HSTM - Earnings call transcript Q1 2024

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good morning, and welcome to HealthStream's First Quarter 2024 Earnings Conference Call. At this time, I would like to inform you that this conference 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, Thank Thank you quarter discuss first today joining results. us XXXX to our for Also call the on conference A. is Robert with me today CFO and and of Frist, of and and Roberts, Finance CEO President Senior Jr., Accounting. Vice Chairman Scotty HealthStream;

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

HealthStream Additionally, A call. EBITDA we financial reconciling income non-GAAP adjusted may on as issued in earnings adjusted yesterday information to may such included reference 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 today, So over the Frist. Bobby I'll to CEO, call start turn

Robert Frist

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

solid analysts EBITDA. revenue print. As was achieved the it sometimes we our and first quarter, say In adjusted a record record

showed In release. earnings increases fact, major in quarterly highlight financial in our year-over-year categories our performance each we of the

be to type able performance. report and excited that I'm of of

now, we'll middle able middle of year the were up right to X% over able We be were expectation financial the up the adjusted of the $XX.X We're over revenues of full was year, The full have of the we for ranges down million, quarter performance. our to and range reiterate XXXX. last the EBITDA XX% first fairway. hit quarter million, guidance the and ball first And the to last first looking of right $XX.X year. the quarter that

our about results. Scotty reiterate of in Later suites an these of results helping to deliver after strong some going expectation learning, the to I'm these excited financial we're going and discussion [indiscernible] right financials, financial are drive developments and that credentialing call, scheduling application So middle. this the describe down with in

up talk emerging I seeing worth of bit broadly calling to are amount of about healthcare I little The referring the organizations workforce their a an think paying and that trend to increasing back do out. we're trend that I'm attention want to is it's defined. kind

staffing most Now your that the of are And asset. we the served more were of importance exacerbated to that by pandemic the valuable believe CEOs healthcare shortages embracing is workforce care fact the ever, taking that their than their ongoing reinforce workforce. really

things and And for retain capacity. point sets. professionals. on laser-focused workflow HealthStream these the there's And investing by and applications course, on of that capabilities long, skill knowledge view, a hopefully, from that develop these in our focused are both to of the them of healthcare and knowledge the and And the time. quality, been has long their them just improve We're

right the place the make also at right in time. sure are the right We people

So there's deliver focus that we things focus a a organizations do retaining developing lot that help of [indiscernible]. and and on bring

who skills people always what employee, say they are. of they're been to if that their HealthStream I'd ask vision healthcare our improving of In by the through proud you healthcare and say fact, any are quality has the about improving

well, our based a the as developing it's priority improve who vision we've workforce to And long just for time. held increasingly conversations care healthcare a by And them of the on deliver so for becoming topic. customers, with people a top healthcare that quality the as

their need of at direction These kind are -- cross-develop to these areas. them are in needs that invest and competencies It's we together be workforce look how of care people complex, can just and well. for customers, all to to help Healthcare from know realizing working any the with our emergingly you everyone. take And can these do skills. something that we but the shortages, benefits that hospitals

the application healthcare. X network have our of platform underpinning the as our position deep suites, HealthStream the So along them and people say workforce sometimes with maybe helped customers platform now platform or choice HealthStream of for we

drivers -- I in Moving parts that on are to we're of more areas But that to we our to today. become updates years. believe the these business To share to see material could contributors be [indiscernible] excited going the discuss. emerging results growth initial clear, results specific growth want are business in topics. future that not X expected we're

The to we're our excited first capabilities. advance is, commerce

have time, field longest our sales a which the facilitated sales been is most all wonderful. by of done organization, For

capabilities And that through of increasingly, we building areas and part with relationships thousands strong supported But e-commerce incredible capabilities are of this commerce. for our organization. with X these bridges built customers they're hStream we're platform, sales out and of

with enterprise-level purchasing, call purchasing, we but brought prior built up tools evolving of purchasing kind is we capabilities e-commerce are first in. The collaborative better collaborative now this calls, on and our

And that's so exciting.

[indiscernible] would is it's others business-to-business their which The kind education second department departmental at tools, training budgets is, level I purchasing exciting. of purchasing, heads development And level. guess, that and commerce we're call now what through tools the new the we have manage launching and we departmental

opioid commerce And the through about on going to kind individual And then required you I'm actually purchasing. in a physician [indiscernible] that our during with course. to we last ecosystem [indiscernible] commerce individuals of mentioned talk started mandate. the It's is the newest -- I the to federal have one direct our a called call, DEA-mandated focus finally, selling

strong and opportunity tailwinds. we it present [indiscernible], to our own able e-commerce areas. But this of our own and through were has to through inside in the in it promoting capabilities cases, So course purchase some application our network

during the report of first course that DEA can direct-to-professional, quarter million $X.X in direct core alone. of I approximately sales DEA doctors had the now to we sales

use exciting by as allow to purchasing And breakthrough direct tools commerce so our really an is course. this case, this in kind this new we physicians for moment of

a Now have again, it's and for this mandate, course, based right been have being just time wouldn't anomalous But the opportunity to possible new federal on our [indiscernible] tools. commerce unique powered bit happen sensitive, is it. without content a because, we by nonetheless, a

what healthcare, think individuals of also and is this to when So represents selling think one platform taken [indiscernible] people I the get by we of capabilities. group commerce them. when to to But need then well need which to And these the it they represents itself, of positioned individuals. opportunity direct-to-professional as know scheme and course greater the an HealthStream things, in it expand how

feel this capability healthcare. commerce part as extend of positioned the platform so well [indiscernible] to for I And

app Well, extraordinarily the direct recall popular through NurseGrid nurses. commerce other Learn. with channel where we're seeing you'll our expansion NurseGrid And that of is is

like have rate really users. active both over some that beginning million features work they which you high manage And X.X new of the going And NurseGrid and helps ask if have like its and schedules. a We nurse, appreciate schedules their them to hit almost app, monthly any to NurseGrid, they're Learn. you're personal capabilities

tools. to as direct to be through by nurses to began NurseGrid see Learn to we so recent new transactional that powered see start commerce [indiscernible] our some well volume And

Let's October announced year. move last market, which to in of of total we on our the addressable expansion

After provide of pleased school sale nursing the we to our completing Specifically, I I'm quarter, major second [indiscernible] that to have innovation, one to full want that our [ first the some we're nursing largest with you Cross enterprise making schools. platform HealthStream and announce rollout expect now campuses, of this over the at fully ] quarter. technology dozen during Resuscitation implemented the their Red a we Suite and around

the nursing one technology after the entering school schools with the with their system. a job work And to platform, nurses, hStream Cross first graduating rollout get using with Red nation, thanks So now interwork an Red in this relationship largest becoming ID, exciting of to Suite. nursing with Resuscitation the when nursing along they're this Cross and they certificate, new they [indiscernible] large

wave And and we're report and workforce excited the begun, on that see enter credential. that. really to but We'll the implementation Red with there Cross has so able excited progress be that we're with our to financially, more them about ID

the land work would them that that that suite. really, or organization application health Anyhow, of their with certificate completion they facility forward learning into on opportunity a is our the great at uses if data carry

that And APIs. of its course, really powered advance, so also excited about by interoperability platform and we're hStream [indiscernible] the

both see to excited implementation progress nursing school progress again, and the in technical So financial market.

model, sales as Of to work course, a our well. that is channel we'll best with this how working opportunities figure to in expand

DEA I of and school [ [indiscernible] nursing X school, opportunities nursing cover. the the ] developments early So want to made market direct-to-professional nursing market, nursing the The those and market. entering student there, are

do areas, new those of want of excited but material These our progress some do to are not new expectations. report both And to light. so see channels. we're business, we areas. parts manage I They're in

some We're development excited market opportunity and declaring to earnings in light call. prior see as funnel the the of at these an end our expanded

we're again, excited describe call, the of on kind base a level want business, for developments. a you as just of see take I description the to So nature can to those anybody business. new reminder away of our our

platform, on foremost, our the HealthStream healthcare We're scheduling and [indiscernible]. dedicated technology to and is healthcare of and First the credentialing technology development developing focused a workforce. we're

predictable. And credit been a a solutions recurring our basis and that years that those scheduling we of technology do some that subscription technology application which business. hStream under unique X learning are becoming for we'd SaaS interoperable the revenues kind our platform of eventually. three, that building. subscription development contracts increasingly, on sell to and their we to people This And revenue like workflows get SaaS provide to [indiscernible] makes SaaS-based is So Historically, [indiscernible] recurring our stacks and healthcare credentialing, all stacks. separate both we've through average

subscription-based. In fact, XX% revenues of our are

As I nursing channels sales to mentioned, and students. our we to started directly professionals open have also

profitable. are We

have We debt. interest-bearing no

bit $XX.X That's We over quarter. to balance, million a the in have which strong good $XX.X QX up prior surge cash did million.

free cash flows cash flows quarter. during good and So the

on focused healthcare, are healthcare the more solely We workforce. specifically

So we our engage given our nursing this market. the of with we think platform. through [indiscernible] ecology it's we're trends especially of addressable major ecology healthcare ecosystem, primary network important of of us X of to There through applications all define -- all suites our hStream as the which initially effect as making and all all secondary a XX.X in time, we of as them and want towards million professionals mentioned it I of And want total are good of our the the or million call. making well. our and they'll over opening [indiscernible] members application students, -- XX.X them headwinds an XX.X

dive top the couple. Well, hit turn to Thank little to [indiscernible] to deeper Go Scotty into I Scotty. a the I'd take just you. because over it Roberts like ahead, numbers

Scott Roberts

and All Bobby, good right. Thanks, morning.

SaaS per compared the for revenues Revenues includes quarter. year. otherwise we've solutions, first from noted, from highlights So over to was defined growing last and deliver million, And quarter. same be or increasing X%. to of share of we I'll first total also coming period XX% for for and XX%, XX%. Revenues at right license the million year's $XX.X earnings share them software accounted $XX.X share solid products share, top was jump was $X.X financial performance adjusted by both and $X.XX in as up that will X%, $X.X million to were $X.X pleased in go by quarter the million $XX.X and for up were was revenues, Net million was against but for income the comparisons in our the time, $XX.X unless X%. line $X.XX continue EBITDA. XX%. increased last I'm first some million, per and Subscription Operating Revenues million, maintenance up quarter, up subscription fees. up predominantly income million, per EBITDA the $XX.X adjusted and

occasionally associated by prior as were $X.X the customers. this and in products $X.X here our existing your to approximately are scheduling over they attention Software ANSOS legacy solution because licenses onetime I'm the are million increased calling million with to and revenues such year. license quarter sold first

We not sale. revenue license and the should $X.X came $X.X I this million level, expect not repeat do million first remind of from X exclusively to fact, modeled the of sales quarters. onetime quarter In that sales the at in to you to be continue ANSOS upcoming quarter in want license

quarter, $X.X X declines XX%. revenues. I in Additionally, our or Last by declined discussed revenues are that service professional experiencing products million

So quick update a those. on I give want to

is second first scheduling of solution. ANSOS our renewals the The are manager and the products; quality

$X.X During the these quarter, by declined first or XX%. million products collectively

professionals the On quarter. to directly $X.X positive our the channels side, in revenue delivered commerce initiative sell million of through to over our

backlog primarily compared to over million year, compared revenue of approximately in margin last of year months. due down hosting reorganization XX% costs the software and $XXX next prior the the be last a XX XX.X% staffing than improvement were period royalties, year. the our million converted for from growth obligations quarter cost the last we to perspective, $XXX is same the as This performance grew of Gross the remaining year's revenues. due end cost efforts were offset And Our to to XX.X% of and to reductions. expect more was the and while labor over

most As for able expenses was and was and of this to a increase cost up operating operating increase. X%. product excluding X%, we year-over-year of expenses, from maintain up And to were expenses, amortization, revenues, depreciation X% were which development

margin XX.X% was million, expenses to to marketing EBITDA XX% and down X% X%, were adjusted XX.X% and sales which Adjusted $XX.X less year. last than and improved and G&A respectively. compared was EBITDA up Our

EBITDA of severance strategy. $X As associated the impacted single last and a year's reminder, with our million adjusted by charges reorganization negatively was platform

balance go with investment We the quarter. over cash million compared million balances $XX.X let's last Now and the ended metrics. sheet to $XX.X of quarter

we for shareholders to million the our quarter, and paid through deployed $X.X program. $X.X capital During expenditures dividend million

compared was our material. management, DSO receivables which of And customer year. improved. the stable. were outstanding quarter days days to speaking, debt led last base Bad For it generally collections, sales charges not a fairly from XX payment strong has days of remains timeliness XX overall, to

switching Now cash flows. to

by paid good free million in dividends a cash million our in $X.XXX or flows from debt, flows and of of prior in M&A, are be available share improved With a per deploy and were repurchases. Yesterday, strong our coming we position and cash million cash declared strategically including to up sheet no the May. $XX.X a $XX Our capital $X.X of Board a over cash slightly X%. balance operations to over year, containing of variety share dividend Directors ways, in quarterly at

March shares the on expired program XX, and no quarter. repurchase there were share Our repurchased during

For out this $X.X million of the we million program, repurchased authorization. $XX

guidance, previously were as Now February. that announced expectations reaffirming are we financial in for the

We expect and consolidated million revenues to $XXX million. range $XXX between

million. expenditures $XX.X assumptions adjusted and between and EBITDA include expect the million We for we range does that and $XX This $XX any range million may for $XX.X to between million to year. guidance complete capital during acquisitions not

I'll time Bobby. That wraps up my and call morning, comments turn over Thanks the your for this this back quarter's call. to now for

Robert Frist

few where plan in some a each I'm Scotty. you, success we advances in X primary of our we saw well. areas Thank application going core [indiscernible] some to and a of the call hStream highlight suites talk as technology, about little our bit

that their one pairing multiple are might with that with time workforce HealthStream And them purchase that. clinical for center of the to of purchase the their customers our their And our competency to renewal learning that an they HealthStream workforce. a HealthStream of of to an is application tailwind subsets an benefit the various a Competency use of suite. customers as concluded customer the this strong with adding about in purchased the importantly, renewal, came of a clinical along when the Learning evaluate way they when population. example Center by on medical be suite it And see HealthStream It's HealthStream their entire entire opportunity to flagship set, renew, our new I when renewal may Center of we solutions help kind application. center. HealthStream of So would it expanding solutions product mentioned how already the share kind continues Learning But renew. And be earlier, and the of kind wallet market. think different And this to example serve of academic Learning Center for is it customers up learning the frequently

content onboard competency an newly residency The they nurse suite used of schools. nursing we're kind of our and that kind nurses, the added some is doing of comprehensive bundle the service develop which from in is entire continuum now which also a clinical customer this in program, of cohesive important and case, graduated bundle. of staff. The applications And to kind added of that work

the And so we them residency to nurse well. as program account add the saw

the by their kind for first grew that share So adding expanding the base center was quarter, customer $XXX,XXX the a XX% of clinical making bundles and net of ARR, cross-selling this in residency and result contract. competency or upon of example good recurring the revenue renewal wallet learning approximately products. In case, this the on program nurse

scheduling SaaS we will to [indiscernible] customer customers gears We In which XX% ] quarter, platform. continue Welcome as [ now only known new begins customers from to high we're the integrate its technology hStream ShiftWizard and first as best-in-class the revenues satisfaction the grew excited list. as through become customer state solution, [indiscernible] ShiftWizard ] [indiscernible] Hutchison customers customers of With were [ to And it it quarter our contracted our to [ ] over is more Center, Regional shifting a during think to all for application. kind. with valuable with prior add solution report year to quarter, new Health you several base Medical [indiscernible] excited about. ShiftWizard the ShiftWizard

increased enjoyed start tell successful conversions customers and year, And solutions. terms the we from migrate. competitive also sales our now this our Our to team year. on time to year, We of in of really it's conversions legacy credentialing start focus going you're time takeouts these by both see the the an think our at solutions a to as

time to Morrisey, legacy process. our for platforms that is get HealthLine and you'll migration CredentialStream of under be you the it's HealthStream from So think that we hearing if you're on right and older

engages a not believe. One you market-leading know differentiator believe solution we is this of as that see one is in credentialing with it's -- market professionally. we its of credentialing physicians of position, [indiscernible] the control about thing taking that's user-centered in for privileging physician and solution may more the first software, enrolled really CredentialStream and much a think and and thing. think process. best-in-class really good the individually traffic by increasing just We So the We credentialing process logging physicians [indiscernible] it we a

[indiscernible] [ many kind with centered people proud we of And we're think consistent that's healthcare. ways. our suite being the of ] so Asian in physician platform that And is

possible laser-focus as application. we make [indiscernible] want as and from the physicians, that that to physicians Score Net We on particular process or pain-free for Promoter on

not system first one our lot the of by that that to a known CredentialStream process. that use the physicians may is the XX,XXX quarter, really you application is the we which CredentialStream, have we've tools themselves over an for contracted subscribers million twist And exceeded So is which control of exciting on add. of our exciting. easy credentialing has now are new subscribers suite, to take X In

Blue Cross excited customer And new CredentialStream which Center, [indiscernible] of like Blue all processes, we Regional and Littleton acute because really customers suite than welcome profile and application is their it's welcome as Healthcare Shield, to added slightly Health Medical we're Arkansas, our to kind customers. different hospitals, the exciting [indiscernible] care them

In solutions, customers company. for to our exciting terms the our APIs paving platform using seeing momentum regard for we're adoption is the an of way of with the future

[indiscernible] the fourth As portal launched a reminder, XXXX. quarter of we in the

So new. it's fairly

I into of the this developer a platform. portal actual think as window

make the paid access by call based license of growing driven the already platform get hStream about customers, to fees you access that APIs you HealthStream So the we some use the available they've application get to now APIs. if of is suites, on a them Center, Learning under like we our X and but we've talked learning library

themselves data we APIs think assets. the and in that platform time, monetizable But and will become their over are sets these also capabilities

as working. the is utilization about that. sign developer portal, a platform-level these the sign We doubling of platform that of saw we're of So a the excited of kind capabilities. life or measures And different of strategy

among shared with growing applications and and all platform-level scalable, these provides services, So of collection of a architecture components. APIs connect [indiscernible] the portal different to modern, to secure

to build. is get for have in At and collectively, access account developers level most first XXXX, APIs. APIs, an applications kind other healthcare account access area them of currently technology example, integrate organizations on open you their learning then developer of the have of to a to the chosen environment, the broader portal, how to the into XXX our And library they technologies intranet which into end their of their of XXX of growing quarter may these

easy And access for example, Stanford built completions. Healthcare to an quarter, internal in course Epic first provides the app that

And access app they're using an so are APIs who example, APIs into access these licensed here deliver those a that by customer they hStream have Epic to the of portal platform, course this them developer broader at Stanford the helps because is Health, new and completion. incorporating to

really So it's exciting.

examples, England a And New there of in retrieve also are conveniently assignment developer plenty [indiscernible] Life and using and they're course other app exciting the progress, to APIs portal.

get and feel APIs customers. our utilized, we So more as into the these more we of platforms threaded [indiscernible] broader more get

to demonstrates more the think expands, increasingly platform more and the as hopefully we capabilities customers. value the our platform, it of use we So be in and and and there'll more reasons utility interoperable. platform again, that to more more value think, our strategies And provides

an of And also directly monetizing capabilities the long-range these vision, exciting course, is possibility.

expect gains investor. directly you're [indiscernible] increased to shareholders dividend, you're you in deliver increasingly middle SaaS if and that interested think technology I concluding, steady we recurring kind say, the healthcare fairway if which in determined a as company, of for a share I'd a our revenue, good of we of think XXXX, for form profitable last some new about I the of maybe guidance, to fact, down growth and our of So the Platform-as-a-Service in stock a to we've and one PaaS, quarter,

If and that X:XX [indiscernible] letter notifications we annual the remind April out is you our know, at and sent participate shareholder to XX to access on take and place and meeting May shareholder meeting XX-K you p.m., XX. welcome in of statement, virtually were proxy to you're a shareholder, scheduled the

to of you the we your and encourage in shareholder, company. participate a vote our future you're if So shares

turn back questions. to to over the now the begin I'll operator it

Operator

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

Matthew Hewitt

the first attention on how at you're change that healthcare Congratulations bit about that year. purchasing customers seeing Maybe strong the And your seeing that the it the think paying you onboarding them is last appears renewals to are customers start improving little systems to maybe I how from you more today But their as are implement the customers' applications day are workforce spoke the decisions? question, starting wallet to hospitals your hire. year. process. occurs, situation than since a and the pre-pandemic. versus you you employment are share right that they a upon even And starting beginning greater those seeing and did on with solutions X HealthStream at seeing, downstream I guess, initial with

Robert Frist

To think in a all that, and trends there's lot purchasing [indiscernible] patterns. of through

as of done products little I into sale an can competency value. better result of suites is a in I bundling of think our suite add-on And we've that earlier. them now little one that mentioned higher job some a order

used the be kind aggregation that staff. is develop suite competency to more comprehensive to viewed of The an X as individually, and tool of set competencies a of they're sold or X products now

the lives a workforce think organization. the do skill make learning way and for pandemic better directly mentioned. of in awareness more and a mentioned consistent their to and better I their I And earlier, opportunities new invest to jobs the better them the greater inside them job help so greater, your need up we're things position in as I tailwinds with created that's definitely little

awareness is in the need [indiscernible] for So an workforce there earlier investing think I development. in

workforce. your outsource just can't You

the I our strategies make I to demonstrated as now to before think hopefully, a the getting that a C-suite. they And workforce in on little moving people then willing the think, far the invest, priority moving for more workforce. are as are and we more upstream, discussion of become yes, upstream call, in workforce

but school what their the can catch people early, -- that it's for mean in earlier us So about just market, career. we're can as we we're excited nursing very

more that about take the too need of willing release not in to their ] that nurses and had and jobs study, mobility I fact, release ago and long over in [indiscernible] And with think time. in students a and of we the them Again, doing research, we the or employees. it's early help but problem in think And to they down help preceptive lot good those retain the a were nurses are hiring early talked done white and where [indiscernible] HealthStream might making hospitals position increasing the we kind to And rotations. at a develop need workforce's clinical intern define think road. place at retain really hospitals, they recruiting -- press a candidates [indiscernible] [ that paper students be full-time for great did rotations

another we're upstream, mentioned. going So as you way

all a little I ways, just a So yes, better in strategies [indiscernible] those and attitude I think for better investing our bundling -- little us in deal pipeline.

Matthew Hewitt

revenues have hospitals government-mandated expected a that it question quickly in. X% regarding Obviously, kind course. how factor it could year? of to a that, think of tailwind. tailwind to course? are it's implement that type Or this That's really trying add And of a to or to like Is the helpful. And for that nice separate mean? opioid maybe to then a a what How this could driver Just year? X%

Robert Frist

kind here, you of and things is pointed unique A rightly. out couple of This a opportunity. a

So I did in we we the $X.X to it's exciting, don't right, mean quarter. want get million --

that remember, to to keep find up. we sales. that's And rate So way if a professional direct can

renewing where see this to is necessarily a much. But a course to has get the in $X.X not a license don't opportunity [indiscernible] institutional million physician certainly the we of direct a drove or So quarter. requirement, that any sales in

going selling be ability that a now also it's overextrapolate good direct we want and fortune our our new requirement it well us keep our if small to market of we set tools of the think and to we is e-commerce first channels nice to But and quarter. to kind up be already individuals up, I of [indiscernible] these that the curriculum think I do yes, to had in So it's a contributor. not can careful capabilities

is onetime it a mandate. But kind of a

XX circumstances. next unique the in met the months, point it some was set a at And again, of -- everyone or don't requirement not. we have will So

to So we about that. want overexcited don't

So that's the saying the we -- we enterprise fairway, we license we that the expand just based -- on license, and $XXX,XXX, don't focus not the middle like we're obviously, going of in don't I keep of -- We middle what fairway, We're customer Scotty middle keep ANSOS. $XXX,XXX think, we, onetime the of on of the so and to the had onetime that But fairway. we about, [indiscernible] license, going it's take did to business at want to and think fairway we again, wants revenue saying. we middle ANSOS. why -- is I I the selling to we which or forecast -- an which the of had to on mentioned their [indiscernible] anomalous bit also out want overengineer use called don't of

Operator

Our next from Haase comes question William with Blair Company. & Jared

Jared Haase

on relatively segment with curious, Ryan you I little win I a new. Bobby, -- and Jared I'm a in payer, is for the think, for think This credentialing bit, Ryan that's Daniels. talked about a

a it opportunity how more So to sounded hear we curious just as plan. the like be And was about [indiscernible] a bit payer customers. should that then with specifically, to think little

further penetrate So see of an if sort to here network of I'm nationwide. [indiscernible] wondering opportunity you plans the

Robert Frist

okay. Well,

way interoperability sometimes application been health that see we time, owned customer engineered we're market over future. we built potentially and systems that the benefits excited might create it's way create are mobility, it's by We might work So plans our it to health and unique us. that. to benefits that for the think new in segment give type some on that data And that up yes, a the and first, you picked of CredentialStream

new the can a us sales one cut in well. for X for we presence So or it's us. an We to yes, if a set thing beneficial have new got a if of to that in in of think you're that segment do area. kind of as terms sell we become said, exciting And us. app could X example we I'd for development plans to. of you be that health It's years, the in to love hard think team health are work of a lot out in where see That plans. that have capabilities unique But

owned hopefully, we benefits health health its plans, potential and will when data they're some again, application built and particularly hospitals way by the So to systems. interoperability and provide the mobility

So for it don't -- us particular Blues, was new any the the see But required we'll selling that yes, have but again we new and that's Blues, claim expertise of new to goes. where modeling, some approach. selling and

making opportunity that more I shot think once. an than we've got that a at repeats

Jared Haase

today, forward to next get few look one, coming Maybe was you the business Got portion to over think sounds a if it comes makes also Yes, like purchasing hoping, number growth Bobby, the about And additional with the of bookings over today more maybe that's through sense expect contextualize could sort it purchasing ARR collaborative little what remarks, hearing you know follow-up just some like enterprise I a years. sounded I years? part it. to talked just evolving the it's collaboratives. capabilities. of from where that and but And another prepared I then bit and a maybe or material you not of

So hear that well. love bit would a as about little to I more just

Robert Frist

Yes.

So for collaborative them our to purchasing most. offerings. enterprise their is of process certain of It's for a and the orchestrate kind of benefits [indiscernible] the them purchasing way organize

different So across organize facilities. the they demand they see those figure CNOs how things a XX looking XX at. if on for they've multiple, want much the organized have products to for the out at bundle, It's each hospitals, facility to way based a at if all got or really dozen it kind need them they in of say they're XX-day

that we've we've an gives demand digital is be aggregates growing process. but visibility tools long each historically model the are how time, engagement sales formalized manual of orders. that to in orders organization product it's consultative on into used led a our kind of that it people on a kind for very and used as of But our indicated -- since So kind by

that. can So at they level, the enterprise see

there's on discount the get grow. end, discounting lets as [indiscernible] a a levels that the volume At model they based commitment

gamifies budget So and it purchasing it's aligned. the almost process

the So purchasing their cycle. process aligned they budget with can whole do

increasingly digital but not product built is, facilitate deployed, So widely it. again, to class tools we've

sales directly are to we in So connected sets for capabilities pricing our that our now, book have. models the tool stores example, and price [indiscernible]

as discount you hold collaborative we the the now Salesforce. automatically purchase occurring it's mechanism present, higher because software to volumes process, the is in So connected see booking price commit will you in way can the of to that digitally the

in better more of these because the small years. million been in purchasing the automated I to purchase and for we process through and but It budget it's orders in love more more and orders So does achieved -- continue the on part to easier it's products better tool set it collaborative purchase extend hStream use portion aligned process. enterprise-level increasingly get capabilities we by but and a are several an orders, broadly of that collaboratives aggregate our overall hope and they'll someday But can powered platform. a

can the you believe other new the of spectrum, of untapped orchestrate level, budgets commerce enterprise now there end tools the say, a spend because $X,XXX we at of of let's are but at to at sometimes mentioned that that also And managers, launch I The we year. that hope departmental capabilities for being department our they level kind [indiscernible] for ability my are on budget have [indiscernible] kind this education department. I and

those We go are typically level. team our -- to sales didn't areas [indiscernible] would we enterprise

things. allow at kind have level we of department and may that tools people now shop to commerce so buy these And the

That's kind we'll tools where at X. of have built. So this currently that goes see been year. The

we We really seen haven't them demonstrated them. released and but have them,

direct professional that. into the talked And about spectrum far the course. is DEA commerce. excited about then to we're make So We

a open a like hStream click directly the kind check ID network, an have single can now to say, learnings and if and mini it in available they stores, wants you federal can on can this they to on course that reg, buy we course our of professional doctors will, little as course one meet a We out to this platform.

So was recognized immediately the kind we saw fun. $X.X million in sales is in quarter, of and revenue which that

while tiny fun their lot to individual -- gaps again, quarter lot be we money our Now consumer of each a rather do past. sleep, with And of it to that a call their I company, just card. might of I But fill a to professional. credit with it direct individuals own development overall tiny, buying didn't needs fraction think our in

ultimately -- of an think make someday, So the may mobile it's BXB fun a have to customers that And of do that purchasing, we services of through DEA lot now directly. maybe it's millions the organization, be example not course. just but just customers this

don't and too to So again, get we about. want things overengineer excited these

level And kind is Direct We're enterprise-level all but to out. than the capabilities excited future. things They're doing good commerce to for features of it's we these not the promising department about. fun functions have about purchasing, talking it. and new of exciting we're kind and tools that purchasing. we're nascent, more expand signs these add but point for The of anything, grow, as and the interoperability all platform professional

Some of commerce. us have better

individually and one customers move earned another location people data. in application, let Some credential with to a a follow them around of their

excitement for So the emerging future. capabilities give us

but questions. you answer, here a off for Q&A you long scared have queue, if question. I I such the I more still the Thank we're get guess

Operator

Canaccord Close with Our next Richard from Genuity. question comes

Richard Close

an that renewal versus is I putting ARR X are insight would in in on basis? that for you follow-up -- like up then with X into there XX% when to the Maybe your customers on I'm center. years perspectives XX% of increase And to with -- growth of example you come guess, the maybe come in medical Maybe seeing for up book look great. at ARR or increase an the what ago? that to Congratulations. academic good percentage question. a any Matt's perspective, first percentage curious, business annual A acceleration, be SaaS offerings, just

Robert Frist

overall more think I prevalent. if higher much be rate growth will was that

I obviously which focused sales an account bundled. of think account do exception [indiscernible] gave is and give our one we manager see We But our here, that take. kind expansion. on team, this

added had maybe products they less of if them, X ones. X they they one new X up they for used So and new were renewal,

So that's do. what account managers

say, well, to new good, are that the account didn't managers they XX about or this they calls process. focus And X have group our use did new do this X Again, X, managers much, if here as we but puts and X have what for add there if they whole they're on We they cross-sell, really that products. and one upsell. account products

to the we what renewal every our our But to happening say and Richard, want on We that's not example. It's model The course, other thing don't do. give that's shifting, best and I so would objective, want of it's, we overengineer. yet.

job The the doing we're happening you if and other so is, take example. thing better like that's that bundling [indiscernible] is a a things bit as

value bigger we've a order initial QX in that's a the delay can the in ever pipeline So little more be greater. And than the pipeline, little deals resulted in seen. but

in to is tool in The we And example, checklist lot in that so there's the there. sell for used is content separately. Jane of [indiscernible] a there.

the upstream an their there's CNO evaluate Xx a of buy that in X they making workforce a real to making instead suite. now a so investment can And way by products, separate

in made that but we some [indiscernible]. in in is pipeline little delay deals repositioning the bigger purchasing more in effect some And as also seen, that's than so the QX, And a the areas shift. we've

where takes So kind strategy. I'm through hopefully excited us of bundling this QX about

our a obviously, by study a And hopefully, want with that grow that up is emulate growth grows we overall, rate XX%. it that not you're occurrence. seeing more overall broad That's than ARR come an But we're renewal talking that about. of example every case to and

Richard Close

Just And sure to something be on with renewals to want I to seems helpful. make That's in that. the concerned ANSOS, anything understand. be decline I on the understand Okay. manager there new? quality Is then maybe that

Robert Frist

stress working and a of defining acquisition It's focused manager quality on from their market is on under kind skilled the financially was an space the market. think. ago. better, Yes, lot reengineering that of And nursing years I and

part quality like tighter again, where So manager, see a overall there, huge we don't budgets, business, purchasing but enough the of not our it's to declines. slowed

space. more version We're competitive And that's to a so could be hospitals, we'll but sold product. it's skilled fight sold position the that a predominantly building But to nursing continue to that market.

challenge. one as decline risk. This did in fight along smaller can we'll just note And bigger a a as market ones of to ANSOS, general, [indiscernible] kind may think of with dozens we we we have I the So of it so a not But products. not be what is facing through. do level that bigger

Richard Close

your And Okay. I'd then welcome That's perspectives. helpful.

little and You about concerned some pipeline, with any on on book Change just respect talked a pulling about bigger business but Healthcare bit there, that. I'm back going everything you're maybe several deals I'm too just just line, new your it or across in potential with the going Healthcare? to the that business like over doesn't in in renewals, that's get months, finish to the the sound on longer with based just that's everything people terms impact of seen Change of you curious last have curious.

Robert Frist

No. to I Healthcare to in QX relate we any don't Again, Change we been able purchase if patterns patterns. know, little I've purchase saw to Richard, wanted. lighter than a

strategies. rebundling our of some to due that's think I

had Some great fourth we a -- quarter.

in second rebuilding deals the of pulled we So quarter. bunch a quarter. We're for fourth the

under in be the we're customers. some kind for something got the whole occurred I see of duress we've the think or challenge things macro kind a acute that -- The haven't that a -- So I workforce opposite, interest headwinds any trends but Change financial tailwind, care trends the seeing, also more relate been of more able in for bit like to public do systems are skilled nursing so some industry. the the the the macro to are that the a fact, to Healthcare in market, little in to like known that's there. work But condition stress. But I few is workforce.

too in So the but doesn't exciting, them. bigger much hopefully, it the and bundling take longer more pipeline the close and deals bigger deals is to the

in which their retention versus is is of a investing that both direct and develop maybe attitude think now. so the of interest they workforce, want lot filling a value employees they staffing in result positions, I got their own and our products developing think, the more bundling direct interest we're I in the of the nurses a pre-COVID But about think maybe shift, of I in their how to tired and

hoping. out So that is the over plays next few I hope what years we're

Richard Close

good to the that anything And quarters. anything terms quarter and there seasonality we is Scotty, respect in maybe about sales of like think and to maybe the keep through the rest helpful mind to of or hear. second to That's in as or respect then remaining year, Okay. with events marketing, with the

Scott Roberts

Yes.

particular, budget in expectation, more Richard think planned our event. in we've set we I an marketing, attend to in-person

for conference first had actually customer event. we in customers that that quarter credentialing was So the the our X called name That own Thrive. was of

the more to plan also do continue course of to events the throughout We year.

I of of some know should we an continue -- I across we'd -- to necessarily expect but where if think some hiring there you quarters, positions but events be us needed. materially, outsized can P&L would as expect hire a quarter of be those scatter sales to that there's the the don't particular tend continuation see kind to impact presence that

year. going So the probably to any feather that in not particular significantly. again, quarter should But impact across

Richard Close

Okay. That's helpful.

Robert Frist

but some we the saying expense benefit that result. which there also change last overengineer got to keep And we license the did, a restructuring fairway. strong, do was reinforce want benefit. couple The just I'd to an didn't why make The middle things. year-over-year to just onetime ANSOS reorg. that's onetime we of sure it's We a of year, kind quarter comparators need on like a basis, onetime obviously another Richard, don't we couple are but the we that the was of also from,

and just out the want -- the we that but we things of we so result, our about kind is be where point right we're sticking quarter, we also now, of be the future total some the it's could to want and in middle excited range But to think the our way. about to impact a to are. people think range pushing positive of and we And

Richard Close

helpful... Okay. very That's

Robert Frist

year the each Yes. quarter. for For full and

be strong. for the cash even standpoint. not flows quarter, in example, of as first Typically, free trend would really quarter, second kind cash strong are from Just our another a exceptional free flow

are, in on pay I where the we lot a comment more QX can QX. commissions think, and and Scotty think I higher maybe a quarter out more, usually royalties that's but

well. that, little cash flow a comment except maybe as QX So free on on

Scott Roberts

Yes.

strongest at that I look you you'll you flow typically and and year, quarters look if QX to and cash trend, our last QX free QX think in back tail that with particular, years tending probably see QX several at are of off.

year's I to think even flat second negative. last quarter,

a be so basis. tend And just to tax is state quarterly recurring payments, consideration tax federal on payments another of income income not timing

quarter trend should we in the So similar expect as second year. that a that some you last to saw pop well, of

Operator

from comes Constantine Davides next Citizens JMP. with Our question

Constantine Davides

around for something with us missed I a your talked the thoughts in you consolidated you're about just if to might midyear. that better also previously ARR we'd KPIs be understand an has new you but reporting apologize if latest provide way there expectation I business a Can been terms there? this, something with And other considering? us get of potential

Robert Frist

at mean at I when looking internally, we it. we're invested Yes. trying but level to the XX everything And talk about we -- company looked use from the level. ways level, to chase ARR not management account there's on down -- return out, at We're capital. account

for to metric few publicly. a do how out we we reliably out see it, release internally figuring plays it probably calculate commit how so would have a to And and it to quarters before and

at new at probably earliest QX metrics. So we're for the now looking

it because working finding working new retired we're but to on And Constantine, we today, nothing so other metric metrics. we're on no new a report

things run quarters we're would quarters at do least to about several But straight, to to few that Scotty, have kind think would looking of internally talk it. on definitions then again, and we because, it, at, for do a I it want more you we're about our more how to any use. we away adopted comment want a hint out figure give get the

we now. internal release flow nothing own to have definition monitor. of right and our we But Of free cash course, things planned that

details? more any Scotty,

Scott Roberts

Yes.

internally, but we're considering just the to those trying basis. internally Bobby publicly. and on point We've want focused whether metrics, mentioned, I or think Constantine, obviously, an as sharing that been we other used get is we're where on publicly. account-by-account -- one those on ARR at some well, not we've looked retention more to those to share as are obviously But worth

So net in retention, possible particular, is well. as metric a

Constantine Davides

clear, the helpful. not that you paying then, they're called I kind organizations hitting to at just And Bobby, be portal, all out for the Great. of access. want That's XXX

what is to to do it. later how or this event? you that? on -- commercialize starting guess next of it that that need to I a monetize is the what sort Is And So event? how support expectation year do that think opportunity. to Just about maybe a And wondering year

Robert Frist

Yes, sure.

couple a So things. of

for for is with it, paying for the you hStream HealthStream of gives learning. buy subscription and are a pay a learning HStream they also for application that you APIs license and Learning an like When agreement do right, your access effectively, you all, to you Center, in learning buy a hStream that comes how. to subscription. you, of some that First for here's

a of APIs the as several access X those customer. to what So together subscriptions you are the give

those that for utilizing for most So XXX [indiscernible] hStream of the example. by gained they've are license, rights paying Learning the for

other That some we we've commercial that an looking and directly. customers given example our -- licensing sets some get And license directly validity. to through the examples, have said, the and some functionality license to platform the accessing out license also fee, of more we library content example, a libraries, are but I have like as compliance we've data library, of our of where sets, regulatory them given individual had success examples, some for platform proposals the a more up the of of data our we privilege for think

basis that give check of And we license to an [indiscernible]. an to our validity a didn't customers on applications. pay health We they system licensing for have third-party only. and application a that checking us, license But an example currently a from had access we function that function API just buy

the environment so examples of the And XXX people new functionality there technical developers to gain some [indiscernible] our And [indiscernible] they're license. utilizing right APIs the learning more data directly their platform. by hStream the have technology monetizing the the mostly, and both in thread by into for portal for those their for paying limited they are of example. and we But

is it paid way. for So in a

use -- get hStream, in In to APIs. say, of be part way developer fact, directly the of APIs. A of to I are some platform, noncustomers to get customer where the say I portal, these engineered if access value a being them sold could proposition you "Oh, what's of it's would and lot they to

directly data year. And learning and And category in hope of that by that end each the will monetizing the APIs I of in be examples way of the journey.

Constantine Davides

it. just here. a you one squeeze Got no guys good in last I are Obviously, cash debt. If really could one in position,

just Or terms expand I'm of the having even a M&A the of opportunities, platform you curious, X to suites application of there is to prior unified least In start upon the at are fully you sort just near in you currently have? committed pretty realized? sort to that possibility term

Robert Frist

Yes.

expanding focused already meaning Constantine, within we context. suites, X the are think, the of kind application I X own on the their areas,

our dimension our we only something credentialing, hStream. something the have itself, we at capability, that would not a The find is dimension. be call bolsters learning adding So our we platform that fourth scheduling, fourth if look but

want license well. And and the and a X to value to we license platform together ways the get is a center network. this adding of year APIs. good I those, when demonstrate the We just where learning want all for these interoperability. That's had which the the you to talked one, of get think suites to hStream really learning, So example you access our you hStream we that all working X is application about

than new the focused on migration our exist more so business focused on word And this that already adding strategy of areas interoperability kind customers. And key the M&A of creating also for is areas is legacy a of to year. and those

if over XXX in application building So to say the we've you're accounts been [indiscernible] legacy application the now that it. selling a and we modern on with on credentialing acquired

of I the growth to they a revenue they you'll more conversions don't So revenue have legacy we bit of on year is is unfortunately get which solidly convert, new a application what suite. people see -- from little lot when mean us do really on this [indiscernible], but do grow

So that's M&A to areas. a And bolster this about our existing specifically then asked strategy, year. is focus

expanding than model areas. the areas So new incremental add-ons to existing more into

we lines business. to the fourth next if that strengthen be network it in work all on then But M&A operational I get areas XX maybe would of the exciting. think would current the the dimension Now focused right months, be now,

Operator

with Research. Colicchio question from Barrington Vincent Our comes next

Vincent Colicchio

Bobby. Yes,

strong Another for quarter ShiftWizard.

if -- clients. enterprise few move clients? Curious up clients. You new were correct, be And added if they're I mostly a mid-market to they that's may assume mostly larger when to prepared you

Robert Frist

we're Well, working that. on

right. I great. I generally, think mean product that is you're

but examples the and of system big think We right now, some of are team. coming general, have that's our good focus that sales the in the it, I successes in mid-market using are

and So make it we relevant. continue to try capability more to expand its

We to to have properties ShiftWizard the would its ambition extend NurseGrid, integrate which like app the application, functionality.

market. remainder year, X this And so I focus of at year, full X for think is right the next maybe the now, middle our to the for though, even months,

Vincent Colicchio

competitive worth quarter? market in one. since last one And last the Anything out calling

Robert Frist

mean, AI is think strategies. their don't I on everyone, No, anything I including HealthStream working particular.

So [indiscernible] we're that Jane technology we evolve, to to excited. our continues see different approaches

We in to the really have in some technology stack. learning about refresh second things of year. We're pipeline excited our the half this

working we're time. positioning So area, application competitive quite our revitalized been our in leadership and hasn't leadership on and there in that some thought our which

[indiscernible] in coming hope that business sneak we that to with. catch So peek the got competitors learning that's a we've little our

that fair well. but we're more as in with share. [indiscernible] landscape very our competitive of general, startups big of or is our lots established than piece it for And -- So just fighting a companies and

Operator

Barclays. from question next Stephanie with Our comes Davis

Stephanie Davis

proactive pushback updates sunset activity look any could length for us remarks. on the more number about [indiscernible] But can maybe process? that for forward? about sunsetting Is impact, you're in getting more a would talk more go time bit the to of the follow-up, your get keep excluding first, like little I'll of been call. it the brief And way as sort there what try out prepared a to any line talking and and a cleaner the growth the you on being your to you've tease

Robert Frist

Yes.

[indiscernible], we've credentialing and is not message twofold. so both sunsetting. this think focus in and in I January, determined areas like to we're We're early the customers our year, scheduling need that to that like some we have existing platforms legacy

to need and we word, frequently use. with little that how those to we're of a still, and releasing So bit supporting better legacy tone platforms their because of course, enhances communicating optimize some to customers

a ANSOS. for expansion We X healthy big see, [indiscernible] ANSOS. of So you big did to example, wins convert were model able contract in financially. into another had more

had we expansion. ANSOS then And the license big

customer to but out The actively selling. supporting sunsetting. So we're expand are not sell those. we just We're useful wants not

the in the conference message, We stacks. migrate that our earlier, that is the of we to now are mentioned changing to we January beginning at application SaaS year said though, tone

that's so stay with for comfortable and different where And are migration. than wait you

we're to promoting customers actively Now migrate. is now that the year to

maintenance uplift as tone $X the little because annual that. of does that under. is switching another. kind go growth that mentioned, models the you're is tamp so set bit of There [indiscernible] bit from the revenue an recurring down from I when they're you tone And application a And a the to [indiscernible] in of HealthStream

positive, customer. new it's the say, So a wholly but same not nearly and it's acquiring

effect bit line. top does to dampening little have a bit that has a a that as of a have a focus, of yes, effect So -- on on dampening the

do and is to But do a begin the to the thing look, healthiest from migration to it's aggressive the more right strategy thing older.

We're And so tools. We're doing successful. are but of we're by not examples better We're at migrations actually better stating where and that at and sunsetting. encouraging doing that it. the giving just by

about So talk barriers. you

data have sets. migration We better tool

our teams We've methodologies. a job. the great doing migrations. a lot have better are And We from overall, learned early

communicating. we're so And

we confidence mentioned. too, migrations just more handle all have because now, could We of that I

top And to question. growth less It changed. XX-month but -- equipped technologically better do does great and that So stellar a again, those we're for focus, message is right to horizon. thing makes it line has a it little the look make the to a marketing absolutely facilitate

I hope So thanks got to for answer. the I question, and the

Operator

any the remarks. are Bobby time. Frist I'd like over back to call this to There at closing turn further for questions no

Robert Frist

congrats everyone, of hard to you this the work to call reporting and all see our next going everyone. Thanks, forward call. earnings to and next you, the A happen. employees. lot we'll Thank to make on everyone, Look on

Operator

Thank does great day. a you you the Everyone, This and may conclude your now for disconnect. program, participation. have

HealthStream (HSTM) 23 Apr 242024 Q1 Earnings call transcript