Virtual mental health company Talkspace on Thursday added to its run of promising earnings reports, with the once-embattled company continuing to project it would break even by early 2024.
Analyst groups like William Blair nodded along approvingly at Talkspace’s latest “step in the right direction” as the company, whose main business is providing therapy over text chat and audio and video connections, beat expectations by posting $35.6 million in revenue, for a $4.7 million net loss. This time last year, Talkspace had posted $29.8 million in revenue at a $23 million loss. The company also raised its annual revenue guidance and said it would lose less money than it had originally forecasted.
While Talkspace isn’t yet profitable, it’s starting to look like one of the success stories of the 2021 digital health boom, when investors poured a record $29 billion into the sector and many companies, including Talkspace, took advantage of a frothy market and went public. Now, digital health companies are struggling to raise money and grow their businesses in an uncertain economy, and some mental health companies specifically have fared poorly: App developer Pear Therapeutics filed for bankruptcy earlier this year, and Headspace, a Talkspace competitor, recently laid off employees and took on $105 million in debt to grow its business.