HealthStream, Inc.

Good morning and welcome to HealthStream's second quarter 2026 earnings conference call. At this time, I'd 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 Ms. Mollie Condra, Head of Investor Relations in Corporate Communications. Please go ahead, Ms. Condra.

Okay, thank you. Good morning. and thank you for joining us today to discuss our second quarter 2026 results. Also on the conference call with me today 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 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 certain non-GAAP financial measures related to the company's past and future expected performance on this call. The most directly comparable GAAP financial metrics and reconciliations are included in the earnings release that we issued yesterday. So with that start, I'll now turn the call over to CEO Bobby Frist.

Good morning, everyone. Welcome to our second quarter 2026 earnings call. We do have a lot to discuss, as always, and it's fun when we can start with strong financial growth that we delivered during the quarter. So I'll dive into some of the numbers. The quarter included record-setting revenues of $83.7 million, up 12.5% year-over-year, and record-setting adjusted EBITDA, which was $20.6 million, up 16.9% year-over-year. Operating income also grew 41.4% year-over-year. Based on our performance for the first half of the year, we increased our expectations for revenue and adjusted EBITDA for the full year 2026 in our financial guidance. Remind you of the strong cash balance of $66.7 million, an untapped line of credit, and no long-term debt. We do remain well-positioned to pursue M&A opportunities as they arise and other capital deployment strategies that we believe will benefit shareholders. Our successful execution and financial performance in the first half of the year is allowing us to invest more aggressively in key areas than we had planned at the outset of the year. We believe these investments, which I'll speak to throughout today's call, will help broaden our reach into healthcare and help us deliver long-term growth in the future. This investment strategy is a primary reason we are slightly trimming net income guidance for 2026. The first area of investment I want to highlight is our career networks. Our career networks help healthcare organizations find the most qualified and competent employees while helping individual healthcare professionals develop and navigate their careers. Remember, Healthstream is already helping healthcare organizations develop Retain, Engage, Credential, and Schedule the Healthcare Workforce. So our career networks provide another dimension to our capabilities, that of finding the best employees. We are now investing in personnel, approving 15 new positions beyond our original budget to develop our career networks. And they include a nice mix of sales, operations, and support for this growing part of our business. Career network applications, such as My Clinical Exchange, help us do this by interfacing directly with students as they prepare for their first job in healthcare. Already, we are seeing some of our largest and most progressive customers utilize My Clinical Exchange to help them find the best students for clinical internships and rotations to develop those individuals in ways that make their transition to practice more efficient and effective and to help ensure that they are able to successfully hire those students upon graduation. By moving upstream into the nursing and medical student market, Healthstream is beginning to help our customers solve their staffing problems and improve the quality and readiness of these new hires. My Clinical Exchange, one of our three career networks, grew 29% in the quarter versus the same period last year, which gives us confidence that we're on the right track with this investment strategy, again, incremental to our original budget plans at the beginning of the year. So to summarize, due to the strength of the first half performance, We have decided electively to increase our investment in our career networks and added 15 new positions that we're rapidly hiring and onboarding. So we expect them to begin contributing during the second half of the year, but also we'll have the new payroll, new expenses. As we look ahead, we continue to monitor a number of external factors that may influence the operating environment for both Healthstream and our customers. Several of our larger hospital system customers have described headwinds associated with the expiration of the enhanced ACA premium tax credits at the end of last year. A few have also noted future Medicaid reimbursement pressure related to the One Big Beautiful Bill Act. We'll continue to track these developments, including any spending impact they may have on our customers. To date, because of how we're positioned, we have not seen a negative impact on our business, and that's partially because our solutions are specifically designed to help health systems save money associated with their operations. So we'll continue to focus on enabling our customers to operate more efficiently regardless of the macroeconomic conditions. And I think that's while our solutions are well positioned even in this tighter money environment for our customers. As a reminder, in the last couple of calls, I outlined four reasons why HealthStream sees significant opportunities in the rapidly evolving AI landscape. As AI continues to advance, we're even more confident in each of these reasons that we've articulated in the past. So let me reiterate them. First, our healthcare user base continues to grow. Unlike industries that may experience seat compression from AI, healthcare employment is largely projected and expected to remain a major source of job growth in our country, with nurses our largest user base for Healthstream at the center of that trend. We believe AI will help caregivers spend more time with patients and less time on administrative work. And so just a general characterization is that we see a lot of job growth in healthcare, and particularly in the nursing base. Second, our data remains a key differentiator. As we enter the AI area and the era, our enterprise applications serve as systems of record for learning, credentialing, and scheduling. while our career networks generate proprietary workforce data. NurseGrid alone now reaches approximately one in five U.S. nurses, providing valuable insight into nurses' preferences and work life. Third, our HealthStream platform is designed to incorporate AI as a core capability, and assets such as our H-Stream ID and our expanding API footprint provide foundational infrastructure to support AI-driven innovation across healthcare workforce technology. We already, for example, have over 780 registered users of our developer portal building dozens of customer-built applications and integrations using our API. I think this is solid footing for the AI-driven future. Fourth, our ecosystem brings these advantages together. Thousands of healthcare organizations, millions of caregivers, dozens of industry partners, and more than 30 years of expertise create a differentiated platform that is difficult to replicate. While AI cannot create an ecosystem like ours, we believe it can make that ecosystem even more valuable. Before we go further in the call and I turn it over to Scotty, I want to summarize, for those of you new to the HealthStream story, kind of a business overview, the business description. So for anyone new to the story, first and foremost, HealthStream is a healthcare technology company dedicated to finding, developing, retaining, engaging, credentialing, and scheduling the healthcare workforce through technology solutions. each of which we believe are becoming more valuable because of the interoperability they are achieving through our HStream technology platform. The company holds 21 patents on its innovative products, which have been awarded over 40 Brandon Hall awards. Historically, we sell our solutions on a subscription basis under contracts that average three to five years in length, which makes our revenues recurring and predictable. In fact, 97% of our revenues are subscription-based. We are profitable, have no interest-bearing debt, and reported strong cash balance of $66.7 million at the end of the second quarter of 2026. The strong cash balance allows us to allocate capital to product development, M&A, share repurchases and dividends. We are solely focused on healthcare and more specifically the healthcare workforce and those preparing to enter it. The 12.6 million healthcare professionals and nursing students in the United States comprise the core total addressable market for our solutions. Later in the call today, I'll describe some of the exciting developments in each of our areas, learning, credentialing, and scheduling primarily. But first, let's turn the mic over to Scotty Roberts, our CFO, who will provide a more detailed discussion of the financial metrics for the second quarter of 2026, along with further comments about how we view our financial outlook for the remainder of 2026. Scotty, I'll turn it over to you.