LifeStance Health Group, Inc. Q1 FY2025 earnings call

• Macro Environment: As a U.S.-based service business, not directly impacted by tariffs. Model resilient to economic cycles; potential increase in mental health demand during uncertainty. Commercially insured model provides stability.
• Quarterly Results: Solid top-line with 11% y-o-y revenue growth, adjusted EBITDA of 10.4%, first quarter positive net income, and improved free cash flow.
• Operational Execution: Clinician base grew by 152; implemented cash bonus incentive program for clinicians (effective May) and sunset stock-based program; digital patient check-in tool improved patient experience and collections; working on EHR discovery process to enhance capabilities.

Revenue for the first quarter was $333 million, representing an 11% year-over-year growth. Adjusted EBITDA was $35 million, achieving a double-digit margin of 10.4%. The company achieved positive net income for the first time as a public company. Visit volumes were 2.1 million, up 10% y-o-y, driven by clinician growth. Clinician base grew by 152 to over 7,500 clinicians. Revenue contribution from different segments wasn't explicitly broken down beyond overall revenue figures.

• Full year guidance: Revenue $1.4B-$1.44B, center margin $440M-$464M, adjusted EBITDA $130M-$150M.
• Q2 guidance: Revenue $332M-$352M, center margin $100M-$114M, adjusted EBITDA $28M-$34M.
• Stock-based compensation: Expect $70M-$85M in 2025; sunsetting clinician stock program to reduce SBC by ~$10M/year starting 2026.

• Macro economic uncertainty with potential recession impact.
• Competitive landscape in clinician recruitment and retention.
• Potential impact of expiration of virtually prescribing controlled substances at year-end.

Q: Steven Dechert of KeyBanc Capital Markets asked about controlled substances and de novo openings.

A: David Bourdon said expiration of virtual prescribing controlled substances is welcome as it aligns with clinical best practice, and de novos are in replacement of old centers and new growth areas based on patient demand and recruitment.