.

Jennifer Fulk: The timing a timing effect.

Jennifer Fulk: Yes.

Jennifer Fulk: What's driving that back up.

Jennifer Fulk: Yeah, and I'll come back to, you know, as we issued guidance for the year, we said there were, you know, the two factors are growth and payers specifically from the covered lives. And what we saw in the first quarter, particularly early in the quarter, was a nice ramp of those covered lives that we added in December of 23. So and then we also said that, you know, our guidance for the year was going to be dependent on those direct to enterprise, you know, the pipeline, maturing and turning, you know, having a contribution. We also said it was going to be lumpy, and that we'd have variability from quarter to quarter. So that's the context for that.

Jennifer Fulk: Yeah.

Speaker Change: Come back to us.

Jennifer Fulk: <unk>.

Jennifer Fulk: We issued guidance for the year, we said there were.

Jennifer Fulk: Two factors are growth and payers specifically from <unk>.

Jennifer Fulk: The covered lives and what we saw in the first quarter, particularly early in the quarter was a nice ramp of those covered lives that we added in.

Jennifer Fulk: In December of 'twenty, three so and then we also said that.

Jennifer Fulk: Our guidance for the year was going to be dependent on those direct to enterprise.

Jennifer Fulk: The pipeline maturing and turning.

Jennifer Fulk: Having a contribution we also said it was going to be lumpy.

Jennifer Fulk: We'd have variability from quarter to quarter. So that's the context for that.

Jennifer Fulk: Okay.

Operator: Great. I appreciate it. Thanks for the question.

Jennifer Fulk: Great.

Speaker Change: Thanks for the questions.

Operator: Your next question comes from the line of Ryan Daniels with William Blair. Please go ahead.

Operator: Your next question comes from the line of Ryan Daniels with William Blair. Please go ahead.

Jack A. Senft: This is Jack Senft. I'm with Ryan Daniels.

Operator: This is Jack I'm done Brian Daniel Thanks for taking the question. So first I know you don't guide to this specifically, but how should we think about gross margins going forward I know, it's down from from mix shift and it has been but just kind of for the remainder of the year, how should we think about this thanks.

Jack A. Senft: Thanks for taking the question. So first, I know you don't guide to this specifically, but how should we think about gross margins going forward? I know it's down from makeshift, and it has been, but just kind of for the remainder of the year, how should we think about this? Thanks.

Jennifer Fulk: Yeah, thanks. Thanks, Jack.

Speaker Change: Yeah. Thanks, Thanks, Jack so I'll come back to them.

Speaker Change: What we said originally in guidance I know I didnt referenced it earlier, but we still anticipate.

Speaker Change: That revenue growth to be 23% to 30% and we.

Speaker Change: The gross profit too.

Jennifer Fulk: Grow at a lower rate given the payer the payer categories, making up.

Speaker Change: As you saw in the first quarter, a larger percentage of our topline. So we don't have a change at the moment.

Jennifer Fulk: So I'll come back to what we said originally in guidance. I know I didn't reference it earlier, but we still anticipate that revenue growth to be, you know, 23 to 30%. And we expect gross profit to grow at a lower rate, given that the payer category is making up, as you saw in the first quarter, a larger percentage of our top line. So we don't have a change at the moment to make to that guidance.

Jennifer Fulk: To make to that to that guidance.

Jon R. Cohen: Okay. Thank you. And just a quick follow-up. I know in your prepared remarks, you guys mentioned some headwinds with respect to account attrition, and that the main drivers were really inflation and increasing competition. Can you just dive a bit deeper on the competitive front and generally kind of what you're seeing there? Yeah, so first off, I'll reiterate

Speaker Change: Understood. Thank you and just a quick follow up I know in your prepared remarks, you guys mentioned some headwinds with respect to account attrition.

Jon R. Cohen: The main drivers were really inflation and an increase in competition can you just dive a bit deeper on the competitive front and generally kind of what youre seeing there.

Jon R. Cohen: Thanks.

Jon R. Cohen: Yeah, I'll first off reiterate that, you know, revenue on DTE did grow 14% in the quarter. So that's taking into consideration both new wins and, of course, attrition.

Jon R. Cohen: Yes.

Jon R. Cohen: So first off I'll reiterate that.

Jon R. Cohen: Revenue in DTD grow 14% in the quarter so.

Jon R. Cohen: Taking into consideration.

Jon R. Cohen: Both new wins and of course attrition and there are multiple reasons for Tricia I don't want to make sure we don't point to anything specific that.

Jennifer Fulk: And there are multiple reasons for attrition. I wanna make sure we don't point to anything specific that competition is one of them, but there are product issues versus, you know, international versus national. There are budgetary restraints and constraints that we're seeing with some employers. There are some employers that have tried mental health benefits and decided for one reason or another that they don't want to offer the benefit anymore. There is an issue, which is a good thing for us, but people do realize that they have Talkspace frequently through their payer, through their behavioral health benefits.

Jennifer Fulk: That it's really because the competition is one of them, but there are product issues versus international versus national there are budgetary restraints and constraints that we're seeing in some employers.

Jennifer Fulk: There are some employers that have tried mental health benefits and decided for one reason or rather that they don't want to offer the benefit anymore. There is.

Jennifer Fulk: There is an issue with which is a good thing for us, but people do realize that they have talks with frequently through their payer through.

Jennifer Fulk: So they sometimes will move towards that as opposed to having a DT relationship. And then sometimes they'll say, well, utilization is not as good as they thought it was. So the reason I talk about all that is there are multiple, multiple reasons for how companies evaluate their mental health benefits. So it's not just one or the other.

Jennifer Fulk: Through their behavioral health benefits, so they sometimes will move towards that as opposed to having a <unk> relationship.

Jennifer Fulk: And then sometimes they'll say well utilization is not as what they thought it was so the reason I talk about all of that is there's multiple multiple reasons about how companies evaluate their mental health benefit. So it's not just one or the other.

Operator: And your next question comes from the line of Stephanie Davis with Barclays.

Jennifer Fulk: And your next question comes from the line of Stephanie Davis with Barclays.

Operator: Hey guys, thank you for taking my questions. I appreciate it. When we saw you in March, you talked about this B2B member retention increasing quite a bit, given some changes in duration on the platform as you got more of a covered benefit. Can you talk about the durability of these duration increases and how the addition of some of these newer populations that maybe we don't have as much data on could potentially impact that?

Stephanie July Davis: Please go ahead. Thank you for taking my question Kristina.

Operator: When we saw your March you did talk about it.

Operator: Member retention increase in quite a bit given some changes in duration on your platform and you got to get more of a covered benefit can you talk about the durability.

Operator: <unk> increases and how the addition of some of these newer.

Operator: Relations that maybe we don't have that much that could potentially impact that.

Operator: Okay.

Jon R. Cohen: Sure, I'll get back to Jennifer in a second, but we know we continue to see a strong amount of evidence that the people who are on the payer side who are not consumers who are coming through the BH benefits are absolutely staying on the platform longer than consumers. That data is very clear. I don't know what we're going to give relative to specifics, but we have seen increases in people on the platform relative to the length of time and the number of sessions that they do.

Operator: Sure.

Speaker Change: Back to Jennifer in a second but we know we continue to see strong.

Jon R. Cohen: The.

Jon R. Cohen: Strong amount of evidence that the people who are on the.

Jon R. Cohen: Payer side or not consumers, who are coming to the BH benefits are absolutely staying on the platform longer than consumers.

Jon R. Cohen: That data is very clear.

Jon R. Cohen: They know what we're going to give relative to specifics, but we do we have seen increase.

Jon R. Cohen: Increases of people on the platform relative to the length of time and the number of sessions that they do.

Jennifer Fulk: And I'll just point back, Stephanie, to the metrics that we provide. You really see progress against all of them, right? Of course, covered lives, and that's been consistent, but also the growth in, you know, the members that are completing a session on the platform, total sessions, of course, but that's also driven by utilization. We've only moved in the positive direction across all of these metrics, and I believe we've got a good line of sight to additional levers, both when it comes to the top of the funnel, as I mentioned, but also within product features.

Jon R. Cohen: And I'll just point, thanks, Stephanie too.

Jennifer Fulk: The metrics that we provide you really see progress against all of them of course covered lives and that's been consistent.

Jennifer Fulk: But also the growth in the members that are completing a session on the platform.

Jennifer Fulk: Total sessions of course, but thats driven also by utilization.

Jennifer Fulk: Only moved in a positive direction across all of these metrics and I believe we've got good line of sight to additional.

Jennifer Fulk: Levers both when it comes to the <unk>.

Jennifer Fulk: Top of funnel like it shouldn't but also within product features so.

Jennifer Fulk: Jon referenced a couple of those features, but we do feel like we've got, you know, the teams in place, the focus on them, and some really interesting levers to pull when it comes to just improving, reducing the friction throughout the funnel, further increasing the capture rate, and the utilization within that capture rate. I'll just comment on Medicare. You know, this is a new category in TAM for us, and so we've stayed, we're staying relatively conservative just in our outlook, but we will be testing a lot of things and figuring out what works for that population as we launch these new lives here during the rest of the year.

Jennifer Fulk: John John referenced a couple of those features but we do feel like.

Jennifer Fulk: There's we've got the teams in place the focus on them and so really interesting.

Jennifer Fulk: The levers to pull when it comes to just improving and reducing the friction throughout the funnel.

Jennifer Fulk: Are there increasing the capture rate.

Jennifer Fulk: Sure.

Jennifer Fulk: The utilization within that capture rate I'll just comment on Medicare.

Jennifer Fulk: This is a new.

Jennifer Fulk: Category and Tam for Us and so we've stayed.

Jennifer Fulk: We're staying relatively conservative just in our in our outlook, but we will be testing a lot of things and figuring out what works for that for that population.

Jennifer Fulk: And as we launch these new lives here in the rest of the year.

Jon R. Cohen: And in terms of how you're thinking of, I know you mentioned that's not really a big factor in the guidance, but thinking about these new populations coming on, how are you planning on structuring the rollout, and how are you... Basically, what are your assumptions in order to get us? as you ramp up to this.

Speaker Change: And in terms of how you're thinking of I know you mentioned, that's not really a big factor in the guidance, but thinking about these new populations coming on Howard.

Jon R. Cohen: How are you planning on structuring the rollout and how are you.

Jon R. Cohen: <unk>.

Jon R. Cohen: Basically what are your assumptions in order to get us.

Jon R. Cohen: As you ramp up.

Jon R. Cohen: on the commercial on the on the Medicare commercial or either or on the Medicare side, just thinking it's a new population you don't know how to utilize. Yes, we don't know how durable our program is, so what are you with? You know, as Jennifer said, we're being relatively conservative in terms of what we think the uptake will be as we begin to test multiple different ways. There is, as I mentioned earlier, a significant go-to-market strategy, which involves multiple levers that we're going to look at, both on the marketing side and actually directly to Medicare patients.

Jon R. Cohen: On the commercial.

Jon R. Cohen: On the Medicare or commercial or either or on the Medicare on the Medicare side, just to new population.

Jon R. Cohen: Yes, we don't.

Jon R. Cohen: Now what that durability.

Speaker Change: What are you asking me okay.

Jon R. Cohen: Ed.

Jon R. Cohen: As Jennifer said, where we're being relatively conservative in terms of what we think the uptake will be as.

Jon R. Cohen: As we begin to test multiple different ways, there's a as I mentioned earlier.

Jon R. Cohen: A significant go to market strategy, which involves multiple multiple levers that we're going to look at both.

Jon R. Cohen: On the marketing side and actually directly to Medicare patients. So we are.

Jon R. Cohen: So we've spent a lot of time thinking through this, quite honestly, and it's also taken us a fair amount of time, as I've discussed before, to get us to the point where we can build and collect Medicare and actually address all the nuances of a secondary payer. But the launch itself to get Medicare patients on board is, as it begins, it'll be a test.

Jon R. Cohen: Where we've spent a lot of time thinking through this quite honestly and it has also taken us a fair amount of time as I've discussed before to get us to.

Jon R. Cohen: To the point, where we can bill and collect Medicare.

Jon R. Cohen: And actually address all the nuances of secondary payer, but the launch itself to get Medicare patients on board is as it begins it'll be it'll be a test.

Jon R. Cohen: We have the ability, quite honestly, to move relatively quickly to test things that work and don't work. As I said, relative to the same thing we do with the schools. But as I said today, I can't tell you what the exact number is for a variety of other reasons. But we also know that a fair number of them are very tech savvy. All of that has gone into the decisions about how we're gonna approach the market. Yeah.

Jon R. Cohen: We have the ability quite honestly to move relatively quickly to test things that work and don't work as I said relative to the same thing we did with the schools.

Jon R. Cohen: But.

Jon R. Cohen: As I sit here today I can't tell you what the exact is where we know what platforms. They use video and social media platforms. They use we know what the what's big with them, we know what they're going to use video versus texting because for a variety of other reasons, but we also know that there's a fair number of them are very tech savvy.

Jon R. Cohen: All of that has gone into the decisions about how we're going approach the market.

Jennifer Fulk: Yeah, and maybe I'll just I'll just add real quick because it's important to everything else we do On day one what we do get is just the synergy with our broad Marketing media messages and with our brands So now if you're a Medicare patient if you see an ad or if you just come to talkspace.com Looking for where you know your insurance you might have benefits that cover therapy you will Now see that you know you're when you put in Medicare that you are that you are covered so on day one We get the benefit of capture rate just from that that broader just the you know The size of our covered lives and that expanding

Speaker Change: Maybe I'll just I'll just add real quick because it's important to everything else we deal.

Jennifer Fulk: On day, one, but we do get is just the synergy with our broad marketing media messages and with our brand. So now if you're a Medicare patient.

Jennifer Fulk: You see an AD or if you just come to talk space Dot com looking for where your insurance you might have benefits that cover therapy.

Jennifer Fulk: You will.

Jennifer Fulk: Now see that when you put in Medicare that you're that you are covered so on day, one we get the benefit of capture rate just from that broader just that the size of our covered lives and that expanding.

Speaker Change: Alright Super helpful and last one out of me just a quick question on.

Jon R. Cohen: All right. Super helpful. And last one out of me, just a quick question on kind of the shift from D2E to payer coverage. How are you thinking about your cost structure as you do this? Is there a way to repurpose some of the folks on the D2E side, or is this something that just maybe declines in importance a bit as you focus more on the payer side?

Jon R. Cohen: The kind of the shift from D to E U.

Jon R. Cohen: Payer coverage how are you thinking about your cost structure as you do that is there a way to repurpose some of the folks in the BDC side or is this something that just maybe declines important to that as you focus more on the payer side.

Jon R. Cohen: So, I would say first off, we took out a fair number of people within the last year relative to the size of the commercial operation, and we have reconfigured it with new leadership and new people, which I've talked about now being here, you know, close to, you know, eight months to a year, in terms of what that organization looks like. The organization now, honestly, is right where I think it should be relative to what we're going after on the DT side.

Speaker Change: So I would say first off we took out we've taken a fair number of people within the last year relative to the size of the commercial operation. We have re configured it with new leadership and new people, which I've talked about it now been here close to.

Jon R. Cohen: Eight months to a year.

Jon R. Cohen: In terms of what that organization looks like.

Jon R. Cohen: The organization now.

Jon R. Cohen: He is.

Jon R. Cohen: Where I think it should be relative to what we're what we're going after on the <unk> side and remember the <unk> side as employers.

Jon R. Cohen: Remember, the DT side is employers, colleges, universities, teens, subcategories, cities, states, and counties. So there is a continuing to be a very large opportunity on the DTE side as and not just thinking about it as only employers. And I honestly believe that we are now currently configured as a commercial organization to approach all of those opportunities with a very substantial pipeline that we've already built. So I don't think there'll be much more change in the DTE. Actually, no; there won't be much more change in the DTE organization as it's currently structured.

Jon R. Cohen: Colleges universities teens subcategories City States counties.

Jon R. Cohen: So there is a very continue to be a very large opportunity on the DTA side as in not just thinking about it is all employers.

Jon R. Cohen: And I honestly believe that we are now currently configured the commercial organization to approach all of those opportunities with a very substantial pipeline that we've already built so I don't think there'll be much more change in the DTA or we could actually no there won't be much of a change in the DTC organization as it's currently structured.

Speaker Change: Super helpful. Thank you.

Jon R. Cohen: Thanks.

Jon R. Cohen: That concludes our Q&A session I will now turn the conference back over to Jon Cohen for closing remarks.

Speaker Change: Thank you in closing I want to reiterate our unique position in the market reflected in our sustained momentum over the last six quarters.

Jon R. Cohen: Prehensile offerings and modalities are built to serve all demographics from teams to the elderly.

Jon R. Cohen: Enhanced by innovation, we believe our capabilities continue to set industry standards. This quarter's results underscore our commitment to our mission of expanding mental health care access. Thank you again for joining us this morning.

Speaker Change: Ladies and gentlemen that concludes today's call. Thank you all for joining you may now disconnect.

Jon R. Cohen: Oh.

Jon R. Cohen: That concludes our Q&A session. I will now turn the conference back over to Jon Cohen for closing remarks.

Operator: Super helpful. Thank you.

Jon R. Cohen: Please wait the conference will begin shortly.

Jon R. Cohen: In closing, I want to reiterate our unique position in the market reflected in our sustained momentum over the last six quarters. Apprehensive offerings and modalities are built to serve all demographics from teens to the elderly. Enhanced by innovation, we believe our capabilities continue to set industry standards. This quarter's results underscore our commitment to our mission of expanding mental health care access. Thank you again for joining us this morning, ladies.

Jon R. Cohen: [music].

Jon R. Cohen: Okay.

Jon R. Cohen: Sure.

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Jon R. Cohen: Yes.

Speaker Change: Thank you.

Jon R. Cohen: [music].

Operator: Ladies and gentlemen, that concludes today's call. Thank you all for joining. You may now disconnect. Please wait; the conference will begin shortly.

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