Talkspace posted a profit in 2024, a milestone for the virtual mental health company.
The company reported a net income of $1.1 million, or 1 cent per share, in 2024, compared with a $19.2 million net loss, or 2 cents per share, in 2023. It’s the first time Talkspace posted a net annual profit.
Related: Medicare Advantage is a big focus for Talkspace, CEO says
“In 13 years since our inception and three years as a public company, Talkspace has built a sustainable, profitable business model ... With mental health needs only growing, the future is bright,” said Talkspace CEO Dr. Jon Cohen in the company’s fourth-quarter earnings call Thursday.
In a release, the company attributed the profit to a 7% annual decrease in operating expenses to $90.3 million last year from $97.5 million in 2023. It also increased payer revenue to $124.3 million in 2024 from $80.8 million in 2023, offsetting a 30% decline in consumer revenue.
Two years ago, Talkspace began shifting to working with insurers, employers and government agencies, away from a cash-pay, direct-to-consumer business. The company completed 1.2 million therapy sessions covered by payers in 2024, up from 851,000 in 2023.
Talkspace will continue to emphasize these payer-focused segments, particularly Medicare and Medicare Advantage, said Cohen. It will work on marketing toward these populations in 2025, he said.
“We’ve done a fair amount of research up to this point about how to reach seniors,” Cohen said. “We know, for instance, that they're much they're bigger users of Facebook than any of the other social platforms. And then we also know that read newspapers, they receive direct mail, they’re attuned to onsite visits. All of that information is going into the marketing plan.”
The shift toward the payer business does mean the company will see a decrease in its gross margins, said Chief Financial Officer Ian Harris during the call. Gross margins went to 44.2% in 2024 from 49.4% in 2023.
Talkspace’s stock traded at $3 per share Thursday morning after the call, down 22% from its Wednesday close price of $3.85 per share.
