Company: TALK
Filing Date: 2025-03-12
Form Type: 10-K
Source: 0000950170-25-038107
Chunk: 139

Company: Talkspace, Inc.
Filing Date: 2025-03-12
Form: 10-K
Item: Item 7
Chunk 139
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 by $10.8 million, or 30.4%, to $24.8 million for the year ended December 31, 2024 from $35.6 million for the year ended December 31, 2023, due to the Company's intentional and strategic decision to optimize and focus marketing efforts on attracting Payor members. 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 of revenues 

Cost of revenues increased by $26.1 million or 34.5%, to $101.8 million for the year ended December 31, 2024 from $75.7 million for the year ended December 31, 2023, primarily due to increased hours worked by therapists as a result of increased Payor sessions.

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Gross profit 

Gross profit increased by $11.5 million, or 15.4%, to $85.8 million for the year ended December 31, 2024 from $74.4 million for the year ended December 31, 2023. Gross margin was 45.8% for the year ended December 31, 2024, compared to 49.6% during the year ended December 31, 2023. The increase in gross profit was primarily driven by an increase in revenues partially offset by an increase in cost of revenues to service more members and sessions. The decline in gross margin was driven by a shift in revenue mix towards Payor.

Operating Expenses

Overall, our operating expenses for the year ended December 31, 2024 have decreased by $7.3 million or 7.4% to $90.3  million from $97.6 million compared to the year ended December 31, 2023, primarily due to our efforts to achieve greater operational efficiency.

Research and development expenses 

Research and development expenses decreased by $7.1 million, or 40.2%, to $10.5 million for the year ended December 31, 2024 from $17.6 million for the year ended December 31, 2023, primarily due to a decrease in employee-related costs, inclusive of non-cash stock compensation expense and the exclusion of amounts reflected as capitalized internal-use software development costs. Capitalized internal-use software development costs were $6.1 million for the year ended December 31, 2024 and were immaterial for the year ended December 31, 2023.

Clinical