HealthStream (HSTM) Q1 2026 earnings summary

Executive summary

• Achieved record Q1 2026 revenue of $81.2 million, up 10.5% year-over-year, with adjusted EBITDA of $20.1 million, a 24.1% increase, and net income of $5.9 million, up 36.4% from Q1 2025.

• Operating income rose 71.6% to $7.5 million; EPS increased to $0.20 from $0.14 year-over-year.

• Growth was driven by organic expansion and recent acquisitions, including Virsys12 and MissionCare Collective.

• Maintains a strong cash balance of $66.5 million, no long-term debt, and an untapped credit facility.

• Michael M. Collier promoted to COO & EVP, leading enterprise operations and AI transformation.

Financial highlights

• Subscription revenues increased by $7.6 million (10.7%) to $78.4 million; professional services rose 4% to $2.8 million.

• Gross margin improved to 65.8% from 65.3% year-over-year; adjusted EBITDA margin was 24.8%.

• Operating margin improved to 9.3% from 6.0% year-over-year.

• Cash, cash equivalents, and marketable securities totaled $66.5 million as of March 31, 2026.

• Market capitalization stood at ~$713.9 million as of May 5, 2026.

Outlook and guidance

• Reaffirmed 2026 full-year guidance: revenue $323–$330 million, net income $20.4–$22.8 million, adjusted EBITDA $73–$77 million.

• Capital expenditures for 2026 projected at $31–$34 million.

• Guidance excludes impacts from future acquisitions, dispositions, or asset impairments and assumes stable economic conditions.

• Sufficient liquidity is anticipated to fund operations, dividends, share repurchases, and capital expenditures for at least the next 12 months.

• 39% of $687 million in remaining performance obligations to be recognized over the next 12 months.