Q4 2025 LifeStance Health Group Inc Earnings Call

February 25, 2026

Operator: Good morning, and thank you for standing by. My name is Tina, and I'll be your conference operator today. At this time, I'd like to welcome everyone to the LifeStance Health Q4 2025 Earnings Call. At this time, all lines are in a listen-only mode to prevent any background noise. After the speaker's remarks, there will be a question-and-answer session. Please limit questions to one and one follow-up. To ask a question, simply press star one on your touchtone phone. To withdraw your question, press star one again. It is now my pleasure to turn today's call over to Monica Prokopowicz. Please go ahead.

Speaker #2: At this time, all lines are in a listen-only mode. To prevent any background noise, after the speaker's remarks, there will be a question-and-answer session.

Speaker #2: Please limit questions to one, and one follow-up. To ask a question, simply press star one on your touch-tone phone. To withdraw your question, press star one again.

Speaker #2: It is now my pleasure to turn today's call over to Monica Prokocki. Please go ahead. Thank you, operator. Good morning, everyone, and welcome to LifeStance Health 4th Quarter 2025 earnings conference call.

Monica Prokopowicz: Thank you, operator. Good morning, everyone, and welcome to LifeStance Health's Q4 2025 Earnings Conference Call. I'm Monica Prokopowicz, Vice President of Finance and Investor Relations. Joining me today are David Bourdon, Chief Executive Officer, and Ryan McGroarty, Chief Financial Officer. In addition, Ken Burdick, our Executive Chairman, is also with us. We issued the earnings release and presentation before the market opened this morning. Both are available on the investor relations section of our website, investors.lifestance.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.

Monica Prokocki: Thank you, operator. Good morning, everyone, and welcome to LifeStance Health's Q4 2025 Earnings Conference Call. I'm Monica Prokopowicz, Vice President of Finance and Investor Relations. Joining me today are David Bourdon, Chief Executive Officer, and Ryan McGroarty, Chief Financial Officer. In addition, Ken Burdick, our Executive Chairman, is also with us. We issued the earnings release and presentation before the market opened this morning. Both are available on the investor relations section of our website, investors.lifestance.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.

Speaker #2: I'm Monica Prokocki, Vice President of Finance and Investor Relations. Joining me today are Dave Bourdon, Chief Executive Officer, and Ryan McGroarty, Chief Financial Officer.

Speaker #2: In addition, Kenneth Burdick, our Executive Chairman, is also with us. We issued the earnings release and presentation before the market opened this morning. Both are available on the Investor Relations section of our website, investor.lifestance.com.

Speaker #2: In addition, a replay will be available following the call. Before turning over to management for their prepare for marks, please direct your attention to the disclaimers about forward-looking statements included in the earnings press release and SEC filings.

Speaker #2: 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.

Monica Prokopowicz: 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 Borden, CEO of LifeStance. Dave?

Monica Prokocki: 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 Borden, CEO of LifeStance. Dave?

Speaker #2: 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.

Speaker #2: 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.

Speaker #2: At this time, I'll turn the call over to Dave Bourdon, CEO of LifeStance. Dave?

Speaker #3: Thanks, Monica. And thank you all for joining us today. 2025 was an exceptional year for LifeStance. We delivered robust, organic revenue and visit growth.

David Bourdon: Thanks, Monica. Thank you all for joining us today. 2025 was an exceptional year for LifeStance. We delivered robust organic revenue and visit growth, driven by continued expansion of our clinician base, as well as noteworthy improvements in productivity, all of which translated to delivering on our mission of expanding much-needed access to outpatient mental health services. As a result, our team of 8,000 clinicians delivered care to over 1 million patients and conducted nearly 9 million visits during 2025. It starts and ends with the quality care delivered by our LifeStance clinicians. Patients continue to provide great feedback on their experience. In 2025, LifeStance achieved a patient Net Promoter Score of 84. Our over 570 centers maintained consistently high Google ratings, averaging 4.7 stars.

Dave Bourdon: Thanks, Monica. Thank you all for joining us today. 2025 was an exceptional year for LifeStance. We delivered robust organic revenue and visit growth, driven by continued expansion of our clinician base, as well as noteworthy improvements in productivity, all of which translated to delivering on our mission of expanding much-needed access to outpatient mental health services. As a result, our team of 8,000 clinicians delivered care to over 1 million patients and conducted nearly 9 million visits during 2025. It starts and ends with the quality care delivered by our LifeStance clinicians. Patients continue to provide great feedback on their experience. In 2025, LifeStance achieved a patient Net Promoter Score of 84. Our over 570 centers maintained consistently high Google ratings, averaging 4.7 stars.

Speaker #3: Driven by continued expansion of our clinician base, as well as noteworthy improvements in productivity, all of which translated to delivering on our mission of expanding much-needed access to outpatient mental health services.

Speaker #3: As a result, our team of 8,000 clinicians delivered care to over 1 million patients and conducted nearly 9 million visits during 2025. It starts and ends with the quality care delivered by our LifeStance clinicians.

Speaker #3: Patients continue to provide great feedback on their experience. In 2025, LifeStance achieved a patient net promoter score of 84, and our over 570 centers maintained consistently high Google ratings averaging 4.7 stars.

Speaker #3: In terms of financial results, this was a year of outperformance, milestones, and records for LifeStance. For both the 4th Quarter and the full year, we once again exceeded each of our guided metrics capping a year of consistent outperformance.

David Bourdon: In terms of financial results, this was a year of outperformance, milestones, and records for LifeStance. For both the Q4 and the full year, we once again exceeded each of our guided metrics, capping a year of consistent outperformance. We generated mid-teens revenue growth for the full year through clinician growth of 9%, as well as a remarkable 7% improvement in clinician productivity in the second half of the year. We achieved double-digit adjusted EBITDA margins for the full year for the first time as a public company, a milestone that reflects both the operating leverage in our model and the consistency of our execution over the past three years. We delivered positive net income and earnings per share for the full year, reaching this key milestone as a public company 1 year ahead of our expectations.

Dave Bourdon: In terms of financial results, this was a year of outperformance, milestones, and records for LifeStance. For both the Q4 and the full year, we once again exceeded each of our guided metrics, capping a year of consistent outperformance. We generated mid-teens revenue growth for the full year through clinician growth of 9%, as well as a remarkable 7% improvement in clinician productivity in the second half of the year. We achieved double-digit adjusted EBITDA margins for the full year for the first time as a public company, a milestone that reflects both the operating leverage in our model and the consistency of our execution over the past three years. We delivered positive net income and earnings per share for the full year, reaching this key milestone as a public company 1 year ahead of our expectations.

Speaker #3: We generated mid-teens revenue growth for the full year through clinician growth of 9%, as well as a remarkable 7% improvement in clinician productivity in the second half of the year.

Speaker #3: We achieved double-digit adjusted EBITDA margins for the full year for the first time, as a public company, a milestone that reflects both the operating leverage in our model and the consistency of our execution over the past three years.

Speaker #3: We delivered positive net income and earnings per share for the full year, reaching this key milestone as a public company one year ahead of our expectations.

Speaker #3: Finally, 2025 was a record year for free cash flow generation, demonstrating the strength of our operating model and our ability to invest in the business while creating long-term value.

David Bourdon: Finally, 2025 was a record year for free cash flow generation, demonstrating the strength of our operating model and our ability to invest in the business while creating long-term value. Ryan will provide more color on our financial performance. Our results in 2025 bolster the confidence we have as we carry strong momentum into 2026. Turning to operational execution. We made great strides in 2025 to drive improvements in the performance of the business. Earlier in the year, we outlined several initiatives designed to better fill the time clinicians make available to see patients. As these initiatives were implemented, their impact became increasingly evident in the back half of the year. For example, we implemented process improvements around clinician scheduling to better utilize available capacity. We also launched a cash incentive program that rewards clinicians for improving quality and productivity.

Dave Bourdon: Finally, 2025 was a record year for free cash flow generation, demonstrating the strength of our operating model and our ability to invest in the business while creating long-term value. Ryan will provide more color on our financial performance. Our results in 2025 bolster the confidence we have as we carry strong momentum into 2026. Turning to operational execution. We made great strides in 2025 to drive improvements in the performance of the business. Earlier in the year, we outlined several initiatives designed to better fill the time clinicians make available to see patients. As these initiatives were implemented, their impact became increasingly evident in the back half of the year. For example, we implemented process improvements around clinician scheduling to better utilize available capacity. We also launched a cash incentive program that rewards clinicians for improving quality and productivity.

Speaker #3: Ryan will provide more color on our financial performance. Our results in 2025 bolster the confidence we have as we carry strong momentum into 2026.

Speaker #3: Turning to operational execution, we made great strides in 2025 to drive improvements in the performance of the business. Earlier in the year, we outlined several initiatives designed to better fill the time clinicians make available to see patients.

Speaker #3: And as these initiatives were implemented, their impact became increasingly evident in the back half of the year. For example, we implemented process improvements around clinician scheduling to better utilize available capacity.

Speaker #3: We also launched a cash incentive program that rewards clinicians for improving quality and productivity. In addition, we expanded patient access through shortened booking lead times, which improved show rates.

David Bourdon: In addition, we expanded patient access through shortened booking lead times, which improved show rates, and made enhancements to conversion of phone call to booked appointments by new patients. We also strengthened patient engagement with a new platform that enhances patient acquisition and retention. Importantly, these initiatives have now delivered consistently improved results since implementation in the back half of the year, reinforcing the durability of the improvements. Turning to technology. 2025 marked an important year of progress in how we use digital tools to support patient access, clinician experience, and operational efficiency. Throughout the year, we applied digital and AI solutions in targeted, practical ways to improve the experience for both patients and clinicians. From a new patient phone booking perspective, we implemented a new AI technology solution to support our scheduling team, which facilitated stronger appointment conversion and operational efficiency.

Dave Bourdon: In addition, we expanded patient access through shortened booking lead times, which improved show rates, and made enhancements to conversion of phone call to booked appointments by new patients. We also strengthened patient engagement with a new platform that enhances patient acquisition and retention. Importantly, these initiatives have now delivered consistently improved results since implementation in the back half of the year, reinforcing the durability of the improvements. Turning to technology. 2025 marked an important year of progress in how we use digital tools to support patient access, clinician experience, and operational efficiency. Throughout the year, we applied digital and AI solutions in targeted, practical ways to improve the experience for both patients and clinicians. From a new patient phone booking perspective, we implemented a new AI technology solution to support our scheduling team, which facilitated stronger appointment conversion and operational efficiency.

Speaker #3: And made enhancements to conversion of phone call to booked appointments by new patients. We also strengthened patient engagement with a new platform that enhances patient acquisition and retention.

Speaker #3: Importantly, these initiatives have now delivered consistently improved results since implementation in the back half of the year, reinforcing the durability of the improvements. Turning to technology, 2025 marked an important year of progress in how we use digital tools to support patient access, clinician experience, and operational efficiency.

Speaker #3: Throughout the year, we applied digital and AI solutions in targeted practical ways to improve the experience for both patients and clinicians. From a new patient phone booking perspective, we implemented a new AI technology solution to support our scheduling team which facilitated stronger appointment conversion and operational efficiency.

Speaker #3: We are improving the clinician experience and enhancing the care our patients receive. An example of this is we piloted AI-assisted documentation for clinicians. The early results show reduced administrative burden and cognitive load enabling clinicians to work more efficiently and spend more time on patient care, while also supporting improved satisfaction and retention.

David Bourdon: We are improving the clinician experience and enhancing the care our patients receive. An example of this is we piloted AI-assisted documentation for clinicians. The early results show reduced administrative burden and cognitive load, enabling clinicians to work more efficiently and spend more time on patient care, while also supporting improved satisfaction and retention. We are also using digital and AI tools that are benefiting operational excellence, including revenue cycle management. Examples of this are the digital patient check-in tool, AI, and robotic process automation that were instrumental in delivering strong cash collections. Overall, our approach to technology in 2025 was intentional and disciplined, using digital and AI for business enablement and decision support to drive engagement, productivity, and scale, while improving the satisfaction for patients, clinicians, and our non-clinician teammates.

Dave Bourdon: We are improving the clinician experience and enhancing the care our patients receive. An example of this is we piloted AI-assisted documentation for clinicians. The early results show reduced administrative burden and cognitive load, enabling clinicians to work more efficiently and spend more time on patient care, while also supporting improved satisfaction and retention. We are also using digital and AI tools that are benefiting operational excellence, including revenue cycle management. Examples of this are the digital patient check-in tool, AI, and robotic process automation that were instrumental in delivering strong cash collections. Overall, our approach to technology in 2025 was intentional and disciplined, using digital and AI for business enablement and decision support to drive engagement, productivity, and scale, while improving the satisfaction for patients, clinicians, and our non-clinician teammates.

Speaker #3: We are also using digital and AI tools that are benefiting operational excellence, including revenue cycle management. Examples of this are the digital patient check-in tool, AI, and robotic process automation that were instrumental in delivering strong cash collections.

Speaker #3: Overall, our approach to technology in 2025 was intentional and disciplined—using digital and AI for business enablement and decision support to drive engagement, productivity, and scale, while improving satisfaction for patients, clinicians, and our non-clinician teammates.

Speaker #3: Turning to 2026 and beyond, we will continue building on our progress and advancing our operational and clinical excellence by focusing on several initiatives that support our long-term growth and scalability.

David Bourdon: Turning to 2026 and beyond, we will continue building on our progress in advancing our operational and clinical excellence by focusing on several initiatives that support our long-term growth and scalability. First, we completed our EHR discovery process and made a decision to transition to a best-in-class vendor. This is an important step in advancing our long-term operating model and positioning the business for continued scale. The new EHR will be instrumental in supporting clinicians and patients to improve both their experience and clinical outcomes. In addition, we expect the new EHR to improve interoperability, which will benefit growing health system partnerships. We will begin working through the implementation in 2026 and expect to transition to the new EHR during 2027. Second, technology will continue to be an important enabler to delivering on our commitments this year, with an emphasis on applying AI and digital tools.

Dave Bourdon: Turning to 2026 and beyond, we will continue building on our progress in advancing our operational and clinical excellence by focusing on several initiatives that support our long-term growth and scalability. First, we completed our EHR discovery process and made a decision to transition to a best-in-class vendor. This is an important step in advancing our long-term operating model and positioning the business for continued scale. The new EHR will be instrumental in supporting clinicians and patients to improve both their experience and clinical outcomes. In addition, we expect the new EHR to improve interoperability, which will benefit growing health system partnerships. We will begin working through the implementation in 2026 and expect to transition to the new EHR during 2027. Second, technology will continue to be an important enabler to delivering on our commitments this year, with an emphasis on applying AI and digital tools.

Speaker #3: First, we completed our EHR discovery process and made a decision to transition to a best-in-class vendor. This is an important step in advancing our long-term operating model and positioning the business for continued scale.

Speaker #3: The new EHR will be instrumental in supporting clinicians and patients to improve both their experience and clinical outcomes. In addition, we expect the new EHR to improve interoperability which will benefit growing health system partnerships.

Speaker #3: We will begin working through the implementation in 2026 and expect the transition to the new EHR during 2027. Second, technology will continue to be an important enabler to delivering on our commitments this year, with an emphasis on applying AI and digital tools.

Speaker #3: We expect to build on the progress we made in 2025 by expanding technology solutions that improve access, clinician productivity, and operating efficiency. We are starting the year with additional use cases in customer service and revenue cycle management, along with expansion of initiatives like AI clinical documentation and workflow management.

David Bourdon: We expect to build on the progress we made in 2025 by expanding technology solutions that improve access, clinician productivity, and operating efficiency. We are starting the year with additional use cases in customer service and Revenue Cycle Management, along with expansion of initiatives like AI clinical documentation and workflow management. Third, we remain focused on attracting new patients and better converting those inquiries to visits. An example of this is provider and partner referrals, a core differentiator of our growth model. We are making additional investments in this channel in 2026 through increased talent resources to support that opportunity with a new operating model that improves local market support. In addition, we have seen improved online conversion of new patients with our care matching pilot and expect to implement it across all of our state practices this year.

Dave Bourdon: We expect to build on the progress we made in 2025 by expanding technology solutions that improve access, clinician productivity, and operating efficiency. We are starting the year with additional use cases in customer service and Revenue Cycle Management, along with expansion of initiatives like AI clinical documentation and workflow management. Third, we remain focused on attracting new patients and better converting those inquiries to visits. An example of this is provider and partner referrals, a core differentiator of our growth model. We are making additional investments in this channel in 2026 through increased talent resources to support that opportunity with a new operating model that improves local market support. In addition, we have seen improved online conversion of new patients with our care matching pilot and expect to implement it across all of our state practices this year.

Speaker #3: Third, we remain focused on attracting new patients and better converting those inquiries to visits. An example of this is provider and partner referrals, a core differentiator of our growth model.

Speaker #3: We are making additional investments in this channel in 2026 through increased talent resources to support that opportunity, with a new operating model that improves local market support.

Speaker #3: In addition, we have seen improved online conversion of new patients with our care matching pilot and expect to implement it across all of our state practices this year.

Speaker #3: In closing, I'm very proud of the progress we have made as a company this year. As we enter 2026, we do so from a position of momentum and confidence.

David Bourdon: In closing, I'm very proud of the progress we have made as a company this year. As we enter 2026, we do so from a position of momentum and confidence. Looking ahead, we are well positioned to meet the increasing demand for high quality mental health services and patients moving to insurance from cash pay for affordability. We will continue to extend our leadership and outpatient mental health care by pairing continued innovation with disciplined execution. Before turning it over to Ryan, I want to take a moment to acknowledge Ken Burdick. Ken has been and will remain an integral part of LifeStance's journey. In addition, I appreciate and value his continued mentorship. I'd like to turn it over to him to share a few words regarding a change in his role at LifeStance. Ken?

Dave Bourdon: In closing, I'm very proud of the progress we have made as a company this year. As we enter 2026, we do so from a position of momentum and confidence. Looking ahead, we are well positioned to meet the increasing demand for high quality mental health services and patients moving to insurance from cash pay for affordability. We will continue to extend our leadership and outpatient mental health care by pairing continued innovation with disciplined execution. Before turning it over to Ryan, I want to take a moment to acknowledge Ken Burdick. Ken has been and will remain an integral part of LifeStance's journey. In addition, I appreciate and value his continued mentorship. I'd like to turn it over to him to share a few words regarding a change in his role at LifeStance. Ken?

Speaker #3: Looking ahead, we are well positioned to meet the increasing demand for high-quality mental health services and patients moving to insurance from cash pay for affordability.

Speaker #3: We will continue to extend our leadership and outpatient mental health care by pairing continued innovation with disciplined execution. Before turning over to Ryan, I want to take a moment to acknowledge Ken Burdick.

Speaker #3: Ken has been and will remain an integral part of LifeStance's journey. In addition, I appreciate and value his continued mentorship. I'd like to turn it over to him to share a few words regarding a change in his role at LifeStance.

Speaker #3: Ken?

Speaker #2: Thanks, Dave. I transitioned to the executive chair role in March of 2025. During the past year, I have been incredibly impressed with the way in which Dave has stepped into the CEO role and Ryan has taken the reins as CFO.

Ken Burdick: Thanks, Dave. I transitioned to the Executive Chair role in March 2025. During the past year, I have been incredibly impressed with the way in which Dave has stepped into the CEO role, and Ryan has taken the reins as CFO. The performance of the business in 2025 speaks volumes of their leadership and the quality and cohesion of the entire leadership team. In light of the confidence that I and the entire LifeStance board have in the leadership and direction of the business, I will be transitioning to the role of non-executive chair of the LifeStance board next month. I could not be more proud of Dave and his team, nor could I be more confident about the future for LifeStance.

Speaker #2: The performance of the business in 2025 speaks volumes—of their leadership, and the quality and cohesion of the entire leadership team. In light of the confidence that I, and the entire LifeStance board, have in the leadership and direction of the business, I will be transitioning to the role of non-executive chair of the LifeStance board next month.

Speaker #2: I could not be more proud of Dave and his team nor could I be more confident about the future for LifeStance. The financial and operational discipline that has been incorporated into the culture of purpose and passion that has always existed at LifeStance is a powerful combination that will drive sustained success for years to come.

Ken Burdick: The financial and operational discipline that has been incorporated into the culture of purpose and passion that has always existed at LifeStance is a powerful combination that will drive sustained success for years to come. With that, I'll turn it back to the team. Ryan will now walk you through the financial results. Ryan?

Speaker #2: With that, I'll turn it back to the team. Ryan will now walk you through the financial results. Ryan?

Speaker #3: Thanks, Ken. I'm pleased with the team's operational and financial performance in the fourth quarter, which exceeded our expectations. We delivered solid growth across revenue and visit volumes as well as a record adjusted EBITDA margins driven by operational discipline.

Ryan McGroarty: Thanks, Ken. I'm pleased with the team's operational and financial performance in Q4, which exceeded our expectations. We delivered solid growth across revenue and visit volumes, as well as a record adjusted EBITDA margins, driven by operational discipline. For Q4, revenue grew 17% year-over-year to $382 million. Revenue exceeded our expectations, primarily due to better than expected total revenue per visit and to a lesser extent, visit volumes. Visit volumes of 2.4 million increased 18% year-over-year. Our visits per average clinician increased 7% year-over-year.

Speaker #3: For the fourth quarter, revenue grew 17% year over year to $382 million. Revenue exceeded our expectations primarily due to better-than-expected total revenue per visit and to a lesser extent visit volumes.

Speaker #3: Visit volumes of 2.4 million increased 18% year over year. The outperformance was primarily driven by better-than-expected clinician productivity; our visits per average clinician increased 7% year over year.

Speaker #3: We grew our net clinicians by 44 in the fourth quarter and 657 for the full year, bringing our total clinician base to 8,040, representing growth of 9% year over year.

Ryan McGroarty: We grew our net clinicians by 44 in Q4 and 657 for the full year, bringing our total clinician base to 8,040, representing growth of 9% year-over-year. The level of net clinician adds in Q4 was based on an intentional effort to balance the existing capacity of our clinician base and new clinician hires. This strategy was effective, as demonstrated by the strong visit and revenue performance in the quarter, increases our confidence in this approach going forward. Total revenue per visit of $160 was roughly flat year-over-year and modestly ahead of our expectations. For the full year, we delivered revenue of $1.424 billion, up 14% year-over-year, driven entirely by visit volumes.

Speaker #3: The level of net clinician ads in the fourth quarter was based on our intentional effort to balance the existing capacity of our clinician base and new clinician hires.

Speaker #3: This strategy was effective as demonstrated by the strong visit and revenue performance in the quarter, and increases our confidence in this approach going forward.

Speaker #3: Total revenue per visit of $160 was roughly flat year over year and modestly ahead of our expectations. For the full year, we delivered revenue of $1.424 billion, up 14% year over year, driven entirely by visit volumes.

Speaker #3: Turning the profitability center margin of 126 million dollars in the quarter increased 15% year over year and was 33% as a percentage of revenue.

Ryan McGroarty: Turning to profitability, Center Margin of $126 million in the quarter increased 15% year-over-year and was 33% as a percentage of revenue. This exceeded our expectations, primarily due to the revenue beat, as well as slightly lower spend. Full year Center Margin of $461 million grew 15%. adjusted EBITDA of $49 million in the quarter was very strong and exceeded our expectations. This 49% year-over-year increase resulted in our adjusted EBITDA as a percentage of revenue of 12.8%, the highest in our history as a public company. The outperformance in the quarter was primarily attributable to favorable Center Margin and slightly lower G&A spending than expected.

Speaker #3: This exceeded our expectations primarily due to the revenue beat as well as slightly lower spend. Full-year center margin of $461 million grew 15%. Adjusted EBITDA of $49 million in the quarter was very strong and exceeded our expectations.

Speaker #3: This $49% year over year increase resulted in our adjusted EBITDA as a percentage of revenue of $12.8%, the highest in our history as a public company.

Speaker #3: The outperformance in the quarter was primarily attributable to favorable center margin and slightly lower G&A spending than expected. For the full year, adjusted EBITDA was $158 million increasing 32% year over year with margins increasing 150 basis points to 11.1%.

Ryan McGroarty: For the full year, adjusted EBITDA was $158 million, increasing 32% year-over-year, with margins increasing 150 basis points to 11.1%. We have continued to deliver on our commitment to drive operating leverage in G&A as we maintain a disciplined approach to expanding margins while supporting sustainable growth. As Dave mentioned earlier, we finished the full year with positive net income and earnings per share. This achievement was delivered a year earlier than we expected and is a key milestone in our journey as a public company. Turning to liquidity, we generated robust Free Cash Flow of $47 million in Q4 and $110 million for the full year, exceeding our expectations due to better-than-expected earnings and the dedicated efforts of our collections team.

Speaker #3: We have continued to deliver on our commitment to drive operating leverage and G&A as we maintain a disciplined approach to expanding margins while supporting sustainable growth.

Speaker #3: As Dave mentioned earlier, we finished the full year with positive net income and earnings per share. This achievement was delivered a year earlier than we expected and is a key milestone in our journey as a public company.

Speaker #3: Turning to liquidity, we generated robust free cash flow of $47 million in the fourth quarter and $110 million for the full year, exceeding our expectations due to better-than-expected earnings and a dedicated effort on our collections. We ended the quarter with a strong balance sheet, including a cash position of $249 million and net long-term debt of $266 million.

Ryan McGroarty: We exited the quarter with a strong balance sheet, including a cash position of $249 million and net long-term debt of $266 million. We have additional capacity from an undrawn revolver of $100 million. We are pleased with our leverage ratios with net and gross leverage of 0.2 and 1.8 times, respectively. We have significant financial flexibility to run the business and fully execute on our strategy. Additionally, this morning, we announced that our board of directors has authorized a share repurchase program, allowing us to repurchase up to $100 million worth of our outstanding shares. We will fund this program with cash on hand.

Speaker #3: We have additional capacity from an undrawn revolver of $100 million. We are pleased with our leverage ratios with net and gross leverage of 0.2 and 1.8 times respectively.

Speaker #3: We have significant financial flexibility to run the business and fully execute on our strategy. Additionally, this morning we announced that our board of directors has authorized a share repurchase program allowing us to repurchase up to $100 million worth of our outstanding shares.

Speaker #3: We will fund this program with cash on hand. With a strong balance sheet, meaningful free cash flow generation, and a leverage levels that provide ample financial flexibility, we believe this share repurchase program is an attractive and highly efficient way to deploy capital and create long-term shareholder value.

Ryan McGroarty: With a strong balance sheet, meaningful Free Cash Flow generation, and leverage levels that provide ample financial flexibility, we believe this share repurchase program is an attractive and highly efficient way to deploy capital and create long-term shareholder value. At the same time, M&A continues to be a priority, and we have resources dedicated to exploring opportunities in a disciplined manner. In terms of our outlook for 2026, we expect full year revenue of $1.615 to $1.655 billion, Center Margin of $526 to $550 million, and adjusted EBITDA of $185 to $205 million, with the midpoint representing 11.9% margin, or almost a point of margin expansion.

Speaker #3: At the same time, M&A continues to be a priority, and we have resources dedicated to exploring opportunities in a disciplined manner. In terms of our outlook for 2026, we expect full-year revenue of $1.615 to $1.655 billion; center margin of $526 to $550 million; and adjusted EBITDA of $185 to $205 million.

Speaker #3: With the midpoint representing $11.9% margin, we're almost a point of margin expansion. Our annual guidance assumes year-over-year revenue growth driven primarily by higher visit volumes combined with low to mid single-digit increases toward total revenue per visit.

Ryan McGroarty: Our annual guidance assumes year-over-year revenue growth, driven primarily by higher visit volumes, combined with low to mid-single digit increases to our total revenue per visit. As for phasing, our guidance contemplates a revenue split of roughly 50/50 in the first and second half of the year, with the second half slightly higher. For Q1, we expect revenue of $380 to 400 million, Center Margin of $118 to 132 million, and adjusted EBITDA of $39 to 45 million. In terms of earnings, Q1 is seasonally impacted by higher payroll taxes. Additionally, we expect Stock-Based Compensation of approximately $60 to 70 million in 2026. As a reminder, we announced in May that we would be sunsetting our stock-based incentive program for clinicians and replacing it with a cash bonus incentive program.

Speaker #3: As for phasing, our guidance contemplates a revenue split of roughly 50/50 in the first and second half of the year, with the second half slightly higher.

Speaker #3: For the first quarter, we expect revenue of $380 to $400 million; center margin of $118 to $132 million; and adjusted EBITDA of $39 to $45 million.

Speaker #3: In terms of earnings, the first quarter is seasonally impacted by higher payroll taxes. Additionally, we expect stock-based compensation of approximately 60 to 70 million dollars in 2026.

Speaker #3: As a reminder, we announced in May that we would be sunsetting our stock-based incentive program for clinicians and replacing it with a cash bonus incentive program.

Speaker #3: The impact of this change was expected to result in a decrease in stock-based compensation of roughly $10 million per year. We are seeing this benefit for the first time beginning in 2026 and will continue to see a reduction over the next four years as the existing tranches of clinician stock vest.

Ryan McGroarty: The impact of this change was expected to result in a decrease in Stock-Based Compensation of roughly $10 million per year. We are seeing this benefit for the first time beginning in 2026, and we'll continue to see a reduction over the next four years as the existing tranches of clinicians dock vest. Regarding Free Cash Flow, we expect to once again generate meaningful positive Free Cash Flow for the full year 2026. Additionally, we expect to open 20 to 30 new centers this year. As Dave mentioned, we recently completed our EHR discovery process and are moving ahead with implementation this year. During 2026 and 2027, we expect this implementation to represent a use of cash of roughly $20 to 30 million. Much of the spend will be capitalized or adjusted in EBITDA as it is non-recurring.

Speaker #3: Regarding free cash flow, we expect to once again generate meaningful positive free cash flow for the full year 2026. Additionally, we expect to open 20 to 30 new centers this year.

Speaker #3: As Dave mentioned, we recently completed our EHR discovery process and are moving ahead with implementation this year. During 2026 and 2027, we expect this implementation to represent a use of cash of roughly $20 to $30 million.

Speaker #3: Much of this spend will be capitalized or adjusted in EBITDA as it is non-recurring. Any P&L impact associated with these activities has already been reflected in our 2026 guidance assumption.

Ryan McGroarty: Any P&L impact associated with these activities has already been reflected in our 2026 guidance assumption. We look beyond 2026, we continue to expect revenue growth in the mid-teens based on low to mid-single digit annual rent growth, combined with low double-digit volume growth. We expect to continue to expand operating leverage through the G&A line and now expect to reach mid-teens adjusted EBITDA margins by fiscal year 2028. We believe this trajectory underscores the strength of our platform, combined with favorable macro mental health trends, gives us confidence in our ability to consistently deliver growth and expanding margins over the coming years. With that, I'll turn it back to Dave for his closing comments.

Speaker #3: As we look beyond 2026, we continue to expect revenue growth in the mid-teens based on low to mid single-digit annual rate growth combined with low double-digit volume growth.

Speaker #3: We expect to continue to expand operating leverage through the G&A line and now expect to reach mid-teens adjusted EBITDA margins by fiscal year 2028.

Speaker #3: We believe this trajectory underscores the strength of our platform combined with favorable macro mental health trends and gives us confidence in our ability to consistently deliver growth and expanding margins over the coming years.

Speaker #3: With that, I'll turn it back to Dave for his closing comments.

Speaker #1: Thanks, Ryan. In closing, 2025 was an exceptional year for LifeStance. Our results demonstrate the dedication of each of our clinicians and team members and the resilience of our model.

David Bourdon: Thanks, Ryan. In closing, 2025 was an exceptional year for LifeStance. Our results demonstrate the dedication of each of our clinicians and team members, and the resilience of our model. We enter 2026 with strong momentum to continue expanding access to high quality, affordable mental health care. Operator, we'll now take questions.

Dave Bourdon: Thanks, Ryan. In closing, 2025 was an exceptional year for LifeStance. Our results demonstrate the dedication of each of our clinicians and team members, and the resilience of our model. We enter 2026 with strong momentum to continue expanding access to high quality, affordable mental health care. Operator, we'll now take questions.

Speaker #1: We enter 2026 with strong momentum to continue expanding access to high-quality, affordable mental healthcare. Operator, we'll now take questions.

Speaker #3: As a reminder, to ask a question, simply press star one on your telephone keypad please limit questions to one and one follow-up. And our first question comes from the line of Craig Hettenbach with Morgan Stanley.

Operator: As a reminder, to ask a question, simply press star one on your telephone keypad. Please limit questions to one and one follow-up. Our first question comes from the line of Craig Hettenbach with Morgan Stanley. Please go ahead.

Speaker #3: Please go ahead.

Speaker #4: Yes, thanks. And just to start, Ken, echoing your comments, nice to see that the execution of the team kind of playing out and kind of the strategy Dave, maybe just building on that, the inflection and productivity in the back half of the year and your comments about durability, can you just talk about kind of this year and as we play it forward, just how that's impacting the business?

Craig Hettenbach: Yes, thanks. Just to start, Ken, echoing your comments, nice to see that the execution of the team kind of playing out and kind of the strategy. Dave, maybe just building on that, the inflection in productivity in the back half of the year and your comments about durability, can you just talk about kind of this year and as we play it forward, just how that's impacting the business?

Speaker #1: Yeah, good morning, Craig. Thanks for the question. In regards to the productivity initiatives and we talked about a number of them throughout especially the back half of last year.

David Bourdon: Yeah, good morning, Craig. Thanks for the question. Yeah, in regards to the productivity initiatives, you know, we talked about a number of them throughout, especially the back half of last year. What you're seeing is the durability in those, whether it's the improvements that we've made in our phone scheduling team for new patients, the new cash incentive program that we have for clinicians that are tied to quality and productivity, you know, all those kinds of initiatives that we put in. It wasn't just a Q3 lift. We actually saw it build into Q4. We're very happy with the productivity improvements and the durability that we've seen, including as we've stepped into 2026.

Dave Bourdon: Yeah, good morning, Craig. Thanks for the question. Yeah, in regards to the productivity initiatives, you know, we talked about a number of them throughout, especially the back half of last year. What you're seeing is the durability in those, whether it's the improvements that we've made in our phone scheduling team for new patients, the new cash incentive program that we have for clinicians that are tied to quality and productivity, you know, all those kinds of initiatives that we put in. It wasn't just a Q3 lift. We actually saw it build into Q4. We're very happy with the productivity improvements and the durability that we've seen, including as we've stepped into 2026.

Speaker #1: And what you're seeing is the durability in those, whether it's the improvements that we've made in our phone scheduling team for new patients, the new cash incentive programs that we have for clinicians that are tied to quality and productivity.

Speaker #1: All those kinds of initiatives that we put in, it wasn't just a Q3 lift. We actually saw it build into Q4. And so we're very happy with the productivity improvements and the durability that we've seen including as we've stepped into 2026.

Speaker #1: Now, having said that, just at a macro level, just a reminder is that we're guiding to about 15% revenue growth in 2026. And the growth algorithm of that is still, we expect low double-digit visit growth.

David Bourdon: Now, having said that, just at a macro level, just a reminder is that, you know, we're guiding to about 15% revenue growth in 2026, and the growth algorithm of that is still, we expect low double digit visit growth, and that's gonna come primarily from net clinician adds with some complementary benefit from productivity. In addition, we'll see low to mid-single digit revenue per visit growth coming from the payer rate increases.

Dave Bourdon: Now, having said that, just at a macro level, just a reminder is that, you know, we're guiding to about 15% revenue growth in 2026, and the growth algorithm of that is still, we expect low double digit visit growth, and that's gonna come primarily from net clinician adds with some complementary benefit from productivity. In addition, we'll see low to mid-single digit revenue per visit growth coming from the payer rate increases.

Speaker #1: And that's going to come primarily from net clinician ads, with some complementary benefit from productivity. And then in addition, we'll see low to mid single-digit revenue per visit growth coming from the payer rate increases.

Speaker #4: Got it. And then just as a follow-up, when you think about the path to 15% EBITDA margin, and you spoke a lot about just some of the technology investments as a management team, how are you looking at just the ROI kind of payback and the investments you're making translating into the model?

Craig Hettenbach: Got it. Just as a follow-up, when you think about the path to 15% EBITDA margin, and you spoke a lot about just some of the technology investments. As a management team, how are you looking at just the ROI kind of payback and the investments you're making, like, translating into the model?

Speaker #2: Yeah, sure, Craig. This is Ryan. I'll jump into that question. So I appreciate you starting off just kind of highlighting what our long-term guide is overall.

Ryan McGroarty: Yeah, sure, Craig, this is Ryan. I'll jump into that question. I appreciate you starting off just kind of highlighting, like, what our long-term guide is overall. Again, like, I think we've been able to demonstrate a history of delivering on our results. As it relates to investment, we are very disciplined in our approach in kind of looking at whether it's an AI enablement solution or other technological solution, looking at the return profile of the investment and making sure that it pencils out to be able to kind of drive the leveraging that we're looking for from an operating perspective. Again, a very disciplined and thoughtful process that we have in terms of looking at investments.

Speaker #2: So again, I think we've been able to demonstrate a history of delivering on our results. As it relates to investment, we are very disciplined in our approach in kind of looking at whether it's an AI enablement solution or other technological solution.

Speaker #2: Looking at the return profile of the investment and making sure that it pencils out to be able to kind of drive the leveraging that we're looking for from an operating perspective.

Speaker #2: So, again, a very disciplined and thoughtful process that we have in terms of looking at investments.

Speaker #4: Great. Thank you.

Craig Hettenbach: Great. Thank you.

Speaker #3: From JPMorgan, your next question comes from the line of Lisa Gill. Please go ahead.

Operator: From J.P. Morgan, your next question comes from the line of Lisa Gill. Please go ahead.

Speaker #5: Hi, thanks very much and good morning. I just really wanted to follow up on your comments around the visit per clinician being up 7%.

Lisa Gill: Thanks very much, and good morning. I just wanted to follow up on your comments around the visit per clinician being up 7%. You made some earlier comments around digital and AI. Can you talk about how that's playing into those visits per clinician?

Speaker #5: You made some earlier comments around digital and AI. Can you talk about how that's playing into those visits per clinician?

Speaker #1: Yeah, Lisa, good morning. It's Dave. I'll take that one. So, there's really two aspects to this. The first was that we worked with the clinicians to get more capacity on their calendars, right, so that they gave us more availability to be able to see patients.

David Bourdon: Yeah, Lisa, good morning. It's Dave. I'll take that one. There's really two aspects to this. The first was that we worked with the clinicians to get more capacity on their calendars, right? So that they gave us more availability to be able to see patients, and that's been a multi-year journey for us, and it's really nice to see the benefits of that. Now, the converse of that is then the clinician said: "Okay, we're giving you more capacity. Now, we want you to use it. We want to see more patients." Obviously, if they see more patients, they also make more income. They were asking for us to fill more of the time on their calendars. We worked with them around schedule optimization, basic practice enablement, and practice management initiatives.

Dave Bourdon: Yeah, Lisa, good morning. It's Dave. I'll take that one. There's really two aspects to this. The first was that we worked with the clinicians to get more capacity on their calendars, right? So that they gave us more availability to be able to see patients, and that's been a multi-year journey for us, and it's really nice to see the benefits of that. Now, the converse of that is then the clinician said: "Okay, we're giving you more capacity. Now, we want you to use it. We want to see more patients." Obviously, if they see more patients, they also make more income. They were asking for us to fill more of the time on their calendars. We worked with them around schedule optimization, basic practice enablement, and practice management initiatives.

Speaker #1: And that's been a multi-year journey for us, and it's really nice to see the benefits of that. Now, the converse of that is then the clinician said, 'Okay, we're giving you more capacity.'

Speaker #1: Now we want you to use it. We want to see more patients." And obviously, if they see more patients, they also make more income.

Speaker #1: And so they were asking for us to fill more of the time on their calendars. So we worked with them around schedule optimization, basic practice enablement and practice management initiatives so that was one aspect of it.

David Bourdon: That was one aspect of it. The other is then increasing the flow of new patients. We've talked about some of those things, like improving the conversion of the phone calls that we get from people seeking care to actually booking an appointment. Some of the AI tools that we put in place there last year improved that conversion rate by 5%. We have a number of initiatives that are driving improved new patient conversion. As we step into this year, one of the initiatives that I mentioned in my prepared remarks is our new care matching algorithm and tool. We really believe by improving the matching, we improve the therapeutic alliance between the clinician and the patient.

Dave Bourdon: That was one aspect of it. The other is then increasing the flow of new patients. We've talked about some of those things, like improving the conversion of the phone calls that we get from people seeking care to actually booking an appointment. Some of the AI tools that we put in place there last year improved that conversion rate by 5%. We have a number of initiatives that are driving improved new patient conversion. As we step into this year, one of the initiatives that I mentioned in my prepared remarks is our new care matching algorithm and tool. We really believe by improving the matching, we improve the therapeutic alliance between the clinician and the patient.

Speaker #1: And then the other is increasing the flow of new patients. And so we've talked about some of those things, like improving the conversion of the phone calls that we get from people seeking care to actually booking an appointment.

Speaker #1: And some of the AI tools that we put in place there last year improved that conversion rate by 5%. And so we have a number of initiatives that are driving improved new patient conversion.

Speaker #1: And then as we step into this year, one of the initiatives that I mentioned in my prepared remarks is our new care matching our new care matching algorithm and tool.

Speaker #1: And we really believe by improving the matching, we improve the therapeutic alliance between the clinician and the patient. And what we've seen from the early results of the pilot is improved conversion both not only in the phone from phone calls, but also from online scheduling and once we get that patient in the door, they're actually stickier.

David Bourdon: What we've seen from the early results of the pilot is improved conversion, both, not only in the phone, from phone calls, but also from online scheduling. Once we get that patient in the door, they're actually stickier, and we believe is we'll see better health outcomes on the back end of that as well.

Dave Bourdon: What we've seen from the early results of the pilot is improved conversion, both, not only in the phone, from phone calls, but also from online scheduling. Once we get that patient in the door, they're actually stickier, and we believe is we'll see better health outcomes on the back end of that as well.

Speaker #1: And we believe as we'll see better health outcomes on the back end of that as well.

Speaker #5: That's great. Dave, just as a follow-up, in your first answer to the question, you talked about low to mid payer rates. I know one of the initiatives that Ken had was cleaning up some of the managed care relationships can you talk about where you are on that path?

Lisa Gill: That's great. Dave, just as a follow-up, you know, in your first answer to the question, you talked about low to mid payer rates. I know, you know, one of the initiatives that Ken had was cleaning up some of the managed care relationships. Can you talk about where you are on that path? Is it where you want to be, and low to mid payer rates sounds like a positive. Do you have good line of sight to that over a multi-year period of time?

Speaker #5: Is it where you want to be and low to mid payer rates sounds like a positive. Do you have good line of sight to that over a multi-year period of time?

Speaker #1: We do. So first of all, we're pretty much complete on the journey of cleaning up the payer contracts. Gotcha. Over the last three years, we've probably reduced the number of contracts by 50%.

David Bourdon: We do. First of all, we're pretty much complete on the journey of cleaning up the payer contracts. Over the last 3 years, we've probably reduced the number of contracts by 50%. It is a meaningful improvement. The genesis of that, or the reason we did that, was really around administrative efficiency. We wanted our team to focus on the relationships that mattered, and so that was really the driver of that. We've largely completed that, Lisa. As far as the payer rate increases and the durability of that low to mid single digit, we primarily use an approach of annual rate discussions with clinicians or with the payers.

Dave Bourdon: We do. First of all, we're pretty much complete on the journey of cleaning up the payer contracts. Over the last 3 years, we've probably reduced the number of contracts by 50%. It is a meaningful improvement. The genesis of that, or the reason we did that, was really around administrative efficiency. We wanted our team to focus on the relationships that mattered, and so that was really the driver of that. We've largely completed that, Lisa. As far as the payer rate increases and the durability of that low to mid single digit, we primarily use an approach of annual rate discussions with clinicians or with the payers.

Speaker #1: So, we had a meaningful improvement. The genesis of that, or the reason we did that, was really around administrative efficiency. We wanted our team to focus on the relationships that mattered.

Speaker #1: And so that was really the driver of that. But we've largely completed that. Lisa, and then as far as the payer rate increases and the durability of that low to mid single digit, we primarily use an approach of annual rate discussions with clinicians or with the payers we will from time to time, depending on the situation, lock in a multi-year arrangement, similar to what a hospital system would do with a payer.

David Bourdon: We will, from time to time, depending on the situation, lock in a multi-year arrangement, similar to like what a hospital system would do with a payer. For the most part, we are more annual contracts with the payers, and we are having very constructive conversations with them. Again, feel very good about that low to mid single digits and being able to achieve that in the coming years.

Dave Bourdon: We will, from time to time, depending on the situation, lock in a multi-year arrangement, similar to like what a hospital system would do with a payer. For the most part, we are more annual contracts with the payers, and we are having very constructive conversations with them. Again, feel very good about that low to mid single digits and being able to achieve that in the coming years.

Speaker #1: But for the most part, we're more annual contracts with the payers. And we're having very constructive conversations with them. And so, again, we feel very good about that low to mid-single digits and being able to achieve that in the coming years.

Lisa Gill: Great. Congrats on those great results.

Speaker #5: Great. Congrats on those great results.

Lisa Gill: Great. Congrats on those great results.

Speaker #1: Thank you.

David Bourdon: Thank you.

Dave Bourdon: Thank you.

Speaker #3: Your next question comes from UBS from the line of Kevin Keleno. Please go ahead.

[Analyst] (UBS): The next question comes from UBS, from the line of Kevin Cullinane. Please go ahead.

Operator: The next question comes from UBS, from the line of Kevin Cullinane. Please go ahead.

Speaker #2: Thanks. Good morning, guys. Thanks for taking my question. I just want to go into the comment about moderating the net adds in the quarter and the efficiency.

Kevin Cullinane: Thanks. Good morning, guys. Thanks for taking my question. I just want to go into the comment about the moderating the net adds in the quarter and the efficiency. Does that mean that you could have added, and this is like a more measured approach to, you know, making sure your efficiency and onboarding was in the best shape possible? Is there, like, a backlog? I guess the follow-up to that is: How should we think about the adds organically versus M&A, versus, you know, what is exciting in this new buyback that you announced, which I think will be very well received?

Speaker #2: Does that mean that you could have added, and this is like a more measured approach to making sure your efficiency and onboarding was in the best shape possible?

Speaker #2: Is there a backlog? And I guess the follow-up to that is how should we think about the ads organically versus M&A versus what is exciting in this new buyback that you announced, which I think will be very well received?

Speaker #1: Yeah, I'll take that one, Kevin. There's a few parts to that. So first of all, as far as the Q4 clinician ads, I think where you were going with that is we are having an intentional balance between the adding of new clinicians versus taking advantage of the capacity that we have with our existing clinicians.

David Bourdon: Yeah, I'll take that one, Kevin. There's a few parts to that. First of all, as far as the Q4 clinician adds, sure, I think you know where you were going with that is, we are having an intentional balance between the adding of new clinicians versus taking advantage of the capacity that we have with our existing clinicians. Our priority is to take advantage of that capacity on the existing clinicians first, because of two reasons. The first is that we actually believe by doing that, we'll improve their satisfaction, and eventually, that'll turn into better retention. The other is, it's actually a win-win for both the clinician and the company. It's just a more efficient way for us to be able to run the business. That has been an intentional balancing act.

Dave Bourdon: Yeah, I'll take that one, Kevin. There's a few parts to that. First of all, as far as the Q4 clinician adds, sure, I think you know where you were going with that is, we are having an intentional balance between the adding of new clinicians versus taking advantage of the capacity that we have with our existing clinicians. Our priority is to take advantage of that capacity on the existing clinicians first, because of two reasons. The first is that we actually believe by doing that, we'll improve their satisfaction, and eventually, that'll turn into better retention. The other is, it's actually a win-win for both the clinician and the company. It's just a more efficient way for us to be able to run the business. That has been an intentional balancing act.

Speaker #1: And our priority is to take advantage of that capacity on the existing clinicians first. Because of two reasons. The first is that we actually believe by doing that, we'll improve their satisfaction and eventually that'll turn into better retention.

Speaker #1: And the other is it's actually a win-win for both the clinician and the company. It's just a more efficient way for us to be able to run the business.

Speaker #1: So that has been an intentional balancing act. Again, what I mentioned earlier is that we still believe for our growth algorithm, as we step into '26 and in the coming years, the primary driver of visits will continue to be clinician net ads.

David Bourdon: Again, what I mentioned earlier is that we still believe, for our growth algorithm, as we step into 2026 and in the coming years, the primary driver of visits will continue to be clinician net adds. Improvements in productivity will be complementary, but not the major driver. Then as far as M&A goes, first thing I'd wanna make the point on is there's no material M&A included in our 2026 guidance. It does continue to be a priority, and we do have an active pipeline. At the same time, we're gonna be very disciplined, and we're focused on opportunities that are both strategic and financially make sense. It's an interesting environment right now. We see this with the larger companies, you know, revenue in the $75 million to $250 million range.

Dave Bourdon: Again, what I mentioned earlier is that we still believe, for our growth algorithm, as we step into 2026 and in the coming years, the primary driver of visits will continue to be clinician net adds. Improvements in productivity will be complementary, but not the major driver. Then as far as M&A goes, first thing I'd wanna make the point on is there's no material M&A included in our 2026 guidance. It does continue to be a priority, and we do have an active pipeline. At the same time, we're gonna be very disciplined, and we're focused on opportunities that are both strategic and financially make sense. It's an interesting environment right now. We see this with the larger companies, you know, revenue in the $75 million to $250 million range.

Speaker #1: Improvements in productivity will be complementary, but not the major driver. And then as far as M&A goes, first thing I'd want to make the point on is there's no material M&A included in our '26 guidance.

Speaker #1: It does continue to be a priority, and we do have an active pipeline. At the same time, we're going to be very disciplined, and we're focused on opportunities that are both strategic and financially make sense.

Speaker #1: And it's an interesting environment right now. We've seen this with the larger companies. Revenue in the $75 to $250 million range—they have valuation expectations that are dislocated from reality.

David Bourdon: They have valuation expectations that are dislocated from reality. At the same time, as we're going down market, those opportunities seem to have more appropriate valuations, and we're targeting those kinds of companies for geo expansion. I would expect to see some of those smaller tuck-ins, but again, that is not gonna materially move the needle on the financials in 2026. What it does is it positions us well for future year growth.

Dave Bourdon: They have valuation expectations that are dislocated from reality. At the same time, as we're going down market, those opportunities seem to have more appropriate valuations, and we're targeting those kinds of companies for geo expansion. I would expect to see some of those smaller tuck-ins, but again, that is not gonna materially move the needle on the financials in 2026. What it does is it positions us well for future year growth.

Speaker #1: At the same time, as we're going down market, those opportunities seem to have more appropriate valuations and we're targeting those kinds of companies for geo expansion.

Speaker #1: So I would expect to see some of those smaller tuck-ins, but again, that is not going to materially move the needle on the financials in '26.

Speaker #1: What it does is it positions us well for future year growth.

Speaker #2: Got it. Thank you.

Matthew Mardula: Got it. Thank you.

Kevin Cullinane: Got it. Thank you.

Speaker #3: I'm from Jefferies. Your next question comes from the line of Jack Sleven. Please go ahead.

Operator: From Jefferies, your next question comes from the line of Jack Slevin. Please go ahead.

Speaker #4: Hey, thanks for taking the question. I wanted to ask about the '26 guide and some of the commentary around the EHR implementation. I guess just looking at how some of the G&A stacks in the initial guide, and appreciate sort of the conservative approach and all the execution y'all have been undertaking recently.

Jack Slevin: Hey, thanks for taking the question. Wanted to ask about the 2026 guide and some of the commentary around the EHR implementation. I guess, just looking at how some of the G&A stacks in the initial guide and appreciate sort of the conservative approach and all the execution y'all have been undertaking recently. Like, it looks like the EBITDA drop-through is gonna be a bit lower. I was just curious if you could speak a little bit more to, like, the process of implementing that EHR and if there's anything specific on the cost side we need to be thinking about there.

Speaker #4: But it looks like the EBITDA dropthrough is going to be a bit lower. So I was just curious if you could speak a little bit more to the process of implementing that EHR and if there's anything specific on the cost side we need to be thinking about there.

Speaker #2: Yeah, sure. So Jack, appreciate the question. Good morning. So I'll start off with the EHR and then I'll talk a little bit just in terms of G&A and totality.

Ryan McGroarty: Yeah, sure. Jack, appreciate the question, and good morning. I'll start off with the EHR, and then I'll talk a little bit just in terms of, like, G&A in totality between 2025 and 2026 and the growth rates. First and foremost, as I mentioned on the call, in my prepared remarks, the overall EHR kind of implementation, like, we wanted to put out, like, just in terms of the representation of the cash usage, and, you know, as I mentioned, it's $20 to 30 million. Most of these costs will be adjusted through EBITDA or capitalized. Again, we're still, you know, we're in the early stages, just in terms of overall, the journey to implementation of a new EHR, which we're all really excited about.

Speaker #2: Between '25 and '26 and the growth rates, so first and foremost, as I mentioned on the call and my prepared remarks, the overall EHR kind of implementation, we wanted to put out just in terms of the representation of the cash usage and as I mentioned, it's 20 to 30 million dollars.

Speaker #2: Most of these costs will be adjusted through EBITDA or capitalized. So again, we're still in the early stages just in terms of overall the journey to implementation of a new EHR, which we're all really excited about.

Speaker #2: When you look at G&A in totality, so when you look at '25, our growth rate was 7%, which is unnaturally low when you peg it against the growth rate of the business.

Ryan McGroarty: When you look at G&A in totality, when you look at 2025, our growth rate was 7%, which is unnaturally low when you peg it against the growth rate of the business. If you recall, when you go back to our original guide, our original guide was closer to 10%. When you look at our full-year guide from a G&A perspective, like where it implies that we're at 13%, which stacks up well against the 15% overall growth rate. You're able to leverage your operating expenses, but at the same time, it provides us flexibility as it relates to being able to continue to make the investments in growth. You know, where Craig went earlier, just in terms of capabilities to kinda that ROI and kind of pencil out.

Speaker #2: If you recall, and you go back to our original guide, our original guide was closer to 10%. And so, when you look at our full year guide from a G&A perspective, it implies that we're at 13%, which stacks up well against the 15% overall growth rate.

Speaker #2: So you're able to leverage your operating expenses. But at the same time, it provides us flexibility as it relates to being able to continue to make the investments in growth and where Craig went earlier just in terms of capabilities to kind of that ROI and kind of pencil out.

Speaker #2: So overall, that's kind of the cause of the step-up year over year.

Ryan McGroarty: Overall, that's kind of the cause of the step-up, year-over-year.

Speaker #4: Okay, got it. Really helpful. And then maybe just as a follow-up, thinking about some of the M&A commentary, I guess to take a step back a bit, can you maybe just level set on any sort of KPIs or things you think about as you look at organic growth in the business versus M&A opportunities?

Jack Slevin: Okay, got it. Really helpful. Maybe just as a follow-up, thinking about some of the M&A commentary. I guess, to take a step back a bit, can you maybe just level set on, like, any sort of KPIs or things you think about as you look at organic growth in the business versus M&A opportunities? I would think the hurdle rates are getting higher because of the broad network you have and your sort of track record of being able to add on the organic side. I wasn't sure if there's any way you can think about either know, return profiles or other things on sort of growth via those two vectors, given where the portfolio stands right now. Thanks.

Speaker #4: I would think the hurdle rates are getting higher because of the broad network you have and your sort of track record of being able to add on the organic side.

Speaker #4: But I wasn't sure if there's any way you can think about even though return profiles or other things on sort of growth via those two vectors given where the portfolio stands right now.

Speaker #4: Thanks.

Speaker #2: Yeah, we just talked a minute ago about M&A. I think just to pile on with a few comments. So, certainly from that financial discipline perspective, we have a profile around multiples on EBITDA and things like that where we have our hurdle rates, which we're not going to—we obviously aren't going to—publicly disclose.

David Bourdon: Yeah, just talked a minute ago about M&A. I think just to pile on with a few comments. Certainly from that financial discipline perspective, we have a profile around you know, multiples on EBITDA and things like that we have our hurdle rates, which we're not gonna, you know, we obviously aren't gonna publicly disclose. We are, you know, we do have financial metrics that we're, again, very disciplined on. The downmarket opportunities are the ones that are currently the most attractive to us, and it's attractive primarily for geographic expansion. We do not see doing small tuck-ins in geographies where we already have a meaningful presence. The economics are actually much more attractive for us to just grow those organically.

Dave Bourdon: Yeah, just talked a minute ago about M&A. I think just to pile on with a few comments. Certainly from that financial discipline perspective, we have a profile around you know, multiples on EBITDA and things like that we have our hurdle rates, which we're not gonna, you know, we obviously aren't gonna publicly disclose. We are, you know, we do have financial metrics that we're, again, very disciplined on. The downmarket opportunities are the ones that are currently the most attractive to us, and it's attractive primarily for geographic expansion. We do not see doing small tuck-ins in geographies where we already have a meaningful presence. The economics are actually much more attractive for us to just grow those organically.

Speaker #2: But we are we do have financial metrics that we're again, very disciplined on. The down market opportunities are the ones that are currently the most attractive to us.

Speaker #2: And it's attractive primarily for geographic expansion. So we do not see doing small tuck-ins in geographies where we already have a meaningful presence. The economics are actually much more attractive for us to just grow those organically.

Speaker #4: Okay, helpful. Appreciate the color.

Jack Slevin: Okay, helpful. Appreciate the color.

Speaker #3: On your next question is from the line of Richard Close with Canicore Genuity. Please go ahead.

Operator: Your next question is from the line of Richard Close with Canaccord Genuity. Please go ahead.

Speaker #5: Yeah, thanks for the questions. Congratulations on a great year. Dave, in the past, you talked about differentiation and optimization phase that included I guess several strategies like specialty services, expansion.

Richard Close: Yeah, thanks for the questions. Congratulations on a great year. You know, Dave, in the past, you talked about a differentiation and optimization phase that included, I guess, several strategies, like specialty services expansion. I'm interested in how that has progressed. Also becoming the referral partner of choice, just, you know, what you're doing there, you know, maybe more details in terms of payer relationships and provider organizations, you know, with respect to referrals.

Speaker #5: So I'm interested in how that has progressed and then also becoming the referral partner of choice just what you're doing there maybe more details in terms of payer relationships and provider organizations with respect to referrals.

David Bourdon: Thanks for the question, Rich. There's a number of components there, I'll try to hit them all. First of all, to your point around specialty services, that is an important part of our future growth story. We're doing that because what we wanna be able to do is holistically treat the patient. Whether it's therapy, psychiatry, the kind of those core services, or if they need additional services like Neuropsychological Testing, or if they have Treatment-Resistant Depression and, you know, they need to step up in care in regards to, like, a Spravato or TMS or things like that. This is all about treating the patient holistically and driving to a better health outcome.

Speaker #1: Thanks for the question, Rich. There's a number of components there, so I'll try to hit them all. First of all, to your point around specialty services, that is an important part of our future growth story.

Dave Bourdon: Thanks for the question, Rich. There's a number of components there, I'll try to hit them all. First of all, to your point around specialty services, that is an important part of our future growth story. We're doing that because what we wanna be able to do is holistically treat the patient. Whether it's therapy, psychiatry, the kind of those core services, or if they need additional services like Neuropsychological Testing, or if they have Treatment-Resistant Depression and, you know, they need to step up in care in regards to, like, a Spravato or TMS or things like that. This is all about treating the patient holistically and driving to a better health outcome.

Speaker #1: And we're doing that because what we want to be able to do is holistically treat the patient. So whether it's therapy, psychiatry, kind of those core services, or if they need additional services like neuropsych testing, or if they have treatment-resistant depression, and they need a step-up in care in regards to a Spravato or TMS or things like that.

Speaker #1: So this is all about treating the patient holistically and driving to a better health outcome. And so specific to specialty, just to ground you, previously we had talked about it as about 50 million of revenue.

David Bourdon: Specific to specialty, just to ground you know, previously, we had talked about it as about $50 million of revenue. We are targeting $70 million of revenue for 2026, so about a 40% increase. That's consistent with how we've talked about that business segment in the sense of that it would grow at a rate larger than our core book of business. That growth is primarily coming from those Treatment-Resistant Depression services of Spravato and TMS. Just a couple of things I'd mention is this is low capital intensity. What we're doing is we're leveraging our existing centers. Again, we just think this is a tremendous opportunity for us in the coming years, and it's gonna contribute to both growth and margins. That was on the specialty.

Dave Bourdon: Specific to specialty, just to ground you know, previously, we had talked about it as about $50 million of revenue. We are targeting $70 million of revenue for 2026, so about a 40% increase. That's consistent with how we've talked about that business segment in the sense of that it would grow at a rate larger than our core book of business. That growth is primarily coming from those Treatment-Resistant Depression services of Spravato and TMS. Just a couple of things I'd mention is this is low capital intensity. What we're doing is we're leveraging our existing centers. Again, we just think this is a tremendous opportunity for us in the coming years, and it's gonna contribute to both growth and margins. That was on the specialty.

Speaker #1: We are targeting $70 million of revenue for 2026, so about a 40% increase. And that's consistent with how we've talked about that business segment, in the sense that it would grow at a rate larger than our core book of business.

Speaker #1: And that growth is primarily coming from those treatment-resistant depression services of Spravato and TMS. Just a couple of things I'd mention is this is low capital intensity.

Speaker #1: What we're doing is we're leveraging our existing centers and again, we just think this is a tremendous opportunity for us in the coming years.

Speaker #1: And it's going to contribute to both growth and margins. So that was on the specialty. In regards to being the partner of choice, I'm going to stick primarily to the medical providers.

David Bourdon: In regards to being the partner of choice, you know, I'm gonna stick primarily to the medical providers, 'cause we addressed that a little bit in our prepared remarks. We're continuing to invest in those resources. Everything from a technology perspective and how we interface with them, and the unique requests we get from, for example, a health system, as well as we're investing in additional feet on the street. We've implemented a new operating model to make those resources even more local, to be able to support our state practices and drive increased referrals from the medical practices. We feel really good, we feel really good about that.

Dave Bourdon: In regards to being the partner of choice, you know, I'm gonna stick primarily to the medical providers, 'cause we addressed that a little bit in our prepared remarks. We're continuing to invest in those resources. Everything from a technology perspective and how we interface with them, and the unique requests we get from, for example, a health system, as well as we're investing in additional feet on the street. We've implemented a new operating model to make those resources even more local, to be able to support our state practices and drive increased referrals from the medical practices. We feel really good, we feel really good about that.

Speaker #1: Because we addressed that a little bit in our prepared remarks. So we're continuing to invest in those resources. Everything from a technology perspective and how we interface with them and the unique requests we get from, for example, a health system, as well as we're investing in additional feet on the street.

Speaker #1: We've implemented a new operating model to make that those resources even more local to be able to support our state practices. And drive increased referrals from the medical practices.

Speaker #1: So we feel really good. We feel really good about that. And then we also mentioned last year the new comm relationship. And I think that's that was more about the signal of a different kind of referral partner than our typical PCP or hospital system or those kinds of referral sources.

David Bourdon: You know, we also mentioned last year, the new Calm relationship, and I think that was more about the signal of a different kind of referral partner than our typical PCP, or hospital system, or those kinds of referral sources. I think it's just an exciting example of a different opportunity that we think we're uniquely positioned for, because of our large scale, you know, the focus on the patient experience and outcomes, as well as our hybrid model of both in-person and virtual. Those kinds of services and characteristics are very appealing to some of these national digital players.

Dave Bourdon: You know, we also mentioned last year, the new Calm relationship, and I think that was more about the signal of a different kind of referral partner than our typical PCP, or hospital system, or those kinds of referral sources. I think it's just an exciting example of a different opportunity that we think we're uniquely positioned for, because of our large scale, you know, the focus on the patient experience and outcomes, as well as our hybrid model of both in-person and virtual. Those kinds of services and characteristics are very appealing to some of these national digital players.

Speaker #1: And I think it's just an exciting example of a different opportunity that we think we're uniquely positioned for because of our large-scale, the focus on the patient experience and outcomes.

Speaker #1: As well as our hybrid model of both in-person and virtual those kinds of services and characteristics are very appealing to some of these national digital players.

Speaker #5: Okay, thank you.

Matthew Mardula: Okay, thank you.

Richard Close: Okay, thank you.

Speaker #3: And from William Blair, your next question comes from the line of Ryan Daniels. Please go ahead.

Operator: From William Blair, your next question comes from the line of Ryan Daniels. Please go ahead.

Speaker #6: Hello, this is Matthew Mardula on for Ryan. And thank you for taking the question. And I just want to kind of touch up on the answer to the last question.

Matthew Mardula: Hello, this is Matthew Mardula on for Ryan. Thank you for taking the question. I just wanna kind of touch up on the answer to the last question. Can you kind of provide an update on how the patient referral segments have been trending? How should we think about the momentum with patient referrals into 2026? I know demand outpaces supply in the industry, but I do wanna focus on those newer initiatives, like the partnership with Calm, and then additional investments of the provider and partner referrals for 2026. I know this is a kind of big main point of my question, but are you expected to see maybe a newer or a different type of patients because of these patient referral segments? Thank you.

Speaker #6: So can you kind of provide an update on how the patient referral segments have been trending? And then how should we think about the momentum with patient referrals into 2026?

Speaker #6: I know the man I'll pay to supply in the industry, but I do want to focus on those newer initiatives like the partnership with comm and then additional investments of the provider and partner referrals for 2026.

Speaker #6: And now this is the kind of big main point of my question, but are you expected to see maybe a newer or a different type of patients because of these patient referral segments?

Speaker #6: Thank you.

Speaker #1: Hey, this is Dave. I'll take that. So in regards to the referrals, this is a primary channel for us to get new patients. It's one of the things that differentiates LifeStance versus many of our competitors in the outpatient mental health space.

David Bourdon: This is Dave. I'll take that. In regards to the referrals, this is a primary channel for us to get new patients. It's one of the things that differentiates LifeStance versus many of our competitors in the outpatient mental health space. We only spend about 2% of our revenue acquiring new patients, that's a very efficient model. The way we're able to do that is through these referral programs with the medical practices, that continues to grow, I'd say, commensurate with the business. I wouldn't point to anything that's unique there, that from a growth rate perspective. In regards to the update on Calm, it's still early days on that relationship. I think both sides, we're still working together to optimize that partnership.

Dave Bourdon: This is Dave. I'll take that. In regards to the referrals, this is a primary channel for us to get new patients. It's one of the things that differentiates LifeStance versus many of our competitors in the outpatient mental health space. We only spend about 2% of our revenue acquiring new patients, that's a very efficient model. The way we're able to do that is through these referral programs with the medical practices, that continues to grow, I'd say, commensurate with the business. I wouldn't point to anything that's unique there, that from a growth rate perspective. In regards to the update on Calm, it's still early days on that relationship. I think both sides, we're still working together to optimize that partnership.

Speaker #1: And we only spend about 2% of our revenue acquiring new patients. And that's a very efficient model. The way we're able to do that is through these referral programs with the medical practices.

Speaker #1: And that continues the grow. I'd say commensurate with the business. So I wouldn't point to anything that's unique there that from a growth rate perspective.

Speaker #1: And then in regards to the update on comm, it's still early days on that relationship. I think both sides were still working together to optimize that partnership.

David Bourdon: We are getting new patient volume from the Calm relationship, but it is not to a level that is very meaningful at this point. We expect it will build in the coming months and years, but it's not something that is gonna meaningfully move the needle for us in 2026. As far as the demographics go, it's one of the reasons that the partnerships with some of these large digital players like Calm are intriguing to us because we do believe that will attract a younger, more digitally native type demographic than what we've historically had at LifeStance, and so it's a completely different demographic.

Speaker #1: We are getting new patient volume from the comm relationship, but it is not to a level that is so that is very meaningful at this point.

Dave Bourdon: We are getting new patient volume from the Calm relationship, but it is not to a level that is very meaningful at this point. We expect it will build in the coming months and years, but it's not something that is gonna meaningfully move the needle for us in 2026. As far as the demographics go, it's one of the reasons that the partnerships with some of these large digital players like Calm are intriguing to us because we do believe that will attract a younger, more digitally native type demographic than what we've historically had at LifeStance, and so it's a completely different demographic.

Speaker #1: We expect it will build in the coming months and years, but it's not something that is going to meaningfully move the needle for us in 2026.

Speaker #1: And then as far as the demographics go, it's one of the reasons that the partnerships with some of these large digital players like comm are intriguing to us because we do believe that that will attract a younger, more digitally native type demographic than what we've historically had at LifeStance.

Speaker #1: And so it's a completely different demographic.

Speaker #3: Your next question comes from the line of David Larson with BTIG. Please go ahead.

Operator: Your next question comes from the line of David Larsen with BTIG. Please go ahead.

Speaker #7: Hi, can you please talk a bit about the EMR? Who are you using now? Who are you going to be switching to? And then, what capabilities do you expect to get from this new EMR?

David Larsen: Hi. Can you please talk a bit about the EMR? Like, who are you using now, who are you going to be switching to? What capabilities do you expect to get from this new EMR? For example, will the workflow be easier? Will this contribute to even more physician productivity? Any thoughts on, like, reporting from the new EMR? What do you hope to get from that one that you don't get from your existing one? Thank you.

Speaker #7: So for example, will the workflow be easier? Will this contribute to even more physician productivity? And then any thoughts on reporting from the new EMR?

Speaker #7: What do you hope to get from that one that you don't get from your existing one? Thank you.

Speaker #1: Yeah, all of the above, David. But thanks for the question. So first of all, we have a practice we do not mention other companies on our earnings call.

David Bourdon: Yeah, all of the above, David, thanks for the question. First of all, we have a practice. We do not mention other companies on our earnings calls. I'm not gonna talk about where we are today or where we're going from an EHR perspective. Take it up a level. We put a lot of work in over the last year in regards to the discovery process, which we've now completed, and we have decided upon a new EHR vendor, so a new one, and we'll be going away from our existing one. It is foundational for the future. It goes to your question of what we're trying to get out of it. I mean, at a high level, it's about unlocking advancements in both clinical and operational excellence.

Dave Bourdon: Yeah, all of the above, David, thanks for the question. First of all, we have a practice. We do not mention other companies on our earnings calls. I'm not gonna talk about where we are today or where we're going from an EHR perspective. Take it up a level. We put a lot of work in over the last year in regards to the discovery process, which we've now completed, and we have decided upon a new EHR vendor, so a new one, and we'll be going away from our existing one. It is foundational for the future. It goes to your question of what we're trying to get out of it. I mean, at a high level, it's about unlocking advancements in both clinical and operational excellence.

Speaker #1: So I'm not going to talk about where we are today or where we're going from an EHR perspective. But take it up a level.

Speaker #1: We put a lot of work in over the last year. In regards to the discovery process, which we've now completed and we have decided upon a new EHR vendor.

Speaker #1: So a new one and we'll be going away from our existing one. It is foundational for the future. So it goes to your question of what we're trying to get out of it.

Speaker #1: And I mean, at a high level, it's about unlocking advancements in both clinical and operational excellence. So yes, from a clinical perspective, it's going to improve workflows.

David Bourdon: Yes, from a clinical perspective, it's gonna improve workflows. I think of things like care pathways and that next best action to support our clinicians, being able to tie in new AI point solutions, things like that, as well as a much better patient experience, both from an administrative as well as a care perspective. There's a lot around the EHR that is core and foundational to where we wanna take the company over the next five years. We're gonna begin the planning now and throughout this year, and then we expect the rollout to be next year.

Dave Bourdon: Yes, from a clinical perspective, it's gonna improve workflows. I think of things like care pathways and that next best action to support our clinicians, being able to tie in new AI point solutions, things like that, as well as a much better patient experience, both from an administrative as well as a care perspective. There's a lot around the EHR that is core and foundational to where we wanna take the company over the next five years. We're gonna begin the planning now and throughout this year, and then we expect the rollout to be next year.

Speaker #1: I think things like care pathways and that next best action to support our clinicians, being able to tie in new AI point solutions, things like that, as well as a much better patient experience both from an administrative as well as a care perspective.

Speaker #1: There's a lot. Around the EHR that is core and foundational to where we want to take the company over the next five years. We're going to begin the planning now.

Speaker #1: And throughout this year, and then we expect to roll out to be next year.

David Larsen: That's great. That's very helpful. Thank you. Then with regards to, like, the payer relationships, a lot of times, like, health plans will view mental health providers as, like, ancillary providers. They'll spend a lot of time with, like, the large acute care medical centers, maybe some of the large physician groups. Mental health, based on my experience, has been more of a price taker from the handful of large, dominant commercial plans in each city. Can you maybe just talk about that? Are you a price taker, where they're like: Okay, here's the mental health rates, here's the fee schedule, that's what you get? Or is it much more of a collaborative approach? Just any discussion around, like, the quality care you're providing to the patients, fewer ER admissions, improvements in cost of care? Thanks very much.

Speaker #7: That's great. That's very helpful. Thank you. And then with regards to the payer relationships, a lot of times health plans will view mental health providers as ancillary providers.

Speaker #7: They'll spend a lot of time with the large acute care medical centers. Maybe some of the large physician groups, some mental health. Based on my experience, it's been more of a price taker from the handful of large dominant commercial plans in each city.

Speaker #7: Can you maybe just talk about that? Are you a price taker where they're like, "Okay, here's the mental health rates. Here's the fee schedule." That's what you get?

Speaker #7: Or is it much more of a collaborative approach? And just any discussion around the quality care you're providing to the patients, fewer admissions, improvements in cost of care. Thanks very much.

Speaker #7: I just want to make sure you're not a price taker. Thanks.

David Larsen: I just wanna make sure you're not a price taker. Thanks.

Speaker #1: Yeah, I mean, as far as the payer relationships, I said earlier is I think we're having constructive conversations with most payers that there's always going to be tension.

David Bourdon: I mean, as far as the payer relationships, you know, I said earlier is, we're having constructive conversations with most payers. There's always gonna be tension. There's tension in all providers across the entire healthcare ecosystem and payers. You know, that's a normal level of tension. The thing that I would point you to in regards to outpatient mental health is that the payers are still getting a lot of pressure from their employer clients and their members for access to in-network outpatient mental health care. That's really the balance to the pricing conversation and what leads to those constructive dialogues.

Dave Bourdon: I mean, as far as the payer relationships, you know, I said earlier is, we're having constructive conversations with most payers. There's always gonna be tension. There's tension in all providers across the entire healthcare ecosystem and payers. You know, that's a normal level of tension. The thing that I would point you to in regards to outpatient mental health is that the payers are still getting a lot of pressure from their employer clients and their members for access to in-network outpatient mental health care. That's really the balance to the pricing conversation and what leads to those constructive dialogues.

Speaker #1: There's tension in all providers across the entire healthcare ecosystem and payers. So it's, but that's a normal level of tension. The thing that I would point you to in regards to outpatient mental health is that the payers are still getting a lot of pressure from their employer clients and their members for access to in-network outpatient mental healthcare.

Speaker #1: And so that's really the balance to the pricing conversation. And what leads to the constructive dialogues. For the more thought-leading payers, the ones that are now thinking about quality and outcomes in addition to access, those are the payers that I think have really gotten their head around the mind-body connection.

David Bourdon: For the more thought-leading payers, the ones that are now thinking about quality and outcomes in addition to access, those are the payers that I think have really gotten their head around the mind-body connection, and that there is opportunity for even increased mental health utilization, leading to a total cost of care reduction.

Dave Bourdon: For the more thought-leading payers, the ones that are now thinking about quality and outcomes in addition to access, those are the payers that I think have really gotten their head around the mind-body connection, and that there is opportunity for even increased mental health utilization, leading to a total cost of care reduction.

Speaker #1: And that there is opportunity for even increased mental health utilization, leading to a total cost of care reduction.

David Larsen: Thanks very much. I'm a big believer, obviously, in mental health and how it can keep people productive and at work and improve the total health of the market. Thanks very much. Congrats on a good quarter.

Speaker #7: Thanks very much. I'm a big believer, obviously, in mental health and how it can keep people productive and at work and improve the total health of the market.

Speaker #7: So, thanks very much. Congrats on a good quarter.

Speaker #1: Thanks, David.

David Bourdon: Thanks, David.

Dave Bourdon: Thanks, David.

Speaker #3: And from Barclays, our next question comes from the line of Peter Warndorf. Please go ahead.

Operator: From Barclays, our next question comes from the line of Sarah James. Please go ahead.

Speaker #8: Yeah, hey, thanks for the question. I just wanted to touch on the 20 to 30 news center ads that you guys are expecting this year.

Sarah James: Yeah, hey, thanks for the question. I just wanted to touch on the 20 to 30 new center adds that you guys are expecting this year. I know you said that the costs are accounted for in guidance, but is it right to assume that those come on with lower margins? Just trying to get a sense for kind of the cadence of margins throughout the year. Thanks.

Peter Warendorf: Yeah, hey, thanks for the question. I just wanted to touch on the 20 to 30 new center adds that you guys are expecting this year. I know you said that the costs are accounted for in guidance, but is it right to assume that those come on with lower margins? Just trying to get a sense for kind of the cadence of margins throughout the year. Thanks.

Speaker #8: I know you said that the costs are accounted for in guidance, but I'm is it right to assume that those come on with lower margins?

Speaker #8: Just trying to get a sense for kind of the cadence of margins throughout the year. Thanks.

Speaker #9: Yeah, Peter, this is Ryan. Appreciate the question. You got it right. So, overall, 20 to 30 new centers, they do come on with a lower margin profile.

Ryan McGroarty: Yeah, Sarah James, this is Ryan. Appreciate the question. You got it right. Like, overall, 20 to 30 new centers, they do come on with a lower margin profile, that's fully contemplated in the guidance, in what we put out to the market. Again, like, we look at it as a very nice accelerator to, like, overall growth strategy in terms of where we decide to plant a flag for a new center. Again, very, very, the return profile is relatively quick on them, too. You know, again, you get the initial piece where it's lower, then it gets up to normal at a relatively fast pace.

Speaker #9: But that's fully contemplated in the guidance and what we put out to the market. But again, we look at it as a very nice accelerator to overall growth strategy in terms of where we decide to plant a flag for a new center.

Speaker #9: And again, the return profile is relatively quick on them too. So again, you get the initial piece where it's lower, but then it gets up to normal at a relatively fast pace.

Speaker #8: Got it. Thanks. And then maybe just one quick follow-up from a high level on the competitive landscape. I mean, are you seeing anybody get more or less aggressive?

Sarah James: Got it. Thanks. Then maybe just one quick follow-up from a high level on the competitive landscape. I mean, are you seeing anybody get more or less aggressive? Is there anything worth calling out on the competitive landscape early in the year?

Peter Warendorf: Got it. Thanks. Then maybe just one quick follow-up from a high level on the competitive landscape. I mean, are you seeing anybody get more or less aggressive? Is there anything worth calling out on the competitive landscape early in the year?

Speaker #8: Is there anything worth calling out on the competitive landscape early in the year?

Speaker #1: I wouldn't point out anything in particular that's new in the competitive landscape. So first of all, it is and remains a very competitive environment for attracting and retaining clinicians.

David Bourdon: I wouldn't point out anything in particular that's new in the competitive landscape. First of all, it is and remains a very competitive environment for attracting and retaining clinicians. They have lots of choices. That's not new. That's the environment we've been in now for years. When I think about the competitive dynamics, because it is such a fragmented industry, it is really a very local conversation. At the local level, we have competitors, there's not anyone across the nation that I would flag for you.

Dave Bourdon: I wouldn't point out anything in particular that's new in the competitive landscape. First of all, it is and remains a very competitive environment for attracting and retaining clinicians. They have lots of choices. That's not new. That's the environment we've been in now for years. When I think about the competitive dynamics, because it is such a fragmented industry, it is really a very local conversation. At the local level, we have competitors, there's not anyone across the nation that I would flag for you.

Speaker #1: They have lots of choices, so that's not new. That's the environment we've been in now for years. When I think about the competitive dynamics, because it is such a fragmented industry, it is really a very local conversation.

Speaker #1: So at the local level, we have competitors, but there's not anyone across the nation that I would flag for you.

Speaker #8: Great. Thank you.

Sarah James: Great. Thank you.

Peter Warendorf: Great. Thank you.

Operator: From KeyBank, we have a question from Steven DeChirico. Please go ahead.

Speaker #3: And from KeyBank, we have a question from Steve Deckard. Please go ahead.

Operator: From KeyBank, we have a question from Steven DeChirico. Please go ahead.

Speaker #7: Hey, thanks guys for the questions and congrats on a solid quarter. I just wanted to ask around visits per clinician. Sequentially into 26, how should we think about the move into 1Q from the level you were at in 4Q?

Steven DeChirico: Hey, thanks, guys, for the questions, and congrats on a solid quarter. I just wanted to ask one around visits per clinician. Sequentially into 2026, how should we think about the move into Q1 from the level you were at in Q4? Thanks.

Steve Dechert: Hey, thanks, guys, for the questions, and congrats on a solid quarter. I just wanted to ask one around visits per clinician. Sequentially into 2026, how should we think about the move into Q1 from the level you were at in Q4? Thanks.

Speaker #7: Thanks.

Speaker #9: Yeah, so I appreciate the question. This is Ryan. Overall, and so when you look into 1Q, overall, so maybe I'll just tackle this from overall kind of revenue perspective.

Ryan McGroarty: Yeah. Appreciate the question. This is Ryan overall. When you look into Q1 overall. Maybe I'll just tackle this from a overall kind of revenue perspective, and then we can kind of get into, like, the contribution just in terms of how to think about productivity versus net clinicians. When you look at the revenue step up from Q4 to Q1, it goes up approximately $8 million, which is 17% year-over-year, which I went through on the prepared comments earlier. When you think about the actual step up in visit volume, really, you can think of that as net clinician, where Dave went earlier, just in terms of being the driving force between the sequential growth and then supported by rate, right overall.

Speaker #9: And then we can kind of get into the contribution, just in terms of how to think about productivity versus that of clinicians. So when you look at the revenue step-up from Q4 to Q1, it goes up approximately $8 million, which is 17% year over year, which we went through in the prepared comments earlier.

Speaker #9: So, when you think about the actual step-up in visit volume, really you can think of that as net clinician, where day one earlier—just in terms of being the driving force—between the sequential growth.

Speaker #9: And then supported by rate, right? Overall. So those are kind of the key components as you kind of build from Q4 into Q1. And then as Dave mentioned, we have high confidence just in terms of the durability as it relates to productivity.

Ryan McGroarty: Those are kind of the key components as you kind of build from Q4 into Q1. As Dave mentioned, like, we have high confidence just in terms of the durability as it relates to productivity, in terms of what we're doing from a practice management perspective, around the productivity, as an enabler there.

Speaker #9: In terms of what we're doing from a practice management perspective, around the productivity as an enabler there.

Speaker #7: Okay, thanks. Then I want to ask one around free cash flow. So I think previously you guys had guided to it being down in 25, but was actually up.

Steven DeChirico: Okay, thanks. I want to ask one around Free Cash Flow. I think previously you guys had guided to it being down in 2025, but it was actually up. Just wondering, did any of those de novos in 2025 get bumped into 2026? Are you expecting Free Cash Flow to be up in 2026 versus 2025? Thanks.

Steve Dechert: Okay, thanks. I want to ask one around Free Cash Flow. I think previously you guys had guided to it being down in 2025, but it was actually up. Just wondering, did any of those de novos in 2025 get bumped into 2026? Are you expecting Free Cash Flow to be up in 2026 versus 2025? Thanks.

Speaker #7: Just wondering, did any of those de novos in '25 get bumped into '26, and then are you expecting free cash flow to be up in '26 versus '25?

Speaker #7: Thanks.

Speaker #9: Yeah, and when you look at just the there's always the timing and movement between new centers just in terms of being able to fully execute on the implementation.

Ryan McGroarty: Yeah. When you look at just there's always the timing and movement between new centers, just in terms of being able to fully execute on the implementation. I'd call that, like, relatively minor. When you think about the 20 or 30 centers, kind of consistent with what, you know, we've been doing here for a bit. When you talk about Free Cash Flow, Free Cash Flow did exceed our expectations in 2025, so at $110 million, versus 2024 was $86 million. As we think ahead, Dave went through this earlier, this is a super capital efficient business that we have. We expect to be positive again in 2026 as we continue to grow our adjusted EBITDA, kind of consistent with the guidance that we put out there.

Speaker #9: I'd call that relatively minor. When you think about the 20 to 30 centers kind of consistent with what we've been doing here for a bit, when you talk about free cash flow, so free cash flow did exceed our expectations.

Speaker #9: In 2025, so at 110 million, versus 2024 was 86 million. As we think ahead and Dave went through this earlier, this is a super capital-efficient business that we have.

Speaker #9: We expect to be positive again in '26 as we continue to grow our adjusted EBITDA, kind of consistent with the guidance that we put out there.

Speaker #9: Again, this is a relatively new phenomenon for us being for the last two years, being free cash flow positive. And we're pleased with the progression and happy to be able to our expectation being that we'll again be free cash flow positive in 26.

Ryan McGroarty: again, like, this is a relatively new phenomena for us, being for the last two years, being Free Cash Flow positive. We're pleased with the progression. Our expectation being that we'll again be Free Cash Flow positive in 2026.

Speaker #8: All right. Thank you.

Steven DeChirico: All right. Thank you.

Steve Dechert: All right. Thank you.

Operator: From BMO Capital Markets, our final question comes from the line of Sean Dodge. Please go ahead.

Speaker #3: From BMO Capital Markets, our final question comes from the line of Sean Dodge. Please go ahead.

Speaker #10: Yeah, thanks. Good morning. Dave, your comments on technology and using that to drive savings, I'd imagine a big chunk of your costs related to the clinicians and occupancy costs.

Sean Dodge: Yeah, thanks. Good morning. Dave, your comments on technology and using that to drive savings, I'd imagine a big chunk of your costs are related to the clinicians and occupancy costs. If we add up all the support costs, the things you mentioned, like the scheduling, credentialing, the revenue cycle, like all the labor-intensive stuff, what proportion of your cost base is that? Things that are addressable or impactable with technology over time. Then maybe how much of that you think you can actually drop out over the coming years, and then just maybe any thoughts on, you know, kind of like, what inning we're in with all this?

Speaker #10: But if we add up all the support costs, the things you mentioned like the scheduling, credentialing, the revenue cycle, all the labor-intensive stuff, what proportion of your cost base is that?

Speaker #10: So, things that are addressable or impactable with technology over time, and then maybe how much of that you think you can actually drop out over the coming years. And then just maybe any thoughts on kind of what inning we're in with all this?

Speaker #9: Yeah, Sean, this is Ryan. I appreciate the question there. And so, I think I would kind of handle this question by grounding you again just in terms of our long-term growth algorithm.

Ryan McGroarty: Yeah, Sean, this is Ryan. I appreciate the question there. I think I would, like, kind of handle this question by grounding you again just in terms of our long-term growth algorithm. As it relates to, Dave went through this, mid-teens revenue growth, we expect Center Margin to expand out to mid-30s from the low 30s, where it sits today. Part of the Center Margin expansion is from leveraging things like your occupancy costs. You get down to the G&A line, and overall, that's where, you know, with the new part of our long-term guidance that we put out today, is expect to be in mid-teens EBITDA by 2028. You can think of that both from expansion of Center Margin plus the G&A line.

Speaker #9: So as it relates to day one through this, mid-teens revenue growth, we expect center margin to expand out to mid-30s from the low 30s where it sits today.

Speaker #9: And part of the center margin expansion is from leveraging things like your occupancy cost. And then you get down to the G&A line. And overall, that's where with the new part of our long-term guidance that we put out today, is expect to be in mid-teens EBITDA by 2028.

Speaker #9: And you can think of that both from expansion of center margin plus the G&A line. And in the G&A line, that's getting at the crux of your question, just in terms of being able to drive efficiencies to be able to pull out, to be able to get the leverage.

Ryan McGroarty: In the G&A line, that's getting at the crux of your question, just in terms of being able to drive efficiencies, to be able to pull out, to be able to get the leverage. We feel really confident in our ability to be able to do that. We've proven our ability to be able to implement technology, to be able to drive an overall lower expense base.

Speaker #9: So we feel really confident in our ability to be able to do that. And we've proven our ability to be able to implement technology to be able to drive an overall lower expense base.

Speaker #10: Okay. Understood. Thanks.

Sean Dodge: Okay, Thanks.

Speaker #3: With no further questions, thank you. I will now turn the call over to CEO David Bourdon for closing remarks.

Operator: With no further questions in queue, I will now turn the call over to CEO, Dave Borden, for closing remarks.

Speaker #11: Hey, thank you, operator. I'd like to thank our nearly 11,000 mission-driven teammates who make sure that our patients get the quality care that they need and they deserve.

David Bourdon: Hey, thank you, operator. I'd like to thank our nearly 11,000 mission-driven teammates who make sure that our patients get the quality care that they need and they deserve. I continue to be inspired by the passion and the resilience that you all bring every day. Our services are needed more than ever. We look forward to furthering the positive impact that we can have on the millions of Americans whose lives can be improved by the high-quality mental health care services that LifeStance provides. Thank you for joining us today. Operator, that'll conclude our call. Thank you.

Dave Bourdon: Hey, thank you, operator. I'd like to thank our nearly 11,000 mission-driven teammates who make sure that our patients get the quality care that they need and they deserve. I continue to be inspired by the passion and the resilience that you all bring every day. Our services are needed more than ever. We look forward to furthering the positive impact that we can have on the millions of Americans whose lives can be improved by the high-quality mental health care services that LifeStance provides. Thank you for joining us today. Operator, that'll conclude our call. Thank you.

Speaker #11: I continue to be inspired by the passion and the resilience that you all bring every day. Our services are needed more than ever. And we look forward to furthering the positive impact that we can have on the millions of Americans whose lives can be improved by the high-quality mental healthcare services that Lifestance provides.

Speaker #11: Thank you for joining us today, and operator, that'll conclude our call. Thank you.

Operator: Thank you again for joining us today. This does conclude today's conference call. You may now disconnect.

Q4 2025 LifeStance Health Group Inc Earnings Call

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