Executive Summary

Q1 delivered 19% revenue growth to $300.4M, Center Margin expanded to 31.5% and Adjusted EBITDA rose to $27.7M (9.2% margin), marking a sixth consecutive quarter of meeting/exceeding guided metrics .
Management raised FY24 Center Margin and Adjusted EBITDA guidance while reiterating revenue and positive free cash flow outlook; Q2 guidance was introduced with revenue of $297–$315M and Adj. EBITDA of $20–$26M .
Against public consensus proxies (S&P Global data unavailable), LFST modestly beat revenue (~$300.44M vs ~$299.0M) and beat EPS (-$0.06 vs -$0.09) for Q1; ensuing estimate resets should skew toward higher margins with stable top line .
Key near-term watch items: payer “outlier” rate normalization set to pressure Total Revenue Per Visit (TRPV) in 2H24, offset by broader rate gains and operating leverage; Change Healthcare disruption lifted DSO temporarily but is normalizing .

What Went Well and What Went Wrong

What Went Well
- Strong operating leverage: Center Margin grew 36% to $94.7M (31.5%) and Adj. EBITDA rose 174% to $27.7M (9.2%) on revenue growth and G&A discipline .
- Guidance raised: FY24 Center Margin to $353–$373M and Adj. EBITDA to $88–$98M; revenue reiterated at $1.19–$1.24B; positive full-year FCF reiterated .
- Management tone/confidence: “met or exceeded expectations for the sixth consecutive quarter” and “raising full year adjusted EBITDA guidance” signaled execution momentum .
What Went Wrong
- Payer outlier headwind: one national payer with historically above-market rates reset to portfolio levels, creating short-term TRPV pressure in 2H24/early 2025 (partially offset by other rate increases) .
- Collections/DSO disruption: Change Healthcare cyberattack extended DSO by ~9 days in Q1 and reduced operating cash flow, though management expects normalization as systems recover .
- Some Q1 upside was timing-related: center-level spending (e.g., digital check-in, front-office investments) slipped from Q1 to Q2, benefiting Q1 margins but not recurring at the same level intra-year .

Financial Results

Operating summary (oldest → newest):

Metric	Q1 2023	Q4 2023	Q1 2024
Revenue ($M)	$252.6	$280.6	$300.4
Loss from Operations ($M)	$(34.1)	$(32.3)	$(16.8)
Net Income (Loss) ($M)	$(34.2)	$(45.0)	$(21.1)
Center Margin ($M)	$69.6	$83.3	$94.7
Center Margin (% of Revenue)	27.6%	29.7%	31.5%
Adjusted EBITDA ($M)	$10.1	$20.3	$27.7
Adjusted EBITDA (% of Revenue)	4.0%	7.2%	9.2%
Visits (‘000)	1,665	1,783	1,912
Total Revenue Per Visit ($)	$151.7	$157.4	$157.1

EPS vs prior year:

Metric	Q1 2023	Q1 2024
Diluted EPS ($)	$(0.09)	$(0.06)

Actual vs public consensus proxies for Q1 2024 (S&P Global consensus unavailable today; see note):

Metric	Actual	Consensus	Surprise
Revenue ($M)	$300.44	$299.02	+$1.42
EPS (GAAP, $)	$(0.06)	$(0.09)	+$0.03

Notes: S&P Global consensus data was unavailable at time of writing due to access limits. Public consensus proxies from MarketBeat/Nasdaq/Zacks show similar levels (~$299M revenue, -$0.09 EPS) .

KPI snapshot:

KPI	Q1 2023	Q4 2023	Q1 2024
Clinicians (end period)	5,961	6,645	6,866
Clinician net adds (Q)	—	—	221
Visits (‘000)	1,665	1,783	1,912
TRPV ($)	151.7	157.4	157.1

Segment breakdown: Not applicable; LifeStance reports as a single operating platform .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue ($B)	FY 2024	$1.19–$1.24 (02/28/24)	$1.19–$1.24	Maintained
Center Margin ($M)	FY 2024	$345–$365 (02/28/24)	$353–$373	Raised
Adjusted EBITDA ($M)	FY 2024	$80–$90 (02/28/24)	$88–$98	Raised
Free Cash Flow	FY 2024	Positive (02/28/24)	Positive	Maintained
Revenue ($M)	Q2 2024	—	$297–$315	New quarterly guide
Center Margin ($M)	Q2 2024	—	$85–$97	New quarterly guide
Adjusted EBITDA ($M)	Q2 2024	—	$20–$26	New quarterly guide

Earnings Call Themes & Trends

Topic	Q3 2023 (Prev-2)	Q4 2023 (Prev-1)	Q1 2024 (Current)	Trend
Payer strategy	Culled ~30% low-volume contracts; early assertive rate posture	Expect further payer pruning; incremental rate benefits into 2024	One outlier payer re-priced to market; TRPV pressure 2H24; broader rate gains continue	Mixed near term; positive LT
Productivity focus	Utilization (no-show/cancel) improvements; 9–10% rates achieved	Shift attention toward capacity in 2024	Capacity initiatives underway; Q2 net adds seasonally slower; no productivity baked into guidance	Improving
Tech/digital ops	Single EHR/phone; digital check-in pilots	HRIS/credentialing go-live by summer; EHR enhancement path	Digital check-in/front-office investments timing shifted Q1→Q2	Execution progress
Real estate	70–82 center consolidations in 2023; 2024 benefit >$5M	Project largely complete; de novo pace moderated	Footprint optimization continuing; hybrid care a differentiator	Tailwind
Free cash flow	Expect approach to breakeven in 2024	Milestone: positive FCF in 2024 expected	FY24 positive FCF reiterated	Improving
Collections/DSO	DSO held claims in Q3 (timing)	DSO improved to 41 days	Change Healthcare incident added ~9 days to DSO; normalizing	Normalizing
Legal/regulatory	Securities class action settlement sizing	Final $25M paid in Q1’24	Other privacy/comp. class actions ongoing; costs treated as non-recurring	De-risking

Management Commentary

“We met or exceeded expectations for the sixth consecutive quarter…We are also raising full year adjusted EBITDA guidance” — Ken Burdick, CEO .
“The beat in the first quarter primarily came through performance in center margin…investments…getting off the ramp a little bit slower than we thought” — David Bourdon, CFO (re timing) .
“A single outlier [payer]…meaningfully higher…will now bring them in line…short-term downward pressure on TRPV…already contemplated in 2024 guidance” — Management on payer normalization .
“Change Healthcare…resulted in a net impact of approximately $18 million…DSO increased…~9 days…expected to…resolve in the second quarter” — CFO on collections .
“We remain confident…positive free cash flow in 2024…grow revenue at mid-teens through 2025 and exit 2025 with double-digit margins” — CEO on outlook .

Q&A Highlights

Operating leverage: Management framed Q1 as “initial progress” in an 8–9 quarter efficiency journey; some delayed spend aided the beat .
Payer cadence and TRPV: The outlier reprice phases in across lines of business; modeling should assume higher TRPV in 1H than 2H 2024 .
Capacity focus: 2024 emphasis shifts from utilization to clinician capacity; incentives tilt to full-time with benefits/equity while maintaining recruiting engine .
Collections normalization: Change Healthcare disruption largely timing; DSO already improving in April with reversion expected later in 2024 .
Leadership/bench: COO transition handled with elevated internal leaders; process/KPI discipline underpins stability .

Estimates Context

S&P Global consensus data was unavailable at time of writing due to access limits. Public consensus proxies indicated revenue of ~$299.0M and EPS of -$0.09 for Q1 2024; LFST reported $300.44M and -$0.06, implying modest top-line and EPS beats .
Implication: Street models may raise FY24 Adj. EBITDA and Center Margin to reflect guidance lift and operating leverage, while holding revenue bands; TRPV trajectory should be tempered in 2H to reflect payer reset commentary .

Key Takeaways for Investors

Execution momentum: Six straight “meet/exceed” quarters with visible operating leverage and raised FY24 margin guidance; watch sustainability as deferred spend catches up .
Mix headwind flagged: A single payer reprice will weigh on TRPV in 2H24/early 2025; broader rate gains and volume growth are expected to offset over time .
Cash dynamics improving: DSO spike from Change Healthcare is transitory; FY24 positive free cash flow reiterated, supporting self-funded growth and no near-term need for capital .
Capacity is the 2024 lever: With utilization stabilized, benefits/equity and process improvements aim to drive more full-time clinician hours and throughput .
Footprint optimized, de novos selective: 2023 real estate consolidation done; 2024 de novos moderated (≤20), aiding margin expansion .
Short-term modeling cues: Q2 guide embeds some Q1 spend timing catch-up; model 1H TRPV > 2H; margin expansion continues but not strictly linear .
Marketing/brand: Ongoing stigma-reduction campaign (“Not One Face”) supports patient funnel and brand equity with limited paid acquisition reliance .

Additional Sources Read

Q1 2024 8‑K and press release with full financials, reconciliations, and quarterly appendices .
Q1 2024 earnings call transcript (prepared remarks and Q&A) –.
Q4 2023 and Q3 2023 earnings call transcripts for prior-quarter trend analysis – –.
Other Q2 2024 guidance details from the earnings slide deck .
Marketing press release (May 1, 2024) .

Estimate note: S&P Global consensus estimates were not retrievable at the time of writing due to access limits. Public proxies are cited above for context.

LifeStance Health Group, Inc. (LFST)·Q1 2024 Earnings Summary