HealthStream, Inc. (the “Company”) (Nasdaq: HSTM), a leading
healthcare technology platform for workforce solutions, announced
today results for the second quarter ended June 30, 2024.
Second Quarter 2024
- Revenues of $71.6 million in the second quarter of 2024, up
3.4% from $69.2 million in the second quarter of 2023
- Operating income of $4.4 million in the second quarter of 2024,
up 10.1% from $4.0 million in the second quarter of 2023
- Net income of $4.2 million in the second quarter of 2024, up
0.8% from $4.1 million in the second quarter of 2023
- Earnings per share (EPS) of $0.14 per share (diluted) in the
second quarter of 2024, up from $0.13 per share (diluted) in the
second quarter of 2023
- Adjusted EBITDA1 of $15.8 million in the second quarter of
2024, up 3.3% from $15.3 million in the second quarter of 2023
- A charge associated with a customer bankruptcy negatively
impacted operating income by $1.0 million, net income by $0.8
million, EPS by $0.02 (diluted), and adjusted EBITDA by $1.0
million in the second quarter of 2024
- Board of Directors declared a quarterly cash dividend of $0.028
per share, payable on August 16, 2024 to holders of record on
August 5, 2024
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: Second Quarter 2024 Compared to
Second Quarter 2023
Revenues for the second quarter of 2024 increased by $2.4
million, or 3.4%, to $71.6 million, compared to $69.2 million for
the second quarter of 2023. Subscription revenues increased $2.5
million, or 3.8%, and professional services revenues declined by
$0.1 million, or 5.5%, compared to the second quarter of 2023.
Operating income was $4.4 million for the second quarter of
2024, up 10.1% from $4.0 million in the second quarter of 2023. The
improvement in operating income was primarily attributable to
increased revenues and an increase in capitalized labor associated
with software development activities, which were partially offset
by the $1.0 million charge associated with the bankruptcy of a
single customer as referenced above as well as increases in
software, labor costs, and amortization expenses.
Net income was $4.2 million in the second quarter of 2024, up
0.8% from $4.1 million in the second quarter of 2023, and EPS was
$0.14 per share (diluted) in the second quarter of 2024, up from
$0.13 per share (diluted) in the second quarter of 2023.
Adjusted EBITDA was $15.8 million for the second quarter of
2024, up 3.3% from $15.3 million in the second quarter of 2023.
A charge associated with the customer bankruptcy referenced
above negatively impacted operating income by $1.0 million, net
income by $0.8 million, EPS by $0.02 (diluted), and adjusted EBITDA
by $1.0 million in the second quarter of 2024.
At June 30, 2024, the Company had cash and cash equivalents and
marketable securities of $83.0 million. The Company does not have
any outstanding indebtedness for borrowed money. Capital
expenditures incurred during the second quarter of 2024 were $6.9
million.
Year-to-Date 2024 Compared to Year-to-Date 2023
For the six months ended June 30, 2024, revenues were $144.3
million, an increase of 4.5% over revenues of $138.1 million for
the first six months of 2023. Operating income for the first six
months of 2024 increased by 46.4% to $10.1 million, compared to
$6.9 million for the first six months of 2023. The increase in
operating income was primarily attributable to higher revenues, a
decrease in labor costs (primarily resulting from the absence of
restructuring charges incurred during the six months ended June 30,
2024 in connection with the Company's 2023 restructuring under a
single platform strategy), and an increase in capitalized labor
associated with software development activities. Operating income
was also impacted by higher expenses, including software, bad debt
related to the customer bankruptcy discussed above, amortization,
cloud hosting, general marketing, and travel expenses. Net income
for the first six months of 2024 increased to $9.4 million,
compared to $6.8 million for the first six months of 2023. Earnings
per share were $0.31 per share (diluted) for the first six months
of 2024, compared to $0.22 per share (diluted) for the first six
months of 2023. Adjusted EBITDA increased by 13.2% to $32.9 million
for the first six months of 2024, compared to $29.1 million for the
first six months of 2023.
Other Business Updates
On July 22, 2024, the Board approved a quarterly cash dividend
under the Company's dividend policy of $0.028 per share, payable on
August 16, 2024 to holders of record on August 5, 2024.
Financial Outlook for 2024
The Company is updating its guidance for 2024 for certain of the
measures set forth below. In addition, the Company is including
projected net income for 2024 in its guidance as 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 2024, see the table
included on page nine of this release.
Full-Year 2024
Guidance
Low
High
Revenue
$
292.0
-
$
296.0
million
Net Income
$
16.7
-
$
18.6
million
Adjusted EBITDA1
$
64.5
-
$
67.5
million
Capital Expenditures
$
28.0
-
$
30.0
million
1 Adjusted EBITDA is a non-GAAP financial
measure. A reconciliation of projected adjusted EBITDA to projected
net income (the most comparable GAAP measure) is included later in
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.
“Second quarter 2024 revenues, operating income, and adjusted
EBITDA all showed year-over-year growth, which was achieved amidst
a couple of unique, one-time customer events presenting headwinds
in the quarter,” said Robert A. Frist, Jr., Chief Executive
Officer, HealthStream. “With strong sales at the end of the second
quarter and a solid sales pipeline, our confidence is reinforced in
finishing the year with sequential growth and within our guidance
range.”
A conference call with Robert A. Frist, Jr., Chief Executive
Officer, Scott A. Roberts, Chief Financial Officer and Senior Vice
President, and Mollie Condra, Vice President of Investor Relations
and Communications, will be held on Tuesday, July 23, 2024, at 9:00
a.m. (ET). Participants may access the conference call live via
webcast using this link:
https://edge.media-server.com/mmc/p/nvbfharo. To participate via
telephone, please register in advance using this link
https://register.vevent.com/register/BI26a9c0161c8a4eb78840c47da97b3936.
A replay of the conference call and webcast will be archived on the
Company’s website in the Investor Relations section under “Events
& Presentations.”
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. In addition, as discussed below, for periods ended
on or prior to December 31, 2023, adjusted EBITDA excludes the
impact of the deferred revenue write-downs associated with fair
value accounting for acquired businesses. 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.
As previously disclosed, prior to the Company early adopting ASU
2021-08 effective January 1, 2022, following the completion of any
acquisition by the Company, the Company was required to record the
acquired deferred revenue at fair value as defined in GAAP, which
typically resulted in a write-down of the acquired deferred
revenue. In connection therewith, management determined that
including an adjustment in the definition of adjusted EBITDA for
the impact of the deferred revenue write-downs associated with fair
value accounting for businesses acquired prior to the January 1,
2022 effective date of the Company's adoption of ASU 2021-08 (the
“Pre-2022 Acquisitions”) provided useful information to investors
because the deferred revenue write-down recognized in periods after
any such Pre-2022 Acquisitions could, given the nature of this
non-cash accounting impact, cause our GAAP financial results during
such periods to not fully reflect our underlying operating
performance. Following the adoption of ASU 2021-08, contracts
acquired in an acquisition completed on or after January 1, 2022
have been measured as if the Company had originated the contract
(rather than the contract being measured at fair value) such that,
for such acquisitions, the Company no longer records deferred
revenue write-downs associated with acquired businesses. With
respect to periods ended on or prior to December 31, 2023, the
Company has included an adjustment in the calculation of adjusted
EBITDA for the impact of deferred revenue write-downs associated
with the Pre-2022 Acquisitions consistent with this prior
accounting standard, given the ongoing impact of such deferred
revenue on our financial results under GAAP over this time period.
With respect to periods beginning on and after January 1, 2024, the
Company no longer recognizes any deferred revenue write-downs
associated with the Pre-2022 Acquisitions under GAAP, and
accordingly such deferred revenue write-downs are not an adjustment
in connection with the calculation of adjusted EBITDA for periods
on and after January 1, 2024.
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 HealthStream
HealthStream (Nasdaq: HSTM) is the healthcare industry’s largest
ecosystem of platform-delivered workforce solutions that empowers
healthcare professionals to do what they do best: deliver
excellence in patient care. For more information about
HealthStream, visit www.healthstream.com or call 800-521-0574.
HEALTHSTREAM, INC.
Condensed Consolidated
Statements of Income
(In thousands, except per
share data)
(Unaudited)
Three Months Ended
Six Months Ended
June 30, 2024
June 30, 2023
June 30, 2024
June 30, 2023
Revenues, net
$
71,556
$
69,198
$
144,316
$
138,144
Operating costs and expenses:
Cost of revenues (excluding depreciation
and amortization)
23,738
23,567
48,355
47,424
Product development
12,076
11,031
24,107
22,711
Sales and marketing
11,405
11,307
23,179
23,035
Other general and administrative
expenses
9,556
9,063
17,868
17,927
Depreciation and amortization
10,370
10,222
20,706
20,148
Total operating costs and expenses
67,145
65,190
134,215
131,245
Operating income
4,411
4,008
10,101
6,899
Other income, net
889
492
1,741
742
Income before income tax provision
5,300
4,500
11,842
7,641
Income tax provision
1,132
367
2,448
885
Net income
$
4,168
$
4,133
$
9,394
$
6,756
Net income per share:
Basic
$
0.14
$
0.13
$
0.31
$
0.22
Diluted
$
0.14
$
0.13
$
0.31
$
0.22
Weighted average shares of common stock
outstanding:
Basic
30,401
30,684
30,357
30,638
Diluted
30,526
30,775
30,472
30,717
Dividends declared per share
$
0.028
$
0.025
$
0.056
$
0.050
HEALTHSTREAM, INC.
Condensed Consolidated Balance
Sheets
(In thousands)
(Unaudited)
June 30,
December 31,
2024
2023
ASSETS
Current assets:
Cash and cash equivalents
$
46,131
$
40,333
Marketable securities
36,869
30,800
Accounts and unbilled receivables, net
36,195
38,446
Prepaid and other current assets
19,917
20,631
Total current assets
139,112
130,210
Capitalized software development, net
41,540
40,643
Property and equipment, net
11,880
13,005
Operating lease right of use assets,
net
18,842
20,114
Goodwill and intangible assets, net
252,140
259,410
Deferred commissions
31,377
31,700
Other assets
4,664
4,860
Total assets
$
499,555
$
499,942
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable, accrued, and other
liabilities
$
24,996
$
34,738
Deferred revenue
86,887
83,623
Total current liabilities
111,883
118,361
Deferred tax liabilities
15,568
16,132
Deferred revenue, noncurrent
1,891
2,169
Operating lease liability, noncurrent
18,780
20,247
Other long-term liabilities
2,219
2,281
Total liabilities
150,341
159,190
Shareholders’ equity:
Common stock
250,368
249,075
Accumulated other comprehensive loss
(1,217
)
(691
)
Retained earnings
100,063
92,368
Total shareholders’ equity
349,214
340,752
Total liabilities and shareholders'
equity
$
499,555
$
499,942
HEALTHSTREAM, INC.
Condensed Consolidated
Statements of Cash Flows
(In thousands)
(Unaudited)
Six Months Ended
June 30,
June 30,
2024
2023
Operating activities:
Net income
$
9,394
$
6,756
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization
20,706
20,148
Stock-based compensation
2,154
2,038
Amortization of deferred commissions
5,956
5,464
Deferred income taxes
(542
)
(490
)
Provision for credit losses
1,802
371
Loss on equity method investments
82
241
Other
(746
)
(342
)
Changes in assets and liabilities:
Accounts and unbilled receivables
449
1,460
Prepaid and other assets
(5,569
)
(8,733
)
Accounts payable, accrued, and other
liabilities
(9,282
)
(3,042
)
Deferred revenue
2,985
1,618
Net cash provided by operating
activities
27,389
25,489
Investing activities:
Business combinations, net of cash
acquired
—
(6,621
)
Changes in marketable securities
(5,330
)
(21,983
)
Proceeds from sale of non-marketable
equity investments
765
—
Purchases of property and equipment
(914
)
(1,382
)
Payments associated with capitalized
software development
(13,552
)
(13,309
)
Net cash used in investing activities
(19,031
)
(43,295
)
Financing activities:
Taxes paid related to net settlement of
equity awards
(861
)
(797
)
Payment of cash dividends
(1,700
)
(1,534
)
Net cash used in financing activities
(2,561
)
(2,331
)
Effect of exchange rate changes on cash
and cash equivalents
1
(81
)
Net increase (decrease) in cash and cash
equivalents
5,798
(20,218
)
Cash and cash equivalents at beginning of
period
40,333
46,023
Cash and cash equivalents at end of
period
$
46,131
$
25,805
Reconciliation of GAAP to
Non-GAAP Financial Measures(1)
Operating Results
Summary
(In thousands)
(Unaudited)
Three Months Ended June
30,
Six Months Ended June
30,
2024
2023
2024
2023
GAAP net income
$
4,168
$
4,133
$
9,394
$
6,756
Deferred revenue write-down
—
48
—
98
Interest income
(944
)
(550
)
(1,848
)
(913
)
Interest expense
25
33
49
65
Income tax provision
1,132
367
2,448
885
Stock-based compensation expense
1,094
1,093
2,154
2,038
Depreciation and amortization
10,370
10,222
20,706
20,148
Adjusted EBITDA
$
15,845
$
15,346
$
32,903
$
29,077
(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.
Reconciliation of GAAP to
Non-GAAP Financial Measures
Financial Outlook for
2024
(In thousands)
(Unaudited)
Low
High
Net income
$
16,700
$
18,600
Interest income
(3,200
)
(3,300
)
Interest expense
100
100
Income tax provision
4,700
5,300
Stock-based compensation expense
4,500
4,700
Depreciation and amortization
41,700
42,100
Adjusted EBITDA
$
64,500
$
67,500
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 2024 and our quarterly dividend policy, that
involve risks and uncertainties regarding HealthStream. These
statements are based upon management’s beliefs, as well as
assumptions made by and data currently available to management.
This information has been, or in the future may be, included in
reliance on the “safe harbor” provisions of the Private Securities
Litigation Reform Act of 1995. The Company cautions that
forward-looking statements involve known and unknown risks,
uncertainties, and other factors that may cause the actual results,
performance, or achievements to be materially different from future
results, performance, or achievements expressed or implied by the
forward-looking statements, including as a result of negative
economic conditions, inflationary conditions, geopolitical
instability (including as the result of the Russia/Ukraine
conflict, the conflict in the Middle East, and the potential
expansion of such conflicts), legal requirements and contractual
restrictions which may affect continuation of our quarterly cash
dividend policy and the declaration and/or payment of dividends
thereunder, which may be modified, suspended, or canceled in any
manner and at any time that our Board may deem necessary or
appropriate, as well as risks referenced in the Company’s Annual
Report on Form 10-K for the year ended December 31, 2023, filed on
February 26, 2024, and in the Company’s other filings with the
Securities and Exchange Commission from time to time. Consequently,
such forward-looking information should not be regarded as a
representation or warranty or statement by the Company that such
projections will be realized. Many of the factors that will
determine the Company’s future results are beyond the ability of
the Company to control or predict. Readers should not place undue
reliance on forward-looking statements, which reflect management’s
views only as of the date hereof. The Company undertakes no
obligation to update or revise any such forward-looking
statements.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240722762541/en/
Scott A. Roberts Chief Financial Officer (615) 301-3182
ir@healthstream.com Media: Mollie
Condra, Ph.D. Vice President, Investor Relations &
Communications (615) 301-3237 mollie.condra@healthstream.com
HealthStream (NASDAQ:HSTM)
過去 株価チャート
から 6 2024 まで 7 2024
HealthStream (NASDAQ:HSTM)
過去 株価チャート
から 7 2023 まで 7 2024
