LifeStance Health Group (Nasdaq: LFST) has reported its second profitable quarter as a public company in the third quarter of 2025. The executives of the hybrid in-person and telehealth outpatient mental health company attributed this profitable turn to clinician productivity improvements, reduction in general and administrative expenses, and significant growth in new clinicians joining the organization.
CEO Dave Bourdon expressed his satisfaction with the company’s performance, stating, “This was a quarter of records for LifeStance. In the third quarter, we achieved the largest improvement of quarterly organic productivity in our company’s history.” Bourdon highlighted various productivity initiatives that contributed to this success, including cash incentives for clinicians to increase availability, a new patient engagement platform, technology to support call center scheduling for patients, and AI-automated clinician documentation.
In terms of financials, LifeStance Health reported a net income of approximately $1.1 million in the third quarter, marking a significant turnaround from the $6 million loss incurred the previous year. Quarterly revenue also saw a 16% increase, reaching $364 million. For the first three quarters of the year, the company generated $1.04 billion in revenue and reported a net loss of $2 million. However, the company’s overall cash position improved by $49 million, or 32%.
Part of the progress towards profitability in 2025 can be attributed to LifeStance’s strategic shift from growth to productivity. The company began closing clinics in 2023, shutting down 82 clinics, and opening approximately 10 new clinics in 2024. Looking ahead to the end of 2025, CFO Ryan McGroarty mentioned plans to open between 20 and 25 new centers this year.
In addition to clinic expansion, LifeStance Health added 288 net new clinicians in the third quarter, representing an 11% increase and bringing the total clinician headcount to 7,996. The company remains focused on attracting and retaining clinicians, with one region boasting an 87% retention rate, surpassing the company’s mid- to high 80% retention goal.
While the company has slowed down its merger and acquisition (M&A) activity, executives hinted at a potential return to acquisitions in the near future. With a strong financial position and an undrawn revolving credit line of $100 million, the company is well-equipped to pursue strategic acquisitions for geographic expansion.
The resumption of M&A activity could further accelerate LifeStance’s growth in its core business of traditional therapy and psychiatry offerings. The company also sees potential for growth in specialty mental health services, such as interventional psychiatry services like transcranial magnetic stimulation (TMS) and Sparvato. These services, with higher margins, have the potential to become a larger part of the company’s revenue in the future.
Overall, LifeStance Health remains optimistic about its future growth prospects, with investments in technology and productivity paving the way for continued success. The company’s commitment to organic growth, coupled with potential strategic acquisitions, positions it well for sustained growth and success in the mental health services industry.
