Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2023 | May 03, 2023 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Mar. 31, 2023 | |
Entity Registrant Name | LifeStance Health Group, Inc. | |
Entity Central Index Key | 0001845257 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Accelerated Filer | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Small Business | false | |
Entity Emerging Growth Company | true | |
Entity Shell Company | false | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q1 | |
Trading Symbol | LFST | |
Title of 12(b) Security | Common Stock, par value $0.01 per share | |
Security Exchange Name | NASDAQ | |
Entity Ex Transition Period | false | |
Entity Common Stock, Shares Outstanding | 376,764,734 | |
Entity File Number | 001-40478 | |
Entity Tax Identification Number | 86-1832801 | |
Entity Address, Address Line Two | Suite 6000 | |
Entity Incorporation, State or Country Code | DE | |
Entity Address, Address Line One | 4800 N. Scottsdale Road | |
Entity Address, City or Town | Scottsdale | |
Entity Address, State or Province | AZ | |
Entity Address, Postal Zip Code | 85251 | |
City Area Code | 602 | |
Local Phone Number | 767-2100 |
CONSOLIDATED BALANCE SHEETS (un
CONSOLIDATED BALANCE SHEETS (unaudited) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
CURRENT ASSETS | ||
Cash and cash equivalents | $ 68,294 | $ 108,621 |
Patient accounts receivable, net | 118,382 | 100,868 |
Prepaid expenses and other current assets | 25,833 | 23,734 |
Total current assets | 212,509 | 233,223 |
NONCURRENT ASSETS | ||
Property and equipment, net | 193,511 | 194,189 |
Right-of-use assets | 196,193 | 199,431 |
Intangible assets, net | 253,964 | 263,294 |
Goodwill | 1,293,613 | 1,272,939 |
Other noncurrent assets | 8,772 | 10,795 |
Total noncurrent assets | 1,946,053 | 1,940,648 |
Total assets | 2,158,562 | 2,173,871 |
CURRENT LIABILITIES | ||
Accounts payable | 7,709 | 12,285 |
Accrued payroll expenses | 83,673 | 75,650 |
Other accrued expenses | 32,022 | 30,428 |
Current portion of contingent consideration | 13,257 | 15,876 |
Operating lease liabilities, current | 41,647 | 38,824 |
Other current liabilities | 2,833 | 2,936 |
Total current liabilities | 181,141 | 175,999 |
NONCURRENT LIABILITIES | ||
Long-term debt, net | 224,761 | 225,079 |
Operating lease liabilities, noncurrent | 207,903 | 212,586 |
Deferred tax liability, net | 37,569 | 38,701 |
Other noncurrent liabilities | 2,059 | 2,783 |
Total noncurrent liabilities | 472,292 | 479,149 |
Total liabilities | 653,433 | 655,148 |
COMMITMENTS AND CONTINGENCIES (see Note 12) | ||
STOCKHOLDERS' EQUITY | ||
Preferred stock - par value $0.01 per share; 25,000 shares authorized as of March 31, 2023 and December 31, 2022; 0 shares issued and outstanding as of March 31, 2023 and December 31, 2022 | 0 | 0 |
Common stock - par value $0.01 per share; 800,000 shares authorized as of March 31, 2023 and December 31, 2022; 376,537 and 375,964 shares issued and outstanding as of March 31, 2023 and December 31, 2022, respectively | 3,767 | 3,761 |
Additional paid-in capital | 2,108,184 | 2,084,324 |
Accumulated other comprehensive income | 2,004 | 3,274 |
Accumulated deficit | (608,826) | (572,636) |
Total stockholders' equity | 1,505,129 | 1,518,723 |
Total liabilities and stockholders' equity | $ 2,158,562 | $ 2,173,871 |
CONSOLIDATED BALANCE SHEETS (_2
CONSOLIDATED BALANCE SHEETS (unaudited) (Parenthetical) - $ / shares | Mar. 31, 2023 | Dec. 31, 2022 |
Preferred Stock, par value | $ 0.01 | $ 0.01 |
Preferred Stock, Shares Authorized | 25,000,000 | 25,000,000 |
Preferred Stock, Shares Issued | 0 | 0 |
Preferred Stock, Shares Outstanding | 0 | 0 |
Common Stock, par value | $ 0.01 | $ 0.01 |
Common Stock, Shares Authorized | 800,000,000 | 800,000,000 |
Common Stock, Shares, Issued | 376,537,000 | 375,964,000 |
Common Stock, Shares, Outstanding | 376,537,000 | 375,964,000 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
TOTAL REVENUE | $ 252,589 | $ 203,095 |
OPERATING EXPENSES | ||
Center costs, excluding depreciation and amortization shown separately below | 182,987 | 148,893 |
General and administrative expenses | 84,626 | 103,369 |
Depreciation and amortization | 19,069 | 15,684 |
Total operating expenses | 286,682 | 267,946 |
LOSS FROM OPERATIONS | (34,093) | (64,851) |
OTHER INCOME (EXPENSE) | ||
Gain (loss) on remeasurement of contingent consideration | 1,037 | (434) |
Transaction costs | (86) | (278) |
Interest expense, net | (5,092) | (3,441) |
Other expense | (45) | 0 |
Total other expense | (4,186) | (4,153) |
LOSS BEFORE INCOME TAXES | (38,279) | (69,004) |
INCOME TAX BENEFIT | 4,037 | 6,676 |
NET LOSS | $ (34,242) | $ (62,328) |
NET LOSS PER SHARE, BASIC | $ (0.09) | $ (0.18) |
NET LOSS PER SHARE, DILUTED | $ (0.09) | $ (0.18) |
Weighted-average shares, basic net loss per share | 360,902 | 350,849 |
Weighted-average shares, diluted net loss per share | 360,902 | 350,849 |
NET LOSS | $ (34,242) | $ (62,328) |
OTHER COMPREHENSIVE LOSS | ||
Unrealized losses on cash flow hedge, net of tax | (1,270) | 0 |
COMPREHENSIVE LOSS | $ (35,512) | $ (62,328) |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (unaudited) - USD ($) $ in Thousands | Total | Common Stock [Member] | Additional Paid-in Capital [Member] | Accumulated Other Comprehensive Income Member | Accumulated Deficit [Member] |
Balance at Dec. 31, 2021 | $ 1,545,028 | $ 3,743 | $ 1,898,357 | $ (357,072) | |
Shares, Outstanding at Dec. 31, 2021 | 374,255 | ||||
NET LOSS | (62,328) | (62,328) | |||
Issuance of common stock upon vesting of restricted stock units | (37) | $ 1 | (38) | ||
Issuance of common stock upon vesting of restricted stock units, Shares | 96 | ||||
Forfeitures, value | (185) | (185) | |||
Forfeitures, shares | (28) | ||||
Stock-based compensation expense | 60,040 | 60,040 | |||
Balance at Mar. 31, 2022 | 1,542,518 | $ 3,744 | 1,958,174 | (419,400) | |
Shares, Outstanding at Mar. 31, 2022 | 374,323 | ||||
Balance at Dec. 31, 2022 | 1,518,723 | $ 3,761 | 2,084,324 | $ 3,274 | (572,636) |
Shares, Outstanding at Dec. 31, 2022 | 375,964 | ||||
NET LOSS | (34,242) | (34,242) | |||
Issuance of common stock upon vesting of restricted stock units | $ 17 | (17) | |||
Issuance of common stock upon vesting of restricted stock units, Shares | 1,711 | ||||
Forfeitures, value | (3,365) | $ (11) | (3,354) | ||
Forfeitures, shares | (1,138) | ||||
Other comprehensive loss | (1,270) | (1,270) | |||
Adoption of ASU 2016-13 | (1,948) | (1,948) | |||
Stock-based compensation expense | 27,231 | 27,231 | |||
Balance at Mar. 31, 2023 | $ 1,505,129 | $ 3,767 | $ 2,108,184 | $ 2,004 | $ (608,826) |
Shares, Outstanding at Mar. 31, 2023 | 376,537 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
CASH FLOWS FROM OPERATING ACTIVITIES | ||
Net loss | $ (34,242) | $ (62,328) |
Adjustments to reconcile net loss to net cash provided by operating activities: | ||
Depreciation and amortization | 19,069 | 15,684 |
Non-cash operating lease costs | 10,113 | 0 |
Stock-based compensation | 23,866 | 59,855 |
Amortization of discount and debt issue costs | 549 | 295 |
(Gain) loss on remeasurement of contingent consideration | (1,037) | 434 |
Loss on disposal of assets | 45 | 0 |
Change in operating assets and liabilities, net of businesses acquired: | ||
Patient accounts receivable, net | (17,138) | (18,121) |
Prepaid expenses and other current assets | (4,543) | (12,065) |
Accounts payable | (5,466) | 1,852 |
Accrued payroll expenses | 7,663 | 12,759 |
Operating lease liabilities | (8,736) | 0 |
Other accrued expenses | 1,967 | 4,943 |
Net cash (used in) provided by operating activities | (7,890) | 3,308 |
CASH FLOWS FROM INVESTING ACTIVITIES | ||
Purchases of property and equipment | (7,729) | (27,910) |
Acquisitions of businesses, net of cash acquired | (19,820) | (22,945) |
Net cash used in investing activities | (27,549) | (50,855) |
CASH FLOWS FROM FINANCING ACTIVITIES | ||
Proceeds from long-term debt | 0 | 20,000 |
Payments of long-term debt | (586) | (331) |
Payments of contingent consideration | (4,302) | (5,720) |
Taxes related to net share settlement of equity awards | 0 | (441) |
Net cash (used in) provided by financing activities | (4,888) | 13,508 |
NET DECREASE IN CASH AND CASH EQUIVALENTS | (40,327) | (34,039) |
Cash and Cash Equivalents - Beginning of period | 108,621 | 148,029 |
CASH AND CASH EQUIVALENTS – END OF PERIOD | 68,294 | 113,990 |
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION | ||
Cash paid for interest | 5,059 | 3,091 |
Cash paid for taxes, net of refunds | (13) | (60) |
SUPPLEMENTAL DISCLOSURES OF NON CASH INVESTING AND FINANCING ACTIVITIES | ||
Equipment financed through finance leases | 0 | 57 |
Contingent consideration incurred in acquisitions of businesses | 1,985 | 2,470 |
Acquisition of property and equipment included in liabilities | $ 8,297 | $ 12,320 |
Nature of the Business
Nature of the Business | 3 Months Ended |
Mar. 31, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Nature of the Business | NOTE 1 NATURE OF THE BUSINESS Description of Business LifeStance Health Group, Inc. ("LifeStance" or the "Company") operates as a provider of outpatient mental health services, spanning psychiatric evaluations and treatment, psychological and neuropsychological testing, and individual, family and group therapy. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2023 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The Company's significant accounting policies are discussed in Note 2 "Summary of Significant Accounting Policies" in Item 15 of its Annual Report on Form 10-K for the year ended December 31, 2022. During the three months ended March 31, 2023, there have been no significant changes to these policies other than the addition to the cash and cash equivalents policy further described below. Basis of Presentation and Principles of Consolidation The Company has prepared the accompanying unaudited consolidated financial statements pursuant to the rules and regulations of the SEC regarding interim financial reporting, which include the accounts of LifeStance, its wholly-owned subsidiaries and variable interest entities ("VIEs") in which LifeStance has an interest and is the primary beneficiary. Pursuant to these rules and regulations, the Company has omitted certain information and footnote disclosures it normally includes in its annual consolidated financial statements prepared in accordance with U.S. generally accepted accounting principles (“GAAP”). All intercompany balances and transactions have been eliminated in consolidation. In management’s opinion, the Company has made all adjustments (consisting only of normal, recurring adjustments, except as otherwise indicated) necessary to fairly state its consolidated financial condition, results of operations and cash flows. The Company’s interim period operating results do not necessarily indicate the results that may be expected for any other interim period or the full fiscal year. These financial statements and accompanying notes should be read in conjunction with the consolidated financial statements and notes thereto in the Company’s audited financial statements for the year ended December 31, 2022 in the Company's Annual Report on Form 10-K. Use of Accounting Estimates The preparation of consolidated financial statements in conformity with GAAP requires management to make a number of estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Variable Interest Entities The Company evaluates its ownership, contractual and other interests in entities to determine if it has any variable interest in a VIE. These evaluations are complex, involve judgment, and the use of estimates and assumptions based on available information. If the Company determines that an entity in which it holds a contractual or ownership interest is a VIE and that the Company is the primary beneficiary, the Company consolidates such entity in its consolidated financial statements. The primary beneficiary of a VIE is the party that meets both of the following criteria: (i) has the power to make decisions that most significantly affect the economic performance of the VIE; and (ii) has the obligation to absorb losses or the right to receive benefits that in either case could potentially be significant to the VIE. The Company performs ongoing reassessments of whether changes in the facts and circumstances regarding the Company’s involvement with a VIE will cause the consolidation conclusion to change. The Company acquires and operates certain care centers which are deemed to be Friendly-Physician Entities (“FPEs”). As part of an FPE acquisition, the Company acquires 100 % of the non-medical assets, however due to legal requirements the physician-owners must retain 100% of the equity interest. The Company’s agreements with FPEs generally consist of both a Management Service Agreement, which provides for various administrative and management services to be provided by the Company to the FPE, and Stock Transfer Restriction (“STR”) agreements with the physician-owners of the FPEs, which provide for the transition of ownership interests of the FPEs under certain conditions. The outstanding voting equity instruments of the FPEs are owned by the nominee shareholders appointed by the Company under the terms of the STR agreements. The Company has the right to receive income as an ongoing management fee, which effectively absorbs all of the residual interests and has also provided financial support through loans to the FPEs. The Company has exclusive responsibility for the provision of all nonmedical services including facilities, technology and intellectual property required for the day-to-day operation and management of each of the FPEs, and makes recommendations to the FPEs in establishing the guidelines for the employment and compensation of the physicians and other employees of the FPEs. In addition, the STR agreements provide that the Company has the right to designate an appropriately licensed person(s) to purchase the equity interest of the FPE for a nominal amount in the event of a succession event at the Company’s discretion. Based on the provisions of these agreements, the Company determined that the FPEs are VIEs due to the equity holder having insufficient capital at risk, and the Company has a variable interest in the FPEs. The contractual arrangements described above allow the Company to direct the activities that most significantly affect the economic performance of the FPEs. Accordingly, the Company is the primary beneficiary of the FPEs and consolidates the FPEs under the VIE model. Furthermore, as a direct result of nominal initial equity contributions by the physicians, the financial support the Company provides to the FPEs (e.g., loans) and the provisions of the contractual arrangements and nominee shareholder succession arrangements described above, the interests held by noncontrolling interest holders lack economic substance and do not provide them with the ability to participate in the residual profits or losses generated by the FPEs. Therefore, all income and expenses recognized by the FPEs are allocated to the Company. The Company does not hold interests in any VIEs for which the Company is not deemed to be the primary beneficiary. As noted previously, the Company acquires 100% of the non-medical assets of the VIEs. The aggregate carrying values of the VIEs total assets and total liabilities not purchased by the Company but included on the consolidated balance sheets were not material at March 31, 2023 and December 31, 2022 . Cash and Cash Equivalents Cash and cash equivalents include cash and highly liquid investments with original maturities of three months or less at the time of purchase. Cash and cash equivalents consist of demand deposits held with financial institutions and investments in money market funds. Emerging Growth Company Status The Company is an emerging growth company, as defined in the Jumpstart Our Business Startups Act of 2012 (the "JOBS Act"). Under the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards issued subsequent to the enactment of the JOBS Act until such time as those standards apply to private companies. The Company has elected to use this extended transition period for complying with new or revised accounting standards that have different effective dates for public and private companies until the earlier of the date that the Company (i) is no longer an emerging growth company or (ii) affirmatively and irrevocably opts out of the extended transition period provided in the JOBS Act. As a result, the Company's unaudited consolidated financial statements may not be comparable to companies that comply with the new or revised accounting pronouncements as of public company effective dates. Recently Adopted Accounting Pronouncements In June 2016, the FASB issued ASU 2016-13, Financial Instruments (Topic 326)-Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”). ASU 2016-13 requires an entity to utilize a new impairment model known as the current expected credit loss (“CECL”) model to estimate its lifetime “expected credit loss” and record an allowance that, when deducted from the amortized cost basis of the financial asset, presents the net amount expected to be collected on the financial asset. The estimate of expected credit losses requires entities to incorporate considerations of historical information, current information and reasonable and supportable forecasts. The CECL model is expected to result in more timely recognition of credit losses. The Company adopted the standard on January 1, 2023 using the modified retrospective adoption method and did not have a material impact to the consolidated financial statements. The Company makes estimates of expected credit losses based on a combination of factors, including historical losses adjusted for current market conditions, the Company's customers' financial condition, delinquency trends, aging behaviors of receivables and credit and liquidity indicators, and future market and economic conditions and regularly reviews the adequacy of the allowance for credit losses. As of March 31, 2023 , the allowance for credit losses was not material. |
Total Revenue
Total Revenue | 3 Months Ended |
Mar. 31, 2023 | |
Revenues [Abstract] | |
Total Revenue | NOTE 3 TOTAL REVENUE The Company’s total revenue is dependent on a series of contracts with third-party payors, which is typical for providers in the health care industry. The Company has determined that the nature, amount, timing and uncertainty of revenue and cash flows are affected by the payor mix with third-party payors, which have different reimbursement rates. The payor mix of fee-for-service revenue from patients and third-party payors consists of the following: Three Months Ended March 31, 2023 2022 Amount % of Total Revenue Amount % of Total Revenue Commercial $ 228,919 91 % $ 183,609 91 % Government 10,951 4 % 8,833 4 % Self-pay 9,747 4 % 8,375 4 % Total patient service revenue 249,617 99 % 200,817 99 % Nonpatient service revenue 2,972 1 % 2,278 1 % Total $ 252,589 100 % $ 203,095 100 % Among the commercial payors, the table below represents insurance companies that individually represented 10 % or more of revenue: Three Months Ended March 31, 2023 2022 Payor A 19 % 19 % Payor B 13 % 14 % |
Property and Equipment, Net
Property and Equipment, Net | 3 Months Ended |
Mar. 31, 2023 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment, Net | NOTE 4 PROPERTY AND EQUIPMENT, NET Property and equipment, net consists of the following: March 31, 2023 December 31, 2022 Leasehold improvements $ 154,912 $ 148,249 Computers and peripherals 27,299 26,650 Internal-use software 8,206 7,894 Furniture, fixtures and equipment 38,026 36,437 Medical equipment 950 950 Construction in process 14,851 16,892 Total $ 244,244 $ 237,072 Less: Accumulated depreciation ( 50,733 ) ( 42,883 ) Total property and equipment, net $ 193,511 $ 194,189 Depreciation expense consists of the following: Three Months Ended March 31, 2023 2022 Depreciation expense $ 8,896 $ 5,727 |
Leases
Leases | 3 Months Ended |
Mar. 31, 2023 | |
Leases [Abstract] | |
Leases | NOTE 5 LEASES The Company adopted ASC 842 on January 1, 2022 utilizing the private company effective date which did not require adoption of the new standard for any interim periods of the fiscal year in which it was adopted. As of December 31, 2022 and March 31, 2023 and for three months ended March 31, 2023, the Company accounts for its leases in accordance with ASC 842. For the comparative interim periods prior to 2023, the Company prepared its quarterly unaudited consolidated financial statements in accordance with ASC 840, which is a basis different from that of the current year. Accordingly, for the comparative three months ended March 31, 2022 leases are presented in accordance with ASC 840. The Company leases its office facilities and office equipment which are accounted for as operating leases. Some leases contain clauses for renewal at the Company's option with renewal terms that generally extend the lease term fro m one to seven years . The Company incurred $ 14,308 in operating lease costs related to its operating leases in its unaudited consolidated statements of operations and comprehensive loss for the three months ended March 31, 2023. Variable lease costs and short-term lease costs were no t material. The weighted-average remaining lease term and discount rate for operating lease liabilities included in the consolidated balance sheets are as follows: March 31, 2023 December 31, 2022 Weighted-average remaining lease term (in years) 5.1 5.3 Weighted-average discount rate 6.62 % 6.47 % Supplemental cash flow information related to operating leases was as follows: Three Months Ended Cash paid for amounts included in the measurement of lease liabilities Operating cash flows from operating leases $ 15,339 Noncash lease activity Right-of-use lease assets obtained in exchange for new operating lease liabilities $ 6,878 The future minimum lease payments under noncancellable operating leases as of March 31, 2023 are as follows: Year Ended December 31, Amount Remainder of 2023 $ 40,751 2024 62,902 2025 58,925 2026 51,403 2027 38,149 Thereafter 44,781 Total lease payments $ 296,911 Less: imputed interest ( 47,361 ) Total lease liabilities $ 249,550 The Company incurred $ 212 in related-party lease expense in its unaudited consolidated statements of operations and comprehensive loss for the three months ended March 31, 2023 . The Company recognized the following amounts in its unaudited consolidated balance sheets in connection with leases with related parties: March 31, 2023 December 31, 2022 Right-of-use assets $ 2,413 $ 5,058 Operating lease liabilities, current 527 1,324 Operating lease liabilities, noncurrent 1,979 3,902 Total rent expense amounted to as follows in the unaudited consolidated statements of operations and comprehensive loss for the three months ended March 31, 2022: Three Months Ended Related-party rent expense $ 387 Third-party rent expense 11,159 Total lease cost $ 11,546 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 3 Months Ended |
Mar. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | NOTE 6 GOODWILL AND INTANGIBLE ASSETS Goodwill The following table summarizes changes in the carrying amount of goodwill: Amount Balance as of December 31, 2022 $ 1,272,939 Business acquisitions (Note 7) 20,733 Measurement period adjustments ( 59 ) Balance as of March 31, 2023 $ 1,293,613 Intangible Assets Intangible assets consist of the following: March 31, 2023 Gross Accumulated Net Weighted Regional trade names $ 36,694 $ ( 18,523 ) $ 18,171 5.0 LifeStance trade names 235,500 ( 30,174 ) 205,326 22.5 Non-competition agreements 94,535 ( 64,068 ) 30,467 4.2 Total intangible assets $ 366,729 $ ( 112,765 ) $ 253,964 December 31, 2022 Gross Accumulated Net Weighted Regional trade names $ 36,259 $ ( 16,688 ) $ 19,571 5.0 LifeStance trade names 235,500 ( 27,557 ) 207,943 22.5 Non-competition agreements 94,127 ( 58,347 ) 35,780 4.2 Total intangible assets $ 365,886 $ ( 102,592 ) $ 263,294 Gross carrying amount is based on the fair value of the intangible assets determined at the acquisition date. Total intangible asset amortization expense consists of the following: Three Months Ended March 31, 2023 2022 Amortization expense $ 10,173 $ 9,957 |
Business Combinations
Business Combinations | 3 Months Ended |
Mar. 31, 2023 | |
Business Combinations [Abstract] | |
Business Combinations | NOTE 7 BUSINESS COMBINATIONS During the three months ended March 31, 2023 and 2022, the Company completed the acquisitions of 3 and 2 outpatient mental health practices, respectively. The Company accounted for the acquisitions as business combinations using the acquisition method of accounting. The purchase price was allocated to the tangible and intangible assets acquired and liabilities assumed based on their estimated fair values as of the respective acquisition dates. Total consideration transferred for these acquisitions consisted of the following: Three Months Ended March 31, 2023 2022 Cash consideration $ 20,000 $ 23,325 Contingent consideration, at initial fair value 1,985 2,470 Total consideration transferred $ 21,985 $ 25,795 The results of the acquired businesses have been included in the Company’s consolidated financial statements beginning as of their acquisition dates. It is impracticable to provide historical supplemental pro forma financial information along with revenue and earnings subsequent to the acquisition dates for acquisitions during the period due to a variety of factors, including access to historical information and the operations of acquirees being integrated within the Company shortly after closing and not operating as discrete entities within the Company’s organizational structure. Fair Values of Assets Acquired and Liabilities Assumed The following table summarizes the preliminary fair values of assets acquired and liabilities assumed as of the dates of acquisition: Three Months Ended March 31, Allocation of Purchase Price 2023 2022 Cash $ 181 $ 421 Patient accounts receivable 372 486 Prepaid expenses and other current assets 138 64 Property and equipment 221 34 Right-of-use assets 368 — Other noncurrent assets 22 3 Intangible assets 843 782 Goodwill 20,733 24,701 Total assets acquired 22,878 26,491 Total liabilities assumed 893 696 Fair value of net assets $ 21,985 $ 25,795 The majority of the tangible assets acquired and liabilities assumed were recorded at their carrying values as of the respective dates of acquisition, as their carrying values approximated their fair values due to their short-term nature. The fair values of goodwill and other intangible assets acquired in these acquisitions were estimated primarily based on the income approach. The income approach estimates fair value based on the present value of the cash flows that the assets are expected to generate in the future. The Company developed estimates for the expected future cash flows and discount rates used in the present value calculations. The following table summarizes the fair values of acquired intangible assets as of the dates of acquisition: Three Months Ended March 31, 2023 2022 Regional trade names (1) $ 435 $ 342 Non-competition agreements (2) 408 440 Total $ 843 $ 782 (1) Useful lives for regional trade names are 5 years . (2) Useful lives for non-competition agreements are 5 years . Contingent Consideration Under the provisions of the acquisition agreements, the Company may pay additional cash consideration in the form of earnouts, contingent upon the acquirees achieving certain performance and operational targets (see Note 8). The following table summarizes the maximum contingent consideration based on the acquisition agreements: Three Months Ended March 31, Contingent consideration 2023 2022 Maximum contingent consideration based on acquisition agreements $ 2,650 $ 3,000 Goodwill Goodwill is primarily attributable to the assembled workforce, customer and payor relationships and anticipated synergies and economies of scale expected from the integration of the businesses. The synergies include certain cost savings, operating efficiencies, and other strategic benefits projected to be achieved as a result of the acquisition. All goodwill is deductible for tax purposes. |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 31, 2023 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | NOTE 8 FAIR VALUE MEASUREMENTS Contingent Consideration The Company measures its contingent consideration liability at fair value on a recurring basis using Level 3 inputs. The Company estimates the fair value of the contingent consideration liability based on the likelihood and timing of the contingent earn-out payments. The following is the summary of the significant assumptions used for the fair value measurement of the contingent consideration liability as of March 31, 2023 and December 31, 2022. Valuation Technique Range of Significant Assumptions March 31, 2023 December 31, 2022 Probability-weighted analysis Probability 50 % - 100 % 50 % - 100 % based earn-outs Discount rate 9.0 % 8.0 % As of March 31, 2023 and December 31, 2022, the Company adjusted the fair value of the contingent consideration liability due to remeasurement at the reporting date. The noncurrent portion of the contingent consideration liability is included within other noncurrent liabilities on the unaudited consolidated balance sheets. Hedging Activities The Company uses derivative financial instruments, including an interest rate swap, for hedging and non-trading purposes to manage its exposure to changes in interest rates. The Company entered into a hedge transaction (interest rate swap) using a derivative financial instrument for the purpose of hedging the Company’s exposure to interest rate risks, which the contractual terms of the hedged instrument closely mirror those of the hedged item, providing a high degree of risk reduction and correlation. The objective of entering into the interest rate swap is to eliminate the variability of cash flows in the Secured Overnight Financing Rate ("SOFR") interest payments associated with the variable-rate loan over the life of the loan. In August 2022, the Company entered into an interest rate swap agreement to pay a fixed rate of 3.24 % on a total notional value of $ 189,000 of debt. As a result of the interest rate swap, 94.5 % of the term loan previously exposed to interest rate risk from changes in SOFR is now hedged against the interest rate swap at a fixed rate. The interest rate swap matures on September 30, 2025. As of March 31, 2023, the notional value was $ 188,055 . As changes in interest rates impact the future cash flow of interest payments, the hedge provides a synthetic offset to interest rate movements. The Company used the income approach to value the derivative for the interest rate swap using observable market data for all significant inputs and standard valuation techniques to convert future amounts to a single present value amount, assuming that participants are motivated but not compelled to transact. This derivative instrument (interest rate swap) is designated and qualifies as a cash flow hedge, with the entire gain or loss on the derivative reported as a component of other comprehensive income. Amounts recorded in accumulated other comprehensive income are released to earnings in the same period that the hedged transaction impacts consolidated earnings within interest expense, net. The cash flows from the derivative treated as a cash flow hedge is classified in the Company’s consolidated statements of cash flows in the same category as the item being hedged. For the three months ended March 31, 2023, the Company included an immaterial gain on the hedged instrument (variable-rate borrowings) in the same line item (interest expense, net) as the offsetting gain on the related interest rate swap in the unaudited consolidated statements of operations and comprehensive loss. The following table summarizes the location of the interest rate swap in the unaudited consolidated balance sheets as of March 31, 2023: Consolidated balance sheets location March 31, 2023 December 31, 2022 Interest rate swap Other noncurrent assets $ 2,709 $ 4,426 The amount of estimated cash flow hedge unrealized gains and losses that are expected to be reclassified to earnings in the next twelve months is not material. Fair Value Measured on a Recurring Basis The following table presents information about the Company’s assets and liabilities that are measured at fair value on a recurring basis: March 31, 2023 December 31, 2022 Assets Measured at Fair Value Money market funds $ 54,391 $ — Level 1 $ 54,391 $ — Interest rate swap asset $ 2,709 $ 4,426 Level 2 $ 2,709 $ 4,426 Total assets measured at fair value $ 57,100 $ 4,426 Liabilities Measured at Fair Value Contingent consideration liability: Beginning balance $ 17,824 $ 17,430 Additions related to acquisitions 1,985 11,221 Payments of contingent consideration ( 4,302 ) ( 12,515 ) (Gain) loss on remeasurement ( 1,037 ) 1,688 Ending balance 14,470 17,824 Level 3 $ 14,470 $ 17,824 Total liabilities measured at fair value $ 14,470 $ 17,824 |
Long - Term Debt
Long - Term Debt | 3 Months Ended |
Mar. 31, 2023 | |
Debt Disclosure [Abstract] | |
Long-term Debt | NOTE 9 LONG-TERM DEBT On May 4, 2022, the Company entered into a credit agreement (the “2022 Credit Agreement”) among LifeStance Health Holdings, Inc., Lynnwood Intermediate Holdings, Inc., Capital One, National Association, and each lender party thereto. The 2022 Credit Agreement established commitments in respect of a term loan facility of $ 200,000 , a revolving loan facility of up to $ 50,000 and a delayed draw term loan facility of up to $ 100,000 . The commitments under the term loan facility and the revolving facility were available to be drawn on May 16, 2022. The Company borrowed $ 200,000 in term loans on that date, with a maturity date of May 16, 2028 . The remaining commitments under the delayed draw term loan facility are scheduled to terminate on the second anniversary of May 16, 2022 . Once drawn upon, the delayed draw term loan facility has a maturity date of May 16, 2028. The loans under the term loan facility and the delayed draw term loan facility bear interest at a rate per annum equal to (x) adjusted term SOFR (which adjusted term SOFR is subject to a minimum of 0.75 %) plus an applicable margin of 4.50 % or (y) an alternate base rate (which will be the highest of (i) the prime rate, (ii) 0.50 % above the federal funds effective rate and (iii) one-month adjusted term SOFR (which adjusted term SOFR is subject to a minimum of 0.75 %) plus 1.00 %) plus an applicable margin of 3.50 %. The term loans are collateralized by substantially all of the assets of the Company. The revolving loan has interest only payments until the maturity date of May 16, 2027 . The 2022 Credit Agreement requires the Company to maintain compliance with certain restrictive financial covenants related to earnings, leverage ratios, and other financial metrics. The Company was in compliance with all debt covenants at March 31, 2023 and December 31, 2022. Long-term debt consists of the following: March 31, 2023 December 31, 2022 Term loans $ 199,000 $ 199,500 Delayed Draw loans 34,378 34,464 Total long-term debt 233,378 233,964 Less: Current portion of long-term debt ( 2,345 ) ( 2,345 ) Less: Unamortized discount and debt issue costs (1) ( 6,272 ) ( 6,540 ) Total Long-Term Debt, Net of Current Portion $ 224,761 $ 225,079 (1) The unamortized debt issue costs related to long-term debt are presented as a reduction of the carrying amount of the corresponding liabilities on the unaudited consolidated balance sheets. Unamortized debt issue costs related to delayed draw term loan commitments and revolving loans are presented within other noncurrent assets on the unaudited consolidated balance sheets. The current portion of long-term debt is included within other current liabilities on the unaudited consolidated balance sheets. Interest expense, net consists of the following: Three Months Ended March 31, 2023 2022 Interest expense, net $ 5,092 $ 3,441 Future principal payments on long-term debt as of March 31, 2023 are as follows: Year Ended December 31, Amount Remainder of 2023 $ 1,759 2024 2,345 2025 2,345 2026 2,345 2027 2,345 Thereafter 222,239 Total $ 233,378 The fair value of long-term debt is based on the present value of future payments discounted by the market interest rates or the fixed rates based on current rates offered to the Company for debt with similar terms and maturities, which is a Level 2 fair value measurement. Long-term debt is presented at carrying value on the unaudited consolidated balance sheets. The fair value of long-term debt at March 31, 2023 and December 31, 2022 was $ 237,451 and $ 235,049 , respectively. Revolving Loan Under the 2022 Credit Agreement, the Company has a revolving loan commitment from Capital One in the amount of $ 50,000 . Any borrowing on the revolving loan under the 2022 Credit Agreement is due in full on May 16, 2027 . The revolving loan bears interest at a rate per annum equal to (x) adjusted term SOFR plus an applicable margin of 3.25 % or (y) an alternate base rate (which will be the highest of (i) the prime rate, (ii) 0.50 % above the federal funds effective rate and (iii) one-month adjusted term SOFR plus 1.00 %) plus an applicable margin of 2.25 %. The unused revolving loan incurs a commitment fee of 0.50 % per annum. There are no amounts outstanding on the revolving loan as of March 31, 2023 and December 31, 2022. In April 2023, the Company drew $ 25,000 from the aforementioned revolving loan and converted the outstanding balance on the revolving loan to a delayed draw term loan in May 2023. |
Stock - Based Compensation
Stock - Based Compensation | 3 Months Ended |
Mar. 31, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Stock Based Compensation | NOTE 10 STOCK-BASED COMPENSATION 2021 Equity Incentive Plan Effective June 9, 2021, the Company’s Board of Directors (the "Board") and its stockholders as of that date adopted and approved the LifeStance Health Group, Inc. 2021 Equity Incentive Plan (the “2021 Equity Incentive Plan”). The 2021 Equity Incentive Plan permits the grant of awards or restricted or unrestricted common stock, stock options, stock appreciation rights, restricted stock units, performance awards, and other stock-based awards to employees and directors of, and consultants and advisors to, the Company and its affiliates. On January 1, 2023, the number of shares of common stock reserved and available for issuance under the 2021 Equity Incentive Plan increased by 18,798 shares. Restricted Stock Awards ("RSA") The following is a summary of RSA transactions as of and for the three months ended March 31, 2023: Unvested Shares Weighted-Average Unvested, December 31, 2022 16,796 $ 11.98 Vested ( 125 ) 11.98 Forfeited ( 1,138 ) 11.98 Unvested, March 31, 2023 15,533 $ 11.98 Restricted Stock Units ("RSU") The following is a summary of RSU transactions as of and for the three months ended March 31, 2023: Unvested Shares Weighted-Average Outstanding, December 31, 2022 14,203 $ 10.61 Granted 17,209 6.02 Vested ( 1,711 ) 8.59 Canceled and forfeited ( 1,439 ) 10.47 Outstanding, March 31, 2023 28,262 $ 7.94 Stock Options The following is a summary of stock option activity as of and for the three months ended March 31, 2023: Number of Options Weighted-Average Weighted-Average Aggregate Intrinsic Value Outstanding, December 31, 2022 13,476 $ 7.42 9.70 $ — Granted — — Vested — — Canceled and forfeited — — Outstanding, March 31, 2023 13,476 $ 7.42 9.46 $ 2,375 Vested or expected to vest at March 31, 2023 13,476 $ 7.42 9.46 $ 2,375 Stock-Based Compensation Expense The Company recognized stock-based compensation expense related to RSAs, RSUs, and stock options within general and administrative expenses in the unaudited consolidated statements of operations and comprehensive loss as follows: Three Months Ended March 31, 2023 2022 Stock-based compensation expense $ 23,866 $ 59,855 As of March 31, 2023, the Company had $ 233,046 in unrecognized compensation expense related to all non-vested awards (RSAs, RSUs and stock options) that will be recognized over the weighted-average remaining service period of 2.2 years. 2021 Employee Stock Purchase Plan Effective June 9, 2021, the Board and its stockholders as of that date adopted and approved the LifeStance Health Group, Inc. 2021 Employee Stock Purchase Plan (the “ESPP”). The ESPP is more fully described in Note 14 in the consolidated financial statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2022. As of March 31, 2023 , no shares of common stock have been purchased under the Company’s ESPP. |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | NOTE 11 INCOME TAXES The benefit for income taxes is as follows: Three Months Ended March 31, 2023 2022 Benefit for income taxes $ 4,037 $ 6,676 The effective tax rates are as follows: Three Months Ended March 31, 2023 2022 Effective tax rate 10.5 % 9.7 % The difference between the Company’s effective tax rate and the U.S. statutory tax rate of 21 % was prima rily the result of non-deductible equity awards. The Company regularly evaluates the realizability of its deferred tax assets and establishes a valuation allowance if it is more likely than not that some or all the deferred tax assets will not be realized. The Company had a valuation allowance of $ 1,424 as of March 31, 2023 and December 31, 2022 . |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | NOTE 12 COMMITMENTS AND CONTINGENCIES Professional Liability Insurance The medical malpractice insurance coverage is subject to a $ 3,000 per claim limit and an annual aggregate shared limit of $ 8,000 . Should the claims-made policy not be renewed or replaced with equivalent insurance, claims based on occurrences during its term, but reported subsequently, would be uninsured. The Company is not aware of any unasserted claims, unreported incidents, or claims outstanding that are expected to exceed malpractice insurance coverage limits as of March 31, 2023 and December 31, 2022. Health Care Industry The health care industry is subject to numerous laws and regulations of federal, state, and local governments. These laws and regulations include, but are not necessarily limited to, matters such as licensure, accreditation, and government health care program participation requirements, reimbursement for patient services, and Medicare fraud and abuse. Recently, government activity has increased with respect to investigations and allegations concerning possible violations of fraud and abuse statutes and regulations by health care providers. Violation of these laws and regulations could result in expulsion from government health care programs together with imposition of significant fines and penalties, as well as significant repayments for patient services billed. Laws and regulations concerning government programs, including Medicare and Medicaid, are complex and subject to varying interpretation. As a result of investigations by governmental agencies, various health care companies have received requests for information and notices regarding alleged noncompliance with those laws and regulations, which, in some instances, have resulted in companies entering into significant settlement agreements. Compliance with such laws and regulations may also be subject to future government review and interpretation as well as significant regulatory action, including fines, penalties, and potential exclusion from the related programs. There can be no assurance that regulatory authorities will not challenge the Company’s compliance with these laws and regulations, and it is not possible to determine the impact (if any) such claims or penalties would have upon the Company. In addition, the contracts the Company has with commercial payors also provide for retroactive audit and review of claims. Management believes that the Company is in substantial compliance with fraud and abuse as well as other applicable government laws and regulations. While no regulatory inquiries have been made, compliance with such laws and regulations is subject to government review and interpretation, as well as regulatory actions unknown or unasserted at this time. General Contingencies The Company is exposed to various risks of loss related to torts; theft of, damage to and destruction of assets; errors and omissions, injuries to employees, and natural disasters. These risks are covered by commercial insurance purchased from independent third parties. There has been no significant reduction in insurance coverage from the previous year in any of the Company’s policies. Litigation The Company may be involved from time-to-time in legal actions relating to the ownership and operations of its business. In management’s opinion, the liabilities, if any, that may ultimately result from such legal actions are not expected to have a material adverse effect on the financial condition, results of operations, or cash flows of the Company. On August 10, 2022, a shareholder class action lawsuit captioned Nayani v. LifeStance Health Group, Inc., et al. was filed in the United States District Court for the Southern District of New York (the “Court”) against the Company and certain executives and board members (the “LifeStance Defendants”), as well as the underwriters of the Company’s initial public offering (the “IPO”) (collectively, “Defendants”). The lawsuit alleges, in part, that the Defendants violated Section 11 of the Securities Act of 1933 (the “Securities Act”) because the IPO registration statement purportedly contained inaccurate and misleading statements and/or failed to disclose certain facts concerning patient visits and clinician retention. The lawsuit also asserts that the LifeStance Defendants violated Section 15 of the Securities Act because they are control persons of the Company. The lawsuit seeks unspecified monetary damages and purports to represent all shareholders who purchased the Company’s common stock pursuant to the IPO registration statement. The process of resolving these matters is inherently uncertain and may develop over an extended period of time; therefore, at this time, the ultimate resolution cannot be predicted. The Company has not recorded any material accruals for loss contingencies and in management's opinion no material range of loss is estimable for this matter as of March 31, 2023 . |
Net Loss Per Share
Net Loss Per Share | 3 Months Ended |
Mar. 31, 2023 | |
Earnings Per Share [Abstract] | |
Net Loss Per Share | NOTE 13 NET LOSS PER SHARE The following table presents the calculation of basic and diluted net loss per share (“EPS”) for the Company’s common shares: Three Months Ended March 31, 2023 2022 Net loss available to common stockholders' $ ( 34,242 ) $ ( 62,328 ) Weighted-average shares used to compute basic and 360,902 350,849 Net loss per share, basic and diluted $ ( 0.09 ) $ ( 0.18 ) The Company has issued potentially dilutive instruments in the form of RSAs, RSUs and stock options. The Company did not include any of these instruments in its calculation of diluted loss per share for the three months ended March 31, 2023 and 2022 because to include them would be anti-dilutive due to the Company’s net loss during the period. See Note 10 for the issued, vested and unvested RSAs, RSUs and stock options. The Company excluded the following potential common shares, presented based on amounts outstanding at each period end, from the computation of diluted net loss per share: As of March 31, 2023 2022 RSAs 15,533 23,270 RSUs 28,262 15,759 Stock options 13,476 — 57,271 39,029 |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2023 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Principles of Consolidation | Basis of Presentation and Principles of Consolidation The Company has prepared the accompanying unaudited consolidated financial statements pursuant to the rules and regulations of the SEC regarding interim financial reporting, which include the accounts of LifeStance, its wholly-owned subsidiaries and variable interest entities ("VIEs") in which LifeStance has an interest and is the primary beneficiary. Pursuant to these rules and regulations, the Company has omitted certain information and footnote disclosures it normally includes in its annual consolidated financial statements prepared in accordance with U.S. generally accepted accounting principles (“GAAP”). All intercompany balances and transactions have been eliminated in consolidation. In management’s opinion, the Company has made all adjustments (consisting only of normal, recurring adjustments, except as otherwise indicated) necessary to fairly state its consolidated financial condition, results of operations and cash flows. The Company’s interim period operating results do not necessarily indicate the results that may be expected for any other interim period or the full fiscal year. These financial statements and accompanying notes should be read in conjunction with the consolidated financial statements and notes thereto in the Company’s audited financial statements for the year ended December 31, 2022 in the Company's Annual Report on Form 10-K. |
Use of Accounting Estimates | Use of Accounting Estimates The preparation of consolidated financial statements in conformity with GAAP requires management to make a number of estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. |
Variable Interest Entities | Variable Interest Entities The Company evaluates its ownership, contractual and other interests in entities to determine if it has any variable interest in a VIE. These evaluations are complex, involve judgment, and the use of estimates and assumptions based on available information. If the Company determines that an entity in which it holds a contractual or ownership interest is a VIE and that the Company is the primary beneficiary, the Company consolidates such entity in its consolidated financial statements. The primary beneficiary of a VIE is the party that meets both of the following criteria: (i) has the power to make decisions that most significantly affect the economic performance of the VIE; and (ii) has the obligation to absorb losses or the right to receive benefits that in either case could potentially be significant to the VIE. The Company performs ongoing reassessments of whether changes in the facts and circumstances regarding the Company’s involvement with a VIE will cause the consolidation conclusion to change. The Company acquires and operates certain care centers which are deemed to be Friendly-Physician Entities (“FPEs”). As part of an FPE acquisition, the Company acquires 100 % of the non-medical assets, however due to legal requirements the physician-owners must retain 100% of the equity interest. The Company’s agreements with FPEs generally consist of both a Management Service Agreement, which provides for various administrative and management services to be provided by the Company to the FPE, and Stock Transfer Restriction (“STR”) agreements with the physician-owners of the FPEs, which provide for the transition of ownership interests of the FPEs under certain conditions. The outstanding voting equity instruments of the FPEs are owned by the nominee shareholders appointed by the Company under the terms of the STR agreements. The Company has the right to receive income as an ongoing management fee, which effectively absorbs all of the residual interests and has also provided financial support through loans to the FPEs. The Company has exclusive responsibility for the provision of all nonmedical services including facilities, technology and intellectual property required for the day-to-day operation and management of each of the FPEs, and makes recommendations to the FPEs in establishing the guidelines for the employment and compensation of the physicians and other employees of the FPEs. In addition, the STR agreements provide that the Company has the right to designate an appropriately licensed person(s) to purchase the equity interest of the FPE for a nominal amount in the event of a succession event at the Company’s discretion. Based on the provisions of these agreements, the Company determined that the FPEs are VIEs due to the equity holder having insufficient capital at risk, and the Company has a variable interest in the FPEs. The contractual arrangements described above allow the Company to direct the activities that most significantly affect the economic performance of the FPEs. Accordingly, the Company is the primary beneficiary of the FPEs and consolidates the FPEs under the VIE model. Furthermore, as a direct result of nominal initial equity contributions by the physicians, the financial support the Company provides to the FPEs (e.g., loans) and the provisions of the contractual arrangements and nominee shareholder succession arrangements described above, the interests held by noncontrolling interest holders lack economic substance and do not provide them with the ability to participate in the residual profits or losses generated by the FPEs. Therefore, all income and expenses recognized by the FPEs are allocated to the Company. The Company does not hold interests in any VIEs for which the Company is not deemed to be the primary beneficiary. As noted previously, the Company acquires 100% of the non-medical assets of the VIEs. The aggregate carrying values of the VIEs total assets and total liabilities not purchased by the Company but included on the consolidated balance sheets were not material at March 31, 2023 and December 31, 2022 . |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents include cash and highly liquid investments with original maturities of three months or less at the time of purchase. Cash and cash equivalents consist of demand deposits held with financial institutions and investments in money market funds. |
Emerging Growth Company Status | Emerging Growth Company Status The Company is an emerging growth company, as defined in the Jumpstart Our Business Startups Act of 2012 (the "JOBS Act"). Under the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards issued subsequent to the enactment of the JOBS Act until such time as those standards apply to private companies. The Company has elected to use this extended transition period for complying with new or revised accounting standards that have different effective dates for public and private companies until the earlier of the date that the Company (i) is no longer an emerging growth company or (ii) affirmatively and irrevocably opts out of the extended transition period provided in the JOBS Act. As a result, the Company's unaudited consolidated financial statements may not be comparable to companies that comply with the new or revised accounting pronouncements as of public company effective dates. |
New Accounting Pronouncements Not Yet Adopted | In June 2016, the FASB issued ASU 2016-13, Financial Instruments (Topic 326)-Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”). ASU 2016-13 requires an entity to utilize a new impairment model known as the current expected credit loss (“CECL”) model to estimate its lifetime “expected credit loss” and record an allowance that, when deducted from the amortized cost basis of the financial asset, presents the net amount expected to be collected on the financial asset. The estimate of expected credit losses requires entities to incorporate considerations of historical information, current information and reasonable and supportable forecasts. The CECL model is expected to result in more timely recognition of credit losses. The Company adopted the standard on January 1, 2023 using the modified retrospective adoption method and did not have a material impact to the consolidated financial statements. The Company makes estimates of expected credit losses based on a combination of factors, including historical losses adjusted for current market conditions, the Company's customers' financial condition, delinquency trends, aging behaviors of receivables and credit and liquidity indicators, and future market and economic conditions and regularly reviews the adequacy of the allowance for credit losses. As of March 31, 2023 , the allowance for credit losses was not material. |
Total Revenue (Tables)
Total Revenue (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Disaggregation of Revenue [Abstract] | |
Schedule of revenue from patients and third - party payors | The payor mix of fee-for-service revenue from patients and third-party payors consists of the following: Three Months Ended March 31, 2023 2022 Amount % of Total Revenue Amount % of Total Revenue Commercial $ 228,919 91 % $ 183,609 91 % Government 10,951 4 % 8,833 4 % Self-pay 9,747 4 % 8,375 4 % Total patient service revenue 249,617 99 % 200,817 99 % Nonpatient service revenue 2,972 1 % 2,278 1 % Total $ 252,589 100 % $ 203,095 100 % |
Schedule of percentage of revenue from insurance companies | Among the commercial payors, the table below represents insurance companies that individually represented 10 % or more of revenue: Three Months Ended March 31, 2023 2022 Payor A 19 % 19 % Payor B 13 % 14 % |
Property and Equipment, Net (Ta
Property and Equipment, Net (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment | Property and equipment, net consists of the following: March 31, 2023 December 31, 2022 Leasehold improvements $ 154,912 $ 148,249 Computers and peripherals 27,299 26,650 Internal-use software 8,206 7,894 Furniture, fixtures and equipment 38,026 36,437 Medical equipment 950 950 Construction in process 14,851 16,892 Total $ 244,244 $ 237,072 Less: Accumulated depreciation ( 50,733 ) ( 42,883 ) Total property and equipment, net $ 193,511 $ 194,189 |
Schedule of Depreciation Expense | Depreciation expense consists of the following: Three Months Ended March 31, 2023 2022 Depreciation expense $ 8,896 $ 5,727 |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Leases [Abstract] | |
Summary of Components of Lease Expense | The weighted-average remaining lease term and discount rate for operating lease liabilities included in the consolidated balance sheets are as follows: March 31, 2023 December 31, 2022 Weighted-average remaining lease term (in years) 5.1 5.3 Weighted-average discount rate 6.62 % 6.47 % |
Summary of Supplemental Cash Flow Information Related to Operating Leases | Supplemental cash flow information related to operating leases was as follows: Three Months Ended Cash paid for amounts included in the measurement of lease liabilities Operating cash flows from operating leases $ 15,339 Noncash lease activity Right-of-use lease assets obtained in exchange for new operating lease liabilities $ 6,878 |
Summary of Future Minimum Lease Payments | The future minimum lease payments under noncancellable operating leases as of March 31, 2023 are as follows: Year Ended December 31, Amount Remainder of 2023 $ 40,751 2024 62,902 2025 58,925 2026 51,403 2027 38,149 Thereafter 44,781 Total lease payments $ 296,911 Less: imputed interest ( 47,361 ) Total lease liabilities $ 249,550 |
Schedule of Unaudited Consolidated Balance Sheets in Connection with Leases with Related Parties | The Company recognized the following amounts in its unaudited consolidated balance sheets in connection with leases with related parties: March 31, 2023 December 31, 2022 Right-of-use assets $ 2,413 $ 5,058 Operating lease liabilities, current 527 1,324 Operating lease liabilities, noncurrent 1,979 3,902 |
Schedule of Total Rent Expense | Total rent expense amounted to as follows in the unaudited consolidated statements of operations and comprehensive loss for the three months ended March 31, 2022: Three Months Ended Related-party rent expense $ 387 Third-party rent expense 11,159 Total lease cost $ 11,546 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Summary of Goodwill | The following table summarizes changes in the carrying amount of goodwill: Amount Balance as of December 31, 2022 $ 1,272,939 Business acquisitions (Note 7) 20,733 Measurement period adjustments ( 59 ) Balance as of March 31, 2023 $ 1,293,613 |
Summary of Intangible Assets | Intangible assets consist of the following: March 31, 2023 Gross Accumulated Net Weighted Regional trade names $ 36,694 $ ( 18,523 ) $ 18,171 5.0 LifeStance trade names 235,500 ( 30,174 ) 205,326 22.5 Non-competition agreements 94,535 ( 64,068 ) 30,467 4.2 Total intangible assets $ 366,729 $ ( 112,765 ) $ 253,964 December 31, 2022 Gross Accumulated Net Weighted Regional trade names $ 36,259 $ ( 16,688 ) $ 19,571 5.0 LifeStance trade names 235,500 ( 27,557 ) 207,943 22.5 Non-competition agreements 94,127 ( 58,347 ) 35,780 4.2 Total intangible assets $ 365,886 $ ( 102,592 ) $ 263,294 |
Summary of Intangible Assets Amortization Expense | Gross carrying amount is based on the fair value of the intangible assets determined at the acquisition date. Total intangible asset amortization expense consists of the following: Three Months Ended March 31, 2023 2022 Amortization expense $ 10,173 $ 9,957 |
Business Combinations (Tables)
Business Combinations (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Business Combinations [Abstract] | |
Summary Of Consideration Transferred | Total consideration transferred for these acquisitions consisted of the following: Three Months Ended March 31, 2023 2022 Cash consideration $ 20,000 $ 23,325 Contingent consideration, at initial fair value 1,985 2,470 Total consideration transferred $ 21,985 $ 25,795 |
Schedule of Recognized Assets Acquired and Liabilities Assumed | The following table summarizes the preliminary fair values of assets acquired and liabilities assumed as of the dates of acquisition: Three Months Ended March 31, Allocation of Purchase Price 2023 2022 Cash $ 181 $ 421 Patient accounts receivable 372 486 Prepaid expenses and other current assets 138 64 Property and equipment 221 34 Right-of-use assets 368 — Other noncurrent assets 22 3 Intangible assets 843 782 Goodwill 20,733 24,701 Total assets acquired 22,878 26,491 Total liabilities assumed 893 696 Fair value of net assets $ 21,985 $ 25,795 The majority of the tangible assets acquired and liabilities assumed were recorded at their carrying values as of the respective dates of acquisition, as their carrying values approximated their fair values due to their short-term nature. The fair values of goodwill and other intangible assets acquired in these acquisitions were estimated primarily based on the income approach. The income approach estimates fair value based on the present value of the cash flows that the assets are expected to generate in the future. The Company developed estimates for the expected future cash flows and discount rates used in the present value calculations. |
Schedule of Fair Values of Acquired Intangible Assets | The following table summarizes the fair values of acquired intangible assets as of the dates of acquisition: Three Months Ended March 31, 2023 2022 Regional trade names (1) $ 435 $ 342 Non-competition agreements (2) 408 440 Total $ 843 $ 782 (1) Useful lives for regional trade names are 5 years . (2) Useful lives for non-competition agreements are 5 years . |
Schedule of Maximum Contingent Consideration Based on the Acquisition Agreements | The following table summarizes the maximum contingent consideration based on the acquisition agreements: Three Months Ended March 31, Contingent consideration 2023 2022 Maximum contingent consideration based on acquisition agreements $ 2,650 $ 3,000 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Fair Value Disclosures [Abstract] | |
Summary of the Significant Assumptions Used for the Fair Value Measurement of the Contingent Consideration Liability | The following is the summary of the significant assumptions used for the fair value measurement of the contingent consideration liability as of March 31, 2023 and December 31, 2022. Valuation Technique Range of Significant Assumptions March 31, 2023 December 31, 2022 Probability-weighted analysis Probability 50 % - 100 % 50 % - 100 % based earn-outs Discount rate 9.0 % 8.0 % |
Schedule of Location of the Interest Rate Swap | The following table summarizes the location of the interest rate swap in the unaudited consolidated balance sheets as of March 31, 2023: Consolidated balance sheets location March 31, 2023 December 31, 2022 Interest rate swap Other noncurrent assets $ 2,709 $ 4,426 |
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis | The following table presents information about the Company’s assets and liabilities that are measured at fair value on a recurring basis: March 31, 2023 December 31, 2022 Assets Measured at Fair Value Money market funds $ 54,391 $ — Level 1 $ 54,391 $ — Interest rate swap asset $ 2,709 $ 4,426 Level 2 $ 2,709 $ 4,426 Total assets measured at fair value $ 57,100 $ 4,426 Liabilities Measured at Fair Value Contingent consideration liability: Beginning balance $ 17,824 $ 17,430 Additions related to acquisitions 1,985 11,221 Payments of contingent consideration ( 4,302 ) ( 12,515 ) (Gain) loss on remeasurement ( 1,037 ) 1,688 Ending balance 14,470 17,824 Level 3 $ 14,470 $ 17,824 Total liabilities measured at fair value $ 14,470 $ 17,824 |
Long - Term Debt (Tables)
Long - Term Debt (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Debt Disclosure [Abstract] | |
Summary of Long-term Debt Instruments | Long-term debt consists of the following: March 31, 2023 December 31, 2022 Term loans $ 199,000 $ 199,500 Delayed Draw loans 34,378 34,464 Total long-term debt 233,378 233,964 Less: Current portion of long-term debt ( 2,345 ) ( 2,345 ) Less: Unamortized discount and debt issue costs (1) ( 6,272 ) ( 6,540 ) Total Long-Term Debt, Net of Current Portion $ 224,761 $ 225,079 (1) The unamortized debt issue costs related to long-term debt are presented as a reduction of the carrying amount of the corresponding liabilities on the unaudited consolidated balance sheets. Unamortized debt issue costs related to delayed draw term loan commitments and revolving loans are presented within other noncurrent assets on the unaudited consolidated balance sheets. |
Summary of Interest Expense | Interest expense, net consists of the following: Three Months Ended March 31, 2023 2022 Interest expense, net $ 5,092 $ 3,441 |
Summary of Maturities of Long-term Debt | Future principal payments on long-term debt as of March 31, 2023 are as follows: Year Ended December 31, Amount Remainder of 2023 $ 1,759 2024 2,345 2025 2,345 2026 2,345 2027 2,345 Thereafter 222,239 Total $ 233,378 |
Stock- Based Compensation (Tabl
Stock- Based Compensation (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Summary of Restricted Stock Awards (RSA) Activity | The following is a summary of RSA transactions as of and for the three months ended March 31, 2023: Unvested Shares Weighted-Average Unvested, December 31, 2022 16,796 $ 11.98 Vested ( 125 ) 11.98 Forfeited ( 1,138 ) 11.98 Unvested, March 31, 2023 15,533 $ 11.98 |
Summary of Restricted Stock Unit (RSU) Activity | The following is a summary of RSU transactions as of and for the three months ended March 31, 2023: Unvested Shares Weighted-Average Outstanding, December 31, 2022 14,203 $ 10.61 Granted 17,209 6.02 Vested ( 1,711 ) 8.59 Canceled and forfeited ( 1,439 ) 10.47 Outstanding, March 31, 2023 28,262 $ 7.94 |
Summary of Stock Option Activity | The following is a summary of stock option activity as of and for the three months ended March 31, 2023: Number of Options Weighted-Average Weighted-Average Aggregate Intrinsic Value Outstanding, December 31, 2022 13,476 $ 7.42 9.70 $ — Granted — — Vested — — Canceled and forfeited — — Outstanding, March 31, 2023 13,476 $ 7.42 9.46 $ 2,375 Vested or expected to vest at March 31, 2023 13,476 $ 7.42 9.46 $ 2,375 |
Summary of Stock Based Compensation Expense | The Company recognized stock-based compensation expense related to RSAs, RSUs, and stock options within general and administrative expenses in the unaudited consolidated statements of operations and comprehensive loss as follows: Three Months Ended March 31, 2023 2022 Stock-based compensation expense $ 23,866 $ 59,855 |
Income Taxes (Tables)
Income Taxes (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
Schedule of Provision for Income Tax Expense (Benefit) | The benefit for income taxes is as follows: Three Months Ended March 31, 2023 2022 Benefit for income taxes $ 4,037 $ 6,676 |
Schedule of Effective Tax Rates | The effective tax rates are as follows: Three Months Ended March 31, 2023 2022 Effective tax rate 10.5 % 9.7 % |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Business Acquisition, Contingent Consideration [Line Items] | |
Schedule of Maximum Contingent Consideration Based on the Acquisition Agreements | The following table summarizes the maximum contingent consideration based on the acquisition agreements: Three Months Ended March 31, Contingent consideration 2023 2022 Maximum contingent consideration based on acquisition agreements $ 2,650 $ 3,000 |
Schedule Of Related-party Rent Expense | Total rent expense amounted to as follows in the unaudited consolidated statements of operations and comprehensive loss for the three months ended March 31, 2022: Three Months Ended Related-party rent expense $ 387 Third-party rent expense 11,159 Total lease cost $ 11,546 |
Summary of Future Minimum Lease Payments | The future minimum lease payments under noncancellable operating leases as of March 31, 2023 are as follows: Year Ended December 31, Amount Remainder of 2023 $ 40,751 2024 62,902 2025 58,925 2026 51,403 2027 38,149 Thereafter 44,781 Total lease payments $ 296,911 Less: imputed interest ( 47,361 ) Total lease liabilities $ 249,550 |
Net Loss Per Share (Tables)
Net Loss Per Share (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Earnings Per Share [Abstract] | |
Schedule of Basic and Diluted Net Loss Per Share | The following table presents the calculation of basic and diluted net loss per share (“EPS”) for the Company’s common shares: Three Months Ended March 31, 2023 2022 Net loss available to common stockholders' $ ( 34,242 ) $ ( 62,328 ) Weighted-average shares used to compute basic and 360,902 350,849 Net loss per share, basic and diluted $ ( 0.09 ) $ ( 0.18 ) |
Computation of Diluted Net Loss per Share | The Company excluded the following potential common shares, presented based on amounts outstanding at each period end, from the computation of diluted net loss per share: As of March 31, 2023 2022 RSAs 15,533 23,270 RSUs 28,262 15,759 Stock options 13,476 — 57,271 39,029 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies - Additional Information (Details) | Mar. 31, 2023 |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |
Acquisition of Non Medical Assets | 100% |
Total Revenue - Additional Info
Total Revenue - Additional Information (Details) | Mar. 31, 2023 |
Minimum [Member] | |
Health Care Organization, Receivable and Revenue Disclosures [Line Items] | |
% of Total Revenue | 10% |
Total Revenue - Schedule of Rev
Total Revenue - Schedule of Revenue From Patients And Third - Party Payors (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Health Care Organization Receivable And Revenue Disclosures [Line Items] | ||
Amount | $ 252,589 | $ 203,095 |
% of Total Revenue | 100% | 100% |
Commercial | ||
Health Care Organization Receivable And Revenue Disclosures [Line Items] | ||
Amount | $ 228,919 | $ 183,609 |
% of Total Revenue | 91% | 91% |
Government | ||
Health Care Organization Receivable And Revenue Disclosures [Line Items] | ||
Amount | $ 10,951 | $ 8,833 |
% of Total Revenue | 4% | 4% |
Self-pay | ||
Health Care Organization Receivable And Revenue Disclosures [Line Items] | ||
Amount | $ 9,747 | $ 8,375 |
% of Total Revenue | 4% | 4% |
Total patient service revenue | ||
Health Care Organization Receivable And Revenue Disclosures [Line Items] | ||
Amount | $ 249,617 | $ 200,817 |
% of Total Revenue | 99% | 99% |
Nonpatient service revenue | ||
Health Care Organization Receivable And Revenue Disclosures [Line Items] | ||
Amount | $ 2,972 | $ 2,278 |
% of Total Revenue | 1% | 1% |
Total Revenue - Schedule of Per
Total Revenue - Schedule of Percentage Of Revenue From Insurance Companies (Details) | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Health Care Organization Receivable And Revenue Disclosures [Line Items] | ||
% of Total Revenue | 100% | 100% |
Payor A | ||
Health Care Organization Receivable And Revenue Disclosures [Line Items] | ||
% of Total Revenue | 19% | 19% |
Payor B | ||
Health Care Organization Receivable And Revenue Disclosures [Line Items] | ||
% of Total Revenue | 13% | 14% |
Property and Equipment, Net - S
Property and Equipment, Net - Schedule of Property and Equipment (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Property Plant And Equipment [Line Items] | ||
Total | $ 244,244 | $ 237,072 |
Less: Accumulated depreciation | (50,733) | (42,883) |
Total property and equipment, net | 193,511 | 194,189 |
Leasehold Improvements [Member] | ||
Property Plant And Equipment [Line Items] | ||
Total | 154,912 | 148,249 |
Computers and Peripherals [Member] | ||
Property Plant And Equipment [Line Items] | ||
Total | 27,299 | 26,650 |
Internal-use software [Member] | ||
Property Plant And Equipment [Line Items] | ||
Total | 8,206 | 7,894 |
Furniture, Fixtures and Equipment [Member] | ||
Property Plant And Equipment [Line Items] | ||
Total | 38,026 | 36,437 |
Medical Equipment [Member] | ||
Property Plant And Equipment [Line Items] | ||
Total | 950 | 950 |
Construction in Process [Member] | ||
Property Plant And Equipment [Line Items] | ||
Total | $ 14,851 | $ 16,892 |
Property and Equipment, Net -_2
Property and Equipment, Net - Schedule of Depreciation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation expense | $ 8,896 | $ 5,727 |
Leases - Additional Information
Leases - Additional Information (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2023 USD ($) | |
Lessee, Lease, Description [Line Items] | |
Operating lease costs | $ 14,308 |
Variable lease costs | 0 |
Short-term lease costs | 0 |
Related Party | |
Lessee, Lease, Description [Line Items] | |
Related party lease expense | $ 212 |
Maximum | |
Lessee, Lease, Description [Line Items] | |
Operating leases renewal term | 7 years |
Minimum | |
Lessee, Lease, Description [Line Items] | |
Operating leases renewal term | 1 year |
Leases - Summary of Weighted Av
Leases - Summary of Weighted Average Remaining Lease Term and Discount Rate (Details) | Mar. 31, 2023 | Dec. 31, 2022 |
Leases [Abstract] | ||
Weighted-average remaining lease term (in years) | 5 years 1 month 6 days | 5 years 3 months 18 days |
Weighted-average discount rate | 6.62% | 6.47% |
Leases - Summary of Supplementa
Leases - Summary of Supplemental Cash Flow Information Related to Operating Leases (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2023 USD ($) | |
Cash paid for amounts included in the measurement of lease liabilities | |
Operating cash flows from operating leases | $ 15,339 |
Non Cash Leases Activity Abstract | |
Right-of-use lease assets obtained in exchange for new operating lease liabilities | $ 6,878 |
Leases - Summary of Future Mini
Leases - Summary of Future Minimum Lease Payments (Details) $ in Thousands | Mar. 31, 2023 USD ($) |
Leases [Abstract] | |
Remainder of 2023 | $ 40,751 |
2024 | 62,902 |
2025 | 58,925 |
2026 | 51,403 |
2027 | 38,149 |
Thereafter | 44,781 |
Total lease payments | 296,911 |
Less: imputed interest | (47,361) |
Total lease liabilities | $ 249,550 |
Leases - Schedule of Unaudited
Leases - Schedule of Unaudited Consolidated Balance Sheets in Connection with Leases with Related Parties (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Right-of-use assets | $ 196,193 | $ 199,431 |
Operating lease liabilities, current | 41,647 | 38,824 |
Operating lease liabilities, noncurrent | 207,903 | 212,586 |
Related Party | ||
Right-of-use assets | 2,413 | 5,058 |
Operating lease liabilities, current | 527 | 1,324 |
Operating lease liabilities, noncurrent | $ 1,979 | $ 3,902 |
Leases - Schedule Of Total Rent
Leases - Schedule Of Total Rent Expense (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2022 USD ($) | |
Operating Leased Assets [Line Items] | |
Total lease cost | $ 11,546 |
Related Party | |
Operating Leased Assets [Line Items] | |
Total lease cost | 387 |
Third Party | |
Operating Leased Assets [Line Items] | |
Total lease cost | $ 11,159 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets - Summary of Goodwill (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2023 USD ($) | |
Goodwill [Line Items] | |
Beginning balance | $ 1,272,939 |
Business acquisitions | 20,733 |
Measurement period adjustment | (59) |
Ending balance | $ 1,293,613 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets - Summary of Intangible Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2023 | Dec. 31, 2022 | |
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 366,729 | $ 365,886 |
Accumulated Amortization | (112,765) | (102,592) |
Net Carrying Amount | 253,964 | 263,294 |
Regional Trade Names [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | 36,694 | 36,259 |
Accumulated Amortization | (18,523) | (16,688) |
Net Carrying Amount | $ 18,171 | $ 19,571 |
Weighted Average Useful Life (Years) | 5 years | 5 years |
Life Stance Trade Names [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 235,500 | $ 235,500 |
Accumulated Amortization | (30,174) | (27,557) |
Net Carrying Amount | $ 205,326 | $ 207,943 |
Weighted Average Useful Life (Years) | 22 years 6 months | 22 years 6 months |
Non-Competition Agreements [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Amount | $ 94,535 | $ 94,127 |
Accumulated Amortization | (64,068) | (58,347) |
Net Carrying Amount | $ 30,467 | $ 35,780 |
Weighted Average Useful Life (Years) | 4 years 2 months 12 days | 4 years 2 months 12 days |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets - Summary of Intangible Asset Amortization Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Amortization expense | $ 10,173 | $ 9,957 |
Business Combinations - Additio
Business Combinations - Additional Information (Details) - Facility | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Business Combinations [Abstract] | ||
Acquisitions of outpatient mental health practices | 3 | 2 |
Business Combinations - Summary
Business Combinations - Summary of Consideration Transferred (Details) - Outpatient Mental Health Practices - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Business Acquisition [Line Items] | ||
Cash consideration | $ 20,000 | $ 23,325 |
Total consideration transferred | 21,985 | 25,795 |
Class A-2 Common Units [Member] | ||
Business Acquisition [Line Items] | ||
Contingent consideration, at initial fair value | $ 1,985 | $ 2,470 |
Business Combinations - Schedul
Business Combinations - Schedule of Fair Value Assets Acquired And Liabilities Assumed (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Business Combinations [Abstract] | ||
Cash | $ 181 | $ 421 |
Patient accounts receivable | 372 | 486 |
Prepaid expenses and other current assets | 138 | 64 |
Property and equipment | 221 | 34 |
Right-of-use assets | 368 | 0 |
Other noncurrent assets | 22 | 3 |
Intangible assets | 843 | 782 |
Goodwill | 20,733 | 24,701 |
Total assets acquired | 22,878 | 26,491 |
Total liabilities assumed | 893 | 696 |
Fair value of net assets | $ 21,985 | $ 25,795 |
Business Combinations - Sched_2
Business Combinations - Schedule of Fair Values of Acquired Intangible Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | ||
Business Acquisition [Line Items] | |||
Acquired intangible assets, Fair value | $ 843 | $ 782 | |
Regional Trade Names [Member] | |||
Business Acquisition [Line Items] | |||
Acquired intangible assets, Fair value | [1] | 435 | 342 |
Non-Competition Agreements [Member] | |||
Business Acquisition [Line Items] | |||
Acquired intangible assets, Fair value | [2] | $ 408 | $ 440 |
[1] Useful lives for regional trade names are 5 years . Useful lives for non-competition agreements are 5 years . |
Business Combinations - Sched_3
Business Combinations - Schedule of Fair Values of Acquired Intangible Assets (Parenthetical) (Details) | 3 Months Ended |
Mar. 31, 2023 | |
Regional Trade Names [Member] | |
Business Acquisition [Line Items] | |
Useful lives for acquired intangible assets | 5 years |
Non-Competition Agreements [Member] | |
Business Acquisition [Line Items] | |
Useful lives for acquired intangible assets | 5 years |
Business Combinations - Sched_4
Business Combinations - Schedule of Maximum Contingent Consideration Based on the Acquisition Agreements (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Contingent Consideration [Member] | ||
Business Acquisition [Line Items] | ||
Maximum contingent consideration based on acquisition agreements | $ 2,650 | $ 3,000 |
Fair Value Measurements - Summa
Fair Value Measurements - Summary of the Significant Assumptions Used for the Fair Value Measurement of the Contingent Consideration Liability (Details) | Mar. 31, 2023 | Dec. 31, 2022 |
Minimum | Probability Weighted Analysis | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Business Combination, Contingent Consideration, Liability, Measurement Input | 0.50 | 0.50 |
Minimum | F T E Based Earn Outs | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Business Combination, Contingent Consideration, Liability, Measurement Input | 0.090 | 0.080 |
Maximum | Probability Weighted Analysis | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Business Combination, Contingent Consideration, Liability, Measurement Input | 1 | 1 |
Fair Value Measurements - Sched
Fair Value Measurements - Schedule of location of the interest rate swap (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative Asset | $ 57,100 | $ 4,426 |
Derivative Asset, Statement of Financial Position [Extensible Enumeration] | Other noncurrent assets | |
Interest Rate Swap | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative Asset | $ 2,709 | $ 4,426 |
Fair Value Measurements - Sum_2
Fair Value Measurements - Summary of Fair Value, Assets and Liabilities Measured on Recurring Basis (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2023 | Dec. 31, 2022 | |
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Derivative Asset | $ 57,100 | $ 4,426 |
Beginning balance | 17,824 | 17,430 |
Additions related to acquisitions | 1,985 | 11,221 |
Payments of contingent consideration | (4,302) | (12,515) |
(Gain) loss on remeasurement | (1,037) | 1,688 |
Ending balance | 14,470 | 17,824 |
Derivative Liability | 14,470 | 17,824 |
Money Market Funds | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Derivative Asset | 54,391 | 0 |
Interest Rate Swap | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Derivative Asset | 2,709 | 4,426 |
Fair Value, Inputs, Level 1 | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Derivative Asset | 54,391 | 0 |
Fair Value, Inputs, Level 2 | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Derivative Asset | 2,709 | 4,426 |
Fair Value, Inputs, Level 3 | ||
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items] | ||
Derivative Liability | $ 14,470 | $ 17,824 |
Fair Value Measurements - Addit
Fair Value Measurements - Additional Information (Details) - Interest Rate Swap - USD ($) | Mar. 31, 2023 | Aug. 31, 2022 |
Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Derivative Percent of Debt Exposed | 94.50% | |
Cash Flow Hedging | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Derivative, Fixed Interest Rate | 3.24% | |
Derivative, Notional Amount | $ 188,055 | $ 189,000 |
Long - Term Debt - Summary of L
Long - Term Debt - Summary of Long-term Debt Instruments (Detail) - USD ($) | Mar. 31, 2023 | Dec. 31, 2022 | May 04, 2022 | |
Debt Instrument [Line Items] | ||||
Term loans | $ 224,761,000 | $ 225,079,000 | ||
Less: Current portion of long-term debt | (2,345,000) | (2,345,000) | ||
Less: Unamortized discount and debt issue costs | [1] | (6,272,000) | (6,540,000) | |
Total | 233,378,000 | 233,964,000 | ||
Term Loans | ||||
Debt Instrument [Line Items] | ||||
Total | 199,000,000 | 199,500,000 | $ 200,000 | |
Delayed Drawn Loans | ||||
Debt Instrument [Line Items] | ||||
Total | $ 34,378,000 | $ 34,464,000 | ||
[1] The unamortized debt issue costs related to long-term debt are presented as a reduction of the carrying amount of the corresponding liabilities on the unaudited consolidated balance sheets. Unamortized debt issue costs related to delayed draw term loan commitments and revolving loans are presented within other noncurrent assets on the unaudited consolidated balance sheets. |
Long - Term Debt - Additional I
Long - Term Debt - Additional Information (Detail) - USD ($) | 3 Months Ended | |||
May 04, 2022 | Mar. 31, 2023 | Apr. 01, 2023 | Dec. 31, 2022 | |
Debt Instrument [Line Items] | ||||
Long-term Debt, Fair Value | $ 237,451,000 | $ 235,049 | ||
Long term debt fair value | 233,378,000 | 233,964,000 | ||
2022 Credit Agreement [Member] | ||||
Debt Instrument [Line Items] | ||||
Term loan facility | $ 200,000 | |||
Debt instrument, basis spread on variable rate | 1% | |||
2022 Credit Agreement [Member] | Revolving Credit Facility [Member] | ||||
Debt Instrument [Line Items] | ||||
Loan withdrawal amount | 0 | 0 | ||
Maximum borrowing capacity | $ 50,000 | |||
Unused revolving loan commitment fee percentage | 0.0050 | |||
Revolving loan outstanding amount | $ 0 | 0 | ||
Revolving loan,expiration date | May 16, 2027 | |||
Subsequent Event [Member] | Revolving Credit Facility [Member] | ||||
Debt Instrument [Line Items] | ||||
Loan withdrawal amount | $ 25,000,000 | |||
Revolving loan outstanding amount | $ 25,000,000 | |||
Term Loans | ||||
Debt Instrument [Line Items] | ||||
Long-term Debt, Maturities, Repayment Terms | May 16, 2028 | |||
Long term debt fair value | $ 200,000 | $ 199,000,000 | 199,500,000 | |
Delayed Drawn Loans | ||||
Debt Instrument [Line Items] | ||||
Long term debt fair value | $ 34,378,000 | $ 34,464,000 | ||
Maximum | 2022 Credit Agreement [Member] | ||||
Debt Instrument [Line Items] | ||||
Loan withdrawal amount | 50,000 | |||
Revolving loan outstanding amount | 50,000 | |||
Maximum | Delayed Drawn Loans | 2022 Credit Agreement [Member] | ||||
Debt Instrument [Line Items] | ||||
Aggregate loan commitment amount | $ 100,000 | |||
Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate | 2022 Credit Agreement [Member] | ||||
Debt Instrument [Line Items] | ||||
Long-term Debt, Maturities, Repayment Terms | May 16, 2027 | |||
Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate | Minimum | 2022 Credit Agreement [Member] | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, basis spread on variable rate | 0.75% | |||
Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate | Minimum | 2022 Credit Agreement [Member] | Revolving Credit Facility [Member] | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, basis spread on variable rate | 1% | |||
Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate | Maximum | 2022 Credit Agreement [Member] | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, basis spread on variable rate | 4.50% | |||
Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate | Maximum | 2022 Credit Agreement [Member] | Revolving Credit Facility [Member] | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, basis spread on variable rate | 3.25% | |||
Federal Funds Rate | 2022 Credit Agreement [Member] | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, basis spread on variable rate | 0.50% | |||
Federal Funds Rate | 2022 Credit Agreement [Member] | Revolving Credit Facility [Member] | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, basis spread on variable rate | 0.50% | |||
Base Rate | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, basis spread on variable rate | 3.50% | |||
Base Rate | 2022 Credit Agreement [Member] | Revolving Credit Facility [Member] | ||||
Debt Instrument [Line Items] | ||||
Debt instrument, basis spread on variable rate | 2.25% |
Long - Term Debt - Summary of I
Long - Term Debt - Summary of Interest Expense (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Debt Disclosure [Abstract] | ||
Interest expense, net | $ 5,092 | $ 3,441 |
Long - Term Debt - Future Princ
Long - Term Debt - Future Principal Payments on Long Term Debt (Detail) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Debt Disclosure [Abstract] | ||
Remainder of 2023 | $ 1,759 | |
2024 | 2,345 | |
2025 | 2,345 | |
2026 | 2,345 | |
2027 | 2,345 | |
Thereafter | 222,239 | |
Total | $ 233,378 | $ 233,964 |
Stock - Based Compensation - Ad
Stock - Based Compensation - Additional Information (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2023 | Jan. 01, 2023 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Unrecognized compensation expense | $ 233,046 | |
Unrecognized compensattion expense, weighted-average period | 2 years 2 months 12 days | |
2021 Equity Incentive Plan [Member] | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Common Stock, Capital Shares Reserved for Future Issuance | 18,798 | |
2021 Employee Stock Purchase Plan [Member] | Common Stock [Member] | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Stock Issued During Period, Shares, Employee Stock Purchase Plans | 0 |
Stock - Based Compensation - Su
Stock - Based Compensation - Summary of Restricted Stock Awards (RSA) Activity (Details) - Restricted Stock Award | 3 Months Ended |
Mar. 31, 2023 $ / shares shares | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Outstanding | shares | 16,796 |
Vested | shares | (125) |
Forfeited | shares | (1,138) |
Outstanding | shares | 15,533 |
Outstanding | $ / shares | $ 11.98 |
Vested | $ / shares | 11.98 |
Canceled and forfeited | $ / shares | 11.98 |
Outstanding | $ / shares | $ 11.98 |
Stock - Based Compensation - _2
Stock - Based Compensation - Summary of Restricted Stock Unit (RSU) Activity (Details) - Restricted Stock Unit | 3 Months Ended |
Mar. 31, 2023 $ / shares shares | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |
Outstanding | shares | 14,203 |
Granted | shares | 17,209 |
Vested | shares | (1,711) |
Canceled and forfeited | shares | (1,439) |
Outstanding | shares | 28,262 |
Outstanding | $ / shares | $ 10.61 |
Granted | $ / shares | 6.02 |
Vested | $ / shares | 8.59 |
Canceled and forfeited | $ / shares | 10.47 |
Outstanding | $ / shares | $ 7.94 |
Stock - Based Compensation - _3
Stock - Based Compensation - Summary of Stock Option Activity (Details) - Stock Options [Member] $ / shares in Units, $ in Thousands | 3 Months Ended |
Mar. 31, 2023 USD ($) $ / shares shares | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | |
Number of shares options outstanding, Beginning Balance | shares | 13,476 |
Number of options, granted | shares | 0 |
Number of options, Vested | shares | 0 |
Number of options, forfeited | shares | 0 |
Number of shares options outstanding, Ending Balance | shares | 13,476 |
Number of shares options, vested or expected to vest | shares | 13,476 |
Weighted average exercise price outstanding, Beginning Balance | $ / shares | $ 7.42 |
Weighted average exercise price, granted | $ / shares | 0 |
Weighted average exercise price, Vested | $ / shares | 0 |
Weighted average exercise price, forfeited | $ / shares | 0 |
Weighted average exercise price outstanding, Ending Balance | $ / shares | 7.42 |
Weighted average exercise price, vested or expected to vest | $ / shares | $ 7.42 |
Weighted average remaining term in years, Outstanding, Beginning | 9 years 8 months 12 days |
Weighted average remaining term in years, Outstanding, Ending | 9 years 5 months 15 days |
Weighted average remaining contractual life, vested or expected to vest | 9 years 5 months 15 days |
Aggregate intrinsic value outstanding, Ending Balance | $ | $ 2,375 |
Aggregate intrinsic value, vested or expected | $ | $ 2,375 |
Stock - Based Compensation - _4
Stock - Based Compensation - Summary of Stock Based Compensation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Stock and unit-based compensation expense | $ 23,866 | $ 59,855 |
Income Taxes - Schedule of Prov
Income Taxes - Schedule of Provision for Income Tax Expense (Benefit) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Income Statement [Abstract] | ||
Benefit for income taxes | $ 4,037 | $ 6,676 |
Income Taxes - Schedule of Effe
Income Taxes - Schedule of Effective Tax Rates (Details) | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Income Statement [Abstract] | ||
Effective tax rate | 10.50% | 9.70% |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2023 | Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | ||
Statutory tax rate | 21% | |
Effective tax rate due to its valuation allowance | $ 1,424 | $ 1,424 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2023 USD ($) | |
Commitments and Contingencies Disclosure [Abstract] | |
Medical malpractice insurance, coverage per claim limit | $ 3,000 |
Medical malpractice insurance, annual coverage per clinician | $ 8,000 |
Net Loss Per Share - Schedule o
Net Loss Per Share - Schedule of Basic and Diluted Net Loss Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Earnings Per Share [Abstract] | ||
Net loss available to common stockholders' | $ (34,242) | $ (62,328) |
Weighted-average shares used to compute basic and diluted net loss per share | 360,902 | 350,849 |
Net loss per share, basic | $ (0.09) | $ (0.18) |
Net loss per share, diluted | $ (0.09) | $ (0.18) |
Net Loss Per Share - Computatio
Net Loss Per Share - Computation of Diluted Net Loss per Share (Details) - shares | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Diluted net loss per share | 57,271 | 39,029 |
Restricted Stock Awards RSA [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Diluted net loss per share | 15,533 | 23,270 |
Restricted Stock Units RSU [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Diluted net loss per share | 28,262 | 15,759 |
Stock Options [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Diluted net loss per share | 13,476 | 0 |