[10-Q] Talkspace, Inc. Quarterly Earnings Report

Rhea-AI Filing Summary

Talkspace, Inc. reported stronger results for the quarter ended September 30, 2025. Revenue grew 25.3% to $59.4 million, driven by Payor revenue up 42.1% as completed Payor sessions increased and the number of health plan customers expanded. Consumer revenue declined 23.1% as the company focused marketing on Payor channels.

Net income was $3.3 million (diluted EPS $0.02) versus $1.9 million last year. Adjusted EBITDA rose to $5.0 million. Gross cost growth reflected higher therapist hours to meet Payor demand, while R&D and G&A were contained year over year. Cash, cash equivalents and restricted cash were $43.7 million, with $52.1 million in marketable securities and no debt.

The company repurchased 3,516,677 shares in the quarter for $8.8 million and 6,577,115 year‑to‑date for $17.2 million, leaving $11.8 million authorized. As of November 4, 2025, shares outstanding were 165,656,124. In October 2025, Talkspace completed the acquisition of Wisdo Health, using cash and stock.

Insights

Equity analyst

Solid topline growth and profitability with Payor-led mix shift.

Talkspace posted revenue up 25.3% to about $59.4M, with Payor revenue up 42.1%. The model is leaning into reimbursed sessions as health plan customers increased, and Consumer revenue fell 23.1% amid a deliberate refocus.

Profitability improved: net income reached $3.251M (diluted EPS $0.02), and adjusted EBITDA was $4.968M. Cost of revenue rose with therapist hours, while R&D and G&A stayed disciplined, aiding operating leverage.

Liquidity remains sound with cash and restricted cash of $43.653M and marketable securities of $52.100M as of Sep 30, 2025, and no debt. The company repurchased $8.8M in shares in Q3, leaving $11.8M authorized. Subsequent acquisition of Wisdo Health adds capabilities; financial impact not detailed here.

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2025

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 001-39314

TALKSPACE, INC.

(Exact Name of Registrant as Specified in its Charter)

Delaware	84-4636604
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
622 Third Avenue, New York, New York	10017
(Address of principal executive offices)	(Zip Code)

(212) 284-7206

(Registrant’s telephone number, including area code)

N/A

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common stock, par value $0.0001 per share		TALK		Nasdaq Stock Market
Warrants to purchase common stock		TALKW		Nasdaq Stock Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer		☐		Accelerated filer		☒
Non-accelerated filer		☐		Smaller reporting company		☐
Emerging growth company		☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of November 4, 2025, the registrant had 165,656,124 shares of common stock, $0.0001 par value per share, outstanding.

Table of Contents

Table of Contents

		Page
PART I.	FINANCIAL INFORMATION
Item 1.	Financial Statements (Unaudited)	3
	Condensed Consolidated Balance Sheets as of September 30, 2025 (unaudited) and December 31, 2024	3
	Condensed Consolidated Income Statements (unaudited) for the three and nine months ended September 30, 2025 and 2024	4
	Condensed Consolidated Statements of Comprehensive Income (unaudited) for the three and nine months ended September 30, 2025 and 2024	5
	Condensed Consolidated Statements of Stockholders' Equity (unaudited) for the three and nine months ended September 30, 2025 and 2024	6
	Condensed Consolidated Statements of Cash Flows (unaudited) for the nine months ended September 30, 2025 and 2024	8
	Notes to Unaudited Condensed Consolidated Financial Statements	9
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	18
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	28
Item 4.	Controls and Procedures	28
PART II.	OTHER INFORMATION
Item 1.	Legal Proceedings	29
Item 1A.	Risk Factors	29
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	29
Item 3.	Defaults Upon Senior Securities	29
Item 4.	Mine Safety Disclosures	29
Item 5.	Other Information	29
Item 6.	Exhibits	30
Signatures		31

2

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PART I—FINANCIAL INFORMATION

Item 1. Financial Statements.

TALKSPACE, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

		September 30, 2025				December 31, 2024
(U.S. dollars in thousands, except share and per share data)		Unaudited
ASSETS
CURRENT ASSETS:
Cash and cash equivalents (1)		$	39,508			$	76,692
Restricted cash			4,145				—
Marketable securities			52,100				41,118
Accounts receivable, net (1)			14,927				9,643
Other current assets			3,800				2,729
Total current assets			114,480				130,182
Fixed assets, net			12,728				6,259
Other long-term assets			1,852				2,236
Total assets		$	129,060			$	138,677
LIABILITIES AND STOCKHOLDERS’ EQUITY
CURRENT LIABILITIES:
Accounts payable		$	9,617			$	7,710
Accrued expenses and other current liabilities (1)			6,649				8,031
Deferred revenue			3,112				3,282
Total current liabilities			19,378				19,023
Other long-term liabilities			577				2,259
Total liabilities			19,955				21,282
Commitments and contingencies (Note 6)
STOCKHOLDERS’ EQUITY:
Common stock of $0.0001 par value per share: Shares authorized: 1,000,000,000 as of September 30, 2025 (unaudited) and December 31, 2024; shares issued and outstanding: 165,105,058 and 168,849,591 as of September 30, 2025 (unaudited) and December 31, 2024, respectively.			17				17
Additional paid-in capital			375,235				386,612
Accumulated deficit			(266,208	)			(269,236	)
Accumulated other comprehensive income			61				2
Total stockholders’ equity			109,105				117,395
Total liabilities and stockholders’ equity		$	129,060			$	138,677

(1) Talkspace, Inc's condensed consolidated balance sheets include assets of consolidated variable interest entities (“VIEs”) that can only be used to settle obligations of these VIEs and liabilities of consolidated VIEs for which creditors may have recourse to Talkspace, Inc. or its affiliates. At September 30, 2025 and December 31, 2024, assets of these consolidated VIEs totaled $12,893 and $6,875, respectively. At September 30, 2025 and December 31, 2024, liabilities of these consolidated VIEs totaled $3,663 and $2,528, respectively. See Note 11, “Variable Interest Entities,” in the notes to the condensed consolidated financial statements for further details.

The accompanying notes are an integral part of the condensed consolidated financial statements.

3

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TALKSPACE, INC.

CONDENSED CONSOLIDATED INCOME STATEMENTS

(Unaudited)

		Three Months Ended								Nine Months Ended
		September 30,								September 30,
(U.S. dollars in thousands, except share and per share data)		2025				2024				2025				2024
Revenue		$	59,381			$	47,399			$	165,873			$	138,873
Costs and operating expenses:
Cost of revenue, excluding depreciation    and amortization			34,741				25,667				94,447				74,236
Research and development			1,784				2,298				7,187				8,048
Clinical operations, net			1,638				1,677				5,415				4,802
Sales and marketing			13,245				12,295				41,423				38,535
General and administrative			5,089				5,132				16,024				17,666
Depreciation and amortization			686				231				2,054				652
Total costs and operating expenses			57,183				47,300				166,550				143,939
Income (loss) from operations			2,198				99				(677	)			(5,066	)
Financial income, net			(1,078	)			(1,701	)			(3,929	)			(5,123	)
Income before income taxes			3,276				1,800				3,252				57
Income tax expense (benefit)			25				(74	)			224				123
Net income (loss)		$	3,251			$	1,874			$	3,028			$	(66	)
Net income (loss) per share:
Basic		$	0.02			$	0.01			$	0.02			$	(0.00	)
Diluted		$	0.02			$	0.01			$	0.02			$	(0.00	)
Weighted average shares used to compute net income (loss) per share:
Basic			166,190,495				168,426,349				167,455,607				168,805,882
Diluted			171,462,202				173,753,763				174,009,390				168,805,882

The accompanying notes are an integral part of the condensed consolidated financial statements.

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TALKSPACE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)

		Three Months Ended								Nine Months Ended
		September 30,								September 30,
(U.S. dollars in thousands)		2025				2024				2025				2024
Net income (loss)		$	3,251			$	1,874			$	3,028			$	(66	)
Other comprehensive income:
Change in unrealized gain on marketable debt securities			42				—				59				—
Total other comprehensive income			42				—				59				—
Total comprehensive income (loss)		$	3,293			$	1,874			$	3,087			$	(66	)

The accompanying notes are an integral part of the condensed consolidated financial statements.

5

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TALKSPACE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(U.S. dollars in thousands, except share data)		Common Stock
Three and Nine Months Ended September 30, 2025		Number of Shares Outstanding				Amount				Additional paid-in capital				Accumulated other comprehensive income				Accumulated deficit				Total
Balance as of December 31, 2024			168,849,591			$	17			$	386,612			$	2			$	(269,236	)		$	117,395
Exercise of stock options			1,010,942			*)					678				—				—				678
Restricted stock units vested, net of tax			515,033			*)					(571	)			—				—				(571	)
Repurchase of common stock for retirement			(2,519,170	)		*)					(6,975	)			—				—				(6,975	)
Other comprehensive income			—				—				—				25				—				25
Stock-based compensation			—				—				2,548				—				—				2,548
Net income			—				—				—				—				318				318
Balance as of March 31, 2025 (unaudited)			167,856,396			$	17			$	382,292			$	27			$	(268,918	)		$	113,418
Exercise of stock options			28,602			*)					49				—				—				49
Restricted stock units vested, net of tax			600,458			*)					(1,126	)			—				—				(1,126	)
Repurchase of common stock for retirement			(541,268	)		*)					(1,429	)			—				—				(1,429	)
Other comprehensive loss			—				—				—				(8	)			—				(8	)
Stock-based compensation			—				—				2,578				—				—				2,578
Net loss			—				—				—				—				(541	)			(541	)
Balance as of June 30, 2025 (unaudited)			167,944,188			$	17			$	382,364			$	19			$	(269,459	)		$	112,941
Exercise of stock options			94,717			*)					135				—				—				135
Restricted stock units vested, net of tax			582,830			*)					(457	)			—				—				(457	)
Repurchase of common stock for retirement			(3,516,677	)		*)					(8,885	)			—				—				(8,885	)
Other comprehensive income			—				—				—				42				—				42
Stock-based compensation			—				—				2,078				—				—				2,078
Net income			—				—				—				—				3,251				3,251
Balance as of September 30, 2025 (unaudited)			165,105,058			$	17			$	375,235			$	61			$	(266,208	)		$	109,105
		Common Stock
Three and Nine Months Ended September 30, 2024		Number of Shares Outstanding				Amount				Additional paid-in capital				Accumulated other comprehensive income				Accumulated deficit				Total
Balance as of December 31, 2023			168,428,856			$	16			$	389,014			$	—			$	(270,384	)		$	118,646
Exercise of stock options			605,565			*)					741				—				—				741
Restricted stock units vested, net of tax			534,654			*)					(595	)			—				—				(595	)
Stock-based compensation			—				—				2,252				—				—				2,252
Net loss			—				—				—				—				(1,466	)			(1,466	)
Balance as of March 31, 2024 (unaudited)			169,569,075			$	16			$	391,412			$	—			$	(271,850	)		$	119,578
Exercise of stock options			697,798			*)					843				—				—				843
Restricted stock units vested, net of tax			851,177			*)					(1,248	)			—				—				(1,248	)
Repurchase of common stock for retirement			(2,948,892	)		*)					(8,004	)			—				—				(8,004	)
Stock-based compensation			—				—				3,349				—				—				3,349
Net loss			—				—				—				—				(474	)			(474	)
Balance as of June 30, 2024 (unaudited)			168,169,158			$	16			$	386,352			$	—			$	(272,324	)		$	114,044
Exercise of stock options			45,761			*)					32				—				—				32
Restricted stock units vested, net of tax			609,539				1				(469	)			—				—				(468	)
Stock-based compensation			—				—				2,106				—				—				2,106
Net income			—				—				—				—				1,874				1,874
Balance as of September 30, 2024 (unaudited)			168,824,458			$	17			$	388,021			$	—			$	(270,450	)		$	117,588

*) Represents an amount lower than $1

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The accompanying notes are an integral part of the condensed consolidated financial statements.

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TALKSPACE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

		Nine Months Ended September 30,
(U.S. dollars in thousands)		2025				2024
Cash flows from operating activities:
Net income (loss)		$	3,028			$	(66	)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization			2,054				652
Accretion of discount on marketable securities			(672	)			—
Stock-based compensation			6,529				7,290
Remeasurement of warrant liabilities			(1,077	)			(794	)
(Increase) decrease in accounts receivable			(5,284	)			572
(Increase) decrease in other current assets			(1,071	)			2,796
Increase in accounts payable			1,907				2,188
(Decrease) increase in deferred revenue			(170	)			438
Decrease in accrued expenses and other current liabilities			(2,082	)			(5,220	)
Other			(4	)			(233	)
Net cash provided by operating activities			3,158				7,623
Cash flows from investing activities:
Purchases of marketable securities			(32,655	)			—
Proceeds from maturities of marketable securities			22,345				—
Capitalized internal-use software costs			(7,345	)			(3,768	)
Other			(47	)			(69	)
Net cash used in investing activities			(17,702	)			(3,837	)
Cash flows from financing activities:
Proceeds from exercise of stock options			862				1,616
Payments for employee taxes withheld related to vested stock-based awards			(2,154	)			(2,312	)
Repurchase of common stock for retirement			(17,203	)			(8,004	)
Net cash used in financing activities			(18,495	)			(8,700	)
Net decrease in cash, cash equivalents and restricted cash			(33,039	)			(4,914	)
Cash, cash equivalents and restricted cash at the beginning of the period			76,692				123,908
Cash, cash equivalents and restricted cash at the end of the period		$	43,653			$	118,994
Reconciliation of cash, cash equivalents and restricted cash to the condensed consolidated balance sheets
Cash and cash equivalents		$	39,508			$	118,994
Restricted cash			4,145				—
Total cash, cash equivalents and restricted cash		$	43,653			$	118,994
Supplemental cash flow data:
Cash paid during the period for income taxes		$	254			$	45
Non-cash activities:
Non-cash stock-based compensation capitalized as part of capitalization of internal-use software costs		$	675			$	417
Liability incurred for repurchase of common stock		$	86			$	—
Lease liabilities arising from obtaining right-of-use assets		$	—			$	595

The accompanying notes are an integral part of the condensed consolidated financial statements.

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TALKSPACE, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 1. DESCRIPTION OF ORGANIZATION AND BUSINESS OPERATIONS

Talkspace, Inc. (together with its consolidated subsidiaries, the “Company” or “Talkspace”) is a leading behavioral healthcare company enabled by a purpose-built technology platform. Talkspace provides individuals and licensed therapists, psychologists and psychiatrists with an online platform for one-on-one therapy delivered via messaging, audio and video. The Company offers convenient and affordable access to a fully credentialed network of highly qualified providers. Since its inception, the Company has connected millions of patients with licensed behavioral health providers across a wide and growing spectrum of care through virtual psychotherapy and psychiatry.

The Company's principal executive office is located in New York, NY. The Company has wholly-owned subsidiaries and holds a variable interest in professional associations and professional corporations, which have been established pursuant to the requirements of their respective domestic jurisdiction governing the corporate practice of medicine. These entities are considered Variable Interest Entities (“VIEs”). See Note 11, “Variable Interest Entities,” in the notes to the condensed consolidated financial statements for further details.

NOTE 2. SIGNIFICANT ACCOUNTING POLICIES

Basis of presentation

The unaudited condensed consolidated financial statements and accompanying notes have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”). In management’s opinion, the unaudited condensed consolidated financial statements reflect all adjustments of a normal recurring nature that are necessary for a fair presentation of the results for the interim periods presented. The Company’s interim period results do not necessarily indicate the results that may be expected for any other interim period or for the full fiscal year. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements as of and for the year ended December 31, 2024, included in the Company's Annual Report on Form 10-K for the year ended December 31, 2024. The significant accounting policies applied in the annual consolidated financial statements of the Company as of December 31, 2024, have been applied consistently in these unaudited condensed consolidated financial statements, unless otherwise stated.

The Company consolidates all subsidiaries in which it has a controlling financial interest, as well as any VIEs where the Company is deemed to be the primary beneficiary. Intercompany transactions and balances have been eliminated in the preparation of the condensed consolidated financial statements.

Use of estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates, judgments, and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, together with amounts disclosed in the related notes to the condensed consolidated financial statements. The Company’s significant estimates and assumptions used in these condensed consolidated financial statements include, but are not limited to, the recognition of revenue, stock-based compensation awards and internal-use software costs. The Company bases its estimates on historical factors, current circumstances and the experience and judgment of management. The Company evaluates its assumptions on an ongoing basis. The Company’s management believes that the estimates, judgments, and assumptions used are reasonable based on information available at the time they are made. Estimates, by their nature, are based on judgment and available information, therefore, actual results could be materially different from these estimates.

Reclassification

Certain prior year amounts have been reclassified to conform to the current period presentation. These reclassifications had no effect on the reported results of operations.

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Operating Segments

Talkspace provides virtual behavioral healthcare services through its online platform for one-on-one therapy delivered via messaging, audio and video. The Company's chief operating decision maker ("CODM") is the Chief Executive Officer, who manages the Company by reviewing consolidated results. Accordingly, the Company operates as one operating and reportable segment.

The CODM uses the Company’s consolidated net income to assess the financial performance of the Company and allocate resources. Since the Company operates in one operating segment, financial information, including consolidated net income information evaluated by the CODM, can be found in the condensed consolidated income statements.

The Company's assets are managed on a consolidated basis. For total asset information please refer to the condensed consolidated balance sheets included within the condensed consolidated financial statements. Most of the Company's long-lived tangible assets, as well as the Company's operating lease right-of-use asset, are located in the United States. Other financial information regarding the Company's operating segment is presented elsewhere in the condensed consolidated financial statements.

For the three and nine months ended September 30, 2025 and 2024, all of the Company’s revenue was generated from customers located in the United States. For the types of services from which the reportable segment derives its revenue refer to Note 3, “Revenue Recognition.”

Recently Issued Accounting Pronouncements

The following Accounting Standards Update (“ASU”) issued by the Financial Accounting Standards Board (“FASB”) have been adopted by the Company:

In July 2025, the FASB issued ASU 2025-05, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets, to provide a more simplified and less forward-looking approach to estimating credit losses under the current expected credit loss (“CECL”) model. This guidance is effective for fiscal years beginning after December 15, 2025, and interim periods after December 15, 2025. The Company early adopted this ASU. The adoption of this ASU did not have a significant impact on its consolidated financial statements or related disclosures.

The following ASUs issued by the FASB have not yet been adopted by the Company:

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which requires public entities, on an annual basis, to provide disclosure of specific categories in the rate reconciliation, as well as disclosure of income taxes paid disaggregated by jurisdiction. Further, the ASU requires certain disclosures of state versus federal income tax expense and taxes paid. This ASU is effective for fiscal years beginning after December 15, 2024. The Company is currently evaluating the impact of adopting this ASU.

In November 2024, the FASB issued ASU 2024-03, Income Statement (Topic 220): Disaggregation of Income Statement Expenses, to improve the disclosures of a public business entity’s expenses and address requests from investors for more detailed information about the types of expenses in commonly presented expense captions. This guidance is effective for fiscal years beginning after December 15, 2026, and interim periods after December 15, 2027. Early adoption is permitted. The Company is currently evaluating the impact of adopting this ASU.

In September 2025, the FASB issued ASU 2025-06, Intangibles - Goodwill and Other Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software, to improve the operability of the guidance by removing all references to software development project stages so that the guidance is neutral to different software development methods, including methods that entities may use to develop software in the future. This guidance is effective for fiscal years beginning after December 15, 2027, and interim periods after December 15, 2027. Early adoption is permitted. The Company is currently evaluating the impact of adopting this ASU.

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NOTE 3. REVENUE RECOGNITION

The following table presents the Company’s revenue from sales to unaffiliated customers disaggregated by revenue source:

		Three Months Ended September 30,								Nine Months Ended September 30,
(in thousands)		2025				2024				2025				2024
Revenue from sales to unaffiliated customers:		Unaudited				Unaudited				Unaudited				Unaudited
Payor		$	45,512			$	32,039			$	123,855			$	90,492
DTE			9,260				9,370				28,246				28,911
Consumer			4,609				5,990				13,772				19,470
Total revenue		$	59,381			$	47,399			$	165,873			$	138,873

Accounts Receivable and Allowance for Credit Losses

The Company had receivables related to revenue from Direct-to-Enterprise (“DTE”) customers of $5.4 million and $6.0 million at September 30, 2025 and December 31, 2024, respectively. As of September 30, 2025 and December 31, 2024, the balance of receivables related to revenue from Health insurance plans (commercial and government) and employee assistance programs (“Payor”) customers was $9.5 million and $3.6 million, respectively.

Accounts receivables are stated net of credit loss allowance. The Company’s methodology for estimating credit loss is based on historical collection experience, customer creditworthiness, current and future economic condition and market condition. Additionally, specific allowance amounts are established to record the appropriate provision for customers that have a higher probability of default. Accounts receivables are written off after all reasonable means to collect the full amount have been exhausted. The allowance for credit losses on accounts receivable was immaterial as of September 30, 2025 and December 31, 2024. Credit loss expense was immaterial for the three and nine months ended September 30, 2025 and 2024.

Deferred Revenue

The Company records deferred revenue when cash payments from customers are received in advance of the Company's performance obligation to provide services. As of September 30, 2025 and December 31, 2024, deferred revenue related mainly to individual subscribers (“Consumer”). The Company expects to satisfy the majority of its performance obligations associated with deferred revenue within one year or less. Revenue recognized in the nine months ended September 30, 2025 and 2024 that was included in the deferred revenue balance at the beginning of the reporting period was $2.1 million and $2.0 million, respectively.

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NOTE 4. FAIR VALUE MEASUREMENTS

The following tables show the Company's cash equivalents and marketable securities measured at fair value on a recurring basis as of September 30, 2025 and December 31, 2024:

		Fair Value Measurements as of September 30, 2025
						Unaudited
(in thousands)		Adjusted Cost Basis				Unrealized Gains				Unrealized Losses				Fair Value				Cash, Cash Equivalents and Restricted Cash				Marketable Securities
Cash		$	726			$	—			$	—			$	726			$	726			$	—
Restricted cash			4,145				—				—				4,145				4,145				—
Level 1:
Money market funds			38,782				—				—				38,782				38,782				—
Commercial paper			3,899				1				—				3,900				—				3,900
Total Level 1:			42,681				1				—				42,682				38,782				3,900
Level 2:
U.S. Government securities			14,321				23				—				14,344				—				14,344
Certificates of deposit			1,485				1				—				1,486				—				1,486
Corporate debt securities			32,334				37				(1	)			32,370				—				32,370
Total Level 2:			48,140				61				(1	)			48,200				—				48,200
		$	95,692			$	62			$	(1	)		$	95,753			$	43,653			$	52,100
		Fair Value Measurements as of December 31, 2024
(in thousands)		Adjusted Cost Basis				Unrealized Gains				Unrealized Losses				Fair Value				Cash and Cash Equivalents				Marketable Securities
Cash		$	911			$	—			$	—			$	911			$	911			$	—
Level 1:
Money market funds			68,639				—				—				68,639				68,639				—
Commercial paper			6,876				3				—				6,879				648				6,231
Total Level 1:			75,515				3				—				75,518				69,287				6,231
Level 2:
U.S. Treasury securities			7,232				2				—				7,234				6,494				740
U.S. Government securities			1,439				2				—				1,441				—				1,441
Certificates of deposit			2,920				1				—				2,921				—				2,921
Corporate debt securities			29,791				7				(13	)			29,785				—				29,785
Total Level 2:			41,382				12				(13	)			41,381				6,494				34,887
		$	117,808			$	15			$	(13	)		$	117,810			$	76,692			$	41,118

The carrying value of the Company’s cash, restricted cash, accounts receivable, other current assets, accounts payable, and accrued liabilities approximate fair value because of the relatively short-term nature of the underlying assets or liabilities. The Company's cash equivalents and marketable securities are classified within Level 1 or Level 2 of the fair value hierarchy because their fair values are derived from quoted market prices or quoted market prices for similar assets or liabilities or quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

Contractual Maturities

The following table summarizes the remaining contractual maturities of the Company's marketable securities as of September 30, 2025:

		As of September 30, 2025
(in thousands)		Fair Value
Due within one year		$	51,348
Due after one year to two years			752
Total		$	52,100

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Private Placement Warrants

Private Placement Warrants are valued using the Black-Scholes-Merton Model, which is considered to be a Level 3 fair value measurement, as such they are classified within Level 3 of the fair value hierarchy. The primary unobservable input utilized in determining the fair value of the Private Placement Warrants is the implied volatility from trading prices of the Company's Public Warrants. Significant increases (decreases) in this input in isolation would have resulted in a significantly higher (lower) fair value measurement.

The following table presents the Company's Private Placement Warrants measured at fair value on a recurring basis for the three and nine months ended September 30, 2025 and 2024:

		Level 3 Liabilities
						Unaudited
		For the Three Months Ended September 30, 2025
(in thousands)		Beginning Balance				Change in Fair Value				Ending Balance
Private Placement Warrants		$	862			$	(249	)		$	613
		For the Nine Months Ended September 30, 2025
(in thousands)		Beginning Balance				Change in Fair Value				Ending Balance
Private Placement Warrants		$	1,690			$	(1,077	)		$	613
		Level 3 Liabilities
						Unaudited
		For the Three Months Ended September 30, 2024
(in thousands)		Beginning Balance				Change in Fair Value				Ending Balance
Private Placement Warrants		$	1,332			$	(284	)		$	1,048
		For the Nine Months Ended September 30, 2024
(in thousands)		Beginning Balance				Change in Fair Value				Ending Balance
Private Placement Warrants		$	1,842			$	(794	)		$	1,048

The following were the inputs utilized in determining the fair value of the Private Placement Warrants as of September 30, 2025 and 2024:

		September 30,
Unaudited		2025				2024
Dividend yield (1)			0	%			0	%
Expected volatility (2)			88.4	%			74.5	%
Risk-free interest rate (3)			3.76	%			3.75	%
Term to warrant expiration (years)			0.72				1.72

(1) No dividends were paid during the nine months ended September 30, 2025 and 2024.

(2) The expected volatility is based on the back-solved implied volatility of the Company's public warrants as of the valuation date.

(3) The risk-free interest rate is based on the yield from U.S. Treasury bonds with an equivalent term to the time to maturity of the warrants.

NOTE 5. FIXED ASSETS, NET

Fixed assets, net, as of September 30, 2025 and December 31, 2024 consisted of the following:

		September 30, 2025				December 31, 2024
(in thousands)		(Unaudited)
Capitalized internal-use software costs		$	14,402			$	6,488
Computer and equipment			777				755
Other			144				139
Property and equipment, gross			15,323				7,382
Less: accumulated depreciation			(2,595	)			(1,123	)
Fixed assets, net		$	12,728			$	6,259

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NOTE 6. COMMITMENTS AND CONTINGENT LIABILITIES

Litigation

The Company may in the future be involved in various legal proceedings, claims and litigation that arise in the normal course of business. The Company accrues for estimated loss contingencies related to legal matters when available information indicates that it is probable a liability has been incurred and the Company can reasonably estimate the amount of that loss.

In many proceedings, however, it is inherently difficult to determine whether any loss is probable or even possible or to estimate the amount of any loss. In addition, even where a loss is possible or an exposure to loss exists in excess of the liability already accrued with respect to a previously recognized loss contingency, it is often not possible to reasonably estimate the size of the possible loss or range of loss or possible additional losses or range of additional losses. As of September 30, 2025, there were no material pending legal proceedings, claims or litigation.

Warranties and Indemnification

The Company’s arrangements generally include certain provisions for indemnifying customers against liabilities if there is a breach of a customer’s data or if the Company’s service infringes a third party’s intellectual property rights. To date, the Company has not incurred any material costs as a result of such indemnifications.

The Company has also agreed to indemnify its directors and executive officers for costs associated with any fees, expenses, judgments, fines and settlement amounts incurred by any of these persons in any action or proceeding to which any of those persons is, or is threatened to be, made a party by reason of the person’s service as a director or officer, including any action by the Company, arising out of that person’s services as a director or officer or that person’s services provided to any other company or enterprise at the Company’s request. The Company maintains director and officer liability insurance coverage that would generally enable it to recover a portion of any future amounts paid. The Company may also be subject to indemnification obligations by law with respect to the actions of its employees under certain circumstances and in certain jurisdictions.

NOTE 7. CAPITAL STOCK

Share Repurchase Program

On February 22, 2024, the Company announced that its Board of Directors approved a share repurchase program to authorize the repurchase of up to $15.0 million of the currently outstanding shares of the Company’s common stock over a period of twenty-four months beginning on March 1, 2024 (the “Share Repurchase Program”). On August 1, 2024, the Company’s Board of Directors amended the Share Repurchase Program to authorize the Company to repurchase up to an additional $25.0 million of its common stock for a total of $40.0 million. The Share Repurchase Program will remain in effect until the earliest: 1) the total authorized dollar amount of shares is repurchased or 2) August 1, 2026.

During the three and nine months ended September 30, 2025, the Company repurchased and retired an aggregate of 3,516,677 and 6,577,115 shares, respectively, of its common stock for a total consideration of $8.8 million ($2.51 per share) and $17.2 million ($2.62 per share), respectively. As of September 30, 2025, $11.8 million remained available under the Share Repurchase Program.

The Share Repurchase Program does not obligate the Company to repurchase any dollar amount or number of shares, and may be modified, suspended, or discontinued at any time at the Company’s discretion without prior notice. All shares repurchased will be retired.

NOTE 8. SHARE-BASED COMPENSATION

In June 2021, the Company adopted the 2021 Incentive Award Plan (the “2021 Plan”) under which the Company may grant cash and equity incentive awards to officers, employees, directors, consultants and service providers in order to attract, motivate and retain talent. The 2021 Plan replaced the Company's previous stock compensation plan.

All stock-based awards are measured based on the grant date fair value and are generally recognized on a straight-line basis in the Company’s condensed consolidated income statements over the requisite service period (generally requiring a four-year vesting period).

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The following table sets forth the total share-based compensation expense related to stock options and restricted stock units included in the respective components of operating expenses in the condensed consolidated income statements:

		Three Months Ended September 30,								Nine Months Ended September 30,
		2025				2024				2025				2024
(in thousands)		Unaudited				Unaudited				Unaudited				Unaudited
Research and development		$	225			$	408			$	1,338			$	1,405
Clinical operations, net			55				81				352				212
Sales and marketing			433				354				1,351				1,433
General and administrative			1,128				1,088				3,488				4,240
Total stock-based compensation expense		$	1,841			$	1,931			$	6,529			$	7,290

NOTE 9. NET INCOME (LOSS) PER SHARE

The Company’s basic net income (loss) per share is calculated by dividing net income (loss) attributable to ordinary shareholders by the weighted-average number of shares of common stock outstanding for the period, without consideration of potentially dilutive securities. The diluted net income (loss) per share is calculated by giving effect to all potentially dilutive securities outstanding for the period using the treasury stock method or the if-converted method based on the nature of such securities. Diluted net income (loss) per share is the same as basic net income (loss) per share in periods when the effects of potentially dilutive shares of common stock are anti-dilutive.

		Three Months Ended September 30,				Nine Months Ended September 30,
		2025		2024		2025		2024
(in thousands, except number of shares and per share amounts)		Unaudited		Unaudited		Unaudited		Unaudited
Net income (loss)		$3,251		$1,874		$3,028		$(66)
Weighted average shares used to compute net income (loss) per share:
Basic		166,190,495		168,426,349		167,455,607		168,805,882
Dilutive effect of share-based awards		5,271,707		5,327,414		6,553,783		—
Diluted		171,462,202		173,753,763		174,009,390		168,805,882
Net income (loss) per share:
Basic		$0.02		$0.01		$0.02		$(0.00)
Diluted		$0.02		$0.01		$0.02		$(0.00)

For the three months ended September 30, 2025, the shares underlying the following were excluded from the calculation of diluted net income per share since each would have had an anti-dilutive effect: 3,711,159 stock options, 2,327,232 restricted stock units, 12,757,500 Private Placement Warrants and 20,722,500 Public Warrants to purchase the Company’s common stock.

For the nine months ended September 30, 2025, the shares underlying the following were excluded from the calculation of diluted net income per share since each would have had an anti-dilutive effect: 3,633,163 stock options, 176,299 restricted stock units, 12,757,500 Private Placement Warrants and 20,722,500 Public Warrants to purchase the Company’s common stock.

For the three months ended September 30, 2024, the shares underlying the following were excluded from the calculation of diluted net income per share since each would have had an anti-dilutive effect: 40,136 vested and non-vested stock options outstanding, 892,261 non-vested and outstanding restricted stock units, 12,780,000 Private Placement Warrants and 20,700,000 Public Warrants to purchase the Company’s common stock.

For the nine months ended September 30, 2024, the shares underlying the following were excluded from the calculation of diluted net loss per share since each would have had an anti-dilutive effect giving the Company's net loss: 10,124,328 vested and non-vested stock options outstanding, 7,469,997 non-vested and outstanding restricted stock units, 12,780,000 Private Placement Warrants and 20,700,000 Public Warrants to purchase the Company’s common stock.

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NOTE 10. ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

The following table presents the amounts included within accrued expenses and other current liabilities as of September 30, 2025 and December 31, 2024:

		September 30, 2025				December 31, 2024
(in thousands)		Unaudited
Employee compensation		$	3,278			$	5,144
Professional fees			904				912
Warrant liabilities			614				—
User acquisition			509				248
Other			1,344				1,727
Accrued expenses and other current liabilities		$	6,649			$	8,031

NOTE 11. VARIABLE INTEREST ENTITIES ("VIEs")

The Company, through its subsidiary Talkspace LLC, entered into various agreements with a Texas professional association entity (Talkspace Provider Network, PA or “TPN”), which in turn contracts with the Company's other affiliated professional entities ("PC entities"), physicians, therapists, and other licensed professionals for clinical and professional services provided to the Company's members. Talkspace LLC is party to various Management Services Agreements (MSAs”) with TPN as well as the PC entities.

Pursuant to the MSAs, Talkspace LLC is the managing entity (the “Manager”) and provides management and administrative resources and services essential to the operations of TPN and the PC entities and receives a management fee for these services and reimbursement of expenses incurred. TPN and the PC entities in turn have the obligation under the MSAs to engage all licensed physicians and other health professionals to provide behavioral healthcare services to the Company's members. In addition, to the extent that TPN or the PC entities lack sufficient funds to meet their obligations, the Manager may, at its sole discretion, advance funds to TPN or the PC entities to cover these obligations. Such advances would be considered loans made by the Manager and should be repaid as per the terms of the management agreement. No such advances have been made by the Manager to TPN or the PC entities as of September 30, 2025.

The Company evaluates its ownership, contractual and other interests in entities that are not wholly-owned to determine if these entities are VIEs, and, if so, whether the Company is the primary beneficiary of the VIE. The Company's policy is to consolidate any VIEs where the Company is deemed to be the primary beneficiary. The Company determined that it holds a variable interest in TPN and the PC entities. The Company evaluates whether an entity in which it has a variable interest is considered a VIE as defined under ASC 810, “Consolidation.” VIEs are generally entities that have either a total equity investment that is insufficient to permit the entity to finance its activities without additional subordinated financial support, or whose equity investors lack the characteristics of a controlling financial interest. The Company determined that TPN and the PC entities are VIEs and that it is the primary beneficiary of these VIEs as it is able to direct the activities of TPN and the PC entities that most significantly impact their economic performance and fund and absorb all their losses; therefore, the Company consolidates these VIEs.

The assets of the Company’s consolidated variable interest entities are subject to legal, contractual, and regulatory restrictions that limit their use to specified purposes such as funding operations, servicing debt, and meeting regulatory requirements. The liabilities of these VIEs may be subject to contractual limitations on settlement. Creditors and beneficial interest holders of the VIEs generally have recourse only to the assets of the VIEs and not to the general credit of the Company, except as provided under specific agreements. The Company’s maximum exposure to loss from these VIEs is intended to be limited to its interests in these entities and any specific contractual requirements, including guarantees or other commitments, if any.

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The following table details the assets and liabilities of the VIEs as of September 30, 2025 and December 31, 2024. The assets and liabilities in the table below are presented prior to consolidation and thus a portion of these assets and liabilities are eliminated in consolidation.

		September 30, 2025				December 31, 2024
(in thousands)		Unaudited
ASSETS
Cash and cash equivalents		$	184			$	132
Accounts receivable			12,709				6,743
Other assets			28,756				20,986
Total Assets		$	41,649			$	27,861
LIABILITIES
Accrued expenses and other current liabilities			3,663				2,528
Total Liabilities		$	3,663			$	2,528

NOTE 12. SUBSEQUENT EVENTS

In October 2025, the Company completed the acquisition of Wisdo Health, a clinically-proven social health and peer support platform, to expand Talkspace’s commitment to innovation and holistic mental health care. The consideration consisted of cash and shares of the Company's common stock.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Unless the context otherwise requires, all references in this section as to “Talkspace,” the “Company,” “we,” “us” or “our” refer to the business of Talkspace, Inc. and its consolidated subsidiaries.

The following discussion and analysis of our financial condition and results of operations should be read together with the financial statements and the related notes contained in this Quarterly Report and the financial statements and related notes contained in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2024. This discussion contains forward-looking statements that reflect our plans, estimates, and beliefs that involve risks and uncertainties. As a result of many factors, such as those discussed in Part I, Item 1A, “Risk Factors” of the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2024 and “Forward-Looking Statements” sections and elsewhere in this Quarterly Report, our actual results may differ materially from those anticipated in these forward-looking statements.

The purpose of this section is to discuss and analyze our consolidated financial condition, liquidity and capital resources and results of operations for the three and nine months ended September 30, 2025 and 2024.

Overview

Talkspace is a healthcare company offering its members convenient and affordable access to a fully-credentialed network of highly qualified providers. We are a leading virtual behavioral health company connecting millions of patients with licensed mental health providers across a wide and growing spectrum of care through virtual psychotherapy and psychiatry. We created a purpose-built platform to address the vast, unmet and growing demand for mental health services. Through its platform, Talkspace serves:

•Health insurance plans (commercial and government) and employee assistance programs (“Payor”), who offer their insured members access to the Company's platform at in-network reimbursement rates,

•Direct-to-Enterprise (“DTE”), who offer their enterprise members access to the Company's platform while their enterprise is under an active contract with Talkspace, and

•Individual subscribers (“Consumer”), who subscribe directly to the Company's platform.

For the three and nine months ended September 30, 2025, our clinicians completed approximately 432,200 and 1,167,300 sessions, respectively, related to members covered under our Payor customers, compared to 316,400 and 899,200 completed sessions, respectively, for the three and nine months ended September 30, 2024. As of September 30, 2025, we had approximately 6,400 Consumer active members compared to 8,600 Consumer active members as of September 30, 2024. Please refer to the “Key Business Metrics” section below for a description of Consumer active members.

Inflation Risk and Economic Conditions

The demand for our solution is dependent on the general economy, which is in turn affected by geopolitical conditions, the stability of the global credit markets, inflationary pressures, higher interest rates, the industries in which our Payor and DTE customers operate or serve, and other factors. Downturns in the general economy could disproportionately affect the demand for our solution and cause it to decrease.

Our operations could also be impacted by inflation and higher interest rates. Inflation did not have a material effect on our business, financial condition or results of operations for the nine months ended September 30, 2025 and 2024. However, if our costs were to become subject to significant inflationary pressures (such as Provider cost), we may not be able to fully offset such higher costs through price increases or cost savings. Our inability or failure to do so could harm our business, financial condition or results of operations.

One Big Beautiful Bill Act (“OBBBA”)

The U.S. federal income tax legislation, commonly referred to as the OBBBA, was enacted on July 4, 2025. While the Company continues to record a full valuation allowance against its U.S. deferred tax assets, the OBBBA has a positive impact on our liquidity and the duration of our future cash tax shield. The OBBBA permanently reinstates 100% Bonus Depreciation for qualified capital expenditures made after January 19, 2025, and allows the immediate expensing of domestic Research and Development (“R&D”) costs for tax years beginning after December 31, 2024. These provisions increase the amount of tax deductions available in the current and future periods. The permanent nature of R&D expensing and Bonus Depreciation, combined with the permanent extension of post-2017 Net Operating Loss carryforwards, increases the expected longevity of our tax shield.

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As of September 30, 2025, we continue to maintain a full valuation allowance against our net deferred tax assets which primarily consists of accumulated net operating losses carried forward due to the uncertainty of the realization of such deferred taxes.

Operating Segments

The Company operates as a single segment, which is how the chief operating decision maker (“CODM”), who is the Chief Executive Officer, reviews financial performance and allocates resources.

Key Business Metrics

We monitor the following key metrics to help us evaluate our business, identify trends affecting our business, formulate business plans and make strategic decisions. We believe the following metrics are useful in evaluating our business:

		Nine Months Ended September 30,
		2025		2024
(in thousands except number of health plan and enterprise customers or otherwise indicated)		Unaudited		Unaudited
Number of completed Payor sessions during the period		1,167.3		899.2
Number of health plan customers at period end		34		26
Number of enterprise customers at period end		163		189
Number of Consumer active members at period end		6.4		8.6
		Three Months Ended September 30,
		2025		2024
(in thousands)		Unaudited		Unaudited
Unique Payor active members during the period		120.6		93.5

Active Members: We consider consumer members “active” commencing on the date such member initiates contact with a provider on our platform until the term of their monthly, quarterly or bi-annual subscription plan expires, unless terminated early.

Unique Payor Active Members: Represents unique users who had a session completed during the period.

Components of Results of Operations

Revenue

We generate revenue from services provided to individuals who are qualified to receive access to the Company's services through our commercial arrangements with health insurance plans, employee assistance organizations and enterprises. We also generate revenue from the sale of monthly, quarterly, bi-annual and annual membership subscriptions to the Company's therapy platform as well as supplementary a la carte offerings directly to individual consumers through a subscription plan. See Note 3, “Revenue Recognition” in the notes to the condensed consolidated financial statements for further details.

Revenue growth is generated from a combination of increasing utilization within our Payor members and expanding enterprise customers.

Costs and Operating Expenses

Cost of Revenue, excluding depreciation and amortization

Cost of revenue is comprised primarily of therapist payments. Cost of revenue is largely driven by the number of sessions and the size of our provider network that is required to service the growth of our Payor and DTE customers, in addition to the growth of our customer base.

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We designed our business model and our provider network to be scalable and to leverage a hybrid model of both employee providers and independently contracted providers to support multiple growth scenarios. The compensation paid to our independently contracted providers is variable, and the amount paid to a provider is generally based on the amount of time committed by such provider to our members. Our employee providers receive a fixed-salary and discretionary bonuses, where applicable, all of which is included in cost of revenue.

While we expect to make increased investments to support accelerated growth and scale our provider network, we also expect increased efficiencies and economies of scale. Our cost of revenue as a percentage of revenue is expected to fluctuate from period to period depending on the interplay of these factors as well as pricing fluctuations.

Research and Development Expenses

Research and development expenses include personnel and related expenses for software development and engineering, information technology infrastructure, security, privacy compliance and product development (inclusive of stock-based compensation for our research and development employees), third-party services and contractors related to research and development, information technology and software-related costs. Research and development expenses exclude amounts reflected as capitalized internal-use software development costs.

Clinical Operations Expenses

Clinical operations expenses are associated with the management of our network of therapists. This item is comprised of costs related to recruiting, onboarding, credentialing, training and ongoing quality assurance activities (inclusive of stock-based compensation for our clinical operations employees), costs of third-party services and contractors related to recruiting and training and software-related costs.

Sales and Marketing Expenses

Sales expenses consist primarily of employee-related expenses, including salaries, benefits, commissions, travel and stock-based compensation costs for our employees engaged in sales and account management.

Marketing expenses consist primarily of advertising and marketing expenses for member acquisition and engagement, as well as personnel costs, including salaries, benefits, bonuses, stock-based compensation expense for marketing employees, third-party services and contractors. Marketing expenses also include third-party software subscription services, participation in trade shows, brand messaging and costs of communications materials that are produced for our customers to generate greater awareness and utilization of our platform among our Payor and DTE customers.

General and Administrative Expenses

General and administrative expenses consist primarily of personnel costs, including salaries, benefits, bonuses and stock-based compensation expense for certain executives, finance, accounting, legal and human resources functions, as well as professional fees.

Depreciation and amortization

Depreciation and amortization expense consist primarily of depreciation expense on capitalized internal use-software costs, computer and equipment and amortization of intangible asset.

Financial income, net

Financial income, net includes the impact from (i) interest earned in investments in marketable securities and other highly liquid investments, (ii) non-cash changes in the fair value of our warrant liabilities, and (iii) other financial expenses in connection with bank charges.

Taxes on income

Taxes on income consists of U.S. income taxes related to income generated by our U.S. subsidiary and foreign income taxes related to income generated by our subsidiary organized under the laws of Israel. Taxes on income were not material for the three and nine months ended September 30, 2025 and 2024.

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Results of Operations

The following table presents our results of operations for the three and nine months ended September 30, 2025 and 2024 and the dollar and percentage change between the respective periods:

		Three Months Ended September 30,								Variance								Nine Months Ended September 30,								Variance
(in thousands, except percentages)		2025				2024				$				%				2025				2024				$				%
Revenue:		Unaudited				Unaudited												Unaudited				Unaudited
Payor revenue		$	45,512			$	32,039				13,473				42.1			$	123,855			$	90,492				33,363				36.9
DTE revenue			9,260				9,370				(110	)			(1.2	)			28,246				28,911				(665	)			(2.3	)
Consumer revenue			4,609				5,990				(1,381	)			(23.1	)			13,772				19,470				(5,698	)			(29.3	)
Total revenue			59,381				47,399				11,982				25.3				165,873				138,873				27,000				19.4
Costs and operating expenses:
Cost of revenue, excluding    depreciation and amortization			34,741				25,667				9,074				35.4				94,447				74,236				20,211				27.2
Research and development			1,784				2,298				(514	)			(22.4	)			7,187				8,048				(861	)			(10.7	)
Clinical operations, net			1,638				1,677				(39	)			(2.3	)			5,415				4,802				613				12.8
Sales and marketing			13,245				12,295				950				7.7				41,423				38,535				2,888				7.5
General and administrative			5,089				5,132				(43	)			(0.8	)			16,024				17,666				(1,642	)			(9.3	)
Depreciation and amortization			686				231				455				197.0				2,054				652				1,402				215.0
Total costs and operating expenses			57,183				47,300				9,883				20.9				166,550				143,939				22,611				15.7
Income (loss) from operations			2,198				99				2,099			*					(677	)			(5,066	)			4,389				86.6
Financial income, net			(1,078	)			(1,701	)			623				(36.6	)			(3,929	)			(5,123	)			1,194				(23.3	)
Income before income taxes			3,276				1,800				1,476				82.0				3,252				57				3,195			*
Income tax expense (benefit)			25				(74	)			99			*					224				123				101				82.1
Net income (loss)		$	3,251			$	1,874			$	1,377				73.5			$	3,028			$	(66	)		$	3,094			*

Revenue

Total revenue increased by $12.0 million, or 25.3% for the three months ended September 30, 2025 compared to the three months ended September 30, 2024, primarily due to a 42.1% increase in Payor revenue, partially offset by a 23.1% decline in Consumer revenue. The increase in revenue from our Payor customers is primarily due to a 36.6% increase in number of completed Payor sessions as a result of an increase in active payor members of 29.1% and an increase in the number of health plan customers of 30.8%. Consumer subscription revenue decreased by $1.4 million, or 23.1% for the three months ended September 30, 2025 compared to the three months ended September 30, 2024, primarily due to a 25.9% decline in Consumer active members due to the Company's intentional and strategic decision to optimize and focus marketing efforts on attracting Payor members.

Total revenue increased by $27.0 million, or 19.4% for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024, primarily due to a 36.9% increase in Payor revenue, partially offset by a 29.3% decline in Consumer revenue. The increase in revenue from our Payor customers is primarily due to a 29.8% increase in number of completed Payor sessions as a result of an increase in active payor members of 29.1% and an increase in the number of health plan customers of 30.8%. Consumer subscription revenue decreased by $5.7 million, or 29.3% for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024, primarily due to a 25.9% decline in Consumer active members due to the Company's intentional and strategic decision to optimize and focus marketing efforts on attracting Payor members.

Overall, the increase in revenue for the three and nine months ended September 30, 2025 compared to the three and nine months ended September 30, 2024 was primarily driven by a shift in revenue mix towards Payor, and while we no longer have marketing resources dedicated solely to the Consumer category, it continues to have a positive contribution to our financial results.

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Costs and Operating Expenses

Cost of revenue, excluding depreciation and amortization. Cost of revenue, excluding depreciation and amortization, increased by $9.1 million, or 35.4%, to $34.7 million for the three months ended September 30, 2025 from $25.7 million for the three months ended September 30, 2024 and increased by $20.2 million, or 27.2%, to $94.4 million for the nine months ended September 30, 2025 from $74.2 million for the nine months ended September 30, 2024. The increase in cost of revenue for the three and nine months ended September 30, 2025, was primarily due to increased hours worked by therapists as a result of increased Payor sessions.

Research and development expenses. Research and development expenses decreased by $0.5 million, or 22.4%, to $1.8 million for the three months ended September 30, 2025 from $2.3 million for the three months ended September 30, 2024. The decrease in research and development expenses for the three months ended September 30, 2025 was primarily due to a decrease in employee-related costs, inclusive of non-cash stock compensation expense of $0.4 million, as a result of the exclusion of amounts reflected as capitalized internal-use software development costs.

Research and development expenses decreased by $0.9 million, or 10.7%, to $7.2 million for the nine months ended September 30, 2025 from $8.1 million for the nine months ended September 30, 2024. The decrease in research and development expenses for the nine months ended September 30, 2025 was primarily due to a decrease in employee related costs, inclusive of non-cash stock compensation expense of $0.8 million, as a result of the exclusion of amounts reflected as capitalized internal-use software development costs.

Clinical operations expenses. Clinical operations expenses were $1.6 million for the three months ended September 30, 2025 compared to $1.7 million for the three months ended September 30, 2024. Clinical operations expenses increased by $0.6 million, or 12.8% to $5.4 million for the nine months ended September 30, 2025 from $4.8 million for the nine months ended September 30, 2024. The increase in clinical operations expenses for the nine months ended September 30, 2025 was primarily due to an increase in employee-related costs, inclusive of non-cash stock compensation expense of $0.6 million.

Sales and marketing expenses. Sales and marketing expenses increased by $0.9 million, or 7.7%, to $13.2 million for the three months ended September 30, 2025 from $12.3 million for the three months ended September 30, 2024. The increase in sales and marketing expenses for the three months ended September 30, 2025 was primarily driven by an increase in direct marketing and promotional costs of $1.1 million.

Sales and marketing expenses increased by $2.9 million, or 7.5%, to $41.4 million for the nine months ended September 30, 2025 from $38.5 million for the nine months ended September 30, 2024. The increase in sales and marketing expenses for the nine months ended September 30, 2025 was primarily driven by an increase in direct marketing and promotional costs of $3.6 million, partially offset by a decrease in employee-related costs, inclusive of non-cash stock compensation expense of $0.7 million.

General and administrative expenses. General and administrative expenses were $5.1 million for the three months ended September 30, 2025 and 2024. General and administrative expenses decreased by $1.6 million, or 9.3%, to $16.0 million for the nine months ended September 30, 2025 from $17.6 million for the nine months ended September 30, 2024. The decrease in general and administrative expenses for the nine months ended September 30, 2025 was primarily due to a decrease in severance payments related to the departure of certain key executives of the Company in 2024 of $1.8 million.

Depreciation and amortization expenses. Depreciation and amortization expenses increased by $0.5 million, or 197.0%, to $0.7 million for the three months ended September 30, 2025 from $0.2 million for the three months ended September 30, 2024 and increased by $1.4 million, or 215.0%, to $2.1 million for the nine months ended September 30, 2025 from $0.7 million for the nine months ended September 30, 2024. The increase in depreciation and amortization expenses for the three and nine months ended September 30, 2025 was primarily due an increase in amortization expense related to capitalized internal-use software assets of $0.5 million and $1.4 million, respectively.

Financial income, net

Financial income, net decreased by $0.6 million, or 36.6%, to $1.1 million for the three months ended September 30, 2025 from $1.7 million for the three months ended September 30, 2024. The decrease in financial income, net was primarily due to a decrease in interest income earned on marketable securities and other highly liquid investments of $0.4 million due to a reduction in interest rates.

Financial income, net decreased by $1.2 million, or 23.3%, to $3.9 million for the nine months ended September 30, 2025 from $5.1 million nine months ended September 30, 2024. The decrease in financial income, net was primarily due to a decrease in

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interest income earned on marketable securities and other highly liquid investments of $1.1 million due to a reduction in interest rates.

Income tax expense (benefit)

Income tax expense (benefit) was immaterial for the three and nine months ended September 30, 2025 and 2024.

Non-GAAP Financial Measures

In addition to our financial results determined in accordance with GAAP, we believe adjusted EBITDA, a non-GAAP measure, is useful in evaluating our operating performance, and our management uses it as a key performance measure to assess our operating performance. Because adjusted EBITDA facilitates internal comparisons of our historical operating performance on a more consistent basis, we use this measure for business planning purposes and in evaluating acquisition opportunities.

We also use adjusted EBITDA to evaluate our ongoing operations and for internal planning and forecasting purposes. We believe that this non-GAAP financial measure, when taken together with the corresponding GAAP financial measures, provides meaningful supplemental information regarding our performance by excluding certain items that may not be indicative of our business, results of operations or outlook. We believe that the use of adjusted EBITDA is helpful to our investors as it is a metric used by management in assessing the health of our business and our operating performance. However, non-GAAP financial information is presented for supplemental informational purposes only, has limitations as an analytical tool and should not be considered in isolation or as a substitute for financial information presented in accordance with GAAP.

Some of the limitations of adjusted EBITDA include (i) adjusted EBITDA does not necessarily reflect capital commitments to be paid in the future and (ii) although depreciation and amortization are non-cash charges, the underlying assets may need to be replaced and adjusted EBITDA does not reflect these requirements. In evaluating adjusted EBITDA, you should be aware that in the future we will incur expenses similar to the adjustments described herein. Our presentation of adjusted EBITDA should not be construed as an inference that our future results will be unaffected by these expenses or any unusual or non-recurring items. Our adjusted EBITDA may not be comparable to similarly titled measures of other companies because they may not calculate adjusted EBITDA in the same manner as we calculate the measure, limiting its usefulness as a comparative measure. Adjusted EBITDA should not be considered as an alternative to income (loss) before income taxes, net income (loss), income (loss) per share, or any other performance measures derived in accordance with U.S. GAAP. When evaluating our performance, you should consider adjusted EBITDA alongside other financial performance measures, including our net income (loss) and other GAAP results.

A reconciliation is provided below for adjusted EBITDA to net income (loss), the most directly comparable financial measure stated in accordance with GAAP. Investors are encouraged to review our financial statements prepared in accordance with GAAP and the reconciliation of our non-GAAP financial measure to its most directly comparable GAAP financial measure, and not to rely on any single financial measure to evaluate our business. We do not provide a forward-looking reconciliation of adjusted EBITDA guidance as the amount and significance of the reconciling items required to develop meaningful comparable GAAP financial measures cannot be estimated at this time without unreasonable efforts. These reconciling items could be meaningful.

We calculate adjusted EBITDA as net income (loss) adjusted to exclude (i) depreciation and amortization, (ii) stock-based compensation expense, (iii) financial income, net, (iv) income tax expense, and (v) certain non-recurring expenses, where applicable. The following table presents a reconciliation of adjusted EBITDA from the most comparable GAAP measure, net income (loss) for the three and nine months ended September 30, 2025 and 2024:

		Three Months Ended September 30,								Nine Months Ended September 30,
		2025				2024				2025				2024
(in thousands)		Unaudited				Unaudited				Unaudited				Unaudited
Net income (loss)		$	3,251			$	1,874			$	3,028			$	(66	)
Add:
Depreciation and amortization			686				231				2,054				652
Stock-based compensation			1,841				1,931				6,529				7,290
Financial income, net			(1,078	)			(1,701	)			(3,929	)			(5,123	)
Income tax expense (benefit)			25				(74	)			224				123
Non-recurring expenses (1)			243				89				1,300				1,427
Adjusted EBITDA		$	4,968			$	2,350			$	9,206			$	4,303

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(1)For the three months ended September 30, 2025, non-recurring expenses primarily consisted of acquisition related expenses. For the nine months ended September 30, 2025, non-recurring expenses primarily consisted of severance costs, one-time litigation fees and acquisition related expenses.

For the three and nine months ended September 30, 2024, non-recurring expenses primarily consisted of severance costs related to the departure of key executives of the Company and other related costs.

Liquidity and Capital Resources

As of September 30, 2025, we had $43.7 million of cash, cash equivalents and restricted cash ($76.7 million as of December 31, 2024), and $52.1 million in marketable securities ($41.1 million as of December 31, 2024) which we use to finance our operations and support a variety of growth initiatives and investments. We had no debt as of September 30, 2025 and as of December 31, 2024.

Our primary cash needs are to fund operating activities and invest in technology development. Our future capital requirements will depend on many factors including our growth rate, contract renewal activity, the timing and extent of investments to support product development efforts, our expansion of sales and marketing activities, the introduction of new and enhanced service offerings, and the continuing market acceptance of virtual behavioral services. Additionally, we may enter into arrangements to acquire or invest in complementary businesses, services and technologies.

We currently anticipate to be able to fund our cash needs for at least the next 12 months and thereafter for the foreseeable future using available cash and cash equivalent balances. However, in the future we may require additional capital to respond to technological advancements, competitive dynamics, customer demands, business and investment opportunities, acquisitions or unforeseen circumstances and we may determine to engage in equity or debt financings for other reasons. We may not be able to timely secure additional debt or equity financing on favorable terms, or at all. If we raise additional funds through the issuance of equity or convertible debt or other equity-linked securities, our existing stockholders could experience significant dilution. Any debt financing obtained by us in the future could involve restrictive covenants relating to our capital raising activities and other financial and operational matters, which may make it more difficult for us to obtain additional capital and to pursue business opportunities, including potential acquisitions. If we cannot raise capital when needed, we may be forced to undertake asset sales or similar measures to ensure adequate liquidity.

Share Repurchase Program

On February 22, 2024, the Company announced that its Board of Directors approved a share repurchase program to authorize the repurchase of up to $15.0 million of the currently outstanding shares of the Company’s common stock over a period of twenty-four months beginning on March 1, 2024 (the “Share Repurchase Program”). On August 1, 2024, the Company’s Board of Directors amended the Share Repurchase Program to authorize the Company to repurchase up to an additional $25.0 million of its common stock for a total of $40.0 million. The Share Repurchase Program will remain in effect until the earliest: 1) the total authorized dollar amount of shares is repurchased or 2) August 1, 2026.

During the three and nine months ended September 30, 2025, the Company repurchased and retired an aggregate of 3,516,677 and 6,577,115 shares, respectively, of its common stock for a total consideration of $8.8 million ($2.51 per share) and $17.2 million ($2.62 per share), respectively. As of September 30, 2025, $11.8 million remained available under the Share Repurchase Program.

Such repurchases may be completed periodically through various methods in compliance with applicable state and federal securities laws and will be at times and in amounts as the Company deems appropriate, based on factors such as price, market conditions, corporate and regulatory requirements, constraints specified in any Rule 10b5-1 trading plans, alternative investment opportunities and other business considerations. All shares repurchased will be canceled. The program does not obligate the Company to repurchase any dollar amount or number of shares, and may be suspended or terminated at any time.

See Note 7, “Capital Stock” in the notes to the condensed consolidated financial statements for further details.

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Cash Flows from Operating, Investing and Financing Activities

The following table presents the summary condensed consolidated cash flow information for the periods presented:

Cash Flows

		Nine Months Ended September 30,
		2025				2024
(in thousands)		Unaudited				Unaudited
Net cash provided by operating activities		$	3,158			$	7,623
Net cash used in investing activities			(17,702	)			(3,837	)
Net cash used in financing activities			(18,495	)			(8,700	)
Net decrease in cash, cash equivalents and restricted cash		$	(33,039	)		$	(4,914	)

Operating Activities

The decline in net cash provided by operating activities was primarily due to timing of customer payments which increased accounts receivable, partially offset by net income for the nine months ended September 30, 2025 compared to net loss for the nine months ended September 30, 2024.

Investing Activities

The increase in net cash used in investing activities was driven primarily by purchases of marketable securities and an increase in capitalized internal-use software development costs, partially offset by proceeds from maturities of marketable securities during the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024.

Financing Activities

The increase in net cash used in financing activities was driven primarily by an increase in the purchase of outstanding shares of the Company’s common stock under the Share Repurchase Program, partially offset by a decrease in proceeds from the exercise of stock options during the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024.

Contractual Obligations, Commitments and Contingencies

As of September 30, 2025, we did not have any short-term or long-term debt, or significant long-term liabilities. As of September 30, 2025, we have a non-material long-term operating lease for our office space in New York, NY.

We may in the future be involved in various legal proceedings, claims and litigation that arise in the normal course of business. We accrue for estimated loss contingencies related to legal matters when available information indicates that it is probable a liability has been incurred and we can reasonably estimate the amount of that loss. In many proceedings, however, it is inherently difficult to determine whether any loss is probable or even possible or to estimate the amount of any loss. In addition, even where a loss is possible or an exposure to loss exists in excess of the liability already accrued with respect to a previously recognized loss contingency, it is often not possible to reasonably estimate the size of the possible loss or range of loss or possible additional losses or range of additional losses. Should any of our estimates and assumptions change or prove to be incorrect, it could have a material impact on our results of operations, financial position, and cash flows. As of September 30, 2025 there were no material legal proceedings, claims or litigation.

Our commercial contract arrangements generally include certain provisions requiring us to indemnify customers against liabilities if there is a breach of a customer’s data or if our service infringes a third party’s intellectual property rights. To date, we have not incurred any material costs as a result of such indemnifications.

We have also agreed to indemnify our officers and directors for costs associated with any fees, expenses, judgments, fines and settlement amounts incurred by any of these persons in any action or proceeding to which any of those persons is, or is threatened to be, made a party by reason of the person’s service as a director or officer, including any action by us, arising out of that person’s services as our director or officer or that person’s services provided to any other company or enterprise at our request. We maintain director and officer liability insurance coverage that would generally enable us to recover a portion of any future amounts paid. We may also be subject to indemnification obligations by law with respect to the actions of our employees under certain circumstances and in certain jurisdictions.

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Off-Balance Sheet Arrangements

We do not invest in any off-balance sheet vehicles that provide liquidity, capital resources, market or credit risk support, or engage in any activities that expose us to any liability that is not reflected in our condensed consolidated financial statements.

Critical Accounting Policies and Estimates

The Company’s condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America. Reference is also made to the Company’s consolidated financial statements and notes thereto found in its Annual Report on Form 10-K for the year ended December 31, 2024.

The Company’s accounting policies are essential to understanding and interpreting the financial results reported on the condensed consolidated financial statements. The significant accounting policies used in the preparation of the Company’s condensed consolidated financial statements are summarized in Note 2 to the audited consolidated financial statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024. Certain of those policies are considered to be particularly important to the presentation of the Company's financial results because they require management to make difficult, complex or subjective judgments, often as a result of matters that are inherently uncertain.

During the nine months ended September 30, 2025, there were no material changes to matters discussed under the heading “Critical Accounting Policies and Estimates” in Part II, Item 7 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2024.

Recent Accounting Pronouncements

Information regarding recent accounting developments and their impact on our results can be found in Note 2, “Summary of Significant Accounting Policies and Estimates” in the audited consolidated financial statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2024 and in Note 2, “Significant Accounting Policies” in the notes to the condensed consolidated financial statements of this Quarterly Report on Form 10-Q.

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FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q (the “Quarterly Report”) contains forward-looking statements. We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). All statements other than statements of historical facts contained in this Quarterly Report may be forward-looking statements. In some cases, you can identify forward-looking statements by terms such as “may,” “will,” “should,” “expects,” “plans,” “anticipates,” “could,” “intends,” “targets,” “projects,” “contemplates,” “believes,” “estimates,” “forecasts,” “predicts,” “potential” or “continue” or the negative of these terms or other similar expressions. Forward-looking statements contained in this Quarterly Report include, but are not limited to, statements regarding our future results of operations and financial position, industry and business trends, stock-based compensation, revenue recognition, business strategy, plans and market growth.

The forward-looking statements in this Quarterly Report and other such statements we publicly make from time-to-time are only predictions. We base these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our business, financial condition, and results of operations. Forward-looking statements involve known and unknown risks and uncertainties. Many important factors could cause actual future events to differ materially from the forward-looking statements in this Quarterly Report, including but not limited to: (i) rapid technological change in our industry; (ii) our ability to secure clients' contract renewals; (iii) our ability to maintain and expand our network of therapists, psychiatrists and other providers; (iv) a decline in the prevalence of enterprise-sponsored healthcare or the emergence of new technologies may adversely impact our DTE business; (v) if our or our vendors’ security measures fail or are breached; (vi) changes in healthcare laws, regulations or trends and our ability to operate in the heavily regulated healthcare industry; and (vii) the other factors, risks and uncertainties discussed in Part I, Item 1A, “Risk Factors” of the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2024 and subsequent quarterly reports on Form 10-Q, including this report. The forward-looking statements in this Quarterly Report are based upon information available to us as of the date of this Quarterly Report, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain, and investors are cautioned not to unduly rely upon these statements.

You should read this Quarterly Report and the risk factors discussed in Part I, Item 1A, “Risk Factors” of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2024 with the understanding that our actual future results, levels of activity, performance and achievements may be materially different from what we expect. We qualify all of our forward-looking statements by these cautionary statements. These forward-looking statements speak only as of the date of this Quarterly Report. Except as required by applicable law, we do not plan to publicly update or revise any forward-looking statements contained in this Quarterly Report on Form 10-Q or any forward-looking statements we may publicly make from time-to-time, whether as a result of any new information, future events or otherwise.

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Item 3. Quantitative and Qualitative Disclosures About Market Risk.

During the nine months ended September 30, 2025, there were no material changes to the information contained in Part II, Item 7A of the Company’s Annual Report on Form 10-K for the year ended December 31, 2024.

Item 4. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

Based on an evaluation under the supervision and with the participation of the Company's management, the Company's Chief Executive Officer and Chief Financial Officer have concluded that the Company's disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) were effective as of September 30, 2025 to provide reasonable assurance that information required to be disclosed by the Company in reports filed or submitted under the Exchange Act is (i) recorded, processed, summarized and reported within the time periods specified in the United States Securities and Exchange Commission’s (“SEC”) rules and forms and (ii) accumulated and communicated to the Company’s management, including its Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

Changes in Internal Control Over Financial Reporting

There were no changes in the Company's internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) during the third quarter of 2025 that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.

Inherent Limitations on Effectiveness of Controls

Our management, including our Chief Executive Officer and Chief Financial Officer, believes that our disclosure controls and procedures and internal control over financial reporting are designed to provide reasonable assurance of achieving their objectives and are effective at the reasonable assurance level. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected.

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PART II—OTHER INFORMATION

Item 1. Legal Proceedings.

The Company has no material pending legal proceedings as of September 30, 2025; for more details see Note 6, “Commitments and Contingent Liabilities” in the Notes to the Condensed Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q, which is incorporated herein by reference.

Item 1a. Risk Factors.

In addition to the other information set forth in this Quarterly Report, you should carefully consider the factors discussed under Part I, Item 1A. “Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024. These factors could materially adversely affect our business, financial condition, liquidity, results of operations and capital position, and could cause our actual results to differ materially from our historical results or the results contemplated by any forward-looking statements contained in this Quarterly Report. During the nine months ended September 30, 2025, there were no material changes to the information contained in Part I, Item 1A of the Company's Annual Report on Form 10-K for the year ended December 31, 2024.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

Below is a summary of share repurchases for the three months ended September 30, 2025. See Note 7, “Capital Stock” in the Notes to the Condensed Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q, as well as the section entitled “Liquidity Capital Resources-Share Repurchase Program” in Part I, Item 2 of this Quarterly Report on Form 10-Q for information regarding our share repurchase program.

Period		Total Number of Shares Purchased				Average Price Paid Per Share					Total Number of Shares Purchased as Part of Publicly Announced Programs				Approximate Dollar Value of Shares that May Yet Be Purchased Under the Program (In Thousands) (1)
July 1 - 31			477,066			$		2.49				477,066			$		19,445
August 1 - 31			3,027,111					2.52				3,027,111					11,828
September 1 - 30			12,500					2.50				12,500					11,797
Total			3,516,677									3,516,677

(1)$11.8 million remained available for share repurchases under the Share Repurchase Program as of September 30, 2025.

Item 3. Defaults Upon Senior Securities.

None.

Item 4. Mine Safety Disclosures.

Not applicable.

Item 5. Other Information.

No directors or officers, as defined in Securities Exchange Act Rule 16a-1(f), adopted, modified, or terminated a “Rule 10b5-1 trading arrangement” or a “non-Rule 10b5-1 trading arrangement,” as defined in Item 408 of Regulation S-K, during the three months ended September 30, 2025.

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Item 6. Exhibits.

		EXHIBIT INDEX		Filed/
Exhibit Number		Exhibit Description		Furnished Herewith
31.1		Certification of Chief Executive Officer pursuant to Rule 13a-14(a)/15d-14(a).		*
31.2		Certification of Chief Financial Officer pursuant to Rule 13a-14(a)/15d-14(a).		*
32.1		Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350.		**
32.2		Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350.		**
101.INS		Inline XBRL Instance Document-the instance document does not appear in the Interactive Data file because its XBRL tags are embedded within the Inline XBRL document.		*
101.SCH		Inline XBRL Taxonomy Extension Schema with Embedded Linkbase Documents.		*
104		Cover Page Interactive Data File (as formatted as Inline XBRL and contained in Exhibit 101).		*

* Filed herewith.

** Furnished herewith.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

		Talkspace, Inc.
Date: November 6, 2025		By:	/s/ Jon Cohen
			Jon Cohen
			Chief Executive Officer
Date: November 6, 2025		By:	/s/ Ian Harris
			Ian Harris
			Chief Financial Officer

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FAQ

How did TALK's revenue change in Q3 2025?

Revenue increased 25.3% to approximately $59.4 million, led by Payor revenue up 42.1%.

What were TALK's Q3 2025 earnings per share?

Diluted EPS was $0.02 with net income of $3.251 million.

How is Talkspace's revenue mix shifting?

Payor revenue grew 42.1%, while Consumer revenue declined 23.1% as marketing prioritized Payor members.

What is TALK’s liquidity position?

As of Sep 30, 2025, cash and restricted cash were $43.653 million and marketable securities were $52.100 million; the company has no debt.

Did TALK repurchase shares in Q3 2025?

Yes. It repurchased 3,516,677 shares for $8.8 million, with $11.8 million remaining under the program.

How many shares were outstanding for TALK?

Shares outstanding were 165,656,124 as of November 4, 2025.

Did Talkspace complete any acquisitions?

In October 2025, it acquired Wisdo Health for cash and shares.