May 3, 2022

Talkspace, Inc. (Nasdaq: TALK), a leading virtual behavioral healthcare company, today reported 2022 first quarter results as summarized below. All financial results refer to 2022 first quarter and the prior-year period unless otherwise stated.

“We delivered revenue growth in the first quarter of 2022, led by increasing demand for our business-to-business (“B2B”) services, partially offset by a decline in our consumer business. Our business-to-consumer (“B2C”) business began to demonstrate modest improvement in a number of operating metrics as a result of changes designed to better optimize our marketing investments,” said Chief Financial Officer Jennifer Fulk. “Importantly, we continued making progress on our operational priorities throughout the quarter.”

First Quarter 2022 Key Performance Metrics

  • The number of individuals eligible for Talkspace via their insurance or employer (B2B eligible lives) grew by 54% to 76.5 million, driven by expanded relationships with existing clients including Optum as well as the addition of Beacon.
  • Completed B2B sessions grew 68% to 90,600, driven primarily by growth in B2B eligible lives.
  • Active members grew 10% to 64,500, driven by strong growth in B2B, partially offset by fewer individual consumer subscribers (B2C clients) resulting primarily from lower marketing spend.
  • Conversion metrics and customer acquisition costs modestly improved in the quarter in our B2C business.

First Quarter 2022 Key Financial Metrics

  • Revenue grew 11% to $30 million, driven by 50% growth in B2B revenue partially offset by a 7% decline in B2C revenue. B2B revenue performance was driven by an increase in covered lives from health plan clients and new enterprise clients, and a higher number of completed B2B sessions. B2C revenue declined primarily due to reduced marketing spend, partially offset by a one-time $0.5 million non-cash reversal in deferred revenue associated with customers no longer active on Talkspace’s platform.
  • Gross profit declined 13% to $15 million, and gross margin declined to 50%, due primarily to a revenue mix shift toward the B2B business, a greater number of salaried therapists within Talkspace’s network, and higher therapist hourly compensation expense.
  • Net loss was ($20) million, compared to a net loss of ($13) million in the prior-year period, driven primarily by increased general and administrative expenses and higher cost of revenues. Adjusted EBITDA loss was ($18) million, compared to ($11) million in the prior-year period.