HealthStream(US:HSTM)2023-04-25 19:52Financial Data and Key Metrics Changes - For Q1 2023, the company reported record quarterly revenue of $68.9 million, an increase of 5% compared to the same period in 2022 [4][23] - Operating income was $2.9 million, down 28%, while net income was $2.6 million, down 9% [9] - Adjusted EBITDA was $13.7 million, a decrease of 2%, with an adjusted EBITDA margin of 19.9% compared to 21.4% last year [25][10] - Gross margin was 65.4%, slightly down from 66.3% the previous year, impacted by severance charges and increased costs [10][9] - Days Sales Outstanding (DSO) increased to 51 days from 46 days last year, primarily due to a single customer with a large balance [26] Business Line Data and Key Metrics Changes - Subscription product revenues were $66 million, up 6%, while professional services revenues were $2.9 million, down 11% [23] - Revenues from the ShiftWizard application grew by 30% year-over-year, indicating strong customer satisfaction [33] - The company added 31 new health organizations to the Workforce Validate application set in Q1 [20] Market Data and Key Metrics Changes - The company noted that macroeconomic challenges such as inflation and recession are impacting the market, but it remains confident in its growth trajectory [21] - The integration of the hStream technology platform is expected to enhance interoperability and drive future growth [34][36] Company Strategy and Development Direction - The company has unified its operations under the hStream technology platform, moving away from the previous two-segment structure [5] - A new dividend policy was introduced, with the first cash dividend of $0.025 per share to be paid on April 28, 2023 [59][41] - The company plans to continue investing in its platform as a service technologies to enhance its SaaS application suite [50] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence that the restructuring will positively impact financial performance starting in Q2 2023 [17] - The company anticipates that the revenue impact from slower bookings during COVID will be behind it as the first half of the year closes [21] - Management acknowledged a slight dip in hStream subscriptions but expects growth in the coming quarters [61][30] Other Important Information - The company completed the acquisition of Eeds, expanding its ecosystem in the healthcare technology niche [69] - The developer portal launched in Q4 2022 is expected to enhance the capabilities of the hStream platform [19] Q&A Session Summary Question: What are you hearing from your customers regarding employment trends? - Management noted that as customers grow, the company also benefits, particularly as healthcare organizations build their nursing core and rely less on contracted labor [76][100] Question: How is your employment situation? - The company reported a stable employee count and is finding the necessary talent, following a planned restructuring [78][79] Question: Can you provide color on the learning side in terms of product traction? - Clinical education products are performing well, with notable growth in onboarding and clinical education offerings [126] Question: What does pricing look like for contract renewals? - Pricing remains stable, with adjustments based on customer growth and commitment length [128] Question: Can you provide an update on the digital network development unit? - The company is excited about monetization strategies for NurseGrid and myClinicalExchange, with plans to launch direct-to-consumer education sales [86][112]