HealthStream (HSTM) investor relations material

Executive summary

• Achieved record Q2 2026 revenues of $83.7 million, up 12.5% year-over-year, with adjusted EBITDA of $20.6 million, up 16.9%, and net income of $6.7 million, up 23.8%.

• Growth was driven by organic expansion and contributions from recent acquisitions, notably Virsys12 and MissionCare Collective.

• Diluted EPS was $0.23, up from $0.18 in Q2 2025.

• Board declared a quarterly cash dividend of $0.035 per share.

• 96–97% of revenues are subscription-based, providing high predictability and recurring revenue.

Financial highlights

• Subscription product revenues grew by $8 million (11.2%), professional services by $1.3 million (52.6%) year-over-year.

• Operating income for Q2 2026 was $8.3 million, up 41.4% year-over-year.

• Adjusted EBITDA for the first half was $40.7 million, up 20.4% year-over-year.

• Cash, cash equivalents, and marketable securities totaled $66.7 million at June 30, 2026; no outstanding debt.

• Free cash flow for the first half was $24.7 million, up 73% year-over-year.

Outlook and guidance

• Updated 2026 revenue guidance to $327–$332 million, net income guidance to $19.5–$22.2 million, and adjusted EBITDA to $74–$78 million.

• Capital expenditures guidance: $31.0–$34.0 million.

• Guidance assumes stable economic conditions and excludes future acquisitions or asset impairments.

• Q3 revenue growth expected at ~8%, with adjusted EBITDA margin at ~22%.

• Management expects continued financial pressures among healthcare customers due to legislative and regulatory changes.