HealthStream, Inc. reported fourth‑quarter revenue of $79.7 million, a 7.4% year‑over‑year increase, and full‑year revenue of $304.1 million, up 4.3% from 2024. Subscription revenue grew 8.2% while professional services revenue slipped 0.3%, reflecting a shift toward the company’s higher‑margin SaaS offerings. The company also completed acquisitions of Virsys12 and MissionCare Collective during the quarter, adding new product lines and customer segments to its portfolio.
GAAP operating income fell to $2.4 million, a 48.8% decline from $4.7 million in Q4 2024, largely because of a $3.8 million charge related to a CEO stock gift. After removing that one‑time charge, non‑GAAP operating income rose to $6.2 million, up 31.7% year‑over‑year. Gross margin contracted from 66.2% in Q4 2024 to 63.8% in Q4 2025, driven by higher operating costs and a mix shift toward lower‑margin services.
Diluted earnings per share were $0.09, down from $0.16 in 2024. Adjusted EPS reached $0.18, beating the consensus estimate of $0.11 by $0.07. The beat was driven by strong subscription growth, disciplined cost management, and the exclusion of the $3.8 million CEO stock‑gift charge, which had a material impact on GAAP earnings.
Management guided 2026 revenue to $323.0 million–$330.0 million and adjusted EBITDA to $73.0 million–$77.0 million, both above analyst consensus. The company also announced a $10 million share‑repurchase program and increased its quarterly dividend by 12.9% to $0.035 per share, signaling confidence in cash flow generation.
After the earnings release, after‑hours trading was largely muted, with some reports noting a 5.13% rise and others reporting no immediate movement. Investors appeared to weigh the positive adjusted results against the impact of the CEO stock‑gift charge and margin compression.
"Our fourth quarter and full‑year 2025 results reflect a well‑executed finish to the year, driven by broad‑based customer demand across our offerings. We achieved record quarterly revenue of $79.7 million, up 7.4%, and delivered Adjusted EBITDA of $18.8 million, up 16.4% year‑over‑year," said CEO Robert A. Frist, Jr. He added that HealthStream is "uniquely well positioned to play an instrumental role in the emerging AI‑driven landscape," underscoring the company’s strategic focus on AI and workforce solutions.
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