HealthStream, Inc. reported a net income of $5.4 million for the second quarter of 2025, reflecting a 29.3% increase from $4.2 million in the same period last year. The company's revenues for the quarter reached $74.4 million, a 4% increase compared to $71.6 million in the second quarter of 2024. For the first half of 2025, HealthStream's revenues totaled $147.9 million, up 2% from $144.3 million in the prior year. The company attributed this growth primarily to a $3.5 million increase in subscription revenues, despite facing challenges such as customer bankruptcies and attrition in legacy applications.
Operating income for the second quarter was reported at $5.9 million, a significant increase of 33.4% from $4.4 million in the previous year. The company's earnings per share (EPS) also improved, rising to $0.18 per diluted share from $0.14 per diluted share in the second quarter of 2024. Adjusted EBITDA for the quarter was $17.6 million, an 11.3% increase from $15.8 million in the same quarter last year. The company’s effective tax rate for the quarter was 22%, slightly up from 21% in the prior year.
In terms of operational developments, HealthStream has continued to optimize its workforce by subleasing part of its office space in Nashville, which commenced in April 2025. This move is expected to generate approximately $1.6 million in sublease income over the next six months. The company has also been actively repurchasing shares, having repurchased 649,953 shares valued at $18.1 million during the second quarter, as part of a $25 million share repurchase program initiated in May 2025.
HealthStream's balance sheet as of June 30, 2025, showed total assets of $500.1 million, a decrease from $510.8 million at the end of 2024. The company’s cash and cash equivalents stood at $52.1 million, down from $59.5 million at the end of the previous fiscal year. The decrease in cash is primarily attributed to share repurchases. The company reported a working capital of $29 million, down from $37.4 million at the end of 2024, reflecting the impact of its capital allocation decisions.
Looking ahead, HealthStream acknowledges the challenging macroeconomic conditions affecting the healthcare industry, including potential cuts to federal healthcare spending and inflationary pressures. These factors may lead to delays in purchasing decisions among healthcare providers. Despite these challenges, the company remains focused on its growth strategy, which includes potential acquisitions and investments in complementary businesses. HealthStream believes its existing cash reserves, marketable securities, and cash generated from operations will be sufficient to meet its working capital needs and support future growth initiatives.
About HEALTHSTREAM INC
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