Talkspace, Inc.

Good day and thank you for standing by. Welcome to the Talkspace first quarter 2022 earnings conference call. At this time, all participant lines are in listen-only mode. After the presentation, there will be a question and answer session. To ask a question during the session, you'll need to press star, then 1 on your telephone keypad. Please be advised today's conference may be recorded. If you require operator assistance during the call, please press star, then 0. I'd now like to turn the conference over to Mike Lovell, Investor Relations Director.

Good evening, everyone. Thanks for joining Talkspace's 2022 first quarter earnings call. I hope you've had the opportunity to access the press release. We have a presentation of our earnings materials that you should see on Talkspace's IR site We'll use the presentation to walk you through today's remarks. We will begin with comments from Chairman and Interim Chief Executive Officer Doug Braunstein, followed by Chief Financial Officer Jennifer Falk. Both are available for questions following the prepared remarks. Certain measures we'll discuss on this call are expressed on a non-GAAP basis and have been adjusted to exclude the impact of one-off items. Reconciliations of these non-GAAP measures are included in our earnings release and on our website, Talkspace.com. I also want to remind you that we'll be discussing forward-looking information today, which may include forecasts, targets, and other statements regarding our plans, goals, strategic priorities, and anticipated financial results. While these statements represent our best current judgment about future results and performance as of today, Our actual results are subject to many risks and uncertainties that could cause actual results to differ materially from what we expect. Important factors that may affect our future results are described in our most recent SEC reports and today's earnings press release. For more information, please review our safe harbor disclaimer on slide two. And now I'll turn the call over to Doug, who will begin on slide three.

Thanks, Mike. And thank you all for joining us today to discuss our first quarter 2022 results. I'm going to begin with a snapshot of the first quarter financial performance and then discuss the progress we're making towards the operational and executional priorities we outlined during our fourth quarter earnings call. So you can see on slide three that revenue grew 11% year over year, driven by an expansion of our B2B franchise, which demonstrated year-over-year and quarterly growth in revenues, in sessions, and covered lives. We added Beacon, a significant new national account, at the end of the quarter, and we expanded our relationship with Optum in Q1. We also added 31 new accounts in the quarter for our DTE, or direct-to-employer business. including large national accounts such as Kempton Hotels and Resorts and Restaurants, and two significant broker houses, Gallagher and Alliant. Our B2C business was down year over year, but was essentially flat quarter on quarter, despite another sequential reduction in our advertising spend. We implemented several changes to the funnel in March, that have begun to yield modest improvements in our conversion metrics and reduced our customer acquisition costs. So if you turn to slide four, you'll recall that in January we outlined six strategic priorities that the management team would be focused on to improve our performance. Page four highlights some of the items we introduced in Q1. that we believe represent progress towards these priorities and impacted the performance and the KPIs we track in the first quarter. So first, we began data tests in March, unifying our funnel, essentially making it easier for B2C and B2B customers to find a provider directly through our consumer website and apps. As a reminder, we have several million non-unique visitors to our site each quarter, and the early results from these tests are encouraging. We believe that this can drive both penetration and utilization in our B2B business over time. In addition, we made an important change to our matching process based on consumer research, and we made that change in March as well. This change, which uses our proprietary algorithm to deliver quick and appropriate matches, drove a higher conversion rate and a lower tech in March, which favorably impacted quarterly results. Second, we continue to make progress towards expanding capacity and increasing satisfaction of our clinical network. The marketplace for clinical talent, as you know, is undoubtedly competitive today, and we're taking steps to make Talkspace a platform of choice for providers. We've accelerated multistate licensing, we improved our provider dashboard, and we adjusted our clinical compensation policies, making it both more transparent as well as more responsive to the current market environment. As a result of these actions, we're seeing early signs of improving therapist satisfaction in our most recent surveys. We grew our average hourly engagement from our existing therapists during the quarter, and we had our strongest recruiting month in March for new contracted therapists over the past year. Third, we're continuing to add customers, resources, focus, and products to our B2B business. We introduced a bundled offering product late in the first quarter for our B2B partners. which now includes our new Talkspace self-guided product. And we grew our B2B sales team over 25% in the quarter. Improved targeting and focus in our DTE business introduced in Q1 is helping us to build a pipeline of larger DTE customers. Our average contract size was up in Q1, and we signed our first large million-dollar-plus account this year. While the cycle time for these larger clients is often longer and the revenue growth can be lumpier, we're targeting these opportunities today more directly with our sales force. Fourth, we continue to optimize our consumer businesses to deliver improved efficiencies. As I mentioned, we implemented a number of changes to the funnel in early March that we believe led to our modest improvements in conversion and customer acquisition metrics compared to last quarter. In fact, this is the first positive quarterly trend in our conversion data in the past four quarters for the company. So while media spend was reduced by 19% sequentially pursuant to our plans coming into the quarter, adjusted sequential revenues were flat as we saw increased traction for our highest service video products. We do expect to continue to reduce aggregate B2C media spend going forward as we better manage our cash flows, and that should result in a smaller revenue base for this business. But we believe management can implement changes to further improve our members' experience while also increasing efficiencies in both tech and unit economics. Our fifth strategic priority is continuing to innovate and enhance our product suite. Minor changes like simplifying our onboarding process for our MBH members in their initial evaluation sessions, as well as more significant product launches like PoxBase Self-Guided, do allow us to build towards a better member experience and offer a broader solution set for our B2B customers. And finally, as we continue to focus on optimizing cash flow across the business, as I mentioned on our last call, We believe we have ample cash resources to enhance and expand our capabilities in ways that both deliver operating leverage over time as well as value to our shareholders. But basic operating progress, like introducing KPIs, scorecards, real-time reporting, have been both adopted and embraced throughout the broader organization and it has allowed us to make timelier, data-driven adjustments to our business plan. As an example, actions taken this quarter generated efficiencies in our cash collections that positively reduced working capital. So while management clearly understands that we've got plenty of ongoing work ahead of us, we believe that the actions we've taken in the first quarter reflect the first important steps in our path towards building shareholder value and delivering on our mission. So with that, I'll turn the call over to Jennifer to provide details on our operating and financial performance. Jennifer, over to you.