Good morning, everyone. I am Craig Hettenbach, lead coverage of healthcare technology and providers. Very pleased to have with us, LifeStance today, CEO Dave Bourdon. Just as a heads-up before we get started, for disclosures, you can find them on the Morgan Stanley website, www.morganstanley.com/researchdisclosures. Dave, with that out of the way, I thought we would just set the tone on just the overall outpatient mental health market. Still very fragmented. Just your positioning in this market, just as a starting point. Yeah. First of all, thanks for having us, Craig. It is always great to be here with you. Outpatient mental health industry is unlike anything else in the healthcare ecosystem as you know it today. So highly, highly fragmented industry. The majority of practitioners are 1099, and they are in small practices or even individual practices. You still have a good percentage of them that do not even accept insurance, so they are still cash pay only. I think you read about that, you hear that in the news of people having trouble getting access to affordable care, which means you are not able to use your health benefits. So that is the industry. Obviously, you have the increasing demand for services that we all hear about. The social stigma is reducing, which again, only puts pressure on this fragmented industry. Then you step into where LifeStance is. We are the leader, by far the largest national practice of outpatient mental health care. We have about 8,500 W-2 clinicians, about 600 centers spread across 34 states. We just added a state last week, Iowa, with an acquisition. So we have a big footprint. Still a lot of opportunity, which I am sure Craig will ask me about from a geographic perspective. But we are by far the leader in the outpatient space. Great. One of the things we have seen accelerate through COVID and coming out is this imbalance of supply and demand between clinicians and people that need care. What are some things you've been able to do in terms of whether it's on the clinician front, hiring, and just kind of helping payers out? Because this continues to come up. Yeah. There's an interesting dynamic in outpatient mental health where it's acknowledged that there's this supply-demand imbalance, the supply of clinicians versus the patient demand, and there's an imbalance. It's only getting worse. At the same time, outpatient, because of this highly fragmented industry, it's really hard for patients to find care. So we have this imbalance, but yet every week, LifeStance has thousands of open slots that new patients could use that go unused. It's like an airplane taking off with empty seats, and that's common in the industry. So while we have the imbalance, it's a very inefficient model. Specific to LifeStance, we continue to grow our clinician base near double digits every year organically, and that's helping to improve access for the payers. The other big thing that we do is that with our 600 centers, we're also increasing access to in-person care, and that's very important to the payers because a lot of the new entrants in the industry are really virtual only, especially since COVID. Having that in-person dynamic is really important for the payers. The last thing I'll mention is while the payers are very focused on access, they're starting to pivot towards quality, and we welcome that. This year in both our first and second quarter calls, we referenced white papers that we've put out around the high-quality results we've been achieving for our patients with depression and anxiety, as an example. You should expect more white papers coming. I think next wave will be around some of the specialty services like TMS and SPRAVATO. We're very focused on quality, and we welcome that conversation with the payers. Got it. The point on empty seats I think is a great segue. I did want to talk about productivity. You could see the numbers today. That's one thing in terms of it's been an important driver of growth, full clinician schedules, but I know there was a lot of work that went behind that. So maybe take us back in terms of what you saw in the business, how you tried to gear it to position yourselves for full- Yeah, it's been a journey. As you know, we started out a couple of years ago wanting to increase the capacity or the time that clinicians give us on their calendars. Because capacity and then how well we utilize it, that's what drives productivity. We were very successful in getting additional hours from clinicians. They wanted more work. Last year, we then focused on how do we better utilize that time they're giving us, and there were really two angles to it. The first was that we wanted to drive more patients in the door, new patients in the door, and we did some things. For example, we put some technology AI tools in support of our phone new patient intake team. Hundreds of people answering the phones. That's actually how the majority of new patients book appointments with us still, but we had some AI tools that supported them. As a result, we increased the conversion of patients seeking care to booking an appointment by about 5%, which was really meaningful for us. Part of it was getting new patients in the door, and then the other aspect of it was, again, better utilizing the time clinicians gave us. This was basic practice management. It was as simple as things like my local teams evaluating the capacity that was being unused on the existing clinicians' calendars and saying, "Hey, I don't need to hire a bunch of new clinicians this quarter because I'm going to utilize that time on my existing clinicians' calendars," which again, they were asking for, as well as other things like just working with the clinicians to better set up their calendars so that it was more receptive to the patient demand coming in, and that could be what slots they were making available. As you would expect, there's prime time slots, certain days of the week, certain times, depending on the patient demographics, and so doing a lot of work there. What we saw in the third quarter was productivity, which is calculate that as the number of visits per quarter that clinicians are doing, really step up, and that's continued for the last four quarters. In the second quarter, productivity on a year-over-year basis had improved about 7%. Got it. You're kind of in through this process. I'm curious, kind of additional levers you have to pull, like how do investors kind of gauge where you are and is it even certain regions where you see, like, okay, this is playing well, or things you can kind of point us to say that there's more room to go on productivity? Yeah. So just ground you a little bit on productivity. So we've asked for more time from the clinicians. They give us, on average, about 30 hours a week to see patients. There's administrative time on top of that. So there's still room to move the needle a little bit on the amount of time clinicians give us for patients. The bigger opportunity is on the utilization side. We're utilizing about 70% of that 30 hours today. So there's opportunity to move that up. We don't know exactly where the ceiling is. We're going to keep chipping away, but we do believe there's more opportunity there, Craig, and we have confidence because we do see higher utilization in certain markets. We do see higher hours being available in certain markets. But we also just are identifying as we're ramping up our game on data and insights, things that certain practices were doing that were leading to better results, and I'll give you an example. One of our state practices, when they book a first appointment for a newer patient, they also book the follow-up, and what we saw was that in that particular state, that the patients ended up being stickier. So they had a stronger therapeutic alliance. They were less apt to drop after the first appointment, and they were getting through their treatment faster. So they were more apt to stay through the treatment and to complete it faster. So we then piloted that in a number of other states this year and saw great results, similar results, and now we've rolled that out nationwide, and that's part of why we're outperforming. We're guiding about 20% revenue growth, mid-teen visit growth this year, and it's examples like that as we get smarter and more sophisticated in running the practice. Got it. I wanted to shift gears just to rates in Q2. Total revenue per visit, was that kind of the high end of your low to mid-single- digit target? Just any color on what's driving that, and how does that perhaps instruct the longer-term view around that range of low to mid-single digits? Yeah. We're stepping into this year, and I think the questions we would get is, how do you even have confidence you can get low single digits, right? Now here we are at 6% in Q2 and guiding to mid-single digits for the year. There are two things that I would point to. The first is about 25% of our volume or our revenue comes from contracts with payers that are tied to Medicare. We're not getting Medicare rates. We're getting a percentage of Medicare, so it could be 140% or 180% or whatever the case is, but it's tied to Medicare, and so it'll float with that. The federal government is recognizing that they've been under-reimbursing mental health for years and years and years, you could even say decades, and the importance of mental health services. So really stepped up the reimbursement for 2026. It was high single- digit year-over-year increase, which you don't see very often in Medicare. So that helped. Then with the rest of the portfolio, just blocking and tackling. There were still some payers that are reimbursing below the average, getting them up and then getting reasonable increases from the payers that are reimbursing at a level that we would view as appropriate. So just blocking and tackling, which got us to what we would view as an outperformance for the year. As we step into 2027, I think it's a similar dynamic. We have constructive conversations and relationships with the payers. The early read on the Medicare reimbursement for outpatient is mid-single digits increase year- over- year. Again, that's not set in stone, but that's the early read. We think it's setting up well for, again, another low to mid-single-digit reimbursement increase next year, which we really think is durable and will happen for years to come. Excellent. You mentioned from an AI perspective, the tool on intake. I want to maybe build on that in terms of more broadly perhaps where you're spending and allocating money in terms of investments for technology, like key applications. Well, the big one for us is the electronic health record. We're in the process of planning our transition to a new electronic health record next year, and we're shifting from what I would consider a small practice mental health tool to an industrial strength, big, outpatient, primarily the vendor we're going with is more medical than mental health because there's not any companies in the mental health space that look like us. But industrial strength solution that in itself will have a lot of AI capabilities and be a tremendous foundation for us for the future as we drive improvements in patient experience and clinician experience and operational efficiency. EHR is a big one, but that won't show up until next year. What we're doing in the meantime is really a continuation of last year, right? There's some digital solutions that we've put in place that have been game changers for us around the administration of digital or virtual visits, 70% of our visits in total are still virtual today, even with our big brick- and- mortar footprint. We're doing a number of AI use cases, whether that's AI documentation for the clinicians. We're doing some things with RCM. We're doing some additional use cases with our new patient booking, phone intake team and process. The new one I would point out is, and it's around patient experience and that stickiness with the patient and getting them to a better health outcome, is we're piloting, just started in the last couple of weeks of piloting a patient engagement tool that interacts with the patient in between visits. Based on the learnings of that, we'll connect with the clinician before the patient's next visit with them. So basically to provide them almost the clinician a cheat sheet of here's what's been going on with Dave over the last couple of weeks in between your visits. There's a lot that we're exploring and are excited about when it comes to technology. Got it. Just circling back to the EHR front, I think you've been consistent over the years and I would say also realistic in terms of value-based care, in terms of today it's been mostly access which you're providing. The payers value that. Mental health can be challenging in terms of outcomes, but what does the EHR mean to either from a data perspective or things on an intermediate to longer term perspective on value-based care? Yeah, there's a lot of benefits in the EHR across all aspects of our practice, but it will benefit value-based care or measurement-based care because it's going to help us in driving better outcomes for the patients. I'll give you an example. What it's going to allow us to do is, we call them care pathways, is that we're going to be able to evaluate the progress a patient is making in their journey. They'll take regular health surveys, and we'll be able to measure are they improving on their depression symptoms or not, or did they improve to a level and then have they kind of stagnated but not at a level where we want them to be yet. With the data, we will be able to identify, almost think of it like a next best action for the clinician. In the new EHR, there will be these care pathways, these clinical rules that will populate pop-ups to the clinician, and it might be, "Hey, your patient is not getting better. You are in therapy. We recommend you refer them to a psychiatrist for potential medication management evaluation." Or they are with a psychiatrist. They have tried a number of different medications, have not improved their depression. Now is the time that we start considering something like SPRAVATO or TMS. All of that, Craig, is to get to better health outcomes for the patients, which will then just allow us, when we say like we want to be the best, then prove it, right? That is what changes the game with the payers, to be able to interact with them with data and facts, not anecdote. Got it. I want to come back to just the point of that intake where you get a bit of a bump through AI, which I think is unique. I think most of the focus has been from the investment community on efficiencies. You have that in terms of potential tailwind that could create it. On the efficiency front, though, anything internally as you continue to scale your organization, how are you utilizing technology? Yeah, we are using AI a little bit on the efficiency front. I think our focus has actually been more, up till now, on the growth side, as well as experience. For example, AI documentation. That is to remove burnout, improve clinician satisfaction, things like that, less so about trying to reduce costs. That was our initial focus. We are starting to get into the efficiency side, where we are doing things like revenue cycle management use cases, as well as some use cases in that call intake where we are doing partial containment, whether it is for outbound calling, as an example. We are using some AI tools, and obviously that will allow us to scale more effectively as we continue to grow. There are opportunities there, but I think, again, initially our focus was probably more on the growth side. Got it. On growth, your long-term outlook has been mid-teens growth. Like you said, you are 20% this year, so above that. How do you think about just the durability and, again, on an organic basis, that mid-teens growth algorithm? Yeah. I appreciate the question. Just for grounding, if you take this year's midpoint, our four-year CAGR is 19% on top line. We've been doing better than what we talk about our goal being mid-teens. Every year, we step into the year trying to do at least mid-teens top-line growth. We've been beating that. As we think about the future, we still think the growth algorithm that we have works and is very durable. First of all, it's pinned on getting improved reimbursement from payers. We talked about the low to mid-single digits. We think that's very durable. You're seeing very strong performance this year. Then also double-digit volume growth, visit growth, and that's going to be primarily driven by new clinician adds or net clinician adds. That's how we get to mid-teens. Where there's a potential opportunity to do better is as you think about where specialty services, those service lines could go in the future, things like that. But we feel really good about our underlying growth model. An example that I would point to that we talked about on the last earnings call, and I think was a surprise to some, is we are the largest provider of outpatient mental health services. At the same time, we're in only roughly 50% of the 150 largest U.S. markets. Then even in the markets that we're in, while we're the largest, our market share is usually less than 5%. So we have just tremendous opportunity to run. We're kind of uniquely positioned in this highly fragmented but consolidating space, and that's really what gives us confidence around that growth algorithm. Great. I will come back to specialty services. I figured you would. because I know that's getting a lot of attention. We probably could spend the whole discussion here. But getting back, you called out the stat before, the 70% virtual in terms of visits. How are you thinking about that in terms of on a multi-year basis? Is that the right range? Does it fluctuate a little bit from here? It's been stable at around that 70/30 split for the last year or so. We still believe that over the long run, that in-person will increase with time, but it is a very local dynamic, so we treat the virtual versus in-person as such. I always use it as an example, we have practices here in New York City, and we have them in California. Those are highly virtual. It's just the culture of the clinicians, the patients. They don't come into the office as much. They certainly do in-person appointments, but there's a higher percentage of virtual utilization. You have the opposite of that would be like, for example, our Milwaukee practice, where for whatever reason, the patients and the clinicians like to come into the office to do their sessions. At a local level, we're constantly evaluating, do we need to add another center to support growth? Or no, we have plenty of room. Our clinicians are hybrid. They'll share offices. We can hire more clinicians without having to add real estate. It's always an ongoing evaluation for us, but it is very much at the local level. I still think over time, in-person will increase. Then obviously, as you add things like specialty services, TMS, SPRAVATO, those are in-person obviously. As those become a more meaningful part of our portfolio, that will also raise up in-person utilization. Makes sense. On the clinician front, net clinician adds have been in and around that 10%-11% range. What are some of the things that are helping you? Because it's a competitive space, right? What are some of the things, your ability to continue to attract and retain clinicians at LifeStance? First of all, there's a lot of clinicians out there, and we're not trying to be all things to everyone. If you look at the universe of clinicians, we're low single- digit market share of outpatient mental health clinicians. We have a lot of clinicians that are the potential for us to recruit, and we've been very successful in that. As we continue to hone the value proposition, Craig, it's the same things that will attract clinicians to us is what keeps them with us. As we're recruiting from, we always think of the three cohorts of clinicians. There's the 1099 individual practice, looking for W-2 benefits, more connected to a practice with collegiality and support from an operations and clinical perspective. You've got the new hires that are new grads. The new grads, and then the third bucket would be someone who's coming from salaried at, like, a health system, and they want more flexibility. Still want the W-2 benefits, but they don't want to be 40 hours in a week in the office. They want to be able to be hybrid, choose their hours a little bit more, and they don't want to be hounded on for productivity. Our value prop resonates a little bit different depending on the cohort we're recruiting. But value prop continues to resonate and something we're always working on. Great. On specialized services now, and you mentioned up top that a lot of new entrants to the space, more virtual-only, which is not going to work in this category. Walk us through kind of how you're rolling this out in some of your clinics, what it looks like today. I'd love for you to just kind of size where it's at. I know it's growing above the corporate average, but just some context behind it. Sure. I'll start with the context first. Last year, our specialty services were about $50 million of revenue for us, and were three services that we consider in this portfolio. The first is neuropsych testing. We're the national leader in neuropsych testing. Examples of this, for example, if you need to test your kids for ADHD or autism or things like that, that's an example of neuropsych testing. High demand for these services. Then we get into what we were talking about a little bit earlier, the services for treatment-resistant depression. This is TMS and SPRAVATO today for us. They made up very little of the $50 million last year. They're relatively new for us, and we're looking to expand them. This year, that $50 million will grow to about $70 million. We're going to grow at about 40% year-over-year. The bulk of that growth will come from TMS and SPRAVATO. We are rolling those services out in a very thoughtful and deliberate way. We're only adding about five of each a quarter. When we were looking at these services and we were looking at acquisitions to speed up our growth of them, there were some businesses that are standalone, and this is all they do. What we found was that their economic models weren't viable because their customer acquisition costs were through the roof, and so you just couldn't make the math work. We ended up passing on acquiring and deciding to go organic, which is fine for us. Again, we have a portfolio of 600 centers. How we are doing this is our 600 centers are grouped into practice groups, about three to five centers, and there is an operational leader that sits over the top of each of those practice groups. What our model is, is we are going to put one TMS chair and one SPRAVATO room, which has multiple chairs in it, in each of those practice groups. We believe that with, we have over 1 million patients across the practice, that there is a lot of those patients that need and would benefit from these services. The patients of that practice group will feed those SPRAVATO and TMS, the TMS, and fill that capacity. Obviously all through internal referrals for the most part, which is a very effective way from a CAC perspective. That is how we are doing this. We are maturing our operating model. Part of that is what we need to do internally to execute. Part of it is working with the payers. For example, what we are finding is there is a lot of variability on SPRAVATO reimbursement from the payers, and there are some payers in some states where they are reimbursing at a level where it's not viable. We are passing on putting the SPRAVATO in those particular states for now while our payer engagement team goes out and re-contracts with them. Again, just very thoughtful and deliberate. We are excited about what the future could be, and obviously there is additional therapeutics coming down the road that may have additional conditions like PTSD, trauma, that could be very beneficial to our patients. That's helpful. I would add to it, psychedelics have been in the news a lot, and you have some of the pharma companies really digging into that area. How are you approaching it, and what is your view on that opportunity on a longer-term basis? The SPRAVATO is a psychedelic. The way we are thinking about this is, as we are rolling out SPRAVATO, we are really maturing a model that's foundational for if additional psychedelics were to get approved by both the government as well as by payers for reimbursement. We will be able to quickly roll those out if, again, it's economically viable and it is attractive from a clinical efficacy perspective for our patients. We are excited about what the future could be, but there is a lot of unknowns still around the additional psychedelics. Got it. I do want to touch on just the margin performance of the business. On the back of that strong growth, you are dropping through more to margins. Talk to us about that 15% target for 2028 and 20% longer term. What are some puts and takes to drive towards those targets? Yeah. Every year we step into it and what we are focused on is achieving at least mid-teens top-line growth and expanding margins. That has been our commitment for the last four years and we have been achieving that. Today our guide is about 13% adjusted EBITDA margins, and we have put a marker out for 2028 of being at mid-teen. We are getting pretty close to that with the outperformance this year. We have a line of sight to 15%-20% adjusted EBITDA margins. We are not saying 20% is the ceiling, but we feel like in the coming years we can get into that 15%-20%, again, with that intermediary goal in 2028. The way we get there is continue to drive attractive top-line growth, getting operating leverage as a result of that. What you will continue to see is improving margins on the center margin percentage line. We believe the destination for that today is in the mid-30s, which obviously is a range. We think if we are in the mid-30s, that's part of the ingredients of getting us to that 20% level. The rest, and where I think the bigger opportunity is on the G&A line, where we are in the low 20s as a percent of revenue today, and we believe we can get that down into the mid-teens in the coming years. The combination of that center margin expansion and the G&A leverage will get us to that, what's called into that 15%-20% zone that you mentioned. Got it. As we wrap up here, I do want to talk about just capital allocation, kind of bring some of this together. You have returned to M&A, very small tuck-in deals. More geographic specific. Talk to us about how you are approaching M&A, what the opportunity set looks like out there, and then also you are buying back stock too, which speaks to improved free cash flow and balance sheet. Yeah. You and I have talked about this. Our priorities are, in rank order for capital deployment, are supporting organic growth. We talked about the real estate, opening new de novo centers. This year we will open up 20- 30 new centers. Number two is where your question was, M&A. We are very curious about specialty lines, adjacency services, things like that, and we are out looking. What we have seen that makes sense today for us and is very attractive are small tuck-in deals like the one we did last week in Iowa that opened up a new state for us. Very attractive to us from an economic perspective to do those small tuck-ins, and then you put the LifeStance engine on top of it and grow it from there. We are seeing a lot of those opportunities, Craig. We are doing about one to two a quarter, and we will probably stay at that pace through the rollout of the new EHR next year, and then we will reevaluate our pace after that. Again, a lot of geographic expansion opportunity. We are doing that. Then our third priority being the share repurchase. We just did our third one this year. We have deployed almost $125 million of capital towards share repurchase. We have done it three times. All three were in support or connected to a secondary offering. We have found that to be a very effective use of our capital. Still have a very strong balance sheet, very low debt ratios, as well as strong generation of free cash flow. We feel very good about the balance sheet being able to support the strategy of the business going forward. Excellent. Well, I think we will wrap there. Dave, thanks so much for your time this morning. Thanks, Craig. Appreciate it. Appreciate the opportunity.