HSTM - Earnings call 3 2023 | HealthStream, Inc.

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Operator

Good morning, and welcome to HealthStream's Third Quarter 2023 Earnings Conference Call. At this time, I would like to inform you that this conference call is being recorded. [Operator Instructions] I will now turn the conference over to Mollie Condra, Vice President of Investor Relations and Communications. Please go ahead, Ms. Condra.

Mollie Condra

morning, good and you, everybody. Thank joining Thank third to our today XXXX you results. for quarter discuss us Also conference in Robert is the call with today me A. Jr. Frist, and Finance Chairman Scotty and HealthStream; Senior CFO Vice CEO President Accounting. and of of Roberts, and

results concerning I those and conference these may cause would cause uncertainties Forms Information events the that contain this HealthStream projected of filings actual and future call other differ in from release. could statements. future the SEC, regarding could statements XX-K, company's also performance risks remind factors that our to statements earnings in that the materially including that from forward-looking and with to and the like differ the to results XX-Q you are materially those forward-looking forward-looking involve contained the risks

HealthStream we A call. EBITDA Additionally, financial reconciling income non-GAAP adjusted reference on as issued in earnings adjusted yesterday information to may such included may is net refer and this and EBITDA, a which to release that measures is table to in we supplemental the providing measure. attributable

that with I'll So over the Frist. Bobby now to CEO, call start, turn

Robert Frist

Thank morning, everyone. you, Good Mollie.

increased our strategy, exciting to going about. the continue same expect was characterized of the we progress back, But a period high record quarter reached In our improvement earnings for I'm also We the $XX.X in we same and and it to a the which platform revenue to to million EBITDA the adjusted $XX.X million, period quarter leveraged I some on up financial record third the XXXX most delivered of over strong third of was quarter lot watermarks, EBITDA have EBITDA. X% cover Top reflect revenue wins by is quarter, achieved delivering. talk all, a and over call. growth line of excellent which adjusted was sales XX% quarter, XXXX If XXXX. single

is through greater the delivered. performance efficiency we think to way operating and higher about Another margins

margins have our goals proprietary For our in through with be example, of to investments XX%. financial improved applications, gross XX% to in our line content and medium-term

continues In we workforce. to streamline addition, platform single our our organize approach how

X example, per For the past revenue increasing quarters. employee consecutive for we delivered

minute audience. a HealthStream and to refresh really take define kind for Let's of just our

I new think have might out to our some describe that how we and there we want folks business. hear position

sell applications a HealthStream to and First becoming which health achieving are health developing, technology technology revenues each solutions predictable. are X of of are the on We through is That valuable scheduling length. basis contracts, dedicated and under recurring a more hStream years SaaS-based our foremost, our credentialing the and company platform. care care workforce and to our subscription interoperability means solutions, average they through because X in which

are course yesterday, this the we and fact, of our In checked subscription-based. revenues XX%

profitable. are We

We have debt. no interest-bearing

strong are focused have health $XX specifically We on a workforce. care balance cash care solely of million the and more we health and

of is care talk also about we're our into the In like second pre-professional addressable in and morning. health going is show market the Though expansion organizations. United of schools this half fact, the health care States working beginning well, as the way we million XX.X in define to the that as our nursing professionals presentation to signs this in market markets

in confident $XX including of EBITDA As range for HealthStream our to line importantly, quarter, our guidance that will are to $XX increased we we range, continue the results guidance enter million. with fourth million provide adjusted

the of demonstrated this schools, excited new quarter, In share addition to quarter. wallet existing to nursing markets examples that highlight like we with increasing of really expanding customers. And some into in I'm X

of development also Center Hub, curriculum, our and and of renewed And for they for our account and $XX.XX EBSCO subscription. stop learning $XX.XX clinical XX,XXX the their this of customers part HealthEquity per workforce person is there. this a moving and our They one marketplace of one person year. users, result, Psych didn't Belonging product, as Tracks, example. an year at from their they but skills, checklist programs of their isolated new to our subscriptions as Talent First, to HealthStream large time Skillsoft, X-year renewal. And solutions products added Learning hStream That add was not approximately per X leverage per decided per

and contract, They Unlimited also for our orders. product, while the their contract the SafetyQ one expanding OB to accounts their their subscriptions learning expanding additionally their their XX,XXX and Jane program Another were Learning nurse products large to of subscriptions program. Quality they're from residency HealthStream XX,XXX. renewing our while expanded new subscriptions, added our their checklist But Center CE hStream also our and to they

So year person per for $XXX.XX for all so term, from X-year per for to we're person account, moving approximately a this per year. $XX.XX per

in And the same renewal remember, the all count process. XX,XXX XX,XXX from up went to

of into ecology. Ecology. walls demonstrating we obviously, expansion customers share excited wallet of that to within our shop And examples deep we're this that are kind of X the have. customers So be HealthStream are They already these at X the

programs interoperable them Our are partners promoted that are in to our increasingly become more and to them. interesting applications various

examples. So these are X great

our expand strategic at goal a have The program. to like XXX accounts top this We accounts. is

additions, to these excited and extensions X of renewals, product share wallet. So we're increasing see great really

we interoperability come significantly that expanding grateful And we appreciate it And that to to underlying that quarter them we're them every making they that of commitments new to know capabilities their rolls that make is the they they trying around, HealthStream time together. the want release the they're to for ensuring hStream work leverage sure show all application these of greater various customers membership. and interoperability for making time like get suites. each renewal That's renewal. even committed each our that's So infrastructure others out

area building of company. our solutions strong a this enroll credential is CredentialStream out into of in for a CredentialStream we our important capital also quarter put the It's our and solutions, privilege in because lot

to and great strong we're finally seeing see really it's growth. so see to that beginning And

customers in become we about quarter, contracted remember, And both collectively. our new terms XX subscribe takeouts the member of CredentialStream XXX,XXX and subscriptions credentialing represents hStream a in technology. when application third and conversions CredentialStream And you suite, platform solutions, hStream to new for also importantly, So solutions. you of our that, competitive our from legacy our for

So the to of through we're subscriptions. excited part XXX,XXX add model, new

growth. subscriptions organizations same It's our top third smaller Health, include still customers over in highly Health. product. period and respected suite investing Not in now new for Again, been the to consistently see new several AlohaCare XX% application or Northwell year-over-year show takeout New that from we've this quarter exciting XX CredentialStream the for revenues grew years sure, and health the but we're in growth. And XX% really year. excited Banner XX revenue to customers this last like with

that's in as not we prior over area report our customer of But revenues business continue customers third high our performing. be grew -- is It's another satisfaction. have XX% year from business quarter, ShiftWizard, which the the to quarter outdone, to our scheduling

some to excited building subscriptions. investment But So though lot in and as really even deliver of in really the area as modest, scheduling the XX% growth area, well. to excited have in acquired growth companies to of do we're a we this year-over-year to increased see beginning we this space, know, this promise see in real X you we're relatively in all ShiftWizard

selected ShiftWizard application perform and have as an of its ability significantly we're set, expanding go-forward kind We primary enterprise at scale. to our

some quarter, for during Richmond Really customers the and new suite. Palomar new the added And Plains appropriate Center. scale features Medical to excited were invest working teams and make ShiftWizard that. application customers, the we're and add largest we to Great ShiftWizard of we capacity Health so our application the and delivering that capabilities and our for Health, many And University continue to to

to selecting joining HealthStream new customers So additions to some see coming suite. our ShiftWizard, excited by the great ecosystem the and application

just exciting wallet about back really we developments in to the And I turn Scotty, of quarter. to the about of obviously, about first during expansion kind market talk we're share the we the this, half in talked -- half. year. talk after We'll going of it opportunities half in over second So --

turn market for and to the Scotty let's to in deep back numbers dive of it me a over So and it expansion. reduction do bring

Scott Roberts

morning. All in for right the noted, financial same of period And and year. good unless the you, be I'll right. highlights third otherwise and jump last hit the quarter. Bobby, the against Thank comparisons will

and income million, up And a at was $XX.X up also share, was income As from revenue was adjusted for was $X.XX was $X.XX XX%. Bobby per per EBITDA record in XXX%. in it Operating was mentioned, million, and $X.X adjusted which record revenues watermarks quarter achieved record new up a million, Net we million Earnings X%. share. X%. up high We per up of high, $XX.X coming finally, EBITDA. share achieved $X.X

last for and Now million approximately products let's from third $XX were up for or surpassed start compared subscription which of accounted $XX.X $X.X from time the million and declined with increase subscription million-mark total of to quarter. first year's $X.X Revenues an at million revenues, XX%. in or the services and by XX% while professional revenue revenues were X%, revenues came our X%

reflects our company, that. software versus revenue services revenue a the quarter's and As is just performance focus growing subscription

XX.X% that was last changes margin mix, growth own. products including positively in benefited revenue up from year XX.X%, Gross and from we from

year. changes compensation $X.X due of which implemented or lower costs. Additionally, to by only in the from partially software the cost we X%, our by Though these that offset hosting were organizational was earlier million part increased revenues in resulting expenses and

million up and X%, marketing were X% quarter. of were up excluding last revenues were product sales expenses, over $X.X was and X% amortization and G&A Depreciation development Operating up while or cost respectively. and X%, X% third year's down and

staffing that consistent Our of last maintain increased declined $XXX,XXX over which year, base capitalized capitalized labor net costs level costs We development. the is compensation quarter. for prior by year our X%, product were costs software development to approximately of a labor compared and

and offset or $XXX,XXX. expenses X% a X% down marketing but less lower $XXX,XXX were partially lower offset compensation, by and is in debt consistent were and base were Staffing the revenues. in but this by G&A of also which slightly, increased service expenses partially or general costs were sales down fees around levels expenses. result bad and staffing higher with mostly resulting Sales commissions, by was other growth charges higher professional than

to XX.X% record first was their and EBITDA a operational million, of to up made from we last which growth improved year. during XX.X% in to improved consolidation EBITDA high the compared $XX.X our margins XX% the gross and quarter The led adjusted efficiencies was improvement. efforts revenues, this margin adjusted Our

hStream million. approximately Now $XXX,XXX quarter, me third of moving total previous over to hStream our subscriptions the mention let subscription the In the $X.X quarter, on balance sheet. before increased count by

a balances was cash quarter. with million, up take quarter at ended the $XX investment let's We sheet which and metrics. $XX.X look million Now from the balance of last

$X.X paid million under our expenditures, to capital for in September. and of we common we million our shareholders program, $X.X program repurchased through that deployed repurchase million share $X.X we quarter, the During dividend announced stock the

days days Day to when sales low compared record compared But year. outstanding days last DSO by a of quarter. to X XX came XX last down to increased

a made comfortable that improvement cash with and the of collections. quarter As I'm our the with matter receivables metrics context, we during

On XX% basis, from versus year-to-date million flows by coming last year, to operations and improved or flows cash million year. our million a $XX.X million also $XX.X $X.X compared improved to last free at $XX.X cash in

the third breakeven the cash free tending and over high for which for cash boost million, in quarters. flows quarters and record to seasonal and closer cash generally were our third As flows the $XX Remember, second be million. help are to another quarter, the being fourth cash $XX free flows to the with first strongest balance us,

this this earlier fourth dividend million shareholders. December. With will dividends X the Board shareholder our quarterly $X.X yesterday, And investments products, a quarter regard far dividend our our value Directors improve into cash make the we payments of also to year, dividend capital that by cash policy Directors adoption from back Board be of and our to that capital made we're allocation, deploying share returning Since so aside repurchases. capital through to a have we declared of in year, paid

a will announced third the We $XX $XX quarter a million to repurchases respect during share total $X.X extended. under may purchases has program made of the on we amount had repurchase earlier purchased making maximum the discontinue March been time. XX, or XXXX, this or at any of share program. the through of share repurchases, yesterday, million program And last under we program. dollar million the We In and million the month, program terminate suspend $X.X under when

and are entered and month, this Form this as conditions more you to earlier filed years. we an can of X-K basically details October with for line on facility terms in agreement into we another facility Truist XX. The renew find credit Also, about same Bank the before, our X transaction the credit out

which is sheet free facility an capped us $XX notice for appropriate we million, You'll we size and balance our at the flows. growing that strong given feel cash

as have expectations financial follows. for Now expectations, we our as updated guidance

We continue revenues to million. consolidated range $XXX will between expect $XXX.X that million and

is EBITDA, Capital range $XX.X We $XX which million and million compared $XX million. previous to between adjusted range expenditures $XX now expected have to range still expected updated and $XX to the $XX.X million to are of million. million between

While our any complete guidance acquisitions occurred the of which include the not assumptions year, acquisition eeds, during remainder last includes the late for may year. that of we does

over the Bobby. additional let to now some take So provide call moment back before thoughts on to me the a brief guidance turning

translating guidance growth higher I over range, midpoint is share which our adjusted rate imply the last at increased year. revenues imply EBITDA, our X for the are would metrics range, Furthermore, forecasted our on a for operating And as year. the growth efficiency into the trending and gross focus last the Our to over performance. leverage. And that of around X% would this reinforce financial around want other around midpoint of margins XX% year to

to has back Our compared for has time now from updates. year. additional to $XX,XXX third quarter's this annualized and concludes per improved $XXX,XXX from to morning, I'll Thanks call adjusted That employee per last for the call. some $XX,XXX the annualized for of quarter and this $XXX,XXX employee revenue comments my to turn over EBITDA Bobby your improved

Robert Frist

excited some and portion focus portion first this In take we existing that more some call, selling see customers. focused now expansion excited the of on market on I on products and my into Scotty, working how Thank of very the in. dive here. to to presentation we're and want that And you, traction to we're half to

some directly we're in to nursing that quarter. to we students customers, beginning third the by products our just traction schools, of to and nursing whole So saw set selling a and sell new on

XXXX. hire you the of into hospitals of between acquired company them Some become and to think December a may And nursing the the called that nurse. a as that recall students, and you to them product and students, rotations a ultimately bridge both these myClinicalExchange, can we company gain myClinicalExchange experience in of put

nurses also internships and profile student used to and myClinicalExchange those between And So credential into bridge is kind these like and rotations. a of connection the interestingly and it's rotations. onboard these

little a So dimension to it applicants it of qualifying the kind well. to has as

this over kind we Year-to-date, generated again, product, just And us. over year. $X increase for new million of revenue category a last the from a XX% that's period of same

those So progress declared even in kind capital hStream to the and market because to We we're then with just really workforce entering areas. students, we'll the it's the they just acquisition they And get deploy the we ID, they're students. see of this be love these after that excited pre-profession nurses. the and and before enter exciting idea of

over So clinical XXX,XXX far this rotations. year, we placed

rotation love as a placing some the hospital. nurses, a course, of become to of candidates this hospital. because, at sort, become a student that And hospitals they into in that's nurses, most So work they

before students market technologies they career, our professionals, which their students. to myClinicalExchange, earlier by year, grew product, excited nursing our build these they're great platforms the really as us, us this XX% be bringing doing engaging so with which the a an for is over So X enter And us best customers helping business with we're about. ally nursing things allowing hospital in relationship to it's also them the prior and

the better access what products this understand it. access, careers. into professional to them importantly, students myClinicalExchange need application, So to students And their products can gives transition And use before they who those can directly their the HealthStream they when we direct begin the schools. to we with it enter into and selling

for of schools the third completed the nurse So an because the students, it new quarter, Suite. enterprise earn market. in Resuscitation of addition is and dynamic expansion the the And how also to this credential in targeting schools. in a X to school it targeting forward purchase by to nursing country, selling nursing while really In excited American exciting into this Cross the carry nursing to largest we're the we're Red see to expanding

determined consideration, fulfilling and the X-year for student, So solution this best American careful the the Red customer after certification HealthStream a provide need of that it's Cross resuscitation credential. and

those hospital So And automatically they at the up enter a and market they hStream application. that show platform now the credential. with into that populate the learning if credentials uses

So of HealthStream. -- or before finding with customers individual have example new would [indiscernible] case, another engaged they again, in this professionals interoperability

For for develop these the earlier to this for clinical to an otherwise. market be might the excited we're than stage excited resume. gets enter with who We're graduates skills us stronger Cross to engaging of at they earlier, these have Red the

So all definition how our of around, market to the pre-professional we're a about nursing specifically include lot schools. and of market excitement expanding the

we're of XX% you traction, how with getting entering journey, this hStream market define ID, to the they're that market growth is from a but and can overall. to think myClinicalExchange really way we tell new the and exciting this their market early which So in days we're about our the just new

gears I'll showing employees up how and streaming just we're demonstrating value. our So good our wrap for by shift here

one We quarter. constitution, this value many our have values. of a run our this to business demonstrate we're in we good and streaming And is important by streaming able

services survivors fires Maui, And incredible horrible were those By just the and care for challenges the care professionals the as the of the the overall. able in include fires really in provide front their workforce kind Hawaii. on they we of line health where best health they mental were way, historic to serve to for tried devastating

an Nursing we which up as able of that equity And and Hub, team education, of Center was -- well. the this that partners, free offering we did investment have reason we for in of we we Nursing also and do able Center our State organized State Hawaii so teamed exciting psychological up with -- complete first to aid to online were X Psych Hub, charge. with an and Psych was for HealthStream training Hawaii So a

Hawaii, need. of capabilities good to front nurses excited their able state, we of of to in -- time and streaming their the in We're employees lines service so platforms and through. betterment just our all mode and kind valuable our how provide nursing for the hard the our care can and we're process going at that on a so case, allow And recovery the nurse to for And of health they that extend value are this population help in live we're idea help the Hawaii. fighting of providers that technologies in the the well-being this

honored to So and crucial national resource we're to care. a be that a these we excited them be part and health to care heroes, professionals we're provision of of consider that

of strong the program. dividend payments this quarterly about shareholders we the under what I directly to We're the be our third call, in about we company's as December first do on installment dividend will and policy, return will paid a value So our XX. performance want with our strong the as yesterday, fourth began year. payment close portion that puts I earlier this want us -- month made policy We And you to operational a our the under this plan, approved be remind of just to quarterly sheet position to and Board cash ago. balance pleased

to whether goal, of And course $X year. shareholders. we year next meet expand to our to track the that program XXXX, consider new dividend policy to return on approximately will dividend we're million and Over expect we full

discussions. up So forward that we to look board in future taking

company directly shareholders company have in go for listening. pass recurring technology for deliver subscription is you to XXXX, and you're you as to on this of a if those and that interested us. love gains to to XX% you're revenue, shareholders, health journey the with guys If stock SaaS maybe We'd HealthStream expect share to determined here some growth steady profitable care is the

analysts. over to Q&A back and operator session Let's the begin the turn with it our

Operator

first question Our the line of Matt with Hewitt from Instructions] comes [Operator Craig-Hallum.

Matthew Hewitt

seeing about from so you had are difficulties procedure Thank couple the of you Obviously, commentary all you kind of And you you Maybe morning. hearing broader the some for trends? headwinds off, detailed far. but are customers? what able a talking market this hospitals, hearing just companies income first report to the side still volumes that? the navigate how or equation. are on of up, What from

Robert Frist

lot the do a of is workforce. around great them of our better for a retention aid that the think challenge are in and workforce. the solutions development, management issues their Well, We

part and of to working they're cost So development. workforce that hard engagement to is that structure retention, manage related

be with that of So articulated. helping the that I driving may think aligned challenges those them challenges we're do some financial they

and with to as our customers for like help strength hospital period. So well. our up. our this a We customers to I them as customers of good the It's sign feel aligned trying that market volumes all see through continuum of and

and that have are signs do think there's biggest are which areas of better the the our are workforce. some positive. I retain, manage develop the we engage, challenges how CEOs, So and there the And do topics they

in are in, we Hawaii, So program and the the cost, on way quality with higher Red like about we through nursing the called we're that competition a we to products. our psychological like talked we're when a X,XXX everything skills Cross aligned. the development skill on a which help program be think proud can lower Jane And well-being, from employees to our is development all than

we are challenges help their So way in talking the aligned them that about they macro think the to through we're work that level.

Matthew Hewitt

students, the you question, helpful. up employees then of the And opening you market? now a applications that million address. XX.X this new that kind that the nursing -- that that That's your Does include are Understood. schools,

Robert Frist

that not. metric doesn't Qs, it and pretty it XX% sure does I'm about don't is our We think I Ks in defined market. the does. I'm it include and sure pre-professional --

our believing as are expansion and nursing opportunities. of so an this schools, on declaring we And call,

over sale adjust It's first new us the time. our So number in and quarter. that occurred we big may to have for

market. do we go right we'll nurses. to to become adjust of that to down but in these interested see way students they getting look them I the thousands ID So an particularly the tens into network definition onboarding school, of how new last school, our their before in to year all right market. nursing before are we're and enter professional of grade them But they clearly think catching of We don't now nursing getting

And so we're excited about really that.

and think that market us. expansion I represents for a definition

Matthew Hewitt

That makes a sense those nurses. potential future that, after ton of going

there And more pretty the there. I term? X-year that seen so further? curious would that? -- nice you one the another past nice some growing within would in I beyond midpoint But for just be the maybe be up kind question, XX%, you've maybe last that near growth expanding your over impediment mean, what few way the Scotty, the prevent of what but quarters. XX% stand I'm is gross step your over know from of margins, of mean in I would target. of of anything it's metric kind what the obviously, And the would

Robert Frist

first try add. Scotty and I'll let

and I built production our a introduction products new us think a products that and of that technologies, about inherently little APIs of use more our our things the all products. excited is new one we're of some those of of little rate almost that are platform gives faster using of leveraged being

generally are or products organically technology. general we content data, content my products, application own ideas suites we the sense the where own in the on that either the where pipeline our working data-driven we're that our using platform new So things the building we're is and that

the So in time, margins. general, gross business I think of growing parts have that over inherently our higher

this and I building we target pressure stay now, that goods. define range. around of origins there within had what because But that slight upward the continued the higher opportunity content think the different of should on built gross that say, than, be were that to cost partner is company of right of margin our need So kind nature we're

expansion. X objective. we us X-year our on general So the we're measure stop landing see and is I already continued to that from I have what of really But think in these multi-year could that excited my outlined range don't be that objectives, answer

that progress to we're glad So see year-to-date.

Scotty, hopefully, anything that, addresses but the that If add to want you to question.

Scott Roberts

I to obviously just mind metric. continue on to a continuing think, transitioning Yes. a Matt, thing PaaS mean we've down company to additional for we're I where is. progress talked in just And and one Trying improve that context, headed to that's as to road. that little about keep

things type margins of some cloud margins a a continue hosting from a influencing environment hosting. that's co-location the degree One to is likely on to traditional to move of influence just environments

So the that's our investments And obviously, cost continue delivering increase. cloud in service. to our of

increasing influencing degree. our solutions. it's seeing of So that that margins costs some to related some think will higher-margin to to migrate We cloud. But towards as products we're those continue overcome

Operator

comes Our next question Haase from Jared the line of of William Blair.

Jared Haase

a Ryan -- on innovations know the was new color more products. specifically, just Daniels. you product a announced for hoping little bit Yes. Jared suite suite. credentialing of Bobby, get to of for And on Haase This application maybe I is that couple

of market? the you're just still maybe be great for relative environment about demand position it the would suite how HealthStream to the thinking perspective So how your to about CredentialStream and get thinking you're

Robert Frist

Sure.

It On right. it you CredentialStream suite, the is got suite. first, a is that --

And so that capabilities we library, the it's privileged really a that and differentiators which has to asset data own built technologies. and set our a increasingly some of in roles the differentiator like hStream a is it, into market. application and is curated powerful It connected

of believe, market. in application complete the So X the suites we -- it's and most also,

we've landscape. markets a that competitive the it's almost defined. So every available find competitive highly us finalist we in ourselves think in against the We competition to that is

insurance onboarding processes privileging, the and some some think them ready of credentialing, also provisioning it we HR so provisioned it's to facilitating competitive the enrolling get by health them on process capabilities of process And EHR facilitating training like be and is delivering and electronic because system. around both to includes the the insurance training onboarding record the

think And really together works suite the of that definition well. a have so we very just really, complete we application

physician a our our of differences process, kind process. one in of centered a competition back-office Also, philosophical it's kind of is

in with credentialing, Promoter control positive. Our Score, taking Physician physicians privileging, process. We bit is a which this both is popularity. enrollment over Hub Net it's who And personal more are watch gaining little

hub Physician. really we around application also, workflows component bit hub physician think, a physician point component CredentialStream for of the the So redefining us that be strong with And seeing is the engagement the of a the differentiating suite. little we're view

it's overall, well starting think think demonstrated So positioned by that adding during was we're customers the I little And quarter. across bit. we subscription a And compound -- we revenue a nice also, suite to the are number as the to XX%. XX-plus see

back my note. Maybe me growth on Scotty, what revenue Let rate was the year-over-year CredentialStream? look at

Scott Roberts

I Bobby. got right, think it you

Robert Frist

Yes.

I XX% ShiftWizard and was think percent. XX-something it's

Yes. So

think a finalist overall, at, believe deal look and it's the that than more question. feel very I in we answers we win we every lose. We we I hope competitive,

positioned over have how obviously, we several companies on acquired about excited really So and well core a rebuilt decade We application and over that set, application set expanding, and agreements application rapidly. new the suite core is. that XXX

excited. So we're

Jared Haase

during where Can think then your last you a year. I a staffing. talk It fill bit kind costs broader labor mentioned you're were as a I handful half that like you're of wanted talked about having just about remind hiring open to Great. quarter, you follow-up, to us just And the at second year-over-year. relative of Okay. to expecting sounded needs? positions you the of down

we where quick kind expenses we're XXXX? operating should of sort run just a at rate think for how maybe So of into going and update about a of

Robert Frist

Yes.

have about open XX think I we positions.

about for of I them. XX think we're recruiting

together We hiring and hire as where a some are we have in exciting kind of them on. models which cohorts team new bring

application, applications, hired our a us of team the the development ShiftWizard just an cohort that HealthStream allowed team. from for we offshore which to to of move example, one development For a

and So We're we do natural turn. have business. as to open departure positions reshape also the with using opportunity the an

to And so where of if that more We're emphasis to on about that do is. and managers opportunity we're put development. we've to emphasis our the and got about elect all connectivity on thinking our think customer people structure and our trying using leave,

of puts also and turn numbers going are with of are investment. calls on. stable performance-based those so and natural And hiring our of fairly that's X relative say I'd kind employment Overall, the the areas terming

X,XXX to So in the coming I quarters. of a scale number good is the our think this way about around think overall, workforce

Operator

line of next Our comes from Close of Canaccord. the Richard question

Richard Close

Can Great. you okay? me hear

Robert Frist

Yes, Richard.

Richard Close

success revenues was all, the said overall over A you the curious I numbers your just XX% those X%. mentioned Okay. you prior great just the revenue quarter. growth first -- was just the growth CredentialStream of looking in and like on at And then I ShiftWizard, believe Excellent. quarter. Well, on quarter. congratulations XX% here. grew

ShiftWizard and thought some So that there, those cannibalization growth legacy the of just greater. I referenced, you total curious the just products? in some CredentialStream is would with of that is numbers, be

Robert Frist

yes. Yes,

some So that. there's definitely of

as and acquired those some lot customers. is As goal we of of know, those move to applications classify we our applications. we a legacy And

is that So true.

from of migration about. as Some that comes we talked

historically, I on some But that. migrations quarter, a wins And would around for it we a from And call maybe to guess I it them subscription in application anyway a of you of around suite. successful but off call little I'm new probably in given it's just I is think cannibalization, little comes bit out credential market. any the XX-XX, SaaS believe,

ballpark I'll about is probably I'm So officers if texts me newer applications think anybody one different anything And from probably quarters -- of CredentialStream, And half. over. it's but last legacy new And that And half. those growth see the my the are number But migrations. going to the migration that. than there few around business definitely on again, on is applications. say some celebrate we of we the

Richard Close

Okay.

for customer platform churn, or total lower anything the that? like growth doesn't overall learning significant the imply it like revenue rate So

Robert Frist

a Well, share. there's of got always market of We've that. lot little a

a there's going. and come little always so And

once to leave. more think to though, most X go from get we're likely XX where in to for we recently, I do is X -- trying or highlight what or seem they to of X our than products, customer they X X a to

ago they we Now in and a they them that on the make maybe product, platform. hStream when change -- few lose door years toe just business have that's product, that we in we we X on on where them also product, decision the and difference got a lose the

accounts. partners. them like a don't couple on few We that And real happened think of ago, consider so a I ecosystem quarters

our couple of we're big key really this a the so And to quarter in change excited renewals. see

This other went the quarter way.

doubling XX revenue more and from products we year. And so and growth, in to them because X per we're watch have really that's products overall, obviously, our subscriber excited person their to And per growth go have typical we product newer categories.

Richard Close

revenues probably is like of terms of want any in there sort this of... I Credential the Learning and answer to size versus to ShiftWizard percentage a as question, know overall going but not way you're to

Robert Frist

Richard, because to there. think you we're what get, really we're Well, we're I -- and right are just not trying

-- We this have I'll a this metric, subscription. immature very it call hStream

down -- differences fact, learning a platform for network, to a and lot -- for In think of we're into we've still membership clarify in hStream to for and of subscription this hStream subscriber our do hStream Almost it in scheduling. broken credentialing to hStream as learning. a work

the are we've created of are that sale bundled kind bundles these application. So of value that with core infrastructure each

and us a subscriber will obviously, versus supporting the on trying X NurseGrid, application, we're spend And is individual infrastructure. help And our kind get, many we on of XX application credentialing, out their here that professionals get nurse nurse now number we'll a get all that, goal ID And how Bobby where Bobby, are our unique hours what to the the that. same and X here sort to the each and suites same I And hStream numerator-denominator and can is network. better Bobby these out subscriptions say to rolling there week. hour learning sold to they this we're our place on the minutes to is think to the the nurse entire technology around is reconcile in

learning way to So or the to where a revenue year. goal level we're not to at extreme per -- this account break person our focus you of on a may we of but we're yet. And then move to it there that's metric year. person we per quite And not saying just can per trying down long categories see may get scheduling, and can by like single platform kind grow the per revenue

new isn't revenue per "Well, But know not can't where per where be $X And per product so launched category. it applications, per used overall year our metric headed. internally company scorecards that's to like, yet person can wired product metric. start enough year the my it's company-wide we're would, we've our to The and cable product so managers adds of person all mature say itself you like to can per a

is or next these metrics refine we year so, hope my so And the can further.

to we've team applications So they'll trajectory. to little them subscribers. a so connected the reconcile all more that growth contributing of hard working bit And technologically be more correlated a people of hStream denominator also, measure, adding application the the got that to to are We'll get of unique the subscribers.

that for is know Bobby we on for hStream learning that hStream on the same So scheduling. Bobby

invest their they spend IDs, ecosystem, think So think Apple getting that's they're issues of We right. application you across way be X these of money a users almost think way segmented X them and Instead, be of to and that you're to and platform, the to Apple ecosystem. don't a into thought where billion billion long that's to we single about they want X start way then of saying, suites. the want

we it they products all maybe per generate my makes my sense, that form over I have out Because we're product many instead that and managers of hard but million per our products the a at we system we're subscribers of suites a company less So know on application platform our to working metric eco have $X XXX,XXX year product, a in company, at XX product. in the and trying structuring infrastructure to already be the breaking little of that single so have $X year. support that

it and that's disconnected But much and and we're aggregating a a meaningful. years, We've But bit it's the more we get little thinking where been now, Definitely the users, the then better while. in it hStream much right be someday. to going metric up portfolio-like a around more so metric. for reporting want and to quarters coming And it's of down. with

Richard Close

for go very back guidance going with to then a range little Okay. was Scotty, of but wide, commentary. terms added to helpful. thought That's the wanted the And seemed I I model, your in revenue subscription bit ask just

at you're So be of to revenue range? roughly the towards midpoint the trending the expecting

Scott Roberts

that's where That's I we made. Yes. that the are Richard, remarks forecasting.

Richard Close

-- third to on you declined the go wanted I back clarify That's maybe to I Scotty, if quarter, that. Okay. I curious, product really thought specific I expenses, just to down invest then, helpful. there not second to was I I'm Was last and to And it quarter sequentially. anything to call going step it, mistaken? there you're But continue that led was curious said if just was whatnot. quarter that from, sequential

Scott Roberts

Yes. No.

just software numbers year-over-year. mentioned and a about we I'll are expense the think -- was mentioned, year, was just sequential. I go mix I check Bobby just think and emphasis was that continues relative have projects implants But last that translated staffing as quarter. us. development down. pointing in the to capitalized But think capital development on I out few at go for versus product fairly ongoing moments it more as and it that my putting what I to of We're back into increase obviously remarks, in ago on activity. how my to and sequential look flat

And as to departures, back X no in. reinvest a movement cost mentioned, trade-off up also so the not we the position cost company a be to lot Bobby freed looking of how from dollars an strategically perspective, structure. in those we're and coming have into as may And leaving equal one put at on

how those as business into we're being about deploy back funds strategic more the well. we So

Richard Close

$X themselves? I students Is nursing the million that interesting thought it can you remind Okay. question I guess final nursing million? the was schools on me believe Bobby, that of I like year-to-date. or $X And you guys my that's who's myClinicalExchange. revenue is, the paying just

Robert Frist

It's yes, question. great Yes, about it. fascinating a model, really that's we're excited

of in the the The gets to their it hospital and the as software take works. part a pick rotation. for through software set. how It them rotation -- the some solution allows and get students choose also who preliminary Here's application

school The hospital some the nursing software. did some has So software.

that they're forward also the network. students of their pushing And profile So has see into student hospital the the access. they software can

almost so choose They can And themselves. set get so anyone of for a can the to little profile LinkedIn, chain, they that model profile, bit their access build to pay that essentially like up kind along is it.

so And half And I lets pay. person applicant per $XX student the -- per about market about it's the of about essentially. it's believe

student their a find get so $XX, enters and the this that network rotation. the them when And pay to and they access they helps credit card

part of cases, other pay say, the future some recruiting choose almost to hospitals half, the as In about I'd talent.

make believe, And hospitals half of part of And some by program student. they so it's school. of kind at in paid about paid cases, the nursing the half by and the it I the million, XX-XX $X

almost their they can the So And the choose the fee the school XX% application to that hospitals by the the are the pays like decide easiest paid network. push about hospital. But by about student model reimbursed. to is it be self-paid out it, to would for, way which ones applicant and or and the for XX% about gets adopt. largely can They say, to think pay

Richard Close

nurse... nursing like -- and that then tie-in there was the what app to any it myClinicalExchange And is

Robert Frist

NurseGrid.

Richard Close

-- there these things? between integration X any there is Is

Robert Frist

we Not through apply have their the -- app. myClinicalExchange for that they NurseGrid yet, nurse might but concepts

on we're We the have to myClinicalExchange as that we're I NurseGrid allow and network would think network. on to working offering concepts the offering -- that working know, know learning learning well, you you

make channels before. them And infuse capabilities in to new fact. my platform more going we we know year-end, of ideas both are us are be gives together. those would have both have into now available working that teams vision right course, by work make now, on allows of essentially but to the I That of interoperable, to didn't commerce So our lots of us networks. products commerce those in those to

opportunities So the become we're next XX those days. will in excited that really

Operator

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

Vincent Colicchio

Yes.

per data the where indicator you as growth healthy very headed? overall revenue would a be sort for wondering nice may see. maybe some to employee, in growth. provide of comparable average metric anecdotal had to You renewals I'm A that point have a if the

Robert Frist

examples. the account Obviously, but are they are you did really larger. X great, mean -- level? we they and give Oh, at examples So good

$XX from person but to don't we And account I and have so $XXX.So metric go -- to it's per other $XX-plus is great almost think, $XX around X to see the wide. from, double that

hStream hundreds account the grow have and I've Of manage management per share get in mentioned XX accounts, start goal this in a coming to about quarter. top where for my course, and hStream people should subscriber. to place our learning years to where mean we scheduling, that will launch can averages to as Credentialing globally things of revenue numbers across And quarters subscription, their our of is course, those which we hStream and goal,

don't I an So answer have now. you for

where particular, We exciting we samples person only couple across examples, revenue per cite now, on we'll growing of we're we account management, have But and directionally the instead of can there. But get a focused year. the of product per set. going, teams averages people, in reporting kind it's of Vince. And have kind right of

I to think for so on the much trying get, we're hit even guys about you that the it easier where growth. nail head would you've model to our be

need few quarters. I you're us. track, a little more So a front you're right of the on in

Vincent Colicchio

identity are license platform, the the and management expectations? then meeting hStream on management And products they

Robert Frist

hStream Really service. your service, in which it for exciting. We've data-driven taken that license learning is with subscription. verification We've a bundled

movies, free not know So Amazon and like there's are kind coke free, of really included. they're comes all a Prime included they kind of but concept, almost with we

their service, is that X.X have license being learning to yes, hStream in of we've which surpassed the contracts. so on And activated subscriptions million our for behalf just customers

really to sanction add we're to the those screening. some of of forms upsell converting we're then And other excited. So

rate and service, in And we have the API-driven services data-driven really happening. other sets I because and into so about have these it's new we're application And but do overall an those so me, meanwhile, don't -- services. of excited infusing we're same conversion upselling front

Again, learning we a included get for includes subscription then XX% where but than their "the it their movies. with have less buy probably they in contract. like service" Amazon ops. a license there's And stream It's do now,

of do have well. them as screening sales a team on have purchase, closure We other additional we as that that and forms calls and rate the an offers sanctioned a

of come beginning license verification, see general as screening So out to inspector office of well. we're sanction data-driven revenues those

excited implications about to the base users of And surge $X.X so the really long-term million path see it's to now. And that. great

Vincent Colicchio

Scotty. one the was from for know And contribution it I a percentage to What acquisitions? small. growth was quick

Scott Roberts

Yes, is in $X.X that X.X% percentage growth probably the of around the be just under million revenue It going rate. quarter. the to was of maybe

Operator

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

Robert Frist

that right. happen, quarter. a you, made To all All HealthStream's Thank great everyone. this

that a here out Thank telling this operating to strong hope year-end. We're deliver particularly cash get you you and with up look. leverage, and we our strong cover investors a returns and for forward Looking free us. take in analysts flows our wrapping there, The dividend EBITDA metrics. good shareholder story to trying potential

you, So excited and Thank for look quarter. forward to everyone, participating. next

Operator

and Ladies you. have gentlemen, conference. Thank for Thank and all a great this does conclude today's you day. participating,

You may disconnect. all

HealthStream (HSTM) 24 Oct 232023 Q3 Earnings call transcript