HealthStream Q3 revenue, adjusted EBITDA beat estimates; raises 2026 outlook

Overview

• Healthcare technology platform's Q3 revenue rose 8.9%, beating analyst expectations

• Adjusted EBITDA for Q3 beat analyst expectations

• Q3 EPS fell to $0.18 from $0.20 as higher operating expenses weighed on earnings

Outlook

• HealthStream raises 2026 revenue guidance to $331.0 mln–$333.0 mln from $327.0 mln–$332.0 mln

• Company now expects 2026 net income of $21.8 mln–$22.4 mln, up from $19.5 mln–$22.2 mln

• HealthStream forecasts 2026 adjusted EBITDA of $77.0 mln–$78.0 mln, up from $74.0 mln–$78.0 mln

Result Drivers

• ACQUISITIONS - Virsys12 and MissionCare Collective contributed $3.2 mln to Q3 revenue growth

• PORTFOLIO GROWTH - Co said Q3 revenue growth was also driven by $3.6 mln from growth across its existing portfolio of solutions

• HIGHER OPERATING EXPENSES - Co said decline in Q3 operating income was mainly due to higher expenses for platform and enterprise application investments, personnel costs, third-party software, cloud hosting, and amortization from acquisitions

• CYBERSECURITY INCIDENT COSTS - Co said Q3 operating income was also impacted by $250,000 in expenses related to a cybersecurity incident

Company press release:

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 2 "strong buy" or "buy", 4 "hold" and no "sell" or "strong sell"

• The average consensus recommendation for the software peer group is "buy"

• Wall Street's median 12-month price target for HealthStream, Inc. is $36.00, about 6.8% above its October 30 closing price of $33.70

• The stock recently traded at 41 times the next 12-month earnings vs. a P/E of 35 three months ago

Reuters Recommended Reads

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(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)