HealthStream Inc (HSTM, Financial), a leading healthcare technology platform for workforce solutions, announced its third-quarter results for 2023 on October 23, 2023. The company reported a 5% increase in revenues, reaching $70.3 million compared to $67.3 million in the third quarter of 2022. Subscription revenues also increased by 5%, while professional services revenues declined by $0.3 million.
Financial Performance
The company's operating income for Q3 2023 was $4.9 million, up 104% from $2.4 million in Q3 2022. This improvement was primarily due to increased revenues, a reduction in labor costs, and an increase in capitalized labor associated with software development activities. However, these were partially offset by increases in amortization, bad debt, professional fees, software, and cloud hosting expenses.
Net income for Q3 2023 was $3.9 million, up 5% from $3.7 million in Q3 2022. Earnings per share (EPS) for Q3 2023 was $0.13 per share (diluted), up from $0.12 per share (diluted) in Q3 2022. Adjusted EBITDA for Q3 2023 was $16.2 million, up 28% from $12.7 million in Q3 2022.
Year-to-Date Performance
For the nine months ended September 30, 2023, revenues were $208.5 million, an increase of 5% over revenues of $198.3 million for the first nine months of 2022. Operating income for the first nine months of 2023 increased by 26% to $11.8 million, compared to $9.4 million for the first nine months of 2022. Net income for the first nine months of 2023 increased to $10.6 million, compared to $9.6 million for the first nine months of 2022.
Share Repurchase Program and Dividend
On September 13, 2023, the company announced a share repurchase program approved by the Company's Board of Directors under which the Company is authorized to repurchase up to $10.0 million of its outstanding shares of common stock. On October 23, 2023, the Board approved a quarterly cash dividend under the Company's dividend policy of $0.025 per share, payable on December 22, 2023 to holders of record on December 11, 2023.
Outlook for 2023
The company updated its guidance for 2023, projecting revenues between $277.5 million and $283.0 million, adjusted EBITDA between $59.0 million and $62.0 million, and capital expenditures between $27.0 million and $29.0 million.
CEO Robert A. Frist, Jr. commented on the results, stating, "HealthStream’s performance in the third quarter of 2023 was strong and on target with our expectations, which included both record quarterly revenues and record adjusted EBITDA."
