Healthstream Inc.: Q2 FY2026 earnings call

What management said about Q2 FY2026, from the documents filed with the SEC on 3 August 2026: press release. Guidance figures: 5 raised, 2 lowered, 1 kept. The quarter’s numbers.

Read the filing

Key takeaways

• Revenue set a company quarterly record: Revenue was $83.7 million, up $9.3 million or 12.5% from the second quarter of 2025. Source
• Existing portfolio growth included catch-up: Existing solutions contributed $6.2 million of growth, including $2.0 million from resolving previously constrained variable consideration under a customer contract. Source
• Operating income rose 41.4%: Operating income of $8.3 million rose from $5.9 million, attributed to higher revenue and sublease income that began in the second quarter of 2025. Source
• Adjusted EBITDA reached $20.6 million: Adjusted EBITDA, a non-GAAP measure, was $20.6 million, compared with $17.6 million in the second quarter of 2025. Source
• Second-quarter expenses rose across lines: Higher expenses came from personnel, third-party software, sales commissions, marketing, cloud hosting, royalties, and amortization from fourth-quarter 2025 acquisitions. Source
• Revenue and EBITDA ranges raised: Full-year revenue and adjusted EBITDA ranges were raised, and the company updated guidance for the measures listed in the release. Source

“In the second quarter of 2026, HealthStream delivered record revenue of $83.7 million, up 12.5%, and adjusted EBITDA of $20.6 million, up 16.9%, compared to the second quarter of 2025.”

Robert A. Frist, Jr., Chief Executive Officer, HealthStream

Guidance

What changed from last quarter

• Guidance raised: Full-year revenue guidance raised; prior range was $323.0 to $330.0 million. Source
• Guidance raised: Full-year adjusted EBITDA guidance raised; prior range was $73.0 to $77.0 million. Source
• Guidance lowered: Full-year net income guidance lowered; prior range was $20.4 to $22.8 million. Source
• Guidance kept: Capital expenditure guidance of $31.0 to $34.0 million carried over from the prior quarter.

Results and growth drivers

• Revenue set a company quarterly record: Revenue was $83.7 million, up $9.3 million or 12.5% from the second quarter of 2025. Source
• Subscription revenue drove most of growth: Subscription revenues rose $8.0 million, or 11.2%, and professional services revenues rose $1.3 million compared with the prior-year quarter. Source
• Acquisitions added $3.1 million: Virsys12 and MissionCare Collective, acquired in the fourth quarter of 2025, added $3.1 million to revenue growth in the quarter. Source
• Existing portfolio growth included catch-up: Existing solutions contributed $6.2 million of growth, including $2.0 million from resolving previously constrained variable consideration under a customer contract. Source
• Six-month revenue rose 11.5%: Revenue for the first six months of 2026 was $164.9 million, compared with $147.9 million a year earlier. Source

Operating income and earnings

• Operating income rose 41.4%: Operating income of $8.3 million rose from $5.9 million, attributed to higher revenue and sublease income that began in the second quarter of 2025. Source
• Adjusted EBITDA reached $20.6 million: Adjusted EBITDA, a non-GAAP measure, was $20.6 million, compared with $17.6 million in the second quarter of 2025. Source
• Diluted EPS rose to $0.23: Net income was $6.7 million, and diluted EPS was $0.23, compared with $0.18 in the prior-year quarter. Source
• Six-month operating income up 54.2%: Operating income for the first six months was $15.8 million, compared with $10.3 million a year earlier. Six-month diluted EPS was $0.43. Source

“This performance gives us the flexibility to continue investing in our hStream platform and products that we believe will drive durable, long-term growth as we build an even stronger ecosystem for the healthcare organizations and professionals we serve.”

Robert A. Frist, Jr., Chief Executive Officer, HealthStream

Costs and operating expenses

• Second-quarter expenses rose across lines: Higher expenses came from personnel, third-party software, sales commissions, marketing, cloud hosting, royalties, and amortization from fourth-quarter 2025 acquisitions. Source
• Cost of revenues and product development rose: Cost of revenues was $29,015 thousand, against $26,364 thousand; product development was $13,581 thousand, against $12,073 thousand. Source
• Sales and marketing and G&A rose: Sales and marketing was $13,503 thousand, against $11,808 thousand; general and administrative was $8,037 thousand, against $7,398 thousand. Source

Full-year guidance update

• Revenue and EBITDA ranges raised: Full-year revenue and adjusted EBITDA ranges were raised, and the company updated guidance for the measures listed in the release. Source
• Net income range lowered: The full-year net income range was lowered, while the projected income tax provision, stock-based compensation, and depreciation and amortization ranges were raised. Source
• Capital expenditure range reaffirmed: The capital expenditure range was reaffirmed as previously announced, with no change in the release.

Capital, cash and shareholder returns

• Cash and securities of $66.7M: At June 30, 2026, cash, cash equivalents, and marketable securities totaled $66.7 million, compared with $66.5 million at March 31, 2026. Source
• No borrowed-money debt outstanding: The company reported no outstanding indebtedness from borrowed money at June 30, 2026. Source
• Operating cash flow rose for six months: Net cash provided by operating activities was $40,567 thousand for the six months, compared with $32,097 thousand a year earlier. Source
• Second-quarter capex was $8.5M: Capital expenditures incurred in the second quarter were $8.5 million, compared with $7.3 million in the first quarter. Source
• Buybacks and quarterly dividend declared: The company repurchased 90,131 shares for $1.8 million in the quarter and 432,476 shares for $9.3 million in six months. A $0.035 quarterly dividend was declared. Source

Balance sheet and deferred revenue

• Current deferred revenue at June 30: Current deferred revenue was $92,983 thousand at June 30, 2026, compared with $106,402 thousand at March 31 and $88,417 thousand at December 31, 2025. Source
• Receivables lower than March: Accounts and unbilled receivables, net, were $36,803 thousand at June 30, 2026, against $43,444 thousand at March 31, 2026. Source
• Goodwill and intangibles declined from year-end: Goodwill and intangible assets, net, were $272,697 thousand, down from $282,448 thousand at December 31, 2025. Source

Coming up, as management said on 3 August 2026

• Dividend payment on August 28: The $0.035 per share quarterly dividend is payable on August 28, 2026 to holders of record on August 17, 2026. Source
• Repurchase program ends September 12: The $10.0 million share repurchase program terminates on the earlier of September 12, 2026 or when the maximum amount is expended. Source

Figures management reported

Risks management discussed

• Demand: Guidance reflects expectations for new sales and renewals and assumes that general economic conditions do not deteriorate. Source
• Operational: Expenses in the six months rose to support investment in platform and enterprise applications, including labor, third-party software, royalties, cloud hosting, and commissions. Source

Earlier plans management reported on

• Met: The earlier program ended in the first quarter of 2026 after the maximum dollar amount was expended. Source

Other quarters

• Q1 FY2026 earnings call
• Q4 FY2025 earnings call
• Q3 FY2025 earnings call
• Q2 FY2025 results

Summarised with AI from the documents the company filed with the SEC. Every point is checked against the filing before it is shown: management’s own words word for word, figures against the line or table row they come from. A point that fails the check is left out. Source opens the filing at that line.