HealthStream (HSTM) investor relations material

Executive summary

• Achieved record quarterly revenue of $76.5 million in Q3 2025, a 4.6% increase year-over-year, with operating income up 16.5% to $7.6 million and net income up 6.3% to $6.1 million.

• Adjusted EBITDA reached $19.1 million, up 7.9% year-over-year, with a margin of 25%.

• Diluted EPS increased to $0.20 from $0.19 year-over-year.

• No interest-bearing debt and a strong cash balance of $92.6 million at quarter-end.

• Quarterly dividend of $0.031 per share declared and paid throughout 2025.

Financial highlights

• Revenues increased by $3.4 million to $76.5 million, driven by a $4 million (5.7%) rise in subscription products, while professional services declined by $0.6 million (18.6%).

• Subscription services accounted for 96–97% of Q3 revenues, providing predictable recurring revenue.

• Gross margin for Q3 2025 was approximately 65.3%, down from 66.5% last year, impacted by higher cloud hosting and software licensing costs.

• Year-to-date revenue grew 3.2% to $224.4 million; net income for the first nine months was $15.8 million.

• Cash flow from operations for the nine months was $50.1 million, up from $46.5 million year-over-year.

Outlook and guidance

• Full-year 2025 revenue guidance: $299.5–$301.5 million; net income: $20.3–$21.5 million; Adjusted EBITDA: $69.5–$71.5 million; capital expenditures: $33–$34 million.

• Guidance includes $900,000 revenue from the Virsys12 acquisition and a $3 million expected decline in legacy products for Q4.

• Approximately $621 million in remaining performance obligations are expected to be recognized as revenue, with 39% within 12 months.

• Guidance excludes impacts from future acquisitions, investment gains/losses, or asset impairments.

• Guidance midpoints maintained, with narrowed ranges for clarity.