LifeStance Reports Third Quarter 2023 Results

SCOTTSDALE, Ariz., Nov. 08, 2023 (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, 2023.

(All results compared to prior-year comparative period, unless otherwise noted)
Q3 2023 Highlights and FY 2023 Outlook

  • Total revenue of $262.9 million increased $45.3 million or 21% compared to total revenue of $217.6 million
  • Total clinicians of 6,418 up 18%, a sequential net increase of 286 in the third quarter
  • Net loss of $61.6 million compared to net loss of $37.9 million, primarily driven by the preliminarily approved settlement of our shareholder class action lawsuit and stock-based compensation expenses
  • Adjusted EBITDA of $14.6 million compared to Adjusted EBITDA of $15.4 million
  • Raising the midpoints of Revenue, Center Margin, and Adjusted EBITDA guidance ranges: Now expecting full year 2023 revenue of $1.03 to $1.04 billion, Center Margin of $292 to $300 million and Adjusted EBITDA of $56 to $60 million

“We delivered another strong quarter,” said Ken Burdick, Chairman and CEO of LifeStance. “In addition to solid financial results, we continued to attract high-quality clinical talent with a record quarter of organic recruiting, growing the team by nearly 300 clinicians. As we approach the end of the year, we will continue our commitment to improving the patient and clinician experience while continuing to fortify the company’s foundation to build long-term, scalable operations.”

Financial Highlights        
 Q3 2023  Q3 2022  Y/Y 
(in millions)        
Total revenue$262.9  $217.6   21%
Loss from operations (74.4)  (38.8)  92%
Center Margin 76.2   60.3   26%
Net loss (61.6)  (37.9)  63%
Adjusted EBITDA 14.6   15.4   (5%)
As % of Total revenue:        
Loss from operations (28.3%)  (17.8%)   
Center Margin 29.0%  27.7%   
Net loss (23.4%)  (17.4%)   
Adjusted EBITDA 5.6%  7.1%   

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

  • Total revenue grew 21% to $262.9 million. Strong revenue growth in the third quarter was driven primarily by net clinician growth and increased visit volumes.
  • Loss from operations was $74.4 million, primarily driven by stock-based compensation expense of $21.5 million and the preliminarily approved settlement of our shareholder class action lawsuit. Net loss was $61.6 million.
  • Center Margin grew 26% to $76.2 million, or 29% of total revenue.
  • Adjusted EBITDA declined 5% to $14.6 million, or 5.6% of total revenue. Adjusted EBITDA as a percentage of revenue decreased as a result of higher G&A expenses from investments in the business.

Balance Sheet, Cash Flow and Capital Allocation

For the nine months ended September 30, 2023, LifeStance used $33.7 million cash flow from operations, including $25.4 million during the third quarter of 2023. The Company ended the third quarter with cash of $42.6 million and net long-term debt of $248.4 million.

2023 Guidance

LifeStance is raising the midpoints of full year Revenue, Center Margin, and Adjusted EBITDA guidance ranges, with the following outlook for 2023:

  • The Company expects full year revenue of $1.03 to $1.04 billion, Center Margin of $292 to $300 million, and Adjusted EBITDA of $56 to $60 million.
  • For the fourth quarter of 2023, the Company expects total revenue of $255 to $265 million, Center Margin of $73 to $81 million, and Adjusted EBITDA of $17 to $21 million.

Conference Call, Webcast Information, and Presentations

LifeStance will hold a conference call today, November 8, 2023, at 8:30 a.m. Eastern Time to discuss the third quarter 2023 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 3827662 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 (, 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 health care 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 employs approximately 6,400 psychiatrists, advanced practice nurses, psychologists and therapists and operates across 33 states and approximately 600 centers. To learn more, please visit

We routinely post information that may be important to investors on the “Investor Relations” section of our website at 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 affiliated practices, which we do not own, to provide health care 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, 2022 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. 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 loss from operations.

Center Margin and Adjusted EBITDA anticipated for the fourth quarter of 2023 and full year 2023 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 2023 and full year 2023 Center Margin and Adjusted EBITDA guidance 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. 

Consolidated Financial Information and Reconciliations

(In thousands, except for par value)

 September 30, 2023  December 31, 2022 
Cash and cash equivalents$42,605  $108,621 
Patient accounts receivable, net 149,716   100,868 
Prepaid expenses and other current assets 71,929   23,734 
Total current assets 264,250   233,223 
Property and equipment, net 190,067   194,189 
Right-of-use assets 180,685   199,431 
Intangible assets, net 233,615   263,294 
Goodwill 1,293,426   1,272,939 
Other noncurrent assets 13,023   10,795 
Total noncurrent assets 1,910,816   1,940,648 
Total assets$2,175,066  $2,173,871 
Accounts payable$10,400  $12,285 
Accrued payroll expenses 83,618   75,650 
Other accrued expenses 91,030   30,428 
Current portion of contingent consideration 8,964   15,876 
Operating lease liabilities, current 43,604   38,824 
Other current liabilities 3,258   2,936 
Total current liabilities 240,874   175,999 
Long-term debt, net 248,371   225,079 
Operating lease liabilities, noncurrent 191,515   212,586 
Deferred tax liability, net 38,403   38,701 
Other noncurrent liabilities 855   2,783 
Total noncurrent liabilities 479,144   479,149 
Total liabilities$720,018  $655,148 
Preferred stock – par value $0.01 per share; 25,000 shares authorized as of
   September 30, 2023 and December 31, 2022; 0 shares issued and outstanding as
   of September 30, 2023 and December 31, 2022
Common stock – par value $0.01 per share; 800,000 shares authorized as of
   September 30, 2023 and December 31, 2022; 378,607 and 375,964 shares
   issued and outstanding as of September 30, 2023 and December 31, 2022,
 3,788   3,761 
Additional paid-in capital 2,162,766   2,084,324 
Accumulated other comprehensive income 4,381   3,274 
Accumulated deficit (715,887)  (572,636)
Total stockholders' equity 1,455,048   1,518,723 
  Total liabilities and stockholders’ equity$2,175,066  $2,173,871 

(In thousands, except for Net Loss per Share)

 Three Months Ended September 30,  Nine Months Ended September 30, 
 2023  2022  2023  2022 
TOTAL REVENUE$262,895  $217,560  $775,062  $630,182 
Center costs, excluding depreciation and
   amortization shown separately below
 186,686   157,267   556,280   455,857 
General and administrative expenses 130,945   81,248   317,425   288,176 
Depreciation and amortization 19,621   17,884   58,220   50,311 
Total operating expenses$337,252  $256,399  $931,925  $794,344 
LOSS FROM OPERATIONS$(74,357) $(38,839) $(156,863) $(164,162)
Gain on remeasurement of contingent consideration 1,867   1,176   4,443   562 
Transaction costs    (210)  (89)  (507)
Interest expense, net (5,477)  (4,189)  (15,688)  (14,763)
Other expense (1)  (144)  (70)  (144)
Total other expense$(3,611) $(3,367) $(11,404) $(14,852)
LOSS BEFORE INCOME TAXES (77,968)  (42,206)  (168,267)  (179,014)
INCOME TAX BENEFIT 16,385   4,353   26,964   10,106 
NET LOSS$(61,583) $(37,853) $(141,303) $(168,908)
NET LOSS PER SHARE, BASIC AND DILUTED (0.17)  (0.11)  (0.39)  (0.48)
Weighted-average shares used to compute
   basic and diluted net loss per share
 372,476   357,520   365,556   354,057 
NET LOSS$(61,583) $(37,853) $(141,303) $(168,908)
Unrealized gains on cash flow hedge, net of tax 230   3,185   1,107   3,185 
COMPREHENSIVE LOSS$(61,353) $(34,668) $(140,196) $(165,723)

(In thousands)

 Nine Months Ended September 30, 
 2023  2022 
Net loss$(141,303) $(168,908)
Adjustments to reconcile net loss to net cash (used in) provided by operating
Depreciation and amortization 58,220   50,311 
Non-cash operating lease costs 30,225    
Stock-based compensation 78,469   152,235 
Loss on debt extinguishment    3,380 
Amortization of discount and debt issue costs 1,592   1,351 
Gain on remeasurement of contingent consideration (4,443)  (562)
Other, net 5,105   144 
Change in operating assets and liabilities, net of businesses acquired:     
Patient accounts receivable, net (48,484)  (34,606)
Prepaid expenses and other current assets (52,293)  (5,811)
Accounts payable (3,848)  1,109 
Accrued payroll expenses 7,622   (588)
Operating lease liabilities (30,109)   
Other accrued expenses 65,568   18,816 
   Net cash (used in) provided by operating activities$(33,679) $16,871 
Purchases of property and equipment (29,106)  (68,871)
Acquisitions of businesses, net of cash acquired (19,820)  (40,294)
   Net cash used in investing activities$(48,926) $(109,165)
Proceeds from long-term debt, net of discount 25,000   237,474 
Payments of debt issue costs (188)  (7,266)
Payments of long-term debt (1,821)  (181,230)
Prepayment for debt paydown    (1,609)
Payments of contingent consideration (6,402)  (12,290)
Taxes related to net share settlement of equity awards    (478)
   Net cash provided by financing activities$16,589  $34,601 
Cash and Cash Equivalents - Beginning of period 108,621   148,029 
Cash paid for interest, net$15,424  $9,518 
Cash paid for taxes, net of refunds$416  $1,780 
Equipment financed through finance leases$  $264 
Contingent consideration incurred in acquisitions of businesses$1,985  $7,719 
Acquisition of property and equipment included in liabilities$5,303  $8,607 


 Three Months Ended September 30,  Nine Months Ended September 30, 
 2023  2022  2023  2022 
(in thousands)           
Loss from operations$(74,357) $(38,839) $(156,863) $(164,162)
Adjusted for:           
Depreciation and amortization 19,621   17,884   58,220   50,311 
General and administrative expenses (1) 130,945   81,248   317,425   288,176 
Center Margin$76,209  $60,293  $218,782  $174,325 

 (1)Represents salaries, wages and employee benefits for our executive leadership, finance, human resources, marketing, billing and credentialing support and technology infrastructure and stock-based compensation for all employees.


 Three Months Ended September 30,  Nine Months Ended September 30, 
 2023  2022  2023  2022 
(in thousands)           
Net loss$(61,583) $(37,853) $(141,303) $(168,908)
Adjusted for:           
Interest expense, net 5,477   4,189   15,688   14,763 
Depreciation and amortization 19,621   17,884   58,220   50,311 
Income tax benefit (16,385)  (4,353)  (26,964)  (10,106)
Gain on remeasurement of contingent
 (1,867)  (1,176)  (4,443)  (562)
Stock-based compensation expense 21,525   34,870   78,469   152,235 
Loss on disposal of assets 1   144   70   144 
Transaction costs (1)    210   89   507 
Executive transition costs 114   494   636   494 
Litigation costs (2) 45,418   104   49,267   104 
Strategic initiatives (3) 790      3,242    
Real estate optimization and
   restructuring charges (4)
 1,257      4,977    
Other expenses (5) 214   866   803   3,511 
Adjusted EBITDA$14,582  $15,379  $38,751  $42,493 

 (1)Primarily includes capital markets advisory, consulting, accounting and legal expenses related to our acquisitions.
 (2)Litigation costs include only those costs which are considered non-recurring and outside of the ordinary course of business based on the following considerations, which we assess regularly: (i) the frequency of similar cases that have been brought to date, or are expected to be brought within two years, (ii) the complexity of the case (e.g., complex class action litigation), (iii) the nature of the remedy(ies) sought, including the size of any monetary damages sought, (iv) the counterparty involved, and (v) our overall litigation strategy. During the three and nine months ended September 30, 2023, litigation costs included cash expenses related to three distinct litigation matters, including (x) a securities class action litigation, (y) a privacy class action litigation and (z) a compensation model class action litigation.
 (3)Strategic initiatives consist of expenses directly related to a multi-phase system upgrade in connection with our recent and significant expansion. During each of the three and nine months ended September 30, 2023, we continued a process of evaluating and adopting three critical enterprise-wide systems for (i) human resources management, (ii) clinician credentialing and onboarding process and (iii) a scalable electronic health resources system. Strategic initiatives represents costs, such as third-party consulting costs and one-time costs, that are not part of our ongoing operations related to these enterprise-wide systems. We considered the frequency and scale of this multi-part enterprise upgrade when determining that the expenses were not normal, recurring operating expenses.
 (4)Real estate optimization and restructuring charges consist of cash expenses and non-cash charges related to our real estate optimization initiative, which include certain asset impairment and disposal costs, certain gains and losses related to early lease terminations, and exit and disposal costs related to our real estate optimization initiative to consolidate our physical footprint. As the decision to close these centers was part of a significant strategic project driven by a historic shift in behavior, the magnitude of center closures has been and is expected to be greater than what would be expected as part of ordinary business operations and do not constitute normal recurring operating activities.
 (5)Primarily includes costs incurred to consummate or integrate acquired centers, certain of which are wholly-owned and certain of which are affiliated practices, in addition to the compensation paid to former owners of acquired centers and related expenses that are not reflective of the ongoing operating expenses of our centers. Acquired center integration and other are components of general and administrative expenses included in our unaudited consolidated statements of operations and comprehensive loss. Former owner fees is a component of center costs, excluding depreciation and amortization included in our unaudited consolidated statements of operations and comprehensive loss.

Investor Relations Contact Monica Prokocki VP of Investor Relations 602-767-2100