HealthStream (NASDAQ: HSTM) shares are set to tumble 13.9% in pre-market trading on Tuesday following the release of disappointing first-quarter results and reduced full-year guidance. The healthcare technology platform provider reported earnings that fell short of analyst expectations, signaling potential challenges in its business operations.

For the first quarter ended March 31, 2025, HealthStream reported earnings per share (EPS) of $0.14, missing the consensus estimate of $0.16 by 12.5%. This represents a significant decline from the $0.17 per share earned in the same period last year. The company's quarterly revenue came in at $73.49 million, up 1% year-over-year but falling short of the $74.93 million analysts had projected.

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. 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. Despite these headwinds, HealthStream reported some growth across its portfolio of solutions, which partially offset the negative impacts. The revised outlook and missed earnings have likely contributed to the sharp pre-market decline in the company's stock price.