Jennifer Fulk: Yes. So thanks, Jack. So first on 2024 — and I talked earlier about some specifics there. In 2024, our guidance assumes that the payor category continues to be the largest driver to our revenue growth. And I mentioned that it comes at a lower gross margin relative to the other categories. So we mentioned a moderately slower growth in the gross margin as a result in 2024. As we look further — and again, this is a preliminary long-term outlook that we provided and it was in response to several inquiries we got from investors on what is our view of the longer-term profitability of the business given that 2023 was such a year of important progress towards profitability. 2024 is still a transitional year as we grow into profitability.
We wanted to give this three-year view. And I’ll just come back to the couple of elements that weigh in there, which is continued progress in the payor category. And that’s really in the long-term against our capture rate opportunity. So we mentioned how big of a volume opportunity we see there. And then in direct-to-enterprise, that playing a bigger part to contributing to both the top line and the bottom line over the next three years. And it’s the things we referenced earlier as far as the digital capabilities and very importantly all the opportunities that Jon has mentioned we see in the teams market.
Jon Cohen: Yes, I would just reiterate that the majority of operating costs are taken out. We’re relatively stable on the OpEx side. It’s the top-line growth that we see a lot of opportunity now, which we think is going to have the biggest impact on the longer-range plan because the opportunity is so big. So it’s not like you’re going to see us take a lot more out of the operating costs. It’s going to be much more the ability and the opportunity before us to grow the top line.
Jack Senft: Okay, understood. I appreciate that color. Just a quick follow-up here, too. I know you’ve grown the clinician network to about 5,300 or up about 75%. Can you maybe just talk about therapist turnover, clinician turnover? I’m kind of curious what you’re seeing on that front. And are you seeing good traction from clinicians on the artificial intelligence front? Or is there kind of something else that you see clinicians citing that they really like?
Jon Cohen: Yes, so we don’t. The turnover is low. It’s really not an issue. And the reason it’s growing is because of all the time and effort we put in to be the employer of choice and the interest we have from people coming onto the platform because of all the things that Talkspace actually does offer, a chance to grow their practice in an environment where they like the people they’re talking to, they like the community, they like the education we’re providing them. So the success there has been, as you can see, quite extraordinary in terms of growing the market. I would say that the AI thing we know will be very positive for the therapist. We only have anecdotal information, quite honestly, but the very early experiences, they’re really, really excited about the idea to have the summary available to them, both on sessions that they’ve completed and soon to have the summary of the intake information to be able to make it much easier for them.
So those two documentation issues we know are very popular. The third is going to be the ability to help them provide actually better care, which is what we’re doing with the self-harm and suicide and we’re going to lean in on developing other algorithms which will help them deliver better care. It doesn’t substitute in any way for them, but it gives them, it really makes it better for them as clinicians to provide better care. So we’re seeing a lot of interest in that, to say the least.
Jack Senft: Okay, perfect. Thanks guys and congrats again.
Jennifer Fulk: Thank you.
Operator: We’ll go next to Stephanie Davis at Barclays.
Stephanie Davis: Hey guys, congrats on the quarter. Thank you for taking my question. Jon, you have been very busy since my garden [ph] leave. You have talked about going into the student population and government populations and some payor populations. Should I think about the majority of your expansion into new markets as done and now it’s, you’ve made your proof points and you’re going to go on a kind of a hunting spree? Or are there further markets you’re looking at and thinking, well why don’t we do that?
Jon Cohen: Well, first Stephanie, thanks for that. I would say that one is, focus is a really big issue for us. It always is, not getting diverted. I would say the other yes, we’ve leaned in on teens. We’ve talked about the respect in terms of government, cities, counties is all relative to teens. So it’s the same market that we’re after. It’s just a matter of who the customer is going to be. I would say though, the other big one for us was our announcement for Medicare. We are, we will be, we believe, the primary, if not only large, national telehealth mental health provider that’s going to be providing that service to the Medicare population. As a result of that, we like to think now it’s from teens to seniors. So the senior, it’s not just a matter of getting into Medicare, which as you heard me talk about is both the regular Medicare or standard Medicare, but Medicare Advantage.
It’s really a strategy to get Medicare patients, people over the age of 65 usually, to actually utilize the service. So given we know the mental health challenges of the seniors, the question is, the challenge for us, which we are ready to address because we put an enormous amount of effort and planning into this, is to address the needs of the Medicare patient and get them to use the platform as we’re doing with teens. So you have the product and now we have to figure out how to make sure that they come onto the platform, which we actually have proven we’re able to do with teens and I’m very confident we’ll be able to do on the Medicare population also.
