Earnings call transcript Q4 2022

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Operator

Ladies and gentlemen, welcome to the LifeStance Health Fourth Quarter 2022 Earnings Call. Please note today’s conference is being recorded. [Operator Instructions] At this time, I will turn the conference over to Monica Prokocki, VP of Investor Relations.

You may begin.

Monica Prokocki

Thank you. welcome Health and earnings quarter everyone call. conference morning, to fourth LifeStance XXXX Good Prokocki, of Vice Monica am I President Investor Relations.

Joining Executive Relations our Officer; morning. Both and Ken section presentation before Burdick, of Chief release available opened the are Operating Officer; this market issued Chief Danish me Financial Qureshi, on and website We earnings are investor.lifestance.com. the Dave today Bourdon, Officer. Chief the Investor

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

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

non-GAAP report presentation performance. A prior release to In help noted, year in measures past included of and addition, the investors please prior the we results using and to otherwise facilitate press for we note the compared is comparison results reconciliation tables provide financial information which earnings appendix. that directly additional Unless GAAP comparable most believe all to measures, are period. comparative

to CEO of Burdick, Ken LifeStance. I over time, call this the At turn will Ken?

Ken Burdick

I start increasing clinicians affordable thank would X,XXX outpatient Good highlighting to to mission of market-leading joining leveraging tremendous today. healthcare. personalized the mental of like LifeStance platform morning and with is opportunity nationwide, and trusted, our you us for the by access ahead. over

diagnoses all mental offers allows approach clinicians that model and us multidisciplinary health to hybrid types treat Our our virtual care. of diverse in-person mix of of through a

and the offered advantages flexibility. highly both which model gives reinforcing our our focused remain by hybrid patients on providers desired We strategic

support year, PHE, positioned we in Importantly, centers. in providing care both this virtually of and or May to are patients as the by Public well our ends Health compliantly Emergency,

high-quality We care over patients In services are XXXX, million in-network through XXX,XXX affordable, commercial treated clinicians continuing health X.X approximately mental providing to visits. with by to expand reimbursement. unique access our

Through years growth, all-out we an sprint. been early have in the of tremendous company’s

focused to building the in us. opportunity level we scalable processes already LifeStance not huge of have and the Now, growth but systems, we on to are support only of attained, for front prepare

required growing As focus continue growth. previously sustainable committed we shared, business enhancing are end, To the delivering our we on scale. performance profitable to operational at a to to that operate and tackling execution and blocking and

highlighted LifeStance In earnings will our I last call, receive greater several forward. at areas that going emphasis

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

are to to real we For leverage improve our over the XXX process LifeStance’s optimize our example, evaluating and of physical in operating centers spend. estate generation, cash

further novo some minimal no approximately moderate patients We to our of consolidate our disruption XX proximity de due growth and to or the expect close XX to to to offices, offices. of with clinicians

in Second, this the few scalable next over make strategic years beginning investments we will year. enterprise-level infrastructure

we infrastructure, mean our automation end-to-end manual optimization, and reminder, process strengthening standardization, we scalable reduce when platform a processes. to underlying As refer through to

as become will strategy complexity, Third, simplifying focus selective. our on we more administrative payor

affordable number our of goal is the contracts, less our reduce year, our contracts reminder, end payor XX% access to burden administrative represent than By and of with a high-quality, bottom XX%. by of the As align reduce this while share vision us and mission payor partners healthcare. better X% of will volume. to allowing of expanding who to in visit This mental our our approximately invest payor

with massive scale of in in growth a clinician absolutely Acquisitions on broad are XX% this rather to growth. XXXX, now years, than we organic crucial toward over shift adds were states, to hyper-focused were growth opportunity Fourth, place acquired. but the across acquired market. organic XX In we footprint building versus hired our gross LifeStance’s in continue early

investments the In or like benefits The of brought strengthening days, last XX our as would we quarter, to in performance. our in DSO I we result fourth quarter’s management reflects this made encouraging days highlight in Finally, cycle down sales from flow revenue the quarter’s improvement to X-day an initial free data XX cash outstanding, process. point saw a DSO, operational days. our to that direct progress

our of the of fourth at million exceeded was quarter high-end million center the and range the Turning of expectations. $XX to financial of quarter. our Adjusted for revenue fourth $XX million margin $XXX results guidance of for XXXX, EBITDA

we are encouraged before more we sustainable work and operational we While achieve much our in is and recognize by meaningful do performance. results, there these improvement that financial recent to

cash terms us our to capacity bridge year. enable provide will and our which remarks, begin future prepared XXXX our multi-year simplify processes the our serves have with end-to-end tools what we last Consistent that of we next efficiency quarter, to will outline generation. operations. specifics that be standardize In on our this years work improve as In platform. and consistency, will our investments of our our will business flow profitability will the fortify making Dave share guidance as expectations to commented on Dave in also unglamorous X This committed the and important, focused his will but a to to strategic investments outlook, strategic introduce previously, and operating

long-term. strengthen XXXX setup LifeStance and in foundation for XXXX the to will success the in We

of ahead. size. lie and organization required to be the transformation our career right that newly for our In opportunity of people, management focus that confident of front have we about I led position change in am will closing, the drive fundamentally business. LifeStance plan launched that realistic strategy opportunities in our I am will processes type I and an this I of I robust effort improve multi-year my effectively enterprise-wide previously the that in have am the about amount to also Office Business Transformation confident remain us. required bullish and the

it additional turn performance Dave outlook. to provide our financial now and will over Dave? on to commentary I

Dave Bourdon

I earnings position, opportunity, call. forward this look my I we talented Thank pleased you, our compelling financial working discipline annual on our can of increase very processes and improve participate team. growth and market because LifeStance joined Ken. with multi-year am significant to mission, that to commitments. our so to our unique I company first its team in deliver consistently and planning

XX% per Total LifeStance increased visit higher volumes in XX% increased productivity. our top of $XXX. turning year driven to the quarter of than Visit performance. results. count line outperformance strong year-over Now, to increased the with and million quarter $XXX X,XXX,XXX X% by fourth primarily clinician Revenue expected year-over-year, revenue year-over year. delivered

Our basis materials our visit. revenue look beginning metrics and forward forward. Therefore, function posted to total first a quarterly of is the volumes with a quarter these the information, XXXX, Historical to on going visit of earnings website. is revenue in reporting per provided we

we delivered of For up XX% year, year-over-year. full the revenue million, $XXX

Additionally, a was by flowed EBITDA our XX% $XX year-over-year. the through of quarter team. previously and Center XX% G&A Full such included as cycle the at million the quarter investments of These $XX end our management Center was the of better-than-expected Margin $XXX higher as year across growing revenue line than expected. top result, in results business guidance and were the range, investments Adjusted high year-over-year. increased million Margin. grew in of to Center Margin million accelerated,

full year, X.X% revenue. the adjusted million, of representing $XX For was EBITDA

liquidity. free quarter, of million In cash and Turning flow from cash we $XX to fourth $XX activities. the generated in million, operating positive

improved Ken driven were positive improvements by in mentioned, collections. As these cash flow

a it see encouraged by investment progress as our this are tangible team. and We in this return on

to that $X.X and DSO Our days each million. highlight represents fell like these by X days of one I’d quarter-over-quarter, roughly

Additionally, openings. capital pace of the with consistent moderating expenditures of our were novo de center strategy

with $XXX million long-term and million. We exited debt of net $XXX the of quarter cash

a sufficient have loan as We from $XX well million providing as flexibility. financial us of debt delayed-draw $XX additional million capacity with debt revolving facility, a term

for expect EBITDA In $XXX full year our $XX and $XX to $X.XX to of Adjusted XXXX, terms revenue we $XXX million Margin of billion, of $XXX million, outlook Center million. to of

modest clinicians revenue in combined assumes growth assuming primarily per generally increase guidance annual year-over-year. consistent are Otherwise, total higher the visit. revenue performance Our by visits with we year-over-year and operational a driven

revenue year half a second contemplates split roughly of and in the first also to the guidance seasonality. of due Our XX/XX

to at invest higher margins in a the than depressing rate as which grow we business, revenue We is strengthening expect year-over-year. G&A

For to $XX $XX the Margin first and quarter, million, we expect Center revenue of $X EBITDA of $XXX $XXX to to of Adjusted million, million. $XX

to to seasonality our We taxes expect margins quarter of some services EBITDA reset payroll patient of the to be first deductibles. down adjusted due related sequentially due to and

half of earnings the second We also improve to support investments year. quarter, resulting first in half business. to more expect expect the modestly in driven remainder then by incremental the of the first year, margins the the versus additional in for We expenses the G&A

approximately we in $XX $XX expect to expense new stock-based compensation $XXX including million the approximately from grants. XXXX million Additionally, of XXXX,

spend For of $XX of acquisitions. from million, the to up earn-outs years’ year, $XX million approximately prior M&A in we are expecting inclusive

sheet not have raise continue strong to We do anticipate in the need capital and XXXX. a to balance

funding driven second, such increase flow compensation the taxes, half free the as costs January. factors: in We temporarily of cash and two in have bonus in negative an first responsibility reset XXX(k); deductibles and year, the to the DSO by by expect of driven higher payments primarily payroll as first, patient higher

from absence first the year generate along half in these half cash DSO free of improving We costs, expect quarter first levels. flow to with positive second the the with of

Ken continue achieving serve LifeStance members, make clinicians As while will grow. to highlighted, benefits believe as significant imperative to and that to which deliver long-term strategic investments we our patients, enable areas those it’s we leverage in operating team better

our health identified an XX occur will or We investments employees, of months. critical system effectively credentialing and of lifecycle onboarding implementing to record HRIS have EHR entire the are, platform experience. two, enables clinicians, the that three XX These implementing next manage enhancing investments electronic our that to technology three and over a one,

implemented, a add-back will these Adjusted through for strategic Once as the costs calculate ongoing item We spend non-recurring to the G&A. EBITDA. initiatives come as discrete will identify

of planning onboarding. platform in supports credentialing the that and and the phases are the We and technology HRIS implementation

in to We as initiative the of in be million. with majority the this, the with We is Of to a anticipate $X.X CapEx. expect the EHR early those $X the $X of year. remainder very of next million cost investment to in recognized stages discovery. this be be expenses will XX to that months incurred will completed approximately The $X.X XX G&A

We our vendor a from to solution. expect alternative XXXX use evaluate an to vendor range of implementing collaborating options, to most of current with

provide estimated XXXX update we will for timeline the initiative. our when path forward, We guidance you on and EHR costs

is going to all, be year. a in busy All XXXX

key know building are we future. there and this committed, We company are our ambitious, initiatives. and a we to ahead, bright is going we and execute for growth are long are We on significant

capture that fully organic we We opportunity. to deliver being will ensure XXXX, for that make with the way investments mid-teens we along the future through revenue X level expect M&A years, X incremental outlook In to the necessary next growth. to potential of growth regards to our to annual

We expansion expect XXXX. of and higher such XXXX digit The improvement margin with margin with trajectory margins mental improvement growth leverage, therapy. material by levels by as in XXXX the double end payors, driven from offerings, rate and group of be neuropsych current Adjusted testing to and will EBITDA a operating health

We positive be to growth. well cash free both expect as to organic M&A fund XXXX as for moderate flow

Danish turn operations. to With additional for respect to over with that, I’ll it color

Danish Qureshi

Dave. Thank you,

on we growth aligned our business mentioned call, clinician As priorities: teams and one, last around have two clinician two, our productivity. earnings

in we growth, an the to adds saw approximately of clinician In fourth XX% clinician year-over-year. quarter, of total X,XXX, bringing XXX terms increase our net

approximately this growth XX% Importantly, was organic.

productivity, with patients, in-line relatively previous saw our see clinician quarter. the or capacity, the available Regarding make to clinicians trend we time

team, we bottom to on internal the we partnerships. delivered patients, In new operational traffic, with terms made fill middle, of clinician of our ability the to funnel. referrals, referral discipline enterprise top, clinician At a improvements utilization, continued referral and with enhancements primary top and of patient care or patients. attracting in the time These focus driving our actions funnel, search organic the

national via to By capabilities OBIE in funnel, and OBIE. patients appointments, mid-year. XXXX converting the to patient remain at the matching by online terms pace for to year-end, scheduled live full booking experience, on we our continue in leverage our middle we improve of was digital a XX rollout Second, states of

to complexity, experience we our processes, phone overall enhanced middle the to which scheduling provider of funnel. better our led enhancements Additionally, have intake of reduced profiles, user online the at all and improvements through

terms fourth in rates to of the Finally, at improved cancellation funnel, bottom the half converting of completed our appointments quarter. point by a in scheduled visits the

All fourth of the better-than at in middle contributed bottom the productivity quarter. these improvements top, expected to and funnel

Turning hybrid to model. our

May requirements on controlled requirements believe can with patient competitive our offering. To our ending Medical even Chief capture mentioned, plan the and in-person to XX LifeStance well for our experience. of seamlessly and degree that our and in-person patients flexibility, further of the As quality increasing PHE both of We services winds provide the We Officer the for Ken reflects hybrid the the substances. down will meets our XX, patients’ of in-person disruption us patient and a avoid care. virtual magnify visits, XXXX prescribing of forth in highest we set including is NPS our preferences positions model in as PHE expect hybrid demand provide score this care, resume. differentiation for our in-person has

core of a our Turning centers strategy. hybrid to estate, real part physical remain

to proximity at locations, in a and us in-person and to factors we our way. opportunities occupancy optimize resources of see center our thoughtful efficient However, other looked footprint. We allow each usage leverage costs and to allocate like to existing

a As XX our our consolidate to novo to we year. locations XX XX last XXXX, while plan existing openings of in pace result, to de of down to from XX XX slowing

disruption cause these clinician minimal and to no allow adds efforts Importantly, patients. to for will clinicians continued and

wanted early two services, shared of of foundation In progress quarters improvements clinical made Officer. pleased team and the some operations, have thank drive as the our to we helped members I’m that closing, Operating my at I together of all across Chief in business. have the

we improvement there focused I continue more However, priorities. our that ahead much on fully top aware opportunity am remain to is as for

Ken remarks. closing to back it for turn will I that, With

Ken Burdick

Danish. you, we the are note. a closing, pleased we that positive year concluded In Thank on

by encouraged recognize we fully that are signs improvement the early of much ahead. work but We have

which creation like high shareholders. X to and Our also our of for to access would streamlining years, the next to profitable focus our commitment standardizing mental way and take improve value a pave employees for and for remains long-term business on the to our the sustainable patients, our growth, dedication LifeStance transformation to thank will moment mission affordable and to over I healthcare. our operational their to quality, and

take We will your now questions. Operator?

Operator

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

Craig Hettenbach

the but Yes, to operating might flow? about steps. years and same maybe next just for see can what talk thanks. the competitive optimization you of margins and few brick-and-mortar, you of the envision more Ken, encouraging time, that kind mean It’s at advantage the how footprint cash kind having efficiently of free

Ken Burdick

Sure.

So, XX, operational remarks, for offices. way consolidated because optimization, utilized. opportunity roughly way And little close being disruption, of at those or to I a we the and take and which acquisitions bills your de the as to proximity think estate we look an with run no in a of the the were of be great created your centers hard novo What can our of that prepared is us real Craig, said the XX centers question. comments of the we appreciate example think, The that greater we found in the discipline. made is trying we are combination business with

demand this seeing, we are patients for our seeing important, is preference increased and and visits. are from in-person We

now a footprint. call in great which to given financial explosive XX% pivoting on really operational that, we that a it which the our X balance state So us after of prepared growth, both are we much question, are discipline. to going platform us having But Americans be really we to your or is make It that to speaks and critical. patients is The of cover so of to our sort a careful to allows find our second certainly overlying accessibility years and right positioned of of covers. convenience sort remarks of XX about of part with focus theme sure that

of will As we the absolutely cash Dave as said, in are positive that second to the committed flow to year. lead half this exit margin we And ‘XX. double-digit

Craig Hettenbach

in OB then comment And mentioned just clinician benefits Danish, you of it. can rates. for and You Got of follow-up maybe reduction a on the retention? some cancellation

some looking just and that’s productivity shaping all how up? for terms in more of So, color

Danish Qureshi

Yes.

saw So, the the across did middle funnel we we in see as it really meaning prepared in full in productivity, mentioned remarks, the quarter, and improvements fourth I bottom. top,

with so around discipline we were plays of results out kind that focus ultimately our how And and pleased that and in productivity. on utilization

As in our quarter. experience full clinicians. the far that in as retention multiple about company going improvement to around is something see and a have ensure the be lift to the an everything past, as improvement fourth did of really the consistent something are quarters for we we goes, talked that This and best we takes permanent is retention delivering in that

reason need this far So, as and to that at basis we believe forward our point any guidance think We providing a we how about plans are don’t on goes. have we retention by encouraged reset go improvements. to as that

Operator

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

Lisa Gill

more I Thanks in-person. talk start about ‘XX, for the then very just in-person can versus to –I first have much. talk expectations where much are curious, I morning. network am wanted about XXXX? I heard of just Good wanting about centers? you how with virtual current that consolidation, people you experience. do you Can your and And within you exited capacity you talking

Danish Qureshi

change where will I virtual. so we that. That are continued of back QX, of from were towards overall sequential XX% in-person. look patients was our When point providing our And quarter visits clinicians and care in service, and at the trends kind take previous of

demand an patients looking seeing in We calling appointments. in in-person are increase from the for

of We that, of we we for centers will as through year. ensuring that XX, de balance proximity now telemedicine right that look close locations many capacity optimization and the offline locations. that to believe striking offer as focused we network legacy this appointments the kind have well we year take will in physical availability Ken project of clinicians. novos XX of at how because across current as about help other of on given to in-person the to mentioned, where balance, because of quarter any right including to continuing open our right that the every remain So, will will continue X,XXX have in-person we that optimize our are we ensure But every and our

Lisa Gill

XXXX? expectation And virtual in for your what’s

Danish Qureshi

down. will business the think where to see to hard on a have will But this and as something of total have of where we point. demand us. expect view to don’t that market the I that takes patients do it We percentage is what will trend be virtual just we settle patient out continue

model, because us patients hybrid are optimize really shakes and wherever it and out. shakeout. our will physical virtual our continue preferences of quality the For tools with to clinician we footprints comfortable are of digital delivery to good of care agnostic ensure And wherever we and

Lisa Gill

the talk Great. the for in guidance Can the for X.X%. year, of look I quick And as course margin Dave, follow-up, just just we thanks QX it The of then X.X%. that about? think the midpoint like is about at the should guidance. a should margin maybe is midpoint progressing the about there you we the variables and the the key any is how year ramp think if and If over

Ken Burdick

Lisa. sure, Yes,

services that’s resumption to prepared and highly first I a we primarily due extent, So, taxes for of testing, quarter saw high down, also deductibles. then that to was the like margins remarks, being the of the patient my in reset and and of utilization margin neuropsych lower employees, compensated lesser about payroll talked

quarters. increases. year, in of payroll pay as rest into the get reduction the rate in also products And will then increase to help see the the taxes, the higher look to margin obviously some we we we going later or the that’s modest as So,

QX So, through three contribute things QX. higher to will from those margins

Operator

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

Jack Senft

demand and strong guys. Congrats know Ryan somewhat in-person. quarter I year. follow-up Hey Jack When the it is for comes and in-person versus on you Senft on Daniels. This from is Lisa’s patients Craig are questions. virtual care, of to experiencing a This more the on

XX% get it patients patients that to or parse about think how and is that talk XX-XX clinicians is come it Is I for trying coming that it on, you patients do and consistent pretty virtual just onboarding desire, back or down, in-person, out am that more Thanks. see both I patient? any even are we split new to So, level? generally that if the commentary wanting between was it’s would existing each in-person, in-person come help. to virtual possibly

Danish Qureshi

Yes.

this is Danish. So,

generally there in-person see patients for you a is, visit. what the is or the initial So preference virtual with for

initial visit, of However, forth their the are their over treatment even flexibility selecting with being enjoy virtual and to between course able their clinicians. the of that in-person patients in-person the and back move for

the just adhering continue real for so plan not it life they by And is one visits of to, well plan. and increases to being amount going both them an for in-person switch gives the to a clinicians, skipping their model visit personal the with significant consistency for able factors on as that positive a that’s care to whatever flexibility care of of get of is but operate as can the able being patients may to then a and and access, hybrid virtual to difficult not their be convert visit in their patients

Jack Senft

Thanks. Great. that. appreciate I

investments credentialing the piece. mentioned, beyond, As which you the is you to we want focus the about on second discussed for investment I XXXX think and

have comment how expectations an when to when curious increase might that especially side. with any leverage comes through? impact if you this can flow on Thanks. the then Just negotiations, if impact, will results it secondly, see just help to do And payers, the if you does payer to and have on this

Danish Qureshi

onboarding experience our clinicians to time. helping get mentioned them to So, the process, ram faster we specifically, speed the in credentialing remarks, Dave prepared in our for over the the systems about quality and is really our and or improving and of mentioned, the that investments

– particular credentialing Would So, give the with give us system not not area. any payers. that’s would the primary us leverage purpose

have in revenue. bottom X% our this than payers And that mentioned, his year total XX% However, as bottom contribute for XX% one those less of focus is of the Ken of we us. of section, the pruning areas

processes, well total we that we so administrative of the out a system, are portion services are business, complexity provide as to and ones the put can our our well taking of the improving that our as value payers we our are throughout as attention the country. significant what as And more

Operator

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

Brian Tanquilut

Congrats guess seeing, quarter. the question got to some for work especially macro maybe you, And how I as we peers of seeing? are And in-person. and of your Hi, normalization are back Ken, backdrop out you retention. have of the on What and you what business, think or your my differentiates the more guys. here are your I good do people you morning maybe the view patient from about going what the client competitors Obviously, or insurance sensibility given exposure? COVID. virtual

Ken Burdick

I leads which our ability it of the cadence are, point, patients want he think a a important – also they meet Danish virtual, And want regular visits. to also an they referenced, in-person, the made is as sometimes creates has they a to where really a sometimes Brian, stickiness. more that

So, less visits the which skipping sort patients of so health treatment important our receive. to mental that is

best is think obviously we this So, model. the

demand we see don’t seeing in that point COVID, settle and high terms change are virtual, of are in for Think a a trend. the a mid-XXs. reached out, And now but not at each XX% we we know height dramatic. about of to in maybe steady of it’s where going it’s towards getting the pointer it’s quarter. a sort slow the during But of We not it don’t We in-person increase drastic. visits. to It’s

we a positioning like model. So, as hybrid our

Brian Tanquilut

maybe seeing volumes Thank from COVID some are the then more guess you. or traditional Understand. the hybrid be people those I maybe would recruitment front, and are any as of any color is the models recruitment small change And just interest practitioners any you on of So, from again, pure on helpful. normalizing some running increased changing?

Ken Burdick

yes. Sure,

So, in continues robust. clinician the came of recruiting our remain remarks, adds XXXX very to engine. through organic our we And prepared engine organic our mentioned recruiting approximately in XX% like

where positioned feel we going we in good are to there about scaling continue So, and into that investments very XXXX. make team

from on as the are and seeing we seen focus past. we we recruiting far their than recruiting really ourselves in It’s in to any ever market really always competitive of been the increasing of competition position pops, As have kind and related mom well market difference amount the built a organic there. not have

Operator

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

Jamie Perse

morning. Good you. Thank

Just spend guidance minute a XXXX. the for to on growth revenue wanted

from acquisitions I with from in terms the new the just far getting of organic along the and just clinicians, you XXXX. the pretty think guidance hires maturing XXXX XXXX, to gets for growth the of

growth couple of And hires, guidance what then per to incremental productivity kind you for XXXX guidance so of assuming per trying a for of visit. think? in in understand what’s But embedded I drivers I am increase organic and ‘XX? revenue slight new that, productivity, incremental those for On the just said understand just are beneath visits clinician, trying to

Dave Bourdon

This the appreciate question. Dave. is Yes,

XXXX improvements. guidance As my not operational and I any revenue far year in thing from perspective, as prepared the assuming full remarks first for we is a are said

assuming from ‘XX So, to a ‘XX. productivity consistent are with we be perspective, pretty

clinicians, is, we Danish robust clinician growth but would on expecting clinician minute as have guide going a are point we Second not are engine. ago, just mentioned do to recruiting I a make we

And and so good we coming we are mid-teens that throughout about organic And growth business. the feel growth, expecting drive from clinician the will growth year. visit

Jamie Perse

optimization types center center margin are in or in is rents seeing that there estate I I X% margins for context, it is on as benefits the of you from of much as looks where which over just piece, go And physician stable, And time? bigger the X% market? how compensation, pressures where these the like year-over-year, sales that’s what the but real that are percent think there? seeing Is given demand some there clinicians you out there incentive or then get for guidance of the cost, up just well, Okay. like

Ken Burdick

Yes.

So most for not part, the are salaried. clinicians our

we And have compression. not so a And seeing wage less margin exposure from other the we perspective, of companies. some are versus

as that XXXX, of are rate a to offset noted, the As increases little our in wage we expansion clinicians. on to you bit just passing are in margin our margin we guiding increases help center

Operator

from Your next Caliendo line UBS. of with comes the question Kevin

Kevin Caliendo

more Hi. impact and to more little of or wanted the up of overall level a the take it, doing Thanks on am they national payers some like, through at at with regional terms the consolidating for payer us become how taking with of that are does your reimbursement? impact to my what questions. I end this relationship contracting the rates? and works can think just the bit how and and I with rid more about sort if it? better talk you the guessing in and or If a getting payers the smaller some of what of is of you Do stronger your are payer, about you

Ken Burdick

it’s large de percentage even volume. contracts, of Kevin, though it’s percentage the of payer our minimis visit a

in he So, XX% we respond, contracts it of less volume. represents our our Danish’s out, than talked and about, payer take of X% can

to the therefore, really will not leverage will a be much the to going leverage things it’s it’s administrative The it that is creates. So, it And running that going one help, have contribute business. in more efficient simplicity of our to on rates. help

Kevin Caliendo

they for kind payers? have sort I relationship terms point, of sharing it national sort you the impact And that question, at am or think this forward? may with of to the just second strengthening payers, of and I you, in might that leverage any to anything is At how are relationship about assets you how it just in from level. with being more if additional and understood, wondering leads going looking pricing way, else, anything the the trying the was of a between you Yes. them data done any I Okay. was of my which

Ken Burdick

question. Yes. No, it’s a great

sort bottom of the Let is to National with affected, is, which me for that really first occurring of because payers. are going small really than your rest we the quartile to respond be question, X%. on accounts less the focused only aren’t and definition, by consolidation regional payers local,

absenteeism, whether payers, it’s visits the health As can it relates we demonstrate ER, such are, school things so in-patient really to data interested well work, reduced managed we mental that are the and relationship care. and at as at they as or to on impact the the sharing as of with

that’s collaborating are about care. the we several towards really pilots. where those move behavioral patients years, vision and sure to we interested and theirs environment are we health make as care provide our are something receiving are next with more an the doing care, holistic enthusiastic pretty some value-based are that they LifeStance. physical So, integrated And that for that and over is we That

come. So, part part of increasingly of and you absolutely a playbook, years in be to is it the referenced what important our strategy our have an will

Operator

questions There LifeStance time. are XXXX quarter This this at earnings concludes call. the no fourth further

You may disconnect. now

LifeStance Health (LFST) 8 Mar 232022 Q4 Earnings call transcript