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HealthStream.M HealthStream Announces Third Quarter 2021 Results October 25 , 2021 NASHVILLE , Tenn .-- ( BUSINESS WIRE ) -- Oct . 25 , 2021-- HealthStream , Inc. ( Nasdaq : HSTM ) , a leading provider of workforce and provider solutions for the healthcare industry , announced today results for the third quarter ended September 30 , 2021 . • Revenues of $ 64.1 million in the third quarter of 2021 , up 5 % from $ 60.9 million in the third quarter of 2020 , more than offsetting a $ 9.2 million decline in legacy resuscitation revenues . ● Operating income of $ 1.8 million in the third quarter of 2021 , down 43 % from $ 3.1 million in the third quarter of 2020 . • Net income of $ 1.5 million in the third quarter of 2021 , down 43 % from $ 2.6 million in the third quarter of 2020 . • Earnings per share ( EPS ) of $ 0.05 per share ( diluted ) in the third quarter of 2021 compared to $ 0.08 per share ( diluted ) in the third quarter of 2020 . • Adjusted EBITDA¹ of $ 12.5 million in the third quarter of 2021 , up 12 % from $ 11.2 million in the third quarter of 2020 . Financial Results : Third Quarter 2021 Compared to Third Quarter 2020 Revenues for the third quarter of 2021 increased by $ 3.2 million , or five percent , to $ 64.1 million , compared to $ 60.9 million for the third quarter of 2020 . Revenues from our Workforce Solutions segment were $ 51.2 million for the third quarter of 2021 , an increase of four percent compared to $ 49.2 million for the third quarter of 2020. The workforce segment achieved this four percent growth while overcoming a $ 9.2 million decline in revenues from the legacy resuscitation business . Revenues from recent acquisitions and growth in other solutions more than offset this decline in legacy resuscitation revenues . In addition , workforce revenues also benefitted from a $ 0.5 million increase in professional services revenues , primarily associated with recently acquired businesses . Revenues from our Provider Solutions segment were $ 12.9 million for the third quarter of 2021 , compared to $ 11.7 million for the third quarter of 2020. This revenue growth of $ 1.2 million was primarily attributable to subscription revenues . Generally accepted accounting principles ( GAAP ) require companies to write down beginning balances of acquired deferred revenue as part of " fair value " accounting . During the third quarter of 2021 , HealthStream reported a reduction of $ 800,000 to revenue and operating income and a reduction of $ 630,000 to net income as a result of deferred revenue write - downs from recent acquisitions . During the third quarter of 2020 , Health Stream reported a reduction of $ 80,000 to revenue and operating income and a reduction of $ 60,000 to net income as a result of deferred revenue write - downs from prior acquisitions . 1 Adjusted EBITDA is a nonGAAP financial measure . A reconciliation of adjusted EBITDA to net income and disclosure regarding why we believe adjusted EBITDA provides useful information to investors is included later in this release . Operating income was $ 1.8 million for the third quarter of 2021 , compared to $ 3.1 million from the third quarter of 2020. The decrease in operating income was primarily attributable to higher operating expenses and amortization , primarily associated with businesses acquired over the past twelve months . Net income was $ 1.5 million in the third quarter of 2021 , down 43 percent from $ 2.6 million in the third quarter of 2020 , and EPS was $ 0.05 per share ( diluted ) in the third quarter of 2021 , compared to $ 0.08 per share ( diluted ) for the third quarter of 2020 . Adjusted EBITDA was $ 12.5 million for the third quarter of 2021 , up 12 percent from $ 11.2 million in the third quarter of 2020 . At September 30 , 2021 , the Company had cash and cash equivalents and marketable securities of $ 60.6 million . Capital expenditures incurred during the third quarter of 2021 were $ 5.6 million . Year - to - Date 2021 Compared to Year - to - Date 2020 For the first nine months of 2021 , revenues were $ 192.4 million , an increase of five percent over revenues of $ 183.0 million for the first nine months of 2020. Operating income for the first nine months of 2021 decreased by 42 percent to $ 8.5 million , compared to $ 14.7 million for the first nine months of 2020. The decrease in operating income was primarily attributable to the $ 3.4 million one - time favorable contractual adjustment to royalty expense resulting in a reduction to cost of revenues in the first quarter of 2020. Also contributing to the decrease are higher operating expenses primarily associated with acquisitions completed over the past twelve months . Partially offsetting these declines in operating income was a $ 1.0 million non - recurring , non - cash benefit during the first quarter of 2021 related to the reduction of paid time off ( PTO ) expense resulting from modifications to the Company's PTO policy . Net income for the first nine months of 2021 decreased to $ 6.2 million , compared to $ 13.2 million for the first nine months of 2020 . Earnings per share were $ 0.20 per share ( diluted ) for the first nine months of 2021 , compared to $ 0.41 per share ( diluted ) for the first nine months of 2020. Adjusted EBITDA increased by 15 percent to $ 40.6 million for the first nine months of 2021 , compared to $ 35.2 million for the first nine months of 2020 . Other Business Updates At September 30 , 2021 , we had approximately 4.92 million contracted subscriptions to hStreamTM , our Platform - as - a - Service technology . hStream technology enables healthcare organizations and their respective workforces to easily connect to and gain value from the growing Health Stream ecosystem of applications , tools , and content . Financial Outlook for 2021 The Company is updating its guidance for 2021 for the measures set forth below . For a reconciliation of projected adjusted EBITDA , a non - GAAP financial measure defined later in this release , to projected net income ( the most comparable GAAP measure ) for 2021 , see the table included on page nine of this release . Full Year 2021 Guidance Revenue Workforce Solutions Provider Solutions Consolidated Adjusted EBITDA ¹ Capital Expenditures $ $ $ $ 205.0 50.5 255.5 51.0 25.0 $ $ $ $ 206.5 million 51.0 million 257.5 million 53.0 million 26.0 million