LifeStance Health Group (LFST -0.46%), a large U.S. outpatient mental healthcare provider, reported its financial results for the second quarter of fiscal 2025 on August 7, 2025. The most notable news was that revenue (GAAP) reached $345.3 million, slightly exceeding analyst expectations and registering 11% GAAP growth over the prior year. Net loss (GAAP) improved considerably to $(3.8 million), while Adjusted EBITDA rose 19%. Management raised its expectations for full-year Center Margin to $441 million to $465 million and Adjusted EBITDA to $140 million to $150 million for FY2025, building on operating gains and productivity progress. Overall, the quarter showed progress in volume, clinician expansion, and operating leverage.
| Metric | Q2 2025 | Q2 2025 Estimate | Q2 2024 | Y/Y Change |
|---|---|---|---|---|
| EPS (GAAP) | $(0.01) | $(0.02) | $(0.06) | 83.3 % |
| Revenue (GAAP) | $345.3 million | N/A | $312.3 million | 11.0 % |
| Adjusted EBITDA | $34.0 million | $28.6 million | 18.9 % | |
| Center Margin | $108.4 million | $97.8 million | 10.8 % | |
| Net Loss | $(3.8 million) | $(23.3 million) | 83.7 % |
Source: Analyst estimates provided by FactSet. Management expectations based on management's guidance, as provided in Q1 2025 earnings report.
Company Overview and Strategic Focus
LifeStance is one of the nation's largest outpatient providers of mental health care services, reaching patients in 33 states with more than 7,700 employed clinicians as of Q2 2025. Its platform includes psychologists, psychiatrists, nurse practitioners, and licensed therapists. The company delivers care through both physical centers and a robust virtual infrastructure, making it accessible to millions needing therapy, medication management, and specialty interventions.
Recently, LifeStance has sharpened its focus on three areas: expanding its clinician base, optimizing its hybrid care model that spans in-person and online visits, and deepening its specialty mental health offerings such as neuropsychological testing and Transcranial Magnetic Stimulation. Key to its success are relationships with commercial health insurers, operational scale, and investment in digital tools that boost clinician efficiency and patient engagement.
Quarter Highlights: Financial Performance and Operational Progress
This period reflected growth in both volume and productivity. Visit volumes climbed to 2.2 million in Q2 2025, rising 12% over the prior year, while the clinician base expanded 11% to 7,708 -- a sequential net gain of 173 clinicians.
On the financial front, Center Margin (non-GAAP) grew 11% in Q2 2025 and accounted for 31.4% of total revenue. Adjusted EBITDA (non-GAAP) increased to $34.0 million, with the related Adjusted EBITDA margin rising to 9.8%. The company cites this improvement as a function of revenue growing faster than general and administrative costs, demonstrating operating leverage. Net loss (GAAP) narrowed substantially to $(3.8 million) from $(23.3 million) in Q2 2024, supported by the operating gains and record Free Cash Flow (non-GAAP) of $56.6 million.
Much of this progress stems from investments in digital patient check-in systems. These technology upgrades have directly benefited efficiency, collections, and patient satisfaction. Days Sales Outstanding (DSO), which gauges how quickly the company collects cash after services, was 38 days in Q1 2025. According to the company, over 70% of patient visits are now handled virtually, with 71% of visits conducted virtually in Q1 2025. The hybrid care model allows LifeStance to better manage real estate and offer greater convenience to both patients and clinicians.
Most company revenue comes from in-network commercial payors, limiting exposure to market volatility. The company confirmed that reimbursement parity remains in place for online and in-person visits. Specialty services, including TMS and Spravato (medication for treatment-resistant depression), now account for about $50 million in annualized revenue as of Q1 2025 and are expected to grow at a faster, higher-margin rate than the core business over the next 2 to 3 years.
Looking Ahead: Guidance and Areas to Watch
Management reaffirmed its full-year 2025 revenue outlook of $1.40 billion to $1.44 billion (GAAP). The outlook for Center Margin, a key non-GAAP profitability measure, edged higher to a range of $441 million to $465 million for FY2025. Adjusted EBITDA (non-GAAP) guidance was increased to $140 million to $150 million for FY2025, with the full-year 2025 Adjusted EBITDA guidance midpoint raised by $5 million. For Q3 2025, revenue (GAAP) is projected to be between $345 million and $365 million.
Investors and observers should monitor trends in clinician hiring and retention, as these drive patient volume and revenue expansion. Productivity gains from digital tools, continued adoption of specialty clinical services, and outcomes of upcoming payor contract renegotiations are also crucial. Litigation and regulatory risks may affect the cost structure.
Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.
