HealthStream Announces First Quarter 2026 Results
Key Terms
adjusted EBITDA financial
non-GAAP financial measure financial
Rule 10b5-1 plans regulatory
contingent consideration financial
impairment of long-lived assets financial
First Quarter 2026
-
Revenues of
$81.2 million 10.5% from$73.5 million -
Operating income of
$7.5 million 71.6% from$4.4 million -
Net income of
$5.9 million 36.4% from$4.3 million -
Earnings per share (EPS) of
$0.20 $0.14 -
Adjusted EBITDA1 of
$20.1 million 24.1% from$16.2 million -
Board of Directors declared a quarterly cash dividend of
$0.035 -
Authorized a share repurchase program to repurchase up to
$10.0 million - Michael M. Collier named Chief Operating Officer & Executive Vice President
1 Adjusted EBITDA is a non-GAAP financial measure. A reconciliation of adjusted EBITDA to net income and disclosure regarding why we believe adjusted EBITDA provides useful information to investors is included later in this release. |
Financial Results:
First Quarter 2026 Compared to First Quarter 2025
Revenues for the first quarter of 2026 increased by
Operating income was
Net income was
Adjusted EBITDA was
At March 31, 2026, the Company had cash, cash equivalents, and marketable securities of
Other Business Updates
On March 13, 2026, the Company announced a new share repurchase program approved by the Board of Directors under which the Company is authorized to repurchase up to
Additionally, during the three months ended March 31, 2026, the Company repurchased 222,978 shares of common stock at an aggregate fair value of
In total during the first quarter of 2026, the Company repurchased 342,345 shares of common stock under the share repurchase programs described above at an aggregate fair value of
On May 4, 2026, the Board of Directors approved a quarterly cash dividend under the Company's dividend policy of
Financial Outlook for 2026
The Company reaffirms its guidance for 2026 for the measures set forth below as previously announced on February 23, 2026.
|
|
Full Year 2026 Guidance |
||||||||
|
|
|
Low |
|
|
|
|
High |
|
|
Revenue |
|
$ |
323.0 |
|
- |
|
$ |
330.0 |
|
million |
|
|
|
|
|
|
|
|
|
|
|
Net Income |
|
$ |
20.4 |
|
- |
|
$ |
22.8 |
|
million |
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA1 |
|
$ |
73.0 |
|
- |
|
$ |
77.0 |
|
million |
|
|
|
|
|
|
|
|
|
|
|
Capital Expenditures |
|
$ |
31.0 |
|
- |
|
$ |
34.0 |
|
million |
1 Adjusted EBITDA is a non-GAAP financial measure. A reconciliation of projected adjusted EBITDA to projected net income (the most comparable GAAP measure) is included later in this release. |
||||||||||
The Company’s guidance for 2026, as set forth above, reflects the Company’s assumptions regarding, among other things, expectations for new sales and renewals, and assumes that general economic conditions do not deteriorate. This guidance does not include the impact of any future acquisitions or dispositions that we may complete during 2026, gains or losses from changes in the fair value of non-marketable equity investments or contingent consideration, or impairment of long-lived assets.
Executive Personnel Announcement
Today, HealthStream announced the promotion of Michael M. Collier from Executive Vice President to Chief Operating Officer (COO) & Executive Vice President. In this expanded role, Mr. Collier will lead enterprise operations across HealthStream, including customer experience functions, corporate development and mergers and acquisitions, implementations, legal, human resources, partnerships, business enablement, and other critical areas. He will also serve as executive sponsor for the Company’s AI transformation, driving AI readiness across operational teams and advancing the use of AI to support the workforce and internal business processes. Since joining HealthStream in 2011 as a corporate attorney, Mr. Collier has advanced through roles of increasing responsibility and has been instrumental in the Company’s growth, including leading more than two dozen successful acquisitions.
Robert A. Frist, Jr., Chief Executive Officer, HealthStream, said “HealthStream delivered strong first quarter results in 2026 with revenues up
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 5, 2026 at 9:00 a.m. (ET). Participants may access the conference call live via webcast using this link: https://edge.media-server.com/mmc/p/5oqw9zvm. To participate via telephone, please register in advance using this link: https://register-conf.media-server.com/register/BI5e8b8a5e7bce472e817c80491726179a.
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, impairments of long-lived assets, changes in fair value of contingent consideration, 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. Beginning with the presentation of adjusted EBITDA for the year ended December 31, 2025, the Company has included adjustments in the definition of adjusted EBITDA for impairment of long-lived assets and changes in fair value of contingent consideration because the Company believes that these amounts may not be reflective of the underlying operational performance of our business and that including these adjustments is consistent with the intended purpose of adjusted EBITDA with respect to reflecting the underlying operating performance of our business and comparing the Company’s operational performance between periods. 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.
Adjusted EBITDA 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 clinical workforce solutions that empowers healthcare professionals to do what they do best: deliver excellence in patient care. For more information about HealthStream, visit www.healthstream.com or call 615-301-3100.
HEALTHSTREAM, INC. Condensed Consolidated Statements of Income (In thousands, except per share data) (Unaudited) |
||||||||
|
|
Three Months Ended |
||||||
|
|
March 31, 2026 |
|
March 31, 2025 |
||||
Revenues, net |
|
$ |
81,203 |
|
|
$ |
73,485 |
|
Operating costs and expenses: |
|
|
|
|
||||
Cost of revenues (excluding depreciation and amortization) |
|
|
27,758 |
|
|
|
25,487 |
|
Product development |
|
|
13,606 |
|
|
|
12,047 |
|
Sales and marketing |
|
|
12,960 |
|
|
|
12,149 |
|
General and administrative |
|
|
8,002 |
|
|
|
8,669 |
|
Depreciation and amortization |
|
|
11,365 |
|
|
|
10,755 |
|
Total operating costs and expenses |
|
|
73,691 |
|
|
|
69,107 |
|
|
|
|
|
|
||||
Operating income |
|
|
7,512 |
|
|
|
4,378 |
|
|
|
|
|
|
||||
Interest income |
|
|
414 |
|
|
|
931 |
|
Other expense, net |
|
|
(106 |
) |
|
|
(61 |
) |
|
|
|
|
|
||||
Income before income tax provision |
|
|
7,820 |
|
|
|
5,248 |
|
Income tax provision |
|
|
1,910 |
|
|
|
916 |
|
Net income |
|
$ |
5,910 |
|
|
$ |
4,332 |
|
|
|
|
|
|
||||
Net income per share: |
|
|
|
|
||||
Basic |
|
$ |
0.20 |
|
|
$ |
0.14 |
|
Diluted |
|
$ |
0.20 |
|
|
$ |
0.14 |
|
|
|
|
|
|
||||
Weighted average shares of common stock outstanding: |
|
|
|
|
||||
Basic |
|
|
29,376 |
|
|
|
30,444 |
|
Diluted |
|
|
29,424 |
|
|
|
30,587 |
|
Dividends declared per share |
|
$ |
0.035 |
|
|
$ |
0.031 |
|
HEALTHSTREAM, INC. Condensed Consolidated Balance Sheets (In thousands) (Unaudited) |
||||||||
|
|
March 31, |
|
December 31, |
||||
|
|
2026 |
|
2025 |
||||
ASSETS |
|
|
|
|
||||
Current assets: |
|
|
|
|
||||
Cash and cash equivalents |
|
$ |
48,711 |
|
|
$ |
36,161 |
|
Marketable securities |
|
|
17,787 |
|
|
|
20,843 |
|
Accounts and unbilled receivables, net |
|
|
43,444 |
|
|
|
38,998 |
|
Prepaid and other current assets |
|
|
23,081 |
|
|
|
23,654 |
|
Total current assets |
|
|
133,023 |
|
|
|
119,656 |
|
|
|
|
|
|
||||
Capitalized software development, net |
|
|
45,621 |
|
|
|
45,581 |
|
Property and equipment, net |
|
|
10,203 |
|
|
|
10,661 |
|
Operating lease right of use assets, net |
|
|
14,445 |
|
|
|
15,272 |
|
Goodwill and intangible assets, net |
|
|
276,358 |
|
|
|
282,448 |
|
Other assets |
|
|
47,791 |
|
|
|
46,756 |
|
Total assets |
|
$ |
527,441 |
|
|
$ |
520,374 |
|
|
|
|
|
|
||||
LIABILITIES AND SHAREHOLDERS’ EQUITY |
|
|
|
|
||||
Current liabilities: |
|
|
|
|
||||
Accounts payable, accrued, and other liabilities |
|
$ |
30,112 |
|
|
$ |
35,729 |
|
Deferred revenue |
|
|
106,402 |
|
|
|
88,417 |
|
Total current liabilities |
|
|
136,514 |
|
|
|
124,146 |
|
Deferred tax liabilities |
|
|
17,977 |
|
|
|
18,246 |
|
Deferred revenue, noncurrent |
|
|
1,320 |
|
|
|
1,344 |
|
Operating lease liability, noncurrent |
|
|
14,067 |
|
|
|
14,684 |
|
Other long-term liabilities |
|
|
5,571 |
|
|
|
7,931 |
|
Total liabilities |
|
|
175,449 |
|
|
|
166,351 |
|
|
|
|
|
|
||||
Shareholders’ equity: |
|
|
|
|
||||
Common stock |
|
|
225,089 |
|
|
|
231,797 |
|
Accumulated other comprehensive loss |
|
|
(1,566 |
) |
|
|
(1,361 |
) |
Retained earnings |
|
|
128,469 |
|
|
|
123,587 |
|
Total shareholders’ equity |
|
|
351,992 |
|
|
|
354,023 |
|
Total liabilities and shareholders' equity |
|
$ |
527,441 |
|
|
$ |
520,374 |
|
HEALTHSTREAM, INC. Condensed Consolidated Statements of Cash Flows (In thousands) (Unaudited) |
||||||||
|
|
Three Months Ended |
||||||
|
|
March 31, |
|
March 31, |
||||
|
|
2026 |
|
2025 |
||||
Operating activities: |
|
|
|
|
||||
Net income |
|
$ |
5,910 |
|
|
$ |
4,332 |
|
Adjustments to reconcile net income to net cash provided by operating activities: |
|
|
|
|
||||
Depreciation and amortization |
|
|
11,365 |
|
|
|
10,755 |
|
Stock-based compensation |
|
|
1,309 |
|
|
|
1,104 |
|
Amortization of deferred commissions |
|
|
3,286 |
|
|
|
3,150 |
|
Deferred income taxes |
|
|
— |
|
|
|
751 |
|
Provision for credit losses |
|
|
92 |
|
|
|
237 |
|
Loss on equity method investments |
|
|
40 |
|
|
|
72 |
|
Other |
|
|
(160 |
) |
|
|
(399 |
) |
Changes in assets and liabilities: |
|
|
|
|
||||
Accounts and unbilled receivables |
|
|
(4,550 |
) |
|
|
(1,002 |
) |
Prepaid and other assets |
|
|
(2,006 |
) |
|
|
(2,512 |
) |
Accounts payable, accrued, and other liabilities |
|
|
(6,050 |
) |
|
|
(6,871 |
) |
Deferred revenue |
|
|
17,900 |
|
|
|
17,457 |
|
Net cash provided by operating activities |
|
|
27,136 |
|
|
|
27,074 |
|
|
|
|
|
|
||||
Investing activities: |
|
|
|
|
||||
Cash paid for acquisitions |
|
|
(302 |
) |
|
|
— |
|
Proceeds from marketable securities, net of purchases |
|
|
3,203 |
|
|
|
2,097 |
|
Purchase of other investments |
|
|
(1,750 |
) |
|
|
(500 |
) |
Purchases of property and equipment |
|
|
(740 |
) |
|
|
(1,055 |
) |
Payments associated with capitalized software development |
|
|
(6,727 |
) |
|
|
(7,790 |
) |
Net cash used in investing activities |
|
|
(6,316 |
) |
|
|
(7,248 |
) |
|
|
|
|
|
||||
Financing activities: |
|
|
|
|
||||
Taxes paid related to net settlement of equity awards |
|
|
(582 |
) |
|
|
(1,070 |
) |
Payment of cash dividends |
|
|
(1,028 |
) |
|
|
(943 |
) |
Repurchases of common stock |
|
|
(6,723 |
) |
|
|
— |
|
Net cash used in financing activities |
|
|
(8,333 |
) |
|
|
(2,013 |
) |
|
|
|
|
|
||||
Effect of exchange rate changes on cash and cash equivalents |
|
|
63 |
|
|
|
7 |
|
Net increase in cash and cash equivalents |
|
|
12,550 |
|
|
|
17,820 |
|
Cash and cash equivalents at beginning of period |
|
|
36,161 |
|
|
|
59,469 |
|
Cash and cash equivalents at end of period |
|
$ |
48,711 |
|
|
$ |
77,289 |
|
Reconciliation of GAAP to Non-GAAP Financial Measures(1) Operating Results Summary (In thousands) (Unaudited) |
||||||||
|
|
Three Months Ended March 31, |
||||||
|
|
2026 |
|
2025 |
||||
GAAP net income |
|
$ |
5,910 |
|
|
$ |
4,332 |
|
Interest income |
|
|
(414 |
) |
|
|
(931 |
) |
Interest expense |
|
|
25 |
|
|
|
25 |
|
Income tax provision |
|
|
1,910 |
|
|
|
916 |
|
Stock-based compensation expense |
|
|
1,309 |
|
|
|
1,104 |
|
Depreciation and amortization |
|
|
11,365 |
|
|
|
10,755 |
|
Adjusted EBITDA |
|
$ |
20,105 |
|
|
$ |
16,201 |
|
(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. |
||||||||
Reconciliation of GAAP to Non-GAAP Financial Measures Financial Outlook for 2026 (In thousands) (Unaudited) |
||||||||
|
|
Low |
|
High |
||||
Net income |
|
$ |
20,400 |
|
|
$ |
22,800 |
|
Interest income |
|
|
(1,900 |
) |
|
|
(2,100 |
) |
Interest expense |
|
|
100 |
|
|
|
100 |
|
Income tax provision |
|
|
5,700 |
|
|
|
6,500 |
|
Stock-based compensation expense |
|
|
3,900 |
|
|
|
4,500 |
|
Depreciation and amortization |
|
|
44,800 |
|
|
|
45,200 |
|
Adjusted EBITDA |
|
$ |
73,000 |
|
|
$ |
77,000 |
|
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 2026 and our quarterly dividend 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
View source version on businesswire.com: https://www.businesswire.com/news/home/20260504088266/en/
Scott A. Roberts
Chief Financial Officer
(615) 301-3182
ir@healthstream.com
Media:
Mollie Condra, Ph.D.
Head, Investor Relations & Communications
(615) 301-3237
mollie.condra@healthstream.com
Source: HealthStream, Inc.