Teletherapy company Talkspace saw its stock price rise after reporting second-quarter revenue of $35.6 million, a 19% increase over the prior year period, driven by an 82% increase in B2B revenue year-over-year and partially offset by a 41% consumer revenue decline.
The New York-based company’s net loss was substantially lower in the second quarter at $4.7 million than its $23 million loss in Q2 of 2022.
Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) came to a loss of approximately $4 million, a decrease of 77% from the company’s loss of $16.9 million in the prior year.
Talkspace’s total operating expenses were $24.2 million in the second quarter of this year, a 32% decrease from the prior year period. The company said the drop was primarily due to reductions across all operating costs categories.
Gross profits increased 22% in the second quarter of this year to $17.8 million.
Thanks to results in Q2, the company adjusted its 2023 fiscal year expectations, citing projected revenue in the range of $137 million to $142 million as opposed to previous expectations of $130 million to $135 million.
Adjusted EBITDA loss is now projected to be in the range of $16 million to $19 million as opposed to its previous expectations of $19 million to $21 million.
Talkspace expects to reach adjusted EBITDA break-even status by the end of Q1 2024, with a $100 million cash balance.
“We built on the first quarter’s strong momentum in our payor business by expanding our relationships with commercial partners while activating a growing proportion of our member base. We continued to introduce product innovations and grow our clinical network while maintaining stringent quality standards, driving gains in access and engagement metrics and improving network productivity,” Dr. Jon Cohen, CEO of Talkspace, said in a statement.
“As we look to the second half of the year and beyond, we remain confident in our ability to capitalize on the growing need for covered mental health services and to deliver profitable growth.”
THE LARGER TREND
Talkspace announced its plans to go public in 2021 through a merger with special purpose acquisition company, Hudson Executive Capital.
It hit the Nasdaq later that year at a stock price of $9.80 per share, and subsequently reached a high of $11.95 per share.
However, last November, the company received a letter warning that it could be delisted from Nasdaq since its stock had closed below the minimum $1.00 per share for 30 consecutive business days.
After releasing it’s second quarter 2023 earnings, the company’s stock is trading around $1.70 per share.