LifeStance Health Q1 2025 presentation: revenue up 11%, achieves positive net income

Mental healthcare provider LifeStance Health Group Inc (NASDAQ:LFST) reported strong first-quarter 2025 results on May 7, continuing its momentum from the previous quarter with double-digit growth across key metrics and a shift to positive net income. The company’s stock, which closed at $6.55 on May 6, showed strong premarket gains of 8.4% ahead of the presentation.

Quarterly Performance Highlights

LifeStance reported Q1 2025 revenue of $333 million, representing an 11% year-over-year increase from $300.4 million in Q1 2024. The company achieved a significant milestone by posting positive net income of $0.7 million, a substantial improvement from the $21.1 million loss recorded in the same period last year.

"Our first quarter results demonstrate continued execution of our balanced strategy focusing on both growth and operational excellence," said the company’s management during the presentation.

Visit volumes grew 10% year-over-year to 2.1 million, while the company’s clinician base expanded to 7,535, also representing a 10% increase from the prior year. LifeStance added 152 net new clinicians during the quarter, supporting its growth trajectory.

As shown in the following quarterly performance comparison:

The company’s profitability metrics also showed notable improvement, with Center Margin increasing to $109.8 million (33.0% of revenue) compared to $94.7 million (31.5% of revenue) in Q1 2024. Adjusted EBITDA reached $34.6 million, representing 10.4% of revenue, up from $27.7 million (9.2% of revenue) a year earlier.

Detailed Financial Analysis

LifeStance has demonstrated consistent quarterly improvement across its key financial metrics over the past five quarters, reflecting the company’s successful execution of its growth strategy while enhancing operational efficiency.

The following chart illustrates this consistent upward trend:

The company’s balance sheet remains solid, with $134 million in cash and cash equivalents at the end of Q1 2025. Net long-term debt stood at $276 million, resulting in a manageable leverage position. Operating cash flow for the year-to-date period was negative $3 million, with capital expenditures of $7 million.

"We’re evolving from a purely growth mindset to a balanced set of objectives that include operational excellence, profitable growth, and disciplined capital deployment," noted management in the presentation, highlighting the company’s maturing financial approach.

This strategic shift aligns with comments made during the previous quarter’s earnings call, where the company celebrated achieving its first-ever double-digit EBITDA margin and projected reaching positive net income by 2026 – a milestone it appears to have achieved ahead of schedule with this quarter’s results.

Strategic Initiatives & Capital Allocation

LifeStance continues to expand its national footprint, which now includes over 550 centers across 33 states. The company’s platform is built on four key pillars: national scale, a multidisciplinary clinician model with W-2 employed professionals, tech-enabled hybrid care delivery, and in-network reimbursement providing affordable access.

The company’s mission and vision are clearly articulated in its strategic overview:

Regarding capital allocation, LifeStance is taking a disciplined approach to growth investments. The company plans selective deployment of capital for de novo center openings to enable clinician and market growth, while also considering potential M&A opportunities in 2025.

As illustrated in the following slide detailing the company’s financial position and capital allocation strategy:

This balanced approach to capital deployment represents a maturation of LifeStance’s strategy as it transitions from pure growth to sustainable profitability.

Forward-Looking Statements & Guidance

LifeStance reaffirmed its full-year 2025 guidance, projecting revenue between $1.4 billion and $1.44 billion, Center Margin between $440 million and $464 million, and Adjusted EBITDA between $130 million and $150 million.

For the second quarter of 2025, the company expects:

• Revenue: $332-$352 million
• Center Margin: $100-$114 million
• Adjusted EBITDA: $28-$34 million

The company’s planning assumptions include opening 25-30 de novo centers during 2025, consistent with previous guidance. Management noted that potential M&A activity is not reflected in these projections.

The detailed guidance is presented in the following slide:

The reaffirmation of full-year guidance suggests management’s confidence in the company’s ability to maintain its growth trajectory and continue improving profitability metrics throughout 2025.

LifeStance’s Q1 2025 results and outlook appear to validate the company’s strategic shift toward balanced growth and operational excellence. With positive net income achieved earlier than previously projected and continued double-digit growth across key metrics, the company seems well-positioned to build on its momentum throughout 2025.

Full presentation:

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