LifeStance Reports Third Quarter 2024 Results

SCOTTSDALE, Ariz., Nov. 07, 2024 (GLOBE NEWSWIRE) -- LifeStance Health Group, Inc. (Nasdaq: LFST), one of the nation's largest providers of outpatient mental healthcare, today announced financial results for the third quarter ended September 30, 2024.

(All results compared to prior-year comparative period, unless otherwise noted)

Q3 2024 Highlights and FY 2024 Outlook

• Revenue of $312.7 million increased 19% compared to revenue of $262.9 million
• Clinician base increased 13% to 7,269 clinicians, a sequential net increase of 285 in the third quarter
• Third quarter visit volumes increased 15% to 2.0 million
• Net loss of $6.0 million compared to net loss of $61.6 million
• Adjusted EBITDA of positive $30.7 million compared to Adjusted EBITDA of positive $14.6 million
• For full year 2024, raising revenue expectations to $1.228 billion to $1.248 billion; raising Center Margin expectations to $382 million to $398 million; raising Adjusted EBITDA expectations to $105 million to $115 million; and reiterating expectations for positive Free Cash Flow

• Revenue grew 19% to $312.7 million. Strong revenue growth in the third quarter was driven primarily by improvements in total revenue per visit and higher visit volumes from net clinician growth.
• Income from operations was $47 thousand. Net loss was $6.0 million.
• Center Margin grew 32% to $100.4 million, or 32.1% of total revenue.
• Adjusted EBITDA increased 110% to $30.7 million, or 9.8% of total revenue. Adjusted EBITDA as a percentage of revenue increased in the third quarter as a result of higher total revenue per visit, lower center costs as a percentage of revenue, and improved operating leverage from revenue growing faster than general and administrative expenses.

For the nine months ended September 30, 2024, LifeStance provided $44.9 million cash flow from operations, including $22.7 million during the third quarter of 2024. The Company ended the third quarter with cash of $102.6 million and net long-term debt of $279.1 million.

2024 Guidance

LifeStance is providing the following outlook for 2024:

• The Company is raising full year revenue to $1.228 billion to $1.248 billion; raising Center Margin to $382 million to $398 million; and raising Adjusted EBITDA to $105 million to $115 million. Additionally, the Company continues to expect to generate positive Free Cash Flow for the full year.
• For the fourth quarter of 2024, the Company expects total revenue of $302.5 million to $322.5 million, Center Margin of $89 million to $105 million, and Adjusted EBITDA of $18 million to $28 million.

LifeStance will hold a conference call today, November 7, 2024 at 8:30 a.m. Eastern Time to discuss the third quarter 2024 results. Investors who wish to participate in the call should dial 1-800-715-9871, domestically, or 1-646-307-1963, internationally, approximately 10 minutes before the call begins and provide conference ID number 2787723 or ask to be joined into the LifeStance call. A real-time audio webcast can be accessed via the Events and Presentations section of the LifeStance Investor Relations website (https://investor.lifestance.com), where related materials will be posted prior to the conference call.

About LifeStance Health Group, Inc.

Founded in 2017, LifeStance (Nasdaq: LFST) is reimagining mental health. We are one of the nation's largest providers of virtual and in-person outpatient mental healthcare for children, adolescents and adults experiencing a variety of mental health conditions. Our mission is to help people lead healthier, more fulfilling lives by improving access to trusted, affordable, and personalized mental healthcare. LifeStance and its supported practices employ approximately 7,200 psychiatrists, advanced practice nurses, psychologists and therapists and operates across 33 states and more than 550 centers. To learn more, please visit www.LifeStance.com.

We routinely post information that may be important to investors on the "Investor Relations” section of our website at investor.lifestance.com. We encourage investors and potential investors to consult our website regularly for important information about us.

Forward-Looking Statements

Statements in this press release and on the related teleconference that express a belief, expectation or intention, as well as those that are not historical fact, are forward-looking statements. These statements include, but are not limited to, statements with respect to: full year and fourth quarter guidance and management's related assumptions; the Company's financial position; business plans and objectives; operating results; working capital and liquidity; and other statements contained in this press release that are not historical facts. When used in this press release and on the related teleconference, words such as "may,” "will,” "should,” "could,” "intend,” "potential,” "continue,” "anticipate,” "believe,” "estimate,” "expect,” "plan,” "target,” "predict,” "project,” "seek” and similar expressions as they relate to us are intended to identify forward-looking statements. They involve a number of risks and uncertainties that may cause actual events and results to differ materially from such forward-looking statements. These risks and uncertainties include, but are not limited to: we may not grow at the rates we historically have achieved or at all, even if our key metrics may imply future growth, including if we are unable to successfully execute on our growth initiatives and business strategies; if we fail to manage our growth effectively, our expenses could increase more than expected, our revenue may not increase proportionally or at all, and we may be unable to execute on our business strategy; our ability to recruit new clinicians and retain existing clinicians; if reimbursement rates paid by third-party payors are reduced or if third-party payors otherwise restrain our ability to obtain or deliver care to patients, our business could be harmed; we conduct business in a heavily regulated industry and if we fail to comply with these laws and government regulations, we could incur penalties or be required to make significant changes to our operations or experience adverse publicity, which could have a material adverse effect on our business, results of operations and financial condition; we are dependent on our relationships with supported practices, which we do not own, to provide healthcare services, and our business would be harmed if those relationships were disrupted or if our arrangements with these entities became subject to legal challenges; we operate in a competitive industry, and if we are not able to compete effectively, our business, results of operations and financial condition would be harmed; the impact of health care reform legislation and other changes in the healthcare industry and in health care spending on us is currently unknown, but may harm our business; if our or our vendors' security measures fail or are breached and unauthorized access to our employees', patients' or partners' data is obtained, our systems may be perceived as insecure, we may incur significant liabilities, including through private litigation or regulatory action, our reputation may be harmed, and we could lose patients and partners; our business depends on our ability to effectively invest in, implement improvements to and properly maintain the uninterrupted operation and data integrity of our information technology and other business systems; actual or anticipated changes or fluctuations in our results of operations; our existing indebtedness could adversely affect our business and growth prospects; and other risks and uncertainties set forth under "Risk Factors” included in the reports we have filed or will file with the Securities and Exchange Commission, including our Annual Report on Form 10-K for the year ended December 31, 2023 and subsequent filings made with the Securities and Exchange Commission. LifeStance does not undertake to update any forward-looking statements made in this press release to reflect any change in management's expectations or any change in the assumptions or circumstances on which such statements are based, except as otherwise required by law.

Non-GAAP Financial Information

This press release contains certain non-GAAP financial measures, including Center Margin, Adjusted EBITDA, and Adjusted EBITDA margin. Tables showing the reconciliation of these non-GAAP financial measures to the comparable GAAP measures are included at the end of this release. Management believes these non-GAAP financial measures are useful in evaluating the Company's operating performance, and may be helpful to securities analysts, institutional investors and other interested parties in understanding the Company's operating performance and prospects. This press release also refers to Free Cash Flow, which is calculated as net cash provided by (used in) operating activities less purchases of property and equipment. Management believes Free Cash Flow is a useful indicator of liquidity that provides information to management and investors about the amount of cash generated from our operations that, after investments in property and equipment, can be used for future growth. These non-GAAP financial measures, as calculated, may not be comparable to companies in other industries or within the same industry with similarly titled measures of performance. Therefore, the Company's non-GAAP financial measures should be considered in addition to, not as a substitute for, or in isolation from, measures prepared in accordance with GAAP, such as net loss or income (loss) from operations.

Center Margin and Adjusted EBITDA anticipated for the fourth quarter of 2024 and full year 2024 are calculated in a manner consistent with the historical presentation of these measures at the end of this release. Reconciliation for the forward-looking fourth quarter of 2024 and full year 2024 Center Margin, Adjusted EBITDA guidance and Free Cash Flow is not being provided, as LifeStance does not currently have sufficient data to accurately estimate the variables and individual adjustments for such reconciliation. As such, LifeStance management cannot estimate on a forward-looking basis without unreasonable effort the impact these variables and individual adjustments will have on its reported results.

Management acknowledges that there are many items that impact a company's reported results and the adjustments reflected in these non-GAAP measures are not intended to present all items that may have impacted these results.