Talkspace (TALK) investor relations material

Business performance and growth

• Achieved 35% growth in payer revenue and 18% overall growth in Q2, with payer now the largest and fastest-growing revenue line.

• Added 10,000 net new users in Q2, marking the largest increase in over two years, driven by in-network insurance strategy.

• Three material direct-to-enterprise SaaS contracts slipped from Q2 to Q3 but are expected to be implemented and recognized in Q3.

• Covered lives in payer business increased to approximately 200 million, up from 130–140 million a year ago.

• Direct-to-consumer revenue has stabilized at around $4 million per quarter, with payer revenue now prioritized for long-term growth.

Strategic initiatives and partnerships

• Significant CapEx investments are being made in AI and a proprietary LLM for mental health, aiming for unique market positioning.

• Announced integration with a national express matching network to streamline patient scheduling and improve payer directory relationships.

• Full integration with payer directories enables users to schedule appointments directly, enhancing patient engagement and conversion.

• Entered new payer networks, including Texas Blues, Illinois Blues, and Idaho, after lengthy negotiations.

• Signed TRICARE and Medicare, expanding into military and senior populations with tailored go-to-market strategies.

Market trends and operational focus

• Payers are narrowing networks and shifting focus to value-based contracting, emphasizing quality and outcomes.

• Network audits by payers are frequent, with increasing scrutiny on documentation and therapist quality.

• The business model transition from consumer to insurance-based has been challenging but is now yielding more stable, long-term revenue.

• Marketing allocation is managed flexibly, with spend adjusted based on channel performance and contribution margin.

• No current supply-side issues in therapist recruitment or retention; matching remains efficient across regions.