#27 Talkspace Q3 Earnings Breakdown

Hi friends,

I have a singular goal for The Hemingway Report…

To improve population mental health by helping people build impactful mental health organisations.

All the time I spend researching, interviewing people, running analysis and writing these deep dives, it’s all to try and achieve that goal.

That’s the impact I want to have.

But I realised that while I’ve been trying to have this impact, I’ve been ignoring some of my own advice…

In these newsletters, I always talk about the importance of having a business model to support your impact goals. If you can’t sustain the work you are doing, you’ll never reach the scale you desire.

That’s true for mental health businesses and it’s true for The Hemingway Report.

So I’ve been listening to my own advice lately and questioning what business model would support me to continue delivering on my impact goals, to provide more support to founders and operators, whilst also making it sustainable for me.

The result is that I am launching a new tier of The Hemingway Report, THR Pro.

I’ve thought long and hard about what THR Pro should be and how to balance impact with sustainability.

Here’s how it will work;

Subscribers to the free newsletter will get three newsletters (like this one) every month. However, once a post has been out for three weeks, it will no longer be available to read for free subscribers.

THR Pro subscribers will get access to a new, Pro subscriber email each month. This will cover the most relevant topics in mental health business in even more detail, with first party data and exclusive interviews with top operators.

You will also get access to the entire THR back catalogue of content, additional THR Pro resources like data reports, industry guides and first party data, as well as invitations to THR Member meetups with other mental health operators.

Lastly, you’ll be supporting me to invest more time and energy into creating helpful resources each month!

If you want access to additional insights and resources, and to support my work, please consider becoming a THR Pro member.

Now, back to what’s happening in mental health right now….

On Tuesday, Talkspace announced their Q3 earnings and there is A LOT to talk about. They delivered some very impressive financial results, hitting profitability for the third quarter in a row (on an adjusted EBITDA basis) and actually delivering profit on a net income basis too.

Remember, this is a company which just two years ago, lost $59m in a single year. I analysed this turnaround in a previous post and was eagerly awaiting their earnings release this week to see how they had been progressing. I listened to the call with CEO Jon Cohen and CFO Ian Harris and while it gave me a lot of answers, it also raised a lot of interesting questions.

We’ll get into all of them in this post.

We’ll cover;

• Financial highlights: the key metrics from Talkspace’s earnings release.

• How they got here: What did Talkspace do to deliver these impressive results?

• Capture rate: The single most important metric for Talkspace’s financial future and how they are addressing it.

• Customer acquisition at Talkspace: How Talkspace approach direct and referral partnerships to acquire new users.

• Retention and Engagement: Do Talkspace have a leaky funnel and what can they do to solve it whilst also doing right by patients?

• Question corner: Some open questions and thoughts I have about this business

This article is for THR Pro members only