HealthStream (NASDAQ: HSTM) shares plummeted 17.27% in intraday trading on Tuesday following the release of disappointing first-quarter 2025 financial results and reduced full-year guidance. The healthcare technology platform provider's performance fell short of analyst expectations, raising concerns about its near-term growth prospects.

For the first quarter ended March 31, 2025, HealthStream reported earnings per share (EPS) of $0.14, missing the consensus estimate of $0.16 and declining from $0.17 per share in the same period last year. The company's quarterly revenue came in at $73.5 million, up slightly from $72.8 million a year earlier but falling short of the $74.9 million analysts had projected. The 23.1% decline in operating income to $4.4 million for the quarter further underscored the challenges faced by the company.

Adding to investor concerns, HealthStream lowered its full-year 2025 revenue guidance to a range of $297.5 million to $303.5 million, down from its previous forecast of $302 million to $307 million. The company cited several factors impacting its performance, including a $1.7 million reduction from attrition in legacy applications, a $0.9 million decrease in perpetual license sales, and a $0.6 million reduction due to customer bankruptcies. Management also noted ongoing investments in platform development and increased costs associated with sales and marketing efforts, which contributed to the pressure on profitability. The revised outlook and missed earnings have likely fueled the sharp decline in the company's stock price, as investors reassess HealthStream's growth trajectory in the competitive healthcare technology sector.