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HealthStream Announces First Quarter 2025 Results
First Quarter 2025
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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 EBITDA1 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
$0.031 per share, payable onMay 30, 2025 to holders of record onMay 19, 2025 -
On
March 7, 2025 ,Charles E. Beard , Jr. joined the Company's Board of Directors
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1 Adjusted EBITDA is a non-GAAP financial measure. A reconciliation of adjusted EBITDA to net income and disclosure regarding why we believe adjusted EBITDA provides useful information to investors is included later in this release. |
Financial Results:
First Quarter 2025 Compared to First Quarter 2024
Revenues for the first quarter of 2025 increased by
Operating income was
Net income was
Adjusted EBITDA was
At
Other Business Updates
On
On
Addition to Board of Directors
On
Financial Outlook for 2025
The Company is updating its guidance for 2025 for certain of the measures set forth below. For a reconciliation of projected adjusted EBITDA, a non-GAAP financial measure defined later in this release, to projected net income (the most comparable GAAP measure) for 2025, see the table included on page eight of this release.
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Full Year 2025 Guidance |
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Low |
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High |
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Revenue1 |
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$ |
297.5 |
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- |
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$ |
303.5 |
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million |
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Net Income2 |
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$ |
18.6 |
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- |
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$ |
21.0 |
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million |
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Adjusted EBITDA3 |
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$ |
68.5 |
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- |
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$ |
72.5 |
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million |
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|
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Capital Expenditures |
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$ |
31.0 |
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- |
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$ |
34.0 |
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million |
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1 Previous expected Revenue guidance range was |
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2 Previous expected Net Income guidance range was |
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3 Previous expected Adjusted EBITDA guidance range was |
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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,
A conference call with
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
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Condensed Consolidated Statements of Income |
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(In thousands, except per share data) |
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(Unaudited) |
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Three Months Ended |
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Revenues, net |
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$ |
73,485 |
|
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$ |
72,760 |
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Operating costs and expenses: |
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|
|
|
|
|
|
|
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Cost of revenues (excluding depreciation and amortization) |
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25,487 |
|
|
|
24,617 |
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Product development |
|
|
12,047 |
|
|
|
12,032 |
|
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Sales and marketing |
|
|
12,149 |
|
|
|
11,773 |
|
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General and administrative |
|
|
8,669 |
|
|
|
8,312 |
|
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Depreciation and amortization |
|
|
10,755 |
|
|
|
10,336 |
|
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Total operating costs and expenses |
|
|
69,107 |
|
|
|
67,070 |
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|
|
|
|
|
|
|
|
|
|
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Operating income |
|
|
4,378 |
|
|
|
5,690 |
|
|
|
|
|
|
|
|
|
|
|
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Other income, net |
|
|
870 |
|
|
|
853 |
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|
|
|
|
|
|
|
|
|
|
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Income before income tax provision |
|
|
5,248 |
|
|
|
6,543 |
|
|
Income tax provision |
|
|
916 |
|
|
|
1,316 |
|
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Net income |
|
$ |
4,332 |
|
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$ |
5,227 |
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|
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|
|
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Net income per share: |
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Basic |
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$ |
0.14 |
|
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$ |
0.17 |
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Diluted |
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$ |
0.14 |
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$ |
0.17 |
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|
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|
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Weighted average shares of common stock outstanding: |
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|
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|
|
|
|
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Basic |
|
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30,444 |
|
|
|
30,313 |
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Diluted |
|
|
30,587 |
|
|
|
30,418 |
|
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Dividends declared per share |
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$ |
0.031 |
|
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$ |
0.028 |
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Condensed Consolidated Balance Sheets |
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(In thousands) |
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(Unaudited) |
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2025 |
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2024 |
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ASSETS |
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Current assets: |
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|
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|
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Cash and cash equivalents |
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$ |
77,289 |
|
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$ |
59,469 |
|
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Marketable securities |
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|
36,030 |
|
|
|
37,748 |
|
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Accounts and unbilled receivables, net |
|
|
36,087 |
|
|
|
35,322 |
|
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Prepaid and other current assets |
|
|
20,312 |
|
|
|
20,583 |
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Total current assets |
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|
169,718 |
|
|
|
153,122 |
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|
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|
|
|
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Capitalized software development, net |
|
|
44,042 |
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|
|
43,370 |
|
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Property and equipment, net |
|
|
10,696 |
|
|
|
10,741 |
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Operating lease right of use assets, net |
|
|
16,846 |
|
|
|
17,453 |
|
|
|
|
|
243,361 |
|
|
|
246,768 |
|
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Other assets |
|
|
39,373 |
|
|
|
39,312 |
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Total assets |
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$ |
524,036 |
|
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$ |
510,766 |
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|
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LIABILITIES AND SHAREHOLDERS’ EQUITY |
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Current liabilities: |
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Accounts payable, accrued, and other liabilities |
|
$ |
23,852 |
|
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$ |
31,466 |
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Deferred revenue |
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|
102,009 |
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|
|
84,227 |
|
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Total current liabilities |
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125,861 |
|
|
|
115,693 |
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Deferred tax liabilities |
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|
15,352 |
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|
14,596 |
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Deferred revenue, noncurrent |
|
|
1,330 |
|
|
|
1,655 |
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Operating lease liability, noncurrent |
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|
16,640 |
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|
|
17,366 |
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Other long-term liabilities |
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|
2,045 |
|
|
|
2,101 |
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Total liabilities |
|
|
161,228 |
|
|
|
151,411 |
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|
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|
|
|
|
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Shareholders’ equity: |
|
|
|
|
|
|
|
|
|
Common stock |
|
|
252,466 |
|
|
|
252,432 |
|
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Accumulated other comprehensive loss |
|
|
(2,019 |
) |
|
|
(2,049 |
) |
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Retained earnings |
|
|
112,361 |
|
|
|
108,972 |
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Total shareholders’ equity |
|
|
362,808 |
|
|
|
359,355 |
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Total liabilities and shareholders' equity |
|
$ |
524,036 |
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$ |
510,766 |
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|
|
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Condensed Consolidated Statements of Cash Flows |
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(In thousands) |
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(Unaudited) |
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Three Months Ended |
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2025 |
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2024 |
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Operating activities: |
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Net income |
|
$ |
4,332 |
|
|
$ |
5,227 |
|
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Adjustments to reconcile net income to net cash provided by operating activities: |
|
|
|
|
|
|
|
|
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Depreciation and amortization |
|
|
10,755 |
|
|
|
10,336 |
|
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Stock-based compensation |
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|
1,104 |
|
|
|
1,060 |
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Amortization of deferred commissions |
|
|
3,150 |
|
|
|
2,957 |
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Deferred income taxes |
|
|
751 |
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|
|
771 |
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Provision for credit losses |
|
|
237 |
|
|
|
174 |
|
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Loss on equity method investments |
|
|
72 |
|
|
|
31 |
|
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Other |
|
|
(399 |
) |
|
|
(346 |
) |
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Changes in assets and liabilities: |
|
|
|
|
|
|
|
|
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Accounts and unbilled receivables |
|
|
(1,001 |
) |
|
|
(5,782 |
) |
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Prepaid and other assets |
|
|
(2,513 |
) |
|
|
(1,783 |
) |
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Accounts payable, accrued, and other liabilities |
|
|
(6,871 |
) |
|
|
(6,259 |
) |
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Deferred revenue |
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|
17,457 |
|
|
|
14,552 |
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Net cash provided by operating activities |
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|
27,074 |
|
|
|
20,938 |
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|
|
|
|
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Investing activities: |
|
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|
|
|
|
|
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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 |
) |
|
|
— |
|
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Purchases of property and equipment |
|
|
(1,055 |
) |
|
|
(742 |
) |
|
Payments associated with capitalized software development |
|
|
(7,790 |
) |
|
|
(7,019 |
) |
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Net cash used in investing activities |
|
|
(7,248 |
) |
|
|
(7,120 |
) |
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|
|
|
|
|
|
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Financing activities: |
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Taxes paid related to net settlement of equity awards |
|
|
(1,070 |
) |
|
|
(855 |
) |
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Payment of cash dividends |
|
|
(943 |
) |
|
|
(849 |
) |
|
Net cash used in financing activities |
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|
(2,013 |
) |
|
|
(1,704 |
) |
|
|
|
|
|
|
|
|
|
|
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Effect of exchange rate changes on cash and cash equivalents |
|
|
7 |
|
|
|
(40 |
) |
|
Net increase in cash and cash equivalents |
|
|
17,820 |
|
|
|
12,074 |
|
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Cash and cash equivalents at beginning of period |
|
|
59,469 |
|
|
|
40,333 |
|
|
Cash and cash equivalents at end of period |
|
$ |
77,289 |
|
|
$ |
52,407 |
|
|
Reconciliation of GAAP to Non-GAAP Financial Measures(1) |
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Operating Results Summary |
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(In thousands) |
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(Unaudited) |
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Three Months Ended |
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2025 |
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2024 |
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GAAP net income |
|
$ |
4,332 |
|
|
$ |
5,227 |
|
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Interest income |
|
|
(931 |
) |
|
|
(904 |
) |
|
Interest expense |
|
|
25 |
|
|
|
24 |
|
|
Income tax provision |
|
|
916 |
|
|
|
1,316 |
|
|
Stock-based compensation expense |
|
|
1,104 |
|
|
|
1,060 |
|
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Depreciation and amortization |
|
|
10,755 |
|
|
|
10,336 |
|
|
Adjusted EBITDA |
|
$ |
16,201 |
|
|
$ |
17,059 |
|
|
|
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(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. |
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Reconciliation of GAAP to Non-GAAP Financial Measures |
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Financial Outlook for 2025 |
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(In thousands) |
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(Unaudited) |
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|
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Low |
|
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High |
|
||
|
Net income |
|
$ |
18,600 |
|
|
$ |
21,000 |
|
|
Interest income |
|
|
(3,100 |
) |
|
|
(3,500 |
) |
|
Interest expense |
|
|
100 |
|
|
|
100 |
|
|
Income tax provision |
|
|
4,900 |
|
|
|
5,700 |
|
|
Stock-based compensation expense |
|
|
4,300 |
|
|
|
4,900 |
|
|
Depreciation and amortization |
|
|
43,700 |
|
|
|
44,300 |
|
|
Adjusted EBITDA |
|
$ |
68,500 |
|
|
$ |
72,500 |
|
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
View source version on businesswire.com: https://www.businesswire.com/news/home/20250505146854/en/
Chief Financial Officer
(615) 301-3182
ir@healthstream.com
Media:
Head, Investor Relations
(615) 301-3237
mollie.condra@healthstream.com
Source: