Latest news with #HealthStream
Business Wire
08-05-2025
- Business
- Business Wire
HealthStream Announces Share Repurchase Program
NASHVILLE, Tenn.--(BUSINESS WIRE)--HealthStream (Nasdaq: HSTM), a leading healthcare technology platform company for workforce solutions, today announced that its Board of Directors has approved a new share repurchase program for the Company's common stock, under which the Company may repurchase up to $25 million of outstanding shares of common stock. Pursuant to the authorization, repurchases may be made from time to time in the open market, including under a Rule 10b5-1 plan, through privately negotiated transactions, or otherwise. In addition, any repurchases under the authorization will be subject to prevailing market conditions, liquidity and cash flow considerations, applicable securities laws requirements (including under Rule 10b-18 and Rule 10b5-1 of the Securities Exchange Act of 1934, as applicable), and other factors. The share repurchase program will terminate on the earlier of May 31, 2026 or when the maximum dollar amount has been expended. The share repurchase program does not require the Company to acquire any amount of shares and may be suspended or discontinued at any time. About HealthStream HealthStream (Nasdaq: HSTM) is the healthcare industry's largest ecosystem of platform-delivered workforce solutions that empowers healthcare professionals to do what they do best: deliver excellence in patient care. For more information, visit or call 615-301-3100. This press release contains forward-looking statements that involve risks and uncertainties regarding HealthStream. This information has been included in reliance on the 'safe harbor' provisions of the Private Securities Litigation Reform Act of 1995. Investors are cautioned that such results or events predicted in these statements may differ materially from actual future events or results. These forward-looking statements are based on a variety of assumptions that may not be realized, and which are subject to significant risks and uncertainties, including that the anticipated financial and strategic benefits of the acquisition may not be realized, as well as risks and uncertainties referenced from time to time in the Company's filings with the Securities and Exchange Commission.
Yahoo
07-05-2025
- Business
- Yahoo
Q1 2025 HealthStream Inc Earnings Call
Thank you, Mollie. Good morning, everyone. Welcome to our first quarter 2025 earnings call. There is certainly a lot to talk about here on the call for the quarter. And before I hand it off to Scotty Roberts, our CFO, who's going to give us detail on the financial results, I want to do a couple of key things. First, as I want to talk a little bit about the company's strengths, as we enter a time of uncertainty, I think a company with an experienced management team that knows what they're building, that build incrementally strong and understands the market environment they're operating in, and knows how to create value for customers, its customer base during these times, is the kind of company that people should want to invest in. And so I want to talk a little bit about those strengths in our growth trajectory. And then I also want to acknowledge a couple of items that are kind of hitching our step, some challenges that are, we think, temporary that we're going to work our way through, that have resulted in us trimming our guidance our in-year guidance a little bit. And we're going to talk about both those things in detail. It's an interesting period of kind of irony, but probably opportunity, and we're going to talk through that a little bit. I've seen a lot of cycles in health care, and I can tell you why HealthStream generates growth and profitability throughout those cycles, been doing this quite a long time. And the experience of our team that knows how to bundle and create value for customers in times of uncertainty. It's really a good time to rise and shine. The value of our core application suites and learning, credentialing and scheduling as well as our emerging hStream platform, they get demonstrably better every quarter. And that is why we continue to add both wallet share and market share across the board and why our bookings and sales pipelines are strong, but is also while we're forecasting both revenue and EBITDA growth on a year-over-year basis even amid some of the macroeconomic choppiness and recently addressed issues of technology scale with one of our products, CredentialStream. Let's talk a little bit about the macroeconomic headwinds. We are seeing them manifest in a couple of areas. In some areas, we have direct correlation where we can say, oh, that's a challenge. In others, they're less direct, maybe indirect, but maybe anticipated, is more intelligent way to talk about the macroeconomic conditions that concerns that we may have, we need to factor into how we think about the next three or four quarters. Funding cuts, for example, particularly the Federally Qualified Health Centers, FQHCs and Academic Medical Institutions seem to be impacting renewal decisions on a nice to have content -- on the nice to have content. And the good news is a lot of our content is mandatory, but we do have a program such as our health equity and belonging content, which was a shining growth star last year, which is really not on our growth trajectory this year. And so as we entered the year with the health equity and belonging curriculum, we have seen a diminishing purchasing patterns of that. And that may also have to do with kind of the political correctness of the environment or trying to be in alignment with that and also the macroeconomic conditions, the pressure because it's more elective type of content offering in our many content offerings. So we do believe that some customers may be delaying some purchasing decisions as precautionary measures to protect their businesses against potential policy-related impacts as the example I just gave. And supporting this belief we saw a handful of medium-sized deals that are expected to close in Q1 pushed to Q2. And we're watching those very closely to determine why we think there might be a delay in the closing of those medium-sized deals. We do expect still those particular sales to close. They're all still in the pipeline. We're all still in active dialogue with the customers. And they are nice, we would call the medium size kind of the $1 million to $3 million deals or even bigger $2 million to $4 million deals. And we think they're all viable deals. They're all going to close here in Q2. But we're going to have to watch it really closely to see the timing of the close because timing and delays have an impact about how we think about revenue in the year. And so we do expect them to close, but the fact that they haven't closed and they didn't close in Q1 is just something we have to watch. It's good news that many of those solutions help meet mandatory requirements. I did give the example of the Health Equity and Belonging content libraries, which are a little more optional. But a lot of these are focused on their primary asset, their people, and their primary expense category and developing their people to be more effective, retaining their people so they have lower turnover. And it's good news that many of these solutions are focused on these mandatory requirements and they help organizations optimize their expense around labor and labor, their workforce. And so I think being workforce focused in a time of economic uncertainty is a good thing to be. And so I think a management team that understands that environment and tweaks its programs to align with those messages will be in a stronger position. So I think the next thing to talk about is we do have this ongoing demand for application suites and current sales pipelines for Learning, Credentialing and Scheduling are all strong. And there's some irony that have such a strong pipeline that see a little delay that may affect in-year revenue recognition. But it's interesting that's almost an irony built into the quarter, because during Q1, we did land sign and are beginning to execute on one of the largest deals that we've done in our history. It's a $14 million deal, where we bundled a tremendous value proposition for a large, one of the country's larger health systems, and it included some of our key products like our new Competency suite, which we've talked about in prior calls. And so it just does demonstrate that when you meet the need with this concept here of helping develop the confidence, cross-training people for other roles, you help retain the workforce with these development programs, that you can close deals. And so again, a little bit of irony in the fact that we had a handful, I'd say, about 4 deals that we would call these medium-sized deals push, and then yet one of the largest deals in our history closed during the first quarter, a $14 million deal to a large health system, including our newer product bundles around Competency development. So we're really excited about that. So amid this market turbulence, it is our diverse product offering and the nature of that offering meaning it meets mandatory needs. And the fact that this major sale did close gives us that confidence to deliver growth on the year, despite some of these early indicators like some of the elected content purchasing may be dropping off. And so overall, we still feel really well positioned, but some revenue may be pushed into the next year. It's just this quarter, as we reflect on it, there's a lot of these kind of mixed blessings and we've experienced a couple of those in other areas of operations, and we're going to talk about those too. So impacting our in-year outlook, these mixed blessings they stem from recent success in closing larger deals with larger and longer contract terms than our three-year average. And so the result of that is that we secure a greater contract order value, but we spread it over more time. And so as you heard in the story I just told that these four deals that were kind of medium size and shorter run recognition pushed, they haven't closed yet, but we think they will, yet, we land this really big deal. It's a five-year deal. It spreads the revenue a little longer. And so it's a great reason for optimism. Of course, we'd rather close large deals that are over a longer period of time. And we just have to work that middle market and get those medium-sized deals, that are shorter run revenue recognition closed in this quarter, but that would represent a delay from our expectations. So the overall size of that deal put us well over our Q1 bookings expectations. So if you ask our internal team how we did, we would say that our contract order value and sales for the quarter exceeded our total expectation, but the average time to revenue and the time over which that value is spread is stretched. And so again, it's kind of this weird thing of a long-term positive look at the sales pipeline, but some trepidation and some hesitancy to close. We'll just have to follow those four or five medium-sized deals and see if we bring them all in, in Q2 as we now expect. So we do want to acknowledge that some of this hesitancy and some other operational issues, which we think are temporary, which we are addressing, particularly some technology scaling issues with CredentialStream, which we do feel we've quickly addressed, but those kind of scaling issues, if you have some blips on the radar with customers, create some uncertain impact where you have to kind of wait and recover confidence of your customers, and we were -- but we were able to put really good teams of people on the scale issues with the result of really great sales and building up a big implementation backlog. And then you have a little service quality delivery issues that persisted for four or five weeks, but put our teams on it. We feel like the issues have been addressed on this CredentialStream application, and as you'll hear in a minute, we still delivered the revenue growth on CredentialStream in the quarter. But again, in recognizing our experience, we've been doing this a long time, -- we know that sometimes those kind of service problems can have a lag effect on your expectations. And so we factored a little of that into our revised guidance. But once again, I would say that we feel we've addressed the scaling issues that were the result of bringing on so many customers, and we had to kind of reconfigure our -- some of our tech stack to expand. In this case, very technically, we took our server groups from a few to almost a dozen, and so we're able to scale to handle volume and redistribute load and get back to a place where we think we have the stability we need to cover the growth that we were delivering. So when we shifted our full attention to optimization of product performance, it did slow our CredentialStream implementation efforts. As you can imagine, if you're in the middle of an implementation and you have some service timing issues then it delays that pipeline a little bit. So again, and with the wisdom of experience, we think it's wise to expect those delays to play out in your revenue recognition a little bit. And so again, you can see that in our revised downward guidance. But the nature of the problem, we think, was temporary. And we feel we've resolved it and we're on the building the credibility side again with those customers. So that -- but that shift in focus did have the effect of slower time to revenue, and you don't recognize revenue until the products are fully implemented. And so the way those two things work together had us resulting -- we needed to push some of the revenue recognition into the future, maybe into Q1 of next year. And so again, those slight adjustments resulted in this revised downward guidance. As we think through those -- and those are factored in, of course, to why we trimmed our guidance expectations a little bit kind of overall. Slower time to revenue was one of the factors. Overall, we see a CredentialStream implementation backlog is representing a strong source of potential revenue acceleration. I mean, again, an ironic situation, while we did see that delayed purchasing in the medium-sized deals, we had a really strong closing quarter in the fourth quarter. And so we've got this great implementation backlog that we just need to get to, to get to revenue. And we're working through that. Of course, we have configured our company in different ways. We've assigned new people to try to work into that backlog and so we can deliver revenue off of that really strong backlog of sold deals. It's one of our more successful products in our history from a growth perspective. So now we just have to do a better job of managing that growth and getting those customers live, which we'll do. We've been doing this a long time and worked through a lot of different temporary challenges, and this is another one that we're going to tackle. Let's summarize. I'd like to just kind of take a pause and for people new to HealthStream in these times, just kind of give a quick summary of our business structure and why we think we're well positioned. First and foremost, HealthStream is a healthcare technology company dedicated to developing, credentialing and scheduling the healthcare workforce. So we're focused on people in healthcare. And we do that by delivering SaaS-based solutions each of which are becoming more valuable because the interoperability they're achieving through our emerging hStream technology platform, as you know, we've been talking about this for a long time, but we've declared this is the year of the platform. And what we mean by that is the emergence of strategic and tactical and operational benefits of the platform, as we see every quarter increased interoperability of our core applications, which brings that additional benefit to our customers. The company holds 20 patents for its innovative products. We see our competitors emulating us and trying to catch up with our vision. The company holds these patents. We've won over 40 Brandon Hall awards, which recognize excellence in innovation in the industry. and we sell our solutions on a subscription basis under contract that average three to five years. And actually that very statement reminds me to think about the ironic dynamic that occurred in Q1, where the three-year deals that were medium-sized are delayed in the pipeline yet the five-year, one of the biggest deals in history did come in and get signed in the process of being executed. But that may nature three to five year recurring revenue contracts makes our revenues predictable. In fact, 96% of our revenues are subscription-based. As I just mentioned, we have also started to open our sales channels directly to healthcare professionals and nursing students across the continuum of healthcare training. So we are profitable. We have no interest-bearing debt. We have a strong cash balance of $113 million, and we're solely focused on healthcare and we work to work towards the mandatory needs and the workforce needs, which are the trending hot topics is how to be more effective, managing, retaining and developing your workforce. And so I think we're well positioned in this kind of environment where the CEOs of these health systems are worried about their labor. They're trying to figure out their best ways to retain and develop their people. And we think increasingly HealthStream's portfolio of solutions is the answer to that question. We have about -- our target market is 12.5 million healthcare professionals, which also now includes the nursing students in the United States, and those comprise the core addressable market for our SaaS solutions, is this -- where health care is delivered is where HealthStream wants to be, and that's where these 12.5 million people are. And they can be in skilled nursing facilities, long-term care facilities, acute care facilities. Those are the markets that we're going after with these workforce-oriented solutions. Let's take a pause now I turn it over to Scotty, with the highlights. We want to -- I wanted to acknowledge that we did revise our guidance downward that we think the causes of that are temporary that our vision remains strong, and we had some ironic occurrences in the quarter, winning the biggest deal in our history, but seeing a delay in some of the medium-sized deals, and we're just going to work through all this. We still put out a growth forecast, although revised downward a little bit. And well, of course, we're going to do everything we can as this quarter unfolds to get it back on track, and there's -- we'll work hard to see if we can do that, get back on track and maybe get out of this revised downward guidance. But right now, that's where we sit. Let's turn it over to Scotty Roberts for his summary of financial results. Thank you. Good morning, and thank you for joining us today to discuss our first quarter 2025 results. Also on the conference call with me today is Robert A. Frist, Jr., CEO and Chairman of HealthStream; and Scotty Roberts, CFO and Senior Vice President of Finance and Accounting. I would also like to remind you that this conference call may contain forward-looking statements regarding future events and the future performance of HealthStream that involve risks and uncertainties that could cause the actual results to differ materially from those projected in the forward-looking statements. Information concerning these risks and other factors that could cause the results to differ materially from those forward-looking statements are contained in the company's filings with the SEC, including Forms 10-K, 10-Q and our earnings release. Additionally, we may reference measures such as adjusted EBITDA, which is a non-GAAP financial measure. A table providing supplemental information of adjusted EBITDA and reconciling net income attributable to HealthStream is included in the earnings release that we issued yesterday and may refer to, in this call. And with that start, I'll now turn the call over to CEO, Bobby Frist. Story continues Scott Roberts All right. Thank you, Bobby, and good morning, everyone. I have several topics to cover today, and I'll begin with our financial results for the first quarter. Unless otherwise noted, the comparisons will be against the same period of last year. Our revenues were $73.5 million. They were up 1%. Operating income was $4.4 million and was down 23.1%. Net income was $4.3 million, and it was down 17.1%. EPS was $0.14 per share, down from $0.17 per share and adjusted EBITDA was $16.2 million and was down 5%. We indicated on our last earnings call that we expected more of our revenue growth for the year will be concentrated in the second half of the year versus the first half, and this was reflected in the 1% growth for the first quarter. I want to reiterate that our revised revenue forecast is still second half weighted and is expected to build from quarter to quarter. I also want to call out some items that impacted the first quarter according to expectations. The first one is a large perpetual license sale of approximately $0.9 million in our legacy Scheduling business that occurred in the first quarter of 2024. We've not actively been selling perpetual licenses for several years, but occasionally an existing customer were purchased an expansion license, which is what happened last year. Given our focus on selling subscriptions to our SaaS application, ShiftWizard as opposed to licenses to our legacy Scheduling applications, we do not expect any license revenue in the first quarter of 2025, which was the case. The second one was caused by a large health care system bankruptcy during the second quarter of last year, which we've talked about on several calls in the past and which was well publicized. We had approximately $600,000 of revenue from this customer in last year's first quarter, and we're not expecting any revenue from this customer this year. The full year revenue loss is about $1.6 million and we'll see this variance begin to normalize into the fourth quarter of 2025. Finally, we also experienced lower revenues from our legacy products in Credentialing and Scheduling, which resulted in a $1.7 million decline in these products compared to last year. Attrition in both of these legacy product lines is negatively impacting the revenue growth rate. We believe our core business and go-forward solutions are providing us with a solid foundation to achieve revenue growth and operating leverage. Now let me highlight some of the solutions that help fuel our underlying growth such as CredentialStream with 25% growth, ShiftWizard with 19% growth and Competency suite with 12% growth. Absent the impact of the legacy products, and the customer bankruptcy from the core business, the core business actually grew over 6%. Our remaining performance obligations were $613 million as of the end of the first quarter compared to $514 million for the same period of last year. We expect approximately 40% of the remaining performance obligations will be converted to revenue over the next 12 months and 68% over the next 24 months. Gross margin was 65.3% compared to 66.2% in the prior year quarter. Investments that we made in our platform and SaaS application suites resulted in higher labor costs for cloud hosting, software and labor. The changes in our revenue mix, in particular, the lost revenues from legacy applications, including perpetual licenses and the impact of customer bankruptcies contributed to the change in gross margin. Operating expenses, excluding cost of revenues, increased by 2.7%. Sales and marketing were up 3.2%. General and administrative were up 4.3% and depreciation and amortization was up 4.1%. These increases primarily resulted from higher labor costs associated with additions to staffing levels higher sales commission associated with growth in revenues, increased investments in marketing initiatives and higher software expense. Adjusted EBITDA was $16.2 million and was down 5% and adjusted EBITDA margin was 22% compared to 23.4% last year. Now moving on to the balance sheet. We ended the quarter with cash and investment balances of $113.3 million, up from $97.2 million last quarter. During the first quarter, we deployed $8.8 million for capital expenditures and paid $0.9 million to shareholders through our dividend program. Days sales outstanding improved to 37 days compared to 46 days last year, marking the third consecutive quarter that DSO was below 40 days. Our cash metrics were strong for the quarter, leading to new records for cash flows from operations and free cash flows. Our cash flows from operations were $27.1 million compared to $20.9 million in the prior year, an increase of 29.3%. Free cash flows improved by $5 million or 38.3% and were $18.2 million compared to $13.2 million last year. These improvements are a result of growth in Billings over the prior year and improved cash collections. I would characterize that our balance sheet is strong, and it's been my experience that companies with strong balance sheets are positioned for long-term success regardless of the economic environment in which they operate. With $113.3 million of cash and investments, a track record of generating positive free cash flows and no debt, we remain well positioned to deploy capital to improve shareholder value. We maintain a disciplined approach to capital allocation and how we prioritize our use of capital. Our utmost priority is making organic investments back into the business, which is evident by our annual capital expenditure and R&D plans. The second is pursuing acquisition opportunities, which we have a long track record of executing. And third is returning a portion of profits back to shareholders in the form of cash dividends. And finally, the fourth priority is that our Board may authorize share repurchase programs, which we also have a successful track record of executing. From an M&A perspective, we maintain an active pipeline and continue to evaluate opportunities that align with our platform and product strategy. In respect to our dividend program, yesterday, our Board of Directors declared a quarterly cash dividend of $0.031 per share to be paid on May 30 to holders of record on May 19. We currently do not have an active share repurchase program in place, but the Board continues to evaluate such programs as it deems appropriate. Now moving over to our financial outlook for the year. Yesterday, we announced a revision to our previously issued financial expectations. We now expect consolidated revenues to range between $297.5 million $303.5 million and net income to range between $18.6 million and $21 million. We now expect adjusted EBITDA to range between $68.5 million and $72.5 million. We continue to expect capital expenditures to range between $31 million and $34 million. This guidance does not include assumptions for any acquisitions that we may complete during the year. And earlier, Bobby outlined the key aspects impacting guidance and why we are confident in our ability to grow through them. That wraps up my comments for this quarter's call. Thanks for your time this morning. And now I'll turn it back over to you, Bobby for some additional updates. Robert Frist Thanks, Scotty. We do have kind of now the normal business updates. We've talked about some of the challenges in the quarter, a little bit of delay in the implementation pipeline, so time to revenue was deferred. We talked about some delays we saw in the sales pipeline, but the irony of landing on our biggest deals in history, but the net effect of that is a lengthening of the average time to revenue to implement and then to close those sales and so pushing things a little bit out. And therefore, we have discussed the revised downward guidance. Although, again, I think on the whole, it's a little over 1.5 points change in the big picture. We think it's a wise adjustment based on all the things we talked about and the macro conditions. That said, I think we should support through our core businesses real quick and talk about what's normal and what we're also excited about. So let's go through each of Scheduling, Credential and Learning briefly and talk about some of the developments during Q1. First, we'll talk about ShiftWizard, which is our core product in Scheduling. It continues to deliver strong revenue growth. As Scotty just announced that revenues for ShiftWizard have eclipse the legacy product ANSOS in the second quarter of 2024, has continued to be our top-performing product in Scheduling. So ShiftWizard revenues grew 19% over the first quarter of last year. In the first quarter, sales were both from competitive takeouts like State Tammany Parish Hospital and from growth within existing customers like Children's Wisconsin and Hospital for Special Care, among others. This revenue growth was offset in the overall Scheduling application suite by an unexpected nonrenewal of an ANSOS customer. So some continued challenges in the legacy application ANSOS, which we've discussed this over many quarters. The good thing about that problem is it does continue, but it is also finite. I mean, eventually, we'll have customers either migrated or they'll choose to stay where they are or in the worst case, we may lose them to market. But either way, it's a finite problem, and it's getting smaller as the quarters progress. So let's take a look now to the Credentialing application suite and our primary application CredentialStream. It also had a productive quarter despite some of the issues I mentioned earlier. Revenues on CredentialStream grew 25% and over the first quarter last year. These results included sales from both new customers like BayCare Medical Group and customers expanding like Prisma Health and Duke Medical Center. And customers who chose to migrate from our legacy credentialing applications like Ridgeview Medical Center and Door County Medical Center, all of which closed in the first quarter. So again, just kind of the normal course of business, you see some migrations from legacy applications, some new wins in the market and overall put up 25% year-over-year growth in the quarter on the CredentialStream application. And as I mentioned, though, we do have some client recovery to do. We had some performance issues due to scale. And I feel like we've put those behind us, meaning we have good stability. We've expanded our server capacity and we're working on that client recovery of confidence now. As I previewed in our prior call, we also hosted our Annual Credentialing User Group Conference, which was really fantastic. It's called DRIVE25, and we did that at our corporate office in a hotel in Nashville. It was really an energizing event. And the highlight for me was hearing customers talk about how they use CredentialStream to reduce the time it takes to get providers credential and role in generating revenues to the organization. I mean if you think of the purpose of the credentialing applications is to keep the bad actors out, by verifying or they say they are and to grant them the privileges they need to do practice of a hospital. But ultimately, our software should help optimize the time to revenue on these physicians. We should help onboard them in an efficient way, vetting out the bad ones, of course, that don't meet the criterion and protecting the end consumer by that vetting credentialing and privileging process. But really, what's important to hospitals is, does our software help manage the time from you hire a doctor to when they can be productive and get them seeing patients and generating revenue? And we think the answer to that is yes, and we're working hard to prove that. We think that we can effect positively, the time to revenue on newly hired physicians by accelerating credential and privileging process. And so some of that came out in the case studies at our THRIVE 25 Conference, provider time to revenue was a topic, and we heard customers share stories about their success using CredentialStream to achieve that outcome of shortening time to revenue on physicians. So again, these workforce issues, sometimes you need to talk about how they relate to the economic well-being of the organizations we serve. In this case, it's getting the right physicians in surgery, seeing patients productively and so that the services are built and to do that, you have the credential, privilege and enroll them in insurance programs and our software, we think, is the best in the market of doing those things. So we think this here will continue the growth, and we'll work through these temporary issues and deliver continued results. And we did see some of that growth I talked about in Q1. That brings us to our Learning Application suite, and it's a broad suite. It's a market-leading suite and we continue to innovate. We talked about those innovations last quarter, and I'm going to highlight a few of them now. One of the unique components of our Learning Application suite, we actually built through acquisition. It's our Continuing Medical Education Management Programs, and these are kind of the secondary programs that are used specifically for hospitals that are accredited to develop their own content and issue credit for those contents. We have the best software in the world, we think, is helping them manage that uniquely health care dimension to building accredited content. And our cloud CME products just are having a great successful run. And think of these as add-on modules of the core learning system. And we both did three acquisitions in the space over the years, but we continue to see really great success, high renewal rates adding new customers, but also this module that helps manage continuing medical education and the accreditation process at hospitals is kind of one of those unique workflows in health care that makes us defensible, kind of a moat around our learning business because it's not just an LMS, a learning management system. It's a learning management system that has modules that manages the continuing medical education accreditation process. And so we're really excited to see those acquired products be so successful with high renewal rates and it creates that differentiation overall for our learning suite -- we call our learning application suite, which the foundation of that is our learning management system. So we added sales for that product set that module of learning, the continuing medical education modules. And we just continue to invest in that area and further integrate it with our core applications, and to our platform. So we're just excited at that area, kind of within the learning area. That area is both unique for us and uniquely successful right now in the market. So we're proud of the teams delivering those results. Let's talk a little bit about some of the newer solutions in learning, the Insight Plus, which is our new reporting and analytics capability. It's based on our platform technologies. We've seen it continue to grow. It now has over 7,400 users across 515 organizations. Those then the growth of Insight Plus, which is a purchase system. It's driven by significant data engineering and product development work we've done on our new data stack in the hStream platform. So our Insights and Insights Plus reporting engines that are tied to our Learning Application suites are robust, expanding and we're experiencing good sales velocity on Insights Plus, which is kind of an analytics suite in learning. It kind of gets that learning efficacy, something that you need to measure. We've got to invest in learning, you want to understand its return on investment and Insights Plus, we think is the best in the industry and helping help systems understand the return on investment in learning. And so it's great to see a new platform-based data-centric reporting and analytics tool set be selling well as an add-on module to the learning application suites. I think now is the time to shift recognition as we wrap up this call, to some long-serving and some relatively new members of leadership, particularly on our Board of Directors. We have been fortunate to have an outstanding board members. But today, I want to highlight and thank one of them in particular, after 27 years of service as a Board member, Dr. William Stead is choosing to not stand for reelection this year. We were excited to point out that when he joined our Board 27 years ago, we had 41 employees and $1.4 million in annualized revenue. And so Dr. Stead has been on our board overseeing the creation of a company that generates nearly $300 million in revenue. That's our -- what we expect this year now and employs 1,100 people. We're proud of his strategic contributions over the years. He's also handing us off in a really good position, because he waited until we found essentially his replacement on the Board, and so in addition to congratulating Dr. Stead, we want to welcome our new Board member, Mr. Charles Beer, Jr., who joined our Board of Directors is now a member of our Audit Committee. He's standing for election this year's Annual Shareholder Meeting, and Charles brings a wealth of experience to our Board. And so you guys can all be excited if you're on this call listening, he was the Co-Founder and Chief Operating Officer of GuideHouse, a global consultancy. He has -- he serves on the Board of Directors of Press Del Monte. He serves on the Board of Directors, importantly, of Inova Health System. And so we're really excited. He brings this really incredible background in technology, governance, security and of course, healthcare expertise. So fantastic new add with Charles Beard as we look for your vote to support him in joining our Board of Directors here. He's active on the Board now, and I think that will be a firm here in the upcoming election. He's standing for election at this year's Annual Shareholder Meeting. So we're delighted to have Charles join the Board and we're grateful for Dr. Bill Stead's contribution over the year is guiding us strategically and tactically, we couldn't be more proud of his contribution. So thank you, Dr. Stead, and welcome, Charles. As we wrap up, I just want to kind of think through in times like this with so much uncertainty just in general, I think it's really good to find a management team that knows who they are, knows where they're going, understands the environment they're operating in, and makes adjustments to that environment. And so our downward reflection here in our guidance is part of that. Again, we'll do everything we can to make that not come true, but we think that was the wisest thing to do. We think we achieve value, by the way we approach our customers, focus on their core asset, their people. And in particular, we think it's a good time for bundling value that addresses real economic or mandatory requirements of these organizations. And you see that in our Competency suite, we hope to emulate that strategy in other areas with bundling value to get more velocity in sales. So if you're already a shareholder, we look forward to, we're inviting each to our annual shareholder meeting. It takes place virtually Thursday, May 29 at 2:00 PM Notifications of the meeting and access to the proxy statement, 10-K and shareholder letter were sent out on April 14. So we encourage you to vote your shares and participate in the future of our company. And if you're not a shareholder, we welcome you on the journey. Times like this, warrant companies with strong balance sheets that build strong products and navigate the challenges they face directly and take them on. And ultimately, of course, as we've done for nearly 35 years, we'll overcome these and get to the next growth plateau for the company, the next growth plan. Thank you for listening today. We'll now turn it over to questions from our analyst community. Question and Answer Session Operator (Operator Instructions) Matt Hewitt, Craig-Hallum Capital Group. Matt Hewitt Good morning and thank you for taking the questions. I apologize in advance if if this has been answered. I've been hopping between a couple calls, but maybe first up you noted in the press release that that you're seeing a little bit of hesitancy by customers to purchase, elective. Type applications if you looked at your portfolio of across the board, how much of of your portfolio would you quantify or qualify as being required or government mandated versus elective and you know it you know is I assume it's over 50% it falls in that the prior bucket that mandated versus and required is that a safe assessment? Robert Frist Oh, we do. We think most the majority of our products are tied to some kind of theme of requirement. They're not always legal requirements, but I'll give you two examples, and some are requirements, but some are requirements to achieve certain quality standards. So for example, credentialing is a requirement to maintain accreditation, and you need to be an accredited hospital to be a credible hospital. And so the credentialing process is mandatory, of course, our product is not mandatory, but the credentialing process and privileging process is an essential part of operation. So broadly speaking, we're meeting a need that is considered mandatory. Another one that's not quite legislated, but is one of our top products from a revenue generation standpoint would be our resuscitation suite. So again, while it's not a legal requirement to train your staff on accreditation, I don't think you could achieve accreditation. And in fact, it's become essentially a gold standard. I don't think you can get a job at a hospital as a physician or a nurse without having demonstrated confidence in resuscitation, and the demonstration comes as achieved through a couple of different programs in the industry that are the most. High quality programs and of course one of them is the American Red Cross, the one that we represent the market most vocally. And so while again it's not a mandatory, it kind of has become a gold standard and I really don't think you can get a job without flashing a current credential in resuscitation skills and confidence. So, and that being one of our largest single revenue lines. Within our content selling universe, so probably our biggest singular product across the 100, the the the content selling we do is that resuscitation product and it is mandatory. Of course we have the market leading content product set we call them safety cues. ComplyQ that help meet OSHA federal safety standards. So that's another example of requirement. And we have another bundle in our Jain products that delivers continuing education that are required by more than half of states for licensure maintenance. And so you can see in these four that I've given. That there is an element of requirement and then of course thematically everything we're doing is related to the workforce, which I think is the single biggest cost item on the on the income statements for our customers and managing them effectively is is a priority. So I think we're well aligned, you can't say that 100% of our products are mandatory, but kind of categorically the space we operate in has a high set of requirements state, as we mentioned, state licenser, federal, like OSHA, accreditation requirements like to be accredited. We talked about the cloud CE products which helps maintain ACCME accreditation. And so these standards, that are propagated in the industry, our products help meet them. So I don't know if definitely the majority, probably I would say 80 or 90% are tied thematically to forms of requirement like we talked about and then a meaningful number like like the OSHA libraries, it is a requirement to do annual OSHA safety training. That's a kind of a federal requirement in these clinical settings. So. I think a strong mix, certainly the majority, and you could almost draw a line to forms of requirement for almost all of our products. We did bring up one that was clearly optional and also now kind of under a lot of scrutiny is is diversity equity and inclusion programs, as you can probably imagine, are not the hottest topic now in healthcare. And so our health equity and belonging solutions that we have seen a drop off and, you can probably directly attribute that to the political environment. And so, clearly not required and in some ways there's probably a movement against that kind of elective content, and we have seen a drop off in it. So that's a quick scan of the nature of the products we sell. Matt Hewitt Thank you. And then maybe just to follow up and I apologize if I missed this, but regarding the noted, the largest or one of the largest contracts in your history, was that a renewal or was that a greenfield win? And if it was in fact a renewal, did you, I'm assuming you saw an increase versus the last time they signed. What all was added, that's obviously an opportunity to cross sell and upsell, and what else was included if in fact there was a renewal. Robert Frist Yeah, no, it was in great news, and I probably, I can't believe I didn't say this, that was new business and so this was a big health system where we didn't really have a footprint. By way of example, they did not use our learning management system at all, and of course our learning system is infrastructure for the competency suite. And so effectively with this bundle, tens of thousands of their employees are now going to be using our learning system, but the central theme was our competency suite, which is a bundle of a lot of products that focus on developing clinical staff competence, and they found it being exactly the right time. Effectively though, because of the way we bundle, they're displacing half a dozen competitors that have, this product or that product, but we put it together as a suite. And so again, a highly effective bundling of products to create good share and it does represent an exciting new customer to Healthstream and and through kind of coming through slightly different door than would be traditional like leading with the primary software so like learning, we sold the competency suite with learning bundled into it. Matt Hewitt Well, congratulations on that and thank you very much for taking the questions. Robert Frist Somewhat related to your question, I'll just add a little color because we did talk about a handful of deals. I think there's about 5 that we considered important deals that were medium sized and shorter term to revenue, did push, and but the nice thing about those 5 and so they're kind of a bellwether we're going to watch them this quarter and hope they hope and expect they come in, but, right off the front end, and we talked about whether the mandatory or not was a very large pending when in resuscitation. And where a health system is a good size is, we believe in contracting or we know they're in contracting phase to switch their vendor to American Red Cross. And so of the 5 deals, we hope that that is the first one to resolve itself and come in. And so we'll watch these 5 deals to see if these are related to macroeconomic conditions, these delays where we push out a Q1 and Q2, but it also comes to that theme is that we believe that by switching that institution will save money. So our program is we believe. Both stronger clinically and and less expensive operationally and so there is a good incentive for them to sign that deal and execute on it. So building on the team that that we were just asked by Craig Hallam, Matt Hewitt, one of these five deals has that kind of feel of compliance, but it also is focused on the workforce and it also we think will save money for hospitals, so the message is well timed as well. So we'll see what happens and report on that next quarter. Operator John Pinney, Canaccord Genuity. Richard Close Good morning. This is Richard, Close. I had a, Bobby, just can you talk a little bit about the legacy and you mentioned, I guess Shift wizard is, more revenue than Ansoft now and just talk a little bit about what is left on the legacy products and. You know what do you expect the timeline is for that you know just sort of run off. Robert Frist Yeah, fair enough. There's definitely a category on our tracking sheet of legacy products. They include ASOS, Morrissey, and Healthline, and by definition, when we say legacy, we mean they supported products. So we're we're still adding features and capabilities, although not quite as fast a pace as. Growth product or a mature product in our classification system. So legacy means they're still expected to generate revenue. However, we're not selling any new ones except we know occasional exceptions when a customer that is on a legacy product expands, will accommodate the expansion by selling them more of the legacy. But in general, our sales teams, over 200 people are not selling legacy products. So obviously, we do not expect growth from legacy products. And in fact, as you pointed out, there are kind of three outcomes for legacy products and they're the biggest ones are and. Sauce, which we talked about a lot, Morrissey and Healthline, and I want for the customers to hear those are supported products where we do quarterly releases of enhancements, and so, and that points out some of the complexity in talking about this. As they exist, they are great customers, and some of these products are beloved products, meaning they like their legacy product and they're both supported and and we're we're passing them and fixing them and making them better, not at the same rate as the end products, the Sass products like Credential Stream and Shift Wizard, but some of the difficulty in reporting on this is there's kind of three outcomes for a legacy products and And maybe this changes someday, but the first is the customers can choose to stay where they are, in which case, we expect to service them, generate some profits and IBA from that customer. And so in this bucket of legacy there until we decide to, and we have not decided this to sunset those products, there is a logical outcome that many years from now, many of these customers could be still on that product. And if they're on that, they're not doing the two other options, which is our preferred option now until the last 18 months is they migrate to one of the fast applications and so we're encouraging but not requiring those migrations. Of course, that's a great outcome if we can get them to migrate, we think at this point they get a better product, we get a slight lift in revenue because the better products more robust, has more modules and more capabilities. And so migrating customers is of course our goal, and we have a team of people working on migration. But that conversion rate has gone up and down. Some choose to stay where they are, and so we don't have a clear objective of migration. And of course the third thing that happened is the worst thing is we could lose that customer. They don't migrate and they don't stay, but they go on the market and buy something else. And so some of these lost accounts report are that where we lose the account. We can either keep them where they are or migrate them and because there's three outcomes. It's a little harder to tell what our expectations are because, it kind of it has an order of operations like math where our first preference is they migrate to our SA application. Our second preference is they stay happy customers of their beloved legacy application. Our third option is the worst is they decide they don't want either of those and we lose them to the market. And so we can report on the losses as we did this quarter. Across these legacy applications, I think there's about 1.7 million, maybe Scotty can verify that number. But we can't say the desired outcome or time frame because, again, we could be 4 years from now and still have a nice profitable business on legacy applications. So, I guess you could say there could be an internal debate each year about whether we should change the status of these legacy products to the category we call sunset. And once we're in a sunset mode, we notify customers of some in date, usually a year or two out, where we'll stop support, and then it forces the decision to either migrate or leave, and we have not done that. And so it does give us a little bit of a challenge to to talk about this issue because with three variables you can't really say exactly you know where everything's going to land. And again, two of the three options are good. Like if they stay happy legacy customers, that's fine. They're profitable and we service them well and they like their products. If they migrate, they're probably more profitable and and we can sell them more modules. They have more capabilities. And so our goal is to build shift wizard and Credential stream to a place where it's just self-evident that it's both the best market decision and the best opportunity to enhance their business, improve their outcomes, to go ahead and make that migration decision, and we have dozens of successful migrations, of course, that we've reported on in every quarter there are some migrations. We report on the losses, but we have not quantified the total value of the legacy products because we don't want to give away the competitive information about what, where people will target and and so we just haven't been able to put numbers for, but we do of course talk about our losses, which we think is the material and important part. I did point out it's a finite problem. I mean, we are not selling new legacy customers and so there's really. These three options exist, but, and so that's as much color as I can give. We will report our losses as they occur, but the way you characterize the remainder is they're either staying where they are or they're migrating, and both of those are good outcomes for the company. You saw in the quarter, the 25% growth of streams, some of that, and I named by account, some of migrating customers plus the newly acquired customers delivered that growth. Richard Close Yeah, I guess my concern is that you know you're you're seeing really good growth in those newer products like you just said, but. One of the attractiveness of the newer products and the core learning management system is, it's a platform play, you have good visibility, and then with this legacy it's just, it reduces the visibility or how do you think about visibility, going forward that just sort of hard. Robert Frist Yeah, it does create obviously confusion. It lowers our overall blend blended growth rate when we have those losses. We did report, 6% if you if you factor out those, so we gave a little visibility and the kind of the organic growth of each of the three core Go-or applications. We have reported that in all cases the go-forward applications are larger in scope, size, and revenue than the legacy applications, so you know. That were, the legacy businesses are not bigger than the go forward and, it's our hope that this is the year of the platform, so the ability to demonstrate the value of interoperability will be even a more compelling reason to choose to migrate. And so we're working hard on making that a reality, particularly in the second half of the year where we expect things like feature parity. Of of all these systems with the GoForward applications that feature they exceed in features actually the capabilities of legacy platforms. So we're getting closer, Richard, to a time where we could make the decision to quantify it and essentially force the decision by reclassing the products as sunset products. Since we haven't done that, it makes guidance on a little confusing and and and. And I apologize for that, but I think it's still the right decision because we love our legacy applications. Customs, some customers love them and staying on them is just fine with us until it's so compelling that they moved to the full suite, the suite of suits, there should be so much benefit to learning, credentialing, and scheduling that you buy them together someday, and that's our goal as we end the second half of this year and next year. I'm sorry that it's vague. We did try to, we will talk about the losses, so you can see the offset. We will, we have talked about the organic growth rates of the newer products, which are, they're really exciting levels credential stream is 25%. And and we'll quantify the losses and we also this quarter we we bundled up the legacy products and told the organic growth rate factoring out those those legacy products, non-renewals and so I think we're trying to get as much color as we can, but I think until we declare them sunset, it'll be hard to give a time frame, and so I guess I'll just apologize for that. Yeah I appreciate that and. But I still think it's the right business, so I kind of apologize for the optics. If you dig in deep enough, you can see the growth rates of the exciting go for products. I think also every quarter, the legacy problem gets smaller and it gets smaller relative to the success of the other products. So, in the next several quarters, it just continues to be a shrinking problem even in forecasting because, relative to our other growth, the the category is never going to get bigger and everything else is growing. So eventually it kind of overtakes itself. Operator Vincent Colicchio, Barrington Research. Vincent Colicchio Yes Bobby, are you seeing any pushback on pricing in the current environment? Robert Frist We always have, we think, good pricing. And I think, Vince, we're getting better at what I would call bundling. I mean we're realizing that our portfolio is really nice and broad, and that selling -- instead of selling content against content providers, selling content plus applications plus the secondary application and bundling is a better strategy. We see that with the Competency suite. We'll emulate that more. And so that allows us to get more breadth and penetration and adoption in more competitive displacement -- displacing competitors by bundling. And so I feel good about our pricing. Another thing related to pricing is in the last, really, 18 months, we've been able to make it a normal due course process to add contract escalators and renewals. And so another element of pricing and it's a change for our company. is to include pricing escalators. They're not quite CPI level, kind of we target 3% to 5% on annual price escalators on our products. And so all three of our core products, all the contracts we've been signing on now all of them and we stated that we first released escalators in Learning about one year ago. We released escalators in Credentialing and now in Scheduling. So all three primary products as of really a couple of months ago, all contracts go out with pricing escalators. Ironically, that gives the customer something to negotiate and allows us to maintain a little bit more pricing control of the base of the product prices. So that's been an interesting dynamic. Most software vendors in health care and maybe across industries already had price escalators. So adding those have helped us. So another part of our future growth is just a little bit of built-in inflationary offset with small pricing escalators built into our contracts. Vincent Colicchio And I know you're looking to get more active in the acquisition market. Are you seeing any impact from the economic uncertainty in valuations? Robert Frist I'm not sure of that yet. I would say this. We -- in the last quarter or two, we did bid on a couple of deals. We were not the prevailing bidder. We have a management team that is willing to pay a nice sum for a good business that we think fits but not a ridiculous sum. And so I don't know if that's a dynamic. We think things are still overpriced, but we did make a couple of bids that were not successful and didn't chase them. And so -- we are seeing more deal flow. We're getting more books to look at. And when we find a management team that wants to be a part of HealthStream that wants to be part of our growth story that is, a nice premium. We want those owners to do well. They built good companies, but not -- we're not going to chase things. There's just too much still cash on the sidelines and too much chasing. And I think some of our competitors did that for a while and take really high multiples and sitting on a lot of debt, and we're debt free with the $113 million in cash with the strongest free cash flow generation in our history in the last quarter. And so yes, we're going to be active, but we're still the same, somewhat conservative management team, so we have to hunt a little longer to find deals that we think both fit strategically and have the right economic return opportunities. So our discipline and -- now we're more active looking. We have -- there are definitely bigger pipelines to look at, but our consistent either diligence or a conservative approach as we haven't been successful in two of the competitions. But more to come, we're teeing up lots of opportunities, and we'll find the right ones here in the coming quarters. Operator I'm showing no further questions at this time. I would now like to turn it back to Robert Frist for closing remarks. Robert Frist Thank you to all of our Health Streamers. Welcome to our new Board member, Charles Beer. Thank you to Bill Stead for his 27 years of service and excellent strategic guidance. 1,100 employees are working hard one boat rowing in the same direction through troubled waters, we're going to get there. So thank you to those. And then shareholders, you're thinking about investing, I think sometimes in tough economic times, finding a good consistent management team that knows where they're going and what they're building is a good debt. And so maybe these times represent investing opportunities for those of you that think HealthStream is one of those, which I do believe myself. So thank you all see on the next earnings call, and we'll keep our chins up and keep making incremental progress. Thank you. Operator Thank you for your participation in today's conference. This does conclude the program. You may now disconnect.
Business Wire
05-05-2025
- Business
- Business Wire
HealthStream Announces First Quarter 2025 Results
NASHVILLE, Tenn.--(BUSINESS WIRE)--HealthStream, Inc. (the "Company") (Nasdaq: HSTM), a leading healthcare technology platform for workforce solutions, announced today results for the first quarter ended March 31, 2025. Revenues of $73.5 million in the first quarter of 2025, up 1.0% from $72.8 million in the first quarter of 2024 Operating income of $4.4 million in the first quarter of 2025, down 23.1% from $5.7 million in the first quarter of 2024 Net income of $4.3 million in the first quarter of 2025, down 17.1% from $5.2 million in the first quarter of 2024 Earnings per share (EPS) of $0.14 per share (diluted) in the first quarter of 2025, down from $0.17 per share (diluted) in the first quarter of 2024 Adjusted EBITDA 1 of $16.2 million in the first quarter of 2025, down 5.0% from $17.1 million in the first quarter of 2024 Board of Directors declared a quarterly cash dividend of $0.031 per share, payable on May 30, 2025 to holders of record on May 19, 2025 On March 7, 2025, Charles E. Beard, Jr. joined the Company's Board of Directors Financial Results: First Quarter 2025 Compared to First Quarter 2024 Revenues for the first quarter of 2025 increased by $0.7 million, or 1.0%, to $73.5 million, compared to $72.8 million for the first quarter of 2024. Subscription revenues increased by $0.6 million, or 0.8%, and professional services revenues increased by $0.1 million compared to the first quarter of 2024. Compared to the first quarter of 2024, revenue growth for the first quarter of 2025 was negatively impacted by several factors, including a $1.7 million reduction from attrition in legacy applications, a $0.9 million reduction in perpetual license sales, and a $0.6 million reduction from customer bankruptcies. These reductions to revenue were more than offset by $3.9 million of revenue growth across our portfolio of solutions. Operating income was $4.4 million for the first quarter of 2025, down 23.1% from $5.7 million in the first quarter of 2024. Over the past year, we have continued to make investments in several areas of the business, primarily in our platform and SaaS applications, resulting in higher labor costs, cloud hosting, third-party software, and amortization of capitalized software, as well increased costs associated with our sales and marketing efforts. The increased investments along with the changes in our revenue mix, specifically the lost revenues from legacy applications, contributed to the decline in operating income. Net income was $4.3 million in the first quarter of 2025, down 17.1% from $5.2 million in the first quarter of 2024, and EPS was $0.14 per share (diluted) in the first quarter of 2025, down from $0.17 per share (diluted) in the first quarter of 2024. Adjusted EBITDA was $16.2 million for the first quarter of 2025, down 5.0% from $17.1 million in the first quarter of 2024. At March 31, 2025, the Company had cash, cash equivalents, and marketable securities of $113.3 million. The Company does not have any outstanding indebtedness for borrowed money. Capital expenditures incurred during the first quarter of 2025 were $7.9 million. Other Business Updates On May 5, 2025, the Board approved a quarterly cash dividend under the Company's dividend policy of $0.031 per share, payable on May 30, 2025 to holders of record on May 19, 2025. On March 13, 2025, the Company announced that it had signed an agreement to sublease the 9th and 10th floor space in the Capitol View building in Nashville, Tennessee. The sublease commenced in April 2025 and will end in the fourth quarter of 2031. Addition to Board of Directors On March 7, 2025, the Board of Directors appointed Charles E. Beard, Jr. as a member of the Company's Board. Mr. Beard brings a wealth of experience from his more than 30-year career, where he has held several executive-level positions. Until his retirement in December 2024, he served as Chief Operating Officer at Guidehouse, a global consultancy. Prior to that position, he was a Partner at PwC, working with counsel on investigations of transnational computer-based financial crimes affecting corporate earnings, compliance programs, intellectual property protection, and technology risks. He also previously served as the Chief Information Officer for SAIC (now Leidos) and General Manager of its cybersecurity unit. Financial Outlook for 2025 The Company is updating its guidance for 2025 for certain of the measures set forth below. For a reconciliation of projected adjusted EBITDA, a non-GAAP financial measure defined later in this release, to projected net income (the most comparable GAAP measure) for 2025, see the table included on page eight of this release. The Company's guidance for 2025, as set forth above, reflects the Company's assumptions regarding, among other things, expectations for new sales and renewals. This consolidated guidance does not include the impact of any acquisitions or dispositions that we may complete during 2025, gains or losses from changes in the fair value of non-marketable equity investments, or impairment of long-lived assets. A factor in the Company's update to guidance for 2025 relates to current macroeconomic conditions impacting some of our healthcare organization customers. The Company's updated guidance does not reflect the potential occurrence of unpredictable events, such as significant reductions to payment rates or insurance coverage for individuals. Commenting on HealthStream's results, Robert A. Frist, Jr., Chief Executive Officer, HealthStream, said, 'On a year-over-year basis, we expect to deliver growth in both revenue and adjusted EBITDA. Due to recent issues of technology scaling with CredentialStream, which have been addressed but are impacting the year, and macroeconomic conditions affecting renewals and purchasing patterns for some elective content, we are trimming our financial outlook for the year. Our bookings and sales pipelines remain strong. In fact, we signed one of the largest customer contracts in the history of our Company during the first quarter. I look forward to reporting to you on our progress next quarter and thereafter.' A conference call with Robert A. Frist, Jr., Chief Executive Officer, Scott A. Roberts, Chief Financial Officer and Senior Vice President, and Mollie Condra, Head, Investor Relations and Communications, will be held on Tuesday, May 6, 2025, at 9:00 a.m. (ET). Participants may access the conference call live via webcast using this link: participate via telephone, please register in advance using this link: A replay of the conference call and webcast will be archived on the Company's website in the Investor Relations section under 'Events & Presentations.' Use of Non-GAAP Financial Measures This press release presents adjusted EBITDA, a non-GAAP financial measure used by management in analyzing the Company's financial results and ongoing operational performance. In order to better assess the Company's financial results, management believes that net income before interest, income taxes, stock-based compensation, depreciation and amortization, and changes in fair value of, including gains (losses) on the sale of, non-marketable equity investments ('adjusted EBITDA') is a useful measure for evaluating the operating performance of the Company because adjusted EBITDA reflects net income adjusted for certain GAAP accounting, non-cash, and/or non-operating items which may not, in any such case, fully reflect the underlying operating performance of our business. We believe that adjusted EBITDA is useful to investors to assess the Company's ongoing operating performance and to compare the Company's operating performance between periods. In addition, certain short-term cash incentive bonuses and performance-based equity awards are based on the achievement of adjusted EBITDA (as defined in applicable bonus and equity grant documentation) targets. Adjusted EBITDA is a non-GAAP financial measure and should not be considered as a measure of financial performance under GAAP. Because adjusted EBITDA is not a measurement determined in accordance with GAAP, adjusted EBITDA is susceptible to varying calculations. Accordingly, adjusted EBITDA, as presented, may not be comparable to other similarly titled measures of other companies and has limitations as an analytical tool. This non-GAAP financial measure should not be considered a substitute for, or superior to, measures of financial performance, which are prepared in accordance with GAAP. Investors are encouraged to review the reconciliations of adjusted EBITDA to net income (the most comparable GAAP measure), which is set forth below in this release. About HealthStream HealthStream (Nasdaq: HSTM) is the healthcare industry's largest ecosystem of platform-delivered workforce solutions that empowers healthcare professionals to do what they do best: deliver excellence in patient care. For more information about HealthStream, visit or call 615-301-3100. HEALTHSTREAM, INC. Condensed Consolidated Balance Sheets (In thousands) (Unaudited) March 31, December 31, 2025 2024 ASSETS Current assets: Cash and cash equivalents $ 77,289 $ 59,469 Marketable securities 36,030 37,748 Accounts and unbilled receivables, net 36,087 35,322 Prepaid and other current assets 20,312 20,583 Total current assets 169,718 153,122 Capitalized software development, net 44,042 43,370 Property and equipment, net 10,696 10,741 Operating lease right of use assets, net 16,846 17,453 Goodwill and intangible assets, net 243,361 246,768 Other assets 39,373 39,312 Total assets $ 524,036 $ 510,766 LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Accounts payable, accrued, and other liabilities $ 23,852 $ 31,466 Deferred revenue 102,009 84,227 Total current liabilities 125,861 115,693 Deferred tax liabilities 15,352 14,596 Deferred revenue, noncurrent 1,330 1,655 Operating lease liability, noncurrent 16,640 17,366 Other long-term liabilities 2,045 2,101 Total liabilities 161,228 151,411 Shareholders' equity: Common stock 252,466 252,432 Accumulated other comprehensive loss (2,019 ) (2,049 ) Retained earnings 112,361 108,972 Total shareholders' equity 362,808 359,355 Total liabilities and shareholders' equity $ 524,036 $ 510,766 Expand HEALTHSTREAM, INC. Condensed Consolidated Statements of Cash Flows (In thousands) (Unaudited) Three Months Ended March 31, March 31, 2025 2024 Operating activities: Net income $ 4,332 $ 5,227 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 10,755 10,336 Stock-based compensation 1,104 1,060 Amortization of deferred commissions 3,150 2,957 Deferred income taxes 751 771 Provision for credit losses 237 174 Loss on equity method investments 72 31 Other (399 ) (346 ) Changes in assets and liabilities: Accounts and unbilled receivables (1,001 ) (5,782 ) Prepaid and other assets (2,513 ) (1,783 ) Accounts payable, accrued, and other liabilities (6,871 ) (6,259 ) Deferred revenue 17,457 14,552 Net cash provided by operating activities 27,074 20,938 Investing activities: Proceeds (purchases) of marketable securities, net of proceeds 2,097 (124 ) Proceeds from sale of non-marketable equity investments — 765 Purchase of other investments (500 ) — Purchases of property and equipment (1,055 ) (742 ) Payments associated with capitalized software development (7,790 ) (7,019 ) Net cash used in investing activities (7,248 ) (7,120 ) Financing activities: Taxes paid related to net settlement of equity awards (1,070 ) (855 ) Payment of cash dividends (943 ) (849 ) Net cash used in financing activities (2,013 ) (1,704 ) Effect of exchange rate changes on cash and cash equivalents 7 (40 ) Net increase in cash and cash equivalents 17,820 12,074 Cash and cash equivalents at beginning of period 59,469 40,333 Cash and cash equivalents at end of period $ 77,289 $ 52,407 Expand Reconciliation of GAAP to Non-GAAP Financial Measures (1) Operating Results Summary (In thousands) (Unaudited) Three Months Ended March 31, 2025 2024 GAAP net income $ 4,332 $ 5,227 Interest income (931 ) (904 ) Interest expense 25 24 Income tax provision 916 1,316 Stock-based compensation expense 1,104 1,060 Depreciation and amortization 10,755 10,336 Adjusted EBITDA $ 16,201 $ 17,059 (1) This press release presents adjusted EBITDA, which is a non-GAAP financial measure used by management in analyzing its financial results and ongoing operational performance. Expand This press release includes certain forward-looking statements (statements other than solely with respect to historical fact), including statements regarding expectations for financial performance for 2025 and our quarterly dividend policy, that involve risks and uncertainties regarding HealthStream. These statements are based upon management's beliefs, as well as assumptions made by and data currently available to management. This information has been, or in the future may be, included in reliance on the 'safe harbor' provisions of the Private Securities Litigation Reform Act of 1995. The Company cautions that forward-looking statements involve known and unknown risks, uncertainties, and other factors that may cause the actual results, performance, or achievements to be materially different from future results, performance, or achievements expressed or implied by the forward-looking statements, including as a result of negative economic conditions, changes in U.S. policy, adverse developments impacting the healthcare industry, tariff and trade-related developments, inflationary pressures, geopolitical instability, legal requirements and contractual restrictions which may affect continuation of our quarterly cash dividend policy and the declaration and/or payment of dividends thereunder, which may be modified, suspended, or canceled in any manner and at any time that our Board may deem necessary or appropriate, as well as risks referenced in the Company's Annual Report on Form 10-K for the year ended December 31, 2024, filed on February 28, 2025, and in the Company's other filings with the Securities and Exchange Commission from time to time. Consequently, such forward-looking information should not be regarded as a representation or warranty or statement by the Company that such projections will be realized. Many of the factors that will determine the Company's future results are beyond the ability of the Company to control or predict. Readers should not place undue reliance on forward-looking statements, which reflect management's views only as of the date hereof. The Company undertakes no obligation to update or revise any such forward-looking statements.
Business Wire
22-04-2025
- Business
- Business Wire
HealthStream to Host First Quarter 2025 Earnings Conference Call
NASHVILLE, Tenn.--(BUSINESS WIRE)--HealthStream, Inc. (Nasdaq: HSTM), a leading healthcare technology platform for workforce solutions, announced today that it will host a conference call and webcast to discuss its first quarter 2025 financial results on Tuesday, May 6, 2025. The Company's financial results for the first quarter 2025 ended March 31, 2025 will be released after the routine time for the close of the market on Monday, May 5, 2025. HealthStream's first quarter 2025 earnings conference call will begin at 9:00 a.m. Eastern Time on Tuesday, May 6, 2025. Participants may access the conference call live via webcast using this link: Webcast Link Here. To participate via telephone, please register in advance using this LINK. Upon registration, all telephone participants will receive a one-time confirmation email detailing how to join the conference call, including the dial-in number along with a unique passcode and registrant ID that can be used to access the call. All participants are instructed to dial-in 15 minutes prior to the start time. A replay of the conference call and webcast will be archived on the Company's website for at least 30 days. About HealthStream HealthStream (Nasdaq: HSTM) is the healthcare industry's largest ecosystem of platform-delivered workforce solutions that empowers healthcare professionals to do what they do best: deliver excellence in patient care. For more information, visit or call 615-301-3100. This press release contains forward-looking statements that involve risks and uncertainties regarding HealthStream. This information has been included in reliance on the 'safe harbor' provisions of the Private Securities Litigation Reform Act of 1995. Investors are cautioned that such results or events predicted in these statements may differ materially from actual future events or results. These forward-looking statements are based on a variety of assumptions that may not be realized, and which are subject to significant risks and uncertainties, including that the anticipated financial and strategic benefits of the acquisition may not be realized, as well as risks and uncertainties referenced from time to time in the Company's filings with the Securities and Exchange Commission.
Yahoo
16-03-2025
- Business
- Yahoo
HealthStream, Inc. (NASDAQ:HSTM) Stock's Been Sliding But Fundamentals Look Decent: Will The Market Correct The Share Price In The Future?
It is hard to get excited after looking at HealthStream's (NASDAQ:HSTM) recent performance, when its stock has declined 8.5% over the past month. However, stock prices are usually driven by a company's financials over the long term, which in this case look pretty respectable. In this article, we decided to focus on HealthStream's ROE. ROE or return on equity is a useful tool to assess how effectively a company can generate returns on the investment it received from its shareholders. In simpler terms, it measures the profitability of a company in relation to shareholder's equity. See our latest analysis for HealthStream The formula for ROE is: Return on Equity = Net Profit (from continuing operations) ÷ Shareholders' Equity So, based on the above formula, the ROE for HealthStream is: 5.6% = US$20m ÷ US$359m (Based on the trailing twelve months to December 2024). The 'return' is the profit over the last twelve months. Another way to think of that is that for every $1 worth of equity, the company was able to earn $0.06 in profit. So far, we've learned that ROE is a measure of a company's profitability. Depending on how much of these profits the company reinvests or "retains", and how effectively it does so, we are then able to assess a company's earnings growth potential. Generally speaking, other things being equal, firms with a high return on equity and profit retention, have a higher growth rate than firms that don't share these attributes. On the face of it, HealthStream's ROE is not much to talk about. Yet, a closer study shows that the company's ROE is similar to the industry average of 5.6%. Having said that, HealthStream has shown a modest net income growth of 6.8% over the past five years. Considering the moderately low ROE, it is quite possible that there might be some other aspects that are positively influencing the company's earnings growth. For example, it is possible that the company's management has made some good strategic decisions, or that the company has a low payout ratio. Next, on comparing with the industry net income growth, we found that HealthStream's reported growth was lower than the industry growth of 15% over the last few years, which is not something we like to see. Earnings growth is an important metric to consider when valuing a stock. What investors need to determine next is if the expected earnings growth, or the lack of it, is already built into the share price. Doing so will help them establish if the stock's future looks promising or ominous. What is HSTM worth today? The intrinsic value infographic in our free research report helps visualize whether HSTM is currently mispriced by the market. HealthStream's three-year median payout ratio to shareholders is 17% (implying that it retains 83% of its income), which is on the lower side, so it seems like the management is reinvesting profits heavily to grow its business. Along with seeing a growth in earnings, HealthStream only recently started paying dividends. Its quite possible that the company was looking to impress its shareholders. Our latest analyst data shows that the future payout ratio of the company over the next three years is expected to be approximately 16%. On the whole, we do feel that HealthStream has some positive attributes. That is, a decent growth in earnings backed by a high rate of reinvestment. However, we do feel that that earnings growth could have been higher if the business were to improve on the low ROE rate. Especially given how the company is reinvesting a huge chunk of its profits. Having said that, the company's earnings growth is expected to slow down, as forecasted in the current analyst estimates. To know more about the company's future earnings growth forecasts take a look at this free report on analyst forecasts for the company to find out more. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Sign in to access your portfolio
