Yahoo Finance

• Full Year Revenue Growth: Up 4.5% year-over-year.

• Net Income Growth: Increased by 31.5% year-over-year.

• Operating Income Growth: Up 32.9% year-over-year.

• Adjusted EBITDA Growth: Increased by 9% year-over-year.

• Fourth Quarter Revenue: $74.2 million, up 5.2% from the previous year.

• Fourth Quarter Operating Income: $4.7 million, up 10.2% from the previous year.

• Fourth Quarter Net Income: $4.9 million, up 6.5% from the previous year.

• Earnings Per Share: $0.16, up from $0.15 per share in the previous year.

• Fourth Quarter Adjusted EBITDA: $16.2 million, up 1.3% from the previous year.

• Subscription Revenue: $71.2 million, accounting for 96% of total revenues, up 4.8% from the previous year.

• Professional Services Revenue: $3.1 million, up 15.7% from the previous year.

• Gross Margin: 66.2%, compared to 66% in the prior year quarter.

• Cash and Investment Balances: $97.2 million at the end of the quarter.

• Days Sales Outstanding: Improved to 35 days from 42 days in the previous year.

• Free Cash Flow: $29.5 million, down 17.9% from the previous year.

• Dividend Increase: Approved a dividend payment of $0.031 per share, a 10.7% increase over the previous quarter.

• 2025 Revenue Guidance: Expected to range between $302 million and $307 million.

• 2025 Net Income Guidance: Expected to range between $19.2 million and $21.4 million.

• 2025 Adjusted EBITDA Guidance: Expected to range between $70 million and $74 million.

• Warning! GuruFocus has detected 7 Warning Signs with HSTM.

Release Date: February 25, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• HealthStream Inc (NASDAQ:HSTM) reported strong financial performance for 2024, with full-year revenues up 4.5%, net income up 31.5%, and operating income up 32.9%.

• The company has a strong cash balance of $97.2 million and no long-term debt, positioning it well for future acquisitions and growth opportunities.

• The hStream platform has shown significant progress, with over 400 developers from 184 customer accounts accessing its APIs, indicating growing customer engagement.

• HealthStream's learning and credentialing applications received high rankings from G2, with the HealthStream Learning Center named the top software in healthcare.

• The company has a high percentage of recurring revenue, with 96% of revenues being subscription-based, providing stability and predictability.

Negative Points

• Legacy products such as ASOS, Echo, and MSOW experienced revenue declines, impacting overall growth.

• Bad debt charges increased significantly in 2024, primarily due to customer bankruptcies, totaling $2.6 million for the year.

• Free cash flows declined by 17.9% compared to the previous year, partly due to higher income tax payments.

• The transition from perpetual license sales to SaaS solutions presents a headwind, impacting revenue growth.

• The company faces challenges in achieving its medium-term revenue growth objectives of 7% to 10%, with current growth rates in the mid-single digits.