Transcript: LifeStance Health Gr Q2 2026 Earnings Conference Call

LifeStance Health Gr (NASDAQ: LFST ) held its second-quarter earnings conference call on Thursday. Below is the complete transcript from the call. APIs provide real-time access to earnings call transcripts and financial data. Visit to learn more.

View the webcast at Summary LifeStance Health Gr reported a strong second quarter with revenue growth of over 26% to $435 million and adjusted EBITDA margins exceeding 15%. 725 billion and adjusted EBITDA between $215 to $235 million. Operational highlights include expanding their clinician base to over 8,500, strong clinician productivity, and launching new specialty services to support treatment-resistant depression. LifeStance Health Gr is investing in digital technologies and preparing for a new EHR roll-out in 2027, aiming to enhance patient and clinician experiences and improve operational efficiency.

Geographic expansion remains a focus, with successful tuck-in acquisitions in Arizona and plans to enter new markets through both acquisitions and de novo strategies. The company highlighted its commitment to clinical excellence, with significant improvements in patient outcomes across diverse populations. Management expressed confidence in sustaining long-term growth, driven by a combination of scale, clinical outcomes, and geographic expansion opportunities. Full Transcript Bella, Operator Hello and thank you for standing by.

My name is Bella and I will be your conference operator today. At this time, I would like to welcome everyone to LifeStance Health Gr second quarter 2026 earnings call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question-and-answer session.

We do request for today's session that you please limit to one question and one follow-up only. If you would like to ask a question during this time, simply press star then the number one on your telephone keypad. To withdraw your question, press star one again. I would now like to turn the conference over to Monica Prokocki.

You may begin. Monica Vincent Prokocki, CPA, Vice President of Finance and Investor Relations Thank you, operator. Good morning everyone and welcome to LifeStance Health Gr's second quarter 2026 earnings conference call. I'm Monica Vincent Prokocki, CPA, Vice President of Finance and Investor Relations.

Joining me today are Dave Bourdon, Chief Executive Officer, and Ryan McGroarty, Chief Financial Officer. We issued the earnings release and presentation before the market opened this morning. com. In addition, a replay will be available following the call.

Before turning over to management for their prepared remarks, please direct your attention to the disclaimers about forward-looking statements included in the earnings press release and SEC filings. Today's remarks contain forward-looking statements including statements about our financial performance, outlook, business model and strategy. Those statements involve risks, uncertainties and other factors, as noted in our periodic filings with the SEC, that could cause actual results to differ materially.

Please note that we report results using non-GAAP financial measures which we believe provide additional information for investors to help facilitate comparison of current and past performance. A reconciliation to the most directly comparable GAAP measures is included in the earnings press release tables and presentation appendix. Unless otherwise noted, all results are compared to the comparable period in the prior year. At this time, I'll turn the call over to Dave Bourdon, CEO of LifeStance Health Gr.

Dave Bourdon, Chief Executive Officer Thanks, Monica, and thank you all for joining us today. This was another exceptional quarter for LifeStance Health Gr. We exceeded each of our guided metrics for the quarter, delivering remarkable revenue growth of over 26% and adjusted EBITDA margins that exceeded 15%. Given the outperformance in the quarter, we are again raising our full year guidance across all metrics.

Ryan will provide the details on our improved view of 2026 later. Regarding operational execution, we continue to grow our clinician base, now at over 8,500 clinicians as our value proposition continues to resonate. Clinician productivity also remained strong in the quarter, reflecting the power of our operating model and discipline. As for specialty services, we continue to expand our reach as we launch TMS and Spravato in additional centers to support patients with treatment-resistant depression and to drive clinically meaningful improvements in outcomes.

Turning to technology, we continue to deploy digital, AI-enabled and workflow automation tools that improve patient access, enhance the clinician experience and drive operational efficiency across the organization. Regarding our new EHR, we have begun our preparations for the transition to a new vendor planned for 2027.

This investment is expected to be a critical enabler of our long-term strategy, helping us streamline front and back office operations through more intelligent workflows, deliver a better patient and clinician experience that supports engagement and retention, and equip clinicians with better tools to provide high quality care and drive improved clinical outcomes. S. markets. In addition, there is substantial room to expand in smaller markets as well.

Tuck-in acquisitions remain our preferred approach for entering new geographies and we have a strong pipeline of opportunities that support our disciplined growth strategy. During the second quarter, we successfully completed another small tuck-in acquisition that expands our therapy and psychiatry presence in Arizona. Where compelling acquisition opportunities are not available, we will pursue expansion through our proven de novo approach. Finally, I'd like to highlight our ongoing commitment to clinical excellence.

Delivering high quality care and improving patient outcomes is central to our mission and remains a key differentiator for LifeStance Health Gr. During our first quarter call, we discussed outcomes data we published in April from nearly 180,000 LifeStance Health Gr patients with moderate to severe anxiety and depression, which showed that roughly three-quarters experienced clinically significant improvements in their symptoms. More recently, we took that analysis a step further by examining outcomes from nearly 140,000 LifeStance Health Gr patients across different generations and geographic regions. What we found was remarkably consistent.

At least 75% of patients experienced clinically meaningful improvement regardless of generation or region where they received care. We believe these findings are important because they demonstrate that our strong outcomes are consistent across the diverse populations we serve. More broadly, we believe mental health care is entering its next phase where differentiation will increasingly be driven by outcomes, not just access. While we're pleased to have delivered another quarter of exceptional growth and outstanding margin expansion, we believe the larger opportunity lies ahead.

The combination of our scale, clinical outcomes and geographic expansion opportunities positions LifeStance Health Gr to lead the evolution of outpatient mental health care and supports our confidence in the significant growth runway still in front of us. With that, I'll turn it over to Ryan to provide additional commentary on our financial performance and outlook. Ryan McGroarty, Chief Financial Officer Thanks, Dave. I am pleased with the team's tremendous operational and financial performance in the second quarter, which exceeded our expectations for the quarter.

Revenue grew 26% to $435 million. Revenue surpassed our expectations from both better-than-expected visit volumes and total revenue per visit. 6 million increased 19%. The outperformance was driven by a combination of better-than-expected clinician productivity and net clinician adds.

Total revenue per visit of $167 increased 6% and was ahead of our expectations. Our visits per average clinician were very strong, once again increasing 7% year over year for the third consecutive quarter. This was achieved while at the same time adding 193 clinicians in the second quarter, bringing our total clinician base to 8,542, representing growth of 11%. 2% as a percentage of revenue.

This came in ahead of our expectations primarily due to the revenue beat. Adjusted EBITDA increased 94% to $66 million in the quarter, which was very strong and exceeded our expectations with the outperformance driven by favorable center margin. 2%, which is an impressive improvement of over 500 basis points from the second quarter of last year. We also finished with positive net income of $24 million in the quarter, which was an improvement of $27 million from the second quarter of last year.

Turning to liquidity, we generated robust free cash flow of $88 million in the quarter as compared to $57 million in the second quarter of last year. Free cash flow was driven by strong performance in collections in the quarter and also benefited from the favorable timing of payroll. These payments, along with our annual 401(k) match, represent roughly $60 million and will impact free cash flow in the third quarter. We exited the quarter with a strong balance sheet including a cash position of $226 million and net long-term debt of $259 million.

Importantly, that cash balance is post the $49 million deployment towards share repurchases during the quarter. 3 times. Additionally, this morning we announced that our Board of Directors approved a $100 million share repurchase authorization. Since launching our initial $100 million program earlier this year, we deployed $97 million of the previously authorized capacity.

We believe we are well positioned with significant financial flexibility to support the business and execute on our strategic priorities. 725 billion. The midpoint of the revenue guidance range implies a growth rate of 20% for the full year. We are also raising our center margin range by $23 million at the midpoint to $570 to $594 million and raising our adjusted EBITDA range by $15 million at the midpoint to $215 to $235 million.

2%, which is over 200 basis points of margin expansion year over year. Our updated annual guidance assumes year-over-year revenue growth driven primarily by higher visit volumes combined with mid-single digit increases to our total revenue per visit. Based on the adjusted EBITDA outperformance so far this year, we continue to give ourselves flexibility to make additional investments in the second half of this year to better position us to support our long-term growth objectives.

We are investing across a number of strategic priorities including: first, we are driving patient acquisition and expanding access to our services through marketing and further growing our business development team; second, we are investing in our technology team to support current and future tech and AI enablement; third, we are building out the teams that lead and support clinical excellence to drive improved patient outcomes; and finally, we enhanced total compensation and benefits for our clinicians and many of our center support staff.

These investments are reflected in our updated outlook and support our continued focus on balancing growth, operational execution and profitability. Additionally, we continue to expect stock-based compensation of approximately $60 to $70 million this year. For the third quarter we expect revenue of $420 to $440 million, center margin of $140 to $152 million and adjusted EBITDA of $49 to $59 million. Given our excellent performance in the first half of the year and the strong momentum in the business, I remain excited about our long-term growth potential.

With that, I'll turn it back to Dave for his closing comments. Dave Bourdon, Chief Executive Officer Thanks, Ryan. In closing, our performance in the second quarter underscores the substantial opportunity in front of us as we go deeper in our existing markets, grow our geographic reach, broaden our specialty capabilities and strengthen our differentiation through clinical excellence and measurable patient outcomes. We are positioning LifeStance Health Gr for sustained long-term growth.

Operator, we will now take questions. Bella, Operator At this time I would like to remind everyone, in order to ask a question, press star then the number one on your telephone keypad. We do request for today's session that you please limit to one question only and one follow-up. We will pause for just a moment to compile the Q&A roster.

Your first question comes from the line of Craig Hedgeback with Morgan Stanley. Your line is now open. Please go ahead. Craig, Analyst Thank you.

Dave, understanding you're coming up on more difficult comps on productivity. What are some of the levers that remain to pull on that front as you go forward? Dave Bourdon, Chief Executive Officer Hey, good morning, Craig. This is Dave, and appreciate the question around productivity.

The first thing I would say is that this is our fourth quarter of really strong productivity levels with our clinicians, and this is now just how we operate and manage the practice. We're continuing to evaluate opportunities and work on opportunities to improve that productivity level. Just kind of a reminder from a productivity perspective, there's two angles to it. First, we have to increase the flow of new patients, and we've talked in the past about actions like improving conversion of patients that are seeking care to a booked appointment and continuing to work on activities like that.

And then the other side of that is just general practice management actions like optimizing clinician schedules so that those schedules are more receptive to that increased new patient flow. And then it's that deliberate balance between using more of the capacity that our clinicians are giving us versus adding new clinicians. And we still have a lot of runway on this. We're utilizing right now about 70% of the time that clinicians give us.

Craig, Analyst Very helpful. And then just as a follow up, psychedelics are getting more attention on the back of Lilly's recent acquisition. That space. How do you think about that market and the role LifeStance Health Gr can play there?

Dave Bourdon, Chief Executive Officer Yeah, Craig, I'll take that one as well. You know, first of all, just at a macro level, the specialty services, which is where we would put psychedelics for us, it's a tremendous opportunity for us in the coming years and it's going to drive better outcomes for our patients and it'll contribute to both growth and margins. Specific to the psychedelics, we're monitoring that and we think that is a great opportunity for us, and we're set up really well if that were to be approved by the FDA and also from a payer reimbursement perspective.

We'll be able to roll out those new services in a very efficient way, leveraging our center footprint as well as even some of the foundational work we've done to roll out Spravato. Craig, Analyst Got it. Thank you. Bella, Operator Your next question comes from the line of Lisa Gill with JPMorgan.

Please go ahead. Lisa Gill, Analyst at JPMorgan Thanks very much. Good morning, Dave and Ryan. I was wondering if we could talk a bit about revenue per visit and the key drivers there.

You talk about the specialty business. I'm just curious what the key drivers are. Is that the increase in kind of the acuity level of the patient? Is it your contracting with managed care?

What are some of the key drivers as we think about the revenue per visit? Ryan McGroarty, Chief Financial Officer Yeah, so hey Lisa, I appreciate the question. This is Ryan. I'll go into the question just in terms of, to start off, we're really pleased with the TRPV of 6% year over year.

So we delivered TRPV of $167 in the quarter. 1 overall, and it really is one of the reasons between rate and volume in terms of why we raised our revenue by 45 million for the full year and also adjusted EBITDA by 15 million. To the question around what's driving it, it really is from a payer contracting perspective. We're sitting here mid year now and we have good line of sight into the rate increases for the full year.

And as you probably recognized in our commentary, we updated our guidance from low to mid single digits to mid single digits, and it really is just based off of the good visibility we have into our payer contracts. From an overall kind of payer perspective, we continue to have good constructive dialogue with them in terms of making sure that they're providing the access to high quality mental health care that we offer. Lisa Gill, Analyst at JPMorgan That's really helpful, Ryan. 2% in the quarter, a little more than 13% for the year.

Can you talk about what your long term goals are as we think about the EBITDA margin?