What changed in this filing

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Item 1. Financial Statements

2025-05-09 compared with 2024-10-24 · 103 added, 165 removed, 248 unchanged (52% of the section changed)

3 unchanged sentences

(In thousands)

September 30,

Current assets:

3 unchanged sentences

36,030 37,748

Accounts receivable, net of allowance for doubtful accounts of $ 949 and $ 781 at September 30, 2024 and December 31, 2023, respectively

Accounts receivable, net

30,849 30,189

Accounts receivable - unbilled

Prepaid royalties, net of amortization

Prepaid software maintenance and subscriptions

Other prepaid expenses and other current assets

Prepaid and other current assets

20,312 20,583

Total current assets

169,718 153,122

Property and equipment, net of accumulated depreciation of $ 22,362 and $ 19,503 at September 30, 2024 and December 31, 2023, respectively

Property and equipment, net

10,696 10,741

Capitalized software development, net of accumulated amortization of $ 144,894 and $ 127,009 at September 30, 2024 and December 31, 2023, respectively

Capitalized software development, net

44,042 43,370

2 unchanged sentences

191,245 191,220

Customer-related intangibles, net of accumulated amortization of $ 56,676 and $ 57,095 at September 30, 2024 and December 31, 2023, respectively

Intangibles, net

52,116 55,548

Other intangible assets, net of accumulated amortization of $ 18,420 and $ 16,603 at September 30, 2024 and December 31, 2023, respectively

Deferred commissions

39,373 39,312

Non-marketable equity investments

$ 524,036 $ 510,766

3 unchanged sentences

$ 3,177 $ 6,628

Accrued expenses

17,367 22,717

Accrued royalties

Accrued liabilities

10,355 10,141

Accrued compensation

Deferred revenue

8 unchanged sentences

Other long-term liabilities

Commitments and contingencies

Shareholders’ equity:

Preferred Stock, no par value, 10,000 shares authorized, no shares issued or outstanding

Common stock, no par value, 75,000 shares authorized;

30,415 and 30,298 shares issued and outstanding at September 30, 2024 and December 31, 2023, respectively

30,525 and 30,432 shares issued and outstanding at March 31, 2025 and December 31, 2024, respectively

252,466 252,432

12 unchanged sentences

Three Months Ended

Nine Months Ended

September 30, 2024

September 30, 2023

September 30, 2024

September 30, 2023

March 31, 2025

March 31, 2024

Revenues, net

3 unchanged sentences

Sales and marketing

Other general and administrative expenses

General and administrative

Depreciation and amortization

1 unchanged sentence

Operating income

Other income, net

Interest income

Other expense, net

Income before income tax provision

8 unchanged sentences

Three Months Ended

Nine Months Ended

September 30, 2024

September 30, 2023

September 30, 2024

September 30, 2023

March 31, 2025

March 31, 2024

Other comprehensive income (loss), net of taxes:

Foreign currency translation adjustments

Unrealized gain (loss) on marketable securities

Unrealized loss on marketable securities

Total other comprehensive income (loss)

4 unchanged sentences

(In thousands, except per share data)

Nine Months Ended September 30, 2024

Three Months Ended March 31, 2025

Accumulated Other Comprehensive

4 unchanged sentences

— — 4,332 — 4,332

Comprehensive loss

— — — ( 481 ) ( 481 )

Dividends declared on common stock ($ 0.028 per share)

— — ( 849 ) — ( 849 )

Stock-based compensation

— 1,060 — — 1,060

Common stock issued under stock plans, net of shares withheld for employee taxes

100 ( 855 ) — — ( 855 )

Balance at March 31, 2024

30,398 $ 249,280 $ 96,746 $ ( 1,172 ) $ 344,854

— — 4,168 — 4,168

Comprehensive loss

— — — ( 45 ) ( 45 )

Dividends declared on common stock ($ 0.028 per share)

— — ( 851 ) — ( 851 )

Stock-based compensation

— 1,094 — — 1,094

Common stock issued under stock plans, net of shares withheld for employee taxes

10 ( 6 ) — — ( 6 )

Balance at June 30, 2024

30,408 $ 250,368 $ 100,063 $ ( 1,217 ) $ 349,214

— — 5,725 — 5,725

Comprehensive income

— — — 333 333

Dividends declared on common stock ($ 0.031 per share)

4 unchanged sentences

93 ( 1,070 ) — — ( 1,070 )

Balance at September 30, 2024

Balance at March 31, 2025

30,525 $ 252,466 $ 112,361 $ ( 2,019 ) $ 362,808

Nine Months Ended September 30, 2023

Three Months Ended March 31, 2024

Accumulated Other Comprehensive

Total Shareholders’

(Loss)/Income

Balance at December 31, 2023

11 unchanged sentences

30,398 $ 249,280 $ 96,746 $ ( 1,172 ) $ 344,854

— — 4,133 — 4,133

Comprehensive income

— — — 127 127

Dividends declared on common stock ($ 0.025 per share)

— — ( 767 ) — ( 767 )

Stock-based compensation

— 1,093 — — 1,093

Common stock issued under stock plans, net of shares withheld for employee taxes

4 ( 6 ) — — ( 6 )

Balance at June 30, 2023

30,686 $ 256,073 $ 85,435 $ ( 889 ) $ 340,619

— — 3,867 — 3,867

Comprehensive loss

— — — ( 350 ) ( 350 )

Dividends declared on common stock ($ 0.025 per share)

— — ( 767 ) — ( 767 )

Stock-based compensation

— 1,038 — — 1,038

Common stock issued under stock plans, net of shares withheld for employee taxes

3 ( 20 ) — — ( 20 )

Repurchase of common stock

( 99 ) ( 2,141 ) — — ( 2,141 )

Balance at September 30, 2023

30,590 $ 254,950 $ 88,535 $ ( 1,239 ) $ 342,246

See accompanying Notes to the unaudited Condensed Consolidated Financial Statements.

2 unchanged sentences

(In thousands)

Nine Months Ended September 30,

Three Months Ended March 31,

OPERATING ACTIVITIES:

6 unchanged sentences

Loss on equity method investments

Change in fair value of non-marketable equity investments

Changes in operating assets and liabilities:

Accounts and unbilled receivables

Prepaid royalties

Other prepaid expenses and other current assets

Deferred commissions

Prepaid and other current assets

Accounts payable and accrued expenses

3 unchanged sentences

INVESTING ACTIVITIES:

Business combinations, net of cash acquired

Proceeds from maturities of marketable securities

1 unchanged sentence

Proceeds from sale of non-marketable equity investments

Purchase of other investments

Payments associated with capitalized software development

3 unchanged sentences

Taxes paid related to net settlement of equity awards

Repurchases of common stock

Payment of cash dividends

1 unchanged sentence

Effect of exchange rate changes on cash and cash equivalents

Net increase (decrease) in cash and cash equivalents

Net increase in cash and cash equivalents

Cash and cash equivalents at beginning of period

Cash and cash equivalents at end of period

NONCASH INVESTING AND FINANCING ACTIVITIES:

Purchases of property and equipment, accrued but not paid

Capitalized software development, accrued but not paid

Fair value of common stock issued as consideration for business combinations

See accompanying Notes to the unaudited Condensed Consolidated Financial Statements.

8 unchanged sentences

Increasingly, SaaS-based applications in the Company's diverse ecosystem of solutions utilize the Company's proprietary hStream technology platform to enhance the value proposition for customers by creating interoperability with and among other applications.

We believe that our single platform strategy, as represented by hStream, is the best way to realize our mission of improving the quality of care by developing the people who deliver care and the best way to create value for our shareholders in the process.

As used in this Quarterly Report on Form 10 -Q (“Form 10 -Q”), “HealthStream,” “Company,” “we,” “us,” and “our” mean HealthStream, Inc.

4 unchanged sentences

In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included.

All intercompany transactions have been eliminated in consolidation.

Operating results for the three and nine months ended September 30, 2024 are not necessarily indicative of the results that may be expected for the year ending December 31, 2024.

All intercompany transactions have been eliminated in consolidation and certain prior period amounts have been reclassified to conform to the current period presentation.

Operating results for the three months ended March 31, 2025 are not necessarily indicative of the results that may be expected for the year ending December 31, 2025.

The Condensed Consolidated Balance Sheet at December 31, 2024 was derived from the audited Consolidated Financial Statements at that date but does not include all of the information and footnotes required by US GAAP for a complete set of financial statements.

For further information, refer to the Consolidated Financial Statements and Notes thereto for the year ended December 31, 2024 (included in the Company's Annual Report on Form 10 -K, filed with the Securities and Exchange Commission on February 28, 2025).

Business Segments

The Company’s chief operating decision maker ("CODM") is its Chief Executive Officer.

Since January 1, 2023, the Company’s business has been organized and managed around a consolidated, enterprise approach, including with regard to technology, operations, accounting, internal reporting (including the nature of information reviewed by the CODM), organization structure, compensation, performance assessment, and resource allocation.

The Company’s CODM uses consolidated net income to make operating decisions, assess financial performance, and allocate resources.

Further, the CODM reviews and utilizes functional expenses (cost of revenues, product development, sales and marketing, general and administrative, and depreciation and amortization) at the consolidated level to manage the Company's operations.

Other segment items included in consolidated net income are interest income, other expense, net, and income tax provision, which are reflected in the Condensed Consolidated Statements of Income.

Expenditures for additions to long-lived assets for the consolidated entity were $ 10.7 million and $ 8.9 million for the three months ended March 31, 2025 and 2024, respectively.

Non-Marketable Equity Investments

The aggregate carrying amount of non-marketable equity investments accounted for using the measurement alternative for equity investments that do not have readily determinable fair values was $ 1.5 million as of March 31, 2025 and December 31, 2024, which the Company evaluates for impairment at each reporting period.

Cumulatively, there have been no adjustments recorded due to changes in the fair value of the non-marketable equity investments the Company held as of March 31, 2025.

The fair value of non-marketable equity investments is not estimated if there are no identified events or changes in circumstances that may have a significant adverse effect on the fair value of the investment.

HEALTHSTREAM, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

RECENT ACCOUNTING PRONOUNCEMENTS

1 unchanged sentence

Improvements to Reportable Segment Disclosures .

The new guidance requires disclosures of significant reportable segment expenses that are regularly provided to the chief operating decision maker and other segment items on an interim and annual basis.

The new guidance requires disclosures of significant reportable segment expenses that are regularly provided to the CODM and other segment items on an interim and annual basis.

Entities with a single reportable segment will also be required to apply the disclosure requirements in ASU 2023 - 07 on an interim and annual basis.

ASU 2023 - 07 will be effective for the Company for annual periods beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024.

The Company is currently evaluating the standard;

however, it is not expected to have a material impact on the Company's financial statements.

In December 2023, FASB issued ASU 2023 - 09, Income Taxes (Topic 740 ):

ASU 2023 - 07 was effective for the Company for annual periods beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024.

The Company adopted this standard effective January 1, 2024 using a retrospective method.

In December 2023, the FASB issued ASU 2023 - 09, Income Taxes (Topic 740 ):

Improvements to Income Tax Disclosures , which requires public entities to provide disclosure of disaggregated information in the entity’s tax rate reconciliation, as well as disclosure of income taxes paid disaggregated by jurisdiction.

ASU 2023 - 09 is effective for fiscal years beginning after December 15, 2024.

The Company is currently evaluating the standard;

however, it is not expected to have a material impact on the Company's financial statements.

HEALTHSTREAM, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

REVENUE RECOGNITION AND SALES COMMISSIONS

The Company is currently evaluating the effect of this standard on its disclosures and will adopt the standard effective for the annual period ending December 31, 2025.

In November 2024, the FASB issued ASU 2024 - 03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures:

Disaggregation of Income Statement Expenses , which requires disclosure of disaggregated information about specific categories underlying certain income statement expense line items in the footnotes to the financial statements for both annual and interim periods.

This ASU is effective for fiscal years beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027.

Early adoption is permitted.

The Company is currently evaluating the impact of the adoption of this standard.

REVENUE RECOGNITION

8 unchanged sentences

Sales taxes are excluded from revenues.

Three Months Ended September 30,

Nine Months Ended September 30,

Three Months Ended March 31,

Subscription services

1 unchanged sentence

Professional services

3,177 2,866 8,275 8,489

Total revenues, net

$ 73,485 $ 72,760

three months ended September 30, 2024 and 2023 , the Company recognized

$ 0.2 million and

$ 0.3 million in impairment losses on receivables and contract assets arising from the Company's contracts with customers, respectively.

nine months ended

September 30, 2024 and

2023, the Company recognized

$ 2.0 million and

$ 0.7 million in impairment losses on receivables and contract assets arising from the Company's contracts with customers, respectively.

During the three months ended September 30, 2024 and 2023 , the Company recognized revenues of $ 45.0 million and $ 42.2 million, respectively, from amounts included in deferred revenue at the beginning of the respective periods.

During the nine months ended September 30, 2024 and 2023, the Company recognized revenues of $ 79.4 million and $ 76.0 million, respectively, from amounts included in deferred revenue at the beginning of the respective periods.

As of September 30, 2024 , approximately $ 549 million of revenue is expected to be recognized from remaining performance obligations under contracts with customers.

The Company expects to recognize revenue related to approximately 43 % of these remaining performance obligations over the next 12 months, with the remaining amounts recognized thereafter.

Sales Commissions

Sales commissions earned by the Company's sales employees are considered incremental and recoverable costs of obtaining a contract with a customer.

The Company recorded amortization of deferred commissions of $ 3.1 million and $ 3.0 million for the three months ended September 30, 2024 and 2023 , respectively, and $ 9.1 million and $ 8.5 million for the nine months ended September 30, 2024 and 2023, respectively, which is included in sales and marketing expenses in the accompanying Condensed Consolidated Statements of Income.

HEALTHSTREAM, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

three months ended March 31, 2025 and 2024 , the Company recognized

$ 0.2 million in impairment losses on receivables and contract assets arising from the Company's contracts with customers.

During the three months ended March 31, 2025 and 2024 , the Company recognized revenues of $ 44.3 million and $ 40.0 million, respectively, from amounts included in deferred revenue at the beginning of the respective periods.

As of March 31, 2025 , approximately $ 613 million of revenue is expected to be recognized from remaining performance obligations under contracts with customers.

The Company expects to recognize revenue related to approximately 40 % of these remaining performance obligations over the next 12 months, 68 % over the next 24 months, and 86 % over the next 36 months, with the remaining amounts recognized thereafter.

Income taxes are accounted for using the asset and liability method, whereby deferred tax assets and liabilities are determined based on the temporary differences between the financial statement and tax bases of assets and liabilities measured at tax rates that will be in effect for the year in which the differences are expected to affect taxable income.

The Company computes its interim period provision for income taxes by applying the estimated annual effective tax rate to year-to-date pretax income or loss and adjusts the provision for discrete tax items recorded in the period.

During the three months ended September 30, 2024 and 2023 , the Company recorded a provision for income taxes of $ 1.8 million and $ 1.6 million, respectively.

During the nine months ended September 30, 2024 and 2023, the Company recorded a provision for income taxes of $ 4.2 million and $ 2.5 million, respectively.

The Company’s effective tax rate was 22 % and 19 % for the nine months ended September 30, 2024 and 2023 , respectively.

The Company’s effective tax rate was 17 % and 20 % for the three months ended March 31, 2025 and 2024 , respectively.

The Company’s effective tax rate primarily reflects the statutory corporate income tax rate, the net effect of state taxes, foreign income taxes, the effect of various permanent tax differences, and recognition of discrete tax items.

The Company recognizes excess tax benefits and tax deficiencies associated with stock-based awards as a component of its provision for income taxes.

During the nine months ended September 30, 2024 , the Company recorded discrete tax expense of $ 0.1 million, which consisted primarily of discrete tax expense of $ 0.2 million related to reserves for uncertain tax positions, partially offset by a $ 0.1 million discrete tax benefit associated with stock-based awards.

During the nine months ended September 30, 2023 , the Company recorded discrete tax benefits of $ 0.1 million, which consisted primarily of tax benefits associated with changes in state apportionment rules in Tennessee upon the enactment of the Tennessee Works Tax Act in the amount of $ 0.6 million, and stock-based awards in the amount of $ 0.1 million.

This tax benefit for the nine months ended September 30, 2023 was partially offset by $ 0.3 million of discrete tax expense related to reserves for uncertain tax positions and $ 0.3 million of discrete tax expense associated with the Company merging VerityStream, Inc.

("VerityStream") into HealthStream.

HEALTHSTREAM, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

SHAREHOLDERS' EQUITY

Dividends on Common Stock

During the nine months ended September 30, 2024, the Company's Board of Directors (“Board”) declared the following quarterly dividends under the Company's dividend policy:

During the three months ended March 31, 2025, the Company's Board of Directors (“Board”) declared the following quarterly dividends under the Company's dividend policy (in thousands, except per share data):

Dividend Payment Date Dividend Declaration Date Dividend Per Share Record Date Cash Outlay

March 21, 2025 February 24, 2025 $ 0.031 March 10, 2025 $ 943

May 17, 2024 April 22, 2024 0.028 May 6, 2024 851,000

August 16, 2024 July 22, 2024 0.028 August 5, 2024 851,000

Total dividends $ 0.084 $ 2,551,000

Additionally, o n October 21, 2024, the Board declared a quarterly cash dividend of $ 0.028 per share, payable on November 15, 2024 to holders of record on November 4, 2024 .

Additionally, o n May 5, 2025, the Board declared a quarterly cash dividend of $ 0.031 per share, payable on May 30, 2025 to holders of record on May 19, 2025 .

Stock-Based Compensation

The Company has stock awards outstanding under its 2016 Omnibus Incentive Plan and 2022 Omnibus Incentive Plan.

The Company accounts for its stock-based compensation plans using the fair-value based method for costs related to share-based payments, including restricted share units (“RSUs”) and stock options.

During the nine months ended September 30, 2024 , the Company issued 110,573 RSUs subject to service-based time vesting, with a weighted average grant date fair value of $ 27.80 per share, measured based on the closing fair market value of the Company's stock on the date of the grant.

During the nine months ended September 30, 2023 , the Company issued 128,942 RSUs subject to service-based time vesting, with a weighted average grant date fair value of $ 23.61 per share, measured based on the closing fair market value of the Company’s stock on the date of grant.

Stock Option Activity

A summary of stock option activity for the three months ended March 31, 2025 is as follows (in thousands, except weighted-average exercise price).

Exercise Price

Intrinsic Value

Outstanding at beginning of period

Outstanding at end of period

90 $ 20.34 $ 1,066

Exercisable at end of period

90 $ 20.34 $ 1,066

The weighted average remaining contractual term of options outstanding at March 31, 2025 was 5.7 years.

Restricted Share Unit Activity

A summary of Restricted Share Unit ("RSU") activity for the three months ended March 31, 2025 is as follows (in thousands, except weighted-average grant date fair value):

Average Grant Date

Intrinsic Value

Outstanding at beginning of period

( 127 ) 22.93

Outstanding at end of period

478 $ 26.35 $ 15,380

As of March 31, 2025 , total unrecognized compensation expense related to non-vested RSUs was $ 7.9 million, net of estimated forfeitures, with a weighted average expense recognition period remaining of 2.4 years.

HEALTHSTREAM, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

During the nine months ended September 30, 2024, the Company granted 6,100 performance-based RSUs, the vesting of which occurs over a five -year period in increments of 10 %, 15 %, 20 %, 25 %, and 30 % and is contingent upon continued service and achieving certain performance criteria established by the compensation committee of the Board (the “Compensation Committee”) on an annual basis based on performance in 2024, 2025, 2026, 2027, and 2028, respectively.

The performance criteria for the first -year tranche, or 610 of these performance-based RSUs, is based on 2024 adjusted EBITDA.

The measurement date for these 610 performance-based RSUs was established during the nine months ended September 30, 2024 with a weighted average grant date fair value of $ 28.79 per share, measured based on the closing fair market value of the Company's stock on the date the performance criteria was established.

The performance criteria for the remaining 5,490 performance-based RSUs has not yet been determined and will be established on an annual basis in 2025, 2026, 2027, and 2028, as applicable;

therefore, the measurement date for these remaining 5,490 performance-based RSUs cannot be determined until the performance criteria have been established.

During the nine months ended September 30, 2023, the Company granted 138,000 performance-based RSUs, the vesting of which occurs over a five -year period in increments of 15 %, 20 %, 20 %, 20 %, and 25 % and is contingent upon continued service and achieving certain performance criteria established by the compensation committee of the Board (the “Compensation Committee”) on an annual basis based on performance in 2023, 2024, 2025, 2026, and 2027, respectively.

The performance criteria for the second -year tranche, or 27,600 of these performance-based RSUs, is based on 2024 adjusted EBITDA.

The measurement date for these 27,600 performance-based RSUs was established during the nine months ended September 30, 2024 with a weighted average grant date fair value of $ 26.79 per share, measured based on the closing fair market value of the Company's stock on the date the performance criteria was established.

The performance criteria for the remaining 89,700 performance-based RSUs has not yet been determined and will be established on an annual basis in 2025, 2026, and 2027, as applicable;

therefore, the measurement date for these remaining 89,700 performance-based RSUs cannot be determined until the performance criteria have been established.

During the nine months ended September 30, 2022, the Company granted 91,042 performance-based RSUs, the vesting of which occurs over a five -year period in increments of 15 %, 20 %, 20 %, 20 %, and 25 % and is contingent upon continued service and achieving certain performance criteria established by the Compensation Committee on an annual basis based on performance in 2022, 2023, 2024, 2025, and 2026, respectively.

The performance criteria and measurement date for the third -year tranche, or 18,211 of these performance-based RSUs, is based on 2024 adjusted EBITDA and was established during the nine months ended September 30, 2024 with a grant date fair value of $ 26.79 per share, measured based on the closing fair market value of the Company's stock on the date the performance criteria was established.

The performance criteria for the remaining 40,967 performance-based RSUs has not yet been determined and will be established on an annual basis in 2025 and 2026, as applicable;

therefore, the measurement date for these remaining 40,967 performance-based RSUs cannot be determined until the performance criteria have been established.

Total stock-based compensation expense recognized in the Condensed Consolidated Statements of Income is as follows (in thousands):

Three Months Ended September 30,

Nine Months Ended September 30,

Three Months Ended March 31,

Cost of revenues (excluding depreciation and amortization)

$ 49 $ 50 $ 152 $ 149

Product development

200 188 599 542

Sales and marketing

139 131 415 374

Other general and administrative

743 669 2,119 2,011

General and administrative

Total stock-based compensation expense

$ 1,104 $ 1,060

HEALTHSTREAM, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

EARNINGS PER SHARE

3 unchanged sentences

The dilutive effect of common equivalent shares is included in diluted earnings per share by application of the treasury stock method.

The total number of common equivalent shares excluded from the calculations of diluted earnings per share, due to their anti-dilutive effect or contingent performance conditions, was approximately 177,000 and 340,000 for the three months ended September 30, 2024 and 2023 , respectively, and 169,000 and 278,000 for the nine months ended September 30, 2024 and 2023, respectively.

The total number of common equivalent shares excluded from the calculations of diluted earnings per share, due to their anti-dilutive effect or contingent performance conditions, was approximately 105,000 and 176,000 for the three months ended March 31, 2025 and 2024 , respectively.

The following table sets forth the computation of basic and diluted earnings per share (in thousands, except per share data):

Three Months Ended September 30,

Nine Months Ended September 30,

Three Months Ended March 31,

$ 4,332 $ 5,227

2 unchanged sentences

Effect of dilutive shares

181 86 138 81

Weighted-average diluted shares

3 unchanged sentences

$ 0.14 $ 0.17

HEALTHSTREAM, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

MARKETABLE SECURITIES

The fair value of marketable securities, which were all classified as available for sale and which the Company does not intend to sell nor will the Company be required to sell prior to recovery of their amortized cost basis, included the following (in thousands):

September 30, 2024

March 31, 2025

Adjusted Cost

12 unchanged sentences

The carrying amounts reported in the Condensed Consolidated Balance Sheets approximate fair value based on quoted market prices or alternative pricing sources and models utilizing market observable inputs.

As of September 30, 2024 , the Company did not recognize any allowance for credit impairments on its available for sale securities.

As of March 31, 2025 and December 31, 2024 , the Company did not recognize any allowance for credit impairments on its available for sale securities.

All investments in marketable securities are classified as current assets on the Condensed Consolidated Balance Sheets because the underlying securities mature within one year from the balance sheet date.

20 unchanged sentences

In addition, the Revolving Credit Facility contains certain customary affirmative and negative covenants that, among other things, restrict additional indebtedness, liens and encumbrances, changes to the character of the Company’s business, acquisitions, asset dispositions, mergers and consolidations, sale or discount of receivables, creation or acquisitions of additional subsidiaries, and other matters customarily restricted in such agreements.

As of September 30, 2024 , the Company was in compliance with all covenants.

There were no balances outstanding on the Revolving Credit Facility as of or during the three and nine months ended September 30, 2024 .

As of March 31, 2025 , the Company was in compliance with all covenants.

There were no balances outstanding on the Revolving Credit Facility as of or during the three months ended March 31, 2025 .

SUBSEQUENT EVENT

On May 8, 2025, the Company’s Board of Directors approved a new share repurchase program for the Company’s common stock, under which the Company may repurchase up to $ 25 million of outstanding shares of common stock.

Pursuant to the authorization, repurchases may be made from time to time in the open market, including under a Rule 10b5 - 1 plan, through privately negotiated transactions, or otherwise.

In addition, any repurchases under the authorization will be subject to prevailing market conditions, liquidity and cash flow considerations, applicable securities laws requirements (including under Rule 10b - 18 and Rule 10b5 - 1 of the Securities Exchange Act of 1934, as applicable), and other factors.

The share repurchase program will terminate on the earlier of May 31, 2026 or when the maximum dollar amount has been expended.

The share repurchase program does not require the Company to acquire any amount of shares and may be suspended or discontinued at any time.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements