HSTM - Earnings call transcript Q1 2018

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Operator

Good day, ladies and gentlemen, and welcome to the HealthStream first quarter 2018 earnings conference call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will follow at that time. [Operator Instructions] As a reminder, this call will be recorded. I would now like to introduce your host for today's conference, Mollie Condra, Vice President, Investor Relations and Communications.

begin. may You

Mollie Condra

Jr., good HealthStream projected I that factors cause to concerning and future contain XX-K with filings on you joining you of Vice conference A. contained for conference risk and forward-looking this of and and Thank to differ Hayden, could that also including performance events SEC, Gerry our and morning. that the the Information statements that like first forward-looking involve today Senior the to Frist are results in Robert are discuss with and Also differ may and quarter materially uncertainties future the XX-Q. us regarding other statements. Chairman call the risks and Form HealthStream, CFO. these you President me Thank CEO materially in from would company's XXXX call the results remind results. cause statements actual those from those the forward-looking to

with call Frist. over now to turn that the Bobby will CEO, opening, So, I

Robert Frist Jr.

to Thank call. first morning, Good everyone. our you, Welcome quarter XXXX Mollie. earnings

Let's highlights. jump into some

of to Our full expectations and under XXX. to XX% track performance and to with year XXX line XX% our % first us and XX% on ASC revenue XXXX was quarter sets operating X% of XX% generally in X% growth income over to deliver growth under ASC

of a about you'll accounting that our So, have and going discussions lot growth trajectory. interesting off today just note we earnings right dimension to as talk we're

a Gerry. I'm detail to for leave so, that of going And lot

us business in million gave $XX.X book We from of our to divestiture our in the $XX.X million. Experience February on Patient Certainly, our was to gain highlights. successful Patient declared So, per highlighting Experience on for of first continuing worth the of the this products. business a value end we'll of which opportunity shareholders proceeds end record the transaction do business shareholders we're The couple dollar the to and Press towards right development on a some quarter of X share was received sale of – as we after Associates recorded successful our Ganey to one XX a paid the directors return higher development, $X dividend, X board to XXXX common at cash of our of special the transition of XXXX. workforce margin of quarter In March April or cash.

for For and providing we signs customer focused of curriculum example, obstetrics the and is Reducing to skills announced in OB the knowledge and obstetrics is facilitates risk because it's overall is co-developed risk this infant calls extremely that margins stake important identify combines platform staff ago, malpractice curriculum boosting with to of highest our And in early has solution which our medical solution, by risk an areas with by that ownership towards to with our of distress. risk we reducing this our curriculum, claims. that have maternal warning several an it one a on content, of in some now effect transition investor which solution higher the area. some we we're that margin content the – and going a

and resuscitation for great a customers. to this selection our this our case, benefit early new marketplace doing believe product work brings example choice development to which we're resuscitation competencies. the XXXX. of often to that creating the technologies, new there's Additionally, developing committed clinical core and A is methods, clinical set, of in competencies. We set launch suite new In focused we're in set of on product is partnerships alternative

the of and stop million and RQI we trailing be RQI and XXXX. products expect our generated June XX customers portfolio. expect months revenue products XXXX. of their growth of we $XX.X HeartCode rights RQI and and our month of HealthStream and December of approximately Laerdal will this for revenue. which XXXX expire highest December to selling course the of end announced duration and decline the we end HeartCode to current them the run lowest from HeartCode At those will to to our XXXX, selling year, with that the can will out on growing over the RQI the XX margin of XX% service our at agreements in each Medical over were retains year. In to through of reminder, eight our company's contracts, a the As for some years, They HeartCode for products were provide products continue and prior extended uninterrupted and XX next in XXXX.

factored into have single-digit these sales products revenue XXXX. in expected our in growth resulting on guidance We lower

As launch, XXXX. we've partnership January again products. of for suite resuscitation you, higher slated product years with two signed span already a of previously to minimum a develop shared seven of we've lower-priced quality, beyond agreements new agreements These

product a that years. their our new report are coming to product new more product the higher to deep margins. as double taking pleased carry exciting of launch are we actions development tracking will into existing margin in XXXX for will early for product create customers Therefore, the resuscitation new result have our we choice are therefore, HealthStream are, in suite This approximately in and suite cycles We this partners to planned.

three this advanced greatly Solutions implementation levels one has last integrating reflected these will as of new workable, Of capital segment, unit expenditure a Gerry investments business as the that throughout several provide the products Provider will at In is briefly. which prepare quarters. in believe guidance increase we are backlog to we segment the go to market, now level, in sustainable capital our our XXXX, entities course, our

the new in base At same businesses. In also strong leadership company, one this which Verity, named platform team, of the that have of We Verity. a the launched we Provider rebranding for new business, announced introduction time, our we our and launch complete is Solutions and all business unified January, Echo is the marketplace. name combines HealthStream Morrisey SaaS

new start We to new year. middle Verity expect platform on the the in bringing of this customers

new and platform customers to Morrisey to Over the existing months, migrate next the Verity XX we platform. HealthLine expect

and we extensive unification providers three seeing cross-selling Fortunately, our happen expertise of business the in time. over that and originated businesses we migrations increased With solutions in levels products of making each are this our among have platform greater segment, such integration segment. of from experience

up HealthLine providing needed Morrisey, our trajectory proving providing Sy.Med Our going Monitor privileging of cross-selling our look. OneForm some few to all the for and from and over and customers, growth revenue Provider from accounting be Hayden the are Echo among a popular Echo more the example, the solution, then for short-term a I'll Echo into comments. and for revenue margin to forecasted. and InForm that we treatment and business and turn few We're from it I'll dive Solutions Gerry Echo with wrap for minutes have Verify our to

Gerard Hayden

And Bobby. everyone. good you, Thank morning,

Before reviewing note I'd our first continuing results operations like quarter all that, only. to one, results, are from

and with whereas XXX. accordance divestiture. XXXX with Standards on results XXXX customers, XXXX segment results with contracts accordance our operations And, ASC the Experience presented of Classification example, XXX, known sale exclude to presented Patient statements business recently gain two, the from revenue in and prior in the ASC as for also Accounting XXX, divested XXXX are new results the For are of of such results

income million $X.X of operations XXXX million to continuing quarter Consolidated XXXX $X.X X% or XXXX share, income application impact the of from revenues of that's were first million in the an from quarter from application first in quarter quarter $X the up Net of quarter once there's $XX.X the application up the XXXX, share million first million first diluted from per the million positive ASC million XXX. quarter from in compared of XXXX XXXX $X.X of of were from XXXX. quarter of to in per in And $XX.X the positive of following Operating impact highlights. continuing XXXX, $X.X quarter first continuing XXXX XXX. XXXX. again $X.XX from in first EBITDA operations again, $X.XX ASC operations in operations first with the in $X.X of share million. the $X.X quarter a of continuing in first impact XXX. up the of ASC positive of XXXX in the diluted and Some EPS, of quarter the from $X.X once that's of first first up million from the with in million Earnings the approximate Adjusted of and of first quarter EPS per of

the probably tell from warrant developments reporting there you explanation. in first quarter can my financial are two As that opening,

XX, The the which XXXX. Patient on divestiture occurred first February Experience is

segment. Experience which operations, income XXXX. book Our gain The loss results after adopting $XX.X shows operations of X, of on after-tax operations single February item amount discontinued of January from income ASC the statement of results for The impact Patient for Patient XXXX or a captures capture the at XXXX million line divestiture. the XXX Experience Experience and closing from Patient the recognized

than our and from commission large implementation of XXX reporting under reporting are costs two would number identical the ASC that the the difference ASC and significant expensed in and virtually with XXX recognized under XXXX XXX reporting. XXXX accordance ASC into The expense have payments sales by GAAP lower XXX. live second financial recognition commission affected XXX have was is the quarter development our revenue same capitalized There transactions being the XXX. In areas would first ASC of in same commissions – as ASC method commissions first reported XXX. ASC recognized between commissions amortized capitalized accounting, commission during of now The of under the XXXX, XXX historical first ASC are and been A in period when expense went ASC XXX in more was approach. is quarter been XXXX, between The resulting ASC revenue quarter XXX GAAP accounting. amortized of what the

on Associates certain products first compared of to $X.X the overcoming increased from call in of statement readiness Provider Now, Revenues $XXX,XXX with from Solutions the the $X.X that segment the income XXXX. The increase. highlights areas $XXX,XXX Solutions segment our quarter review XXXX, Solutions of In approximately of approximately when Revenues ICD Morrisey format usual in touch the quarter revenues from first our each let's of XXXX. or to from first Workforce represents acquisition Provider return increased million XX our decline segment. we $XXX,XXX by first increased business quarter of revenues other million quarter XX%. a our XXXX, by from investor of

Now, let's margins. look gross at

this point the XXXX, results the XX.X% of included basis was and Patient margin XXX full-year gross represents previously Our Experience segment. reported which a quarter improvement over

and investments first for expenses expenses. XXXX X.X% version development ASC Now, are increased expenses quarter this quarter combination and operating XXX to of year's capitalized of The Operating XXXX software XXXX quarter first over the up last the for compared expense quarter. product operating some were when the reported expenses between X.X% discussion.

Software development development remains a our priority capacity. and maintained have we

to amortization We reached of equilibrium software equal and have, Sales however, capitalization. where levels a of development levels the marketing. point are

As year. with the we impact the XXX sales marketing mentioned are on standard earlier, impact and comparisons expenses where the its ASC new we and see of prior

acquired This Now, last would a ASC and situation of and development also software amortization assets on first acquisition attributable quarter by Associates invest quarter. the commissions under recent had in Under similar increased Morrisey first in specifically, the continue product XXXX, amortization XXXX's under Depreciation we last to XXXX. levels the expensed development. and G&A increases over grew costs. to approximately about of the full year's facilities fashion several to increased $XXX,XXX of commissions income. reflects first capitalization and the important this in first expense by in been XXXX. of expenses first have which greater of quarter years, amortization and G&A revenues, to quarter that which and software intangible reflects of lower XXX expensed the been still depreciation the expenses XXX sales the between million first increased year the amortization a and decreased XX.X% quarters Operating as expenses protocols, X% defers quarter. X.X% increase in marketing to is creates of XXXX in quarters of of XXXX commissions the It's than sales in quarter note from over of X.X% first is were rate expenses marketing Compared were and by both or inclusion over ASC year.. XXXX while $X.X and capitalized This XXXX.

growth, leverage this an operating quarter on income been expense mentioned income in expense ago, accounting again, change of I of The first in XXXX. ASC of XXX. reduction new approximate $X.X XXX. a under first As what XXXX ASC to versus product under ASC XXX commissions reflects ASC increase revenue development $X.X commissions and XXX $X.X was commissions under million minute represented the in our the quarter the compared million million have Once capitalization operating under revenue would in standard the

In quarter's decline the first over the overcame from margin loss XX this $XXX,XXX quarter. addition, revenues results the in approximate last ICD year's

Now, let's at the balance look sheet.

Our strong. the cash balance and sheet position remains overall

at $X December cash $XX increase $XX Experience million was paid since does on reflect XXXX. flow, this the balance XX yet but million, of cash million XXXX. the share net not which a million cash $XX.X March dividend from Our April course, The approximately cash was year, increase, February Patient XX, of reflects proceeds divestiture in X, per $XXX the

to million capital available us. likely support growth appropriate. to opportunities full be our and capital have our line organic structure is is of position and other believe maximization and outstanding We optimization credit shareholder capacity and strategies value overall inorganic support may We as debt our no $XX

The effective was XXXX's first reflects themes. two income quarter tax XX% and rate

when rate corporations. for First, are is taxed this our the quarter results XX% at operating lower a federal first

exercises which option generated stock quarter's effective tax income during the also first excess reduced rate. tax Second, the benefits, quarter

impact full-year tax year income first updated guidance XXXX quarter's Our reflects the the on full rates. effective

release Yesterday's some earnings guidance. reiterated guidance. our Finally,

ASC different to have expense XXXX in In the forward. guidance provided produces ASC XXX. compared XXX ASC under income comparability under XXX capitalization of better allow we operating for when Most addition, because a notably, results range to going commissions

the explanations the is we've ranges and guidance all includes both information ASC provided, and to subject XXX qualifications just ASC and updated reason, that our XXX For for where relevant.

tax The XXXX expenditures scenarios. XXXX ASC that the under XXXX. income believe and XXX. For the to for grow Provider we annual to X% operating We our when under as expense same and anticipate We increase increase and XX% of And our current between to under XX% consolidated primary to that guidance will the XX% that be an of XX% XXXX XXXX. XXXX. for This income XX% operating X% ASC income between for segment XX% as to ASC we anticipate period revenue our XXXX. growth these to We increased both capitalization to XXX, the in anticipate versus approximately ranges million to impact we XXX, XXX X% ranges Solution XX%. be deferring expect for three XXXX, XX% tax to effective of commissions commissions are will had XXX compared during capital reason $XX of revenues the to ASC to in that revenue X% range segment and that applicable the effective quarters Workforce rate anticipate XX% compared to Solutions compared anticipate ASC for we extended XX% rate range pertains XXX. and between to different will period represents which ASC Under remaining

quarter As lower overall due does from finally, the Bobby. this of exercises a of but XXXX acquisitions effective benefits also for corporate Thanks call XX% of impact I'll the rate XXXX. of quarter for may to option include we any your remainder guidance excess the that to first time back we complete turn and And XXXX. the not just experienced tax the mentioned, income the tax during rate, stock first

Robert Frist Jr.

quarter. speed the highlights which on. Thank to a Gerry. non-acute segment, you, of in up bring Within like first channel, A Solutions sales call kind strong had I'd everybody to few more Workforce sales our to our

leadership, through a non-acute non-acute our with by of company that who and channel. his growing HealthStream team add subscribers is number continues to the Our platform a team, veteran sales rejoined led recently

space. During over we sales saw $X the notable of million non-acute in the quarter,

So, progress congratulations non-acute and sales to the the that team in segment.

has Our clinical I platform that we perform the and where our which have solutions approach well. OB investment earlier blended continued the mentioned and to into data. higher-margin risk products, content the

our its additional is demonstrated the has XXX,XXX we highlighting integrated nursing professional application, to And solution Another software to of a validation content skills. as checklist uniquely progress standalone application. for value with the benefits in with checklist subscribers management maybe it worth the application. Currently, clinical management when healthcare clinical have addition

back that announced In to and see and XXX,XXX clinical the years of pathway growing So, that we few launch have continued of development great libraries we subscribers January, our a assets the different new content residency we checklist workforce. nurse now it it's training now and how program. and the of a many management relevant because tool the capabilities on announced of And combines all available. utilizes we it and has

nurses, nurse nurses, It's these to practice recently rates. closes new the that a improve And graduated new comprehensive nurse confidence practice innovative new program it's So, improve approach their learning it's a curriculum process. residents, to gap blending the their improving for blended while onboarding for the to nurses. an academic XX-month and retention

CHRISTUS their XX%. the person person $XXXX per turnover adopter, early compared between the improving price And range XX% great other our higher less usually, the than portfolio increase if in products. per an Of a by national This our most confidence As set, year. priced point look of significantly product across turnover student levels. rate year you $XXX note, year new levels average confidence from really to to is in our and one per up $X reported curriculum. and per $XXX for reduction products product nurse It's Healthcare per a this in a result a represents and that

employee. they of nurses. train a [indiscernible] it's nurses typical new development blended year us. select group a A the curriculum onboard Two or cohorts as new exciting of small and and albeit hospital at very at is So, XX this for a new $XXXX employees. hospital pretty three $XXX targeted to

of in materially products other proposition than a portfolio. but value many population, smaller our a higher the targeting So,

corporate Thursday, So, us to we're in over see time, I'd would to questions of turn May bringing shareholders we're you the and and our like excited remind to p.m. its this Nashville to from early it here be at meeting, Central and that hope outcomes, In our customers. like held – getting to our I'd be At with market both closing, be that I of many with X annual for of results some which orientation meeting. XX analysts. office. will for attend able visit everyone

Operator

our And Hewitt Instructions]. Thank you. from Matt question comes Craig-Hallum. [Operator first with

Your line open. is

Matthew Hewitt

Good a pretty morning. what was And busy on quarter. congratulations

Robert Frist Jr.

transactions get and on us freeing again to some those to of glad completed focus We're growth.

was shareholder it for quarter yeah, and So, successful a one busy a the with dividend.

we're it. with So, pleased

Matthew Hewitt

Absolutely.

Just of questions couple a me. from

off, understand commission nature I be kind capitalization, was one-time the there a accounting, is benefit Or First that a forward? is in that the the going to model going or the catchup of that one-time change or in that? – anything new is but any

Gerard Hayden

So, Matt, this is Gerry.

So, underway the it's policy. practice,

tried terms substantial explain the to quarter, In for essentially the late I had numbers of quarter high I based on production we think commissions first from a XXXX.

this a differential So, through. from That – of forward, expense it should to expense were opposed the flow a fact that one-time as because would though. year how the in capitalized lot creating those they normalize going

Matthew Hewitt

Okay. regarding gross lumpiness you're the margins, even to that there getting with And that some maybe but what Thank going expect within item that gross then, divestiture, XX%, obviously, to XX% is gross improvement stay margins, I your of margins be high, would will kind line you. or anticipating? significant the is

Gerard Hayden

Yeah.

was obvious to maybe have Bobby the lower margin the increase. quite know forward higher-margin going XX%. the Patient may improvement and lumpiness. continue that see quick, above And provider. on gross Experience benefit We'd due than mentioned as products – the to combined that reason that I real about just don't well a get workforce margin gradually the to So, like the

Matthew Hewitt

maybe in and hop And one then, I'll then the Okay. back more queue.

you into Any incremental ramp you and nice new a quarter quickly seeing in care? customer be have appreciated. market? Bobby, that a that kind post-acute the How Maybe acute implemented can you Thank What quarter you mentioned color of been and since while nice of space. fully area. are – that subscribers. delved we versus it's Another And, sector additions little would that you. saw talk

Robert Frist Jr.

particular a not the been of then last account. highlight steady every color. to We're steady now win a Provider in Solutions incremental it's and There's Yeah. nice space and a lot contributor over a year. larger that of It's

We have off. cut our work

got more progress solutions overall, assemble that work to good So, to care age care there, be partnerships then, important the these we continue the it's the and to do and but in of needs I it's the care through occurring of lot results. home to population steady macro a at – the have new of models. non-acute having to and will think, And that important. level, meet sightings complete A good and area provision keep we've kind doing be the at do is going areas. area, lot home, new increasingly of of of insistence increasingly ageing markets

So, overall, to next shift. better on I total just the But from of to relative non-acute And maybe a growth growth a be shift in basis the in will the its say away these a necessarily increases, there markets, markets. years this if faster settings. ten five provision rate not it's hospital non-acute those demand think, in way care a will continue

Matthew Hewitt

Understood. Thank you.

Operator

next Thank Baird. Gillmor comes Matthew you. And from our question with

open. is line Your

Matthew Gillmor

rates. were were wanted the workforce Obviously, X%. up about the growth ask thanks implemented Hey, subscribers I – of for about the think number they to question. I

in the X%. total revenue growth grew I think workforce

sort guess, if I I explain pressure. implemented was anything could call give revenue would know that versus there total hoping you imply the that a bit divergence out? of of don't was pricing But you metric. I in little So, the growth, ARIS to subscribers the

Robert Frist Jr.

things a there. calling worth There's out few Yeah.

roll-off. it's of is but ICD the XX we're The bit still first a seeing after-effect of the little readiness amazing,

probably What's two product years having relative couple – basis, a government interesting, that into whole based a line positive comparable. specific basis quarter comparable will in still or – we basis, new on the a growth area completely product meaning on surge which And though, year-over-year had new on a still will a crossover, from that mandate. on the a item remember next of territory, back, a seeing product down. the you soon we will year-over-year If drags drop that be and the products won't sunsetted be in the in in introduced we're

So, the product and net growth should for growth category start kind in reflect so that new our for show just that of company. in it category a we'll product, to product of

of The other been all task the you know, partners a years, category than analyzed thing choice ecosystem. per our customers. we've past – product set marketplace our content and single partnerships for they've of we've have is, that and that taken this And not creating working had and our set as three more selection, last over or and our of relationships and on them with to blended some bringing have exited building intentionally a four opportunities of renewed of selection opportunities we our improving and of blended the means upon ourselves choice

same ambition category. a And in it's multiple represent product where a so, And in few represent our the we we now, used have to cases singular to category. products a

old that comfortable of weren't ecosystem. so, our And partnerships out have moved with that

we've through about replaced point, got meaning we're their been resuscitation scale most scope old by met of product transition. business cases, few the in and where So, smaller them products. have the new than much still And transition multiple that a has working

in of a representing category margins in Well, four product cases, or been per for single multiple from diversity, that, more products of again, selection kind many higher lost those three we've the intentionally And content have products. last lost of and, we years going a news customers. content year partners. to products doing couple bringing we So, selection have to choice two. overall, catalog and a added last ten of partners from

that is the in remnants are partners from just marketplace. the new staggering net where So, as pretty of products the few process, are categories trailing there growth those overlap and downward in starting a clinical ecosystem product to are we the them. But create the prior revenues

the remaining seeing flat the lapping growth that us that workforce, single last a in because issues. course, pretty faces biggest category issue And, where And that we is of product. those we're X%, so, we're have

In HealthStream's partners at in fact, that new options in or to addition new today. be with we'll through the has – options a two least bringing two view powerful option it's option, industry older the single mentioned, my I singular exist work the in that only of January more market. And

And rate identified, us because you I'll our time you growth at improve shift at towards to and margins. look to that what to solutions And this so, and of it's call in workforce through transition it's marketplace work that of that. X% a summary, little take if some some the economics or co-investing so to have of going

began or resuscitation. – the guidance really one hence those identified for of clinical to of skills and providers the through in our to because in dropped X% work lower until have we've But X% one. so, the connected and And three largest – I our years segment issues. a transition of us. I'm think to but the we example, environment, we the we workforce it only ago skills X% It's we pleased a big one. for others two It's guidance ecosystem, clinical issue our But have remaining in front

we through have of selection of and in purpose of our often marketplace customers Workforce dynamic the rate lower the this nearing I so, shift prices Solution to migrate end a to And this approach. two area. and that of we marketplace bring our choice clarity. We're the in that that's growth And hope from some one our ecosystem. and the process it's to we're to went excited the provides clarity and some

Matthew Gillmor

using given solutions. helpful. competitive I learning penetration your as that's hoping management little a was And, learning subscriber past, numbers competition. you systems. reason landscape hospitals guess, I And And management out if I of you've was bit the you. could is, think then, elevated for the rate called we I I you multiple ask disclosed, Thank in the a sort curious today on the are Okay, follow-up, can see but of us update

I to an wanted the update dynamics. just on So, get

Robert Frist Jr.

works that's Every learning to sell set platform platform into major every Yeah, think healthcare. has fair. provider just is a platform. major – talent I solution There their talent

and management little on LMS That's on of evaluation we talent, as more over person why have applications a our XXX,XXX strong which checklist value tool, generates we tools now system. the are development learning the the suite relative emphasis see of on software to development strengths emphasis have Some to management which per in really our the the up provide a subscribers. almost environment. tool, That's a clinical healthcare bit like to little shift much a specific others learning in Overall, products highlighted platform. that checklist as and management workflow. a for clinical it's competency significant We basis. why And the

so, sure a more it's competitive. And I'm little

We We'll LMS our churn have tool larger of our we buy more they ecosystem, connecting that content content. partnerships marketplace. of can pure and that checklist in these little customers ways our our use have so hold continue new from XX this through unified to into a own. the any

if to equipped other set solution high we said for our of held the say really that, expect renewal really LMS meaning development LMS, pure But overall, applications. you for our got generating rates. plenty So, ways that more market we've sure, own we've them our and there's broad to in subscribe some in well, do clinical competition. I'd churn still we're

is software competition our although marketplace in feel and with well general, the approach. So, still we up, our positioned applications

Matthew Gillmor

you. thank Okay,

Operator

Needham. Scott Thank Berg you. with our next question comes And from

line open. Your is

Scott Berg

see to products moving a as do end But of we're kind all think as changeover Patient component questions. without is I of obviously Thanks Workforce lot model guess, Hey, of the two markets a years a think, segment What business normalized Gerry. you've a growing say? and the the couple is last of new the Experience your kind products resuscitation revenue model and on the follow-up starting taking question had shall of well, that, to you when last this above operating the what look vendors. we up to Kind the from at? it's for like of years. the Bobby parts cleaned now guide is Solutions does is, my I of and

Robert Frist Jr.

lots there's we opportunity. of a growth-oriented and still we we're to like Well, working find company be feel still

and than and patients value give residency that is think to clinical historic I that we reasons not think propositions the the I of of human or and correlated in were Appropriate mean risk per directly malpractice care but the to mean like other don't is directly program in outcomes And the that of HR spaces of in the investment and team risky is identifying there $X competency to per one think higher medical programs to more year. $XX clinical that development investment all $XX skill are And for through are a the example We capital person the correlated workforce. we these development. nurse only help. of human care knowledge maybe capital or patients. situations improved that, offer avoidance skills, provision and protocol quality of for also skills I development. for dimensions risk quality

So, feel still that tip total on potential. I of we're iceberg really the the

need the out and that industries development. of skills one quite few figured it's hasn't think the in to true invest capital human I remaining

look the out and military firmly the put development at outcomes complex are the that safety, you at yet training today. aviation if fix And investment deaths and to attributable by reports is healthcare the look that higher levels I show cycles just only we way pilots the to human put the significantly than error development that in staggering. get, create that industry think workforce quality through believe and in healthcare nuclear industries of they still the and they and their investment the to the I at and

content So, year it them. you know, But are workforce speed products turnover a affects the full full – rates, this as the of assessment dozens gives set of and retention per per and our and tool checklist helps then nurse for we with year, $XX rates. which like mentioned, of new have, we typical know the and benchmarking services residency to program engages subscription tools $XX, person onboarding $X, tool

$XX it And course. that materially continuing we per that in why course If a And that's price you pulled education than that our perform to a $XXX starting tools has proposition is nurse. well. point different to course highlighted being today up together, $XXXX value

new at course. cohort materially generating you But is an CE selling XX those the gave coming XX new niche XX again, $XX in. $XX,XXX product, nurses can $XX,XXX we different the a think nurses of nurses of XX, I to see example than for sample same

we've is some we representing singular into in We've We're we that get a the We're long moving era model, our more margins our program. We've taken for said for in and of residency labor of now instead a data still category collection content bit divested higher co-investing all little providing marketplace, on biggest view we're per building iceberg nurse a kind building potential like the of growth. And on overall a and center which we're was of the out examples like like the feel single a like products to involvement of the proposition Amazon tip So, on years. Amazon future, tried Netflix. more the segments training manual where to the marketplace. built of to the as creation marketplace. marketplace, full coming history that challenge had value gross we're of like call have

the system, So, you that long-term that choice potentially not our expectation sit at I'm it's seem an Amazon we three would. only doesn't said, But although involves would table, that, today transformation and with as have in partners be our years resuscitation or all a but new that excited partners through to our about with in like ambition the choice can It business. we reengaging much the we to partners, plausible. probable in next that old have [indiscernible] see $XX from create expectation someday the million that hope And we create a get and case future.

helps view all about growth some that. about excited potential. I we're hope So, and clarity that on provide our

Scott Berg

helpful. there? the very start what's those the don't side that's in acute for I this kind that a are of there booking question win kind what you company. of that then, of Is segment? bought. looks still plus newer the pretty with dollar quick That's products do called last How out opportunity the Bobby. And – I maybe of a in of a But know many million of there. the that nice meaningful the out in of level deal Thanks, terms a the think had that area new composition like you they on sales is,

Robert Frist Jr.

don't in I as space. know. that Yeah. many There's big systems fragmentation. There's not a lot of

and I quality consolidate. think the improve to needs continue market to

So, still here even facilities models it's examples it, highly foundation in that thousands are smaller, of might But opportunities are nursing good Tennessee. consolidation market-leading the maybe effectively, tens of and increase. I'll like our mom a more through, highly the years, single-state, why some settings providing In call home of consolidation over – way the companies the and evolve Amedisys Those for fragmented. home single-facility care time, for several care providers. providers, pop next with owned post-acute of still the cases, and the health

And so, we I five larger developed. you systems think out, should if be years more see think

acute think customers us the they're I and there taking so spaces, into big today systems that them. expanding our are those with

highly the XX The about next pretty months is still there. fragmented, so, to get And to. optimistic opportunity I'm hard

are pathway space. the And in many think others a of make in lot important for us. there those to pretty to million each a way we've million people way developing define that small worker defined potential got lot get them. of the to calls it, But The You've think it. we we there's more as places X of of would a healthcare

Scott Berg

you. Thank

Operator

Frank our Analysis. you. And comes Thank with next from Sparacino First question

is Your line open.

Frank Sparacino

we some If if for relative guys. Bobby, growth key products at resuscitation there? the aside workforce, moment, a just of we a give can in sense me and size just rates you as of Hi, to put looked the the

Robert Frist Jr.

Frank. not to going No, We're do that.

of general, decline the us. the is in XX, rate and downward, both occasionally But, business. of year-over-year what's skill ICD like sets. trailing is how it's basis up. occasionally about a for relative five about is you that to when And revenue cycle checklist and break follow clinical subscribers happen along category within areas, to its some scenarios, popping still out a drop our we provide an them what's the hints story. a is competitive this on for of important dynamic but start still the for clinical disclosure the services And see us, a a growing the I XXX,XXX we transformation. is them out area just or in going that It's management to four mix it want going competitive which But to product like its tool, those now think last not it's scale We're growing have now. basis. But advantage We on quarter. starting break broken and key to – quarter it's with we're that We like for product necessity needed. everyone growth growth. we through Actually, product to focus of think because it's it's – finishing to some by lap provide out this started Resuscitation solution

there's is market. how take our those of too strategy, second, of just products. all, them important First products we mix to to the many And

Frank Sparacino

you more been when of think new that think of open or relationships making around this And comments category to already advantages has an had some sort marketplace, per around marketplace, I one And was you an of that's in you've of product follow-up, your terms one that terms healthcare does open of opinion No, HealthStream a the exclusivity had or really fair. dynamic historically, of in the more Bobby, moats the left maybe station? I clinical just change change single in under from and train of the the the content. of competitive sort

Robert Frist Jr.

have But, to example, we're services build Yeah. no It offer that to might there's that building benchmarking of offer stay assets and to But products our maintain advantage. competitive a bit. a for to shortage continue started network. and we're on beginning little that tools

the then to products content So, launch benchmarking tools which products our are benchmarks people our and utilize build partners their available can network. around to in

more our network. important consuming of through becoming the value our and network of a part is so, And proposition data selling through

and If content utilization intelligence consumption, you're partner, and more of get about your adoption you a licensing the rates. products

customer, If you're healthcare you data network extensive across exists. benchmark most to a you that get the allows that

subscribers. Now, X.X million

and a we are enhance investment benchmarking announced measuring two three Juice can the as we partners services. you with Analytics. way in offer so, now years tools content to And Those products ago, or their know,

suits that customers our budget think unified different the tools the their that toolset XX give not across and the think budgetary vendors. a example. people planning and of plan that's only purchasing one advantage, marketplace We light So, or way cycles, health needs we of subscriptions licenses the of We're building systems. these tools millions provide in if managing that hundreds XX of the consumption annual of across of purchasing way automate content a only, and also also their we plan competitive one for

at They to pricing, get sold marketplace. And aggregate So, that products so for we there we're usually outside demand most-favored to or channel, own. reasons achieve channels our we're through of through LMSs a scale. that sell then, strong enough able other scale, partners our can when we are think of even selling on the kind or can't their or to our connecting other direct nation's

the exclusive. customers, Walmart many prices the our more to volume but And, to lowest able don't some fact, our terms, to want favorable most-favored we be in nation, we'd get usually not that Amazon-like, or content so, And partners. have can highest if rather cases, we we're so even because they're in exclusivity bringing

and that hold so, the again, taking power strength our dynamic marketplace. bit a little position think And we of move to a reinforces more as is and And, marketplace. I

Frank Sparacino

you, very helpful. That's Bobby. Thank

Operator

William from question comes Thank Munnings you. next Rob Blair. our And with

line Your open. is

Robert Munnings

Thanks about can guys. there Thanks. in been questions. the actually clients? has these talked discussion you replacement a you taking bit know little start a to Hey, renewal When the marketing around I for HeartCode those conversations? And the Yeah. for of lot partnerships products.

Robert Frist Jr.

sure. Yeah,

competing or full are any We're effect the customers full our products. that existing force selling products So, ahead and through trying sell teams all sales sell fact, those and the are in AHA market, products distribute the consume to we And budgets beat all cannot in achieve Laerdal, products. way as we our it XXXX. as get of of to and much our can

So, through the of Laerdal. with the we're be partners excited year to today end

some Beginning to and and and is And sell and in that but said, products. the to timing. energy full options additional announced January, not marketing focus That we have so, market and their distribute partnerships, announced on customers. we'll able selling our product distributing present be

renewing That the begin existing zero now, message outreach the that if see being healthcare assembled marketplace. years about we'll be our to we just from as a said, – they the that's partnerships, at have Laerdal. hope AHA our partners, have And probability. million We we've of as existing part a to directly right we workers. excited the they will because interested network X.X reaching are XX the in should, think, We of they over last far

time, and So, now our the over end launching out the year is selling new reach then to right we the in priority XXXX. will existing January of but them products the beginning of products through

January XXXX until will deliver wins business obviously. which customers first bit kind or of on these a products to little that to That of It's available first to news won't between these when really ability so, gap competing XXXX, products be probably of of the the what of or distribute can partnerships. January sell can hard that's we And though, definitely see they're product capable lot and market day these will close that products us, any a of have We a we because customers. and hear create deals. new – in our of. January they're only pressure of one develop creates cannot and encourage We

we have are they So, them can't it does the for excited getting great focused the market ourselves, present wholly and to a But, distribute business again, sell products now. customers. teams and challenge they're on result them that

Robert Munnings

too you. second little it advanced? any And with question, I Press kind helpful. guess, could partnership or bit tell soon for That a And talk are significant you from how of your infrastructure Thank there? about was then, my great. you generating is Okay, your Ganey licensing revenue the of has very to

Robert Frist Jr.

set develop in of and still I We're base got them with couple excited relationship a a number, incredible they've entered they're a the and customer making that our again, Experience and excited they broad to of they're to absorbing multi-year seven that We're acquired And progress about over they're customer it's They've there's transition work really to And new appointed our That introducing lot those a high-quality and of think customers. do area We're with new of executives a agreement. the seven-year from senior and into but about us. base complete that. it. is Patient really that. – I multi-year agreement guess place help to them. their helping we've said, more for them tool and in

market to to and develop And have through so, going deliberate product very channel. journey brands to bring their our we're a

licensing revenue as generating some our technologies. yes, so, of from we're And revenue as far the generations,

and the customers but training haven't use branded made We to to with commitments to and amounts, training reach applications technologies content. our – development development Press their disclosed they've Ganey us some and

of care they're excited we're current all tools over about but to And platform. Press now, it successful, really Ganey's of is everybody will in business evolve customers taking right HealthStream making seven transition their years. all wholly on the have So, of the and next that, those customers, hundreds and nearly the are focused off we and sure platforms successful

is year on go likely which branded it help curriculum. rest of a and officers resources brining have development Ganey to we're our exciting focus for And multi-year senior to to fortunately, transition. will achieve is – content appointed Press But Our excited both that journey network unique. build companies be this developmental to the and

about they've platform. the of to agreed excited of some our technology that. So, we're really And use on levels exclusivity

important brands should most be very we of one partner healthcare. a the important in channel So, for

Robert Munnings

queue. Okay, the back great. I'll in hop color. the for Thanks

Operator

time. I'm back turn call the any further showing I'd Thank closing no like Frist Robert to for questions you. at remarks. Mr. this to

Robert Frist Jr.

our in Bye. opportunities a days. our Thanks. and for you look next transformation. forward another the And reporting our We'll and that quarter delivering in write to you of stories call mere solid and progress XX our soon. you we employees follow all earnings the challenges. Thank to Thank analysts to communicate see

Operator

and concludes Ladies thank today's gentlemen, in you This program. conference. for participating today's

day. may You have Everyone, disconnect. all a great

HealthStream (HSTM) 1 May 182018 Q1 Earnings call transcript