HealthStream(US:HSTM)2025-08-07 20:39Financial Performance - Revenues of $74.4 million in Q2 2025, up 4.0% from $71.6 million in Q2 2024[58] - Operating income of $5.9 million in Q2 2025, up 33.4% from $4.4 million in Q2 2024[58] - Net income of $5.4 million in Q2 2025, up 29.3% from $4.2 million in Q2 2024[58] - Adjusted EBITDA of $17.6 million in Q2 2025, up 11.3% from $15.8 million in Q2 2024[58] - Revenues increased by $3.6 million, or 2%, to $147.9 million for the six months ended June 30, 2025, compared to $144.3 million for the same period in 2024[76] - Net income for the six months ended June 30, 2025, was $9.7 million, up from $9.4 million in 2024, with EPS increasing to $0.32 from $0.31[84] - Adjusted EBITDA was $33.8 million for the six months ended June 30, 2025, compared to $32.9 million for the same period in 2024[85] Revenue Breakdown - Subscription revenues increased by $2.9 million, or 4%, in Q2 2025 compared to Q2 2024[65] - Subscription revenues rose by $3.5 million, or 3%, to $142.7 million, representing 97% of total revenues for the six months ended June 30, 2025[77] Costs and Expenses - Cost of revenues increased by $2.7 million, or 11%, to $26.4 million in Q2 2025[66] - Cost of revenues increased by $3.5 million, or 7%, to $51.9 million, with cost of revenues as a percentage of revenues rising to 35% from 34%[77] - General and administrative expenses decreased by $2.2 million, or 23%, to $7.4 million in Q2 2025[69] Cash Flow and Investments - Net cash provided by operating activities increased by $4.7 million to $32.1 million, with days sales outstanding (DSO) improving to 35 days from 45 days[91] - Net cash used in investing activities was $18.4 million, with significant investments in marketable securities and capitalized software development[92] - The company repurchased 649,953 shares of common stock for $18.1 million during the three months ended June 30, 2025, at an average price of $27.86 per share[99] - The Company had cash and investment balances of $90.6 million as of June 30, 2025, with a hypothetical 10% decrease in interest rates potentially reducing annual interest income by $0.3 million[103] Debt and Credit Facilities - The company has a $50.0 million revolving credit facility with no outstanding borrowings as of June 30, 2025[95] - As of June 30, 2025, the Company had no outstanding debt, but may face interest rate market risk with future borrowings under its revolving credit facility[103] Strategic Plans and Risks - The Company plans to pursue acquisitions or strategic investments to enhance its business, potentially using cash, stock, or debt[101] - The Company is exposed to foreign currency risks related to revenues and operating expenses in currencies such as the Canadian dollar, New Zealand dollar, and Australian dollar[104] - The Company has not entered into foreign currency hedging contracts to date but may consider doing so in the future as international operations grow[105] - The Company's investment strategy focuses on highly rated securities to minimize principal loss risk, with limits on credit exposure to single issuers[106] - The investment portfolio includes strategic investments in early-stage healthcare technology companies to expand the Company's ecosystem[107] - The Company may experience volatility in its financial statements due to changes in market prices and impairments of strategic investments[107] - The discussion of market risks and estimated amounts presented are forward-looking statements that may differ materially from actual future results[108]