HealthStream : 2025 Shareholder Letter

Published: 2026-04-13 17:59:03 ET HSTM

Published on 04/13/2026 at 05:59 pm EDT

2025 LETTER TO SHAREHOLDERS

Year Ended December 31, 2025 2024

(In thousands, except per share amounts)

Statement of Income Data:

Revenues, net

G 304,064

S 291,646

Operating costs and expenses

283,828

270,359

Operating income

20,236

21,287

Interest income

3,340

3,834

Other (expense) income, net

(358)

(318)

Income before income tax provision

23,218

24,803

Income tax provision

4,876

4,796

Net income

G 18,342

S 20,007

Net income per share - diluted:

Net income per share - diluted

0.61

0.66

Weighted average shares of common stock outstanding - diluted

30,144

30,544

Dividends declared per share

0.124

0.112

Balance Sheet Data:

Cash and cash equivalents

36,161

59,469

Investments in marketable securities

20,843

37,748

Accounts receivable, net

32,153

30,189

Goodwill and intangible assets, net

282,448

246,768

Working capital

(4,490)

37,429

Total assets

520,374

510,766

Deferred revenue - current and noncurrent

89,761

85,882

Shareholders' equity

354,023

359,355

Reconciliation of GAAP net income to Adjusted EBITDA:

GAAP net income

18,342

S 20,007

Interest income

(3,340)

(3,834)

Interest expense

101

100

Income tax provision

4,876

4,796

Stock-based compensation expense

8,145

4,470

Depreciation and amortization

43,478

41,243

Impairment of long-lived assets

262

Fair value adjustment on contingent consideration (85)

Adjusted EBITDA G 71,779

S 66,782

In order to better assess the Company's financial results, management believes that net income before interest, income taxes, stock-based compensation, depreciation and amortization, impairments of long-lived assets, changes in fair value of contingent consideration, and changes in fair value of, including gains (losses) on the sale of, non-marketable equity investments ("adjusted EBITDA") is a useful measure for evaluating the operating performance of the Company because adjusted EBITDA reflects net income adjusted for certain GAAP accounting, non-cash, and/or non-operating items which may not, in any such case, fully reflect the underlying operating performance of our business.

Total Revenues

(in G millions)

S304.1 S291.6

S279.1 S266.8

S256.7

2025

2024

2023

2022

2021

0 20 40 60 80 100 120 140 160 180 200 220 240 260 280 300 320

Across the country, the need for patient care continues to grow-and it all starts with the clinicians and caregivers who provide it. I believe the opportunity to develop and support the healthcare workforce has never been greater-and HealthStream was built for this moment. As 2026 progresses, we are leaning into our vision to improve the quality of healthcare by developing the people who deliver care, while executing with focus and discipline for our shareholders. We believe that our expanding ecosystem

of applications, content, AI-enabled assessment tools, and partnerships is unmatched, positioning HealthStream as the leading-and most widely adopted-clinical workforce platform in the healthcare industry.

In this letter, I want to review HealthStream's progress made in 2025, which sets the stage for our affirmation of 2026

as the Year of the Ecosystem. I will also discuss our growth strategies and spotlight key developments that reinforce my optimism about our path forward.

Our full-year 2025 financial metrics reflect solid growth and performance, as well as continued investment in innovation. By way of summary, HealthStream achieved S304.1 million of revenue and adjusted EBITDA of S71.8 million, which were up

4.3 percent and up 7.5 percent, respectively, over the prior year. We made S30.0 million of share repurchases; paid S3.7 million in dividends to you, our shareholders; deployed S39.1 million of capital for acquisitions; and invested

S32.2 million for capital expenditures. We ended 2025 well capitalized with a cash and marketable securities balance of S57.0 million and full availability of our S50 million line of credit, which remains untapped.

Increasingly, the nation's healthcare organizations rely on HealthStream to strengthen clinical workforce capability, deliver required training at scale, keep credentials and privileges current, and streamline workforce scheduling. We do this through three core application suites-what we increasingly refer to as our "suite of suites"-all connected through our hStream® platform. Each suite is anchored by a flagship product: the HealthStream Learning Center® within the HealthStream Learning™ Suite; CredentialStream® within the HealthStream Credentialing™ Suite; and ShiftWizard® within the HealthStream Scheduling™ Suite.

Complementing these offerings, we hold 20 patents across our product portfolio and have earned more than 40 awards from the Brandon Hall Group, a leading research organization focused on learning and technology.

Consistent with nationwide healthcare workforce trends, our target market meaningfully expanded approximately nine percent in 2025 to approximately

13.7 million individuals focused on healthcare delivery, primarily through provider organizations. This includes approximately 5.8 million employees who work in the nation's acute-care hospitals and approximately 6.9 million employees who work in the more broadly defined care market outside of acute-care, which includes long-term care organizations, skilled nursing facilities, physician offices, among other care environments.

HealthStream's target market also includes the nation's approximately 1.0 million nursing students and the 1,000+ nursing schools across the U.S. where those students are enrolled. The number of nursing students increased in HealthStream's network with the widespread adoption and growth of our application, myClinicalExchange™, which helps to manage students' clinical rotations and related compliance and scheduling. In 2025 alone, myClinicalExchange was used to place more than 360,000 clinical rotations for students from over 700 healthcare facilities. In the first quarter of 2026, two of the three largest health systems in the U.S. chose to adopt myClinicalExchange, enterprise-wide, for their clinical rotation programs.

Among our portfolio of applications in the HealthStream Learning® Suite, our HealthStream Learning Center® (HLC) is a market-leading SaaS-based application used in all 50 states where an average of approximately 425,000

educational activities occur each day. Within HealthStream Learning, we have amassed an ecosystem of market-leading brands of content from over 90 industry partners. Along with our own proprietary content, our course library for the healthcare workforce is among the largest in the U.S. with over 20,000 online courses and educational activities. Included in these offerings are nationally respected brands like the American Red Cross Resuscitation Suite™, where approximately 400,000 certifications were earned in 2025 alone with nearly two million certifications earned on an aggregate basis through February 2026 since its launch in early 2019.

The HealthStream Credentialing® Suite, with its primary SaaS-based application CredentialStream® and its acquired legacy applications, currently serves thousands of hospitals and outpatient facilities, making us a market-leading credentialing, privileging, and enrollment company in the United States. In fact, for the last two years in a row, the popular vendor ratings site, G2, ranked CredentialStream the highest in customer satisfaction for healthcare credentialing software by its customers, while placing it consistently in their Leader quadrant. For full-

year 2025, revenues from our CredentialStream application grew 23 percent over the prior year.

The HealthStream Scheduling® Suite, with its primary SaaS-based application ShiftWizard® and its acquired

scheduling applications, serves a broad base of healthcare organizations and is trusted by thousands of healthcare professionals. In 2025, ShiftWizard was recognized as a

G2 Grid Leader in medical staff scheduling, also earning recognition for producing the "Best Results" in this category. For full-year 2025, revenues from ShiftWizard grew 24 percent over the prior year, edging past the year-over-year growth rate of 19 percent in 2024.

To enable scalable growth across the Company, HealthStream continues to advance its transition toward a platform-as-a-service (PaaS) approach through the hStream® technology platform. Our hStream technology platform connects everything in HealthStream's ecosystem and includes exclusive applications, services, content, and other benefits. For our customers, the interoperability provided by hStream opens many possibilities for streamlined processes and greater operational efficiencies.

Our proprietary hStream ID, which serves as a core element of our hStream platform, is fundamental to establishing and maintaining interoperability across our ecosystem. By creating a single, verified identity for

each user, the hStream ID enables an individual's progress and accomplishments to travel with them throughout their career while connecting them seamlessly to any hStream-enabled application they use.

Creating hStream ID-enabled relationships with users also creates new channels for e-commerce opportunities. For example, as nurses are issued their hStream ID through their utilization of our popular #1-rated Nursegrid® app, which has over 670,000 monthly active users, they are presented with opportunities to purchase content and course bundles directly from HealthStream and the certifications they earn become part of their hStream

ID record. We have been issuing approximately 2,000 hStream IDs weekly to nurses as they join Nursegrid. We believe our expanding e-commerce capabilities have potential to be a future growth driver for the Company.

Both Nursegrid and myClinicalExchange represent our commitment to supporting the lifelong development of individual professionals and students, respectively. We call these our "Career Networks", and we believe they add an important long-term component in our ecosystem as we directly support individuals in their career journeys. In those two Career Networks alone, over 400,000 hStream IDs have been created with more being added at a rapid pace of approximately 6,000 per week.

A third Career Network was added in December of 2025 with HealthStream's acquisition of MissionCare Collective, which has the largest caregiver network in

the U.S. Its primary offering is myCNAjobs.com, a site that helps recruit and retain home health aides, home care providers, and Certified Nurse Assistants (CNAs) and is currently used by millions of people. U.S. demographics underscore the growing demand for caregivers for older adults, yet the 18,000+ home care organizations that serve this need report that staffing is currently their single greatest challenge. We believe the addition of this third Career Network further strengthens the overall value of our ecosystem.

In the fourth quarter of 2025, we also acquired Virsys12, a healthcare technology company that offers payers and health plans an innovative provider data management suite for onboarding, credentialing, and network management. This addition greatly enhances our position in the payer and health plan market that we initially entered less than two years ago. Earlier this

year, we announced that our enterprise Virsys12 solution was recently named a "Leader" in the prestigious IDS MarketScape report, their highest tier for vendors.

In closing, I want to point out that as AI reshapes how work is performed across industries, we believe that HealthStream is well into the innovation curve-both in product development for our customers and in the

enhancement of our internal workflows. We are sitting at the intersection of a growing healthcare workforce and the trusted systems and data required to help that workforce perform. Unlike many industries where headlines are declaring that AI will likely compress the number of human "seats," healthcare continues to

add staff at a pace unmatched in the broader economy, and we expect demand for nurses and other clinicians to remain strong, as the Bureau of Labor Statistics (BLS) has projected. Approximately one quarter of all new jobs in the U.S. economy over the next decade will be

in healthcare, according to BLS.

Moreover, in an increasingly AI-enabled environment, we believe that the importance of secure, reliable "systems of record" for our healthcare organization customers will increase. Throughout HealthStream Learning and Credentialing, customers often view

us as their "single source of truth." In other words, HealthStream is the original source for critical, structured workforce data that healthcare organizations depend on to effectively make their workflows and insights

safe, accurate, and actionable. This trusted foundation contributes to our customers' confidence as they manage their clinical workforce.

At HealthStream, we are grateful to our customers who trust us as their partner and rely on our solutions every day to support their people and their mission.

We also thank you, as fellow investors in HealthStream, for your investment in the Company. If you are a longterm investor, we greatly appreciate your consistency through the years; if you are a more recent investor, welcome to the Company and thank you for your support. We remain focused on building enduring value for all of our shareholders and expanding our impact across healthcare.

Sincerely,

Robert A. Frist, Jr.

Chief Executive Officer and Chairman of the Board

Chief Executive Officer and Chairman of the Board of Directors

HealthStream, Inc.

Chief Executive Officer

Medaxion, Inc.

Chairman and Chief Executive Officer

Urgent Team

Executive Chairman

Re:Cognition Health

President

Impact Corporate Consulting

Managing Partner

Crofton Capital

Former Commissioner

Federal Communications Commission

Director Emerita

Tennessee Supreme Court / Administrative Office of the Courts

Former Board Chair

Quorum Health Corporation

Associate Chief Medical Officer & Senior Vice President, Physician Network Development

Vanderbilt University Medical Center

Former Chief Operating Officer

Guidehouse, Inc.

Chief Executive Officer and Chairman of the Board of Directors

Chief Financial Officer and Senior Vice President

Executive Vice President,

Corporate Strategy, Development, and Operations

Chief Technology Officer and Senior Vice President

Executive Vice President,

Workforce Development Solutions

Senior Vice President,

Digital and Network Development

Executive Vice President,

Workforce Platform and Applications

Senior Vice President, Sales

Corporate Data

The annual meeting of shareholders will be held on May 28, 2026, at 2:00 p.m. (CT) in a virtual meeting format only, via live webcast.

Computershare Investor Services Computershare

P.O. Box 43101

Providence, RI 02940-5067

(800) 962-4284

Investor Centre™ portal: https://www.computershare.com/investor

Bass, Berry & Sims PLC Nashville, Tennessee

HealthStream, Inc.

500 11th Avenue North, Suite 850

Nashville, Tennessee 37203

A copy of the Company's Annual Report on Form 10-K, as filed with the Securities and Exchange Commission, is being mailed with this letter. Additional copies of the Company's Annual Report on Form 10-K, as filed with the Securities and Exchange Commission, are available without exhibits, free of charge, to its shareholders.

Requests should be addressed to Mollie Condra, Investor Relations Department, HealthStream, Inc., 500 11th Avenue North, Suite 850, Nashville, Tennessee 37203.

Cautionary Note Regarding Forward-looking Statements

This report contains forward-looking statements (all statement other than those made solely with respect to historical fact) within the meaning of Section 21E of the Securities and Exchange Act of 1934 and Section 27A of the Securities Act

of 1933. These forward-looking statements are subject to known and unknown risks and uncertainties (some of which are beyond the Company's control) that could cause actual results to differ materially and adversely from those anticipated in the forward-looking statements. See the Company's Annual

Report on Form 10-K made available with this letter for more detailed disclosure regarding forward-looking statements and associated risks and uncertainties.

HealthStream, Inc.'s common stock is traded on the NASDAQ Stock Market under the symbol HSTM. The following table shows the quarterly range of high and low closing sales prices of the common stock from 2023.

High Low

First Quarter

27.10

S 23.45

Second Quarter

27.47

S 22.81

Third Quarter

24.52

S 20.53

Fourth Quarter

27.29

S 21.84

2024

First Quarter

27.62

S 25.57

Second Quarter

28.13

S 23.99

Third Quarter

30.84

S 27.19

Fourth Quarter

33.16

S 28.11

2025

First Quarter

S 33.99

S 30.95

Second Quarter

S 34.07

S 26.60

As of February 13, 2026, HealthStream, Inc. had approximately 24,458 shareholders, including 1,181 shareholders of record and 23,277 persons or entities holding common stock in nominee name.

On February 20, 2023, we announced that our board of directors approved a quarterly dividend policy. Under this dividend policy, the board of directors declared, and the Company paid, quarterly cash dividends on our common stock at the rate of S0.025 per share, S0.028 per share, and S0.031 per share during the fiscal years ended December 31, 2023, December 31, 2024, and December 31, 2025, respectively. In addition, our board of directors declared a quarterly dividend under this dividend policy in the amount of S0.035 per share, which was paid on March 20, 2026, to holders of record of all of the issued and outstanding shares of common stock as of the close of business as of March 9, 2026, representing an increase of 13% over the previous quarter's dividend payment.

The dividend policy and the declaration and payment of each quarterly cash dividend will be subject to our board's continuing determination that the policy and the declaration of dividends thereunder are in the best interests of our shareholders and are in compliance with applicable law and our credit agreement.

Disclaimer

HealthStream Inc. published this content on April 13, 2026, and is solely responsible for the information contained herein. Distributed via Public Technologies (PUBT), unedited and unaltered, on April 13, 2026 at 21:59 UTC.