- Earnings call transcript Q3 2022

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Operator

Ladies and gentlemen, thank you for standing by and welcome to the LifeStance Health Third Quarter 2022 Earnings Call. I would now like to turn the call over to Monica Prokocki, VP of Investor Relations. Please go ahead.

Monica Prokocki

Thank you. Good afternoon, everyone and welcome to LifeStance Health's third quarter 2022 earnings conference call. President Relations. Vice Prokocki, Monica of Investor I'm

the Joining Executive website, Chief Officer; are closed Ken today. We Operating the available presentation and Relations Chief Burdick, Chairman section issued Officer. Danish Financial the and Both Bruff, me release market investor.lifestance.com. Mike and after today Officer; Chief earnings on Qureshi, Investor are President and our of

of following replay a this the addition, will available conference In be call. call

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

report in and Unless addition, results the is to for using the tables all results non-GAAP over turn that financial comparison information performance. facilitate reconciliation noted, the note time, Burdick, presentation of past compared In which Ken helpful of GAAP investors LifeStance. this earnings measures CEO believe the to directly to and comparable A please provide we we measures most prior to At otherwise year are press prior call appendix. I'll Ken? comparative included period. release

Ken Burdick

for mental a health joined What physical approach by health are from over better. the to national need am start, experiences, to that past how health and both with X I they a society vision observed Informed have must evolve the trajectory to years But for witnessed a for is the initiatives unified creation business to care the patients, -- individuals to today. brought its Over XX-month grow treatment. of health LifeStance, profitability time of has and a deliver and a approximately today us building of thrilled have X,XXX I to more set where joining my accomplished diagnosed mental size, lives healthy these to truly $XXX services and LifeStance an as on physical positioned shareholders. Monica. you, you where LifeStance have needed trailing underserved founders in to the my look company and millions expand undiagnosed make by ever. at and extraordinary. built with it And of are health value decades the of Thank the and when I mental firsthand team over multiples successful than successful I some clinicians integrated a care forward clinicians a a with on underfunded care, all standing and long-term mental starting in current million have thanks our X conditions country, revenue. is company we, for From uniquely

Turning to financial results.

year We quarter on for fourth expectations and quarter performance third are lowering our the outlook. based

adjusted Third associated costs due well benefits Center on EBITDA of $XX with our by revenue as of as of the lower-than-expected being to quarter $XXX end the end employee and was million visit of expectations low affected volume. primarily million program. our revenue health higher-than-expected primarily margin $XX low were million, on expectations,

expectations I'd my set guidance, going how forward. for we to on financial As like intend to share perspective

produces some variation. Our business, this in especially dynamic environment, labor

company we will our going that its each of in these touch of turn in which is reflective number early of number relatively As the will on detail. in Recognizing and driven is their variability. scheduled is ranges this business, utilization. visits our driven this Danish of a forward, journey, their by capacity by a in service inherent clinicians, revenue present variability young

will working be color profitability clear execution, lower $XXX long-term million of laser-focused Mike $XX not our It and LifeStance, the million, for million Since in the lowering we're and the and I higher on visit operational to excellence. Danish to in million due health potential. primarily are costs expectations have center formula strategic performing me provide that our additional volume of our team to remarks. I forecast. $XXX to revenue their am margin prepared full to of to lower-than-expected process. remainder of These company EBITDA and taking In ranges September, on of is planning the benefits are to million $XX joining We prior $XXX adjusted expect creation. been This relative for value through We and million. our our year. $XXX of our now leadership employee leadership will

multiyear and members We management, quarter targets as our our I initial company, guidance team an fourth will as processes observations. update have all the during XXXX countless these from for earnings planning with deliver clinicians other some call. on well Through and across conversations provide

ourselves strategy differentiate types to our in-person are approach we virtual Therefore, multidisciplinary and we all which model model a business treat will the can mental health that diagnoses. and believe sound. I with with care through of hybrid First, continue

of offer new that their space, to broader continue We to health care and on and quality care company I near-term as primary for our we and long-term our historic ambitions. also well long-term has goals succeeded immediate seeking that source ecosystem. impressed our industry affordable overcame unparalleled. and business Furthermore, providers. scale. we finally, a mental partnerships coverage This of mental in at can I'm in remains march the priorities primarily believe trusted, with referral physical component will And access remain passion relationships LifeStance to of care. personalized unchanged. believe patients our continue increasing commercial the and our clinicians developing to the care become health in-network we There to the people potential the and and our as with with mission unique mental we valuable vision deliver will health and unifying LifeStance attract shortage no our ability to patients the a health through is through of expand access services to care commercial model developing mental health challenges unique payers toward

We the strategy, and near-term right have priorities the team. right

business also better impact greatest compound experiences However, LifeStance a and can was scale opportunities of large I in we and positive LifeStance's that support national growth clinicians have growth meet pains may destination to nearly establish need build to company certain opportunities key value. and and rate for with has many XXXX We can me as annual to easy that I evolve natural have to and for society will the experienced systems. the outgrow full founded XX% have a the companies overnight, long-term foundation not the potential taught XXXX. and priorities Like happen LifeStance on revenue delivering the maintaining a profitability. a that trajectory XXXX have These led position growing needs see superior while while challenges. not of it on similar and at from premier the of investments through platform growth companies, processes can making as the grown be to has right focus LifeStance long-term patients. begun and

We've receive build greater and We been have before a to an worthy going processes in systems the We now areas emphasis forward. ahead of us. opportunity us. need runway of will all-out sprint. huge tremendous Several

profitability, long-term discipline further capital generating and cash will we free focus First, on flow.

optimization, we'll When leverage. complexity process strengthening simplifying in the platform investments on end-to-end operating years over XXXX. underlying through infrastructure, beginning automation reduce focus processes will scalable administrative next drive mean we strategic refer to infrastructure Second, to and our standardization manual scalable make and few enterprise-level in we we and

the through implementation efficiencies patients. workforce management supporting retire we and multiple expect better clinicians and our solution, significant systems operational example, an For to enterprise of their drive while

new investments the call platform, to digital care beginning patient continued continuing digital entire Additionally, new plan. of make such continue finding through and which rollout right online care and experience a booking products OBIE to reinvent treatment the journey, clinician we we the and as entire with will our intake virtual launch

administrative and of invest care. mental our to more vision with burden clinicians payer mental align with commensurate support LifeStance will commercial Third, share rates our Today, payer strategy reduce us allow selective. and contracts. improving partners of Streamlining we better coordination payer contracts access physical our health become partners hundreds that vision health care will provide. that and the who value expanding These payer in the to with between

continue we more organic much Finally, our will growth of approach focused our shift through and team expansion toward clinician M&A. a to recruiting

with Now national built we've some of to fewer we broad referenced. I aligned deals priorities the just plan that do presence, a

We primarily on demands. will each as minimum incremental acquisition clinician count with practices administrative larger adds a focus

of like recruited excellence, acquisitions creating joined future capital set and patients. summary, or exceptions that payer We to will our density extraordinary a Psychiatrists, operational that bring businesses ensure form therapists processes when the we're minimal am comes commitment In what profitable will for objectives include service growth to practitioners, evolving of to it purely policies. things we them new and make from the backbone Whether operational In in adjacencies market closing, holds and nurse the mindset us I an line growth psychologists emphasize and about a excited further deployment. they LifeStance. LifeStance. balanced disciplined in we through acquire and they acquisition, we mix, and profitability that

these for color capital provide calling to financial it profitability and that growth optimize support We growth XXXX LifeStance. XXXX at that, up slower I with focus by ability will turn the a will and the of disciplined honor on set long-term in initiatives additional I'll investing that our build remaining will With operational commitment believe to infrastructure. a improve strategic acceleration lives. Mike deployment. our year that will to providing transition other and and to Mike? likely performance is patients' scalable with over them LifeStance beyond company, and expectations. for on This initiatives technology with be while their

Mike Bruff

Ken. Thanks,

As usual, driven of considerations. XX% in long-term strategy $XXX growth, liquidity which XX%. the million up by comments growth my our balancing clinician Starting includes I context growth. year-over-year, was of frame with of Revenue and profitability will

period growth we margin to XX anticipated driven driven $X.X the and we Center as center in employee by not million, million the higher-than-expected occupancy did offset the lower-than-expected XX% revenue. last revenue basis points. revenue Turning impacted in costs costs. achieve of or over $XX in profitability. year, that by by was that percentage of benefit partially quarter Sequentially, growth, increased expansion margin by center center margin This health same a

margin for XXXX, program than sequentially environment the increase actual Total of for during assumptions models higher center increased costs costs Adjusted included expectations. of grew actuarial by revenue. EBITDA inflationary leverage of revenue, XX% resulted growth, line expectations in Adjusted year. and XX to with models points relative persistent by X.X% improved the or magnitude year-over-year percentage generating or in combined G&A. impacted estimated last points, benefits costs a points basis higher basis and was the our million, $X.X basis were in G&A coming of as EBITDA with to in utilization million self-insured $XX XX While up our XX health driven have

sheet. to balance from primarily million of cash cash operations of DSO X quarter, net driven third Turning we increase increase negatively of accounts in quarter days DSO was $XX flow X.X-day solid an generated supported was in Cash operations. to In a items. debt We million. in a liquidity; continues approximately sequentially. exited long-term the $X receivable, the impacted from The be increase by resulting payer-specific by in and LifeStance by million with $XXX of positive

related we resolved and to had requirements example, the quarter. increases we expect in some substantially which implementation fourth short be pays the For coding and of holds new to rate

standardize are cash Overtime, We continuing collections processes. in collections initiatives and to planned our optimize and these with will investments drive efficiency. improvement billing

of $X center from improved lower driven cash Our sequentially, expenditures the flow planned of free million openings. de negative $X capital primarily moderation by million by novo

expectations. to guidance. full covered year Ken Turning our

$XXX will For expectations forecasted to of of due $X.X lower representing million of is benefits margin, the lower $XXX to due impact quarter associated or employee EBITDA $XX XXX volume. margin basis center as health higher-than-expected well margin center Fourth which of of are as and with million to to XXX visit points, below $XX.X $X.X our the adjusted million fourth or quarter, to adjusted million, revenue basis expectations we prior million below costs $X.X to primarily prior points. expect adjusted $XX EBITDA EBITDA impact million million and center revenue Revenue million.

Now, over provide it turn to operational to Danish additional I'll color.

Danish Qureshi

Thank you, Mike.

of now be clear to me past drivers and expectations. into mode taking in our my financial creation. since has performance, with operations are value let stepping COO are a quarter practice been time Regarding the the underlying the of understanding evolved performance more in disappointed years being company I ensure long-term results The closely year examine our am X full hyper we quarter. that the our has role, maximizing to that for co-founder, third we last Despite and growth the significantly

into We predictive to business Ken, didn't dig have and capabilities that we right the team the we months our business. on delivering we continue X data, I yet will now that ago and Like potential. the work drive have not have ensure are insights exhaustively I the deeper to that KPIs and feel and full to

as an to operational organization, a update will am team across value. members commitment leadership I excellence long-term last earnings focused with set greater My let and that highest first, However, was can positioned as align to priorities on net well the strong confident of dedicated drive and first business drive on our as better provide narrow the that, clinician operational that teams the clinician our second, the of improvement With call. various of focus areas order execution on on discussed be me and a growth; COO productivity. we our impact: of we

unchanged. remain priorities these said, Ken As

we XXX net of addition with quarters. to relatively clinicians, in In clinician net clinicians, with base grew X,XXX terms line of our the prior

M&A sequential by starts driven was intentional clinicians an moderation and acquired growth partially this activities. by retention, in via Importantly, improvements of organic offset

teams will invest fourth Regarding our quarter. XXXX. and momentum in were further in organic continue teams Year-to-date, to clinician in to into rather our XX% organic the starts, approximately of to gross our hiring give we in recruiting third us quarter than we adds acquired going the continue invest

of stated is and beginning do "into too we previously at retention, planning culture customer XX% "wrapping mantra small saw around here quarterly early assumptions of to infuse billing initiatives a driven to our Though our with we of encouraging, relative LifeStance. small previously-stated improvements Regarding retention. improvement as too the the and clinicians everything change our enhancements the it as approximately annualized staffing by patient frontline well service support

Regarding acquired quarter. clinicians, we the completed in X acquisitions

we toward retention stated, we clinician by via M&A as previously fewer organic continue quarter As drivers can adds. retention our organic we starts M&A. are this may from fluctuations in to net will clinician this trend via gains as the and sequential greater we direct were lumpy, Though as adds acquisitions moderating see intentionally growth. toward offset The the timing effort and continue of clinician growth be improvements recruiting to primary of shift incremental

time think is second of call, clinician our Clinician This productivity to focus, the into things: with internally we area ability two, by utilization. refer one, to of at fill explaining I we time that available what productivity see to internally wanted to deeper Turning productivity. capacity; a our go how to as clinicians about and appropriately what driven X combination we LifeStance. now refer to patients, as patients, make

were top, time our versus those middle by gains levels offset indications early about take seeing from the call, third by are off funnel spoke decrease the in continue to I periods. capacity actions clinicians driven elevated on they we in While of and in as quarter prior of last improvement utilization bottom a

we've Let the me update on drive our first impact directly levers operational to control. utilization an touch productivity on taken discipline provide and and most greater the actions within

referral top enhancements team; did the referrals began top of search boots conversations care enterprise on focused between things: primary attracting in First, collaborations. the we delivered on partners about our two, built sequentially X potential one, four, at at the terms traffic; ground referral with actions improvement of internal new to These three, funnel. improving clinicians; multistate the of and the out organic our funnel, patients, made

quickly appointments, to via the to capabilities be of digital Two, out we pilot systems user with Second, X provider in middle which X states experience, a we at in we create call launched of the of XX better the of the by live we a now One, of experience our patients nationwide rating matching things. rollout patients of an September leveraged date patient a December planned XX. out will a X.X completion to end ConnectMe year-to-date. our did team October overall scheduled of improve terms and converting QX We average rolled pivoted fully in ConnectMe. funnel, the is and enhanced with OBIE in to nationwide the booking project XXXX, profile

take XXXX. in to have of should the Third meaningful reduced we slower scheduling complexity hold up capacity; are answer reduced third actions -- gain credentialing our middle quarter to ramps. funnel and more hidden improved drive our traction we phone but four, the were beginning impact to three, a lines recent in system intake time and our open indicates and data faster rates to These they

in with we Finally, incremental It for higher seen our approximately these small days productivity improvements the part completed of in the to at XX%. Through still of in QX this fill all spotlight patient focused drove in we clinician task improvements funnel, goal bottom we utilization the rates and having and utilization is In KPI area, schedules, have that, at as to visits, third we improvement of better converting because to the in overall and assumed terms rate a acceleration initiatives meaningful further tick bottom these to of the putting no-show early an top, running funnel early from our guidance. were this of slightly quarter. together of any scheduled impact results, middle cancellation have new XXXX. efforts force appointments a operational quarter, not put have Based a on to XX% these teams. drive on by this but across

on for time average, that third in the clinicians capacity. available Turning to visits than the quarter. found patient made we second In quarter, less

June early we capacity to and term. flexible assumptions with will first driving we been our our relative slightly declined survey across our meet factor the and key and confirm detailed time increased a in to bottom more Though as preferences. as may summer will revealed over our in learn call, better discussed value planning post-COVID key on prior this in a to Work" summer and too fourth such sound the time flexibility "Future was that less And within for hours top, forward funnel months now, for focused that the half them where gain September the built as rolling slightly focus proposition the of who are expectations slightly they into ability value partnerships. and control, clinician well are short-term utilization carried whether term, middle their trends August. for offer or preferences. time like closing, the clinicians approach conducted actions that the in QX we priorities observed not Longer that with of recognize and revenue to potentially those run deeper average, levels the support more work of we work actions are on clinicians appeal clinician M&A to insights, for payer forward clinicians focus as execute lower many continue earnings the We still July we elevated did optimizing study stronger. understand down and on growth previously of fewer persist. want In flexible taking clinician year compared time. to their through is options months, remaining the provide organic across confidence still to off work clinician which at more and labor off quarter they third to our take quarter off clinicians and but comparable a has period. business. work never The versus productivity desire in to purposely Operationally, It's and thousands is my summer, schedules consistent This financially the we near continue we'll to a to the it LifeStance's into As would XXXX range clinicians industries just our dynamic issue. is strategic part-time to and of This we

these levels to to to term. profitability and efforts us revenue give expect us get the We -- higher of over long

also teams that of terms I to by note leadership, our want are recruiting we enhancing top talent. In

of operational Vice welcomed Healthcare served President has a care record most improvements LifeStance we at excellence DaVita. September Q&A. Invo to as ever example, words it operational COO now to having Ken for Senior recently health Lisa excited in before back With in for and for turn strong Lisa services For that, division. and the few to Division a I future President look Miller as forward North Vice the going more than track am business. about across of driving I'll the

Ken Burdick

strategic of long-term comment including in to and care stronger take Operator? industries our Mike, of will health I talented who finance contributions $XX his transformation Aligned health confidence would finance and CFO in taking am Danish to team actions have In knowledge are like to I'd organization, ability confident billion the Transformation to of like work made at questions. day long-term your building the a initiative. and Health. personalized welcome right the take as and care reins like leadership take mental as to organizations, I of well has of optimization, Dave I Cigna, Mike CFO putting decades clinicians to I building with to by closing, by role leading leading the also business leading Dave extensive expand CFO. finance we as company Mike infrastructure, I'd the affordable place thank of Mike to Bruff place and the every team our we dedicated Bourdon, new members on establishing that unit drive process feel high-quality, a now will as CFO we so X demonstrating and as Danish. announcement for our is utmost over and his to integrity. week. and business behavioral as experience this access succeeding and inspired health great organization. Magellan a value. office Thanks, Business on are end-to-end Officer, the standardization scalable last with objectives automation. a

Operator

[Operator first question Instructions] from Stanley. Morgan Hettenbach the Your of from line Craig comes

Craig Hettenbach

And intro next to target pointed of the all color the growth, of Ken, long-term the some remarks. to and Yes. thanks in into year certainly a you kind moderation prior for Relative XX% provided you stronger emphasis the revenue margins. touch pinpoint settle on if where maybe or into? Can you Even will maybe a just just guide, of not of it's you on kind ranges model think growth it? things

Ken Burdick

Yes, Craig, thanks for your question.

You in very the accurately certainly remarks. up picked on commentary the prepared

working least XXXX take precision so us. and We just I growth more the at of our business much of advantage both can full out really for build we read front time plan can't I is and incredible some so opportunity in are an we the infrastructure that period will our long-term as moderate through objectives, what provide see but that of

Craig Hettenbach

around over was previously, kind happening But curious expectation Understood. there. And you goes it your I And just importantly, then think longer-term that know mean for number basis? XX% the a what then visits update And to time. seeing evaluate was what you're of on on as any what maybe of the footprint my might virtually? kind of I follow XX% that from up,

Danish Qureshi

Yes.

So Danish. this is

We in telehealth of XXs. our the visits have percentage recently seen high run

and between forth home. pretty a it clinicians and where still the in slowly in-office flip high being our back place the That coming at care remains level. said, though down, are may of So delivering

it standpoint. heavier visits, So usage, from on the is total physical real it estate in though telehealth overall tracks the of clinician mix person

that that utilized or novos at that not the So placement novos we're into account de better and to novos those or openings in our we sites as also said, around taking of closing country plan all moderate markets. where underutilized we'll offices are while being de either how looking our continue existing of there are new de

Operator

the of JPMorgan. next Your Gill line Lisa from from comes question

Lisa Gill

I a being made selective to Ken, comment basis. go-forward around a more start want with with on payers you that

as to think as from generally just in So that the of past, reimbursement -- translating yourself I payer coming amount. I'm a

So assess some about, other reimbursement any can there that we talk you And potential And at are relationship? you're forward? around other need types as with to be about would think of selective to to of you more going relationships? is think attrition to going looking criteria why it payers? Do relationships you're -- payer exiting any that

Ken Burdick

had XXX there one surprises was of than Lisa, of place. which, number There we contracts the wasn't got in were here frankly, that country. payers the I more many the that that were payer sure when I in

So trying the those caught comes the thing attention with all that X was my contracts. that manage number to administrative complexity

So for that's looking streamline, it can remarks part simplify at about Certainly, it. every is can consideration we run consistent other scale. important the to with X business of opportunity standardize, we that our so reimbursement

impediment treat us of manage like of there have, then that variability LifeStance health suspect, others more sort reimbursement. find positioning We credentialing. you that services. much, smaller but to And entity. this last would the And for they it's getting then We probably be frankly, as in a our eager challenge. to might see XX really unique We're much looking patients partners because their are that to an able for with are I've clinicians behavioral some really a in it's continues years that and the that challenge been the is the space credentialing understand a been so

those think as the fact, we contracts. right, do those see of it. So exiting X some I payer yes, would could of in -- mind see And top that I us of us criteria about sort you're be

Lisa Gill

be up follow then And my for just great. Danish. Okay, would

Do think another in you it and the bit I'm little just you year? capacity but the the Is have Christmas also was in the assuming If built capacity than thought both at curious you the into don't Healthcare quarter. in Conference, have you that quarter. vacation you revenue the what about year utilization remember curious things on last holidays you similar last fourth COVID to just maybe Hopefully, quarter guidance we for more a for anticipated. of I'm how it's fourth our taking Both better? around to revenue as that fourth around talked fairly people the the variant but about utilization for side,

Danish Qureshi

Yes.

So quarter holidays, what how as business they're the in seeing as clinicians far last working those of in on year look quarter. of that terms the fourth refer number mirror plan to of fourth so to are what we the saw the as adjusted those days we we goes around for many and days basically, visits -- how days, the number days

forward the tested we we seen flowed and adjustment in in We've feel current that productivity pressure witnessing. And into the think so QX productivity levels we same continue the levels capacity again, upticks through that. we're QX. good utilization. But forward besides it's we seeing overall, have Though witnessed the period, are we with it. We about offset prudent for holiday to that that obviously

Operator

question next Jefferies. Brian the of comes Your Tanquilut line from from

Brian Tanquilut

to last question of CMS out first my guess I relates week for on came final the services. coverage behavioral rule health that

are over in potentially years. Just of curious you terms few positioning see your to the you're that how what benefits from next thoughts benefit the how and

Ken Burdick

obviously, Yes. to that's sign encouraging an us. I think, Brian,

in pandemic of that affirmation I before that they comments, and just is the mental getting that. that is mental was the underfunded we, a many the illness were behavioral the both simply Americans health the but space pandemic, maybe consistent And that my of health way too think as undiagnosed need. is catalyst with tailwinds it's treatment diagnosed The health have care. a weren't another there fact reality as the with this I matter said is, the country, experiencing opening and

that So to into we this primary the was an do. that CMS care need physicians screening build acknowledgment by this

also the it's behavioral care treatment. was step enthusiastic and it unifying care to because And another toward health so I primary see

Brian Tanquilut

then, forward. just acquisition targets Ken, about to going side on your And on you. larger focusing Got comment the

mean, As does terms how like I of what -- deals? versus landscape, for or assets out at you there like look look scaled is smaller big midsized that assets that in market that

Ken Burdick

know, assets space, did a assets. things arrival, fragmented. one but a we is acquisitions that's in we company, Brian, highly before that all scaled impressed the acquired that you scaled really my far acquired this by how the well them won't I I'm Yes, of number large the as of of say

about to of X- because, set of not we brings So and X-person assets the set different they they characteristics pursue the are is of small, services them comment their simply going provide. a be -- and while to larger may that X- unique practices really own signal perhaps each

the forward started we this applaud of again, this when I platform, X as to view are were journey going -- higher your they huge organization. many And and it's a years accomplishment really recognition To there for positive on are a that And I ago. call, that scale end. rigorous highly out cost cost the so be as more through going in we're organic fragmented this, bringing industry, created growth it's to to going more hidden there because integrating point, what focus not And them hidden on them certainly much our that but assets be and large of we efforts. is I'll as great to acquisitions. be And has which organization that harder of this job why recruiting simply doing there a going is to of looking

Operator

Your next the Ryan question from William of from line Blair. Daniels comes

Jack Senft

a on Daniels. have for just Ryan Jack Senft I question. quick is This

any the on front? of necessarily some a have would shield they additional But the color terms for that kind of Or mean, thought that this the you the if aren't extent on revision. to covered an guess In front macro just or enterprise cost consistent given pressuring the your the enough comments specifically hours? curious you this I of have is appreciate where clinician of market? factor offering these the is more of just headwinds, on the patients. the I if just curious this revised a is result kind would model of I I'm end visit guidance, volume, environment I cause

Danish Qureshi

correct. that's Yes,

the So elevated less time driver there, in in primary in QX than is under when or capacity, they of you less offer case productivity prior quarters meaning they took time as did off. offering levels time are the clinicians get this

that demand that fill patient are are industry. all utilization, working they our clear, and of in there funnel on to with shortage patients, our is rates, ability that to the time on the previous call be cancellation giving I the middle But reduced we bond and simultaneously just So no call. addressed initiatives on meaning

This demand issue decline. bottom patients. overall an and not or of funnel is really So a acquire this to is clinician coupled a ability capacity with at improvements middle patient top funnel

Jack Senft

a as And up. follow just Understood. quick

this sequentially. headwinds kind noted the would and gradual that in quarter you this only all accounts think the of fourth change these X the an I receivable impact of items beginning anticipate year? specific results? next caused of a fourth impact resolved in like X be you increase Or Do into to be where would quarter? Or

Mike Bruff

we changes days, in working thanks. around somewhat unique by through situations was in DSO payers when that in go and typical were increase through rates quarter. driven and coding The to those increase be This X.X Yes, of very is and you types working three expect resolved an unique through of payers. just to days It requirements. fourth changes the few in a

drive team. X resolved. been have that investing So processes. able driver drive cycle which management improved days still in be we're will opportunity a collections over process investing we of revenue resources we've confident end-to-end is And quite Overall, the we'll efficiency those optimizing We've tremendous those in been be time. that in -- to to productivity amount of why in our and

Operator

the from Goldman Jamie final Your comes line of Sachs. Perse from question

Jamie Perse

Ken, maybe to one a high-level start.

see priorities a and of accomplish, benefits? that easier that time You you some to more Things describe versus those are work fruit less you. define as low-hanging opportunities described time going some the maybe longer-term to challenges you and the the however that would would bit ahead are a to little little of bit that? on What take take list,

Ken Burdick

think mean fruit. good done the I I of lower-hanging a has job organization getting the Yes. into

as optimization is now fruit to going Danish to total I processes. we to where market consistent to in addressable remarks, it's operating low-hanging have forward. And it's things, follow there I the bit look up invest is, leverage pain scale that think but hard the with we then point challenge don't lot do automating of are, have and because a to of that said points couple we I business, and we our have us. in saw front we of of a to the work. a need want at little actually, of was processes his If have the assess we to really end-to-end substantial the we leverage room for imply more those operating with

So I wish our but easy of the there stuff reality. next we that's I pick see a XX, could it not days could that you all in you'd through was and XX lot tell

Jamie Perse

evolve costs are of scale second like the processes like and my structure? to cost between leverage. and described, you getting sustainable and understand path where What then? to you trying today And as just mean do what you now the point just question, what infrastructure that as Okay. that between for the does operating I'm looks look the

Ken Burdick

as in further the throes our really that out 'XX to Well, I can planning have process can't I and infrastructure. precision long-term business with the more you provide I before, build tried What color. mentioned of since and right we're objectives, we is share the

pain that at we can have throw has while alleviate not that people worked grown, way we As to forward. points, problems. tended And going to function have those we the it's

in work where sure pause. the of we put to leverage is in need make operating need in upside not a standardization company automation. this process we that but a do that we We want we so solidify we ourselves why that to space much difficult a drive infrastructure But only position future and can improvement, to that's years. so And has the

Operator

call. this you gentlemen, your and participation. today's Thank does for Ladies conclude

disconnect. You may now

LifeStance Health (LFST) 13 Nov 222022 Q3 Earnings call transcript