Financial Data and Key Metrics Changes - The company achieved record quarterly revenues of $76.5 million, up 4.6% from the same quarter last year [10] - Operating income increased by 16.5% to $7.6 million, while net income rose 6.3% to $6.1 million [10] - Adjusted EBITDA reached a new high of $19.1 million, up 7.9%, with an Adjusted EBITDA margin of 25% compared to 24.2% last year [13][10] - Earnings per share (EPS) increased to $0.20 from $0.19 [10] Business Line Data and Key Metrics Changes - Subscription revenues grew by $4 million, or 5.7%, while professional service revenues declined by $0.6 million, or 18.6% [10] - CredentialStream revenue grew by 23%, ShiftWizard by 29%, and CompetencySuite by 18% [11] - Revenues from legacy applications declined by $1.7 million compared to last year, but the core business grew by 8% when excluding legacy impacts [11] Market Data and Key Metrics Changes - Remaining performance obligations were $621 million, up from $549 million year-over-year, with expectations of converting approximately 39% to revenue over the next 12 months [11] - The company reported a strong cash balance of $92.6 million at the end of Q3 2025, with no interest-bearing debt [9] Company Strategy and Development Direction - The recent acquisition of Versus 12 enhances the company's entry into the payer and health plan market, which is expected to grow significantly [5][6] - The company is focusing on developing its career networks, which provide value directly to healthcare professionals, alongside its enterprise application suites [19][20] - HealthStream aims to connect its career networks with enterprise solutions through its HStream technology platform, enhancing the value of both [20][25] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the growth potential in the payer market and the synergies expected from the Versus 12 acquisition [34][35] - The company updated its financial guidance for the full year 2025, expecting consolidated revenues between $299.5 million and $301.5 million [17] - Management acknowledged challenges from declining legacy software revenues, estimating a $3 million drop in Q4, which could offset new growth [72] Other Important Information - The company maintains a disciplined approach to capital allocation, prioritizing organic investments, acquisitions, and returning profits to shareholders [14][15] - A quarterly cash dividend of $0.31 per share was declared, to be paid on November 28 [18] Q&A Session Summary Question: Can you provide more details on the Versus 12 acquisition and its market? - Management indicated that the payer market requires distinct solutions and that the acquisition brings valuable expertise and technology to better meet customer needs [34][35] Question: What are the expectations for Adjusted EBITDA margins in the future? - Management noted that the shift towards owning more content and higher-margin products could lead to upward pressure on margins, potentially reaching 30% over time [36][39] Question: Can you provide revenue details for Versus 12? - The expected revenue contribution from Versus 12 in Q4 is approximately $900,000, with a mix of subscription and consulting revenue [44][45] Question: What monetization strategies are being pursued for the career networks? - Management outlined several monetization strategies, including education offerings and job capabilities, with a focus on building value-added services for healthcare professionals [46][49] Question: Are there opportunities for brand marketing on the platform? - Management confirmed ambitions to model NurseGrid after platforms like LinkedIn and Doximity, recognizing the growing value of nurses in the healthcare industry [55][56] Question: What is the growth outlook for ShiftWizard in large organizations? - Management indicated that while ShiftWizard is not yet fully ready for the largest organizations, there is progress in securing contracts with upper middle-class enterprises [63]

HealthStream (NasdaqGS:HSTM) Q3 2025 Earnings Call November 04, 2025 09:00 AM ET Speaker0Good morning and welcome to HealthStream's Third Quarter twenty twenty five Earnings Conference Call. At this time, I would like to inform you that this conference is being recorded and that all participants are in a listen only mode. At the request of the company, we will open the conference up for questions and answers after the presentation. I will now turn the conference over to Molly Condra, Head of Investor Relati ...