Talkspace CEO: Focused on Operating Better as an Independent Company

Talkspace Inc.’s top executive said it’s focused on optimization plans when asked to talk about the value of being a standalone company compared to being acquired.

Interim CEO Douglas Braunstein told analysts on the company’s fourth-quarter 2021 earnings call that the Talkspace management team is focused on improving shareholder value and how the company operates.

“Right now, the things under our control are to run the business better, to grow our b2b franchise, to optimize our b2c business, to improve our [therapist] network, to increase and improve our controls and financial rigor and discipline and cash flow generation,” Braunstein said.

In 2021, Talkspace saw revenue grow to $114 million, a 49% increase year-over-year. Its net loss deepened to about $63 million, compared to $22 million a year ago, an increase of 185%.

For the fourth quarter, revenue increased 14% year-over-year to about $29 million while its net loss nearly doubled to $21 million, up from about $11 million.

Part of the losses are the result of adding more therapists. Talkspace redesigned its compensation structure, increased training and helped therapists get licensed in additional states, Braunstein said.

Following the debut of the virtual therapy and psychiatry provider on the Nasdaq via a $1.4 billion SPAC deal, Talkspace’s (Nasdaq: TALK) share price has plummeted about 83% from $8.90 a share to about $1.50 as of Wednesday.

And since going public, Talkspace has parted ways with its founders and CEO after the company missed on its quarterly estimates.

Lower acquisitions costs and a focus on b2b

Talkspace lowered its spending on marketing its b2c business during the quarter which led to fewer d2c users. However, Fulk said that the company’s customer acquisition costs (CAC) have stabilized. High CAC and poor online conversion have been a point of concern for the company.

Talkspace saw b2b utilization grow by 139% to 274 sessions completed in 2021. The company also doubled its number of enterprise customers in 2021 and kept its major customers going into 2022. Some of these customers include Blackstone, Expensify, and West Virginia University, Braunstein said.

“The recurring portion of our b2b business continues to increase and the strong momentum continues into 2022,” Braunstein said. “We launched more enterprise accounts in January than in any other month in the company’s history while we also continue to shift our focus to larger enterprises throughout the course of the year.”