TalkSpace | 10-Q: FY2026 Q1 Revenue Misses Estimate at USD 61.68 M

Revenue: As of FY2026 Q1, the actual value is USD 61.68 M, missing the estimate of USD 64.27 M.

EPS: As of FY2026 Q1, the actual value is USD -0.04.

EBIT: As of FY2026 Q1, the actual value is USD -7.907 M.

Talkspace, Inc. operates as a single segment, with consolidated results reviewed by its Chief Executive Officer for management and resource allocation purposes .

Segment Revenue

• Total Revenue: Increased by 18.2% to $61,679 thousand for the three months ended March 31, 2026, from $52,182 thousand for the same period in 2025, primarily driven by volume and a shift in revenue mix towards Payor customers .
• Payor Revenue: Grew by 28.3% to $48,562 thousand in Q1 2026, from $37,842 thousand in Q1 2025, attributed to a 31.2% increase in completed Payor sessions, a 26.4% increase in unique active Payor members, and a 12.9% increase in health plan customers .
• DTE Revenue: Remained stable at $9,613 thousand in Q1 2026, compared to $9,583 thousand in Q1 2025 .
• Consumer Revenue: Decreased by 26.3% to $3,504 thousand in Q1 2026, from $4,757 thousand in Q1 2025, mainly due to a 23.9% decrease in Consumer active members as a result of a strategic focus on Payor members .

Operational Metrics

• Net (Loss) Income: Talkspace, Inc. reported a net loss of - $6,306 thousand for Q1 2026, a decrease from a net income of $318 thousand for Q1 2025 .
• Loss from Operations: Increased to - $7,127 thousand in Q1 2026, from - $1,085 thousand in Q1 2025 .
• Cost of Revenue (excluding depreciation and amortization): Increased by 25.3% to $36,064 thousand in Q1 2026, from $28,789 thousand in Q1 2025, primarily due to increased therapist hours from higher Payor sessions .
• Research and Development Expenses: Decreased by 6.2% to $2,664 thousand in Q1 2026, from $2,840 thousand in Q1 2025, mainly due to a decrease in employee-related costs after excluding capitalized internal-use software development costs .
• Clinical Operations Expenses: Remained relatively unchanged at $1,874 thousand in Q1 2026, compared to $1,856 thousand in Q1 2025 .
• Sales and Marketing Expenses: Remained relatively unchanged at $13,849 thousand in Q1 2026, compared to $13,926 thousand in Q1 2025 .
• General and Administrative Expenses: Increased by 146.2% to $12,818 thousand in Q1 2026, from $5,207 thousand in Q1 2025, primarily due to $7,300 thousand in transaction-related costs for the merger with UHS .
• Depreciation and Amortization Expenses: Increased by 136.8% to $1,537 thousand in Q1 2026, from $649 thousand in Q1 2025, mainly due to a $700 thousand increase in amortization expense from capitalized internal-use software assets .
• Financial Income, Net: Decreased by 38.1% to - $945 thousand in Q1 2026, from - $1,526 thousand in Q1 2025, largely due to a $400 thousand decrease in interest income from marketable securities from reduced interest rates .
• Adjusted EBITDA: Increased to $4,649 thousand in Q1 2026, from $1,955 thousand in Q1 2025 .

Unique Metrics

• Number of completed Payor sessions: 459.3 thousand in Q1 2026, up from 350.0 thousand in Q1 2025 .
• Number of health plan customers: 38 at March 31, 2026, compared to 31 at March 31, 2025 .
• Number of enterprise customers: 153 at March 31, 2026, compared to 173 at March 31, 2025 .
• Number of Consumer active members: 5.2 thousand at March 31, 2026, down from 6.9 thousand at March 31, 2025 .
• Unique active Payor members: 128.0 thousand in Q1 2026, up from 101.2 thousand in Q1 2025 .

Cash Flow

• Net Cash Used in Operating Activities: - $4,418 thousand for Q1 2026, compared to - $1,239 thousand for Q1 2025, primarily due to unfavorable timing of customer payments and net loss .
• Net Cash Used in Investing Activities: - $793 thousand for Q1 2026, a decrease from - $9,019 thousand for Q1 2025, driven by increased proceeds from marketable securities maturities and reduced purchases, partially offset by higher capitalized internal-use software costs .
• Net Cash Used in Financing Activities: - $730 thousand for Q1 2026, a decrease from - $6,357 thousand for Q1 2025, mainly due to no stock repurchases in Q1 2026 compared to $7,000 thousand in repurchases in Q1 2025 .

Future Outlook and Strategy

Talkspace, Inc. entered into a definitive merger agreement with Universal Health Services, Inc. (UHS) on March 9, 2026, for UHS to acquire all outstanding shares for $5.25 per share in cash, valuing the transaction at approximately $835.0 million . The merger is expected to close in the third quarter of 2026, subject to customary conditions and stockholder approval . Talkspace, Inc. anticipates funding its cash needs for at least the next 12 months and the foreseeable future using available cash and cash equivalents .