HealthStream, Inc.

Good morning and welcome to Healthstream's first quarter 2023 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. I will now turn the conference over to Molly Condra, Vice President of Investor Relations and Communications. Please go ahead, Ms. Condra.

Thank you and good morning. Thank you for joining us today to discuss our first quarter 2023 results. Also in the conference call with me is Robert A. Frist, Jr., CEO and Chairman of HealthStream, and Scotty Roberts, CFO and Senior Vice President of Finance and Accounting. I would also like to remind you this morning that this conference call may contain forward-looking statements regarding future events and the future performance of HealthStream that involve risk 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 Healthstream is included in the earnings release that we issued yesterday and may refer to in this call. With that start, I'll now turn the call over to CEO Bobby Frist.

Good morning. Thank you, Molly. Lots to cover this morning. We'll get started. I think one of the first things that's different and we're excited about is on this earnings call, is our new dividend policy. It was announced on February 20th, through which we'll be paying our first cash dividend on Friday of this week. I'm also pleased to share that our second dividend was announced yesterday in our earnings release and will be paid in June. Quarterly cash dividends are a new element of our shareholder return strategy, and we're excited to make our first ever quarterly dividend payment under that policy, that new policy. And it's following a strong quarter of financial results, and we're going to talk more about both of those throughout the course of this call. Let's turn to the financials and do a few highlights. And then of course, Scotty will do more detail. For the first quarter of 2023, we delivered a record amount of quarterly top line revenue at 68.9 million. That was up 5% over the same period of 2022. We had a solid quarter of profitability resulting in EBITDA of 13.7 million, which after accounting for a $1 million severance expense that was related to restructuring announced in our call in February, you know, we've gained some efficiencies on a go-forward basis. We believe that the efficiencies resulting from the restructuring will begin to have a positive impact on our financial performance beginning in the second quarter of this year. And, of course, this is taken into consideration in our guidance, which we're reiterating today. More importantly, with the restructuring in place, we now operate and are organized as a single platform company. Our HStream technology platform is increasingly at the core of everything we do, Where we used to be organized as two business segments, they were called workforce solutions and provider solutions, we are now unified as a single platform company by our HStream technology platform. We refer to this internally as our one HealthStream approach, and we're organizing our company around that approach. Under that approach, we'll continue to invest in our platform as a service technologies that power both our SaaS application suites as well as the applications of our customers and partners. By utilizing our 8Stream technology platform to create interoperability among our expanding array of SaaS solutions, we believe we will help improve healthcare, continue to grow our business, and provide a growing value proposition to customers of more than one of our application suites. Before we move further into call, I'll take a minute to refresh everyone about our business. And I think this is helpful for those that are new to the HealthStream story, which I hope there are many of you on this call. First and foremost, HealthStream is a healthcare technology company dedicated to developing, credentialing, and scheduling the healthcare workforce through SaaS-based solutions, each of which are becoming more valuable because of the interoperability they are achieving through our HStream technology platform. We sell our solutions on a subscription basis under contracts which average three to five years in length. That means our revenues are recurring and predictable. We are profitable, and we have little to no debt. We're solely focused on healthcare, and more specifically, the healthcare workforce. The 11.2 million healthcare professionals working in the United States are the end users of our SAS solutions.