HSTM - Earnings call transcript Q2 2018

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Operator

Good day, ladies and gentlemen, and welcome to the HealthStream Incorporated Second 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 conference is being recorded. I would now like to introduce your host for today’s conference, Ms. of and President Vice Condra, Investor Communications. Relations Mollie you may begin. Ma’am,

Mollie Condra

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

that So, over Bobby call to will the turn I Frist. introduction, with

Bobby Frist Jr.

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

quarter jump metrics. in, financial positive Let’s on right the was performance second our

deliver that to theme to our years. in a new products several early operating margin be generally of the next revenues the in higher in gross of we our Our year exciting income the Improving margins for this growth, continues the launch were preparation company year. expectations investment and income growth did increase will line us with solid enable second half next for over

XXX lowest call platform operations. Verity launched full quarter then, Solutions was in year. our which its of last new its In PX Saas-based the Patient the labor business first intensive about As basis did business overall we center margins over of prior called if our we announced divested Provider given segment, increase business, HealthStream our the without we And the segment the with gross points margins think in see is an second quarter we which our gross February, quarter. Experience

several processes our the have Saas-based and but platforms upgrade in gross after are acquisitions products will yet the again, replace. years, helpline will resuscitation curriculum carry Workforce kind with the our In that our Once expect existing to new new see the complete move another gross Verity and will margins overtime, this Saas those impact OB solutions been which we legacy segment, on next margins, customers boost that are retired. Development and that Over we’re migrations have a gross been and platform we through choose this to platform. and several platforms they of margins, will higher but risk after those and on expect migrate platform focus be like investing year enhancing Morrisey to retired, positive legacy migrations legacy products

about or In as previously months customers well. new existing that those see and as from a we’ve on margins. these to positive adopted fact, our will margins expect double coming investments by as products the solution talked we’ve in the In carry approximately product and the resuscitation gross resuscitation product solutions years, we impact said

over their on with December are resuscitation XXXX. be at we out that expect these XX will products from the At June selling of XXXX. course reminder HeartCode will products XXXX. To XX, end trailing the this expect products approximately million year, duration them to expects quarter those XXXX. announced of XX, our for we agreement the stop December end and can the in from we a generate of the clear, the HealthStream of HeartCode the As for $XX.X extend and zero and to RQI continue RQI and service of we HeartCode to be our to XXXX, five which months RQI current revenue. revenue customers to first of Medical the and decline selling and revenue for two months the products provide Laerdal and rights contracts expire uninterrupted retains run in will next to these XXXX through

solution marketplace are of for resuscitation. more We wide committed to creating a to choice to and range selection bring our customers including critical areas

strategic XXXX. we’re track areas expertise with individual January in new and new software feature Areas of In technologies. multiple curriculum, launch science, on solutions focus of The focus. resuscitation of hardware solutions and new fact, partners will resuscitation like credentialing, to each

we’ve you new shared partnership to plus with agreements seven-year quality As resuscitation we’ve already solutions. signed develop two, previously high innovative

plus are are ready that early signed partners we agreement. we’re to HealthStream about for three of making our be the announce XXXX. pleased seven-year third, our and excited quarter, the to the in We new progress in second solutions launch

the performance, our we increase and which Of able as solid capital we’ll course half and and invest prepare good products expenses throughout to to these first solutions things of will investments increase second Hayden be metrics half this led new early and gearing second quarter the through will the year. Gerry launches financial the At next more for provide results. in year this of time, out detailed discussion

Gerry Hayden

Thank and morning, you, good everyone. Bobby

from to one; Before note results, second reviewing our operations only. our are quarter continuing that like I’d results

operations the gain new from Experience and results segment whereas Accounting XXX), Codification two; Contracts XXXX on our divested recently the example, segment And that business For divestiture. in are Customers with the presented XXX, accordance presented (ASC in ASC Standards with accordance for with XXXX Patient the XXXX sale Revenue results results are XXX. prior results XXXX of of and exclude of to

income share of million in the some XXXX XXX. was a new second year. $X.X or $XXX,XXX to with $XXX,XXX of in quarter million through million the up same Adjusted continuing the ASC quarter positive impact year. were quarter up per ASC up second EBITDA XXXX from to operations XXXX per of X% second quarter. the are of Operating operations a up in continuing from last revenues was impact second of XXX in share second in highlights $XX.X $X.X quarter continuing was in from in the in $X.XX million. second Earnings of $XX application fully $X.X from Here quarter last quarter quarter EPS Net standard. same in $X.XX from from to operations the of XXX. $X.X from the second compared per positive the year Consolidated last standard the from continuing XXXX million the of applying million impact quarter quarter of year ASC our were the in XXXX second the $XXX,XXX new of from positive second in income diluted application the from from second $X.X the this XXXX With quarter quarter operations diluted of share XXXX EPS of million with

first So reporting in other and divestiture now in ASC GAAP Patient to second our XXXX developments results be mandatory of with and adoption remain quarter operating that our financial revenue. the reflective the and is this quarter the new Standard is for the reporting continue is One originated Experience includes XXX two the year. which

divestiture know, XXXX. occurred already As Patient XX, you on February the Experience

from on Our of and income continuing gain income sale statement the the to operations. loss continues segregate the

and Solutions our Our Workforce comments segments. today consist Development on business which of continuing Provider focus operations

reporting. financial [indiscernible] XXX by There our are our reporting implementation areas is of ASC commissions The two second ASC the development accounting. affected revenue and XXX GAAP into

commissions the accordance reported quarter that between it revenue and with quarter historical is second was year. XXX XXX this XXXX under before and was been have under XXX XXX in same XXX difference The ASC first while The ASC most capitalized methods ASC are expensed amortized ASC would to in ASC XXX. similar the as of costs significant accomplished

went on XXXX quarter of the payments during the sales capitalized recognized XXX. being recognized XXXX, same a lower under call, quarter’s with as of in XXX. number would As we of The resulting in discussed first expense first commissions of than have from period commission quarter XXXX in capitalized what last ASC was accordance been large the amortization ASC live transactions commission

XXX this virtually commission ASC on for of and expense calculated However XXX are QX identical. methods year both

increased touch our each – Now second let’s on quarter from business in some the of segment we’ll – $X.X in segments. statement, highlights Solutions income by XXXX. look Revenues our Workforce at of million

due XX%. quarter ICD revenues while in year, A primarily to margins, readiness Revenues the XX.X% lower acquisition increase the increased XX.X% of we Associates of XXXX And approximately revenues. of solutions our this revenues products margin this represents the same Morrisey now products $X.X revenues. last Provider at quarter margin for no HeartCode from increased second increase. XXXX in of million second and XX last reported Solutions XX $XXX,XXX our Workforce let’s quarter the for $XXX,XXX compared revenues other from gross of to quarter’s The quarter increased $XXX,XXX look second The XXXX, In year, ICD XXXX. was quarter or existing contribute gross quarter provider variety to segment includes by of subscription second products. our

However points gross basis product in second X.X% investments X.X% was up software operating last our results. of now this the Patient mentioned when quarter as XXX between expenses earlier, year’s over expenses development margin Operating included second higher our quarter were capitalized increased and is Bobby Experience combination segment and the the XXXX. quarter for quarter. The

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

to are $XXX,XXX Sales increase and from year’s this rates about to our quarter year. of cost due R&D last throughout year’s last nonrecurring some marketing including second plan also investments second We the expenses major marketing – quarter.

through are in expect to capitalized two XXXX. intangible Depreciation quarter. the XXXX year’s and to both of assets reflect development the is XXX identical increased earlier that of acquired year second as last level quarters due commissions important amortization with both XXXX It primarily grossly the were to ASC investments of with through and of of the This and note flat and inclusion second last sales We depreciation expenses quarter over each revenue Morrisey amortization of second this under and G&A full other. quarter revenues increase related second mentioned amortization XX.X% income increase compared income and the and The acquisition and compared still $X.X reflects over to marketing this is XXX software I amortization. in increased year marketing growth, QX our and to leverage by increases quarter quarter primarily The the of expenses and million product growth the personnel in XXXX second operating G&A in approximately second both $X.X development, XXXX. in expenses. in Operating of in quarter of G&A grew second X.X% on XX.X% software were costs. sales revenues of of XXXX. expenses the million was the to XXXX in and quarters

our let’s Now balance look at sheet.

cash sheet the and strong. balance overall Our remains position

this of $XXX X, XX the million which the $XX improved proceeds XXXX. on June was collections The at balance Receivable Experience XXXX. is dividend XX, divestiture December by in paid $XX million, cash February from special and increase this since offset was approximately cash share increase $X year a quarter Our April reflects million net cash Accounts on Patient per

We inorganic Yesterday’s $XX growth and have earnings is capacity may and structure to believe outstanding appropriate. our us. line other full organic likely million release maximization our to and be updated of debt is Financial shareholder our support expectations strategies no available and overall position capital value optimization as XXXX. guidance. capital We included opportunities support credit for

February Given original guidance ASC XXX let’s presented in year-to-date. to XXX. our how On of utilized our guidance the XXXX every from XX, [ph] solution instance we over ASC go XXX this presented we

XXX. utilizing this ASC purposes comparability also April on guidance and we year, provided XX ASC For utilizing of XXX

ASC our XXX under fact being presenting only lies updated presented utilizing XXX. our now that ASC results XXXX We’re are in operating guidance XXXX the

anticipate that XXXX. to X% increase X% to compared we will XXXX, consolidated revenues For as

to anticipate will between We income grow segment Solutions in increase to XXXX Solutions Workforce will and revenue that expenditures X% when capital expect this Provider XXXX. segment XX% between growth X% We between compared as anticipate that compared $XX XX% during operating our to XX% year. to and approximately and million to We be XX% for our XXXX.

the of your three effective quarters the We of an XX% through of full to may of for Bobby. rate more effective we income impact XX% time, XX% represents year guidance not does rate of to for complete strategic XX% expect investments This tax the our any tax This XXXX. include and Thank to you the I’ll acquisitions XXXX. call XXXX. annual remaining the range turn remainder for back between

Bobby Frist Jr.

Gerry. you Thank

initiative section, I’ve wrap product the give then I’d the as in up well. and to about to insights of to quick information products this company new few our share two So like updates.

training hospitals And our program. includes annual benchmarking Solutions KnowledgeQ to KnowledgeQ so to that and let’s we continue of segment, and HealthStream’s solution their mandatory manage software. our steady and utilized third analytics data-driven dive by Workforce see right in, is that KnowledgeQ adoption is generation with solution represents games, curriculum solution. a

fact created Analytics early have collaboration contracted reminder, KnowledgeQ. from and as this to our XXXX curriculum built in first kind Since with over two product build ago first its gen second benchmark we in in third three visualization which million games In the gen Analytics out and analytics into Juice sets. components tool data years to sales upgraded were Juice a about has KnowledgeQ’s subscribers invested the They’ve products some of and it. to analytics, data

closes improve Residency it’s program So nurse market. learning product Solutions turnover, is year, start in which XX-month about that launch practice. Nurse It’s In large contacted and the continued confidence Pathway innovative really At an early program blended in we KnowledgeQ our health onboarding. its all improving also last progress with hospital expand adoption we segment. announced with to the comprehensive excited health Workforce academic nurse reducing the report the that definitely of leading practice pleased a and system system with of nurses a to to in for call new pilot. on system. you to Thereby the in our approach the second their Residency gap I’m health Nurse across their enterprise-wide that to adopter, quarter, having our shared the while success our their

show enterprise-wide So leave two chooses new program very is point. turnover proposition, for employment Residency approximately average – value reference since we’re and of is Residency believe warrants nurse organization or reduce price of agreement a program. of your excited nurse the to that Nurse higher in lot has a we to turnover We’ve $XX,XXX in it nurses, designed a first new a replacing value higher read HealthStream’s and replace has it proposition, there’s Nurse and because to that cost higher to high. it The multi-year for it’s year

improve – market. impact, So very and those of it’s a turnover With to lot a of new much technology And a program turn $XXX a higher we’re serves new and let’s and confidence can excited value to range to product impact the two to to the high in so HealthStream provide nice blend and bring point value to has of initiatives an that exciting student updates HealthStream. nurses. at per new high broad this price higher approximately $X,XXX and proposition it

partnerships. participate customers X.X As new we’ve partners discussed we connecting before, new XX and access million on of introduced internally at our HealthStream that network Recently is users April XX, and and approximately made more or network. We and up HSTREAM. in call a improved way for way to

technologies forward products beginning as enhancement Our to service months our platform more new capabilities an and regarding the in HSTREAM. coming providing the in enabled look new a our new represent HSTREAM details that by of are capabilities. We platform

At leverage by time, that HSTREAM HSTREAM. to partnerships questions. this powered that turn New and are let’s it over services new

Operator

Ryan from of from line our the William Daniels and comes Instructions] [Operator question first Blair.

open. now is line Your

Ryan Daniels

dedicated? it’s any dollars back new I’m those speak ramp start of of helpful. ahead etc., in on have would new people in a of bit will color Can you exclusively little if if focused up the resuscitation of the year, be you’ll just be salesforce, on sales kind so there that products. curious one the the Maybe investments outside uptick in the half to R&D I’ll where with a

Bobby Frist Jr.

little be products. out of new we appropriate the with sales the aggressive technology you’re focus areas, recruiters to of positions fourth Sure. to internal maybe backfill earlier maybe and train performance hire them increase just our products hiring add things and so We of year. the plan the by until catch came get kind most channels quarter hire then in going more But we meetings in the definitely in series until resuscitation a hope our those will exactly sales. and backfilling, probably use of areas think for these expenses We a particular January. or lot authorizing we’ve in and in folks won’t some it’s R&D, having them organization in right, some so to to multiple of expectations those up, we’re over size to lower little in ready try in behind we’re few little

In budget planned expenses increased some marketing not launch products. set addition of all and with and we’ll we aside additional the geared launch, so have in the for launch align but geared are the marketing investments it resuscitation to just increased new of

well the announced, our we’re capabilities platforms, connectivity also investments just adding We’re are services. I and technology and out to in increasing HSTREAM people build underway those new

Ryan Daniels

January on early so? lead of to of is quarter you’re discussed great. going the a those of Xst, products some the in into new XXXX, being to launch still some are you first or Okay, the that or kind and X/X/XX you track development you ready

Bobby Frist Jr.

everything where do selling this expect January on the a the No January we X? targeted we time, begin towards is at launch that X products market can into

Ryan Daniels

it then introducing and here [ph]? to something anymore an – to don’t HSTREAM for around you’re provide, kind if the move model not but wait that, launch actively available and is over want on on HSTREAM it ready of I till offering to opportunity? revenue detail, kind question know is color clients that last you is does today, that Or of but much kind how that Okay it’s of upsell for

Bobby Frist Jr.

will HSTREAM about connect to technology, product second products for of by partnerships ways I capabilities revenue things products. this sold platform way be stream technologies year one; think, technologies, to as of lead our some to I to given is may that here, which think so some and Ryan represents that, customers enhancements of service to way constructive it HSTREAM some to of the powered on us time, that type of product new different be the opportunities there can is the because it create most will maybe gen may allow you new more in think several by or set that our new half in new are and this on going which be about driven enabling best talk are services of for the watch announcements, premium subscription built to HSTREAM than investments over other new based provide

that package So which way which and of be some out and it as think drive a to emerging sold into kind features, of functions now constructive capabilities be will about new – is some will adoption the which power R&D most and new free, new right of of products increased will will some marketplace. of the of

So have new that it that announcements, technologies out Cunningham. future. represents expect of put Jeff anniversary do our and product toolkit will arrival of the this building. we’re his are kind with it emerging we He’s and that, new staff progress this growth some new the to just by be for wanted they’re about being great powered our the year, and R&D in of contextualized in We by a technology the capabilities been by on CTO, these approximately to table new us new

Ryan Daniels

Okay, for thank you the color.

Bobby Frist Jr.

technologies. shows looking It create One is and the Verity adoption may over other everyone the that we words. thing for to from do metric other new opportunity an and since years, of to about of technology represent a and core our create we’ve trajectory technology set – been expect and might that the kind is HealthStream benefit unifying it. metric, It in measurement that new – opportunity across a Ryan a coming foundational it

at million counts, lot because the count dozen our at We have hard subscriber two products. KnowledgeQ subscriber we’ve time our communicating products had counts and of a our a

think and of product of quarter with or platform an think I gave and HLC subscribers lot update on I maybe last XXX,XXX of more checklist a well. the a thousand, as we hundreds is hundreds our

[ph] that broad We’re in the our raw may hopeful opportunity that it create an core a show as unifying penetration metric we technologies. HSTREAM of for will

question. and off just ahead led and signed go with that. went I Ryan so next to the think We I can

Operator

question comes Needham. the Berg line from Our next Scott of from

is line Your now open.

Scott Berg

year-over-year look I at proxy to quarters. know a at basis but kind it’s Gerry. but first I of revenue look and reconcile kind with some revenue go been sales, if Can have consistently. down, the on it’s your never you for your guess usually of up several been variances it’s Gerry, downward will kind is us go last that that you help deferred perfect down trend, growth? been for question of on

Gerry Hayden

more guess your billing cycles the so I and timing Yes, no deferred recognized revenue. of on territory and real, revenue there’s real change going and real – outside

people the revenue I lot [indiscernible] off but monthly, P&L. on who cycles, our have measurement balance between on to I and draw whole so go the on, revenue a in deferred can a revenue correlation the deferred that that annual We affect draw of – come billing don’t my of balance

Scott Berg

an intermediate first completely business. like you these initiatives think profile Great I spoke Gerry margin in currently of undertaking gross Bobby or do raising now to mirror? more my look look of is the years lot in Experience undertaken know question terms next don’t it, top are you be couple at the or now take Bobby Patient a last but margins if you that some the wants gross and view will follow-up a of over about and of model, rear long-term solutions in what term develop as the

Bobby Frist Jr.

that and is PX, revenue opportunity. basis a divestiture to One But points seems we’re is thing gross get. like margin because company the and improvement in subscription I margin services going can gross lot less a margin with change of gross affect of having recurring migrations minimum clearly a are and the less that articulate a happening more more the obfuscate still in looking company XXX like components it there software

say things the that higher visible the the about on rate – the the to over say resuscitation would products It Verity, The be years, decline pressure three to two resuscitation and on have I’d but growth what positive that margins platform years. and of gross margin you transpire I’d gross have of total margin. for products, the will and talked of couple impact the move a we kind happening. So that big rate four Saas would intermediate term,

is five to hard little out bit models, we far. really years guide course it’s have three that we So to project, don’t but of

trying overlapping of margins we and here and think that those a explain can we up and to positive there the We’re kind gross that coming in years. two points the think dynamics we pick have few

Scott Berg

Great. Thanks taking for my questions.

Operator

And next from from Matt comes Craig-Hallum. our question of the line Hewitt

now Your open. line is

Q –Matt Hewitt

to Couple questions, have can’t you first smooth talk least type of that give from them what side? rolling on you you feedback you customers the anticipated garnering out, are discussions regarding been are what getting heads switch kind Obviously changes a resuscitation you’re those questions as conversations you up a them, having? the have anticipate your you about coming, the at new pretty products but of from what transition. And with are

Bobby Frist Jr.

or tricky a now it’s Well so, situation.

I be – facts We’re no to the there really and But current dialog, that customers. in there development can with say with which there with we’re development beyond is be there really a we’ll working the we new one. – but offering products are, is, dialog especially won’t partners, able mean no use have mode in customers

say So RQI products. it selling are HeartCode focused is our challenging, but teams and I would on laser

secure doing I work now, really to talk RQI HeartCode do millions in we need sales that of can introduce sell XXXX, on in say, dialog your fully products the to you’ve to contracts the and we and the give excellent integrated to five quite right millions runway top and customers. teams and customers. order is there say products new is is, us dialog service the no literally product of XXXX, We’ll with would really And have customers. differ products. so those extended expect a selling they’re questions about now now, through our next on the We dollars are that months, to getting you topping right longest those lot of fully of XXX% is that the focused which we need look January would and extent through do with working off and what to get What gotten you off

at, taking products. coming. buy want I of they that’s service encourage collective beyond a that, the them think they’re they through service, how XXXX because hard is more out the focused right change of lot service those to But visioning, everyone’s existing kind them is off to and where on be we current stability have fully A if get of the it’s not so now they’ll for there’s stand, do which the integrated renewal, understand – difficult will extending XXXX. asking them use contracts topping it through

Q –Matt Hewitt

and look like, may period can was with a out ICD of my extensions more like maybe see you’re what now, have some products sounds head, so was, time figure to of correct? contracts seeing touched little bit how they there integrated to significant follow-up and on that Okay you’re months you seeing all that that right with the where just think there coming I your just to a of and get now, it resuscitation XX give that, from six the them out that a customers kind right to was

Bobby Frist Jr.

months critical. were are them. Their of kind behaviours a think there’s five to next and little that, due final and decisions only We’re I months the seeing make of five

their out third think half the what a of more first year will now, the I decisions So then and playing determine quarter more always last that even to be of it be. of to learn will lot right the much and week weighted this so than half course is way extensively second here ultimate seems big there’s year orders but

Q –Matt Hewitt

Okay. And then --.

Bobby Frist Jr.

know, Well They’re ones XXXX. buying that, out but is the really are the that through people trend we that don’t current [indiscernible]. is does like look

Q –Matt Hewitt

Good.

it reinstate had It active regarding be queue. of I’ll to able an of the back provide you to were also the given something in obviously metric, along to Okay. Shifting those growth of about you type fully prepared end become complicated, and hop an had with was being guess would being able remarks users, but the little a a ARPU I or opportunity provide you there and more provided that one lines. gears you. real HSTREAM with metric quick maybe then encompassing type like sounds more at envision do talking your breadth and your Thank the previously some provide and it products that of metric

Bobby Frist Jr.

taking and Sure. HSTREAM connect here’s be though. everything to product what it to become as connect the it, technology in that We and power new contracts don’t whatever to to stack decide age represent we solutions yet, it we’re it of the access hope and needs it will thinking company – what [ph] will in in value solutions, but technology their know will time as the course they of renewals we it’s enabled, kind work The is, it. every everyone buy,

we measure, so do of can different people reporting levels it market. on think versus subscriber unifying specific we have will technology have the of that HSTREAM products, access the counts how to And components penetration that be in

learning wins faster, them, you other at in of but that long if then which front ins are so products have of a it it subscribers, and look some there behind older history subscriber now, reported our metric. them down and dozen outs, that and are more counts have center And more that growing product, ups around has and significant

leverage we’ll the quarters work HSTREAM three define, that a over see metric. start you’ll be common think it two better I more launch So that product we’ll a next few to can and to to

a subscriber be, lot we’re as would Of possible work are of that that and it’s per working building. that may become course [indiscernible] revenue on, driven of we HSTREAM from

stack. second represents stake launch year, put new new that in wanted rely this new today, and will that half that I in these technology on of we enabling see sand of technologies you the think to products a the of kind

Q –Matt Hewitt

That’s great. you. Thank

Operator

from the comes Canaccord. line Hoffman from question of next our And Brian

is line open. now Your

Q –Richard Close

there not by sounds that expect step revenue. Richard done guys really XX-month you how pushing the XXXX in and $XX trailing revenue. XXXX analysis think quarter XXXX? maybe a Close. I step first on million you’re terms guess down like the Have about if is But Question of that in much you HeartCode down it the on step no extension XXXX, any occurring How down and not, in occurs? you of the

Bobby Frist Jr.

contract know the curve. for full shape that still, on know existing [ph] out at time, existing the the and detailed contracts have we hundreds spreadsheets we the contracts crossed Well [ph] of analyses we run and and have of

some that curve, highly on next of where is and particularly kind XXXX, opportunity see product got beginning how may but out shaped think tremendous be even plays the just is, and on take will now beginning buy mean dependent may marketplace, much month fully that right of open our five next so of the through graph’s QX that and the December QX we to shape it major not months say it right on is will be be curve by will point of of endpoint, zero variable last how looks. sales However, and XXXX and in know five the largely then peaks next in too we maybe product face shape device I in the the and when there year will integrated a the based may revenue XXXX. probably they’ve what just system every and some

So every curve. update shape that still there’s said, line that curve quarter the of quarter. too the definitely of as endpoint, this then weighted. every But between update many of most the second will I sales half the to and we’ll heavily it straight beginning and To about are just unknowns more has say shape

Q –Richard Close

like implemented Okay quickly start that or look we it? revenue products on about the new launch, if what’s What of and get You will the and those think of product, the start contracts? buys the and those revenue. new then timing of it using they how will recognizing like products duration someone as does then

Bobby Frist Jr.

unknowns mean it’s a future I there. lot of obviously Well stakes,

don’t will of that I so issue. be implementing, have lot a expect We experience

but will QX next different be adoption of to build is it’s time, at the so is product and ramp the mean exposure I and going but given very probably product see first, budget of customer gate but the you’re a to again we’re decisions excited purchase time of quickly. imagine acceptance, year, won’t year. definitely made some to take forecast and we’re if be it it education I It think our helps have think unknown, up just beginning about market getting so, be be a will I demonstration January going the it, being the ramp next hard and and and that and cycles any. a won’t to will implementation

Q –Richard Close

has they you so someone when else do like doing ends entered to partnership partnerships, And into have whether know they’re Laerdal additional any or your in step that themselves?

Bobby Frist Jr.

can follow ultimate We and how know along don’t, will they’re don’t reforming this and so now, but we no that watching that right announcing we later as their they week, have their as close announcements pending we’ll strategies. be strategies

Q –Richard Close

But comments think question, platform do in final growth margin growth the the you sustainable under think sustainable and Solution? Provider my Definitely the higher business? and respect you the there. is that with appreciate to Solutions, rate how rate do with Provider Okay maybe what on Verity

Bobby Frist Jr.

If guidance with that rate reported where growth this those acquisition to so stand, hope the rate growth together. last We and the but organic and half we [indiscernible] year you growth right provide two we’ll was improve next look growth about in on XX% that’s February. at rate quarter half rate now

Q –Richard Close

thank you. Okay,

Operator

next Colicchio the our of Research. line comes question Vincent Barrington And from from

now is line open. Your

Q –Vincent Colicchio

Bobby, I’m significant with curious, Laerdal efforts note to recent been has compete there years? market the in in of other

Bobby Frist Jr.

time, effort. together the There no There It that Heart of. in but really with in the for aware There HealthStream’s product I characterize spent and currently push market. as the weren’t for that great is would sub-markets market. longest a been markets the American particularly alternatives none again nearly selling a of, really there it’s it’s know and and tech we’re product good a just we really my have I decade – view have strong Laerdal are [ph] in product, simply alternatives in Association significant our competition really major is to

Q –Vincent Colicchio

macro impact sort from are any then And a seeing hospital you of question, consolidation in market?

Bobby Frist Jr.

some company market we Yes it have results impact, share platforms seen it are and sales, that’s that of subscribers consolidates negative, as cost HealthStream. but the someone does ins in and in outs, on shipping consolidation let’s now. losses is say in if consolidation. shifts to so wins directly not this that any material not given the us in right can Generally network, with several and favors systems health quarter, our and landscape the positive our our our Occasionally, quarter given no

We’ve had have some Some it Well divestiture customers business. of to say so wouldn’t bigger our loss in is actively I that been result a and quantify. growing acquiring. factor, hard but

Q –Vincent Colicchio

quarter. job nice guys. Thanks the in Okay,

Bobby Frist Jr.

Thank you.

Operator

and questions no Instructions] [Operator at further I’m this time. showing

Bobby Frist Jr.

conclude Thank Thank quarter. to you comments forward our very reporting next you. much. look and We’ll our

Operator

conclude for This the today’s Ladies in participation your program. and you conference. gentlemen, does thank

disconnect. all a great may day. Everyone You have

HealthStream (HSTM) 24 Jul 182018 Q2 Earnings call transcript