Quarterly Report for Quarter Ending September 30, 2025 (Form 10-Q)

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.

Unless the context otherwise requires, all references in this section as to "Talkspace," the "Company," "we," "us" or "our" refer to the business of Talkspace, Inc. and its consolidated subsidiaries.

The following discussion and analysis of our financial condition and results of operations should be read together with the financial statements and the related notes contained in this Quarterly Report and the financial statements and related notes contained in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2024. This discussion contains forward-looking statements that reflect our plans, estimates, and beliefs that involve risks and uncertainties. As a result of many factors, such as those discussed in Part I, Item 1A, "Risk Factors" of the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2024 and "Forward-Looking Statements" sections and elsewhere in this Quarterly Report, our actual results may differ materially from those anticipated in these forward-looking statements.

The purpose of this section is to discuss and analyze our consolidated financial condition, liquidity and capital resources and results of operations for the three and nine months ended September 30, 2025 and 2024.

Overview

Talkspace is a healthcare company offering its members convenient and affordable access to a fully-credentialed network of highly qualified providers. We are a leading virtual behavioral health company connecting millions of patients with licensed mental health providers across a wide and growing spectrum of care through virtual psychotherapy and psychiatry. We created a purpose-built platform to address the vast, unmet and growing demand for mental health services. Through its platform, Talkspace serves:

For the three and nine months ended September 30, 2025, our clinicians completed approximately 432,200 and 1,167,300 sessions, respectively, related to members covered under our Payor customers, compared to 316,400 and 899,200 completed sessions, respectively, for the three and nine months ended September 30, 2024. As of September 30, 2025, we had approximately 6,400 Consumer active members compared to 8,600 Consumer active members as of September 30, 2024. Please refer to the "Key Business Metrics" section below for a description of Consumer active members.

Inflation Risk and Economic Conditions

The demand for our solution is dependent on the general economy, which is in turn affected by geopolitical conditions, the stability of the global credit markets, inflationary pressures, higher interest rates, the industries in which our Payor and DTE customers operate or serve, and other factors. Downturns in the general economy could disproportionately affect the demand for our solution and cause it to decrease.

Our operations could also be impacted by inflation and higher interest rates. Inflation did not have a material effect on our business, financial condition or results of operations for the nine months ended September 30, 2025 and 2024. However, if our costs were to become subject to significant inflationary pressures (such as Provider cost), we may not be able to fully offset such higher costs through price increases or cost savings. Our inability or failure to do so could harm our business, financial condition or results of operations.

One Big Beautiful Bill Act ("OBBBA")

The U.S. federal income tax legislation, commonly referred to as the OBBBA, was enacted on July 4, 2025. While the Company continues to record a full valuation allowance against its U.S. deferred tax assets, the OBBBA has a positive impact on our liquidity and the duration of our future cash tax shield. The OBBBA permanently reinstates 100% Bonus Depreciation for qualified capital expenditures made after January 19, 2025, and allows the immediate expensing of domestic Research and Development ("R&D") costs for tax years beginning after December 31, 2024. These provisions increase the amount of tax deductions available in the current and future periods. The permanent nature of R&D expensing and Bonus Depreciation, combined with the permanent extension of post-2017 Net Operating Loss carryforwards, increases the expected longevity of our tax shield.

As of September 30, 2025, we continue to maintain a full valuation allowance against our net deferred tax assets which primarily consists of accumulated net operating losses carried forward due to the uncertainty of the realization of such deferred taxes.

Operating Segments

The Company operates as a single segment, which is how the chief operating decision maker ("CODM"), who is the Chief Executive Officer, reviews financial performance and allocates resources.

Key Business Metrics

We monitor the following key metrics to help us evaluate our business, identify trends affecting our business, formulate business plans and make strategic decisions. We believe the following metrics are useful in evaluating our business:

Active Members:We consider consumer members "active" commencing on the date such member initiates contact with a provider on our platform until the term of their monthly, quarterly or bi-annual subscription plan expires, unless terminated early.

Unique Payor Active Members: Represents unique users who had a session completed during the period.

Components of Results of Operations

Revenue

We generate revenue from services provided to individuals who are qualified to receive access to the Company's services through our commercial arrangements with health insurance plans, employee assistance organizations and enterprises. We also generate revenue from the sale of monthly, quarterly, bi-annual and annual membership subscriptions to the Company's therapy platform as well as supplementary a la carte offerings directly to individual consumers through a subscription plan. See Note 3, "Revenue Recognition" in the notes to the condensed consolidated financial statements for further details.

Revenue growth is generated from a combination of increasing utilization within our Payor members and expanding enterprise customers.

Costs and Operating Expenses

Cost of Revenue, excluding depreciation and amortization

Cost of revenue is comprised primarily of therapist payments. Cost of revenue is largely driven by the number of sessions and the size of our provider network that is required to service the growth of our Payor and DTE customers, in addition to the growth of our customer base.

We designed our business model and our provider network to be scalable and to leverage a hybrid model of both employee providers and independently contracted providers to support multiple growth scenarios. The compensation paid to our independently contracted providers is variable, and the amount paid to a provider is generally based on the amount of time committed by such provider to our members. Our employee providers receive a fixed-salary and discretionary bonuses, where applicable, all of which is included in cost of revenue.

While we expect to make increased investments to support accelerated growth and scale our provider network, we also expect increased efficiencies and economies of scale. Our cost of revenue as a percentage of revenue is expected to fluctuate from period to period depending on the interplay of these factors as well as pricing fluctuations.

Research and Development Expenses

Research and development expenses include personnel and related expenses for software development and engineering, information technology infrastructure, security, privacy compliance and product development (inclusive of stock-based compensation for our research and development employees), third-party services and contractors related to research and development, information technology and software-related costs. Research and development expenses exclude amounts reflected as capitalized internal-use software development costs.

Clinical Operations Expenses

Clinical operations expenses are associated with the management of our network of therapists. This item is comprised of costs related to recruiting, onboarding, credentialing, training and ongoing quality assurance activities (inclusive of stock-based compensation for our clinical operations employees), costs of third-party services and contractors related to recruiting and training and software-related costs.

Sales and Marketing Expenses

Sales expenses consist primarily of employee-related expenses, including salaries, benefits, commissions, travel and stock-based compensation costs for our employees engaged in sales and account management.

Marketing expenses consist primarily of advertising and marketing expenses for member acquisition and engagement, as well as personnel costs, including salaries, benefits, bonuses, stock-based compensation expense for marketing employees, third-party services and contractors. Marketing expenses also include third-party software subscription services, participation in trade shows, brand messaging and costs of communications materials that are produced for our customers to generate greater awareness and utilization of our platform among our Payor and DTE customers.

General and Administrative Expenses

General and administrative expenses consist primarily of personnel costs, including salaries, benefits, bonuses and stock-based compensation expense for certain executives, finance, accounting, legal and human resources functions, as well as professional fees.

Depreciation and amortization

Depreciation and amortization expense consist primarily of depreciation expense on capitalized internal use-software costs, computer and equipment and amortization of intangible asset.

Financial income, net

Financial income, net includes the impact from (i) interest earned in investments in marketable securities and other highly liquid investments, (ii) non-cash changes in the fair value of our warrant liabilities, and (iii) other financial expenses in connection with bank charges.

Taxes on income

Taxes on income consists of U.S. income taxes related to income generated by our U.S. subsidiary and foreign income taxes related to income generated by our subsidiary organized under the laws of Israel. Taxes on income were not material for the three and nine months ended September 30, 2025 and 2024.

Results of Operations

The following table presents our results of operations for the three and nine months ended September 30, 2025 and 2024 and the dollar and percentage change between the respective periods:

Revenue

Total revenue increased by $12.0 million, or 25.3% for the three months ended September 30, 2025 compared to the three months ended September 30, 2024, primarily due to a 42.1% increase in Payor revenue, partially offset by a 23.1% decline in Consumer revenue. The increase in revenue from our Payor customers is primarily due to a 36.6% increase in number of completed Payor sessions as a result of an increase in active payor members of 29.1% and an increase in the number of health plan customers of 30.8%. Consumer subscription revenue decreased by $1.4 million, or 23.1% for the three months ended September 30, 2025 compared to the three months ended September 30, 2024, primarily due to a 25.9% decline in Consumer active members due to the Company's intentional and strategic decision to optimize and focus marketing efforts on attracting Payor members.

Total revenue increased by $27.0 million, or 19.4% for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024, primarily due to a 36.9% increase in Payor revenue, partially offset by a 29.3% decline in Consumer revenue. The increase in revenue from our Payor customers is primarily due to a 29.8% increase in number of completed Payor sessions as a result of an increase in active payor members of 29.1% and an increase in the number of health plan customers of 30.8%. Consumer subscription revenue decreased by $5.7 million, or 29.3% for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024, primarily due to a 25.9% decline in Consumer active members due to the Company's intentional and strategic decision to optimize and focus marketing efforts on attracting Payor members.

Overall, the increase in revenue for the three and nine months ended September 30, 2025 compared to the three and nine months ended September 30, 2024 was primarily driven by a shift in revenue mix towards Payor, and while we no longer have marketing resources dedicated solely to the Consumer category, it continues to have a positive contribution to our financial results.

Costs and Operating Expenses

Cost of revenue, excluding depreciation and amortization. Cost of revenue, excluding depreciation and amortization, increased by $9.1 million, or 35.4%, to $34.7 million for the three months ended September 30, 2025 from $25.7 million for the three months ended September 30, 2024 and increased by $20.2 million, or 27.2%, to $94.4 million for the nine months ended September 30, 2025 from $74.2 million for the nine months ended September 30, 2024. The increase in cost of revenue for the three and nine months ended September 30, 2025, was primarily due to increased hours worked by therapists as a result of increased Payor sessions.

Research and development expenses. Research and development expenses decreased by $0.5 million, or 22.4%, to $1.8 million for the three months ended September 30, 2025 from $2.3 million for the three months ended September 30, 2024. The decrease in research and development expenses for the three months ended September 30, 2025 was primarily due to a decrease in employee-related costs, inclusive of non-cash stock compensation expense of $0.4 million, as a result of the exclusion of amounts reflected as capitalized internal-use software development costs.

Research and development expenses decreased by $0.9 million, or 10.7%, to $7.2 million for the nine months ended September 30, 2025 from $8.1 million for the nine months ended September 30, 2024. The decrease in research and development expenses for the nine months ended September 30, 2025 was primarily due to a decrease in employee related costs, inclusive of non-cash stock compensation expense of $0.8 million, as a result of the exclusion of amounts reflected as capitalized internal-use software development costs.

Clinical operations expenses. Clinical operations expenses were $1.6 million for the three months ended September 30, 2025 compared to $1.7 million for the three months ended September 30, 2024. Clinical operations expenses increased by $0.6 million, or 12.8% to $5.4 million for the nine months ended September 30, 2025 from $4.8 million for the nine months ended September 30, 2024. The increase in clinical operations expenses for the nine months ended September 30, 2025 was primarily due to an increase in employee-related costs, inclusive of non-cash stock compensation expense of $0.6 million.

Sales and marketing expenses. Sales and marketing expenses increased by $0.9 million, or 7.7%, to $13.2 million for the three months ended September 30, 2025 from $12.3 million for the three months ended September 30, 2024. The increase in sales and marketing expenses for the three months ended September 30, 2025 was primarily driven by an increase in direct marketing and promotional costs of $1.1 million.

Sales and marketing expenses increased by $2.9 million, or 7.5%, to $41.4 million for the nine months ended September 30, 2025 from $38.5 million for the nine months ended September 30, 2024. The increase in sales and marketing expenses for the nine months ended September 30, 2025 was primarily driven by an increase in direct marketing and promotional costs of $3.6 million, partially offset by a decrease in employee-related costs, inclusive of non-cash stock compensation expense of $0.7 million.

General and administrative expenses.General and administrative expenses were $5.1 million for the three months ended September 30, 2025 and 2024. General and administrative expenses decreased by $1.6 million, or 9.3%, to $16.0 million for the nine months ended September 30, 2025 from $17.6 million for the nine months ended September 30, 2024. The decrease in general and administrative expenses for the nine months ended September 30, 2025 was primarily due to a decrease in severance payments related to the departure of certain key executives of the Company in 2024 of $1.8 million.

Depreciation and amortization expenses.Depreciation and amortization expenses increased by $0.5 million, or 197.0%, to $0.7 million for the three months ended September 30, 2025 from $0.2 million for the three months ended September 30, 2024 and increased by $1.4 million, or 215.0%, to $2.1 million for the nine months ended September 30, 2025 from $0.7 million for the nine months ended September 30, 2024. The increase in depreciation and amortization expenses for the three and nine months ended September 30, 2025 was primarily due an increase in amortization expense related to capitalized internal-use software assets of $0.5 million and $1.4 million, respectively.

Financial income, net

Financial income, net decreased by $0.6 million, or 36.6%, to $1.1 million for the three months ended September 30, 2025 from $1.7 million for the three months ended September 30, 2024. The decrease in financial income, net was primarily due to a decrease in interest income earned on marketable securities and other highly liquid investments of $0.4 million due to a reduction in interest rates.

Financial income, net decreased by $1.2 million, or 23.3%, to $3.9 million for the nine months ended September 30, 2025 from $5.1 million nine months ended September 30, 2024. The decrease in financial income, net was primarily due to a decrease in

interest income earned on marketable securities and other highly liquid investments of $1.1 million due to a reduction in interest rates.

Income tax expense (benefit)

Income tax expense (benefit) was immaterial for the three and nine months ended September 30, 2025 and 2024.

Non-GAAP Financial Measures

In addition to our financial results determined in accordance with GAAP, we believe adjusted EBITDA, a non-GAAP measure, is useful in evaluating our operating performance, and our management uses it as a key performance measure to assess our operating performance. Because adjusted EBITDA facilitates internal comparisons of our historical operating performance on a more consistent basis, we use this measure for business planning purposes and in evaluating acquisition opportunities.

We also use adjusted EBITDA to evaluate our ongoing operations and for internal planning and forecasting purposes. We believe that this non-GAAP financial measure, when taken together with the corresponding GAAP financial measures, provides meaningful supplemental information regarding our performance by excluding certain items that may not be indicative of our business, results of operations or outlook. We believe that the use of adjusted EBITDA is helpful to our investors as it is a metric used by management in assessing the health of our business and our operating performance. However, non-GAAP financial information is presented for supplemental informational purposes only, has limitations as an analytical tool and should not be considered in isolation or as a substitute for financial information presented in accordance with GAAP.

Some of the limitations of adjusted EBITDA include (i) adjusted EBITDA does not necessarily reflect capital commitments to be paid in the future and (ii) although depreciation and amortization are non-cash charges, the underlying assets may need to be replaced and adjusted EBITDA does not reflect these requirements. In evaluating adjusted EBITDA, you should be aware that in the future we will incur expenses similar to the adjustments described herein. Our presentation of adjusted EBITDA should not be construed as an inference that our future results will be unaffected by these expenses or any unusual or non-recurring items. Our adjusted EBITDA may not be comparable to similarly titled measures of other companies because they may not calculate adjusted EBITDA in the same manner as we calculate the measure, limiting its usefulness as a comparative measure. Adjusted EBITDA should not be considered as an alternative to income (loss) before income taxes, net income (loss), income (loss) per share, or any other performance measures derived in accordance with U.S. GAAP. When evaluating our performance, you should consider adjusted EBITDA alongside other financial performance measures, including our net income (loss) and other GAAP results.

A reconciliation is provided below for adjusted EBITDA to net income (loss), the most directly comparable financial measure stated in accordance with GAAP. Investors are encouraged to review our financial statements prepared in accordance with GAAP and the reconciliation of our non-GAAP financial measure to its most directly comparable GAAP financial measure, and not to rely on any single financial measure to evaluate our business. We do not provide a forward-looking reconciliation of adjusted EBITDA guidance as the amount and significance of the reconciling items required to develop meaningful comparable GAAP financial measures cannot be estimated at this time without unreasonable efforts. These reconciling items could be meaningful.

We calculate adjusted EBITDA as net income (loss) adjusted to exclude (i) depreciation and amortization, (ii) stock-based compensation expense, (iii) financial income, net, (iv) income tax expense, and (v) certain non-recurring expenses, where applicable. The following table presents a reconciliation of adjusted EBITDA from the most comparable GAAP measure, net income (loss) for the three and nine months ended September 30, 2025 and 2024:

For the three and nine months ended September 30, 2024, non-recurring expenses primarily consisted of severance costs related to the departure of key executives of the Company and other related costs.

Liquidity and Capital Resources

As of September 30, 2025, we had $43.7 million of cash, cash equivalents and restricted cash ($76.7 million as of December 31, 2024), and $52.1 million in marketable securities ($41.1 million as of December 31, 2024) which we use to finance our operations and support a variety of growth initiatives and investments. We had no debt as of September 30, 2025 and as of December 31, 2024.

Our primary cash needs are to fund operating activities and invest in technology development. Our future capital requirements will depend on many factors including our growth rate, contract renewal activity, the timing and extent of investments to support product development efforts, our expansion of sales and marketing activities, the introduction of new and enhanced service offerings, and the continuing market acceptance of virtual behavioral services. Additionally, we may enter into arrangements to acquire or invest in complementary businesses, services and technologies.

We currently anticipate to be able to fund our cash needs for at least the next 12 months and thereafter for the foreseeable future using available cash and cash equivalent balances. However, in the future we may require additional capital to respond to technological advancements, competitive dynamics, customer demands, business and investment opportunities, acquisitions or unforeseen circumstances and we may determine to engage in equity or debt financings for other reasons. We may not be able to timely secure additional debt or equity financing on favorable terms, or at all. If we raise additional funds through the issuance of equity or convertible debt or other equity-linked securities, our existing stockholders could experience significant dilution. Any debt financing obtained by us in the future could involve restrictive covenants relating to our capital raising activities and other financial and operational matters, which may make it more difficult for us to obtain additional capital and to pursue business opportunities, including potential acquisitions. If we cannot raise capital when needed, we may be forced to undertake asset sales or similar measures to ensure adequate liquidity.

Share Repurchase Program

On February 22, 2024, the Company announced that its Board of Directors approved a share repurchase program to authorize the repurchase of up to $15.0 million of the currently outstanding shares of the Company's common stock over a period of twenty-four months beginning on March 1, 2024 (the "Share Repurchase Program"). On August 1, 2024, the Company's Board of Directors amended the Share Repurchase Program to authorize the Company to repurchase up to an additional $25.0 million of its common stock for a total of $40.0 million. The Share Repurchase Program will remain in effect until the earliest: 1) the total authorized dollar amount of shares is repurchased or 2) August 1, 2026.

During the three and nine months ended September 30, 2025, the Company repurchased and retired an aggregate of 3,516,677 and 6,577,115 shares, respectively, of its common stock for a total consideration of $8.8 million ($2.51 per share) and $17.2 million ($2.62 per share), respectively. As of September 30, 2025, $11.8 million remained available under the Share Repurchase Program.

Such repurchases may be completed periodically through various methods in compliance with applicable state and federal securities laws and will be at times and in amounts as the Company deems appropriate, based on factors such as price, market conditions, corporate and regulatory requirements, constraints specified in any Rule 10b5-1 trading plans, alternative investment opportunities and other business considerations. All shares repurchased will be canceled. The program does not obligate the Company to repurchase any dollar amount or number of shares, and may be suspended or terminated at any time.

See Note 7, "Capital Stock" in the notes to the condensed consolidated financial statements for further details.

Cash Flows from Operating, Investing and Financing Activities

The following table presents the summary condensed consolidated cash flow information for the periods presented:

Cash Flows

Operating Activities

The decline in net cash provided by operating activities was primarily due to timing of customer payments which increased accounts receivable, partially offset by net income for the nine months ended September 30, 2025 compared to net loss for the nine months ended September 30, 2024.

Investing Activities

The increase in net cash used in investing activities was driven primarily by purchases of marketable securities and an increase in capitalized internal-use software development costs, partially offset by proceeds from maturities of marketable securities during the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024.

Financing Activities

The increase in net cash used in financing activities was driven primarily by an increase in the purchase of outstanding shares of the Company's common stock under the Share Repurchase Program, partially offset by a decrease in proceeds from the exercise of stock options during the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024.

Contractual Obligations, Commitments and Contingencies

As of September 30, 2025, we did not have any short-term or long-term debt, or significant long-term liabilities. As of September 30, 2025, we have a non-material long-term operating lease for our office space in New York, NY.

We may in the future be involved in various legal proceedings, claims and litigation that arise in the normal course of business. We accrue for estimated loss contingencies related to legal matters when available information indicates that it is probable a liability has been incurred and we can reasonably estimate the amount of that loss. In many proceedings, however, it is inherently difficult to determine whether any loss is probable or even possible or to estimate the amount of any loss. In addition, even where a loss is possible or an exposure to loss exists in excess of the liability already accrued with respect to a previously recognized loss contingency, it is often not possible to reasonably estimate the size of the possible loss or range of loss or possible additional losses or range of additional losses. Should any of our estimates and assumptions change or prove to be incorrect, it could have a material impact on our results of operations, financial position, and cash flows. As of September 30, 2025 there were no material legal proceedings, claims or litigation.

Our commercial contract arrangements generally include certain provisions requiring us to indemnify customers against liabilities if there is a breach of a customer's data or if our service infringes a third party's intellectual property rights. To date, we have not incurred any material costs as a result of such indemnifications.

We have also agreed to indemnify our officers and directors for costs associated with any fees, expenses, judgments, fines and settlement amounts incurred by any of these persons in any action or proceeding to which any of those persons is, or is threatened to be, made a party by reason of the person's service as a director or officer, including any action by us, arising out of that person's services as our director or officer or that person's services provided to any other company or enterprise at our request. We maintain director and officer liability insurance coverage that would generally enable us to recover a portion of any future amounts paid. We may also be subject to indemnification obligations by law with respect to the actions of our employees under certain circumstances and in certain jurisdictions.

Off-Balance Sheet Arrangements

We do not invest in any off-balance sheet vehicles that provide liquidity, capital resources, market or credit risk support, or engage in any activities that expose us to any liability that is not reflected in our condensed consolidated financial statements.

Critical Accounting Policies and Estimates

The Company's condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America. Reference is also made to the Company's consolidated financial statements and notes thereto found in its Annual Report on Form 10-K for the year ended December 31, 2024.

The Company's accounting policies are essential to understanding and interpreting the financial results reported on the condensed consolidated financial statements. The significant accounting policies used in the preparation of the Company's condensed consolidated financial statements are summarized in Note 2 to the audited consolidated financial statements in the Company's Annual Report on Form 10-K for the year ended December 31, 2024. Certain of those policies are considered to be particularly important to the presentation of the Company's financial results because they require management to make difficult, complex or subjective judgments, often as a result of matters that are inherently uncertain.

During the nine months ended September 30, 2025, there were no material changes to matters discussed under the heading "Critical Accounting Policies and Estimates" in Part II, Item 7 of the Company's Annual Report on Form 10-K for the year ended December 31, 2024.

Recent Accounting Pronouncements

Information regarding recent accounting developments and their impact on our results can be found in Note 2, "Summary of Significant Accounting Policies and Estimates" in the audited consolidated financial statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2024 and in Note 2, "Significant Accounting Policies" in the notes to the condensed consolidated financial statements of this Quarterly Report on Form 10-Q.

FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q (the "Quarterly Report") contains forward-looking statements. We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). All statements other than statements of historical facts contained in this Quarterly Report may be forward-looking statements. In some cases, you can identify forward-looking statements by terms such as "may," "will," "should," "expects," "plans," "anticipates," "could," "intends," "targets," "projects," "contemplates," "believes," "estimates," "forecasts," "predicts," "potential" or "continue" or the negative of these terms or other similar expressions. Forward-looking statements contained in this Quarterly Report include, but are not limited to, statements regarding our future results of operations and financial position, industry and business trends, stock-based compensation, revenue recognition, business strategy, plans and market growth.

The forward-looking statements in this Quarterly Report and other such statements we publicly make from time-to-time are only predictions. We base these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our business, financial condition, and results of operations. Forward-looking statements involve known and unknown risks and uncertainties. Many important factors could cause actual future events to differ materially from the forward-looking statements in this Quarterly Report, including but not limited to: (i) rapid technological change in our industry; (ii) our ability to secure clients' contract renewals; (iii) our ability to maintain and expand our network of therapists, psychiatrists and other providers; (iv) a decline in the prevalence of enterprise-sponsored healthcare or the emergence of new technologies may adversely impact our DTE business; (v) if our or our vendors' security measures fail or are breached; (vi) changes in healthcare laws, regulations or trends and our ability to operate in the heavily regulated healthcare industry; and (vii) the other factors, risks and uncertainties discussed in Part I, Item 1A, "Risk Factors" of the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2024 and subsequent quarterly reports on Form 10-Q, including this report. The forward-looking statements in this Quarterly Report are based upon information available to us as of the date of this Quarterly Report, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain, and investors are cautioned not to unduly rely upon these statements.

You should read this Quarterly Report and the risk factors discussed in Part I, Item 1A, "Risk Factors" of the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2024 with the understanding that our actual future results, levels of activity, performance and achievements may be materially different from what we expect. We qualify all of our forward-looking statements by these cautionary statements. These forward-looking statements speak only as of the date of this Quarterly Report. Except as required by applicable law, we do not plan to publicly update or revise any forward-looking statements contained in this Quarterly Report on Form 10-Q or any forward-looking statements we may publicly make from time-to-time, whether as a result of any new information, future events or otherwise.