Talkspace, Inc. (Nasdaq: TALK), a leading virtual behavioral healthcare company, today reported 2021 full year and fourth quarter results as summarized below. All financial results refer to 2021 full year or fourth quarter and the applicable prior-year period unless otherwise stated. compared to ($9) million in the prior-year period.
“We delivered revenue and gross profit growth in 2021, led by increasing demand for our B2B services, partially offset by a decline in our consumer business in the final months of the year,” said Chief Financial Officer Jennifer Fulk. “Importantly, we made progress on our near-term priorities as we continue to invest in growth initiatives and optimize our business mix, setting the stage for long term value creation.”
Full Year 2021 Key Performance Metrics
- Revenue grew 49% to $114 million, driven primarily by business-to-business (“B2B”) growth in covered lives from health plan clients and new enterprise clients, along with increased business-to-consumer (“B2C”) member subscriptions, partially offset by an increase in revenue reserves on receivables of $4.1 million from existing health plan clients.
- Gross profit grew 34% to $67 million. Gross margin declined to 59% due to a revenue mix shift toward B2B, a greater number of full-time therapists added to Talkspace’s network, and the revenue reserves referenced above.
- Net loss was ($63) million, compared to a net loss of ($22) million in the prior year, driven primarily by higher customer acquisition costs and an increase in headcount, as well as stock-based compensation expense. This was partially offset by non-cash gains related to revaluation of warrant liabilities. Adjusted EBITDA loss was ($61) million, compared to ($18) million in the prior year.
Fourth Quarter 2021 Key Performance Metrics
- Revenue grew 14% to $29 million, driven by an increase in covered lives from health plan clients and new enterprise clients, a higher number of completed B2B sessions, and a favorable revenue reserve on receivables from prior periods of $0.8 million. This was offset by B2C revenue decline of 15% due in part to reduced marketing spend. The $0.8 million revenue reserve favorably impacted revenue growth by 3 percentage points.
- Gross profit declined 5% to $16 million, and gross margin declined to 55%, due to a revenue mix shift toward B2B and a greater number of full-time therapists added to Talkspace’s network, partially offset by the favorable revenue reserve allowance referenced above. The $0.8 million revenue reserve favorably impacted gross margin by 1.2 percentage points.
- Net loss was ($21) million, compared to a net loss of ($11) million in the prior-year period, driven primarily by higher customer acquisition costs, employee-related expenses including one-time cash severance costs, and stock-based compensation. Adjusted EBITDA loss was ($18) million, compared to ($9) million in the prior-year period.