Unless the context otherwise requires, all references in this section as to “Talkspace,” the “Company,” “we,” “us” or “our” refer to the business of Talkspace, Inc. and its consolidated subsidiaries. The following discussion and analysis of our financial condition and results of operations should be read together with the financial statements and the related notes contained in this Quarterly Report and the financial statements and related notes contained in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2025. This discussion contains forward-looking statements that reflect our plans, estimates, and beliefs that involve risks and uncertainties. As a result of many factors, such as those discussed in Part I, Item 1A, “Risk Factors” of the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2025 and “Forward-Looking Statements” sections and elsewhere in this Quarterly Report, our actual results may differ materially from those anticipated in these forward-looking statements. The purpose of this section is to discuss and analyze our consolidated financial condition, liquidity and capital resources and results of operations for the three and six months ended June 30, 2026 and 2025. Overview Talkspace is a leading virtual behavioral healthcare company offering its members convenient and affordable access to a fully-credentialed network of highly qualified providers across a wide and growing spectrum of care through virtual psychotherapy and psychiatry. All care offered at Talkspace is delivered through an easy-to-use, fully-encrypted web and mobile platform that meets HIPAA, federal, and state regulatory requirements. 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”), 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. For the three and six months ended June 30, 2026 our revenues were $61.7 million and $123.4 million, respectively, compared to $54.3 million and $106.5 million, respectively, for the three and six months ended June 30, 2025. For the three and six months ended June 30, 2026, our clinicians completed approximately 473,600 and 933,000 sessions, respectively related to members covered under our Payor customers, compared to 385,100 and 735,100 completed sessions for the three and six months ended June 30, 2025. As of June 30, 2026, we had approximately 5,000 Consumer active members compared to 6,650 Consumer active members as of June 30, 2025. Please refer to the “Key Business Metrics” section below for a description of Consumer active members. Pending Merger with Universal Health Services, Inc. On March 9, 2026, we entered into a definitive Agreement and Plan of Merger (the “Merger Agreement”) with Universal Health Services, Inc., a Delaware corporation (“UHS”), and UHS Merger Subsidiary, Inc., a Delaware corporation and an indirect wholly owned subsidiary of UHS (“Merger Subsidiary”), pursuant to which, among other things, Merger Subsidiary will merge with and into us (the “Merger”), with us continuing as the surviving corporation and a wholly-owned subsidiary of UHS. Under the terms of the Merger Agreement, at the effective time of the Merger, each issued and outstanding share of our common stock (subject to certain exceptions set forth in the Merger Agreement) will be cancelled and converted into the right to receive $5.25 per share in cash, without interest and subject to any applicable withholding taxes. The Company’s board of directors unanimously approved and declared advisable the Merger Agreement on March 6, 2026 and the Company's stockholders voted to adopt the Merger Agreement during a special meeting of stockholders on May 29, 2026. Following completion of the Merger, we will be delisted from the NASDAQ Global Select Market and deregistered under the Securities Exchange Act of 1934, as amended, as soon as reasonably practicable following the effective time, and the Company expects to file a Form 15 to suspend its reporting obligations under the Exchange Act as soon as practicable thereafter. We have made customary representations and warranties in the Merger Agreement and have agreed to customary covenants regarding the operation of our business prior to the consummation of the Merger. 17 Table of Contents Consummation of the Merger is subject to customary closing conditions, including termination or expiration of any waiting periods required under the Hart-Scott-Rodino (“HSR”) Act and certain specified state healthcare laws, approval by our stockholders and other customary closing conditions. The transaction is expected to close in the third quarter of 2026. We have incurred, and expect to continue to incur, significant transaction-related costs, including financial advisory, legal, and accounting fees, which will be recognized as expense in the periods incurred during fiscal year 2026. The foregoing description of the Merger Agreement does not purport to be complete and is subject to, and qualified in its entirety by, the full text of the Merger Agreement, which is attached as Annex A to the Company’s Definitive Proxy Statement on Schedule 14A filed with the SEC on April 20, 2026. For additional information related to the Merger Agreement, please also refer to the other relevant materials in connection with the transaction that we will file with the SEC and that will contain important information about us and the Merger. Clinical Automation and Artificial Intelligence Sentia AI, LLC is Talkspace’s wholly-owned subsidiary dedicated to proprietary Artificial Intelligence (“AI”) development. “Sentia” refers to Talkspace’s behavioral-health-focused large language model (“LLM”). Through Talkspace we recently launched “Tee,” our first purpose-built AI guide for mental wellness. Built on our proprietary behavioral health LLM and trained on clinical data from millions of patient journeys, Tee provides a private, interactive environment for member conversations regarding mental well-being. Tee utilizes Sentia's multi-agent orchestrator paired with a rigorous, human-in-the-loop Quality Management System (“QMS”) to ensure clinical safety and oversight. Tee is designed to augment—not replace—human clinicians by extending access and identifying members who may require elevated clinical intervention. While we are currently scaling Tee’s commercial rollout and marketing efforts across our direct-to-consumer and partner channels, the ongoing costs of compute resources and model development may impact our technology and development expenses. Furthermore, while Tee embeds clinical guardrails and oversight, any failure of AI-driven tools to meet clinical, safety, or regulatory standards could expose us to increased liability, regulatory scrutiny, reputational harm, or reduced demand for our platform. Inflation Risk and Economic Conditions The demand for our solution is dependent on the general economy, which is in turn affected by geopolitical conditions, the stability of the global credit markets, inflationary pressures, higher interest rates, the industries in which our Payor and DTE customers operate or serve, and other factors. Downturns in the general economy could disproportionately affect the demand for our solution and cause it to decrease. Our operations could also be impacted by inflation and higher interest rates. Inflation did not have a material effect on our business, financial condition or results of operations for the six months ended June 30, 2026 and 2025. However, if our costs were to become subject to significant inflationary pressures (such as Provider cost), we may not be able to fully offset such higher costs through price increases or cost savings. Our inability or failure to do so could harm our business, financial condition or results of operations. One Big Beautiful Bill Act In July 2025, the One Big Beautiful Act (“OBBBA”) was enacted, introducing amendments to the U.S. federal income tax code. The OBBBA permanently restores 100% bonus depreciation for qualified property acquired and placed in service after January 19, 2025, and allows immediate expensing of domestic research and experimental expenditures for tax years beginning after December 31, 2024. Although we continue to maintain a full valuation allowance against our U.S. deferred tax assets as of June 30, 2026, we expect these provisions to increase available deductions and extend the period during which future taxable income may be sheltered, improving liquidity to the extent we generate taxable income. Quarterly Fluctuations Our financial results may fluctuate from period-to-period as a result of a variety of factors, many of which are outside of our control, including, without limitation, the factors described in this section. Most of our revenue in any given quarter is derived from contracts entered into with our customers during previous quarters. Consequently, a decline in new or renewed contracts in any one quarter may not be fully reflected in our revenue for that quarter. Such declines, however, would negatively affect our revenue in future periods and the effect of significant downturns in sales of and market demand for our solution, and potential changes in our renewals or renewal terms, may not be fully reflected in our results of operations until future periods. 18 Table of Contents Our subscription model also makes it difficult for us to rapidly increase our total revenue through additional sales in any period, as revenue from new customers must be recognized over the applicable term of the contract. Accordingly, the effect of changes in the industry impacting our business or changes we experience in our new sales may not be reflected in our short-term results of operations. Any fluctuation in our quarterly results may not accurately reflect the underlying performance of our business and could cause a decline in the trading price of our securities. Operating Segments The Company operates as a single segment, which is how the chief operating decision maker (“CODM”), who is the Chief Executive Officer, reviews financial performance and allocates resources. Key Business Metrics We monitor the following key metrics to help us evaluate our business, identify trends affecting our business, formulate business plans and make strategic decisions. We believe the following metrics are useful in evaluating our business: Six Months Ended June 30, 2026 2025 (in thousands except number of health plan and enterprise customers or otherwise indicated) Unaudited Unaudited Number of completed Payor sessions during the period 933.0 735.1 Number of health plan customers at period end 39 31 Number of enterprise customers at period end 151 165 Number of Consumer active members at period end 5.0 6.6 Three Months Ended June 30, 2026 2025 (in thousands) Unaudited Unaudited Unique active Payor members during the period 131.6 111.2 Consumer Active Members: We consider consumer members “active” commencing on the date such member initiates contact with a provider on our platform until the term of their monthly, quarterly or bi-annual subscription plan expires, unless terminated early. Unique Payor Active Members: Represents unique users who had a session completed during the period. Components of Results of Operations Revenue We generate revenue from services provided to individuals who are qualified to receive access to the Company's services through our commercial arrangements with health insurance plans, employee assistance organizations and enterprises. We also generate revenue from the sale of monthly, quarterly, bi-annual and annual membership subscriptions to the Company's therapy platform as well as supplementary a la carte offerings directly to individual consumers through a subscription plan. See Note 3, “Revenue Recognition” in the notes to the condensed consolidated financial statements for further details. Costs and Operating Expenses Cost of Revenue, excluding depreciation and amortization Cost of revenue is comprised primarily of therapist payments. 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 designed our business model and our provider network to be scalable and to leverage a hybrid model of both employee providers and independently contracted providers to support multiple growth scenarios. 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. 19 Table of Contents 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. 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. 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 network of therapists. This item is comprised of costs related to recruiting, onboarding, credentialing, training and ongoing quality assurance activities (inclusive of stock-based compensation for our clinical operations employees), costs of third-party services and contractors related to recruiting and training and software-related costs. Sales and Marketing Expenses Sales expenses consist primarily of employee-related expenses, including salaries, benefits, commissions, travel and stock-based compensation costs for our employees engaged in sales and account management. Marketing expenses consist primarily of advertising and marketing expenses for member acquisition and engagement, as well as personnel costs, including salaries, benefits, bonuses, stock-based compensation expense for marketing employees, third-party services and contractors. 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. 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. For the three and six months ended June 30, 2026 general and administrative expenses also include transaction-related costs, including financial advisory, legal, and accounting fees related to the merger with UHS which is expected to close in the third quarter of 2026. Depreciation and amortization Depreciation and amortization expense consist primarily of depreciation expense on capitalized internal use-software costs, computer and equipment and amortization of intangible asset. Financial income, net Financial income, net includes the impact from (i) interest earned on investments in marketable securities and other highly liquid investments, (ii) non-cash changes in the fair value of our warrant liabilities, and (iii) other financial expenses in connection with bank charges. During the three months ended June 30, 2026, all outstanding warrants (20,722,500 Public Warrants and 12,757,500 Private Placement Warrants) to purchase shares of Common Stock expired unexercised pursuant to the terms of the Warrant Agreement dated June 8, 2020. Up to the date of expiration, the Private Placement Warrants were classified as liabilities on the Condensed Consolidated Balance Sheets and measured at fair value each reporting period. Upon expiration, the liability was derecognized, accordingly the warrant liability was remeasured to zero and the resulting change in fair value was included within Financial income, net in the Condensed Consolidated Statements of Operations. As of June 30, 2026 the Company had no warrant liabilities outstanding. 20 Table of Contents Income tax expense Income tax expense consists of U.S. State income taxes related to income generated by our U.S. subsidiaries and foreign income taxes related to income generated by our subsidiary organized under the laws of Israel. We have a full valuation allowance for our U.S. deferred tax assets, including federal and state NOLs. We expect to maintain this valuation allowance until it becomes more likely than not that the benefit of our federal and state deferred tax assets will be realized through expected future taxable income in the United States. Results of Operations The following table presents our results of operations for the three and six months ended June 30, 2026 and 2025 and the dollar and percentage change between the respective periods: Three Months Ended June 30, Variance Six Months Ended June 30, Variance (in thousands, except percentages) 2026 2025 $ % 2026 2025 $ % Revenue: Unaudited Unaudited Unaudited Unaudited Payor revenue $ 51,497 $ 40,501 $ 10,996 27.1 $ 100,059 $ 78,343 $ 21,716 27.7 DTE revenue 6,886 9,403 (2,517 ) (26.8 ) 16,499 18,986 (2,487 ) (13.1 ) Consumer revenue 3,289 4,406 (1,117 ) (25.4 ) 6,793 9,163 (2,370 ) (25.9 ) Total revenue 61,672 54,310 7,362 13.6 123,351 106,492 16,859 15.8 Costs and operating expenses: Cost of revenue, excluding depreciation and amortization 36,869 30,917 5,952 19.3 72,933 59,706 13,227 22.2 Research and development 2,343 2,563 (220 ) (8.6 ) 5,007 5,403 (396 ) (7.3 ) Clinical operations 1,873 1,921 (48 ) (2.5 ) 3,747 3,777 (30 ) (0.8 ) Sales and marketing 14,661 14,253 408 2.9 28,510 28,178 332 1.2 General and administrative 6,458 5,728 730 12.7 19,276 10,935 8,341 76.3 Depreciation and amortization 1,581 718 863 120.2 3,118 1,368 1,750 127.9 Total costs and operating expenses 63,785 56,100 7,685 13.7 132,591 109,367 23,224 21.2 Loss from operations (2,113 ) (1,790 ) (323 ) (18.0 ) (9,240 ) (2,875 ) (6,365 ) (221.4 ) Financial income, net (608 ) (1,325 ) (717 ) (54.1 ) (1,553 ) (2,851 ) (1,298 ) (45.5 ) Loss before income taxes (1,505 ) (465 ) (1,040 ) (223.7 ) (7,687 ) (24 ) (7,663 ) * Income tax expense 11 76 (65 ) (85.5 ) 135 199 (64 ) (32.2 ) Net loss $ (1,516 ) $ (541 ) $ (975 ) (180.2 ) $ (7,822 ) $ (223 ) $ (7,599 ) * * Percentage not meaningful. Revenue Three months ended June 30, 2026 compared to the three months ended June 30, 2025 Total revenue increased by $7.4 million, or 13.6% for the three months ended June 30, 2026 compared to the three months ended June 30, 2025, primarily due to a 27.1% increase in Payor revenue, partially offset by a 26.8% decrease in DTE revenue and a 25.4% decrease in Consumer revenue. Payor revenue increased by $11.0 million, or 27.1%, to $51.5 million for the three months ended June 30, 2026, compared to the three months ended June 30, 2025. This growth was primarily driven by a 23.0% increase in completed Payor sessions, reflecting an expansion in our platform utilization resulting from an 18.3% increase in unique active Payor members and a 25.8% increase in health plan customers. DTE revenue decreased by $2.5 million, or 26.8%, to $6.9 million for the three months ended June 30, 2026, compared to the three months ended June 30, 2025. This decrease was primarily driven by the timing of contract milestones, as certain annual billable maximums were reached earlier in fiscal year 2026, combined with a decrease in the enterprise customer base of 8.5%. Consumer subscription revenue decreased by $1.1 million, or 25.4%, to $3.3 million for the three months ended June 30, 2026, compared to the three months ended June 30, 2025, primarily due to a 24.1% decrease in Consumer active members due to the Company's intentional and strategic decision to optimize and focus marketing efforts on attracting Payor members. 21 Table of Contents Six months ended June 30, 2026 compared to the six months ended June 30, 2025 Total revenue increased by $16.9 million, or 15.8% for the six months ended June 30, 2026 compared to the six months ended June 30, 2025, primarily due to a 27.7% increase in Payor revenue, partially offset by a 13.1% decrease in DTE revenue and a 25.9% decrease in Consumer revenue. Payor revenue increased by $21.7 million, or 27.7%, to $100.1 million for the six months ended June 30, 2026, compared to the six months ended June 30, 2025. This growth was primarily driven by a 26.9% increase in completed Payor sessions, reflecting an expansion in our platform utilization resulting from an 18.3% increase in unique active Payor members and a 25.8% increase in health plan customers. DTE revenue decreased by $2.5 million, or 13.1% for the six months ended June 30, 2026 compared to the six months ended June 30, 2025. This decrease was primarily driven by the timing of contract milestones, as certain annual billable maximums were reached earlier in fiscal year 2026, combined with a decrease in the enterprise customer base of 8.5%. Consumer subscription revenue decreased by $2.4 million, or 25.9%, to $6.8 million for the six months ended June 30, 2026, compared to the six months ended June 30, 2025, primarily due to a 24.1% decrease in Consumer active members due to the Company's intentional and strategic decision to optimize and focus marketing efforts on attracting Payor members. Overall, the increase in revenue for the three and six months ended June 30, 2026 compared to the three and six months ended June 30, 2025 was predominantly volume-driven reflecting a shift in revenue mix towards Payor. Costs and Operating Expenses Cost of revenue, excluding depreciation and amortization. Cost of revenue, excluding depreciation and amortization, increased by $6.0 million, or 19.3%, to $36.9 million for the three months ended June 30, 2026 from $30.9 million for the three months ended June 30, 2025 and increased by $13.2 million, or 22.2%, to $72.9 million for the six months ended June 30, 2026 from $59.7 million for the six months ended June 30, 2025. The increase in cost of revenue for the three and six months ended June 30, 2026, was primarily due to increased hours worked by therapists as a result of increased Payor sessions. Research and development expenses. Research and development expenses decreased by $0.2 million, or 8.6%, to $2.3 million for the three months ended June 30, 2026 from $2.6 million for the three months ended June 30, 2025. The decrease in research and development expenses for the three months ended June 30, 2026 was primarily due to a decrease in employee-related costs of $0.3 million due to capitalization of internal-use software costs. Research and development expenses decreased by $0.4 million, or 7.3%, to $5.0 million for the six months ended June 30, 2026 from $5.4 million for the six months ended June 30, 2025. The decrease in research and development expenses for the six months ended June 30, 2026 was primarily due to a decrease in employee-related costs of $0.5 million due to capitalization of internal-use software costs. Clinical operations expenses. Clinical operations expenses remained relatively unchanged for the three and six months ended June 30, 2026, compared to the same periods in 2025. Sales and marketing expenses. Sales and marketing expense increased by $0.4 million, or 2.9%, to $14.7 million for the three months ended June 30, 2026 from $14.3 million for the three months ended June 30, 2025. The increase in sales and marketing expenses for the three months ended June 30, 2026 was primarily due to an increase in advertising costs of $0.5 million. Sales and marketing expense increased by approximately $0.3 million, or 1.2%, to $28.5 million for the six months ended June 30, 2026 from $28.2 million for the six months ended June 30, 2025. The increase in sales and marketing expenses for the six months ended June 30, 2026 was primarily due to an increase in advertising costs of $0.6 million, partially offset by a decrease in insurance costs of $0.2 million. 22 Table of Contents General and administrative expenses. General and administrative expenses increased $0.7 million, or 12.7%, to $6.5 million for the three months ended June 30, 2026 from $5.7 million for the three months ended June 30, 2025. The increase in general and administrative expenses for the three months ended June 30, 2026 was primarily due to $0.9 million of transaction-related costs, including financial advisory, legal, and accounting fees related to the merger with UHS. General and administrative expenses increased by $8.3 million, or 76.3%, to $19.3 million for the six months ended June 30, 2026 from $10.9 million for the six months ended June 30, 2025. The increase in general and administrative expenses for the six months ended June 30, 2026 was primarily due to $8.2 million of transaction-related costs, including financial advisory, legal, and accounting fees related to the merger with UHS. Depreciation and amortization expenses. Depreciation and amortization expenses increased by $0.9 million, or 120.2%, to $1.6 million for the three months ended June 30, 2026 from $0.7 million for the three months ended June 30, 2025. The increase in depreciation and amortization expenses for the three months ended June 30, 2026 was primarily due an increase in amortization expense related to capitalized internal-use software assets of $0.7 million. Depreciation and amortization expenses increased by $1.8 million, or 127.9%, to $3.1 million for the six months ended June 30, 2026 from $1.4 million for the six months ended June 30, 2025. The increase in depreciation and amortization expenses for the six months ended June 30, 2026 was primarily due an increase in amortization expense related to capitalized internal-use software assets of $1.5 million and an increase in amortization of intangible assets of $0.3 million. Financial income, net Financial income, net decreased by $0.7 million, or 54.1%, to $0.6 million for the three months ended June 30, 2026 from $1.3 million for the three months ended June 30, 2025. The decrease in financial income, net was primarily due to a decrease in interest income earned on marketable securities and other highly liquid investments of $0.3 million due to a reduction in interest rates, and a decrease in non-cash gain in the remeasurement of warrant liabilities of $0.3 million. Financial income, net decreased by $1.3 million, or 45.5%, to $1.6 million for the six months ended June 30, 2026 from $2.9 million for the six months ended June 30, 2025. The decrease in financial income, net was primarily due to a decrease in interest income earned on marketable securities and other highly liquid investments of $0.7 million due to a reduction in interest rates, and a decrease in non-cash gain in the remeasurement of warrant liabilities of $0.6 million. Income tax expense Income tax expense was immaterial and remained relatively unchanged for the three and six months ended June 30, 2026, compared to the same period in 2025. Non-GAAP Financial Measures In addition to our financial results determined in accordance with GAAP, we believe adjusted EBITDA, a non-GAAP measure, is useful in evaluating our operating performance, and our management uses it as a key performance measure to assess our operating performance. Because adjusted EBITDA facilitates internal comparisons of our historical operating performance on a more consistent basis, we use this measure for business planning purposes and in evaluating acquisition opportunities. We also use adjusted EBITDA to evaluate our ongoing operations and for internal planning and forecasting purposes. We believe that this non-GAAP financial measure, when taken together with the corresponding GAAP financial measures, provides meaningful supplemental information regarding our performance by excluding certain items that may not be indicative of our business, results of operations or outlook. We believe that the use of adjusted EBITDA is helpful to our investors as it is a metric used by management in assessing the health of our business and our operating performance. However, non-GAAP financial information is presented for supplemental informational purposes only, has limitations as an analytical tool and should not be considered in isolation or as a substitute for financial information presented in accordance with GAAP. 23 Table of Contents Some of the limitations of adjusted EBITDA include (i) adjusted EBITDA does not necessarily reflect capital commitments to be paid in the future and (ii) although depreciation and amortization are non-cash charges, the underlying assets may need to be replaced and adjusted EBITDA does not reflect these requirements. In evaluating adjusted EBITDA, you should be aware that in the future we will incur expenses similar to the adjustments described herein. Our presentation of adjusted EBITDA should not be construed as an inference that our future results will be unaffected by these expenses or any unusual or non-recurring items. Our adjusted EBITDA may not be comparable to similarly titled measures of other companies because they may not calculate adjusted EBITDA in the same manner as we calculate the measure, limiting its usefulness as a comparative measure. 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. A reconciliation is provided below for adjusted EBITDA to net loss, the most directly comparable financial measure stated in accordance with GAAP. Investors are encouraged to review our financial statements prepared in accordance with GAAP and the reconciliation of our non-GAAP financial measure to its most directly comparable GAAP financial measure, and not to rely on any single financial measure to evaluate our business. We do not provide a forward-looking reconciliation of adjusted EBITDA guidance as the amount and significance of the reconciling items required to develop meaningful comparable GAAP financial measures cannot be estimated at this time without unreasonable efforts. These reconciling items could be meaningful. We calculate adjusted EBITDA as net loss adjusted to exclude (i) depreciation and amortization, (ii) stock-based compensation expense, (iii) financial income, net, (iv) income tax expense, and (v) certain non-recurring expenses, where applicable. The following table presents a reconciliation of adjusted EBITDA from the most comparable GAAP measure, net loss for the three and six months ended June 30, 2026 and 2025: Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 (in thousands) Unaudited Unaudited Unaudited Unaudited Net loss $ (1,516 ) $ (541 ) $ (7,822 ) $ (223 ) Add: Depreciation and amortization 1,581 718 3,118 1,368 Stock-based compensation 2,072 2,355 5,031 4,688 Financial income, net (608 ) (1,325 ) (1,553 ) (2,851 ) Income tax expense 11 76 135 199 Non-recurring expenses (1) 879 999 8,159 1,057 Adjusted EBITDA $ 2,419 $ 2,282 $ 7,068 $ 4,238 (1)For the three and six months ended June 30, 2026, non-recurring expenses consisted of transaction-related costs, including financial advisory, legal, and accounting fees related to the merger with UHS. For the three and six months ended June 30, 2025, non-recurring expenses primarily consisted of severance costs related to the departure of a key executive of the Company, one-time legal fees and other one-time expenses. Liquidity and Capital Resources As of June 30, 2026, we had $91.0 million of cash, cash equivalents, and short-term marketable securities ($92.6 million as of December 31, 2025), which we use to finance our operations and support a variety of growth initiatives and investments. We had no debt as of June 30, 2026 and as of December 31, 2025. Our primary cash needs are to fund operating activities and invest in technology development. Our future capital requirements will depend on many factors including our growth rate, contract renewal activity, the timing and extent of investments to support product development efforts, our expansion of sales and marketing activities, the introduction of new and enhanced service offerings, and the continuing market acceptance of virtual behavioral services. 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. However, in the future we may require additional capital to respond to technological advancements, competitive dynamics, customer demands, business and investment opportunities, acquisitions or unforeseen circumstances and we may determine to engage in equity or debt financings for other reasons. 24 Table of Contents We may not be able to timely secure additional debt or equity financing on favorable terms, or at all. If we raise additional funds through the issuance of equity or convertible debt or other equity-linked securities, our existing stockholders could experience significant dilution. Any debt financing obtained by us in the future could involve restrictive covenants relating to our capital raising activities and other financial and operational matters, which may make it more difficult for us to obtain additional capital and to pursue business opportunities, including potential acquisitions. If we cannot raise capital when needed, we may be forced to undertake asset sales or similar measures to ensure adequate liquidity. 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”). On August 1, 2024, the Company’s Board of Directors amended the Share Repurchase Program to authorize the Company to repurchase up to an additional $25.0 million of its common stock for a total of $40.0 million. The Share Repurchase Program will remain in effect until the earliest: 1) the total authorized dollar amount of shares is repurchased or 2) August 1, 2026. There were no stock repurchases during the three and six months ended June 30, 2026. During the three and six months ended June 30, 2025, the Company repurchased and retired an aggregate of 541,268 and 3,060,438 shares, respectively, of its common stock for a total consideration of $1.4 million ($2.62 per share) and $8.4 million ($2.73 per share), respectively. As of June 30, 2026, $11.8 million remained available under the Share Repurchase Program. Such repurchases may be completed periodically through various methods in compliance with applicable state and federal securities laws and 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. The program does not obligate the Company to repurchase any dollar amount or number of shares, and may be suspended or terminated at any time. See Note 7, “Capital Stock” in the notes to the condensed consolidated financial statements for further details. Cash Flows from Operating, Investing and Financing Activities The following table presents the summary condensed consolidated cash flow information for the periods presented: Cash Flows Six Months Ended June 30, 2026 2025 (in thousands) Unaudited Unaudited Net cash provided by (used in) operating activities $ 6,967 $ (1,590 ) Net cash used in investing activities (2,829 ) (11,386 ) Net cash used in financing activities (2,331 ) (9,374 ) Net increase (decrease) in cash and cash equivalents $ 1,807 $ (22,350 ) Operating Activities Net cash provided by operating activities was $7.0 million for the six months ended June 30, 2026, compared to net cash used in operating activities of $1.6 million for the six months ended June 30, 2025. The increase in net cash provided by operating activities was primarily driven by favorable changes in working capital and higher non-cash add-backs, partially offset by an increased net loss for the period. Investing Activities Net cash used in investing activities was $2.8 million for the six months ended June 30, 2026, compared to net cash used in investing activities of $11.4 million for the six months ended June 30, 2025. The decrease in net cash used in investing activities was driven primarily by increased proceeds from maturities of marketable securities, partially offset by purchases of marketable securities and an increase in capitalized internal-use software development costs during the six months ended June 30, 2026, compared to the six months ended June 30, 2025. 25 Table of Contents Financing Activities Net cash used in financing activities was $2.3 million for the six months ended June 30, 2026, compared to net cash used in financing activities of $9.4 million for the six months ended June 30, 2025. The decrease in net cash used in financing activities was driven primarily by a decline in the purchase of outstanding shares of the Company’s common stock under the Share Repurchase Program. The Company repurchased and retired $8.4 million of the Company's common stock during the six months ended June 30, 2025; there were no stock repurchases during the six months ended June 30, 2026. Contractual Obligations, Commitments and Contingencies As of June 30, 2026, we did not have any short-term or long-term debt, or significant long-term liabilities. As of June 30, 2026, we have a non-material long-term operating lease for our office space in New York, NY. We may in the future be involved in various legal proceedings, claims and litigation that arise in the normal course of business. 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. 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. Should any of our estimates and assumptions change or prove to be incorrect, it could have a material impact on our results of operations, financial position, and cash flows. There were no material legal proceedings, claims or litigation as of June 30, 2026. Our commercial contract arrangements generally include certain provisions requiring us to indemnify customers against liabilities if there is a breach of a customer’s data or if our service infringes a third party’s intellectual property rights. To date, we have not incurred any material costs as a result of such indemnifications. We have also agreed to indemnify our officers and directors for costs associated with any fees, expenses, judgments, fines and settlement amounts incurred by any of these persons in any action or proceeding to which any of those persons is, or is threatened to be, made a party by reason of the person’s service as a director or officer, including any action by us, arising out of that person’s services as our director or officer or that person’s services provided to any other company or enterprise at our request. We maintain director and officer liability insurance coverage that would generally enable us to recover a portion of any future amounts paid. We may also be subject to indemnification obligations by law with respect to the actions of our employees under certain circumstances and in certain jurisdictions. Off-Balance Sheet Arrangements We do not invest in any off-balance sheet vehicles that provide liquidity, capital resources, market or credit risk support, or engage in any activities that expose us to any liability that is not reflected in our condensed consolidated financial statements. Critical Accounting Policies and Estimates The Company’s condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America. Reference is also made to the Company’s consolidated financial statements and notes thereto found in its Annual Report on Form 10-K for the year ended December 31, 2025. The Company’s accounting policies are essential to understanding and interpreting the financial results reported on the condensed consolidated financial statements. The significant accounting policies used in the preparation of the Company’s condensed consolidated financial statements are summarized in Note 2 to the audited consolidated financial statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025. 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. During the six months ended June 30, 2026, there were no material changes to matters discussed under the heading “Critical Accounting Policies and Estimates” in Part II, Item 7 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2025. 26 Table of Contents Recent Accounting Pronouncements Information regarding recent accounting developments and their impact on our results can be found in Note 2, “Summary of Significant Accounting Policies and Estimates” in the audited consolidated financial statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2025 and in Note 2, “Significant Accounting Policies” in the notes to the condensed consolidated financial statements of this Quarterly Report on Form 10-Q. FORWARD-LOOKING STATEMENTS This Quarterly Report on Form 10-Q (the “Quarterly Report”) contains forward-looking statements. We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). All statements other than statements of historical facts contained in this Quarterly Report may be forward-looking statements. In some cases, you can identify forward-looking statements by terms such as “may,” “will,” “should,” “expects,” “plans,” “anticipates,” “could,” “intends,” “targets,” “projects,” “contemplates,” “believes,” “estimates,” “forecasts,” “predicts,” “potential” or “continue” or the negative of these terms or other similar expressions. Forward-looking statements contained in this Quarterly Report include, but are not limited to, statements regarding our future results of operations and financial position, industry and business trends, stock-based compensation, revenue recognition, business strategy, plans and market growth. The forward-looking statements in this Quarterly Report and other such statements we publicly make from time-to-time are only predictions. We base these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our business, financial condition, and results of operations. Forward-looking statements involve known and unknown risks and uncertainties. Many important factors could cause actual future events to differ materially from the forward-looking statements in this Quarterly Report, including but not limited to: (i) rapid technological change in our industry; (ii) our ability to secure customers' contract renewals; (iii) our ability to maintain and expand our network of therapists, psychiatrists and other providers; (iv) a decline in the prevalence of enterprise-sponsored healthcare or the emergence of new technologies may adversely impact our DTE business; (v) if our or our vendors’ security measures fail or are breached; (vi) changes in healthcare laws, regulations or trends and our ability to operate in the heavily regulated healthcare industry; (vii) risks related to the proposed merger with Universal Health Services, Inc., including the risk that the transaction may not be completed on the anticipated timeline or at all; and (viii) the other factors, risks and uncertainties discussed in Part I, Item 1A, “Risk Factors” of the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2025 and subsequent quarterly reports on Form 10-Q, including this report. The forward-looking statements in this Quarterly Report are based upon information available to us as of the date of this Quarterly Report, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain, and investors are cautioned not to unduly rely upon these statements. You should read this Quarterly Report and the risk factors discussed in Part I, Item 1A, “Risk Factors” of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2025 with the understanding that our actual future results, levels of activity, performance and achievements may be materially different from what we expect. We qualify all of our forward-looking statements by these cautionary statements. These forward-looking statements speak only as of the date of this Quarterly Report. Except as required by applicable law, we do not plan to publicly update or revise any forward-looking statements contained in this Quarterly Report on Form 10-Q 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. 27 Table of Contents