1Q 2024 Total revenue grew 36% year-over-year 1Q 2024 Payor revenue grew 92% year-over-year Reduced GAAP Net loss to $1.5 million from $8.8 million year-over-year Delivers first profitable quarter with Adjusted EBITDA1 of $0.8 million NEW YORK, May 07, 2024 (GLOBE NEWSWIRE) -- Talkspace, Inc. (NASDAQ:TALK), today reported first quarter 2024 financial results.     Three Months       Three Months Ended March 31, 2024 (Unaudited)   Results   % Variance from Prior Year (In thousands unless otherwise noted)         Number of eligible lives at period end (in millions)     131.4     34% Number of completed Payor sessions     284.2     65% Number of Consumer active members at period end     11.1     (26)%           Total revenue     $45,416     36% Gross profit     $21,731     30% Gross margin %     47.8%     Operating expenses     $23,410     (9)% Net loss     $(1,466)     83% Adjusted EBITDA1     $774     112% Cash and cash equivalents at period end     $120,278     —               (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." Dr. Jon Cohen, CEO of Talkspace, said, "We kicked off 2024 with strong momentum, building on our pivotal achievements from last year. Our first quarter results showcase a 36% year-over-year increase in revenue, driven by our deepening engagement and expanding reach within our Payor category. We also made exciting progress with our recent launches in New York City and the Baltimore County Public School system, two initial clients underpinning our efforts to combat the teen mental health crisis." "Importantly, this also marks our first quarter of profitability on an adjusted EBITDA basis. Our cash position, our streamlined operations, and our defined growth strategy give me confidence we are well-equipped to continue advancing our mission to deliver accessible and high-quality mental healthcare. As we continue to scale, our dedication to operational excellence is not only providing greater access to mental healthcare, but also enhancing the quality of care we provide for our members and the experience for our provider network," added Dr. Cohen. First Quarter 2024 Key Performance Metrics Revenue increased 36% over the prior-year period to $45.4 million, driven by a 92% year-over-year increase in Payor revenue and a 14% year-over-year increase in Direct to Enterprise ("DTE") revenue; partially offset by a 29% year-over-year consumer revenue decline. Gross profit increased 30% over the prior-year period to $21.7 million, and gross margin declined to 47.8% from 50.2% year-over-year, driven by a shift in revenue mix towards Payor. Operating expenses were $23.4 million, down 9% year-over-year, driven primarily by efficiencies in Research & Development and Clinical Operations. Net loss was $(1.5) million, an improvement from $(8.8) million net loss in the first quarter of 2023, primarily driven by an increase in revenues and a reduction in operating expenses. Adjusted EBITDA was $0.8 million, an improvement from $(6.4) million in the first quarter of 2023, primarily driven by an increase in revenues and a reduction in operating expenses. Financial Guidance Full fiscal year 2024 guidance remains unchanged. Based on current market conditions and expectations and what the Company knows today, Talkspace expects 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. 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 131 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 For Media: John KimSKDK(310) 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, 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 March 31,       2024   2023   % Change (in thousands, except percentages, share and per share data) Unaudited   Unaudited     Revenue:           Payor revenue $28,508   $14,811   92.5 DTE revenue 9,913   8,676   14.3 Consumer revenue