HealthStream announces first quarter 2024 results

HealthStream, Inc. announced results for the first quarter ended March 31, 2024.

First quarter 2024

• Revenues of $72.8 million in the first quarter of 2024, up 6% from $68.9 million in the first quarter of 2023
• Operating income of $5.7 million in the first quarter of 2024, up 97% from $2.9 million in the first quarter of 2023
• Net income of $5.2 million in the first quarter of 2024, up 99% from $2.6 million in the first quarter of 2023
• Earnings per share (EPS) of $0.17 per share (diluted) in the first quarter of 2024, up from $0.09 per share (diluted) in the first quarter of 2023
• Adjusted EBITDA of $17.1 million in the first quarter of 2024, up 24% from $13.7 million in the first quarter of 2023
• Board of Directors declared a quarterly cash dividend of $0.028 per share, payable on May 17, 2024 to holders of record on May 6, 2024

Financial results:
First quarter 2024 compared to first quarter 2023
Revenues for the first quarter of 2024 increased by $3.8 million, or six percent, to $72.8 million, compared to $68.9 million for the first quarter of 2023. Subscription revenues increased $4.2 million, or six percent, and professional services revenues declined by $0.4 million.

Operating income was $5.7 million for the first quarter of 2024, up 97 percent from $2.9 million in the first quarter of 2023. The improvement in operating income was primarily attributable to increased revenues, a reduction in labor costs (primarily resulting from $1.0 million of severance charges incurred during the first quarter of 2023 in connection with the Company’s restructuring under a single platform strategy), a decrease in professional fees, and an increase in capitalized labor associated with software development activities, which were partially offset by increases in software, cloud hosting expenses, royalties, amortization, and general marketing expenses.

Net income was $5.2 million in the first quarter of 2024, up 99 percent from $2.6 million in the first quarter of 2023, and EPS was $0.17 per share (diluted) in the first quarter of 2024, up from $0.09 per share (diluted) in the first quarter of 2023. Net income and EPS for the first quarter of 2023 were negatively impacted by severance charges recognized in the amounts of $0.8 million and $0.03 per share (diluted), respectively, in connection with the 2023 restructuring discussed above.

Adjusted EBITDA was $17.1 million for the first quarter of 2024, up 24 percent from $13.7 million in the first quarter of 2023.

At March 31, 2024, the Company had cash and cash equivalents and marketable securities of $83.7 million. The Company does not have any outstanding indebtedness for borrowed money. Capital expenditures incurred during the first quarter of 2024 were $6.9 million.

Other business updates
On September 13, 2023, the Company announced a share repurchase program under which the Company was authorized to repurchase up to $10.0 million of its outstanding shares of common stock. Pursuant to this authorization, the Company repurchased shares valued at an aggregate of $8.9 million, with no shares repurchased during the three months ended March 31, 2024. The program expired on March 31, 2024.

On April 22, 2024, the Board approved a quarterly cash dividend under the Company’s dividend policy of $0.028 per share, payable on May 17, 2024 to holders of record on May 6, 2024.

Financial outlook for 2024
The Company reaffirms its guidance for 2024 for the measures set forth below as previously announced on February 19, 2024. 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 2024, see the table included on page nine of this release.

The Company’s guidance for 2024 as set forth above reflects the Company’s assumptions regarding, among other things, expectations for new sales

and renewals, and assumes that general economic conditions, including inflationary pressures, do not deteriorate. This consolidated guidance does not include the impact of any acquisitions that we may complete during 2024, gains or losses from changes in the fair value of minority investments, or impairment of long-lived assets.

Commenting on first quarter 2024 results, Robert A. Frist, Jr., Chief Executive Officer, HealthStream, said, “We were pleased to achieve record quarterly revenues, record adjusted EBITDA, and a strong quarter overall, giving us confidence to reiterate our previously announced financial guidance. We believe our workforce solutions are well-aligned with the current industry focus to engage, retain, and develop the healthcare workforce.”
MB Bureau