Fri, May 9, 8:44 PM (34 days ago)
**HealthStream, Inc. (HSTM) Q1 2025 Financial Summary** **Financial Health and Performance:** - **Revenue:** $73.5 million, up 1% from Q1 2024. - **Operating Income:** $4.4 million, down 23.1% from Q1 2024. - **Net Income:** $4.3 million, down 17.1% from Q1 2024. - **EPS:** $0.14 (diluted), down from $0.17 in Q1 2024. - **Adjusted EBITDA:** $16.2 million, down 5.0% from Q1 2024. **Profit Margins:** - **Operating Margin:** Approximately 6.1% (down from 7.8% in Q1 2024). - **Net Margin:** Approximately 5.9% (down from 7.2% in Q1 2024). **Cash Flow:** - **Operating Activities:** $27.1 million, up from $20.9 million in Q1 2024. - **Investing Activities:** -$7.2 million, slightly improved from -$7.1 million in Q1 2024. - **Financing Activities:** -$2.0 million, slightly higher than -$1.7 million in Q1 2024. **Earnings Changes:** - **Revenue Growth:** Driven by a 1% increase in subscription services and a 6% increase in professional services. - **Cost Increases:** Higher labor costs, software expenses, and investments in platform and SaaS applications. **Quarterly Performance Discussion:** - **Revenue Growth:** Offset by attrition in legacy applications, reductions in perpetual license sales, and customer bankruptcies. - **Operating Income:** Decreased due to higher costs and investments. - **Net Income:** Affected by increased expenses and a lower effective tax rate (17% vs. 20% in Q1 2024). **Trends and Uncertainties:** - **Macroeconomic Challenges:** Inflation, interest rates, geopolitical tensions, and healthcare industry uncertainties. - **Customer Delays:** Some delays in purchasing and non-renewals of existing products and services. - **Share Repurchase Program:** Approved on May 8, 2025, allowing up to $25 million in repurchases. **Future Operations Impact:** - **Sublease Income:** Expected to record $2.3 million in 2025 and $3.2 million annually thereafter. - **Liquidity:** Strong liquidity position with $77.3 million in cash and cash equivalents and $36.0 million in marketable securities. - **Revolving Credit Facility:** $50.0 million available, with no outstanding borrowings as of Q1 2025. **Risk Factors:** - **Economic Uncertainty:** Potential reductions in government healthcare spending and reimbursements. - **Market Risks:** Interest rate, foreign currency, and investment risks. - **Operational Risks:** Dependence on key personnel, technology, and regulatory compliance.