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00:06 Good afternoon and thank you for standing by, and welcome to the LifeStance Health Third Quarter twenty twenty one Earnings Conference Call. At this time, your -- participant lines are in a listen-only mode. After the speakers presentation we will have a question-and-answer session. Please be advised, today's conference call is being recorded. .

00:33 It's now my pleasure to hand today's conference over to Vice President of Investor Relations, Monica Prokocki. Please go ahead, ma'am..

00:42 Thank you, Holly. Good afternoon, everyone, and welcome to LifeStance Health’s third quarter twenty twenty one earnings conference call. I'm Monica Prokocki, Vice President of Investor Relations.

Joining me today are Mike Lester, Chairman, President and Chief Executive Officer; Mike Bruff, Chief Financial Officer; and Danish Qureshi, Chief Growth Officer. While this is my first earnings call with LifeStance, I have been a corporate finance and IR professional for nearly a decade with public healthcare companies.

I am excited to be a member of LifeStance and look forward to working with all of you as we continue our journey as a recent public company. We issued the earnings release and presentation after the market close today. Both are available on the Investor Relations section of our website, investor.lifestance.com.

In addition, a replay of this conference call will be available following the call. 01:34 Before turning the call over to management for their prepared remarks, please direct your attention to the disclosure about forward-looking statements included in the earnings press release and SEC filings.

Today's remarks contain forward-looking statements, including statements about our financial performance outlook. Those statements involve risks uncertainties and other factors, including the possible future impact of the COVID-nineteen pandemic on our business that could cause actual results to differ materially.

02:02 In addition, please note that we report results using non-GAAP financial measures, which we believe provide additional information for investors to help facilitate comparison of prior and past performance. A reconciliation to the most directly comparable GAAP measures is included in the earnings press release tables and presentation appendix.

Also, unless otherwise noted, all results are compared to the prior year comparative period. 02:29 At this time, I'll turn the call over to Mike Lester, Chairman and CEO of LifeStance.

Mike?.

02:34 Thank you, Monica. Welcome back from maternity leave and congratulations on the birth of your son. Good afternoon, everyone. Thank you for joining us today to discuss our third quarter twenty twenty one results. 02:48 As society has navigated the pandemic over the past year and a half, we have seen demand for mental healthcare continue to grow.

At the same time, we've continued to witness the challenges patients face as they try to get access to high quality, affordable mental healthcare.

03:04 Services we offer at LifeStance are needed more than ever, we're deeply committed to our mission to help people eat healthier, while fulfilling labs by improving access to trusted, affordable and personalized mental healthcare.

Our team combines a vision for the future of mental healthcare delivery with a sharp focus on execution and a growth mindset, evidenced by our strong operational and financial results.

03:30 During the quarter, we added four hundred net clinicians, stabilized commission retention to eighty percent annualized aligned with our expectations, opened twenty nine de novo centers and completed six acquisitions.

The team's solid execution brought our footprint to four thousand three hundred and seventy five clinicians and approximately five hundred centers across thirty one states, contributing to our strong growth and enabling us to deliver on our mission of increasing access.

04:03 Financially, we also delivered at the high end of our expectations, including revenue of one hundred and seventy three point eight million dollars up seventy percent year over year. Adjusted EBITDA of ten point seven million dollars and adjusted EBITDA margin of six point two percent.

We continue to maintain a strong capital position with two hundred and twelve million dollars of cash on our balance sheet. 04:28 We've also added new talent to our organization, including the appointment of a new independent director Seema Verma to our Board of Directors.

Seema is a leading national health policy expert with over two decades of experience in the healthcare industry, having most recently served as the longest running administrator for the Centers for Medicare & Medicaid Services. Seema brings to the team deep knowledge of healthcare policy we look forward to learning from her expertise.

04:59 We continue to invest in management leadership throughout the company such as business operations, people operations and information security to strengthen our operating rhythms and the necessary infrastructure to support a growing company.

05:15 At the end of third quarter, we had approximately six thousand employees, investing in our talent and human capital is paramount. Under our employee equity incentive program, we will be making grants to eligible employees, including clinicians, beginning in twenty twenty two.

For clinicians, eligibility for equity awards and vesting will be tied to productivity, directly serving our mission of expanding access to mental healthcare at this critical time for the country.

05:47 We believe our equity program will boost our value proposition in a highly competitive labor market, help attract and retain the talent needed for our outpatient centric business model and establish an ownership mindset among our employees, including our clinicians.

Just as critically, it aligns with our values and purpose and builds on history of investment in our team, by providing meaningful rewards for furthering our mission of enhancing access to mental healthcare in a sustainable manner over the long term.

06:22 Turning to the market environment, we believe that patient demand for mental health services has never been greater. From twenty nineteen to twenty twenty alone, the number of adult seeking psychotherapy increased twenty eight percent as per recent report.

In October, the American Academy of Pediatrics declared a national state of emergency in child and adolescent mental health. 06:48 At the same time as patient demand continues to grow, the healthcare industry is experiencing elevated resignations for the latest jobs reports, driven by worker burnout, childcare costs and pandemic fatigue.

This has impacted the mental healthcare sector as well. According to a survey published by the National Counsel for Mental Well-being in September, eighty two percent of metal healthcare provider organizations reported it has been difficult to retain employees and ninety seven percent said that it has been difficult to recruit employees.

LifeStance is not immune to these broader labor market dynamics and their impact on the mental healthcare industry in particular as we shared back in August.

07:32 While these dynamics present a more difficult operating environment, growth in demand for our services continues, and we’re focused on controlling what we can to drive strong results by being the employer of choice for clinicians.

Over the past quarter, we have escalated focus on our clinician value proposition with special attention to engaging with our clinicians on a regular and systematic basis and leaning into our values of delivering compassion, building relationships and celebrating difference.

08:05 The culture and community rebuild with our clinicians is what really matters, especially in a higher turnover labor market. We've made improvements by engaging clinicians more frequently to hear the distrusters in their labs, and taking actions to ensure that we continue to support them both within and outside of the professional setting.

For example, we've implemented a systematic way of identifying at risk clinicians and working to assess and address their needs. In cases where they are compassion fatigue or burn out or identified, peer to peer support is offered through our national clinical team.

08:42 Additionally, one hundred percent of clinicians have been assigned champions have initiated routine one on one communications to ensure that we are giving our clinicians opportunities to be heard. These initiatives are an important component of our value proposition to clinicians and core to delivering on our mission.

09:01 Across our forums for engagement, one clear team emerged most of all from our clinician feedback. Many are now feeling the impact of COVID fatigue and value the flexibility to deal with our own mental well-being. As a company focused on mental health, allowing for employees to have a flexible schedule is part of the strategy.

To this end, many employees are planning to take more time off than usual during the holiday given the difficult year, and we've adjusted our projections accordingly. We now expect our full year twenty twenty one revenue to land toward the lower end of the six sixty eight million dollars to six seventy eight million dollars range.

To which we previously guided, still representing a growth rate in excess of seventy five percent.

09:49 Clinicians value the flexibility afforded by their crews at LifeStance and we believe that supporting them is the right move to prioritize the well-being of our approximately four thousand four hundred clinicians providing care for patients across the country.

Supporting the well-being of our clinicians will create greater opportunities to recruit and retain talent into the future and ultimately lead to a happier more productive workforce over the long term. 10:18 Our efforts are paying off.

We are pleased to report that even in the current labor market environment we grew our net clinician base by four hundred, a ten percent sequential increase in the third quarter and one of the best quarters in the company's history.

And retention rates have stabilized at a level consistent with our expectations of approximately eighty percent annualized within the quarter. This was driven by our laser focus on our clinician value proposition.

10:47 We've also seen sequential improvement in our clinician satisfaction scores from our internal quarterly surveys, including improvement in our communication scores as we collaborate more closely with our clinicians demonstrating our ability to continue to build a best in class environment for the long term.

We're taking the necessary actions now that we believe will position us well relative to the market as macro conditions improve. 11:13 I'm proud of what we've achieved, but there's much more to do. LifeStance is a leading mental healthcare provider with a broad and unique set of assets and capabilities.

I have great confidence that we will be entering twenty twenty two with an extraordinary set of opportunities to help improve the mental healthcare system for all of those we can serve. 11:33 And now, I'll turn the call over to Danish to provide more detail on the initiatives that are driving growth across the organization..

11:41 Thanks, Mike. And good afternoon, everyone. First off, I wanted to reiterate what Mike said earlier about how proud we all are of the mission we're serving. Here at LifeStance, we are revolution how patients receive easy access to affordable mental healthcare.

There are more than fifty million people in the United States with the mental health condition, many of whom are unable to find the care they need. 12:04 As we continue to deliver growth nationwide, serving those patients that are in desperate need of care is at the core of what drives us every day.

We won't stop until every person in the United States is one click or call away from a LifeStance health clinician. 12:20 As we look to continue to transform the industry, our growth strategy remains focused on three core pillars, expanding into new markets, building market density and deploying our digital tools.

In the second quarter, we expanded into five new states, growing our presence to thirty one states and making progress towards our long term mission of delivering care to all fifty states through either in person or virtual care.

We continue to have a strong acquisition pipeline of new state entry points and look to become fully operational in approximately six more states in the near term. 12:55 In the third quarter, we focus our growth efforts on building market density in our five recently entered states, as well as continued density building in our legacy state.

We build market density by first, executing on our playbook of hiring more clinicians; second, acquiring tuck-in practices; and third opening de novo centers. During the third quarter, we made excellent progress against each of these drivers.

13:22 On the first driver, we added four hundred net clinicians in the quarter, bringing our total clinician base to approximately four thousand three hundred and seventy five, an increase of seventy two percent year over year.

Year to date, we've added a net total of almost thirteen hundred clinicians or approximately thirty percent of our total clinician base.

13:43 Our six point clinician value proposition continues to resonate in the market as we provide a mission driven culture, a collegial and collaborative work environment, a strong work life balance, enhanced digital tools, robust support services and a competitive compensation package.

We are truly dedicated to enhancing our value proposition as an employer of choice for mental health clinicians as evidenced by our support for workplace and work life flexibility.

14:13 Second, regarding acquisitions, in the quarter we completed six tuck-ins bringing our total to seventy acquisitions since inception, further demonstrating the robustness of our acquisition pipeline. These acquisitions deepened our presence in Atlanta, Austin, Chicago, Seattle, and DC and expanded our presence into Columbia, South Carolina.

14:36 Third, in terms of de novo centers, during the quarter we opened twenty nine new locations and reached the company milestone stone of two hundred de novo location opening, bringing the total number of centers to approximately five hundred nationwide as we continue to strengthen our first mover advantage and national scale.

14:55 In addition, we launched a brand new spatial design for all our new de novo centers going forward that reimagine the mental healthcare experience for both patients and clinicians, designed to reinforce our commitment to providing compassionate, evidence based treatment every detail from lighting to materials to color palette has been thoughtfully selected to encourage stress reduction and support personalized high quality care for patients, as well as collaboration and a best in class work environment for our clinicians.

The first centers to feature the new spatial design are now opened in Chicago, and patient and clinician feedback alike has been overwhelmingly positive. 15:33 This enhanced design keeps us at the forefront of innovation in healthcare and delivers on our long term promise to reimagine the mental healthcare experience both in person and online.

15:44 Turning to our growth strategy of deploying our digital tools, we are investing in our digital platform to provide patients and clinicians with a unique, high quality user experience regardless of how they engaged with LifeStance.

We are currently focused on improving the overall booking and intake experience by creating a more streamlined process for our patients that reduces the burden on them and our clinicians while also improving our patient clinician matching process.

Our product built in house will offer personalized experiences based on the workflows and needs of our clinicians and patients. 16:19 Our continued investments in digital tools combined with our investments in physical spatial design, our testament are unique hybrid model that puts LifeStance at the cutting edge of healthcare innovation.

We believe in the future where patients receive a unified experience across all channels regardless of how they choose to receive care with us. And the consistent experience for our clinicians as they flex back and forth between in person and virtual care.

16:46 As we look forward to the future, LifeStance continues to have an unmatched offering that will enable us to deliver strong long term growth for years to come. We remain focused on our core growth strategy and continues to deliver consistent results.

We also remain excited about our long term prospects in the integrated care and value based spaces as we continue to evolve our solutions in those areas over the coming years. 17:12 Let me now turn it over to Mike Bruff for a deeper dive into our financial performance..

17:19 Thanks, Danish. And good afternoon, everyone. In the third quarter, we delivered revenue of one hundred and seventy three point eight million dollars up seventy percent year over year, primarily driven by robust net clinician growth of seventy two percent.

Center margin of fifty two point one million dollars increased fifty seven percent over the same period last year, driven by strong revenue growth. Center margin as a percentage of revenue declined two sixty basis points year over year to twenty nine point nine percent as expected, as new clinicians ramp to maturity.

17:58 Adjusted EBITDA of ten point seven million dollars declined twenty nine percent and adjusted EBITDA margin of six point two percent was down from fourteen point seven percent in the same period last year, primarily driven by planned investments as we build out our growth initiatives and public company infrastructure.

18:19 Our balance sheet remains strong. We ended the quarter with two twelve million dollars of cash and cash equivalents and one hundred and fifty seven million dollars of net long term debt with no material payments due until twenty twenty six.

18:35 For the nine months ended September thirty twenty twenty one, we used twenty one million dollars of cash flow from operations, including twenty three million dollars for IPO related payments and nineteen million dollars in interest payments on long term debt.

18:52 Our capital allocation strategy remains disciplined as we continue to prioritize investing in our growth, both organically and via acquisitions, as well as an operating efficiency as we scale our clinician and support operations. As Mike said, the market remains robust and the need for mental healthcare has never been greater.

19:17 We are building LifeStance for the long run to deliver on our mission of increasing access to trusted, personalized and affordable mental healthcare. We are confident that our investments in our clinicians and in our infrastructure will provide strong leverage and cash returns over the next several years.

19:39 Turning to twenty twenty one guidance, as Mike noted, we still expect full year twenty twenty one revenue within our previously guided six sixty eight million dollars to six seventy eight million dollars range, but now expect to land towards the lower end, reflecting the anticipated incremental holiday time off for our clinicians.

Guidance for center margin of one hundred and ninety eight million dollars to two zero eight million dollars and adjusted EBITDA of forty seven million dollars to fifty three million dollars remain unchanged. 20:14 Looking ahead, we are in the midst of our annual planning cycle for twenty twenty two.

As we work toward finalizing our plan, we are considering strategic, financial and operational factors, as well as continuing to monitor the broader market dynamics. Therefore, we will not be providing formal twenty twenty two guidance at this time.

However, our preliminary outlook is for twenty twenty two revenue growth rate in the low thirty and adjusted EBITDA dollar growth rate on pace with or slightly greater than revenue.

20:55 This assumes retention rates remain relatively consistent with where they are today and that we move forward with making the appropriate infrastructure and talent investments necessary to execute on our long term strategy. We will provide formal twenty twenty two guidance and assumptions on our fourth quarter earnings call.

21:18 As Mike noted, we remain proud and committed to delivering strong year over year growth. We believe that we are delivering a critical service to our patients and continue to see strong demand and unmet need across the country which will persist. 21:36 And with that, I'll turn it back to Mike for a few words before going to Q& A..

21:41 Thanks, Mike. As we look at the market and our environment, we see so much opportunity and room for growth in front of us in a market that is growing mid-double digits and a societal need for mental healthcare that continues to get more recognition and less standardization.

21:58 We know we must invest smartly and continue to build our highly differentiated hybrid platform. We also know we must continue executing on our clinician and geographic growth. We are confident in outlook for our company and that our strategy is working and will continue to allow us to build market share.

22:19 Delivering on our mission of affordable quality mental healthcare for all keeps our approximately six thousand purpose driven employees inspired to execute and make a tangible impact. 22:29 Let me close by thanking our team members and partners for their dedication and support this quarter.

We are proud of the work and results that everyone at LifeStance has produced and the enthusiasm they bring each and every day to achieving our mission. 22:44 Now, operator, let's go to Q& A..

23:05 Our first question is going to come from the line of Ricky Goldwasser with Morgan Stanley..

23:14 Hi. Good evening and thank you for details. So my question is around productivity and retention. I mean, these were sort of the key headwinds that you highlighted in the second quarter. It sounds like attrition is stabilizing at the second quarter levels.

Can you talk about clinicians productivity and how is it sort of progressing versus the key expectation that you laid out for us last quarter?.

23:43 Sure. Thanks, Ricky. I appreciate the question. So our retention rate as we said was eighty percent annualized in Q3 and that was consistent with our expectations for the back half of the year.

As you know, the labor market dynamics present a more difficult operating environment, we continue to be focused on doing everything that's in our control to drive results and really to be the employer of choice for our clinicians. So, overall, we remain very confident in our ability to grow.

We continue to add to our clinician base with four hundred net-adds in the quarter, which is one of the best quarters that we've had since we started the company. 24:20 We continue to see -- we're listening a lot more to the clinicians.

We're getting great feedback from them, we think that we've demonstrated this great place to work by the number of clinicians that we're hiring. But we do see this burn out. And you read about it, what is the, air of exhausted that New York Times talked about earlier this week and the great resignation.

But we're engaging more, we're just a little bit concerned about clinicians wanting to take a little bit extra time off during this holidays, which actually makes a lot of sense to us and then come back completely recharged in January and ready to have a great twenty twenty two..

25:06 So just as a follow-up to that, if you think about your twenty twenty two sort of early, of low thirty revenue growth, which interpreting is sort of thirty percent to thirty two percent, what are you kind of like, what's the underlying assumptions that are included to get to that sort of growth if we think about organic versus M&A? And then, where do you see potential upside to that?.

25:37 Mike Bruff, can you answer that?.

25:39 Sure. Good afternoon, Ricky. You're correctly, in our comments around our outlook of low thirty, the biggest change in our model has been to now include the headwind through the full year of twenty twenty two of having retention at approximately eighty percent annualized rate.

That's the biggest piece, we believe the labor market is uncertain as to whether or not this is a structural move or temporary and we believe that it's pragmatic for us to at least assume that at this point in our planning cycle. I think to get any more detailed on assumptions at this point is premature.

The reason why this is a preliminary outlook as we're still in our planning cycle and we do want to monitor the market more before we move to finalize that plan. So we'll reserve more assumptions until we meet on the fourth quarter earnings call..

26:41 Thank you..

26:44 Our next question is going to come from the line of Lisa Gill with JP Morgan..

26:50 Good afternoon, and thanks for taking my question.

Just really want to follow-up, in addition to the clinicians taking incremental time up, are there any incremental bonuses that you have to pay people today will be my first question? And then secondly, as we think about the competitive marketplace today, how do we think about paying for the clinicians and you talked about next year equity programs around brands and I agree with you around that ownership mindset, but what are some of the other things that you're taking into account as we think about incremental costs for twenty twenty two?.

27:26 Yes, Ricky, this is Mike Lester – Lisa, this is Mike Lester. Thank you for the question. We're actually not seeing any unusual wage inflation in the sector above what we've already contemplated on our models and guidance. We don't see any changes to our prior planning expectations.

Our clinician types have always been in high demand we recognize that the demand in a way that we set our compensation structure and how we build in wage increases for our clinicians. 27:54 The equity program that we rolled out, we think is going to be significant. It was planned for pre IPO and disclosed in our S-Form.

So there's not an additional cost there. But it does -- we've gotten great feedback from the clinicians and it will -- it's structured in a way, invest in a way that is centered around their productivity. So, we think that's going to be a very positive impact at least as the feedback we've gotten from the clinicians going into next year..

28:24 That's very helpful.

And then just a follow-up, can you disclose the six tuck-in acquisitions? What was the revenue contribution in the quarter from the acquisition and expected contribution in the fourth quarter?.

28:38 Lisa, we don't disclose that..

28:41 Okay. Appreciate it. Thank you..

28:44 Thank you, Lisa..

28:46 And our next question is going to come from the line of Brian Daniels with William Blair..

28:51 Hey guys. Thanks so much for taking the question Mike, I want to dive deeper into that equity incentive compensation. I think that's an important data point, and it definitely has potential to engage and bring the workforce more.

So can you speak a little bit more broadly to how broad that will be? Is it all existing clinicians and employees or just newer ones? Maybe help us understand how will that and what those productivity measures are that will drive that vesting or awards? And then I'd also be curious for anyone on the team could hit this one, it’s going to be used more in potential M&A activity going forward, just given physicians that are maybe owners or equity piece of LifeStance versus just pure cash M&A transaction fee?.

29:36 Sure. Thanks, Ryan. So I'll answer the second half first. So in our history we have made seventy acquisitions to date. And depending on the size of acquisitions, we have used rollover equity as a tool in those acquisitions and that's turned out to worked out really well for us as well as the clinicians that have rolled over.

As far as the twenty twenty two equity program, we're moving forward that as I mentioned before, it was planned pre IPO. It's designed to ensure that we can continue to obviously recruit and retain the most talented team members. And it's consistent -- the design is consistent with other public companies.

I would say the one differences is that, the majority of our employees are clinicians. So, I think it's going to be a little bit unique and that we have so many clinicians that are able to participate in the equity of the company. 30:32 And you have to W2 to employee -- full time W2 employee to qualify for or to be eligible for the plan.

And again, there's no incremental cost to add clinicians, we're simply moving forward with our original plan to include clinicians in our allocation which we think is the right thing to do to land with our mission..

30:54 Yes. It sounds like a good program. Thank you for that detail. And then the other one I'll ask is just on some of the technology investments you talked about more sophistication on personalized matching, some more rapid onboarding.

I'm curious if that is fully rolled out or if that's something that's in progress? And if it's rolled out, what kind of benefits you started to see on the patient either in satisfaction or matching and retention side, if it's maybe too soon to update, just any early indicators there would be helpful? Thanks..

31:26 Sure. We continue to deploy a number of tech enabled services and it's really core pillar of our growth strategy. We continue to invest in our digital platform provide patients and clinicians focused and it is with a high -- with a unique high quality user experience regardless of how they engage with LifeStance.

31:46 Danish, could you add some color to that?.

31:48 Sure, yes. So like we mentioned before, we're working on improving the overall booking and intake experience by creating a more streamlined process for our patients that reduces the burden on them and our clinicians, while also improving our patient clinician matching process.

It's really important to make sure that it's a fit from both sides that not only are you getting the patients the right fit for them clinically, but also that you're getting the right types of patients for the clinicians to keep them motivated and focused on the diagnosis that they really like to treat or they're subspecialized in.

The product is totally built in house and it's offering personalized experiences based on the workflows and the needs of our clinician and patient base.

32:35 As far as our continued investment in digital tools, we've put out a product innovation roadmap that's really been built for the end to end patient journey, with this being the first priority that we're executing against along that roadmap..

32:51 Okay, great. Thank you for the color. Appreciate it..

32:55 And our next question is going to come from the line of Kevin Caliendo with UBS..

33:02 Thanks. My first question is on the visibility into twenty twenty two. And I guess that means how much is M&A, how much visibility do you have on incremental recruitment? What's your pipeline look like relative to what it was six months ago? If you can give us some color around the visibility into the revenue number? That's my first question..

33:27 Mike Bruff..

33:28 Yes. Good afternoon, Kevin. At this point in our cycle, we are looking at all of the underlying growth drivers to determine to what level we're going to -- what level of assumptions that we're going to use for each. I think we've been fairly consistently been able to drive growth in our clinician base this past year.

I would expect us to continue to drive clinician based growth next year. 34:05 The wonderful thing about our business model is that, we've got multiple levers to pull to drive that growth. We've got optionality to look at organic or inorganic when they make sense. And those are things that we're working through right now.

With respect to the broader market and the dynamics that we are operating in today, I think the jury is still out as to whether or not some of these things again are structural or if they're temporary and allowing us to have more time to understand that and then to finalize our assumptions is the prudent thing, and I think we'd be getting ahead of ourselves to try to give you a deeper set of assumptions at this point.

34:54 I think the only thing that has changed from our modeling is that, we are taking the eighty percent annualized retention through next year..

35:04 Okay. Fair enough. And I guess when we just look at your sort of guidance, if I just take the EBITDA number forward as well. The margin would have been a little bit lower than what we would have expected given the revenue guidance that you had. And I'm guessing there's some additional spend there that goes above and beyond.

Is it marketing spend? Is it retention spend? Is there anything different from original plan? And if you can maybe not have to quantify it, but if you can just talk to what might be different form just growth opportunity spends?.

35:41 Yeah. Sure, Kevin. Obviously, the first emerging item is fully baking -- at least from our modeling is baking in the eighty percent retention rate. Second is the ongoing investments that we made in the second half of twenty twenty one will carry forward into twenty twenty two.

And then we plan to move forward with those expected twenty twenty two investments because we have a tremendous growth opportunity ahead of us. We have a huge TAM to attack. So, I don't think there's anything out of -- that you would think of surprises in terms of the broad categories of investment in which we're looking at.

I think thinking about the digital and tech enabled services, those continue to differentiate LifeStance. It builds out our hybrid model and then I think just the general public company and other investments in talent that we need to support that growth.

36:44 So I won't get too more detailed underneath that, simply because we haven't finalized the levels of investment or the allocation amongst those priorities. But I would suggest that there's not going to be anything that's a big surprise..

37:03 Appreciate that. Thank you so much..

37:05 You. Got it..

37:07 Thank. Our next question is going to come from the line of Steph With Jefferies..

37:14 Thank you. Good afternoon, everyone. We have two questions related. The first is on the eighty percent annualized retention figure.

I'm wondering if you can help us contextualize that? What it was maybe pre pandemic? How you expect that to trend, I know in the twenty two guidance you're mentioning is holds, but how could that trend over time? What has the peak been in the past? 37:36 And then I want to ask a related question on the fiscal twenty twenty two framework.

What are you assuming in terms of the productivity measures per clinician as you roll out into the forward year? Are you assuming that the bookings per clinician or the appointments per clinician is similar in the fourth quarter as it would be for the full year? Or is there some sort of seasonality handicap that's already built in normally to your fourth quarter and your adding in an additional handicap for additional time off to recover? Thank you..

38:08 Sure, Steph. Thanks for the questions. As far as retention rates, so as we said in our roadshow show in twenty twenty, we saw an eighty seven percent retention rate. And due to COVID, we had indicated that we saw -- we had more clinicians leaving than we had seen historically in twenty twenty.

And so, we felt like that was going to shake out around eighty percent. We in fact have stabilized that around eighty percent and feel good with that number on a go forward basis..

38:41 And when think about -- Steph, this is Mike – Mike Bruff, sorry. I forgot I have to differentiate myself. With respect to clinician productivity for the fourth quarter or said differently, for the back half of the year, we had productivity assumptions and we are pretty spot on with those assumptions, especially through the third quarter.

39:06 Our results came in within our expectations maybe slightly better than. And for the fourth quarter, we -- at this point, we're not expecting any material change in productivity other than the feedback that we've gotten related to the holidays that clinicians would like to take a couple to few more days of time off than normal.

39:32 Beyond that, we don't have any indication that productivity would change. But I do think the reason why we're not calling it is that, there is I think a broader macro debate about what's going to happen with the labor force.

So, right now, as we think about twenty twenty two, we are baking in at least at this preliminary outlook that retention stays at eighty percent, but we have not factored in any shift in productivity one way or the other..

40:08 Thank you. Very helpful..

40:12 Thank you. And with that, we will conclude today's conference call. Thank you for participating in the LifeStance Health Third Quarter twenty twenty one earnings conference call. We appreciate your participation. You may now disconnect..