Thank you for standing by. My name is Benjamin, and I'll be your conference operator today. At this time, I'd like to welcome everyone to Talkspace First Quarter 2024 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question-and-answer session. If you'd like to ask a question during this time, simply press star 1 on your telephone keypad. If you'd like to withdraw your question, press star 1 again. Thank you. I would like to turn the call over to Jeannine Feyen, Director of Communications. Please go ahead. Good morning and welcome to Talkspace's Earnings Conference Call for the first quarter of 2024. I hope you've had the opportunity to access the press release to be posted on Talkspace's IR website and the presentation of our earnings results. We'll use the presentation to walk you through today's remarks. Leading today's call are our CEO, Dr. Jon Cohen, and our CFO, Jennifer Fulk. Management will offer their prepared remarks and will then take your questions. Certain measures we'll discuss on this call are expressed on a non-GAAP basis and have been adjusted to exclude the impact of one-off items. Reconciliations of these non-GAAP measures are included in our earnings release and on our website, talkspace.com. I also want to remind you that we will be discussing forward-looking information today, which may include forecasts, targets, and other statements regarding our plans, goals, strategic priorities, and anticipated financial results. While these statements represent our best current judgment about future results and performance as of today, our actual results are subject to many risks and uncertainties that could cause actual results to differ materially from what we expect. Important factors that may affect our future results are described on our most recent SEC reports and today's earnings press release. For more information, please review our Safe Harbor disclaimer on slide 2. Now, I will turn it over to Dr. Jon Cohen. Thanks, Jeannine, and thank you all for joining us today. We began 2024 with another strong set of results driven by continued execution across the business. This quarter, we delivered revenue of $45.4 million, up 36% year-over-year, and an Adjusted EBITDA of $800,000, which marks our first quarter of profitability in the 13-year history of the company. This is a testament to the focus and dedication of our team. The continued momentum in our top line and our continuous rigorous focus on our cost structure provide a strong base to build upon, and we are confident in our ability to maintain profitable growth going forward. Let me cover our progress in the first quarter by strategic priority. First, in our payer category, revenue grew 92% year-over-year. This growth is the result of our focused efforts to expand our covered lives, increase capture rate, and increase utilization. Our expansion into Anthem commercial lives, which we announced last November, contributed to our strong revenue growth in the quarter and is progressing as expected. We also continue to see favorable member acquisition metrics from our marketing investments and our product work to enhance both capture rate and utilization. In addition, we have entered into strategic conversations with other payers regarding value-based arrangements. The Talkspace platform was built to continuously improve quality and increase efficacy in the delivery of mental health care. Our ability to measure these parameters and report them is a competitive advantage as we discuss value-based arrangements. Medicare, as we've mentioned, is a significant opportunity with 65 million lives. We expect to go live in multiple states later this month within traditional Medicare, representing more than 10 million lives at launch. The reception from payers has been very positive, and we are in advanced discussions to expand within their Medicare Advantage networks. We continue to expect to be in network with Medicare in all 50 states by the end of the year, further cementing our position as the behavioral health company with the most covered lives across the United States. With Medicare, we will continue to lead as the platform advancing affordable behavioral health care. We've also expanded our brand and referral partnerships significantly in 2024. Notable collaborations include our new partnership with Thirty Madison, a specialty telemedicine company operating Keeps, Cove, and Nurx, and an expansion of our provider directories on Zocdoc and Healthgrades. Additionally, we launched our Health Collective marketplace, offering members access to a comprehensive and growing suite of whole health digital providers and services. This platform will provide members with clinically vetted and curated resources and member benefits across the entire health spectrum, with the goal of expanding accessibility to high-quality and holistic care. Some of those first partners include Oura, Evernow, Conceive, and FitOn. Moving to direct-to-enterprise, we are encouraged by the early progress of our offering in New York City and Baltimore, launched in Q4. Results of the first months around engagement and effectiveness indicate that we are reaching diverse populations as well as previously underserved communities. Many thousands of kids have already received help from their Talkspace therapists, and we know that our suicide risk alerts are working as intended. We also know of several occurrences where therapist intervention for teens in crisis has made a dramatic impact on their lives. We are very proud of the impact we're already having on these students. These two partnerships, the first of their kind, exemplify our commitment to addressing the teen mental health crisis. We believe providing teens with access to quality care through a platform that meets them where they are will drive better outcomes for all. The reception and inbound interest we have received from other public health entities as a result of these initiatives has been high. On the employer side of our DTE category, while we did have a number of renewals and new wins in Q1, we also experienced headwinds with respect to account attrition. This was in part due to businesses continuing to review their budgets in the current inflationary environment as well as an increased competition. We believe our ability to demonstrate value for employers is a meaningful differentiator, and last month, we released our ROI calculator aimed at doing just that. This independently validated tool provides enterprises with the ability to measure the impact of offering virtual mental health services and validates potential enterprise savings in three areas: medical savings, time savings with respect to employee commute, and absenteeism savings related to the number of workdays missed by employees due to depression. We are also investing in new technology and digital capabilities to further enhance the offerings and features of our platform for the DTE category, specifically focused on the teens market. I'd like to call out that our platform remains attractive to partners for their members because of the comprehensive nature, including psychiatry and therapy across all stages of life, including teens, couples, soon-to-be seniors, with multiple modalities leading with text-based therapy and live video and audio so that their members can use Talkspace from anywhere, anytime, for any need that comes up. We are excited about our growing DTE pipeline, particularly when it comes to the teens vertical, and look forward to sharing more throughout the year. Moving to our provider network, we continue to build out our network of providers and ended the quarter with over 5,600 therapists, up 6% sequentially. We continue to see strong demand to join the Talkspace network and believe this is a testament to the investments we continue to make in our platform to enhance the provider experience and deliver exceptional clinical outcomes. These outcomes were recently highlighted in a study published in the Journal of the American Medical Association. Using machine learning, researchers from Talkspace and Lyssn analyzed more than 20 million de-identified messages between therapists and their clients to find that the more supportive, empathetic, and warm the therapist was, the stronger the patient's outcomes and the higher their satisfaction with therapy overall. This supports what we know: that the higher the quality of the relationship with the provider, the better the members' experience and outcomes. We also continue to focus on the innovation of our platform for the benefit of both our members and providers. During the quarter, we launched an AI capability that generates a comprehensive, succinct summary for the provider, a Smart Note, which reduces the administrative burden on clinicians. The initial response from our providers has been exceptionally positive, and we estimate that it is eliminating for our full-time providers up to four hours per week of administrative work, optimizing the time they could spend on therapy with members. The AI team is working on multiple other features to improve the therapist workflow and enhance their ability to deliver better clinical care. While we are committed to continuing to invest in new tools such as these, we will, of course, do so in a clinically-led, responsible, and secure manner that protects the privacy and data integrity of our members. Investments such as these not only expand provider productivity but also improve the member experience and are emblematic of our commitment to innovation and operational excellence. In addition to these new AI initiatives, we will continue to make technology enhancements supporting payer capture rate and utilization and investments in DTE digital capabilities to increase the value proposition of Talkspace's offerings. Before I turn the call over to Jennifer, I'd like to note that May is Mental Health Awareness Month, and we join others across the industry to underscore the importance of self-care and making quality mental health care more accessible. This month, we have unveiled a new brand identity on our corporate and investor websites. Our new brand is a bold, design-forward look and feel that captures the company's core beliefs that therapy and mental health support should be a routine, positive part of anyone's life and that everyone deserves access to high-quality mental health services. It is my belief that complete health is both physical health and mental health. As everyone should have access to a primary care physician, everyone should have access to a mental health therapist. You will see that our Mental Health Awareness Month campaign encourages people to talk it out through therapy. The campaign features our own members telling their stories of the pivotal and profound insights they gain while working with their Talkspace therapists. You will also see our new TV spot featuring the relationship with the therapist and member and highlighting a key differentiating for us, which is that our therapists have, on average, over 10 years' experience. With that, I'll turn the call over to Jennifer. Thank you, Jon, and good morning, everyone. We are pleased with our first quarter 2024 results, which reflect continued strengthening of financial performance as the result of execution across our company priorities. My comments today will be based primarily on the first quarter results on a year-over-year basis, unless otherwise noted. I will cover highlights from our financial results and then give more details on our outlook. Total revenue for the first quarter was $45.4 million, a 36% increase from a year ago. Adjusted EBITDA was approximately $800,000 in the first quarter, marking our first quarter of profitability on this basis. Moving to results by category, payer revenue was $28.5 million, a 92% increase versus the prior year period. Payer sessions completed by behavioral health and EAP members grew 14% sequentially and 65% year-over-year to 284,000. Unique payer members completing sessions grew sequentially by 9% and year-over-year by 39% to 86,000. As Jon previously highlighted, the first quarter benefited significantly from the December launch of the 18 million incremental covered commercial lives. In addition, compared to the same period last year, there was an 11% growth in the same basis capture rate and a 19% improvement in the utilization of sessions per member. These gains were primarily driven by continued upper funnel marketing and media optimizations, as well as enhancements across the product. In the direct-to-enterprise category, first quarter revenue was $9.9 million, up 14% from last year and 11% sequentially, primarily due to progress in our recent teen launches last quarter. As Jon noted, these new launches were partially offset by attrition of legacy accounts. In the consumer category, where members pay out of pocket, revenue was $7 million for the first quarter. This was a 14% sequential decline and a 29% year-over-year decrease. The decline primarily stemmed from the substantial increase in covered lives during the fourth quarter, which allowed more members to qualify for coverage, thereby reducing their need to pay out of pocket. While this shift has impacted consumer category revenues, it aligns with our strategic focus on increasing coverage, drives higher conversion rates, and creates greater long-term value from payer members. Moving to gross profit, our first quarter gross profit increased 30% versus the prior year to $21.7 million. Gross margin for the first quarter was 47.8%, lower than last year as expected due to further net revenue mix shift towards the payer category, which has lower gross margins than DTE and consumer categories. Turning to operating expenses, our GAAP operating expenses for the first quarter were reduced 9% year-over-year to $23.4 million. Excluding stock-based compensation, our Q1 expenses amounted to approximately $21.2 million, reflecting a reduction of $2.3 million compared to the same period last year. Over the past several quarters, we've made significant strides in optimizing our cost structure. This includes enhancing organizational efficiencies across all departments, which has improved our operational agility and reduced overhead costs. Additionally, we have strategically invested in our marketing initiatives to align with our growth objectives, focusing on high ROI activities that enhance brand visibility and member acquisition. We have also invested in scaling our platform capabilities, enhancing its robustness and scalability to better accommodate growth and expand our service offerings efficiently. These improvements reflect our ongoing commitment to fostering a lean and responsive operational framework supporting sustained growth and operational excellence. Moving to profitability, GAAP net loss was $1.5 million, a $7.3 million improvement versus the same period a year ago. Adjusted EBITDA was $800,000, an improvement of $7.2 million year-over-year. Adjusted EBITDA in the first quarter did benefit from a few immaterial non-operating accounting items. However, excluding these items, we would still have achieved a positive adjusted EBITDA in the quarter. Turning to the balance sheet, we had $120 million in cash and cash equivalents at the end of the first quarter, down $3.6 million sequentially from Q4 and driven primarily by the payment of corporate employee bonuses from 2023. Finally, we remain confident in the financial guidance we established during our fourth quarter commentary and continue to expect revenue between $185 million-$195 million and adjusted EBITDA between $4 million-$8 million for the full year. We remain enthusiastic for our payer business as we continue to bring on more covered lives through both commercial Blues plans, government, and Medicare. In DTE, we are encouraged by the ongoing value of our employer pipeline and our potential to expand within the teens vertical, supported by the early positive impact from our initiatives in New York and Baltimore. The timing of converting and implementing these prospects to revenue-generating clients remains quite variable quarter to quarter, and as a result, we now expect Adjusted EBITDA to be more heavily weighted towards the second half of the year. To summarize, today's discussion reinforces our enthusiasm for the strategic direction of both our payer and DTE categories. The growing demand for affordable, accessible, and high-quality mental health care, coupled with the significant operational advancements we've achieved in recent quarters, bolsters our confidence in the long-term profitability and sustainability of our business. With that, we will open the call for questions. Thank you. We will now begin the question-and-answer session. If you have dialed in and would like to ask a question, please press star 1 on your telephone keypad to raise your hand and join the queue. If you would like to withdraw your question, simply press star 1 again. If you are called upon to ask your question and are listening via loudspeaker on your device, please pick up your handset and ensure that your phone is not unmuted when asking your question. Again, press star 1 to join the queue. And your first question comes from the line of Charles Rhee with TD Cowen. Thank you. Please go ahead. Yeah. Yeah. Thanks for taking the questions. I wanted to ask about the Medicare opportunity as we think about next year and perhaps how would you expect that kind of rollout to occur? And then secondly, how much of this opportunity have you already perhaps contemplated in the long-term guidance that you gave last quarter? So good morning, Charles. So as we stated, we're going to have 11-ish states that will launch within a very short period of time. And then by the end of the year, we'll have all 50 states. Now, that will be for standard Medicare. We are in, as you heard, fairly deep discussions with Medicare Advantage plans to add on to that. And it's almost split, 32 million, 33 million each, both sides of Medicare. We have a strongly developed go-to-market plan for Medicare. As you know, it's new for most people because there really are no significant national providers to the over-65-year-old or Medicare group. So this will be what I like to call a work in progress as we figure out how we will sign up Medicare patients, make them aware of the service. And in terms of the guidance go ahead. Yeah. I'll touch on that, Charles. So our long-term guidance had several levers. I would describe Medicare expansion and the covered lives that come with it as a component of that. So remember, our long-term guidance was really weighted on both payer, specifically in the long-term payer growth in that same basis capture rate and in utilization within the lives that we have, as well as the direct-to-enterprise category. So those two factors really weigh in. But across those two categories, we had a number of levers, Medicare being one. Okay. I guess the way I was asking the question was more like, given sort of the opportunity here and I look at the guide, it seems like maybe perhaps you haven't put that much in for Medicare per se. Would that be a fair assumption? Yeah. I think that would be a fair assumption. I mean, yeah, we're adding millions of lives with, I think you've heard me talk about, a fairly large opportunity given 25% of Medicare patients are either depressed or lonely and have a diagnosable mental health issue. So we know the opportunity is large. I like to compare this to the schools when we first got into the really providing services to teens. It took us a little bit of time to figure out the go-to-market strategy, but we figured it out. And I think the same thing's going to happen with Medicare. Great. And just a clarification, Jennifer, you talked about Adjusted EBITDA being a little bit more back half weighted. And then is that a relation to sort of as you're ramping up New York City and Baltimore, just the timing effect? Or can you just clarify what's driving that back half weight? Yeah. And I'll come back to as we issued guidance for the year, we said there were the two factors are growth and payer specifically from the covered lives. And what we saw in the first quarter, particularly early in the quarter, was a nice ramp of those covered lives that we added in December of 2023. And then we also said that our guidance for the year was going to be dependent on those direct-to-enterprise, the pipeline maturing and turning, having a contribution. We also said it was going to be lumpy and that we'd have variability from quarter to quarter. So that's the context for that. Great. I appreciate it. Thanks for the questions. Your next question comes from the line of Ryan Daniels with William Blair. Please go ahead. This is Jack. I'm in for Ryan Daniels. Thanks for taking the question. So first, I know you don't guide to this specifically, but how should we think about gross margins going forward? I know it's down from mix shift, and it has been, but just kind of for the remainder of the year, how should we think about this? Thanks. Yeah. Thanks, Jack. So I'll come back to what we said originally in guidance. I know I didn't reference it earlier, but we still anticipate that revenue growth to be the 23%-30%. And we expect the gross profit to grow at a lower rate given that the payer category is making up, as you saw in the first quarter, a larger percentage of our top line. So we don't have a change at the moment to make to that guidance. Understood. Thank you. Just a quick follow-up. I know in your prepared remarks, you guys mentioned some headwinds with respect to account attrition and that the main drivers were really inflation and increasing competition. Can you just dive a bit deeper on the competitive front and generally kind of what you're seeing there? Thanks. Yeah. So first off, I'll reiterate that revenue in DTE did grow 14% in the quarter. So that's taking into consideration both new wins and, of course, attrition. And there are multiple reasons for attrition. I want to make sure we don't point to anything specific that it's really competition is one of them, but there are product issues versus international versus national. There are budgetary restraints and constraints that we're seeing on some employers. There are some employers that have tried mental health benefits and decided for one reason or another that they don't want to offer the benefit anymore. There is an issue which is a good thing for us, but people do realize that they have Talkspace frequently through their payer, through their behavioral health benefits. So they sometimes will move towards that as opposed to having a DTE relationship. Then sometimes they'll say, "Well, utilization is not as what they thought it was." The reason I talk about all that is there's multiple, multiple reasons about how companies evaluate their mental health benefit. It's not just one or the other. Your next question comes from the line of Stephanie Davis with Barclays. Please go ahead. Yeah. Thank you for taking my question. Appreciate it. We saw you in March. You did talk about this B2B member retention increasing quite a bit given some changes in duration on your platform as you got through the amount of covered benefits. Can you talk about the durability of these duration increases and how the addition of some of these newer populations that maybe we don't have as much data on could potentially impact that? Sure. I'll give it back to Jennifer in a second. But we know we continue to see a strong amount of evidence that the people who are on the payer side, who are not consumers, who are coming through the BH benefits, are absolutely staying on the platform longer than consumers. That data is very clear. I don't know what we're going to give relative to specifics, but we have seen increases in people on the platform relative to the length of time and the number of sessions that they do. I'll just point back, Stephanie, to the metrics that we provide. You really see progress against all of them, right? Of course, covered lives, and that's been consistent. But also the growth in the members that are completing a session on the platform, total sessions, of course, but that's driven also by utilization. We've only moved in the positive direction across all of these metrics. I believe we've got good line of sight to additional levers, both when it comes to the top of funnel, like I mentioned, but also within product features. Jon referenced a couple of those features, but we do feel like we've got the teams in place, the focus on them, and some really interesting levers to pull when it comes to just improving, reducing the friction throughout the funnel, further increasing the capture rate, and the utilization within that capture rate. I'll just comment on Medicare. This is a new category and TAM for us. And so we're staying relatively conservative just in our outlook. But we will be testing a lot of things and figuring out what works for that population as we launch these new lives here in the rest of the year. In terms of how you're thinking of, I know you mentioned that's not really a big factor in the guidance. Thinking about these new populations coming on, how are you planning on structuring the rollout, and basically, what are your assumptions in order to get us as you ramp up to this? On the commercial lot? On the Medicare or commercial or either/or? On the Medicare side. It's a new population. We don't know how the utilization will be. We don't know what their durability will be. So what are you assuming? As Jennifer said, we're being relatively conservative in terms of what we think the uptake will be as we begin to test the multiple different ways. There's a, as I mentioned earlier, a significant go-to-market strategy which involves multiple levers that we're going to look at both on the marketing side and actually directly to Medicare patients. So we've spent a lot of time thinking through this, quite honestly. And it's also taken us a fair amount of time, as I've discussed before, to get us to the point where we can bill and collect Medicare and actually address all the nuances of a secondary payer. But the launch itself to get Medicare patients on board is, as it begins, it'll be a test. We have the ability, quite honestly, to move relatively quickly to test things that work and don't work. As I said, relative to the same thing we do with the schools. But as I sit here today, I can't tell you what exactly is working. We know what platforms they use. We know what social media platforms they use. We know what's big with them. We know what they're going to use video versus texting because for a variety of other reasons. But we also know that a fair number of them are very tech-savvy. All of that has gone into the decisions about how we're going to approach the market. Yeah. And maybe I'll just add real quick because it's important to everything else we do. On day one, what we do get is just the synergy with our broad marketing media messages and with our brands. So now if you're a Medicare patient, if you see an ad or if you just come to Talkspace.com looking for where your insurance, you might have benefits that cover therapy, you will now see that when you put in Medicare, that you are covered. So on day one, we get the benefit of capture rate just from that broader, just the size of our covered lives and that expanding. All right. Super helpful. And last one out of me, just a quick question on kind of the shift from DTE to payer coverage. How are you thinking about your cost structure as you do this? Is there a way to repurpose some of the folks on the DTE side, or is this something that just maybe declines importance a bit as you focus more on the payer side of the house? So I would say, first off, we've taken a fair number of people within the last year relative to the size of the commercial operation. We have reconfigured it with new leadership and new people, which I've talked about, who've now been here close to 8 months to a year in terms of what that organization looks like. The organization now, honestly, is right where I think it should be relative to what we're going after on the DTE side. Remember, the DTE side is employers, colleges, universities, teams, subcategories, cities, states, counties. So there is continuing to be a very large opportunity on the DTE side and not just thinking about it as only employers. And I honestly believe that we are now currently configured the commercial organization to approach all of those opportunities with a very substantial pipeline that we've already built. I don't think there'll be much more change in the DTE. Actually, no, there won't be much more change in the DTE organization as it's currently structured. Super helpful. Thank you. Thanks. That concludes our Q&A session. I will now turn the conference back over to Jon Cohen for closing remarks. Thank you. In closing, I want to reiterate our unique position in the market reflected in our sustained momentum over the last six quarters. Our comprehensive service offerings and modalities are built to serve all demographics, from teens to the elderly. Enhanced by innovation, we believe our capabilities continue to set industry standards. This quarter's results underscore our commitment to our mission of expanding mental healthcare access. Thank you again for joining us this morning. Ladies and gentlemen, that concludes today's call. Thank you all for joining. You may now disconnect.