What changed in this filing

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Item 1. Financial Statements

2025-08-07 compared with 2025-05-09 · 134 added, 42 removed, 309 unchanged (36% of the section changed)

48 unchanged sentences

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

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

29,897 and 30,432 shares issued and outstanding at June 30, 2025 and December 31, 2024, respectively

235,041 252,432

12 unchanged sentences

Three Months Ended

March 31, 2025

March 31, 2024

Six Months Ended

June 30, 2025

June 30, 2024

June 30, 2025

June 30, 2024

Revenues, net

$ 74,396 $ 71,556 $ 147,881 $ 144,316

Operating costs and expenses:

Cost of revenues (excluding depreciation and amortization)

26,364 23,738 51,851 48,355

Product development

12,073 12,076 24,121 24,107

Sales and marketing

11,808 11,405 23,958 23,179

General and administrative

7,398 9,556 16,066 17,868

Depreciation and amortization

10,867 10,370 21,621 20,706

Total operating costs and expenses

68,510 67,145 137,617 134,215

Operating income

5,886 4,411 10,264 10,101

Interest income

Other expense, net

958 944 1,889 1,848

Other income (expense), net

23 ( 55 ) ( 39 ) ( 107 )

Income before income tax provision

6,867 5,300 12,114 11,842

Income tax provision

1,478 1,132 2,393 2,448

$ 5,389 $ 4,168 $ 9,721 $ 9,394

Net income per share:

$ 0.18 $ 0.14 $ 0.32 $ 0.31

Weighted average shares of common stock outstanding:

30,320 30,401 30,382 30,357

30,450 30,526 30,519 30,472

Dividends declared per share

$ 0.031 $ 0.028 $ 0.062 $ 0.056

See accompanying Notes to the unaudited Condensed Consolidated Financial Statements.

3 unchanged sentences

Three Months Ended

March 31, 2025

March 31, 2024

Six Months Ended

June 30, 2025

June 30, 2024

June 30, 2025

June 30, 2024

$ 5,389 $ 4,168 $ 9,721 $ 9,394

Other comprehensive income (loss), net of taxes:

Foreign currency translation adjustments

754 ( 44 ) 803 ( 519 )

Unrealized loss on marketable securities

( 13 ) ( 1 ) ( 32 ) ( 7 )

Total other comprehensive income (loss)

741 ( 45 ) 771 ( 526 )

Comprehensive income

$ 6,130 $ 4,123 $ 10,492 $ 8,868

See accompanying Notes to the unaudited Condensed Consolidated Financial Statements.

2 unchanged sentences

(In thousands, except per share data)

Three Months Ended March 31, 2025

Six Months Ended June 30, 2025

Accumulated Other Comprehensive

13 unchanged sentences

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

Three Months Ended March 31, 2024

— — 5,389 — 5,389

Comprehensive income

— — — 741 741

Dividends declared on common stock ($ 0.031 per share)

— — ( 946 ) — ( 946 )

Stock-based compensation

— 836 — — 836

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

22 ( 5 ) — — ( 5 )

Excise tax on repurchases of common stock

( 135 ) ( 135 )

Repurchases of common stock

( 650 ) ( 18,121 ) ( 18,121 )

Balance at June 30, 2025

29,897 $ 235,041 $ 116,804 $ ( 1,278 ) $ 350,567

Six Months Ended June 30, 2024

Accumulated Other Comprehensive

13 unchanged sentences

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

See accompanying Notes to the unaudited Condensed Consolidated Financial Statements.

2 unchanged sentences

(In thousands)

Three Months Ended March 31,

Six Months Ended June 30,

OPERATING ACTIVITIES:

$ 9,721 $ 9,394

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization

21,621 20,706

Stock-based compensation

3 unchanged sentences

Loss on equity method investments

( 776 ) ( 746 )

Changes in operating assets and liabilities:

1 unchanged sentence

Prepaid and other current assets

( 1,728 ) ( 53 )

( 8,596 ) ( 5,516 )

Accounts payable and accrued expenses

( 3,858 ) ( 8,912 )

Accrued royalties

( 366 ) ( 370 )

Deferred revenue

Net cash provided by operating activities

32,097 27,389

INVESTING ACTIVITIES:

Proceeds from maturities of marketable securities

26,073 29,196

Purchases of marketable securities

( 26,100 ) ( 34,526 )

Proceeds from sale of non-marketable equity investments

1 unchanged sentence

Payments associated with capitalized software development

( 14,500 ) ( 13,552 )

Purchases of property and equipment

( 3,372 ) ( 914 )

Net cash used in investing activities

( 18,399 ) ( 19,031 )

FINANCING ACTIVITIES:

Taxes paid related to net settlement of equity awards

( 1,075 ) ( 861 )

Payment of cash dividends

( 1,890 ) ( 1,700 )

Repurchases of common stock

Net cash used in financing activities

( 21,086 ) ( 2,561 )

Effect of exchange rate changes on cash and cash equivalents

Net increase in cash and cash equivalents

Net (decrease) increase in cash and cash equivalents

( 7,367 ) 5,798

Cash and cash equivalents at beginning of period

59,469 40,333

Cash and cash equivalents at end of period

$ 52,102 $ 46,131

NONCASH INVESTING AND FINANCING ACTIVITIES:

1 unchanged sentence

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.

16 unchanged sentences

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.

Operating results for the three and six months ended June 30, 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.

5 unchanged sentences

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.

Other segment items included in consolidated net income are interest income, other income (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 $ 23.2 million and $ 19.4 million for the six months ended June 30, 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 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 June 30, 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 June 30, 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.

27 unchanged sentences

Sales taxes are excluded from revenues.

Three Months Ended March 31,

Three Months Ended June 30,

Six Months Ended June 30,

Subscription services

1 unchanged sentence

Professional services

2,455 2,543 5,151 5,098

Total revenues, net

$ 74,396 $ 71,556 $ 147,881 $ 144,316

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.

three months ended June 30, 2025 and 2024 , the Company recognized

$ 0.2 million and

$ 1.6 million in impairment losses on receivables and contract assets arising from the Company's contracts with customers, respectively.

six months ended June 30, 2025 and 2024 , the Company recognized

$ 0.4 million and

$ 1.8 million in impairment losses on receivables and contract assets arising from the Company's contracts with customers, respectively.

During the three months ended June 30, 2025 and 2024 , the Company recognized revenues of $ 49.1 million and $ 47.2 million, respectively, from amounts included in deferred revenue at the beginning of the respective periods.

During the six months ended June 30, 2025 and 2024 , the Company recognized revenues of $ 69.1 million and $ 65.2 million, respectively, from the amounts included in deferred revenue at the beginning of the respective periods.

As of June 30, 2025 , approximately $ 618 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 39 % of these remaining performance obligations over the next 12 months, 68 % over the next 24 months, and 85 % over the next 36 months, with the remaining amounts recognized thereafter.

1 unchanged sentence

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.

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 was 20 % and 21 % for the six months ended June 30, 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.

1 unchanged sentence

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

On July 4, 2025, the federal budget reconciliation legislation, commonly referred to as the One Big Beautiful Bill ("OBBB”), was signed into law.

The OBBB includes significant changes to federal tax law and other regulatory provisions that may impact the Company, including modifications to capitalization of research and development expenses, limitations on deductions for interest expense, and accelerated fixed asset depreciation.

The Company is currently evaluating the provisions of the new law and the potential effects on its financial position, results of operations, and cash flows.

As of the date of these financial statements, the Company has not completed its assessment, and, therefore, no adjustments have been made.

Additional disclosures will be provided in future periods as the impact of the legislation is determined.

SHAREHOLDERS' EQUITY

Dividends on Common Stock

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):

During the six months ended June 30, 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

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 .

May 30, 2025 May 5, 2025 $ 0.031 May 19, 2025 $ 946

Additionally, o n August 4, 2025, the Board declared a quarterly cash dividend of $ 0.031 per share, payable on August 29, 2025 to holders of record on August 18, 2025 .

Stock-Based Compensation

1 unchanged sentence

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).

A summary of stock option activity for the three months ended June 30, 2025 is as follows (in thousands, except weighted-average exercise price).

Exercise Price

5 unchanged sentences

90 $ 20.34 $ 660

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

The weighted average remaining contractual term of options outstanding at June 30, 2025 was 5.4 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):

A summary of Restricted Share Unit ("RSU") activity for the three months ended June 30, 2025 is as follows (in thousands, except weighted-average grant date fair value):

Average Grant Date

1 unchanged sentence

Outstanding at beginning of period

( 127 ) 22.93

Outstanding at end of period

485 $ 26.46 $ 13,431

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.

As of June 30, 2025 , total unrecognized compensation expense related to non-vested RSUs was $ 6.4 million, net of estimated forfeitures, with a weighted average expense recognition period remaining of 2.6 years.

HEALTHSTREAM, INC.

1 unchanged sentence

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

Three Months Ended March 31,

Three Months Ended June 30,

Six Months Ended June 30,

Cost of revenues (excluding depreciation and amortization)

$ 50 $ 50 $ 103 $ 103

Product development

198 202 428 399

Sales and marketing

109 140 253 276

General and administrative

479 702 1,156 1,376

Total stock-based compensation expense

$ 836 $ 1,094 $ 1,940 $ 2,154

Share Repurchase Plan

On May 8, 2025, the Company announced a share repurchase program approved by the Company’s Board of Directors under which the Company is authorized to repurchase up to $ 25.0 million of its outstanding shares of common stock.

Pursuant to this 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.

During the three months ended June 30, 2025, the Company repurchased and subsequently retired 649,953 shares valued at $ 18.1 million pursuant to this authorization, and the Company continued to repurchase shares pursuant to this authorization during the third quarter, completing the program in July by repurchasing and retiring 255,833 shares valued at $ 6.9 million.

The share repurchase program terminated in July when the maximum dollar amount was expended.

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 105,000 and 176,000 for the three months ended March 31, 2025 and 2024 , 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 184,000 and 155,000 for the three months ended June 30, 2025 and 2024 , respectively, and 145,000 and 166,000 for the six months ended June 30, 2025 and 2024 .

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

Three Months Ended March 31,

Three Months Ended June 30,

Six Months Ended June 30,

$ 5,389 $ 4,168 $ 9,721 $ 9,394

2 unchanged sentences

Effect of dilutive shares

130 125 137 115

Weighted-average diluted shares

7 unchanged sentences

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):

March 31, 2025

June 30, 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 March 31, 2025 and December 31, 2024 , the Company did not recognize any allowance for credit impairments on its available for sale securities.

As of June 30, 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 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.

As of June 30, 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 and six months ended June 30, 2025 .

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