HealthStream, Inc.

Good morning, and welcome to HealthStream's second quarter 2022 earnings conference call. At this time, I would like to inform you that this conference is being recorded and that all participants are in a listen-only mode. At the request of the company, we will open the conference up for questions and answers after the presentation. Should you have a question, please press star 1-1 on your push-button telephone. I will now turn the conference over to Scotty Roberts, CFO, and Senior Vice President. Please go ahead, Mr. Roberts.

Thank you. Good morning, and thank you for joining us today to discuss our second quarter 2022 results. I'll be filling in this morning for Molly Condra. Also in the conference call with me is Robert Atris, Jr., CEO and Chairman of HealthStream. I would also like to remind you that this conference call may contain forward-looking statements regarding future events and the future performance of HealthStream that involve risks and uncertainties that could cause the actual results to differ materially from those projected in the forward-looking statements. Information concerning these risks and other factors that could cause the results to differ materially from those forward-looking statements are contained in the company's filings with the SEC, including forms 10-K, 10-Q, and our earnings release. Additionally, we may reference measures such as adjusted EBITDA, which is a non-GAAP financial measure, a table providing supplemental information on adjusted EBITDA and reconciling to net income attributable to health streams included in the earnings release that we issued yesterday and may refer to in this call. I'll now turn the call over to our CEO, Bobby Frisk.

Thank you, Scotty. Good morning, everyone. Welcome to our second quarter 2022 earnings call. At a time when so many things in the world are up in the air, the pandemic, recessionary trends, war, there's just so many unpredictable things and they continue shifting. I think it's important to kind of pause a little bit and double down on who we are and where we are going. And for that reason, I'm going to take the opportunity here to open to reground everyone in the basics of our business and our business focus. First and foremost, HealthStream is a healthcare technology company dedicated to developing, credentialing, and scheduling the healthcare workforce through SAS-based applications. We sell these applications on a subscription basis under contracts which average three to five years in length. That means our revenues are recurring and highly predictable. We are profitable, and we have little to no debt. We're also fortunate to be solely focused on one of the more recession resistant markets around, healthcare. And as we define our target customers within healthcare, we see it's a rather large audience of about 10.4 million healthcare professionals. Those healthcare professionals are the end users of our SaaS applications. We are led by a seasoned team of executives who have proven track record of generating earnings and cash flows through both organic and inorganic means. We have internally developed innovative patented solutions such as Jane, robust enterprise class market leading applications, again, developed internally such as our Health Stream Learning Center. And we have created new application suites such as Credential Stream through acquiring and integrating other companies. When markets have been appropriate for repurchasing our shares, we have done that as well. Since March of 2020, we have repurchased approximately $48 million of shares at an average price of $21.75, retiring approximately 6.5% of our shares outstanding in the process. Keeping sight of these fundamentals has allowed us to reliably deliver even in unreliable times, and we expect to continue doing so. With that framework in place, I want to share three key takeaways for the remainder of this year. First, we believe we are positioned to deliver an improved top-line growth rate of generally around 6% inclusive of our acquisition of Cloud TME in the second half of the year. This rate, which would be more than double our growth rate of the first half. Second, our gross margin is 66% in the second quarter, representing a 700 basis point improvement from the 2019 gross margins of 59%. That improvement occurred sequentially over time due to our improving mix of higher margin products. Third, we believe sales bookings indicate that customer purchasing decisions are beginning to pick up based on our sales teams reporting higher levels of engagement with customers and an increased level of virtual and in-person meetings when compared to the height of the pandemic. We take each of these three items to be positive indicators as we move into the second half of the year. In fact, as we reflect on the last few years, the management team is excited to feel that we're now more on offense than maybe a slightly more defensive posture of the prior three years. It's exciting to be on offense. Later in the call, I'll talk about important developments with our single platform strategy, as well as areas that we believe will drive future growth and expansion. But first, I'll turn it over to Scotty Roberts, our CFO, to provide details on our financial results for the second quarter.