LifeStance Health Group, Inc.

Hello and thank you for standing by. My name is Mark and I will be your conference operator for today. At this time, all lines have been placed on mute to prevent any background noises. After the speaker remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, please press star and number one again. Thank you. And I would now like to turn the call over to Monica Borkoski. Please go ahead.

Thank you, Operator. Good morning, everyone, and welcome to LifeStance Health First Quarter 2026 Earnings Conference Call. I'm Monica Borkoski, Vice President of Finance and Investor Relations. Joining me today are Dave Borden, Chief Executive Officer, and Ryan McGurry, Chief Financial Officer. We issued the earnings release and presentation before the market opened this morning. Both are available on the investor relations section of our website, investors.lifestance.com. In addition, a replay will be available following the call. Before turning over to management for their prepared remarks, please direct your attention to the disclaimers about forward-looking statements included in the earnings press release and FCC filings. Today's remarks contain forward-looking statements, including statements about our financial performance outlook, business model, and strategy. Those statements involve risks, uncertainties, and other factors, as noted in our periodic filings with the SEC, that could cause actual results to differ materially. Please note that we report results using non-GAAP financial measures. which we believe provide additional information for investors to help facilitate comparison of current and past performance. A reconciliation to the most directly comparable gap measures is included in the earnings press release tables and presentation appendix. Unless otherwise noted, all results are compared to the comparable period in the prior year. At this time, I'll turn the call over to Dave Borden, CEO of LifeGap. Dave?

Thanks, Monica, and thank you all for joining us today. We had an exceptional start to the year at LifeStance. We've seen each of our guided metrics with strong revenue growth of over 21% and more than $50 million in adjusted EBITDA, a 48% increase over last year. We grew our clinician base by more than 300 and a quarter to over 8,300 clinicians. we also delivered meaningful year-over-year improvements in clinician productivity, reflecting the continued impact of the initiatives we implemented last year. Given the outperformance in the quarter, we are raising our full-year guidance across all metrics, and later Ryan will provide the details on our improved view of 2026. From a macro environment perspective, we continue to see a growing demand for high-quality mental health care, as well as patients seeking more affordable solutions, driving a shift from cash pay to insurance coverage. LifeStance is uniquely positioned to meet these needs. We're seeing this through our success in growing our clinician base, attracting new patients, and driving clinical and operational excellence. Regarding operational execution, the momentum we established in 2025 was strong visit growth and clinician productivity carried into the first quarter. These efforts centered around enhancements to new patient conversion and engagement. Importantly, these initiatives are embedded in our operating model and supported by clinician-level visibility, education, and incentives. giving us confidence in their durability as we continue to scale our clinician base. Turning to technology, we continue to apply digital and AI tools in focused, practical ways to improve patient access, clinician experience, and operational efficiency. Across the organization, digital and AI tools, including digital patient check-in, AI-driven workflows, and robotic process automation support operational excellence, particularly in areas with heavy manual processes such as revenue cycle management. In addition, AI-enabled scheduling tools support our new patient telephone booking process, resulting in converting more calls to appointments. We are also rolling out AI-assisted clinical documentation to reduce administrative burden and cognitive load for clinicians, enabling them to spend more time with patients, which should improve patient and clinician satisfaction. As for our new EHR, last quarter we announced the selection of a best-in-class vendor with implementation expected to begin this year and the transition occurring during 2027. Our focus has now shifted to organizational readiness and early clinician engagement. The transition to the new EHR will support our ability to scale efficiently, integrate AI more seamlessly, and improve the consistency of both the clinician and patient experience while delivering clinical excellence. There remains a tremendous opportunity for technology, to further enable the business. We will remain focused on prioritizing use cases with clear clinical and operational impact as we deploy these tools more broadly across the organization. This approach to technology strengthens LifeStance's leadership position while reinforcing clinician trust and the quality of care we deliver to patients. Turning to geographic expansions. we see a significant opportunity ahead to increase both density within our existing markets and to expand our geographic footprint. As we've discussed, tuck-in acquisitions are our preferred way of entering new MFAs, and after three years, we're back to executing on M&A with a disciplined and targeted approach. We have established a strong pipeline of potential acquisitions, and expect tuck-ins going forward to be a meaningful part of our geographic expansion strategy. We're pleased that during the first quarter, we opened two new markets through acquisitions, adding high-quality practices that align well with our model and our culture. While these deals will contribute a non-material amount of revenue this year, they establish new market entry points to support future growth in 2027 and beyond. Where attractive talking opportunities are not available to us, we'll continue to enter new geographies with a de novo approach. Finally, I'd like to highlight our progress on clinical excellence. Our clinicians and the positive impact we're having on patients is the foundation of everything we do at LifeStamps. Measuring How we're improving patient outcomes at scale is critical to ensuring our care is effective, and we also use these findings to identify opportunities to improve that care. In April, we published new clinical outcomes data from nearly 180,000 LifeStance patients that showed roughly three-quarters benefited from clinically significant improvements in their anxiety and depression. further validating our commitment to clinical excellence. These clinical outcomes, combined with strong patient satisfaction, as reflected in our over 4.7 out of 5 Google Stars rating for our over 575 centers, reinforce that our model is working. And importantly, these strong patient outcomes and high satisfaction scores are the direct result of the dedication of our clinicians and our ongoing commitment to enable our clinicians to deliver high-quality care to patients. With that, I'll turn it over to Ryan to provide additional commentary on our financial performance and outlook. Ryan?

Thanks, Dave. I am pleased with the team's operational and financial performance in the first quarter, which exceeded our expectations. For the quarter, revenue grew 21% to $403 million. Revenue surpassed our expectations from both better-than-expected total revenue per visit and visit volumes. Visit volumes of $2.5 million increased 18%. The outperformance was driven by a combination of better-than-expected clinician productivity and net clinician ads. Total revenue per visit of $163 increased 3% and was modestly ahead of our expectations. Our visits per average clinician were strong once again, increasing 7% year-over-year for the second consecutive quarter. This was achieved while at the same time adding 309 clinicians in the first quarter, bringing our total clinician base to 8,349, representing growth of 11%. In terms of profitability, center margin of $136 million in the quarter increased 24% and was 33.7% as a percentage of revenue. This came in ahead of our expectations, primarily due to the revenue beef, as well as lower spending and center costs. Adjusted EBITDA increased 48% to $51 million in the quarter, which was very strong and exceeded our expectations. This resulted in a margin as a percentage of revenue of 12.7%. The outperformance in the quarter was attributable to favorable center margins. We also finished with positive net income of $14 million in the quarter as compared to $1 million last year. Turning to liquidity, we generated robust free cash flow of $22 million in the first quarter, which was an improvement of $32 million from the first quarter of last year. We exited the quarter with a strong balance sheet including a cash position of $195 million and net long-term debt of $263 million. Importantly, that cash balance reflects $49 million deployed towards share repurchases during the quarter following the board's $100 million authorization in February. With net leverage of 0.5 times and gross leverage of 1.6 times, We believe we are well positioned with significant financial flexibility to support the business and execute on our strategic priorities. In terms of our outlook for the full year, we are raising our revenue range by $25 million at the midpoint to $1.64 to $1.68 billion. The midpoint of the revenue guidance implies a growth rate of 17%. We are also raising our center margin range by $21 million at the midpoint to $547 to $571 million and raising our adjusted EBITDA range by $15 million at the midpoint to $200 to $220 million. The midpoint of the adjusted EBITDA guidance implies a margin as a percentage of revenue of 12.7%, which is over 150 basis points of margin expansion year-over-year. As we previously communicated, our annual guidance assumes year-over-year revenue growth driven primarily by higher visit volumes combined with low- to mid-single-digit increases to our total revenue per visit. Additionally, we continue to expect stock-based compensation of approximately $60 to $70 million this year. For the second quarter, we expect revenue of $405 to $425 million, center margin of $135 to $147 million, and adjusted EBITDA of $50 to $60 million. As we look beyond 2026, we continue to expect annual revenue growth in the mid-teens and to achieve mid-teens adjusted EBITDA margins by full year 2028. The macro trends we're seeing across mental health care, along with the momentum in our performance, reinforce our confidence in that outlook. With that, I'll turn it back to Dave for his closing comments.

Thanks, Ryan. This is an exciting time for life spans. Demand for mental health care is growing while affordability is increasingly important for patients. Our model is differentiated and delivers high-quality outcomes. This combination gives us confidence to meet the needs of patients and provide a compelling place to practice for clinicians. Operator, we will now take questions.

At this time, I would like to remind everyone in order to ask a question, please press star then the number one on your telephone keypad. Also, you can ask a one, ten, and one follow-up only. We will pause for just a moment to compile the Q&A roster. So your first question comes from the line of Craig Hettenbach from Morgan Stanley. Please go ahead.

Yes, thank you. Clinician growth was a bit above expectations in the quarter, so any tailwind you would call out in the quarter? And then more broadly, just some of the things you're doing to kind of attract and retain clinicians to the platform.

Good morning, Craig. This is Dave. I'll take that one. So we did have strong – we had very strong results around clinicians in the first quarter, as you noted, not just in the clinician ads, which were over 300 – but also saw the third quarter in a row of strong productivity improvements. We grew that about 7% year over year. In regards to the clinician growth that we saw, nothing new to point to there, primarily driven by the strength of our recruiting along with stable retention.

Got it. Then when I think through on the margin front, so delivering some good operating leverage here, the 15% to 20% longer-term EBITDA margins, how are you thinking about all the things you're doing from a technology perspective? I know you touched on the EHR investment, but just how do you envision kind of some of the efficiencies in AI kind of layering into kind of that path to longer-term margins?

Yeah, hey, Craig. This is Ryan. So, overall, technology is a key lever, right, in terms of being able to deliver the long-term margins. But you framed it exactly right. So, when we've gone out, we've talked about long-term margins in the 15% to 20% range. Overall, we further time dimensioned that to hitting adjusted EBITDA margins of mid-teens by 2028. And so we look at the leveraging. So to get to those margins, you get continued expansion around your center margin, and then you also get continued leveraging through your G&A line, which does come from items such as AI enablement, technological initiatives that kind of make us more efficient in being able to get the scale growth overall. So it is a key component just as we think about the long-term margin profile of the business.

Got it. Thank you.

Your next question comes from the line of Ryan Daniels from William Blair. Please go ahead.

Hello. This is Matthew Mardula. I'm for Ryan. Thank you for taking the question. Congrats on a great quarter. It's great to hear about all the productivity initiatives continuing to work well. But when we look ahead, are there still new productivity initiatives planned by the company to be released in the upcoming quarters that are in the company's pipeline? Or is the strategy more focused to work on the current productivity initiatives that are already established and going well instead of maybe adding new ones?

Hey, Matthew, it's David. I'll take that one. And thanks for the congrats on the quarter. We're really pleased with the strong start to the year. In regards to the clinician productivity, we have numerous initiatives that are underway. We talked about that a lot in the back half of last year. The thing I always start with is remember this is about visit growth. And what we're doing is an intentional balancing of using the available capacity of our existing clinicians versus hiring new clinicians. And, you know, the higher productivity benefits both the clinician as well as the life stance. So we're going to continue to look for new opportunities to improve productivity. while we're also continuing to execute on the initiatives that we've talked about for the past half year, of which all of those are durable and are continuing. You're seeing that in our results. But I always come back to it's that intentional balancing. And when we think about the long-term growth algorithm, we still point to that that's going to be primarily driven by net clinician ads versus productivity, and with productivity just being complementary.

Great. Thank you for that. And then regarding visits, with that coming in strong at, I think, roughly 18% growth, Q1, and then given the last two quarters before Q1, we've seen visit growth around that 16 to 18% growth. And when we think about your guidance of that low double digit visit growth going forward, should we maybe be expecting visits not to accelerate as seen in the past quarters in the back half? And that might just be because of the productivity initiatives that were established and gaining maturity in the second half of last year. But if you could just kind of help me understand what you're thinking about visit growth for the rest of the year and any color to that given what we've seen the past couple of quarters would be great.

Yeah, so perfect. This is Ryan. I'll jump in there for that one. So first and foremost, just as you talk about the guide, overall, we're very pleased with the guide. So just to take it from a top line, from a revenue perspective, growing at the midpoint at 17%. And then if you go down the P&L to adjusted EBITDA of 33%. When you think about revenue, so I'll start there, is obviously we've raised our guidance by 25 million. When you think about the 17% year-over-year growth, it takes on a more normal shape to some of our consistent patterns that we've had in terms of revenue being approximately 50-50, first half versus second half, with second half being, you know, modestly higher. And so that plays into the whole visit volume. So we do have, and you referenced this in your question, you know, as you get into the second half of the year, you do lap your productivity initiatives. And as Dave mentioned, our growth will always be primarily from that clinician ad. complemented by productivity, and you see more of that dynamic kind of happening in the second half versus the big gains in productivity that we saw in the second half of last year and the first half that we're expecting this year.

Great. Thank you so much for all the color. Really appreciate it.

Your next question comes from the line of Richard Gould from Conacore Generity. Please go ahead.

Hi, yeah, John Penny on for Richard Close. Congrats on the quarter, and thanks for the questions. First, on the clinician ads, do you have any sense of, like, where a majority of the strong quarter, 309 ads sequentially, where a majority of them are coming from, and how many are attributable to the token acquisitions? Are they mostly, like, new ads? Are they moving from private practice or just any other sense of the source?

Good morning, John. This is Dave. I'll take that one. So, first of all, I'll take the last part of your question first. M&A did contribute in the quarter to net clinician ads, but very modest. So, as mentioned in our prepared remarks, the M&A is immaterial, the two tuck-ins, from a contribution perspective. So, the net clinician growth is primarily driven by organic hiring, again, with stable retention. Now, the Your first part of the question, where are those clinicians coming from? No real change in that dynamic. We continue to see clinicians coming from three buckets. The first is, and the largest being, clinicians that are 1099, small practice, and they're looking for more support and a stronger connection. to a practice, and so they're joining us. The second bucket I'd highlight is the clinicians that are salaried. This is a smaller bucket. These are ones that are at hospital systems or practices like that, and they're looking for more flexibility, but while still retaining some of those W-2 benefits in regards to health health care matching 401k those kinds of things and then the third bucket is new new graduates so so individuals that are just graduating from school then getting their licensure and coming coming to work at life stance We continue to have a strong pipeline across all three of those categories. And again, I wouldn't point to anything new in the first quarter.

All right. Thanks. And then on the EBITDA guidance, it looks like margin at the midpoint steps up with the 2Q guidance. Then for the full year, it stays pretty consistent with what was achieved in first quarter. Is there anything to... like keep in mind when modeling in the second half of the year?

Yeah, so this is Brian. So I'll jump in on that question. So you got it right, like overall. One thing kind of as you're thinking about your models is that G&A does step up, $6 million from our previous guidance. We're very thoughtful about, like, the investments that support our growth. As it relates to the GNA, there's really nothing significant to point to. As it relates to, we talked about this a little in Craig's question, just around, you know, continued investment around AI and technology, and then also in patient acquisition on a DD perspective. But when you're looking at just the sequencing and the phasing, second half versus first half, that is something that's notable, just in terms of kind of key difference between first half and second half.

Great. Thanks. Congrats again.

Your next question comes from the line of David Larson from BPIG. Please go ahead.

Hi. Congrats on another great quarter. Can you talk a little bit about the technology infrastructure and basically the conversion from inbound inquiries from prospective, you know, patients to first visit? and maybe just talk about how that process is evolving or improving or how it's changed over the years and what your expectations are for going forward. Thank you.

Dave, good morning. This is Dave. I'll take that one. So, in regards to the conversion of patients seeking care to a booked appointment, one of our big focus areas for online booking is We rolled out what we're calling Care Matching 2.0, and we had piloted the new solution. It's a new algorithm with a little bit of new technology in the back half of last year and the beginning of this year, and that went really well. What we're seeing is an improvement in conversion of patient-seeking care to a book appointment by about 5%. And so as a result, We're now rolling out that new care matching algorithm and online tool across the country, and I'll have that rolled out, completed in the next couple of months. So really pleased with that. We won't stop there. It's really a journey. We'll also be looking at the patient's experience online. online as they're going through that process? And are there opportunities to reduce friction? And we'll be doing some of that exploration in the back half of this year.

Great. And then can you talk a little bit about how you measure results, like the functionality of the patient themselves? And I guess, I don't know, perhaps like performance with activities of daily living? Are they tracking, you know, health improvement metrics? And do you have an app where the members can sort of correspond with the docs on a real-time basis and track and measure habits so that, you know, you can sort of see and track, you know, how all the patients are doing and if they're improving, and if so, like by how much? Sure.

Yeah, this is Dave. I'll take that one as well. There were a couple things there. So, first of all, from a measurement perspective, and I talked about in my prepared remarks the study that we published based on data we had across 180,000 patients, and that data was from last year. What we're doing now is, on a regular basis, monthly, We're checking in with our patients, and they're completing surveys primarily around anxiety and depression, and that allows us to track their progress. And, you know, if it's going great, then stay the course, but obviously if their health is not improving, then what we're doing is we're exploring from a care pathway perspective What are other options that our clinicians could provide to those patients to improve their health? And that survey is taken by the patients in our digital patient check-in tool. So that's where the patient interacts and fills out that information. In regards to an app, we do not have that, and so we do not have that capability you described. That is something that we're exploring, and we think about it as almost a continuum of care and what are ways that we can interact with and support the patient in between the visits that they're having with their clinicians. So more to come on that, and we do believe that that will – eventually improve the outcomes for patients and potentially get them healthier faster. But that's more of an exploration phase at this stage.

Okay. Congratulations on a great quarter.

Your next question comes from the line of Sean Dodge from BMO Capital Markets. Please go ahead.

Yeah, thanks. Good morning. Maybe just staying on that outcome study, Dave, you just mentioned, how do you leverage those findings now? Is this more of a tool that helps with negotiations and coverage and rates for managed care, or is this something that maybe more helps with, like, competitive positioning, competitive differentiation, and driving more referral volumes from primary care, or is it kind of all of the above? How do you kind of, like, operationalize this now?

Yes, it's Dave. I'll take that one, Sean. You nailed it. It's really all of the above, right? So, first of all, as I was just talking about, it's going to become a more increasingly important part of how we provide care to patients because it's rich data that our clinicians can use in the treatment of their patients and understanding how their health is improving or not improving. So that starts there. And then, sure, it becomes a proof point for us as we're working with referral partners or prospective referral partners about them sending their patients to us. It's part of that, you know, establishing that trust. And then in regards to the payer dynamic, today, most payers are still focused on access. They need access for their members and their corporate client, you know, and they're hearing it from their corporate clients around that access to outpatient mental health care. But we believe that it will become increasingly important to be able to demonstrate quality outcomes. And that's why we have such a big focus on clinical excellence and we're gonna we're gonna continue to put a lot more emphasis on that this year and in the coming and in the coming years we believe there's a lot of opportunity for us to be able to differentiate ourselves versus uh you know other practices okay great and then um maybe going back to the the clinician productivity enhancements um you talked about one of the other

maybe less direct benefits of that being improved clinician satisfaction and that leading less turnover since they're getting the hours they want as they're seeing more patients. I guess with having a couple of quarters of kind of that behind you now, these improved productivity tools, have you seen any change in clinician retention or clinician churn or is it maybe still a little too early to tell?

I think it's too early to tell. What we're seeing is continued stable retention. We are anecdotally getting very positive feedback from clinicians around us better filling their calendars, the new cash incentive program that's tied to both productivity and quality. Again, we're continuing to get anecdotally positive feedback from the clinicians, but we have not seen anything meaningfully move in regards to retention.

Okay. Great. Thanks again, and congratulations on the quarter.

Your next question comes from the line of Jax Levin from Jefferies.

Hey. Thanks for taking the questions. and congrats on the really strong quarter. Maybe I'll just pack two into one here. You know, I guess looking at the stack of the guidance, a lot of commentary on the productivity efforts and other things, but maybe just more granularly thinking about care margin. You know, I think it assumes sort of a higher year over your step-up based on how that trended last year when you look at the last three quarters. Can you maybe just talk a little bit about what drives that or what in the baseline from last year, you know, may not necessarily be the right thing to comp against as you think about the care margin performance that's implied in the new guidance. And then the second one, you know, we noticed over the last, you know, call it five or six months that payers have been broadening access for TMS or some of the higher acuity services that you provide. Can you maybe just talk a little bit about how that's trending for you or if you see potential for that to accelerate, you know, often, you know, quite recently made it possible for NPs to bill for that service, which they previously had not allowed in a number of states. I just love to think about that broadly and, you know, if those good trends can continue or if there's potential to accelerate. Thanks.

Yeah. Hey, Jack. This is Ryan. I'll start off on the first question. I think Dave will jump in on the second part of your question. So as it relates to center margin, just as it relates to the step-up that we're seeing there, so when you look on a year-over-year basis, you know, center margin approximately has improved about 130 steps. So it went from last year 32.4 to the slide in our guide is 33.7 this year. When you think about some of the components just in terms of the favorability, it really is from rate operating leverage from volume. which includes some of the productivity initiatives that we've talked at length about, and then also just some favorable spending kind of within that bucket. When you think about the spending, I wouldn't point to anything specific on that, but to go back to, like, we're really pleased with the progression just as it relates to being able to expand out center margin, and it's tied back to just center margin expansion in addition to G&A leveraging, gets us to our long-term growth algorithm. I'll turn it over to Dave to answer the specialty question.

Yeah, so in regards to specialty, just from a grounding, last year we did about $50 million in revenue from specialty services, and we expect that to grow to roughly $70 million this year, or about 40% year-over-year increase. The majority of the $50 million is neuropsych testing, where we're the national leader in that particular service. But then when you step into 2026, the higher growth rate versus our, you know, just our regular book of business is driven by the TMS and Scravato services, which we're in the early stage on from a rollout perspective. We're adding new TMS chairs and Scravato sites, every quarter and we'll continue to do that for for some time to come the other thing i would point to jack is is we're really set up well for the for these specialty services whether whether it's tms bravado or if there's new things that are approved in the future like psychedelics because we have over 575 centers, and so this ends up being a very low capital intensity for us because we're able to leverage those centers, and it works well for our model and providing holistic treatment for our patients, especially for the patients that need these services.

Very helpful. Appreciate the color, and congrats again on the strong results.

Thank you.

Your next question comes from the line of Peter Warrendorf from Barclays. Please go ahead.

Hey, morning. Thanks for the question. You guys opened six centers this year, or this quarter, and you had two tuck-in acquisitions. So I was just curious what the cadence might look like for the rest of the year. And then when it comes to that M&A, I know you've talked about recently how some of the larger businesses in that kind of $250 million range, maybe had higher valuations than private markets? I mean, are you seeing anything differently there?

Thanks. Hey, good morning, Peter. This is Dave. I'll take that. So in regards to the first quarter, firstly, you had your facts right. So we opened six centers, and we had the two tuck-in acquisitions. In regards to the rest of the year, what we've talked about is – 20 to opening up 20 to 30 centers for the full year and so that's we're still on pace for that and then from an m a perspective we have a strong pipeline of tuck-in opportunities that were that we're evaluating you know obviously there's a there's a lot of moving pieces there so i don't want to make any commitments in regards to the timing on those but we do expect the tuck-in the tuck-in acquisitions to be a meaningful part of our geographic expansion strategy going forward, and we do intend to do those on a regular basis. In regards to the overall M&A environment, no change to what we said last quarter, and that is we see meaningful opportunity in the tuck-in type acquisitions, down market, We do not see meaningful opportunity for us as you get into that next or the biggest tier of our competitors that are in that $200 million, $250 million of annual revenue. And the reason we don't see an opportunity there is because There's a lot of geographic overlap between us and them. And so there's just not meaningful synergy or value creation in the combining of those practices with us. It's just much more efficient, financially effective for us to grow organically rather than trying to do an acquisition of one of those larger practices.

Got it. Okay, thank you. And then on the visit rate side, you had a nice bump in 1Q of about 3% year over year. Just curious, I think that last year you had the last customer pricing impact that came through in March, so maybe there was a bit of a headwind still in 1Q. How should we think about the cadence of that over the remainder of the year?

Yeah, no, so Peter, again, your fact set is right. So we're actually really pleased with the TRPD. You see reference 3% year over year, so we did 163. from a TRPD perspective. So, you know, sequentially that grew $3.80. You know, this is key as we think about just rate in general. This is one of the reasons why we raised our revenue at $25 million and also EBITDA by the $15 million for the full year was on the strength of rate increases. As we think about the balance of the year, we're still guiding to low to mid single digit as it relates to rates. The environment, you know, we still have some work to do as it relates to kind of executing on the rate and payer negotiations. I would kind of frame the overall environment consistent to, like, our prior calls just around it's very constructive, and we're getting really good response from the payer. So, again, when you think about this year guiding the low to mid-single digits, and, again, it's also a critical component to our long-term growth algorithm, kind of in that same range, low to mid-single digits. But we really like the momentum that we're seeing there.

Super helpful. Thank you.

Your next question comes from the line of Scott from KeyBank Capital Markets. Please go ahead.

Almost got it there. Congrats on the strong start of the year. Really flattering on all cylinders here, team. My question is a follow-up on the six DeNovo ads. Are those, you know, historically you've talked about trying to build density in metropolitan areas. Is that the way we should be thinking about those ads? And then when you're starting a DeNovo clinic, can you talk about the productivity ramp up? It seems like these technology investments have caused your productivity ramp to be quite quick. Maybe just walk us through your DeNovo strategy and the productivity on these DeNovo ads.

Hey, Scott, it's Dave. I'll take that one. So in regards to the de novos or the building of new centers, they come in a lot of different flavors. So you could have a center going in in an adjacent town where we already have an existing center, already have existing referral partnerships. things like that. And so that kind of center is going to ramp very, very quickly. Those are the majority. When we talk about the 20 to 30 centers that we'll build this year, that's the majority of the centers that are being added. We also are placing some de novos in brand new geographies. Because again, our preferred entry is is through M&A rather than going pure de novo. That's a minority of the centers that we're adding in that 20 to 30. And those are going to have a slower ramp than the first category that I mentioned. That you're looking at more of, you know, 12 to 24 months to getting to break even. But, again, those are important beachheads that are going to be the foundation for growth in the years to come.

That's helpful. And then this is sort of an industry broad general question. You know, you've seen a lot of industry changes and shifts, whether it be a large D2C behavioral health company trying to get into the payer market, and then, you know, a company in behavioral health space that was acquired by a large provider network. Maybe talk about, are you seeing any impacts on either recruitment or patient perspective or rate perspective from the payers? Maybe talk about what's changing in the competitive landscape and if it's impacting you guys at all.

This is Dave. I'll take that one. In regards to the overall industry, you always have to start from the framing of it is still a highly, highly competitive fragmented industry. And so you should expect that there will be consolidation in the years to come. And I think we're in the early days of consolidation. And I really like where LifeStance is positioned to be able to take advantage of those trends going forward. And because the industry is so fragmented, because there is such unmet demand from patients, We're not seeing any changes in regards to new patient volumes, clinician hiring, things like that. And you're seeing that in our results in the first quarter with really being strong across pretty much every aspect of the business.

Thank you.

That will conclude our question and answer session, and I will now turn the call back over to Dave Forden, Chief Executive Officer for Closing Remarks. Please go ahead.

Thank you, Operator. I want to take a moment to recognize our nearly 11,000 mission-driven teammates. Every day you show up for our patients, often at some of the hardest moments in their lives, and you do it with extraordinary compassion, professionalism, and resilience, and I'm deeply grateful for what you do. Mental health care has never been more essential. We're proud of the difference LifeStance is making today, and we're even more committed to expanding our reach so we can help millions more people get the high-quality care they deserve. Thank you for joining us today. Operator, that will conclude our call. Thank you.

Ladies and gentlemen, that concludes today's call. Thank you all for joining. You may now disconnect.