HealthStream (HSTM) investor relations material

Executive summary

• Achieved record Q1 2026 revenues of $81.2 million, up 10.5% year-over-year, with adjusted EBITDA reaching $20.1 million, up 24.1% year-over-year, and net income of $5.9 million, a 36.4% increase from Q1 2025.

• Operating income grew 71.6% to $7.5 million year-over-year.

• Growth was driven by both organic expansion and contributions from recent acquisitions, Virsys12 and MissionCare Collective.

• 97% of revenues are subscription-based, providing predictable recurring revenue.

• Michael M. Collier promoted to COO & EVP, leading enterprise operations and AI transformation.

Financial highlights

• Subscription revenues increased by $7.6 million (10.7%) to $78.4 million; professional services revenues rose by $0.1 million (4.3%) to $2.8 million.

• Revenues increased by $7.7 million to $81.2 million compared to $73.5 million in Q1 2025.

• Gross margin improved to 65.8% from 65.3% year-over-year.

• Adjusted EBITDA margin was 24.8%, up from 22% last year.

• Cash, cash equivalents, and marketable securities totaled $66.5 million as of March 31, 2026.

Outlook and guidance

• Reaffirmed 2026 full-year guidance: revenue $323–$330 million, net income $20.4–$22.8 million, adjusted EBITDA $73–$77 million.

• Q2 revenue growth expected at 9.5%, adjusted EBITDA margin at 23%.

• Capital expenditures for 2026 expected to be $31.0–$34.0 million.

• Guidance excludes impacts from future acquisitions, dispositions, or asset impairments.

• Sufficient liquidity is anticipated to fund operations, dividends, share repurchases, and capital expenditures for at least the next 12 months.