Q3 2025 Healthstream Inc Earnings Call

Good morning and welcome to health streams. Third quarter 2025 earnings conference call. At this time I would 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 Molly, condra head of investor relations and Communications. Please go ahead. Miss condra

Joining us today to discuss our third quarter 2025 results.

Also in the conference call with me today is Robert a Frist Jr. CEO and chair of Health stream 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 could 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.

Materially from those forward-looking statements are contained in the company's filings with the SEC including forms, 10K, 10 q, and our earnings release.

Additionally we may reference measures such as adjusted ebit da which is a non-gaap financial measure.

A table, providing supplemental information on adjusted debit de and reconciling to net income attributable, to HealthStream is included in the earnings, release that we issued yesterday. And we may refer to in this call.

So with that start, I'll now turn the call over to CEO Bobby Frist.

Good morning. Thank you. Molly. Uh, Welcome to our third quarter 2025 earnings call.

Ew, it's always good to start a quarter off with this, uh, in the third quarter, we achieved record quarterly revenues. Uh, they were up 4.6% from the third quarter of last year.

Operating income was also up 16.5%, while net income was up 6.3% and adjusted ibida was up, 7.9%, all over the same quarter last year. Now, with the first 3 quarters behind us. We updated our financial guidance for the full year of 2025, by keeping the same midpoints as indicated in previous guidance, while narrowing the range for each of the financial metrics

Later in the call, I'll provide some exciting developments in each of our learning credent and scheduling Enterprise application Suites, but stay tuned because I'm all also going to describe our career Networks.

Uh, which are an emerging part of our business. That we're really excited about

First, I want to highlight our recent acquisition of versus 12 which closed on October 8th versus 12. 12 is a healthcare technology company that offers payers and health plans and Innovative provider data management suite for onboarding credentialing and network management. Right from the start versus 12 strengths, and expands health streams entry into the payer and health plan space, which we entered around 15 months ago, with the launch of network by Health Training.

Over that time we had seen strong demands in the payer market for a dynamic provider data management solution, and we've also identified the need to expand health streams. Pay our related expertise, to better address this Market

Not only does verses 12 provide us with an excellent software solution and an expanded customer footprint combined with our Network product. We now have over 25 active accounts and it also brings world-class payer Market, expertise to healthstream's leadership team. We're excited both by the quality of the verses 12 solution and the quality of the expanded. Knowledge of leadership HealthStream has gained through this acquisition

We Believe those things together position as well for success. In this newly declared about 15 months ago Market.

Before I go further in the call, I want to Briefly summarize for those that are new to the business, the business for the benefit of those that are hearing it for the first time, first and foremost, HealthStream is a healthcare technology company, dedicated to developing credent and scheduling the healthcare Workforce through sas-based Enterprise class Solutions, Each of which are becoming more valuable because of the interoperability they're achieving through our 8 stream technology platform.

The company holds 20.

For its innovative products, which have been awarded and we've been awarded over 40, Brandon Hall Awards. Historically, we sell our Solutions on a subscription basis under contracts that average 3 to 5 years in length, which makes our revenues recurring and predictable, in fact, 96% of our revenues are subscription-based.

So, our new career networks and we coined that phrase. Uh, we have started to open our sales channels directly to healthcare professionals, and nursing students across the Continuum of Healthcare Training.

We are profitable, we have no interest-bearing debt and we report a strong cash balance of 92.6 million. At the end of the third quarter of 2025

We are solely focused on Healthcare and more specifically. We're focused on 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 and target audience for our sas-based. Enterprise class Solutions. At this time, I want to turn the call over to Scotty Roberts our CFO, for more detailed. Look at the financial appointment performance and then we'll Circle back and do some business updates, Scotty. It's all yours. All right. Thanks Bobby, and good morning. Uh, now let's go over the financial results for the third quarter.

Unless otherwise noted, the comparisons would be against the same period of last year.

Our revenues were a record high of 76.5 million, which is up 4.6%.

operating income was 7.6 million, which is up 16.5%

Net income was 6.1 million up 6.3%.

Up from 19, cents per share.

Adjusted EBITDA was also a new record high, coming in at 19.1%.

Revenues increased by 3.4 million or 4.6%, and were 76.5 million compared to 73.1 million in last year's third quarter.

Revenues from from subscription products were 4 or up 4 million or 5.7%, while Professional Service revenues were down, 0.6 million or 18.6%.

Our subscription Revenue growth was supported by continued strong performance from our core Solutions.

With credential stream growing by 23% shipped, wizard growing by 29%.

And competency Suite growing by 18%.

While a portion of the strong Revenue growth and credential stream and shift wizard.

Are associated with conversions from our Legacy credentialing and scheduling applications revenues revenues from these Legacy applications declined by 1.7 million compared to last year.

Excluding the impact of the Legacy products from The Core Business. The Core Business grew by 8%

Our remaining performance obligations. Were 621 million as of the end of the third quarter.

Compared to 549 million for the same period of last year.

We expect approximately 39% of the remaining performance obligations will be converted to revenue over the next 12 months.

And that 67% will be converted over the next 24 months.

Gross margin was 65.3% compared to 66.5% and the prior year quarter.

Gross margin was impacted by an increase in our Cloud hosting costs and software licensing costs.

Primarily for the credential stream application and the age strain platform.

Operating expenses, excluding cost of revenues, increased by 0.6%.

Product development, expenses were flat compared to last year.

Sales of the marketing were up 5.6% and were primarily from additions to Staffing.

Depreciation and amortization was up 7.4%, and this was primarily from capitalized software amortization.

And general administrative was down 13.3%, and that's primarily due to the lower rent. Resulting from the sub lease of a portion of our national office space.

And also lower stock based compensation expense.

Our net income improved to 6.1 million and was up 6.3% over last year.

And finally adjusted ibida came in at 19.1% and adjusted ibida margin was 25% compared to 24.2% last year.

Now moving on to the balance sheet, we ended the quarter with cash and investment, balances of 92.6 million compared to 90.6 Million. Last quarter.

And we repurchased 6.9 million of our common stock under the share repurchase program that we announced in May.

Our days sales outstanding improved to a record low of 33 days compared to 37 days last year.

This Improvement resulted from more timely customer payments compared to prior to the prior year.

On a year-to-date basis. Cash flows from operations were 50.1 million.

Up from 46.5 million in the prior year and increase of 7.8%.

On a year-to-date basis. Free cash flows were down about half a million and we came in at 2 4. 7.

Ending in the quarter with 92.6 million of cash Investments.

Free cash flows and no debt. We are well positioned to to deploy Capital to improve shareholder value.

As a reminder, we maintain a disciplined approach to Capital allocation and how we prioritize, our use of capital.

Our utmost priority is making organic Investments back into the business, which is evident by our annual capital expenditure and R&D plans.

The second is pursuing acquisition opportunities, which we have a long track record of executing

It, the third, is returning a portion of profits back to shareholders in the form of cash dividends. The fourth priority is that our board may authorize share repurchase programs, which they did earlier this year.

In fact, in May our board of directors authorized the 25 million share repurchase program. And during the third quarter, we repurchased 6.9 million of our common stock, completing the full 25 million program.

On October 8th. We announced the acquisition of verses 12 of LLC. A healthcare technology company which Bobby described earlier.

The consideration paid for versus 12 consists of 11.2 million in cash, which takes into effect. Customary purchase price adjustments. It's also subject to a post-closing, working capital adjustment.

Up to an additional 4 million of cash consideration, may be paid over a 3-year period, following closing, which is contingent upon achievement of certain Financial targets.

In addition, we maintain an active m&a Pipeline and continue to evaluate additional opportunities that align with our platform and product strategy.

And now, let's go over our financial outlook, which has been updated as we enter the final quarter of the year.

We expect Consolidated revenues to range between 299.5 and 301.5 million.

We expect net income to range between 20.3 million and 21.5 million.

We expect adjusted evida to range between 69.5 and 71.5 million.

And we expect Capital expenditures to range between 33 and 34 million.

This guidance also includes the recent versus 12 acres does not include consumptions assumptions for any additional Acquisitions that we may complete during the remainder of the year.

Our Revenue estimate includes contributions of approximately 900,000 from the versus 12. AC

Offset by a million dollar expected decline in our Legacy credentialing and scheduling products.

And finally, before I wrap up in respect to our dividend program. Uh, yesterday our board of directors declared a quarterly cash dividend of 3.1 cents per share, which will be paid on November 28th, to Holders of record as of November 17th.

Now, I'll stop here and turn the call back over to you Bobby. Thanks.

Thank you Scotty. Um as we enter this last third here, I'm going to do things a little differently today. Typically I follow Scotty's Financial discussion with business updates on learning credentialing and scheduling application es Suites and we're going to do that. But before I do that, we want to reclassify and recharacterize. Some work we're doing. We've kind of coined this phrase career networks and so I want to explain what we mean by that and what's happening there because it is actually very exciting.

So uh, let's talk about these emerging career networks kind of what are they? It's an exciting new space for us. And after this update, I think you're going to share my excitement about that.

So a quick framework, our C, our career networks, provide value directly to the individuals who provide care, you can contrast that with our Enterprise application Suites, which provide value to the healthcare organizations and then through them to the individuals,

So 1 set of solutions is geared to students and professionals. That's our career Networks.

And the other set of solutions is geared to businesses. That's our Enterprise application Suites

To really address the complex issues around today's Healthcare Workforce. We think you have to have both types of solutions,

And I'll I'll do 1 better to really change the game. I think you have to connect those 2 in unique and Powerful ways and we're doing that through our common platform, which we call hstream.

Those who follow us know that HealthStream has been steadily building robust solutions to support the lifelong, development of individual clinicians. And we are now referring to those as our career networks Prime. Examples of this include our, my clinical exchange Network and our nurse grid Solutions which Empower individuals to build track and evolve their professional identity skills portfolio and career over time.

This network includes over 250,000 clinical students, using my clinical exchange to prepare for their careers in healthcare and more than now 660 nurses using nurse grid to manage and grow their career.

My clinical exchange streamlines, the clinical rotation process for future clinicians, helping them match and schedule. Rotations required for graduation and licensure

These rotations, not only deliver precepted experiential learning across, nursing Allied Health and Medical disciplines. But they also expose students to diverse, care settings and, and career opportunities. Within the organizations where they train,

Nurse grid is the number 1 app for nurses with over 660,000 monthly active users.

And More Than 3 million social connections and a 4.9 star rating from 150,000 reviews in the Apple App Store, you can really think of nurse grid as a social network. Uh, I we like to do an analog and of course, maybe Everyone likes to say this but it is becoming. We believe the LinkedIn for nurses in healthcare.

It's a place for nurses to connect with colleagues. Coordinate, work, and coordinate personal schedules. And that's a key. Interesting point. There is they use it to coordinate, their schedules, their personal calendars and their work calendars.

They can also maintain a career portfolio. They can earn CES uh directly as professionals.

And similar to LinkedIn, users can discover learning that advanced their careers, share career progressed, and explore, work opportunities, full-time, part-time gig and travel, assignments, tailored to their specialty and location.

And that's a relatively new capability in about the last 2 months.

Now, let me give you an example of our, our hstream platform is connecting our career networks. With our enterprise software application Suites in ways that make both of them more valuable.

When a clinical student or nurse joins my clinical exchange or nurse grid, they either log in with or they create an hstream ID. This unique identifier is the key to healthstream's platform, level identity management, which connects users to applications and organizes their learning data throughout their career Journey.

To date.

Users in our career networks have created, 391,000 hstream IDs with approximately 6,000, new IDs added each week.

A powerful example of hstream ID capabilities occurred, just last month.

We enabled users to automatically add their primary source. Verified credentials earned through the HealthStream Learning Center. Our Enterprise class learning management application directly to their portfolio. Their career portfolio and nurse grid. This seamless integration marked a significant step forward in empowering the health professionals to manage and showcase their qualifications. It's a prime example of our hstream platform, connecting the career Network valued by the healthcare professionals. So the Enterprise application Suites valued by the healthcare organizations

Now, let's take a break here and turn our attention to the Enterprise application. Suites that provide the foundation for who we are today and where we're going

Let's hit some of the highlights of the third quarter and I'll take them in order, the learning application suite. And again, Enterprise class is called the HealthStream Learning Center. It's our Flagship product and it continues to be preferred in the market. It was named number 1, best software application, and all of the healthcare industry by G2 at the start of 2025 the hlc as we call it. HealthStream Learning Center grew approximately 7% in the third quarter of this year of the same period last year. On the last day of the quarter on September 30th. We saw a record number, of course, and activity completions achieved by our customers on that, single day, 586,000

307 completions were accomplished through the HealthStream Learning Center. This Milestone is a testament to the commitment of our teams and delivering reliable and powerful and scalable solutions to our customers.

Importantly, when the lstream Learning Center is up for Renewal we frequently. See customers purchase multiple new and additional products with it. When they renew this results in expanding wallet, share from those customer accounts. And the third quarter, for example, Jefferson Health chose to add credentials stream. Another Enterprise class application to their Suite of products already contracted with HealthStream. Similarly Premier Health chose to add the American Red Cross resuscitation Suite to their account for their clinical staff, Enterprise wide.

Many customers are increasingly taking advantage of the opportunity to purchase a bundle of several of our most popular applications and content libraries, which we call the competency Suite, we bundle them together and the customer purchases a subscription to the compy suite for all of their nurse employees with unlimited. Use the customer sees a discount compared to the actual cost. If all the applications and content have been purchased separately, this release the customer of having to go through the arduous process of making multiple 1-off decisions and requests in the organizations in the budget process around separate products, a lot of financially advantageous for HealthStream as well.

Shelter a conference this week in the third quarter, we're up 18% over the same period last year. It is now 1 of our largest revenue drivers and our Workforce Development business.

The third quarter was strong for sales of credential stream application which is our Flagship application, within our credentialing application Suite revenues from sales of credential stream and the third quarter were approximately 23% over the same quarter last year. While we're seeing growth of approximately 25% year to date.

And actually generating revenue from providing care.

Working together with our customers, we are developing solutions to reduce the approximately 120 days. It takes for a physician to onboard enroll credential and privilege a physician.

We believe everyone benefits, including patients from being able to expedite. The time it takes to give Physicians ready and available to deliver care.

Finally, let's turn our attention to shift wizard. Our core Enterprise class scheduling application and it continued to deliver strong Revenue growth at the third quarter revenues from sales up approximately 29% over the third quarter last year.

In terms of quarterly Revenue contribution, we announced last quarter that shift wizard eclipsed our Legacy and sauce Suite of products. In the second quarter it continues to be our top performing product in our scheduling application Suite. We thank the growth trajectory of shift wizard, really speaks to the market viewing it as a best-in-class solution for clinical staff scheduling

Like previous quarters our sales on shift wizard came both from competitive takeouts as well as growth within existing customers.

I always like to remind everyone as we kind of summarize.

That if you're interested in a profitable recurring Revenue SAS, and now pass platform of service Healthcare technology company to expect to deliver steady growth.

Albeit incremental lately but steady and has determined to share some of its gain directly with shelters in the form of a dividend. You know, maybe HealthStream is a company and a stock need to watch and invest in.

With that. As our conclusion, I look forward to delivering the next year in summary. Of course, that'll be early next year in February, but for now, let's turn it. Back over to the operator, to begin the Q&A session.

Thank you sir. At this time, we will conduct the question and answer session to ask a question. You will need to press star 1, 1 on your telephone and wait for your name to be announced.

To withdraw your question. Please press star 1 1 1 again.

Our first question comes from the line of Matt Hewitt from Craig Helen Capital Group LLC.

Morning and, uh, thanks for taking the questions. Maybe first up on the verses 12 AC, and just a little bit more color there. So, you had made the move into the payer Market, uh, a few months ago. And I'm just curious, what are the key differences in that market? Um, you know, what are the, the customers in that, that market using, um, prior um, to you kind of getting in and where do you see that, uh, opportunity going over the next few years?

Yeah, I I think we're we're learning that I we created a, a, a version that was tweaked for that market of our credential stream application Suite, giving it some new capabilities, and how they manage the, the payer, uh, the, the provider rosters, uh, and and several other small small details. Uh, I think we learned that there are still more things that that market needed and the acquisition of versus 12 brings. The more, uh, the experience and the background and and so we'll look forward to the coming quarters for us to distinguish that. But now we have the team and some additional Technologies and just a more complete view of the customer needs set there in the long run. We think there will be synergies between payers and providers using a similar architecture on the back end, um and and particularly in the transfer of certain kind of core primary source, verified data sets, so we're excited about that. But for now it's a it's a distinct Market, it uses a a high, a mix

Of Technologies from our acquisition and our, our adopted or adapted credential stream application. Uh, and we think we're going to be able to better meet the needs, and Tammy Halls. The CEO of of versus 12 has joined us to help. Lead, our efforts in this market and her team, uh, are are really deep in their knowledge of that market. So I think it's just going to add momentum to a market that has a clear need for better provider data management overall.

All right, thank you. And then and maybe a kind of a, a separate question but um you you've shown some nice um IBA adjusted IBA, margin growth or expansion this year. Um, where do you think that the that could go over time, especially with kind of the shift a few years ago where you're owning more of your content? Um, is that is there an opportunity for that to become a 30%? Um, ebit down margin line or just what are your thoughts over the next few years there?

yeah, I guess what I could say is that um,

Delivered, a lot of content, a lot of that was as you pointed out third party content. Third party content has a cost of goods which is royalties. Uh, and sometimes we they sell and we get a high margin fee to deliver their content and sometimes we sell their content where we collect the revenue and we pay out a high cost of goods or a royalty and so the blend the nature of that model again if you go back before we focused on where we are today uh had a lower gross margin profile and so you're right to observe 2 things 1 in that model we've increasingly signed more Partnerships uh and on more favorable terms and we've launched some of our own libraries that we own both the content and the data and the delivery mechanisms. And so we we boosted our our Blended margin there. Now the relative growth rate of some of those products determines our overall Blended margin and I think it's also right to point out in the last say 3 or 4 years. We've moved from kind of the 55 to 65 sort of range. In this margin measure and

And um and and that, that was due to this increasing mix shift because most of the things we've been building in The Last 5 Years are higher margins, SAS and paths applications and so where we end up uh, sure. I think almost every quarter or 2 introduced new things. Those things generally have an intrinsically higher, uh gross margin and evida margin in their delivery because they're more SASS and path based. And so depending on the mix of sales, if we

Have a blowout quarter or 2 in partner products where we have a high cost of goods. It might pull that margin down a little bit but I would say the overall trajectory would be upward pressure on the margins. Meaning positive moving towards a higher margin of business because uh most of the new things rendered reducing and talked about some of those today are intrinsically higher margin products than where we started as a business selling third-party content. And so, uh, again now in any given quarter from the next year or 2, if we sell a a lot and and there's still a lot of Market to go in products, like the American Red, Cross resuscitation Suite, where we have a high cost of goods, but it's a beautiful product. It has a good evaa margin. It it is though intrinsically a lower margin product obviously because we have an incredible partner. In fact, the American Red Cross has the most recognized brand on the planet. It's, I Believe by most measures the number 1, most recognized brand on the planet. So it's a great honor and a privilege to partner with

Them to take their products into the market. Uh, but as a point out, has a lower intrinsic, uh, gross margin profile for us. Uh, but it's still exciting and it gains momentum. It's a unique product. Uh, but so the relative growth rate of that product versus credential stream and shift Wizard and uh, our policy management software and are now career networks, all of which are higher intrinsic. Margins uh should in the future, have a positive influence on our

Gross, margin and ibido. Margins for the company.

That's very helpful. Thank you.

Thank you as a reminder, to ask a question, you will need to press star 1 1 on your telephone.

And wait for your name to be announced. Our next question comes from the line of Richard clothes from canaccord genuity Richard. Your line is now open.

Uh, yes, thanks for the question. Congratulations on, uh, uh, uh, good quarter there. Um, I got on the call late, uh, but but maybe wanted to hit on, uh, versus 12 a little bit. Wasn't sure if you guys provided any Revenue, um, I guess details there on the business, um, curious. Uh, the mix between maybe recurring and, uh, periodic Revenue, maybe Consulting and the historical growth there. Um, don't know if you can provide any details.

Uh, sure, Richard. The one number we did provide, and that doesn't mean there could be more, uh, when we get to next year, but the one that we did provide was our expected contribution of revenue in the fourth quarter. Uh, and that was approximately, our estimate includes about $900,000. We did not break down the mix between subscription revenue and consulting. There is a decent component to consulting, which is really the implement.

Reasonable mix and the estimated quarter Revenue in Q4 is about 900,000. Okay, that's helpful.

And then just, uh, you know, since you spent some time on the career Network here, um, I I was just curious. If you could go over the monetization, um,

um, I guess the offerings in career networks, um, and then

The um, expansion of the Tam or the opportunity um that these provide in terms of expanding your Tam.

Sure, sure. Let me let me uh, um, spend a few minutes on that. That's a, a great question and and we're working on. I mean we're really excited about what we're seeing this organic growth in the subscriber base for both products. In fact nurse grid. As we mentioned, which we can now consider and call our career Network for nurses. Uh, is growing about 2,000 a week in subscribers organically with a very low marketing budget. So it's essentially a viral app. It's super exciting. Now, monetization, we have over 6 strategies for monetization and each of them is at a different stage. Almost all of them are relatively new. Uh, the first was to start to offer education on a credit card, purchase directly to nurses and nurse grid learn, uh, and that was the first of 6 strategies and it's Trucking along and, and doing I think, you know, 40,000 a month or so.

Uh, in sales, uh, through the, the education channels that are Commerce enabled. So, uh, super excited to see that start to get a little traction. Uh, it's fast pay and fast Revenue recognition, and fast value delivery. So, um, uh, we're really excited about that. Uh, on on the other end of the spectrum, uh, we just launched uh, a job, uh, capability a little bit like LinkedIn. And so we don't have our first customers for that yet, but we've begun the process of helping people. And we see great activity, uh, with the initial job opportunities that we posted in there. So we're excited about that. Hopefully, we'll get our first Enterprise customer for that soon. Given the size of our Network, we have a lot of excitement around that. It's also we we think of it as a career development Network because uh, we're building it like an ecosystem itself and bringing value directly to the nurses. We um, have a partnership with a company called plannery and plannery. Uh, is is a, a preferred and referred partner

Uh, from inside of nurse grid, that helps nurses, lower their cost of student debt. It's been amazing. We've helped over 2, 2 million dollars worth of loan, consolidation already through the, through our Network, through our nurses, have selected the planner services and we, uh, Revenue share with plannery as they help nurses, save money. Uh, consolidating their student debt, really fascinating solution. We're trying to only build value added services to the individual into the nurse grid Network, and

And I'm just giving 3 examples of modernization and many more to come. Uh, we're working on a set of tools that will let Enterprise customers communicate, uh, to, uh, the network and potentially finding former employees. For example, that we we track. Now we have now that we have a more longitudinal historical relationship through this app where, you know, they use it even between jobs because of the social app. Uh, it's a way to find people, uh, and maybe communicate with them. And so, uh, look for more exciting opportunities there, uh, around the social, and career Network as we call it for nurses. It's it's getting exciting. But again, all of them are infancy.

And and we're new to this kind of monetization. So we don't want to get too excited. But but uh, we want to just Define it and explain it and show you some of the interesting things too, because it's not a standalone network. Uh both my clinical exchange which I'll talk about in a second and nurse grid are connected through the 8 stream ID. And remember the H stream ID is 1 of the core functions of the hream paths or platform as a service capability set that we have. And so, what that means is that as you heard me mention, we're adding thousands of new hream IDs, uh, to our total ecology. And there's lots and now they can get them. Uh, in fact, all the students in my clinical exchange are uh, are issued in hream ID. That's the only way they can use the software so it's really exciting. Both of those are using the platform service of the hream.

Uh, it's about 50% of the time to the student about 50% of the time. It's paid for by the student about 25% of the time. It's paid for by the nursing school. And about 25% of the time, it's paid for by the hospital. And so, it's an election model where the hospital and the nursing school can choose, uh, who pays the the nearly $30, uh, and and the so, typically in half of them are, and it's grown about a quarter of a million students, pay about $30 to kind of register in the application which then helps match them to rotations and 1 of our bigger customers has learned now that they really need to pay attention to this network because a lot of those students doing rotations in hospitals are great future employees of those Health Systems and frankly from our research hospitals and health systems, do a really bad job. Currently of letting those students know that they're potentially valued future employees. And so, uh, another example, we built a little set of tools.

That exist in our application called my team, that enterprises are beginning to use to communicate to the students. Uh, and so it's kind of like plugging HR, uh, into the network directly. So, for example, when students are rotating at their Hospital, a manager on the, my team application will get a little alert at that hospital. Saying, hey, we have 3 students from Belmont. Nursing school today rotating, uh, on the second floor. Go say hi to them. That's

Going to improve their odds of recruiting that student, uh, when that student eventually becomes a professional. And so little things like that, where we're linking the, in that case my team is is a feature of our platform as well. And that widget is a brand new widget that lets them have an alert to know that that student is in their hospital. And so we're collect connecting the Enterprise to the individual individuals, engaging through, my clinical exchange, the career Network for students and the hospitals engaging through my team and application that ships with our platform. So hope that provides some clarity again, as 1 of the subscription model and the other has a bunch of kind of LinkedIn style monetization and we're new to all of this. So we're learning but we're learning rapidly and we're really excited about their organic growth.

Maybe, uh, uh uh, follow up on that. Um, whether it's either the career networks, there's some of the other uh, parts of your platform, the Enterprise side of it. Um is do you see any opportunities to maybe?

You know, monetize through, you know, something like how Doximity does in terms of where there's some brand marketing, brand awareness from industry on the platform.

We do uh we do. I mean the clearest answer is if if we had to say what we're modeling nurse grid after it would be LinkedIn or doximity. And so we think uh, I think it's fair to to particularly nurse Grid. It's fair to think of it as as the number 1 social network for nurses and growing. And so, you know again, we're new to that kind of monetization but and nurses maybe have a different profile value profile to Industry than than Physicians like doximity where they're strong. But uh it is clear that they are valuable increasingly nurse practitioners, for example, or prescribing nurses, there's a shortage of nurses, so Staffing uh and large large Health Systems have declared a lot of their strategy on on building and strengthening their nursing Corps as Central to their overall strategy for Success. Uh, you see some of these large Health Systems, even buying nursing schools. So I think it's an important audience, uh, and we're going to learn how important in the coming years, but I do think.

Think it's fair to characterize our ambition, there to be aligned with, uh, with the way you would think of doximity and uh, and Linkedin. And of course this big ambition for a small company, but, but we like it and, uh, we're we're starting to see these multiple paths to monetizing. It start to have a little light at the end of the tunnel as we launch some of these Services really, in the last 6 months, a couple of them are brand new

Okay, and my final question just, uh, point of clarification, uh, with respect to the hlc uh, credential stream and shift wizard. Um, the numbers that you gave in terms of the I think it was 7%. Um, growth, uh,

What was it? Uh, 23% for Credentialed Stream, uh, 29% for Shift. Wizard, was that booking like new wins in the quarter, or was that revenue contribution year-over-year growth?

Scotty. Please verify and take a look. That's right. That's the growth in revenues.

Q3 this year versus Q3 of last year.

Okay, perfect. Thank you. Congratulations.

Thank you, thanks.

Thank you. Our next call comes from Vincent, kikio from Bennington, research Vincent. Your line is now open.

Yeah, Bobby, uh, a nice uh, quarter inch with shift wizard. I'm curious, um, is the product at the point to uh, it's ready to penetrate large organizations. Did you uh, did you sell to any large organizations in the quarter?

We've got a good pipeline of, of medium to the of the large Enterprise smaller. It's still not, uh, you know, and and I thought it would be here by now. It's still not quite ready for the, the biggest of the big. Uh, but we're making progress and we are winning some, I guess you could call them the upper middle class, you know, the and so uh, you know, good size contracts million-dollar, plus contracts. So, uh, we're, we're excited to see that, but but we've got work to do around the data and management still, we're trying to leverage our platform data services, we call the insights infrastructure into both credentialing, for example and, and to scheduling, and we're just not quite there yet, but we're on it and we're making Headway. And I, I would say that that we've got a nice pipeline of these upper middle class opportunities if you will.

Oh, that's good to hear. Um uh could you provide an update on the what you're seeing in the small Hospital in rural Hospital markets?

Yeah. Um, you know, we're, we're, we're working on bundling strategies throughout to address, kind of the overall challenge of the marketplace. You heard us mention that even at the big scale, when people cross purchase we're working on bundling strategies, we want to be, uh, viewed as best-in-class and the most economical especially when you're a big customer and use more and more of our Suites. And so uh, in the small hospitals this is also true. I think they're they're definitely under Financial pressure. Uh our strategy there is to be the the the most complete highest quality solution. But also with the way we're bundling and getting the features just right for those smaller hospitals, the most economical and and so you're going to see us move to more bundling strategies by market. Uh we launched our critical access bundle just a few months ago and it what it does. It's a blend of software and content. So instead of multiple decisions over time like incrementally growing

We've kind of created a few opportunities to go, a little bit more, uh, all not all in but but uh take a bigger chunk of our ecosystem under contract at a better price per unit but a more complete uh, selection of products. So um, you know, the compy suite is another effort at bundling that has started to show success. It's kind of reflective of the current

Economic reality. But also it's just frankly, it simplifying our product suite and making them easier. A 1 decision, instead of 5 separate decisions. And so in in all cases, for both, uh, economic benefit to customers under stress, and because we think it's probably overall better selling strategy. You're going to see an increase in our bundling effort. So by way of example on the small markets we have our new critical access bundle which we think, you know, kills the competition. We think it's got uh both software and content and multiple applications and a bundling of applications that are competitors don't have. And so instead of just buying like for example learning which everyone has we put in learning and another and a time management solution and which most of the competitors don't have and if they have that we add the the policy management solution. So

Um, bundling is a key strategy and and uh, said that it, it reflects, uh, both. I think a better selling strategy but also addresses the economic pressures. We think more effectively that the small hospitals are under

Thanks for all the color there. Um, nice quarter. Thanks

thanks.

Thank you. I am seeing that this concludes the question and answer session.

Think about how to model our growth rate and know that we're still working through these Legacy issues and uh, and and it that needs to be factored in and modeled. Now it's a, it's a, a positive and a negative. At the same time, the the sum of the legacies are migrating and some are lost to the market. Uh, and but that number in the fourth quarter is estimated to be about 3 million, uh, offsetting all this wonderful and exciting new core growth in both our career networks and our Enterprise class applications. So, all I'm doing is re-emphasizing that, uh, in spite of all the excitement, you look at our actual guidance as we provided, we maintain the exact same midpoints, uh, as prior guidance and we narrowed the range. So we provided more clarity on the range of our expectations. Uh, with that, uh, I want to, uh, conclude the call and I look forward to reporting, uh, again as we report year end results, uh, sometime late February, I believe. Uh, thank you all for your

Uh, participation following the health stream story.

Thank you for your participation. In today's conference, this does conclude the program, and you may now disconnect