On November 2, 2023, Talkspace Inc (TALK, Financial) released its third quarter 2023 financial results. The company reported a 32% increase in total revenue, reaching $38.6 million, driven by a 79% year-over-year increase in the B2B revenue categories. However, this was partially offset by a 32% year-over-year decline in consumer revenue.
Financial Highlights
The company's gross profit increased by 29% over the prior-year period to $18.8 million, while the gross margin declined slightly to 48.8% from 49.8% year-over-year. This was primarily due to a shift in revenue mix towards payor. Operating expenses were reported at $24.0 million, marking a 30% decrease year-over-year, driven by a reduction across all operating cost categories.
Talkspace Inc (TALK, Financial) reported a net loss of $4.4 million, a significant improvement from the $18.0 million net loss in the third quarter of 2022. This improvement was primarily driven by lower operating expenses and an increase in revenues.
CEO and CFO Commentary
Dr. Jon Cohen, CEO of Talkspace, said, “The strong momentum in our payor business continues, driven by increasing demand for high-quality in-network benefits and enhanced engagement across our covered population. We grew our clinical network to support our current and future growth, while driving further gains in access and quality metrics and improving network productivity."
Jennifer Fulk, CFO of Talkspace, said, “We experienced strong sessions growth in the quarter, while we continue to achieve further efficiencies in collections, traffic conversion and treasury operations. Our leverageable cost base has allowed us to make further progress towards break-even, while enhancing the size and quality of our clinical operations.”
Financial Outlook
For the Fiscal Year 2023, Talkspace expects revenue to be approximately $146 million, improved from previous expectations of $137 million to $142 million. The company also expects the Adjusted EBITDA loss to be in the range of $16 million to $17 million, narrowed from previous expectations of $16 million to $19 million. The company anticipates reaching break-even Adjusted EBITDA by the end of the first quarter of 2024, with a cash balance of approximately $120 million.
Explore the complete 8-K earnings release (here) from Talkspace Inc for further details.
