HealthStream Raises 2026 Revenue Outlook After Profit Decline

The Tip Desk · November 10, 2026 · 4 min read

Third-quarter revenue was $83.3 million, up 8.9%, as the company lifted full-year revenue guidance to $331.0 million–$333.0 million.

HealthStream, Inc. (HSTM), a healthcare technology platform company for clinical workforce solutions, raised its full-year 2026 revenue outlook after a quarter in which operating income reversed two periods of year-over-year growth.

The company now expects 2026 revenue of $331.0 million to $333.0 million, up from a prior range of $327.0 million to $332.0 million. Net income guidance moved to $21.8 million to $22.4 million from $19.5 million to $22.2 million. Adjusted EBITDA guidance was lifted at the low end to $77.0 million to $78.0 million from $74.0 million to $78.0 million. Capital expenditures are expected at $31.0 million to $34.0 million. The company said the outlook reflects assumptions about new sales and renewals and assumes general economic conditions do not deteriorate.

Third-quarter revenue was $83.3 million, up 8.9% from $76.5 million a year earlier. That year-over-year rate slowed from 12.5% in the second quarter and 10.5% in the first quarter. Sequential revenue was $83.3 million versus a record $83.7 million in the second quarter.

Subscription revenue rose 8.0% year over year, slower than 11.2% in the second quarter and 10.7% in the first quarter. Professional services revenue increased $0.7 million. The company said growth was positively impacted by $3.2 million from the Virsys12 and MissionCare Collective acquisitions completed in the fourth quarter of 2025 and $3.6 million from growth across its existing portfolio. In the second quarter, existing-portfolio growth had been $6.2 million, including a $2.0 million ASC 606 catch-up.

Operating income was $6.6 million, down 13.0% from $7.6 million a year earlier, reversing a 41.4% year-over-year increase to $8.3 million in the second quarter and a 71.6% increase to $7.5 million in the first quarter. The company said the decline was primarily attributable to higher operating expenses to support investments in platform and enterprise applications, including personnel costs, third-party software, cloud hosting, and amortization from the fourth-quarter 2025 acquisitions. It also recorded about $250,000 of expense related to a cybersecurity incident disclosed July 29, 2026, after related insurance recoveries.

Net income was $5.4 million, down 11.7% from $6.1 million a year earlier. Diluted earnings were $0.18 a share, down from $0.20 a year earlier. Adjusted EBITDA was $19.3 million, up 1.0% from $19.1 million a year earlier, after 16.9% growth to $20.6 million in the second quarter and 24.1% growth to $20.1 million in the first quarter. The company added the cybersecurity-incident expense, after insurance recoveries, to its adjusted EBITDA reconciliation.

Chief Executive Officer Robert A. Frist, Jr., said nine months into 2026 the company had grown revenues 10.6%, operating income 25.7%, and adjusted EBITDA 13.4% compared with the same period last year. For the nine months ended September 30, 2026, revenues were $248.2 million, up 10.6% from $224.4 million. Operating income for the nine months was $22.4 million, up 25.7% from $17.8 million. Net income for the nine months was $18.0 million, up 13.6% from $15.8 million. Diluted earnings for the nine months were $0.61 a share, compared with $0.52 a share. Adjusted EBITDA for the nine months was $60.0 million, up 13.4% from $52.9 million.

On September 14, 2026, the company issued 1,355,932 shares to WJRJJ Ventures, LLC in a private placement for about $40.0 million, or $29.50 a share. It said it intends to use net proceeds for general corporate purposes, including continued investment in solutions, working capital, potential acquisitions, and other strategic initiatives. Cash, cash equivalents, and marketable securities were $115.2 million at September 30, 2026. The company said it has no outstanding indebtedness of borrowed money. Capital expenditures in the third quarter were $7.5 million.

A $10.0 million share repurchase program authorized March 13, 2026, expired September 12, 2026. The company did not repurchase shares under that program in the three months ended September 30, 2026. During the first nine months of 2026, it repurchased 432,476 shares under previously authorized programs at an aggregate fair value of $9.3 million, an average of $21.50 a share excluding broker commissions and the 1% share repurchase excise tax. The board declared a quarterly cash dividend of $0.035 a share, payable November 27, 2026, to holders of record on November 16, 2026.