Hello and welcome to the LifeStance Health Group Quarter 2025 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. If you'd like to ask a question by that time, please press star one on your telephone keypad. Thank you. Now, I would like to turn the call over to Monica Prokocki. You may begin. Thank you, operator. Good morning, everyone, and welcome to LifeStance Health Group Quarter 2025 earnings conference call. I'm Monica Prokocki, Vice President of Finance and Investor Relations. Joining me today are Dave Bourdon, Chief Executive Officer, and Ryan McGroarty, Chief Financial Officer. Ken Burdick, our Executive Chairman, is also with us. We issued the earnings release and presentation before the market opened this morning. Both are available on the Investor Relations section of our website, investor.lifestance.com. In addition, a replay will be available following the call. Before turning over to management for their prepared remarks, please direct your attention to the disclaimers about forward-looking statements included in the earnings press release and SEC filings. Today's remarks contain forward-looking statements, including statements about our financial performance outlook, business model, and strategy. Those statements involve risks, uncertainties, and other factors, as noted in our periodic filings with the SEC, that could cause actual results to differ materially. Please note that we report results using non-GAAP financial measures, which we believe provide additional information for investors to help facilitate comparison of current and past performance. A reconciliation to the most directly comparable GAAP measures is included in the earnings press release tables and presentation appendix. Unless otherwise noted, all results are compared to the comparable period in the prior year. At this time, I'll turn the call over to Dave Bourdon, CEO of LifeStance. Dave? Thanks, Monica, and thank you all for joining us today. I'm incredibly proud of the LifeStance team for the strong results achieved in the second quarter. We met or exceeded each of our guided metrics. We grew our clinician base by over 170 clinicians, while at the same time improving productivity. We delivered double-digit organic revenue growth, along with 10% adjusted EBITDA margins. Given the outperformance in the first half of the year, we are raising full-year guidance for adjusted EBITDA. We now expect to achieve double-digit margins for the full year. We also delivered exceptionally strong free cash flow of $57 million, our highest in LifeStance's history, which provides additional capacity to further invest in the business. Our model, with the ability to deliver both in-person and virtual care, along with a focus on patients covered by commercial payers, continues to demonstrate its resilience and differentiation. We remain well-positioned to navigate a dynamic healthcare environment as we focus on expanding access to high-quality and affordable mental health care. This quarter, we made meaningful progress to drive improvements in the performance of the business. From an operational perspective, our clinicians' commitment to delivering high-quality patient care continues to be the driving force behind our success. We're proud to have a team of over 7,700 clinicians, an increase of 173 just this quarter, which is further validation that our value proposition is continuing to resonate. We previously shared that this year, in addition to continuing to grow our clinician base, we have a number of initiatives to better fill clinicians' calendars to drive improved productivity. For example, in May, we launched our clinician cash incentive program to reward clinicians for improving access and quality. We have recently implemented a patient engagement platform that improves acquisition and retention by fostering a stronger connection with the patient. Additionally, we are enhancing our care matching capabilities to support an even better clinical fit between patients and providers. This is another important step toward delivering the right care with the right match from the very beginning. When the clinical match is strong, we see better patient engagement, fewer cancellations and no-shows, and a more satisfying experience for both clinicians and patients. These are just a few examples of the concerted effort within the organization to ensure that we effectively utilize the capacity of our talented and dedicated clinicians. In the second quarter, we saw improvement in productivity and believe there will be further improvement in the back half of the year as a result of these and other initiatives. From a technology perspective, we're entering a new chapter of our tech enablement, including a greater emphasis on AI and digital solutions. For example, as part of our continued focus on operational efficiency and effectiveness, we have begun to leverage AI tools to improve accuracy and automate tasks in our revenue cycle processes and to improve the quality and responsiveness of our patient scheduling team. We're also investing in AI solutions to help our clinicians be more effective with documentation. While we're still evaluating options, this will ultimately enhance clinician satisfaction and allow clinicians to focus on what they love: providing excellent, compassionate care to our patients. We are confident that these investments in technology will unlock value by improving the patient and clinician experience while also driving operating leverage. Also, on the technology front, I would like to highlight the recent appointment of Vaughn Punovich as our new Chief Technology Officer. Vaughn has extensive expertise in leading digital transformation initiatives, enabling AI-powered insights, and streamlining digital tools to enhance healthcare delivery. His experience and commitment to innovation make him the right individual to lead our technology organization, ensuring that LifeStance Health Group delivers a best-in-class experience for our patients and clinicians. In closing, this was a strong quarter, and we feel good about the momentum heading into the second half of the year. As we look ahead to 2026, we remain confident in our ability to deliver on mid-teens revenue growth while expanding margins. We expect a low to mid-single-digit rate improvement, continued organic growth of our clinician base, and strong visit volumes as the demand for mental health services continues to increase. In addition, with the efficiencies we're driving, we expect to generate further operating leverage. With that, I'll turn it over to Ryan to provide additional commentary on our financial performance and outlook. Ryan? Thanks, Dave. I am pleased with the team's operational and financial performance in the second quarter. We delivered strong growth across revenue, visit volume, and clinician count. Revenue grew 11% year-over-year to $345 million. This outperformance was driven by slightly better-than-expected clinician productivity and total revenue per visit. Visit volumes of 2.2 million increased 12% year-over-year, driven primarily by clinician growth. We added 173 clinicians this quarter, an 11% increase year-over-year, bringing our total to 7,708 clinicians. With regard to clinician productivity, it was slightly ahead of our expectations in the second quarter. While it is still early, we're encouraged by the initial progress from our productivity initiatives. Total revenue per visit decreased year-over-year as expected. It was $157, which was down 1%, driven by the impact from the single outlier payer dynamic that we previously disclosed, partially offset by rate increases with other payers. Turning to profitability, the center margin of $108 million increased 11% year-over-year and was 31.4% as a percentage of revenue. The outperformance in the quarter was driven by the modest revenue beat. The expense for our new cash-based clinician incentive program, which launched in May, is reflected in these results. Adjusted EBITDA of $34 million in the quarter exceeded our expectations. This 19% year-over-year increase brings our adjusted EBITDA as a percentage of revenue to 9.8%. The outperformance in the quarter was primarily attributable to favorable center margins and slightly lower G&A spending than expected. Turning to liquidity in the second quarter, free cash flow was exceptionally strong at $57 million, the highest we've delivered in any quarter to date. We exited the quarter with a solid cash position of $189 million and a net long-term debt of $273 million. We have additional capacity from an undrawn revolver of $100 million. DSO for the quarter improved significantly to 34 days, a sequential improvement of four days. We remain confident in our ability to generate meaningful positive free cash flow for the full year. Our leverage ratios are strong and continue to improve, with net and gross leverage of 0.7 x- 2.2x, respectively. This represents meaningful progress from the 2.2 x net and 3.2x gross leverage in Q2 of last year. We have significant financial flexibility to run the business and fully execute on our strategy, including potential acquisitions. In terms of our outlook for the full year, we are maintaining our guidance range of $1.4 billion- $1.44 billion for revenue. We are raising our guidance range for center margin to $441 million- $465 million. Given the outperformance in the first half, we are raising our adjusted EBITDA guidance range by $5 million at the midpoint to $140 million- $150 million. This puts us on track for 60 basis points of margin expansion year-over-year and double-digit margins for the full year. In addition, we continue to expect stock-based compensation of approximately $70 million- $85 million. For the third quarter, we expect revenue of $345 million- $365 million, center margin of $105 million- $119 million, and adjusted EBITDA of $33 million- $39 million. As previously communicated, our annual guidance assumes year-over-year revenue growth driven primarily by higher visit volumes, with total revenue per visit being roughly flat. For the second half, we expect modest rate improvement and continued growth in clinicians. Additionally, as noted, we are also focused on better filling existing clinician calendars. Our guidance contemplates a step-up in productivity in the third quarter, with further improvements in the fourth quarter, driven by the ongoing initiatives Dave mentioned earlier. The combination of these drivers will lead to higher revenue in the back half of the year. As we shared last quarter and as implied in our guidance, we expect earnings to build in the back half of the year, driven by modest rate improvement, increased visit volumes, and growth in specialty revenue. We expect to see a step-up in adjusted EBITDA margins in the second half over the first half. We previously guided to exiting the year with double-digit margins and are now pleased to expect to achieve double-digit margins for the full year. Looking ahead, we feel confident in 2026 and the coming years. We expect to benefit from industry tailwinds, including increasing demand for mental health services and patient trends from cash pay toward commercial insurance. At LifeStance Health Group, we are well-positioned to take advantage of the macro trends and anticipate growing revenue in the mid-teens through increased visit volumes, rates, and specialty services. We remain confident that 15%- 20% margins are achievable in the long term as we drive center margin expansion and operating leverage in the business. With that, I'll turn it back to Dave for his closing comments. Thanks, Ryan. In closing, this was a great quarter for LifeStance Health Group. We met or exceeded each of our guided financial metrics, delivered strong organic revenue growth and adjusted EBITDA margins, and generated our highest quarter of free cash flow ever. Our progress to date and the incredible dedication of each of our clinicians and team members serve to reinforce our confidence in the future as we focus on expanding access to high-quality, affordable mental health care. Operator will now take questions. Thank you. We will now begin the question-and-answer session. At this time, I would like to remind everyone that in order to ask a question, press star then the number one on your telephone keypad. Just as a reminder to please limit yourself to one question and one follow-up. Your first question comes from the line of Craig Hettenbach with Morgan Stanley. Please go ahead. Craig, thanks. Just a question on the implied RAM for Q4, and appreciate all the color and the prepared remarks, but you should probably have some improvement from as the payer reduction headwind abates, and you've talked about productivity. Just looking for kind of your confidence level into that back half RAM and things that you're seeing in the business that builds that. Okay. Hey, Craig, this is Ryan. Appreciate the question. Going to the point of your question, we're super pleased with our performance in the first half of the year, and we have meaningful momentum going into the second half of the year, driving up a step up in revenue, as you kind of acknowledged in your question. In addition, from revenue contribution from clinician rates, we continue to plan to drive productivity in the second half of the year. To help dimension this, from the first half to the second half, we expect roughly $60 million of revenue growth. The way you can think about that is driven by 10% from rate and 90% from visit volume. To further dimension that, when you think of a 90% that's related to visit volume, you can think of that as approximately 60% is coming from clinician adds and 40% is coming from productivity. As we mentioned in previous quarters in our prepared comments, we're prioritizing filling existing clinician calendars, which we believe will result in increased productivity in the second half. Dave went through a number of initiatives that we have in play to drive the filling of the schedules in his prepared comments. To your question, just in terms of Q3 versus Q4, clinician adds will be a meaningful driver in both quarters. When you get to Q4, you will see a higher contribution for productivity as the initiatives that are in play have more time to make a meaningful impact. From a rate perspective, going to that part of your question, we expect modest growth in rates the first half to second half, and it really is driven by further rate negotiations and some specialty services in there. Overall, we've absorbed the one unique payer dynamic, and overall, we're still guiding to flat TRPV for the year. As you get into future years, we expect to return to low to mid-single digits from a rate perspective. To close the comments out, you know, we feel really good about our growth in the first half and the momentum going into the second half. Very helpful details. Thanks for that. As my follow-up, can you just talk about the backdrop in terms of clinician adds and retention, kind of what you're seeing in the marketplace and maybe what are some of the things that are resonating for the LifeStance platform? Hey, Craig, good morning. It's Dave. I'll take that one. In regards to the clinician recruiting retention dynamics, first of all, we feel good about our clinician net ads in Q1 and Q2. They were consistent with our expectations, and that's really the result of stable retention and strong recruiting, which are consistent with the dynamics that we've seen play out now for quite a while. There's nothing new that I would point to in the overall environment. It remains a highly competitive environment for the recruiting and retention of clinicians. I think with the net growth that you're seeing from us, it's just further validation that our value prop is resonating. Got it. Thanks for that. Your next question comes from the line of Lisa Jill with JP Morgan. Please go ahead. Thanks very much. Good morning. I just wanted to go back to a couple of things. One on your comment, Ryan, I think that you made around cash pay shifting towards commercial. Do you have any updates on managed care contracting, you know, contracting around that? I'm just curious, is it that we're seeing expansion of the benefit that that comment was made around what you're seeing for cash pay going into the commercial volumes? Lisa, good morning. It's Dave. I'll take that one. In Ryan's remarks about the tailwinds that we're seeing in the industry and we expect to see as we step into 2026 and 2027, there were two things you referenced. The first was increasing demand overall for mental health services, and the second, which is what you're referencing, is a shift from cash pay to insurance. The point we're making there is that you still have a very high percentage of clinicians today who do not accept insurance, and that is a financial challenge, makes it less affordable for patients. What we've seen in recent years and we expect to see in coming years is further migration of the patients from a cash pay environment to using their insurance, and obviously that trend would benefit LifeStance Health Group as we focus on patients that have insurance. Do you feel, Dave, that you have the capacity to take on that incremental patient volume? I think that, historically, you've been bringing on clinicians and you kind of build their book. Do you feel like you have a lot of capacity today? It's just curiosity from a capacity standpoint. How do I think about that? We do. We feel good about the capacity that we have in our clinicians, existing clinicians. That's why we're actually focused on productivity and better filling out their calendars. The reality is, in many markets, we could probably hire more clinicians if we felt that the patient demand was going to be there. It's always a balancing act around how many clinicians we hire because we need to make sure that we're ramping them at a good pace or they get dissatisfied and leave, which would drive up turnover. Obviously, that's one of the areas that we're focused on improving with retention. Okay, great. Thanks for the comments. Your next question comes from the line of Jamie Purse with Goldman Sachs. Please go ahead. Hey, thank you. Good morning. I wanted to follow up on the first question around implied guidance for 4Q. I think if we take the midpoint at 3Q and the full year, that implies about 19% revenue growth in the fourth quarter. You said about 90% of that is coming from volume, so high teens volume growth. Can you just comment on sort of the sustainability of that? You mentioned some of the productivity initiatives you're putting in place that support the ramps to that type of volume growth, exiting the year. Can you just spend a minute on what those are and your assumptions around how those initiatives translate into the improved volume growth? Yeah, sure, Jamie. This is Ryan. I'll start off, and then Dave will provide a little bit more color in terms of some of the initiatives that we're doing in totality. You got the quantum right, just in terms of if you kind of go back and think of the progression of revenue. Revenue grew Q1 to Q2 by $12 million. Q2 to Q3, we're expecting $10 million. From Q3 to Q4, we're expecting roughly $30 million. The way I kind of have you think about that, similar to my second half, first half commentary, is think about 75%- 80% of it is coming from clinician adds and productivity, and then, roughly split for that 75%- 80%, 50/50 to productivity. As you kind of put in your question, we've got a number of initiatives in play, both around the incentive program that we put in, care matching, better just practice operation type stuff that really impacts the ability to get folks filled into the clinician schedule. We're pleased with the progress that we've shown to date. We had productivity improvement Q2 over Q2 of last year. We like the momentum that we're seeing around productivity and the initiatives kind of ramping up and taking hold through Q3 into Q4. Dave, I don't know if there's anything further you want to put on the initiatives. Yeah, I mean, that was well said. One thing I'd just close on is a reminder of why we're doing this. We're trying to improve retention of our clinicians, and we're listening to them around where their pain points are. One of the big ones that they've highlighted for us is they'd like their calendars to be more full. That's the focus on productivity. This isn't something we're forcing on them. This is something they're asking for. The additional benefit to us as LifeStance Health Group is obviously that makes us more efficient if we're able to have our existing clinicians be more productive. Okay, thanks. That's helpful. Just one on the free cash flow. You guys mentioned this a couple of times in the script, $57 million generated in the quarter. Looks like there's pretty good working capital performance on things like accounts payable and accrued payroll. Just anything to call out there in terms of being one-time. If I look at free cash flow on a year-to-date basis, conversions around 68%. I think that normalizes for some of these timing elements. How would you just generally frame free cash flow outlook going forward, free cash flow conversion on a sustainable basis? Yeah, sure, Jamie. This is Ryan again. You captured some of the headline points. Clearly, we achieved exceptional kind of free cash flow here in the first half, and we do feel good about the trajectory kind of as we think through the full year. In the first half, and as you referenced, we drove $46 million year -to- date, including $57 million in Q2. I do want to point out in Q3, it will be down meaningful from the strong Q2 cash flow, and it really is related to the 401(k) match. The 401(k) match hits in Q3, higher CapEx as it relates to the timing and the phasing of rolling out de novos, and then also just some timing just in terms of improved payroll. Overall, you know, we feel really good just in terms of the trajectory of the cash flow for the business. Last year was our first year of positive free cash flow, and we're pleased now to be in the second year of strong cash flow generation, which provides us the flexibility to execute on our overall strategic priorities. Yeah, one thing I'd pile on to Ryan's comments is, I want to make sure we don't walk past it, is the strength of the operational performance of the team with DSO now at 34 days. We were over 50 at one point last year, just tremendous work by our team. Each one of those days is worth roughly $3.5 million- $4 million of cash. Okay, great. Thank you. Your next question comes from the line of Ryan Daniels with William Blair. Please go ahead. Hey, this is Matthew Mardula on for Ryan Daniels, and this is more of a top-level question, but in the past few weeks, we've seen a noticeable increase in state-level legislation around the use of AI in therapy sessions and just broader AI participation in the mental health industry. I'm curious, do you believe this evolving regulatory environment poses any potential headwinds or opportunities for your business? Hey, Matthew. It's Dave. It's a great question, and it's really early days around AI and its impact on healthcare in total and then specific to the mental health space. The way we think about AI and technology in general is that we're going to be able to use that to support our clinicians in how they practice care and improve their experience and the patient experience. We do not view AI as a replacement for the care that our clinicians provide. I think that's really the bottom line for us. Great, thank you for that. Your next question comes from the line of Brian Tanquilut with Jefferies. Please go ahead. Hey, good morning. Just curious, are you seeing any dynamics in the recruitment front that are impacting some of these metrics that you're seeing? I understand some of the comments from earlier, but anything we should be thinking about that could be changing fundamentally in terms of what's happening in the clinician side? Hey, good morning. It's Dave. I'll take that. I mentioned earlier, the environment for recruiting of clinicians remains very competitive, and we're successful in that environment by providing a comprehensive value prop that, you know, everything from compensation and benefits to clinical and administrative support to the clinicians. That recruiting of new clinicians has been the primary driver of our net clinician growth the last couple of years, including this quarter, while we've gotten the retention to a stable level. Nothing new that I would point to in the market. Got it. As I think about cash flow's strong performance during the quarter, anything to call out there that I should be thinking about as we model for the back half of the year on free cash flow? Yeah, just as it relates to cash flow, Brian, similar to the answer that I provided around that, obviously really strong cash flow in the first half of the year with $46 million year to date. As you think about Q3, we will see some downward meaningful kind of change to cash flow just as it relates to the, as I mentioned, the 401(k), higher CapEx as it relates to rollout of de novos, and then also just some timing as it relates to accrued payroll. I don't want that to take away from the messaging just as it relates to this is our second year with really strong cash performance and looking forward to future periods just in terms of our cash generation ability. Awesome. Thank you. Your next question comes from the line of Richard Close with Canaccord Genuity. Please go ahead. Yes, thanks for the questions. Obviously, higher mental health utilization has been called out a handful of times here by managed care in the quarter in the first half. You seem pretty positive on the rate environment and the tailwinds in your business. I'm just curious your thoughts on the potential for managed care trying to rein in the rising cost trends in mental health. You come from that side of the business previously. Just curious what your perspectives are. Hey, Richard. It's Dave. I'll take that one. Good morning. First of all, I'd say in the payer environment and that dynamic, there's really not been a material change. Payers certainly have financial pressure. That's not new. It may be more heightened for some of them. It's not a new dynamic, and it's something that we've been dealing with them now for a period of time. I'd also say as payers continue to focus on access and increasing access for both their employer clients and their members, you have that as a counterbalance to the financial pressures. Additionally, I would say there's a few of the payers that are more thought-leading that are starting to focus on quality in mental health. We expect that the market in the coming years will gradually shift toward access, quality, and outcomes. We welcome that change, and we believe we're very well positioned if the market goes in that direction. Where you started your question is, as previously stated, we feel good about our ability to negotiate reimbursement reflective of the value that our clinicians are providing. Next year, we expect to return to that low to mid-single-digit rate increase. Okay, that's helpful. Maybe as a follow-up, just back on the productivity programs that you're implementing, just a clarification on the patient engagement. Is that the same offering that you rolled out earlier in the year? You had mentioned acquisition and retention. Just want a clarification there. On the care management capabilities that you talked to or talked about, is that new? Is that something new? Do you have any details on any pilots that you did in terms of the improved productivity? Any, maybe percentage improvement or whatnot would be helpful? Yeah, this is Dave. I'll take that. There are a number of pieces there. First of all, on the patient engagement, this is different than the digital patient check-in tool, which I think is what you were referencing. Think of that as more administrative in nature for patients as they're checking in both for a virtual appointment or for an in-person appointment. It allows us to get insurance cards and ID cards, updated addresses, forms signed, things like that. That's more what that tool was. It was administrative in nature. This is really more of a patient CRM marketing tool, and it's allowing us to communicate with patients in a more systematic way, a more structured, standardized way, both engaging with a new patient before they've showed up to their first appointment, as well as existing patients and ongoing communications with them around mental health and allowing the clinician to engage with the patient as well. There's a lot to that. We're very excited. It's just something that we don't do today in a standard way throughout the country. In regards to the matching, we do matching today, and we do a decent job on matching our patients and our clinicians. However, we believe there is opportunity for improvement in improving that match. If we're able to do that, what we'll end up with is patients will be stickier with their clinicians and stay with the care, which will improve their health outcomes. It'll also reduce cancellation no-show rates and things like that. I wouldn't quote any stats, but we have looked at this from a number of different angles, and we do believe that as we roll this out in the second half of the year, it will improve, again, that clinician experience, the patient experience, the stickiness, and will drive improved productivity as it better fills our clinicians' calendars. Okay, thank you. Congratulations. Thanks. Your next question comes from the line of Kevin Caliendo with UBS. Please go ahead. Thanks for taking my question. Last quarter, you introduced the idea of potentially starting the M&A engine again. You didn't do any this quarter, it appears. Can you maybe talk about where you stand with that, how valuations are now or opportunities are now compared to when you were doing them years ago, how the pipeline looks like? Hey, Kevin. It's Dave. Good morning, and thanks for the question. We did signal that in the last quarter, and we are active in exploring M&A. Our focus right now is primarily tuck-in acquisitions in geographies that are new to us or where we're very subscale. This is really more of a beachhead and for geographic expansion. Those opportunities are really exciting to us, whether that's entering a new MSA or a new MSA in a new state. That's the focus. The pipeline is pretty robust, and we are actively working through a number of opportunities. I wouldn't signal at this point timing on when you'll see those coming through. That is a big focus area for us, and there's a lot of positive activity there. I just want to understand, none of the guidance assumes any M&A, right? It's all organic what you're talking about in the guidance that you provided. That's correct. The margin expansion that you've shown has been great and better, I think, than we had modeled. Was it easier to get the kind of margin expansion that you got this year? I'm not asking you for guidance on margin expansion in 2026 or 2027 or beyond, but when we think about margin expansion, in terms of magnitude, is it incremental? Was this year just the first step? Where are we along the margin expansion pathway longer term? I'd be happy to answer that one. I appreciate the question. If you kind of think through, we're pleased with the margin expansion that we've achieved here in 2025, even given the fact that the meaningful decrease from the one unique payer to kind of flatten out your TRPV, but still being able to expand margin, we're pretty proud of that. That's on top of expansion of last year, you know, 400 bps just in terms of expansion. As we start thinking through the long-term kind of growth algorithm that we have here, we definitely see a path to margins, you know, to 15%- 20% from an adjusted EBITDA perspective, which will be done both through center margin expansion, through rate growth, a little bit of operating leverage on center margin and specialty services. There is still further opportunity to expand out leverage through the G&A line. Overall, kind of getting to that long-term destination of 15%- 20%. Again, we feel really good in terms of what the growth algorithm and even proven out like in a difficult year, still being able to expand out margins year over year. Sounds good. Thanks, guys. Your next question comes from the line of David Larsen with BTIG. Please go ahead. Hey, congratulations on the good quarter. For the digital patient check-in solution, is that 100% deployed or is it maybe 50% deployed? How far along are you in that process? You also use the phrase CRM. Is there a separate technology administrative solution that will assist in like a scheduling process to facilitate filling calendars? Those two technology components I think are very important. Thanks very much. Hey, Dave. Good morning. This is Dave, and I'll take your questions. First of all, on the digital patient check-in, that is fully rolled out. That process was completed earlier in the year. In regards to the patient CRM, I think of this as more of a marketing CRM. It is not connected to our scheduling system. The scheduling component is not part of that. Scheduling would be more connected to what I was discussing in that matching initiative, the enhanced matching that we're doing. This is really about marketing and communications with our patients. Okay. In terms of the One Health Plan where there's a little bit of a rate reset, that will be final 1/1/2026, and you would expect an increase in rates from that payer 1/1/2026 for the year. Is that correct? Yeah, this is Ryan. The last of the three rate decreases went into effect on March 1st, 2024. That's the driving force between the flattish TRPV from 2025 over 2024. As it relates to future, we're in rate negotiations across our overall payer portfolio. Not all of our contracts line up to 1/1, so they're more scattered throughout the year in totality. Okay. Any thoughts on the proposed Medicare fee schedule? It looks to me like the conversion factor could increase by 3% to 4%, and the RVU rates in some codes for some psych visits also look like they'd be going up mid-single digits. It looks like reimbursement is looking pretty good for next year. Any thoughts on that or the big beautiful bill and the impact that that might have, if any, on your business? Thanks. Yeah, this is Dave. I'll take those questions. First of all, in regards to the Medicare rates, you're reading the signals correctly. I would say it's very early, and we'll see how that plays out, and obviously we'll know the final numbers as we get towards the end of the year. The good news is that there appears to be really strong bipartisan support around mental health. Early signals being that it's positive, a positive rate increase for next year, but we will wait and see how they finalize. In regards to the other legislation, the concern around that bill is the reductions to Exchange and Medicaid, and we have limited exposure to those business lines. A reminder, we have about 5% of our total revenue is the government as a payer, and then we do have some Exchange and Medicaid business with commercial payers, but that being a small percentage of our total revenue. Okay, thanks very much. Congrats on a good quarter. Thank you. Your next question comes from the line of Steven Dechert with KeyBanc. Please go ahead. Hey guys, I want to ask about the AI tool that you mentioned in your prepared remarks. When do you expect to see the full cost reduction of those benefits going to affect from those tools? As a follow-up, I'll certainly give an update on your new EHR initiative. Thanks. Hey, Steve, this is Dave. Good morning. I'll take those. In regards to AI, we referenced a few things in our prepared remarks. First of all, more from an efficiency perspective, we are starting to use AI in our revenue cycle, and we're using it in our patient scheduling team. Some of that is for efficiency, some of that is for quality and effectiveness. It's starting to come through in cost savings, but again, I wouldn't say all of that's not about cost. Some of that is about improving quality, and it's one of the areas where, again, we're early, but we expect to help us in driving operating leverage as we step into 2026, 2027, and beyond. The other use case around AI that we referenced in the prepared remarks was related to clinician documentation. I would not point to this as a savings. I would point to this more as part of our value proposition to clinicians. This is a mundane task that they don't like, that they don't enjoy doing. We believe by rolling out AI documentation that will improve their day-to-day and allow them to really focus on what they enjoy doing, which is delivering great care to our patients. Your second question was around the EHR. Nothing new to point to there. We're still in the process of evaluating the various solutions, and we expect to have that decision made in the second half of this year. Great, thanks. There are no further questions at this time. I will now turn the call back over to Dave Bourdon, Chief Executive Officer, for closing remarks. Thank you, operator. I'd like to thank our over 10,000 mission-driven teammates who make sure that our patients get the quality care that they need and deserve. I continue to be inspired by the passion and the resilience that you all bring every day. Our services are needed more than ever, and we look forward to furthering the positive impact that we can have on the millions of Americans whose lives can be improved by the high-quality mental health care services that LifeStance Health Group provides. Thank you for joining us today. Ladies and gentlemen, that concludes today's call. Thank you all for joining. You may now disconnect.