On July 22, 2024, HealthStream Inc (HSTM, Financial) released its 8-K filing for the second quarter ended June 30, 2024. HealthStream Inc provides workforce and provider solutions for healthcare organizations, with a focus on subscription-based products and software applications for credentialing and enrollment activities.
Quarterly Financial Performance
HealthStream Inc reported revenues of $71.6 million for Q2 2024, a 3.4% increase from $69.2 million in Q2 2023. This growth was primarily driven by a 3.8% increase in subscription revenues, which offset a 5.5% decline in professional services revenues. Despite a $1.0 million charge related to a customer bankruptcy, operating income rose by 10.1% to $4.4 million, compared to $4.0 million in the same period last year.
Net income for the quarter was $4.2 million, a slight increase from $4.1 million in Q2 2023. Earnings per share (EPS) came in at $0.14 per share (diluted), up from $0.13 per share (diluted) in the previous year, surpassing the analyst estimate of $0.12 per share. Adjusted EBITDA also saw a modest increase of 3.3%, reaching $15.8 million.
Year-to-Date Performance
For the first six months of 2024, HealthStream Inc reported revenues of $144.3 million, a 4.5% increase from $138.1 million in the same period of 2023. Operating income surged by 46.4% to $10.1 million, driven by higher revenues and reduced labor costs due to the absence of restructuring charges from the previous year. Net income for the first half of 2024 was $9.4 million, up from $6.8 million in the first half of 2023, with EPS at $0.31 per share (diluted), compared to $0.22 per share (diluted) in the prior year.
Balance Sheet and Cash Flow
As of June 30, 2024, HealthStream Inc had cash and cash equivalents and marketable securities totaling $83.0 million, with no outstanding indebtedness. Capital expenditures for the quarter were $6.9 million. The company declared a quarterly cash dividend of $0.028 per share, payable on August 16, 2024, to holders of record on August 5, 2024.
| Metric | Q2 2024 | Q2 2023 |
|---|---|---|
| Revenue | $71.6 million | $69.2 million |
| Operating Income | $4.4 million | $4.0 million |
| Net Income | $4.2 million | $4.1 million |
| EPS (Diluted) | $0.14 | $0.13 |
| Adjusted EBITDA | $15.8 million | $15.3 million |
Analysis and Outlook
HealthStream Inc's performance in Q2 2024 demonstrates resilience amidst challenges, including a significant customer bankruptcy. The company's ability to grow revenues and operating income, while maintaining a strong balance sheet with substantial cash reserves, positions it well for future growth. The increase in subscription revenues highlights the strength of its core business model.
“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.
Looking ahead, HealthStream Inc has updated its full-year 2024 guidance, projecting revenues between $292.0 million and $296.0 million, net income between $16.7 million and $18.6 million, and adjusted EBITDA between $64.5 million and $67.5 million. The company's focus on expanding its subscription services and maintaining operational efficiency will be crucial in achieving these targets.
For more detailed insights and to access the full earnings report, visit the 8-K filing.
Explore the complete 8-K earnings release (here) from HealthStream Inc for further details.
