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What changed in Talkspace, Inc.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of Talkspace, Inc.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+285 added−246 removedSource: 10-K (2026-03-13) vs 10-K (2025-03-12)

Top changes in Talkspace, Inc.'s 2025 10-K

285 paragraphs added · 246 removed · 198 edited across 2 sections

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

11 edited+0 added−1 removed16 unchanged
Biggest changeAlthough our risk factors include further detail about the material cybersecurity risks we face and how a cybersecurity incident may affect our business strategy, results of operations or financial condition, we believe that risks from prior cybersecurity threats, including as a result of any previous cybersecurity incident, have not materially affected our business to date.
Biggest changeAlthough our risk factors include further detail about the material cybersecurity risks we face and how cybersecurity incidents may affect our business, management has not determined that any cybersecurity incidents the Company has experienced to date have resulted in, or are reasonably likely to result in, a material impact to our financial condition, results of operations, or business strategy.
We have implemented the following activities (among others) to mitigate risk: • Periodic risk assessments to identify and assess cybersecurity risks and vulnerabilities in our information technology systems; • Background checks prior to hire; • Encryption of data at rest and in transit; • Logging and event monitoring; • Threat detection to monitor for malicious activity and anomalous behavior; • Malware protection and restricting connections to malicious websites; • Data loss protection mechanisms; • Third party penetration testing and internal vulnerability assessments; • Cybersecurity risk assessments of our third-party vendors; • Reviews by internal and external audit of the effectiveness of information security-related internal controls; • Closely monitor emerging data protection laws and implement changes to our processes designed to comply as needed; and • Carry information security risk insurance that provides protection against the potential losses arising from a cybersecurity incident. 39 Table of Contents Our incident response plan, as implemented by management, coordinates the activities we take to prepare for, detect, contain, eradicate, and recover from cybersecurity incidents as well as to comply with potentially applicable legal obligations and mitigate brand and reputational damage.
We have implemented the following activities (among others) to mitigate risk: • Periodic risk assessments to identify and assess cybersecurity risks and vulnerabilities in our information technology systems; • Background checks prior to hire; • Encryption of data at rest and in transit; • Logging and event monitoring; • Threat detection to monitor for malicious activity and anomalous behavior; • Malware protection and restricting connections to malicious websites; • Data loss protection mechanisms; • Third party penetration testing and internal vulnerability assessments; • Cybersecurity risk assessments of our third-party vendors; • Reviews by internal and external audit of the effectiveness of information security-related internal controls; • Closely monitor emerging data protection laws and implement changes to our processes designed to comply as needed; and • Carry information security risk insurance that provides protection against the potential losses arising from a cybersecurity incident. 43 Table of Contents Our incident response plan, as implemented by management, coordinates the activities we take to prepare for, detect, contain, eradicate, and recover from cybersecurity incidents as well as to comply with potentially applicable legal obligations and mitigate brand and reputational damage.
We can provide no assurances that there will not be incidents in the future or that they will not materially affect us, including our business strategy, results of operations or financial condition. See “Item 1A. Risk Factors” for further information about these risks.
We can provide no assurances that there will not be additional incidents in the future or that they will not materially affect us, including our business strategy, results of operations, or financial condition. See “Item 1A. Risk Factors” for further information about these risks.
The CTO has over 20 years of experience and leads our Company’s information systems and technological advancements. The SVP of Engineering has over 20 years of experience in IT and has specialized knowledge in systems and network infrastructure.
The CTO has over 21 years of experience and leads our Company’s information systems and technological advancements. The SVP of Engineering has over 21 years of experience in IT and has specialized knowledge in systems and network infrastructure.
The Director of Site Reliability Engineering and Security has nine years of experience and has principal responsibility for our network operations and system administration.
The Director of Site Reliability Engineering and Security has 10 years of experience and has principal responsibility for our network operations and system administration.
The CISO and the Senior Director Information Security are responsible for our overall security and assessing and managing cybersecurity risks and threats. The CISO has over 20 years of information security, privacy, auditing and compliance experience and holds numerous certifications. The Senior Director of Information Security has over 15 years of experience in information security, and holds numerous certifications.
The CISO and the Senior Director Information Security are responsible for our overall security and assessing and managing cybersecurity risks and threats. The CISO has over 21 years of information security, privacy, auditing and compliance experience and holds numerous certifications. The Senior Director of Information Security has over 16 years of experience in information security, and holds numerous certifications.
As of December 31, 2024, the majority of the Company’s employees are working remotely. The Company has limited operations outside the United States. The Company has one foreign subsidiary located in Israel which leases its operating facilities under a month-to-month operating lease agreement. The Company does not view any of its leased facilities as material to its business.
As of December 31, 2025, the majority of our employees are working remotely. We have limited operations outside the United States. We have one foreign subsidiary located in Israel which leases its operating facilities under a month-to-month operating lease agreement. We do not view any of our leased facilities as material to our business. Ite m 3.
Ite m 3. LEGAL PROCEEDINGS The Company has no material pending legal proceedings as of December 31, 2024, however the Company may in the future be involved in various legal proceedings, claims and litigation that arise in the normal course of business.
LEGAL PROCEEDINGS We have no material pending legal proceedings as of December 31, 2025, however we may in the future be involved in various legal proceedings, claims and litigation that arise in the normal course of business.
See Note 8, “Commitments and Contingencies,” in the notes to consolidated financial statements included in Part II, Item 8 of this Annual Report on Form 10-K, which is incorporated herein by reference. It em 4. MINE SAFETY DISCLOSURES Not applicable. 41 Table of Contents PART II
For additional information, see Note 8, “Commitments and Contingent Liabilities,” in the notes to the consolidated financial statements included in Part II, Item 8 of this Form 10-K. It em 4. MINE SAFETY DISCLOSURES Not applicable. 45 Table of Contents PART II
The Company accrues for estimated loss contingencies related to legal matters when available information indicates that it is probable a liability has been incurred and the Company can reasonably estimate the amount of that loss.
We accrue for estimated loss contingencies related to legal matters when available information indicates that it is probable a liability has been incurred and we can reasonably estimate the amount of that loss. In many proceedings, however, it is inherently difficult to determine whether any loss is probable or even possible or to estimate the amount of any loss.
These members of management are informed about and monitor the prevention, mitigation, detection, and remediation of cybersecurity incidents through their management of, and participation in, the cybersecurity risk management and strategy processes described above. 40 Table of Contents It em 2. PROPERTIES The Company's headquarters are located in New York, NY.
These members of management are informed about and monitor the prevention, mitigation, detection, and remediation of cybersecurity incidents through their management of, and participation in, the cybersecurity risk management and strategy processes described above. 44 Table of Contents It em 2. PROPERTIES Our headquarters, located in midtown Manhattan, NYC, is available to NYC-area employees who typically work a hybrid schedule.
Removed
In many proceedings, however, it is inherently difficult to determine whether any loss is probable or even possible or to estimate the amount of any loss.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

187 edited+87 added−47 removed115 unchanged
Biggest changeIncome (loss) before taxes is attributable to the following tax jurisdictions: Year Ended December 31, (in thousands) 2024 2023 2022 U.S. operations $ 1,078 $ ( 19,576 ) $ ( 79,788 ) Foreign operations 164 612 370 Income (loss) before income taxes $ 1,242 $ ( 18,964 ) $ ( 79,418 ) 77 Table of Contents Income taxes are comprised of the following: Year Ended December 31, (in thousands) 2024 2023 2022 Current: Federal $ — $ — $ — State 169 44 40 Foreign 46 174 214 Total Current 215 218 254 Deferred: Federal — — — State ( 121 ) — — Foreign — — — Total Deferred ( 121 ) — — Total $ 94 $ 218 $ 254 The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities are as follows: As of December 31, (in thousands) 2024 2023 Net deferred tax assets: Net operating loss carryforwards $ 70,373 $ 70,701 Stock based compensation 3,338 2,892 Depreciation 232 378 Other 201 45 Total gross deferred tax assets, net 74,144 74,016 Valuation allowance ( 73,978 ) ( 74,016 ) Deferred tax liabilities (long term): Other ( 166 ) — Net deferred tax assets $ — $ — Realization of the future tax benefits is dependent on the Company’s ability to generate sufficient taxable income within the carryforward period.
Biggest changeA reconciliation of the statutory federal income tax rate to the Company's effective income tax rate for the year ended December 31, 2024 and 2023 is as follows: Year Ended December 31, (in thousands, except percentages) 2024 2023 Income (loss) before income tax $ 1,242 $ ( 18,964 ) Statutory tax rate 21 % 21 % Federal taxes 261 ( 3,982 ) Increase (decrease) in effective tax rate due to: State taxes, net of federal effect ( 164 ) 276 Permanent differences 683 897 Other adjustments ( 648 ) ( 373 ) Valuation allowance ( 38 ) 3,400 Income tax expense $ 94 $ 218 The main reconciling item between the statutory tax rate and the effective tax rate for the year ended December 31, 2025 is the change in valuation allowance which was impacted by higher net income during the year ended December 31, 2025 and the enactment of the OBBBA in July 2025, which altered the treatment of unamortized Section 174 expenses and impacted the projected realization of deferred tax assets. 85 Table of Contents Income (loss) before income taxes is attributable to the following tax jurisdictions: Year Ended December 31, (in thousands) 2025 2024 2023 U.S. $ 8,200 $ 1,078 $ ( 19,576 ) Foreign 167 164 612 Income (loss) before income tax $ 8,367 $ 1,242 $ ( 18,964 ) Income tax expense applicable to income (loss) before income taxes consists of the following: Year Ended December 31, (in thousands) 2025 2024 2023 Current income taxes: Federal $ — $ — $ — State 468 169 44 Foreign 106 46 174 Total current 574 215 218 Deferred income taxes: Federal — — — State — ( 121 ) — Foreign — — — Total deferred — ( 121 ) — Income tax expense $ 574 $ 94 $ 218 The amount of cash paid for income taxes (net of refunds) for the year ended December 31, 2025 is as follows: Year Ended December 31, 2025 (in thousands) Federal $ — State Texas 57 Pennsylvania 30 Maryland 30 Tennessee 23 Other 81 Foreign Israel 196 Total income taxes paid, net of refunds $ 417 For the years ended December 31, 2024 and 2023, we paid $ 0.1 million and $ 0.2 million, respectively, in income taxes, net of refunds received. 86 Table of Contents The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities are as follows: As of December 31, (in thousands) 2025 2024 Net deferred tax assets: Net operating loss carryforwards $ 72,523 $ 70,373 Stock based compensation 3,282 3,338 Lease liability 125 164 Depreciation and amortization 44 232 Other 91 37 Total gross deferred tax assets 76,065 74,144 Valuation allowance ( 72,627 ) ( 73,978 ) Deferred tax liabilities: Section 174 ( 3,312 ) — Right-of-use asset ( 126 ) ( 166 ) Net deferred tax assets $ — $ — Realization of the future tax benefits is dependent on the Company’s ability to generate sufficient taxable income within the carryforward period.
Adjusted EBITDA should not be considered as an alternative to income (loss) before income taxes, net income (loss), income (loss) per share, or any other performance measures derived in accordance with U.S. GAAP. When evaluating our performance, you should consider adjusted EBITDA alongside other financial performance measures, including our net income (loss) and other GAAP results.
Adjusted EBITDA should not be considered as an alternative to income (loss) before income taxes, net income (loss), income (loss) per share, or any other performance measures derived in accordance with U.S. GAAP. When evaluating our performance, you should consider adjusted EBITDA alongside other financial performance measures, including our net income and other GAAP results.
The Company carries these at fair value and determines any realized gains or losses on the sale of these investments on a specific identification method, and includes such gains or losses in financial income, net, in the consolidated statements of income. Unrealized gains and losses are excluded from earnings and reported as a component of other comprehensive income (loss).
The Company carries these at fair value and determines any realized gains or losses on the sale of these investments on a specific identification method, and includes such gains or losses in financial income, net, in the consolidated income statements. Unrealized gains and losses are excluded from earnings and reported as a component of other comprehensive income (loss).
Diluted net income (loss) per share is the same as basic net income (loss) per share in periods when the effects of potentially dilutive shares of shares of common stock are anti-dilutive. See Note 11, “Net Income (Loss) per Share,” for further details.
Diluted net income (loss) per share is the same as basic net income (loss) per share in periods when the effects of potentially dilutive shares of common stock are anti-dilutive. See Note 11, “Net Income (Loss) per Share,” for further details.
In addition, even where a loss is possible or an exposure to loss exists in excess of the liability already accrued with respect to a previously recognized loss contingency, it is often not possible to reasonably estimate the size of the possible loss or range of loss or possible additional losses or range of additional losses.
In addition, even where a loss is possible or an exposure to loss exists in excess of the liability already accrued with respect to a previously recognized loss contingency, it is often not possible to reasonably estimate the size of the possible loss or range of loss or possible additional losses or range of additional losses.
In addition, to the extent that TPN or the PC entities lack sufficient funds to meet their obligations, the Manager may, at its sole discretion, advance funds to TPN or the PC entities to cover these obligations. Such advances would be considered loans made by Manager and should be repaid as per the terms of the management agreement.
In addition, to the extent that TPN or the PC entities lack sufficient funds to meet their obligations, the Manager may, at its sole discretion, advance funds to TPN or the PC entities to cover these obligations. Such advances would be considered loans made by the Manager and should be repaid as per the terms of the management agreement.
For the year ended December 31, 2023, the following were excluded from the calculation of diluted loss per share since each would have had an anti-dilutive effect given the Company’s net loss: 11,208,573 stock options, 8,984,827 restricted stock units, 12,780,000 Private Placement Warrants and 20,700,000 Public Warrants to purchase the Company’s common stock.
For the year ended December 31, 2023 , the following were excluded from the calculation of diluted loss per share since each would have had an anti-dilutive effect given the Company’s net loss: 11,208,573 stock options, 8,984,827 restricted stock units, 12,780,000 Private Placement Warrants and 20,700,000 Public Warrants to purchase the Company’s common stock. NOTE 12.
Estimation of transaction price and variable consideration for revenue recognition Description of the Matter As discussed in Note 2 of the consolidated financial statements, the Company recognizes revenues from contracted insurance payors and employee assistance organizations (“Payor”) at a point in time based on contracted rates, net of implicit price concessions, as virtual therapy or psychiatry session is rendered ("payor revenues").
Estimation of transaction price and variable consideration for revenue recognition Description of the Matter As discussed in Note 2 of the consolidated financial statements, the Company recognizes revenues from contracted insurance payors and employee assistance organizations at a point in time based on contracted rates, net of implicit price concessions, as virtual therapy or psychiatry session is rendered ("payor revenues").
Share-Based Compensation Plans The Company maintains a stock-based compensation plan under which the Company may grant cash and equity incentive awards to officers, employees, directors, consultants and service providers and one employee stock purchase plan under which employees of the Company and its participating subsidiaries are provided with the opportunity to purchase Talkspace common stock at a discount through accumulated payroll deductions during successive offering periods.
Stock-Based Compensation Plans The Company maintains a stock-based compensation plan under which the Company may grant cash and equity incentive awards to officers, employees, directors, consultants and service providers and one employee stock purchase plan under which employees of the Company and its participating subsidiaries are provided with the opportunity to purchase Talkspace common stock at a discount through accumulated payroll deductions during successive offering periods.
On each reporting period, the Company evaluates whether declines in fair value below carrying value are due to expected credit losses, as well as the ability and intent to hold the investment until a forecasted recovery occurs, in accordance with ASC 326.
In each reporting period, the Company evaluates whether declines in fair value below carrying value are due to expected credit losses, as well as the ability and intent to hold the investment until a forecasted recovery occurs, in accordance with ASC 326.
The warrants were measured at fair value at inception and thereafter on a recurring, quarterly basis, with changes in fair value presented within financial income, net, in the consolidated statements of income. Private Placement Warrants are classified within Level 3 in the fair value hierarchy.
The warrants were measured at fair value at inception and thereafter on a recurring, quarterly basis, with changes in fair value presented within financial income, net, in the consolidated income statements. Private Placement Warrants are classified within Level 3 in the fair value hierarchy.
Research and Development Expenses Research and development expenses include personnel and related expenses for software development and engineering, information technology infrastructure, security and privacy compliance and product development (inclusive of stock-based compensation for our research and development employees), third-party services and contractors related to research and development, information technology and software-related costs.
Operating Expenses: Research and Development Expenses Research and development expenses include personnel and related expenses for software development and engineering, information technology infrastructure, security, privacy compliance and product development (inclusive of stock-based compensation for our research and development employees), third-party services and contractors related to research and development, information technology and software-related costs.
General and Administrative Expenses General and administrative expenses consist primarily of personnel costs, including salaries, benefits, bonuses and stock-based compensation expense for certain executives, finance, accounting, legal, compliance and human resources functions, as well as professional fees.
General and Administrative Expenses General and administrative expenses consist primarily of personnel costs, including salaries, benefits, bonuses and stock-based compensation expense for certain executives, finance, accounting, legal and human resources functions, as well as professional fees.
Forward-looking statements involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements, including, but not limited to, the important factors discussed in Part I, Item 1A, “Risk Factors” in this Annual Report on Form 10-K for the fiscal year ended December 31, 2024.
Forward-looking statements involve known and unknown risks, uncertainties and other important factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements, including, but not limited to, the important factors discussed in Part I, Item 1A, “Risk Factors” in this Annual Report on Form 10-K for the fiscal year ended December 31, 2025.
Expected term is calculated based on the simplified method as adequate historical experience is not available to provide a reasonable estimate. The simplified method will continue to apply until enough historical experience is available to provide a reasonable estimate of the expected term.
Expected term is calculated based on the simplified method as adequate historical experience is not yet available to provide a reasonable estimate. The simplified method will continue to apply until enough historical experience is available to provide a reasonable estimate of the expected term.
FAIR VALUE MEASUREMENTS The carrying value of the Company’s cash, cash equivalents, accounts receivable, other current assets, accounts payable, and accrued liabilities approximate fair value because of the relatively short-term nature of the underlying assets or liabilities.
FAIR VALUE MEASUREMENTS The carrying value of the Company’s cash, cash equivalents, accounts receivable, other current assets, accounts payable, and accrued expenses and other current liabilities approximate fair value because of the relatively short-term nature of the underlying assets or liabilities.
CONTROLS AND PROCEDURES EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES In connection with the preparation of this report, an evaluation was carried out by certain members of Company management, with the participation of the Chief Executive Officer and our Chief Financial Officer of the effectiveness of the Company’s disclosure controls and procedures (as defined in Securities and Exchange Commission’s (“SEC”) Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (“Exchange Act”)), as of December 31, 2024.
CONTROLS AND PROCEDURES EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES In connection with the preparation of this report, an evaluation was carried out by certain members of Company management, with the participation of the Chief Executive Officer and our Chief Financial Officer of the effectiveness of the Company’s disclosure controls and procedures (as defined in Securities and Exchange Commission’s (“SEC”) Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (“Exchange Act”)), as of December 31, 2025.
Research and development expenses exclude amounts reflected as capitalized internal-use software development costs. Clinical Operations Expenses Clinical operations expenses are associated with the management of our provider network of therapists.
Research and development expenses exclude amounts reflected as capitalized internal-use software costs. Clinical Operations Expenses Clinical operations expenses are associated with the management of our network of therapists.
The Company’s independent registered public accounting firm, Kost Forer Gabbay & Kasierer, a member of EY Global, which audited our consolidated financial statements included in this Form 10-K, has audited the effectiveness of the Company’s internal control over financial reporting as of December 31, 2024, and has issued an attestation, which appears in their report in Item 8 Financial Statements and Supplementary Data of this form 10-K.
The Company’s independent registered public accounting firm, Kost Forer Gabbay & Kasierer, a member of EY Global, which audited our consolidated financial statements included in this Form 10-K, has audited the effectiveness of the Company’s internal control over financial reporting as of December 31, 2025, and has issued an attestation, which appears in their report in Item 8 Financial Statements and Supplementary Data of this form 10-K.
Based upon that evaluation, our management, including our Chief Executive Officer and our Chief Financial Officer, concluded that our disclosure controls and procedures were effective as of December 31, 2024. Management also believes that the consolidated financial statements in this Annual Report on Form 10-K present, in all material aspects, the company’s financial condition as reported, in conformity with U.S.
Based upon that evaluation, our management, including our Chief Executive Officer and our Chief Financial Officer, concluded that our disclosure controls and procedures were effective as of December 31, 2025. Management also believes that the consolidated financial statements in this Annual Report on Form 10-K present, in all material aspects, the company’s financial condition as reported, in conformity with U.S.
A reconciliation is provided below for adjusted EBITDA to net income (loss), the most directly comparable financial measure stated in accordance with GAAP.
A reconciliation is provided below for adjusted EBITDA to net income, the most directly comparable financial measure stated in accordance with GAAP.
Allowance for credit losses on available for sale debt securities are recognized as a charge in financial income, net, in the consolidated statements of income.
Allowance for credit losses on available for sale debt securities are recognized as a charge in financial income, net, in the consolidated income statements.
Deferred Revenue The Company records deferred revenues when cash payments from customers are received in advance of the Company's performance obligations to provide services. As of December 31, 2024 and 2023, deferred revenue related mainly to Consumer subscriptions. The Company expects to satisfy the majority of its performance obligations associated with deferred revenue within one year or less.
Deferred Revenue The Company records deferred revenues when cash payments from customers are received in advance of the Company's performance obligations to provide services. As of December 31, 2025 and 2024, deferred revenue related mainly to Consumer subscriptions. The Company expects to satisfy the majority of its performance obligations associated with deferred revenue within one year or less.
As of December 31, 2024, there were no material pending legal proceedings, claims or litigation. Warranties and Indemnification The Company’s arrangements generally include certain provisions for indemnifying customers against liabilities if there is a breach of a customer’s data or if the Company’s service infringes a third party’s intellectual property rights.
As of December 31, 2025 , there were no material pending legal proceedings, claims or litigation. Warranties and Indemnification The Company’s arrangements generally include certain provisions for indemnifying customers against liabilities if there is a breach of a customer’s data or if the Company’s service infringes a third party’s intellectual property rights.
Changes in Internal Control Over Financial Reporting There were no changes in the Company's internal controls over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) that occurred during the fourth quarter of fiscal year 2024 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Changes in Internal Control Over Financial Reporting There were no changes in the Company's internal controls over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) that occurred during the fourth quarter of fiscal year 2025 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Recent Accounting Pronouncements See Note 2, “Summary of Significant Accounting Policies and Estimates” in the notes to the consolidated financial statements for information regarding recent accounting developments and their impact on our results. 53 Table of Contents FORWARD-LOOKING STATEMENTS This Annual Report on Form 10-K contains forward-looking statements.
Recent Accounting Pronouncements See Note 2, “Summary of Significant Accounting Policies and Estimates” in notes to the consolidated financial statements for information regarding recent accounting developments and their impact on our results. 58 Table of Contents FORWARD-LOOKING STATEMENTS This Annual Report on Form 10-K contains forward-looking statements.
In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2024, in conformity with U.S. generally accepted accounting principles.
In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025, in conformity with U.S. generally accepted accounting principles.
Under the supervision of and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we assessed the effectiveness of our internal control over financial reporting as of December 31, 2024, using the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) in Internal Control—Integrated Framework (2013) .
Under the supervision of and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we assessed the effectiveness of our internal control over financial reporting as of December 31, 2025, using the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) in Internal Control—Integrated Framework (2013) .
The Company has elected not to record operating lease ROU assets and lease liabilities for leases with an initial term of 12 months or less. The Company also elected the practical expedient to not separate lease and non-lease components for its leases. The Company's lease assets and liabilities were immaterial as of December 31, 2024 and 2023.
The Company has elected not to record operating lease ROU assets and lease liabilities for leases with an initial term of 12 months or less. The Company also elected the practical expedient to not separate lease and non-lease components for its leases. The Company's lease assets and liabilities were immaterial as of December 31, 2025 and 2024.
See Note 5, “Fair Value Measurements,” for further details. 65 Table of Contents Fixed Assets, net The following table presents the average useful life used for the Company's fixed assets: Average Useful Life (years) Computers and software 3 Furniture and equipment 5 Fixed assets are stated at cost, net of accumulated depreciation.
See Note 5, “Fair Value Measurements,” for further details. 71 Table of Contents Fixed Assets, net The following table presents the average useful life used for the Company's fixed assets: Average Useful Life (years) Computers and software 3 Furniture and equipment 5 Fixed assets are stated at cost, net of accumulated depreciation.
The Company's marketable securities are recorded at fair value and are generally classified within Level 1 or Level 2 of the fair value hierarchy using quoted market prices or quotes from market makers or broker-dealers. Marketable securities classified within Level 1 are valued based on quoted market prices in active markets and consist of money market funds and commercial paper.
The Company's marketable securities are recorded at fair value and are generally classified within Level 1 or Level 2 of the fair value hierarchy using quoted market prices or quotes from market makers or broker-dealers. Marketable securities classified within Level 1 are valued based on quoted market prices in active markets and consist of commercial paper.
OTHER INFORMATION During the fiscal quarter ended December 31, 2024, no director or officer of the Company adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as the terms are defined in Item 408(a) of Regulation S-K.
OTHER INFORMATION During the fiscal quarter ended December 31, 2025 , no director or officer of the Company adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as the terms are defined in Item 408(a) of Regulation S-K.
See Note 3, “Revenue Recognition,” for further details. Contract Costs The Company capitalizes incremental costs of obtaining a contract if these costs are determined to be recoverable. Capitalized contract costs are expensed over the life the contract. As of December 31, 2024 and 2023, capitalized contract costs were immaterial.
See Note 3, “Revenue Recognition,” for further details. Contract Costs The Company capitalizes incremental costs of obtaining a contract if these costs are determined to be recoverable. Capitalized contract costs are expensed over the life the contract. As of December 31, 2025 and 2024 , capitalized contract costs were immaterial.
For a discussion of our results of operations, liquidity and capital resources for the year ended December 31, 2022, see “Management's Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of our Annual Report on Form 10-K for the fiscal year ended December 31, 2023.
For a discussion of our results of operations, liquidity and capital resources for the year ended December 31, 2023, see “Management's Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of our Annual Report on Form 10-K for the fiscal year ended December 31, 2024.
Marketing expenses also include third-party software subscription services, third-party independent research, participation in trade shows, brand messaging and costs of communications materials that are produced for our customers to generate greater awareness and utilization of our platform among our Payor and DTE customers.
Marketing expenses also include third-party software subscription services, participation in trade shows, brand messaging and costs of communications materials that are produced for our customers to generate greater awareness and utilization of our platform among our Payor and DTE customers.
Opinion on Internal Control Over Financial Reporting We have audited Talkspace, Inc.'s internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria). In our opinion, Talkspace, Inc.
Opinion on Internal Control Over Financial Reporting We have audited Talkspace, Inc.'s internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria). In our opinion, Talkspace, Inc.
Stock Performance Graph The following graph and table illustrate the cumulative total return from June 23, 2021 through December 31, 2024, for (i) our common stock, (ii) the Standard & Poor’s 500 Index, (iii) the Standard & Poor’s 500 Healthcare Index and (iv) the Russell 2000 Composite Index.
Stock Performance Graph The following graph and table illustrate the cumulative total return from June 23, 2021 through December 31, 2025, for (i) our common stock, (ii) the Standard & Poor’s 500 Index, (iii) the Standard & Poor’s 500 Healthcare Index and (iv) the Russell 2000 Composite Index.
Accordingly, non-dollar denominated transactions and balances have been re-measured into the functional currency in accordance with ASC 830, “Foreign Currency Matters”. These transactions were not material for the years ended December 31, 2024, 2023 and 2022.
Accordingly, non-dollar denominated transactions and balances have been re-measured into the functional currency in accordance with ASC 830, “Foreign Currency Matters”. These transactions were not material for the years ended December 31, 2025, 2024 and 2023 .
Certain of those policies are considered to be particularly important to the presentation of the Company's financial results because they require management to make difficult, complex or subjective judgments, often as a result of matters that are inherently uncertain.
Certain of those policies are considered to be particularly important to the presentation of our financial results because they require management to make difficult, complex or subjective judgments, often as a result of matters that are inherently uncertain.
(the Company) as of December 31, 2024 and 2023, the related consolidated statements of income, comprehensive income (loss), stockholders' equity and cash flows for each of the three years in the period ended December 31, 2024, and the related notes (collectively referred to as the “consolidated financial statements”).
(the Company) as of December 31, 2025 and 2024, the related consolidated income statements, comprehensive income (loss), stockholders' equity and cash flows for each of the three years in the period ended December 31, 2025, and the related notes (collectively referred to as the “consolidated financial statements”).
Except as required by applicable law, we do not plan to publicly update or revise any forward-looking statements contained in this Annual Report on Form 10-K or any forward-looking statements we may publicly make from time-to-time, whether as a result of any new information, future events or otherwise. Ite m 7A.
Except as required by applicable law, we do not plan to publicly update or revise any forward-looking statements contained in this Annual Report on Form 10-K or any forward-looking statements we may publicly make from time-to-time, whether as a result of any new information, future events or otherwise. 59 Table of Contents Ite m 7A.
Critical Accounting Policies and Estimates The Company's accounting policies are essential to understanding and interpreting the financial results reported on the consolidated financial statements. The significant accounting policies used in the preparation of the Company's consolidated financial statements are summarized in Note 2, “Summary of Significant Accounting Policies and Estimates” in the notes to the consolidated financial statements.
Critical Accounting Policies and Estimates Our accounting policies are essential to understanding and interpreting the financial results reported on the consolidated financial statements. The significant accounting policies used in the preparation of our consolidated financial statements are summarized in Note 2, “Summary of Significant Accounting Policies and Estimates” in the notes to the consolidated financial statements.
In determining transaction price, management develops estimates based on actual historical collection experience by insurance payor. 56 Table of Contents How We Addressed the Matter in Our Audit We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the Company’s process for estimating the amount of variable consideration that is included in the transaction price, including management’s review of the assumptions used, results of calculations and assessment of the underlying data.
In determining the transaction price, management develops estimates based on actual historical collection experience by insurance payor. 62 Table of Contents How We Addressed the Matter in Our Audit We obtained an understanding, evaluated the design, and tested the operating effectiveness of controls over the Company’s process for estimating the amount of variable consideration included in the transaction price, including management’s review of the assumptions used, results of calculations, and assessment of the underlying data.
To the extent the transaction price includes variable consideration, revenue is recognized using the variable consideration allocation exception, or, if the allocation exception is not met, the Company recognizes revenue ratably over the period based on estimates of the variable consideration to the extent it is probable that a significant reversal of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequent resolved.
To the extent the transaction price includes variable consideration, revenue is recognized using the variable consideration allocation exception, or, if the allocation exception is not met, the Company recognizes revenue ratably over the contract term based on estimates of the variable consideration to the extent it is probable that a significant reversal of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequent resolved.
Cost of revenues is largely driven by the number of sessions and the size of our provider network that is required to service the growth of our Payor and DTE customers, in addition to the growth of our customer base.
Cost of revenue is largely driven by the number of sessions and the size of our provider network that is required to service the growth of our Payor and DTE customers, in addition to the growth of our customer base.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework)and our report dated March 12, 2025 expressed an unqualified opinion thereon.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated March 13, 2026 expressed an unqualified opinion thereon.
We will continue to evaluate each quarter whether there are changes that materially affect our internal control over financial reporting. 81 Table of Contents It em 9B.
We will continue to evaluate each quarter whether there are changes that materially affect our internal control over financial reporting. 90 Table of Contents It em 9B.
During the year ended December 31, 2024, the Company repurchased and retired an aggregate of 3,911,259 shares of its common stock for a total consideration of $11.0 million ($2.81 per share). As of December 31, 2024, $29.0 million remained available under the Share Repurchase Program.
During the year ended December 31, 2024, the Company repurchased and retired an aggregate of 3,911,259 shares of its common stock for a total consideration of $ 11.0 million ($ 2.81 per share). As of December 31, 2025 , $ 11.8 million remained available under the Share Repurchase Program.
The purpose of this section is to discuss and analyze our consolidated financial condition, liquidity and capital resources and results of operations for the years ended December 31, 2024 and 2023.
The purpose of this section is to discuss and analyze our consolidated financial condition, liquidity and capital resources and results of operations for the years ended December 31, 2025 and 2024.
In the future, we may choose to focus on international expansion, which may increase our exposure to foreign currency exchange risk. 54 Table of Contents Ite m 8.
In the future, we may choose to focus on international expansion, which may increase our exposure to foreign currency exchange risk. 60 Table of Contents Ite m 8.
Share Repurchase Program On February 22, 2024, the Company announced that its Board of Directors approved a share repurchase program to authorize the repurchase of up to $ 15.0 million of the currently outstanding shares of the Company’s common stock over a period of twenty-four months beginning on March 1, 2024 (the “Share Repurchase Program”).
Share Repurchase Program On February 22, 2024, the Company announced that its Board of Directors approved a share repurchase program to authorize the repurchase of up to $15.0 million of the currently outstanding shares of the Company’s common stock over a period of 24 months beginning on March 1, 2024 (the “Share Repurchase Program”).
Variable consideration is included in the transaction price if it is probable that a significant reversal of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved. The Company determines its estimate of variable consideration primarily based on actual historical collection experience.
Variable consideration is included in the transaction price if it is probable that a significant reversal of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved. Variable consideration estimate is primarily based on actual historical collection experience.
The transaction price is determined based on the consideration to which the Company will be entitled in exchange for the service rendered. To the extent the transaction price includes variable consideration, the Company estimates the amount of variable consideration that is included in the transaction price at contract inception and reassesses this estimate at each reporting date.
The transaction price is determined based on the consideration to which we will be entitled in exchange for the service rendered. To the extent the transaction price includes variable consideration, we estimate the amount of variable consideration that is included in the transaction price at contract inception and reassesses this estimate at each reporting date.
Auditing management's determination of transaction price including variable consideration was complex and judgmental due to significant data inputs and subjective assumptions utilized in the process.
Auditing management's determination of the transaction price, including variable consideration, was complex and judgmental due to significant data inputs and subjective assumptions used in the process.
(the Company) maintained, in all material respects, effective internal control over financial reporting as of December 31, 2024, based on the COSO criteria.
(the Company) maintained, in all material respects, effective internal control over financial reporting as of December 31, 2025, based on the COSO criteria.
Such purchases will be at times and in amounts as the Company deems appropriate, based on factors such as price, market conditions, corporate and regulatory requirements, constraints specified in any Rule 10b5-1 trading plans, alternative investment opportunities and other business considerations. All shares repurchased will be retired.
Such purchases will be at times and in amounts as the Company deems appropriate, based on factors such as price, market conditions, corporate and regulatory requirements, constraints specified in any Rule 10b5-1 trading plans, alternative investment opportunities and other business considerations.
While we expect to make increased investments to support accelerated growth and the required investment to scale our provider network, we also expect increased efficiencies and economies of scale. Our cost of revenues as a percentage of revenues is expected to fluctuate from period to period depending on the interplay of these factors as well as pricing fluctuations.
While we expect to make increased investments to support accelerated growth and scale our provider network, we also expect increased efficiencies and economies of scale. Our cost of revenue as a percentage of revenue is expected to fluctuate from period to period depending on the interplay of these factors as well as pricing fluctuations.
Based upon that evaluation, our management concluded that our internal control over financial reporting was effective as of December 31, 2024.
Based upon that evaluation, our management concluded that our internal control over financial reporting was effective as of December 31, 2025.
The NOL carryforwards begin to expire in 2032 and may become subject to annual limitation in the event of certain cumulative changes in the ownership interest of significant stockholders over a three-year period in excess of 50 %, as defined under I.R.C.
The NOL carryforwards begin to expire in 2035 and may become subject to annual limitation in the event of certain cumulative changes in the ownership interest of significant stockholders over a three-year period in excess of 50 %, as defined under I.R.C. Section 382 .
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Talkspace, Inc. as of December 31, 2024 and 2023, the related consolidated statements of income, comprehensive income (loss), stockholders’ equity and cash flows for each of the three years in the period ended December 31, 2024, and the related notes and our report dated March 12, 2025 expressed an unqualified opinion thereon.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2025 and 2024, the related consolidated income statements, comprehensive income (loss), stockholders’ equity and cash flows for each of the three years in the period ended December 31, 2025, and the related notes and our report dated March 13, 2026 expressed an unqualified opinion thereon.
Expected volatility is calculated based upon the Company's historical share price movements as well as similar traded companies’ historical share price movements as adequate historical experience is not available to provide a reasonable estimate based only on the Company's share price.
Expected volatility is calculated based upon our historical share price movements as well as similar traded companies’ historical share price movements as adequate historical experience is not available to provide a reasonable estimate based only on our share price.
Section 382 . 78 Table of Contents This could limit the amount of tax attributes that can be utilized annually to offset future taxable income or future tax liabilities. The federal losses generated from 2018 onward do not expire. The Company is subject to U.S. federal and state and Israeli income taxes with varying statutes of limitations.
This could limit the amount of tax attributes that can be utilized annually to offset future taxable income or future tax liabilities. The federal losses generated from 2018 onward do not expire. The Company is subject to U.S. federal and state and Israeli income taxes with varying statutes of limitations.
Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. /s/ Kost Forer Gabbay & Kasierer A Member of EY Global Tel-Aviv, Israel March 12, 2025 58 Table of Contents TALKSPACE, INC.
Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. /s/ Kost Forer Gabbay & Kasierer A Member of EY Global Tel-Aviv, Israel March 13, 2026 64 Table of Contents TALKSPACE, INC.
The weighted average grant-date fair value of stock options granted to employees during the years ended December 31, 2024 was $ 1.48 per share ($ 0.74 per share and $ 0.88 per share for the years ended December 31, 2023 and 2022, respectively).
The weighted average grant-date fair value of stock options granted to employees during the years ended December 31, 2025 was $ 1.80 per share ($ 1.48 per share and $ 0.74 per share for the years ended December 31, 2024 and 2023, respectively).
As of December 31, 2024, there was $ 11.1 million of total unrecognized compensation cost related to non-vested RSUs that are expected to be recognized over a weighted average period of 1.5 years.
As of December 31, 2025 , there was $ 11.1 million of total unrecognized compensation cost related to non-vested RSUs that are expected to be recognized over a weighted average period of 2.5 years. NOTE 11.
We had no debt as of December 31, 2024. Our primary cash needs are to fund operating activities and invest in technology development.
We have no debt as of December 31, 2025 and December 31, 2024. Our primary cash needs are to fund operating activities and invest in technology development.
The compensation paid to our 46 Table of Contents independently contracted providers is variable, and the amount paid to a provider is generally based on the amount of time committed by such provider to our members. Our employee providers receive a fixed-salary and discretionary bonuses, where applicable, all of which is included in cost of revenues.
The compensation paid to our independently contracted providers is variable, and the amount paid to a provider is generally based on the amount of time committed by such provider to our members. Our employee providers receive a fixed-salary and discretionary bonuses, where applicable, all of which is included in cost of revenue.
The Company has three wholly-owned subsidiaries and holds variable interest in one professional association and various professional corporations, which have been established pursuant to the requirements of their respective domestic jurisdiction governing the corporate practice of medicine. These entities are considered Variable Interest Entities (“VIEs”). See Note 13, “Variable Interest Entities,” for further details. NOTE 2.
The Company has wholly-owned subsidiaries and holds a variable interest in professional associations and professional corporations, which have been established pursuant to the requirements of their respective domestic jurisdiction governing the corporate practice of medicine. These entities are considered Variable Interest Entities (“VIEs”). See Note 13, “Variable Interest Entities,” for further details. NOTE 2.
Contracts include annual evergreen clauses and generally may be terminated by either party typically upon a minimum 60-day advance notice. DTE The Company contracts with enterprises to provide access to the Company's therapist platform for their enterprise members, primarily based on a per-member-per-month (“PMPM”) or paid-per-use (“PPU”) basis or as a fixed monthly fee.
Contracts include annual evergreen clauses and generally may be terminated by either party upon advance notice per the terms of the contract. DTE The Company contracts with enterprises to provide access to the Company's therapist platform for their enterprise members, primarily based on a per-member-per-month (“PMPM”) or paid-per-use (“PPU”) basis or as a fixed monthly fee.
The comparisons reflected in the graph and table are not intended to forecast the future performance of our stock and may not be indicative of our future performance. 43 Table of Contents It em 6. Reserved. 44 Table of Contents It em 7.
The comparisons reflected in the graph and table are not intended to forecast the future performance of our stock and may not be indicative of our future performance. 47 Table of Contents It em 6. Reserved. 48 Table of Contents It em 7.
As of December 31, 2024 and 2023, the balance of accounts receivable, net, related to revenue from Payor customers was $ 3.6 million and $ 2.4 million, respectively. Credit losses related to these receivables were immaterial for the years ended December 31, 2024, 2023 and 2022.
As of December 31, 2025 and 2024 , the balance of accounts receivable, net, related to revenue from Payor customers was $ 7.3 million and $ 3.6 million, respectively. Credit losses related to these receivables were immaterial for the years ended December 31, 2025, 2024 and 2023.
We assessed the historical accuracy of management’s estimate and performed sensitivity analysis to evaluate the changes in variable consideration that would result from changes in the expected collection rates used and the corresponding effect on revenues. /s/ Kost Forer Gabbay & Kasierer A Member of EY Global We have served as the Company’s auditor since 2014.
We also assessed the historical accuracy of management’s estimates and performed a sensitivity analysis to evaluate changes in variable consideration resulting from changes in the expected collection rates used and the corresponding effect on revenues. /s/ Kost Forer Gabbay & Kasierer A Member of EY Global We have served as the Company’s auditor since 2014.
All shares repurchased will be retired. The program does not obligate the Company to repurchase any dollar amount or number of shares, and may be modified, suspended, or discontinued at any time at the Company’s discretion without prior notice. NOTE 10.
The Share Repurchase Program does not obligate the Company to repurchase any dollar amount or number of shares, and may be modified, suspended, or discontinued at any time at the Company’s discretion without prior notice. NOTE 10.
As of December 31, 2024 there were 12,757,500 Private Placement Warrants and 20,722,500 Public Warrants ( 12,780,000 Private Placement Warrants and 20,700,000 Public Warrants as of December 31, 2023) to purchase the Company’s common stock at an exercise price of $ 11.50 per share. No shares of preferred stock were issued or outstanding for any years presented.
As of December 31, 2025 there were 12,757,500 Private Placement Warrants and 20,722,500 Public Warrants ( 12,757,500 Private Placement Warrants and 20,722,500 Pu blic Warrants as of December 31, 2024 ) to purchase the Company’s common stock at an exercise price of $ 11.50 per share. No shares of preferred stock were issued or outstanding for any years presented.
The Company estimates the amount of variable consideration that is included in the transaction price mainly by estimating claims denials by insurance payor, primarily based on actual historical collection experience by insurance payor. For the year ended December 31, 2024, payor revenues were $124.3 million.
The Company estimates the amount of variable consideration that is included in the transaction price mainly by estimating claims denials by insurance payor, primarily based on actual historical collection experience by insurance payor. For the year ended December 31, 2025, payor revenues were $171.5 million.
For the types of services from which the reportable segment derives its revenues please refer to Note 3, “Revenue Recognition”. Stock Repurchases The Company repurchases its common stock from time to time pursuant to a board-authorized share repurchase program. Stock repurchases are accounted under ASC 505-30, Treasury Stock.
For the types of services from which the reportable segment derives its revenue refer to Note 3, “Revenue Recognition.” Stock Repurchases The Company repurchases its common stock from time to time pursuant to a board-authorized share repurchase program. Stock repurchases are accounted under ASC 505-30, Treasury Stock.
There were no impairment charges for the years ended December 31, 2024, 2023 or 2022. 66 Table of Contents Revenue Recognition The Company recognizes revenue in accordance with ASC 606, “Revenue from Contracts with Customers”, when the Company satisfies its performance obligation to perform its defined contractual obligations to provide virtual behavioral healthcare services.
There are no impairment charges for the years ended December 31, 2025, 2024 and 2023 . 73 Table of Contents Revenue Recognition The Company recognizes revenue in accordance with ASC 606, “Revenue from Contracts with Customers”, when the Company satisfies its performance obligation to perform its defined contractual obligations to provide virtual behavioral healthcare services.
Additionally, we may in the future enter into arrangements to acquire or invest in complementary businesses, services and technologies. We currently anticipate to be able to fund our cash needs for at least the next twelve months and thereafter for the foreseeable future using available cash and cash equivalent balances as of December 31, 2024.
Additionally, we may enter into arrangements to acquire or invest in complementary businesses, services and technologies. We currently anticipate to be able to fund our cash needs for at least the next 12 months and thereafter for the foreseeable future using available cash and cash equivalent balances.
The following table sets forth the total share-based compensation expense related to stock options and RSUs included in the respective components of operating expenses in the consolidated statements of income: Year Ended December 31, (in thousands) 2024 2023 2022 Research and development, net $ 1,781 $ 2,463 $ 2,550 Clinical Operations, net 293 455 549 Sales and Marketing 1,860 1,722 3,090 General and administrative 5,239 3,755 5,927 Total stock-based compensation expense $ 9,173 $ 8,395 $ 12,116 During the year ended December 31, 2024, the Company modified certain equity awards in connection with certain key executives' separation from the Company and recognized $ 1.2 million of additional stock-based compensation expense as a result of these modifications.
The following table sets forth the total stock-based compensation expense related to stock options and RSUs included in the respective components of operating expenses in the consolidated income statements: Year Ended December 31, (in thousands) 2025 2024 (1) 2023 Research and development $ 1,485 $ 1,781 $ 2,463 Clinical Operations 400 293 455 Sales and Marketing 1,748 1,860 1,722 General and administrative 4,812 5,239 3,755 Total stock-based compensation expense $ 8,445 $ 9,173 $ 8,395 (1) During the year ended December 31, 2024, the Company modified certain equity awards in connection with certain key executives' separation from the Company and recognized $ 1.2 million of additional stock-based compensation expense as a result of these modifications.
Through its platform, Talkspace serves: • Health insurance plans (commercial and government) and employee assistance programs (“Payor”) who offer their members access to our platform at in-network reimbursement rates, • Direct-to-Enterprise (“DTE”) comprised of enterprises who offer their enterprise members access to our platform while their enterprise is under an active contract with Talkspace, and • Individual subscribers (“Consumer”) who subscribe directly to our platform.
Our customers are comprised of the following: • Health insurance plans from commercial and government institutions, and employee assistance programs (“Payor”), who offer their members access to our platform at in-network reimbursement rates, • Direct-to-Enterprise (“DTE”), comprised of enterprises who offer their enterprise members access to our platform while their enterprise is under an active contract with Talkspace, and • Individual subscribers (“Consumer”) who subscribe directly to our platform.

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