HealthStream (NASDAQ: HSTM) saw its stock price plummet 13.90% in pre-market trading on Tuesday following the release of disappointing first-quarter 2025 financial results and reduced full-year guidance.
The healthcare technology platform provider reported quarterly earnings of $0.14 per share, missing the consensus analyst estimate of $0.16 per share. This represents a 17.65% decrease from earnings of $0.17 per share in the same quarter last year. Revenue for Q1 came in at $73.49 million, also falling short of analyst expectations of $74.93 million, though it was up 1% year-over-year.
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 outlook. The company cited several factors impacting its performance, including a $1.7 million reduction from attrition in legacy applications, a $0.9 million reduction in perpetual license sales, and a $0.6 million reduction from customer bankruptcies. Management also noted ongoing investments in platform development and increased costs associated with sales and marketing efforts, which contributed to the 23.1% decline in operating income to $4.4 million for the quarter.