Key Highlights

  • HSTM reported third quarter 2026 Revenue of $83.3 million, up 8.9% from $76.5 million a year earlier.
  • Net income fell 11.7% to $5.4 million, with diluted EPS of $0.18 versus $0.20 in the prior-year quarter.
  • Adjusted EBITDA edged up 1.0% to $19.3 million for the quarter ended Sep 30, 2026.
  • Full-year 2026 revenue guidance was raised to a range of $331.0 million to $333.0 million.
  • HSTM received about $40 million from a private Placement and declared a quarterly Dividend of $0.035 per share.

Revenue Growth of 8.9% Meets Higher Costs in the Third Quarter

HealthStream (NASDAQ:HSTM) reported results for the third quarter ended Sep 30, 2026 on Nov 2, 2026. Revenue reached $83.3 million, an increase of $6.8 million, or 8.9%, from $76.5 million in the same quarter of 2025. Subscription revenue grew 8.0%, or $6.2 million, while professional services revenue rose by $0.7 million.

The Nashville-based company operates a healthcare technology platform that serves the clinical workforce, helping hospitals and other care providers find, develop, credential, schedule and retain staff. Of the quarterly revenue gain, $3.2 million came from two acquisitions completed in the fourth quarter of 2025, and $3.6 million came from growth across the existing portfolio.

Platform Investment and a Cyber Incident Weigh on Operating Income

Operating income declined 13.0% to $6.6 million from $7.6 million a year earlier. The company attributed the drop to higher spending on its platform and enterprise applications, including personnel costs, third-party software, cloud hosting and amortization tied to the acquisitions. Total operating costs and expenses rose to $76.7 million from $68.9 million.

Results also absorbed about $250,000 of expense linked to the Cybersecurity incident the company disclosed on Jul 29, 2026, after insurance recoveries. Net Income came in at $5.4 million, down 11.7%, and Diluted Earnings per Share were $0.18 against $0.20. Adjusted EBITDA, a non-GAAP measure that excludes the incident costs, rose 1.0% to $19.3 million.

For the first nine months of 2026, revenue climbed 10.6% to $248.2 million and Operating Income rose 25.7% to $22.4 million. Net income for the period increased 13.6% to $18.0 million, or $0.61 per diluted share, and adjusted EBITDA grew 13.4% to $60.0 million.

Guidance Lifted Across Revenue, Net Income and Adjusted EBITDA

The company updated its 2026 outlook and now expects revenue of $331.0 million to $333.0 million, compared with 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 is projected at $77.0 million to $78.0 million, up from $74.0 million to $78.0 million.

Capital expenditures are expected to fall between $31.0 million and $34.0 million. The company said its projections assume new sales and renewals meet expectations and that general economic conditions do not deteriorate. They exclude the effect of any future acquisitions or dispositions.

Private Placement Lifts Cash to $115.2 Million as Dividend Continues

On Sep 14, 2026, the company issued 1,355,932 shares at $29.50 each in a private placement, raising approximately $40.0 million. It plans to use the proceeds for general corporate purposes, including product investment, Working Capital and possible acquisitions. Cash, cash equivalents and marketable securities stood at $115.2 million at quarter end, with no borrowed Debt outstanding.

Operating cash flow for the nine months was $58.0 million versus $50.1 million a year earlier. The company repurchased 432,476 shares for $9.3 million in that period, and a $10.0 million program expired on Sep 12, 2026.

The board declared a quarterly dividend of $0.035 per share, payable Nov 27, 2026 to holders of record on Nov 16, 2026. The raised full-year ranges now frame the fourth quarter.