hstm20250930

hstm20250930_10q.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒	Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended September 30, 2025

☐	Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Commission File No.: 000-27701

HealthStream, Inc.

(Exact name of registrant as specified in its charter)

Tennessee	62-1443555
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

500 11th Avenue North, Suite 850,
Nashville, Tennessee	37203
(Address of principal executive offices)	(Zip Code)

(615) 301-3100

(Registrant's telephone number, including area code)

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock (Par Value $0.00)	HSTM	Nasdaq Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☒
Non-accelerated filer	☐	Smaller reporting company	☐
Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of November 3, 2025, there were 29,668,137 shares of the registrant’s common stock outstanding.

Table of Contents

Index to Form 10‑Q

HEALTHSTREAM, INC.

		Page Number
Part I.	Financial Information	1
Item 1.	Financial Statements	1
	Condensed Consolidated Balance Sheets (Unaudited) – September 30, 2025 and December 31, 2024	1
	Condensed Consolidated Statements of Income (Unaudited) – Three and Nine Months ended September 30, 2025 and 2024	2
	Condensed Consolidated Statements of Comprehensive Income (Unaudited) – Three and Nine Months ended September 30, 2025 and 2024	3
	Condensed Consolidated Statement of Shareholders' Equity (Unaudited) – Three and Nine Months ended September 30, 2025 and 2024	4
	Condensed Consolidated Statements of Cash Flows (Unaudited) – Nine Months ended September 30, 2025 and 2024	5
	Notes to Condensed Consolidated Financial Statements (Unaudited)	6
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	12
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	18
Item 4.	Controls and Procedures	18
Part II.	Other Information	19
Item 1.	Legal Proceedings	19
Item 1A.	Risk Factors	19
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	20
Item 5.	Other Information	20
Item 6.	Exhibits	21
	SIGNATURE	22

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PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

HEALTHSTREAM, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)

(In thousands)

	*September 30,*			*December 31,*
	*2025*			*2024*
ASSETS
Current assets:
Cash and cash equivalents	$	53,544		$	59,469
Marketable securities		39,047			37,748
Accounts receivable, net		27,675			30,189
Accounts receivable - unbilled		6,047			5,133
Prepaid and other current assets		21,261			20,583
Total current assets		147,574			153,122

Property and equipment, net		11,143			10,741
Capitalized software development, net		45,699			43,370
Operating lease right of use assets, net		15,667			17,453
Goodwill		191,623			191,220
Intangibles, net		45,369			55,548
Other assets		42,855			39,312
Total assets	$	499,930		$	510,766

LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	3,924		$	6,628
Accrued royalties		5,642			5,190
Accrued liabilities		10,643			10,141
Accrued compensation		6,600			9,507
Deferred revenue		85,687			84,227
Total current liabilities		112,496			115,693

Deferred tax liabilities		19,671			14,596
Deferred revenue, noncurrent		1,289			1,655
Operating lease liability, noncurrent		15,292			17,366
Other long-term liabilities		1,989			2,101
Commitments and contingencies

Shareholders’ equity:
Preferred Stock, no par value, 10,000 shares authorized, no shares issued or outstanding		—			—
Common stock, no par value, 75,000 shares authorized; 29,652 and 30,432 shares issued and outstanding at September 30, 2025 and December 31, 2024, respectively		228,753			252,432
Retained earnings		121,972			108,972
Accumulated other comprehensive loss		(1,532	)		(2,049	)
Total shareholders’ equity		349,193			359,355
Total liabilities and shareholders’ equity	$	499,930		$	510,766

See accompanying Notes to the unaudited Condensed Consolidated Financial Statements.

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HEALTHSTREAM, INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)

(In thousands, except per share data)

	*Three Months Ended*						*Nine Months Ended*
	*September 30, 2025*			*September 30, 2024*			*September 30, 2025*			*September 30, 2024*
Revenues, net	$	76,474		$	73,095		$	224,355		$	217,411
Operating costs and expenses:
Cost of revenues (excluding depreciation and amortization)		26,507			24,470			78,357			72,825
Product development		12,107			12,100			36,228			36,208
Sales and marketing		12,143			11,497			36,101			34,676
General and administrative		7,330			8,457			23,396			26,325
Depreciation and amortization		10,820			10,073			32,441			30,779
Total operating costs and expenses		68,907			66,597			206,523			200,813

Operating income		7,567			6,498			17,832			16,598

Interest income		788			1,007			2,676			2,856
Other expense, net		(103	)		(26	)		(141	)		(134	)

Income before income tax provision		8,252			7,479			20,367			19,320
Income tax provision		2,166			1,754			4,559			4,202
Net income	$	6,086		$	5,725		$	15,808		$	15,118

Net income per share:
Basic	$	0.20		$	0.19		$	0.52		$	0.50
Diluted	$	0.20		$	0.19		$	0.52		$	0.50

Weighted average shares of common stock outstanding:
Basic		29,688			30,409			30,151			30,374
Diluted		29,811			30,590			30,283			30,512
Dividends declared per share	$	0.031		$	0.028		$	0.093		$	0.084

See accompanying Notes to the unaudited Condensed Consolidated Financial Statements.

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HEALTHSTREAM, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)

(In thousands)

	*Three Months Ended*					*Nine Months Ended*
	*September 30, 2025*			*September 30, 2024*		*September 30, 2025*		*September 30, 2024*
Net income	$	6,086		$	5,725	$	15,808	$	15,118

Other comprehensive (loss) income, net of taxes:
Foreign currency translation adjustments		(293	)		290		511		(229	)
Unrealized gain on marketable securities		39			43		6		36
Total other comprehensive (loss) income		(254	)		333		517		(193	)
Comprehensive income	$	5,832		$	6,058	$	16,325	$	14,925

See accompanying Notes to the unaudited Condensed Consolidated Financial Statements.

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HEALTHSTREAM, INC.

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (UNAUDITED)

(In thousands, except per share data)

	*Nine Months Ended September 30, 2025*
	*Common Stock*						*Retained*			*Accumulated Other Comprehensive*			*Total Shareholders’*
	*Shares*			*Amount*			*Earnings*			*(Loss)/Income*			*Equity*
Balance at December 31, 2024		30,432		$	252,432		$	108,972		$	(2,049	)	$	359,355
Net income		—			—			4,332			—			4,332
Comprehensive income		—			—			—			30			30
Dividends declared on common stock ($0.031 per share)		—			—			(943	)		—			(943	)
Stock-based compensation		—			1,104			—			—			1,104
Common stock issued under stock plans, net of shares withheld for employee taxes		93			(1,070	)		—			—			(1,070	)
Balance at March 31, 2025		30,525		$	252,466		$	112,361		$	(2,019	)	$	362,808
Net income		—			—			5,389			—			5,389
Comprehensive income		—			—			—			741			741
Dividends declared on common stock ($0.031 per share)		—			—			(946	)		—			(946	)
Stock-based compensation		—			836			—			—			836
Common stock issued under stock plans, net of shares withheld for employee taxes		22			(5	)		—			—			(5	)
Excise tax on repurchases of common stock		—			(135	)								(135	)
Repurchases of common stock		(650	)		(18,121	)								(18,121	)
Balance at June 30, 2025		29,897		$	235,041		$	116,804		$	(1,278	)	$	350,567
Net income		—			—			6,086			—			6,086
Comprehensive loss		—			—			—			(254	)		(254	)
Dividends declared on common stock ($0.031 per share)		—			—			(918	)		—			(918	)
Stock-based compensation		—			794			—			—			794
Common stock issued under stock plans, net of shares withheld for employee taxes		11			(121	)		—			—			(121	)
Excise tax on repurchases of common stock		—			(64	)		—			—			(64	)
Repurchases of common stock		(256	)		(6,897	)		—			—			(6,897	)
Balance at September 30, 2025		29,652		$	228,753		$	121,972		$	(1,532	)	$	349,193

	*Nine Months Ended September 30, 2024*
	*Common Stock*					*Retained*			*Accumulated Other Comprehensive*			*Total Shareholders’*
	*Shares*		*Amount*			*Earnings*			*(Loss)/Income*			*Equity*
Balance at December 31, 2023		30,298	$	249,075		$	92,368		$	(691	)	$	340,752
Net income		—		—			5,227			—			5,227
Comprehensive loss		—		—			—			(481	)		(481	)
Dividends declared on common stock ($0.028 per share)		—		—			(849	)		—			(849	)
Stock-based compensation		—		1,060			—			—			1,060
Common stock issued under stock plans, net of shares withheld for employee taxes		100		(855	)		—			—			(855	)
Balance at March 31, 2024		30,398	$	249,280		$	96,746		$	(1,172	)	$	344,854
Net income		—		—			4,168			—			4,168
Comprehensive loss		—		—			—			(45	)		(45	)
Dividends declared on common stock ($0.028 per share)		—		—			(851	)		—			(851	)
Stock-based compensation		—		1,094			—			—			1,094
Common stock issued under stock plans, net of shares withheld for employee taxes		10		(6	)		—			—			(6	)
Balance at June 30, 2024		30,408	$	250,368		$	100,063		$	(1,217	)	$	349,214
Net income		—		—			5,725			—			5,725
Comprehensive income		—		—			—			333			333
Dividends declared on common stock ($0.028 per share)		—		—			(851	)		—			(851	)
Stock-based compensation		—		1,131			—			—			1,131
Common stock issued under stock plans, net of shares withheld for employee taxes		7		(71	)		—			—			(71	)
Balance at September 30, 2024		30,415	$	251,428		$	104,937		$	(884	)	$	355,481

See accompanying Notes to the unaudited Condensed Consolidated Financial Statements.

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HEALTHSTREAM, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

(In thousands)

	*Nine Months Ended September 30,*
	*2025*			*2024*
OPERATING ACTIVITIES:
Net income	$	15,808		$	15,118
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		32,441			30,779
Stock-based compensation		2,734			3,285
Amortization of deferred commissions		9,190			9,060
Provision for credit losses		568			2,027
Deferred income taxes		5,055			(960	)
Loss on equity method investments		150			150
Other		(1,146	)		(1,205	)
Changes in operating assets and liabilities:
Accounts and unbilled receivables		1,033			4,744
Prepaid and other current assets		(180	)		785
Other assets		(11,881	)		(8,995	)
Accounts payable and accrued expenses		(5,192	)		(8,371	)
Accrued royalties		453			1,266
Deferred revenue		1,094			(1,183	)
Net cash provided by operating activities		50,127			46,500

INVESTING ACTIVITIES:
Proceeds from maturities of marketable securities		41,286			46,170
Purchases of marketable securities		(41,434	)		(51,531	)
Proceeds from sale of non-marketable equity investments		—			765
Purchase of other investments		(1,500	)		—
Payments associated with capitalized software development		(21,910	)		(20,107	)
Purchases of property and equipment		(3,481	)		(1,198	)
Net cash used in investing activities		(27,039	)		(25,901	)

FINANCING ACTIVITIES:
Taxes paid related to net settlement of equity awards		(1,196	)		(932	)
Payment of cash dividends		(2,809	)		(2,551	)
Repurchases of common stock		(25,018	)		—
Net cash used in financing activities		(29,023	)		(3,483	)

Effect of exchange rate changes on cash and cash equivalents		10			40
Net (decrease) increase in cash and cash equivalents		(5,925	)		17,156
Cash and cash equivalents at beginning of period		59,469			40,333
Cash and cash equivalents at end of period	$	53,544		$	57,489

NONCASH INVESTING AND FINANCING ACTIVITIES:
Purchases of property and equipment, accrued but not paid	$	181		$	28
Capitalized software development, accrued but not paid	$	746		$	583

See accompanying Notes to the unaudited Condensed Consolidated Financial Statements.

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HEALTHSTREAM, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

1. OVERVIEW AND BASIS OF PRESENTATION

Company Overview

HealthStream provides primarily Software-as-a-Service ("SaaS") based applications for healthcare organizations—all designed to improve business and clinical outcomes by supporting the people who deliver patient care. The Company is focused on helping individuals and organizations in healthcare meet their ongoing learning, clinical development, credentialing, and scheduling needs. The Company also provides its solutions to nursing schools and nursing students.

The Company is organized and operated according to its One HealthStream approach, with its hStream technology platform at the center of that approach. Increasingly, SaaS-based applications in the Company's diverse ecosystem of solutions utilize the Company's proprietary hStream technology platform to enhance the value proposition for customers by creating interoperability with and among other applications. We believe that our single platform strategy, as represented by hStream, is the best way to realize our mission of improving the quality of care by developing the people who deliver care and the best way to create value for our shareholders in the process. As used in this Quarterly Report on Form 10-Q (“Form 10-Q”), “HealthStream,” “Company,” “we,” “us,” and “our” mean HealthStream, Inc. and its subsidiaries, unless the context indicates otherwise.

Basis of Presentation

The accompanying unaudited Condensed Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States (“US GAAP”) for interim financial information and with the instructions to Form 10‑Q and Article 10 of Regulation S‑X. Accordingly, condensed consolidated financial statements do not include all of the information and footnotes required by US GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. All intercompany transactions have been eliminated in consolidation and certain prior period amounts have been reclassified to conform to the current period presentation. Operating results for the three and nine months ended September 30, 2025 are not necessarily indicative of the results that may be expected for the year ending December 31, 2025.

The Condensed Consolidated Balance Sheet at December 31, 2024 was derived from the audited Consolidated Financial Statements at that date but does not include all of the information and footnotes required by US GAAP for a complete set of financial statements. For further information, refer to the Consolidated Financial Statements and Notes thereto for the year ended December 31, 2024 (included in the Company's Annual Report on Form 10-K, filed with the Securities and Exchange Commission on February 28, 2025).

Business Segments

The Company’s chief operating decision maker ("CODM") is its Chief Executive Officer. Since January 1, 2023, the Company’s business has been organized and managed around a consolidated, enterprise approach, including with regard to technology, operations, accounting, internal reporting (including the nature of information reviewed by the CODM), organization structure, compensation, performance assessment, and resource allocation. The Company’s CODM uses consolidated net income to make operating decisions, assess financial performance, and allocate resources. Further, the CODM reviews and utilizes functional expenses (cost of revenues, product development, sales and marketing, general and administrative, and depreciation and amortization) at the consolidated level to manage the Company's operations. Other segment items included in consolidated net income are interest income, other expense, net, and income tax provision, which are reflected in the Condensed Consolidated Statements of Income. Expenditures for additions to long-lived assets for the consolidated entity were $34.2 million and $29.8 million for the nine months ended September 30, 2025 and 2024, respectively.

Non-Marketable Equity Investments

The aggregate carrying amount of non-marketable equity investments accounted for using the measurement alternative for equity investments that do not have readily determinable fair values was $1.5 million as of September 30, 2025 and December 31, 2024, which the Company evaluates for impairment at each reporting period. Cumulatively, there have been no adjustments recorded due to changes in the fair value of the non-marketable equity investments the Company held as of September 30, 2025. The fair value of non-marketable equity investments is not estimated if there are no identified events or changes in circumstances that may have a significant adverse effect on the fair value of the investment.

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HEALTHSTREAM, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

2. RECENT ACCOUNTING PRONOUNCEMENTS

In November 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. The new guidance requires disclosures of significant reportable segment expenses that are regularly provided to the CODM and other segment items on an interim and annual basis. Entities with a single reportable segment will also be required to apply the disclosure requirements in ASU 2023-07 on an interim and annual basis. ASU 2023-07 was effective for the Company for annual periods beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024. The Company adopted this standard effective January 1, 2024 using a retrospective method.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which requires public entities to provide disclosure of disaggregated information in the entity’s tax rate reconciliation, as well as disclosure of income taxes paid disaggregated by jurisdiction. ASU 2023-09 is effective for fiscal years beginning after December 15, 2024. The Company is currently evaluating the effect of this standard on its disclosures and will adopt the standard effective for the annual period ending December 31, 2025.

In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures: Disaggregation of Income Statement Expenses, which requires disclosure of disaggregated information about specific categories underlying certain income statement expense line items in the footnotes to the financial statements for both annual and interim periods. This ASU is effective for fiscal years beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. Early adoption is permitted. The Company is currently evaluating the impact of the adoption of this standard.

In September 2025, the FASB issued ASU 2025-06, Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software, to modernize the accounting guidance for the costs to develop software for internal use. The standard applies to costs incurred to develop or obtain software for internal use. ASU 2025-06 amends the existing standard that refers to various stages of a software development project to align better with current software development methods, such as agile development. Under the new standard, entities will commence capitalizing eligible costs when (i) management has authorized and committed to funding the software project, and (ii) it is probable that the project will be completed and the software will be used to perform the function intended. The new standard also supersedes the guidance related to costs incurred to develop a website. ASU 2025-06 is effective for annual periods beginning after December 15, 2027. The guidance can be applied on a prospective basis, a modified basis for in-process projects, or on a retrospective basis. The Company is currently evaluating the impact of this accounting standard on its consolidated financial statements.

3. REVENUE RECOGNITION

Revenues are recognized when control of the promised goods or services is transferred to the customer in an amount that reflects the consideration the Company expects to be entitled to in exchange for transferring those goods or services. Revenue is recognized based on the following five step model:

•

Identification of the contract with a customer

•

Identification of the performance obligations in the contract

•

Determination of the transaction price

•

Allocation of the transaction price to the performance obligations in the contract

•

Recognition of revenue when, or as, the Company satisfies a performance obligation

The following table represents revenues disaggregated by revenue source (in thousands). Sales taxes are excluded from revenues.

	*Three Months Ended September 30,*				*Nine Months Ended September 30,*
	*2025*		*2024*		*2025*		*2024*
Subscription services	$	73,887	$	69,918	$	216,617	$	209,136
Professional services		2,587		3,177		7,738		8,275
Total revenues, net	$	76,474	$	73,095	$	224,355	$	217,411

For both the three months ended September 30, 2025 and 2024, the Company recognized $0.2 million in impairment losses on receivables and contract assets arising from the Company's contracts with customers. For the nine months ended September 30, 2025 and 2024, the Company recognized $0.6 million and $2.0 million in impairment losses on receivables and contract assets arising from the Company's contracts with customers, respectively.

During the three months ended September 30, 2025 and 2024, the Company recognized revenues of $45.9 million and $45.0 million, respectively, from amounts included in deferred revenue at the beginning of the respective periods. During the nine months ended September 30, 2025 and 2024, the Company recognized revenues of $81.9 million and $79.4 million, respectively, from the amounts included in deferred revenue at the beginning of the respective periods. As of September 30, 2025, approximately $621 million of revenue is expected to be recognized from remaining performance obligations under contracts with customers. The Company expects to recognize revenue related to approximately 39% of these remaining performance obligations over the next 12 months, 67% over the next 24 months, and 85% over the next 36 months, with the remaining amounts recognized thereafter.

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HEALTHSTREAM, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

4. INCOME TAXES

Income taxes are accounted for using the asset and liability method, whereby deferred tax assets and liabilities are determined based on the temporary differences between the financial statement and tax bases of assets and liabilities measured at tax rates that will be in effect for the year in which the differences are expected to affect taxable income. The Company computes its interim period provision for income taxes by applying the estimated annual effective tax rate to year-to-date pretax income or loss and adjusts the provision for discrete tax items recorded in the period. The Company’s effective tax rate was 22% for both the nine months ended September 30, 2025 and 2024. The Company’s effective tax rate primarily reflects the statutory corporate income tax rate, the net effect of state taxes, foreign income taxes, the effect of various permanent tax differences, and recognition of discrete tax items.

On July 4, 2025, the federal budget reconciliation legislation, commonly referred to as the One Big Beautiful Bill Act ("OBBB”), was signed into law. The OBBB includes significant changes to federal tax law and other regulatory provisions that may impact the Company, including modifications to capitalization of research and development expenses and accelerated fixed asset depreciation. The legislation did not have a material impact on the Company's income tax expense during the three months ended September 30, 2025, and it is not expected to materially impact the Company's effective income tax rate for 2025.

5. SHAREHOLDERS' EQUITY

Dividends on Common Stock

During the nine months ended September 30, 2025, the Company's Board of Directors (“Board”) declared the following quarterly dividends under the Company's dividend policy (in thousands, except per share data):

Dividend Payment Date	Dividend Declaration Date	Dividend Per Share		Record Date	Cash Outlay
March 21, 2025	February 24, 2025	$	0.031	March 10, 2025	$	943
May 30, 2025	May 5, 2025	$	0.031	May 19, 2025	$	946
August 29, 2025	August 4, 2025	$	0.031	August 18, 2025	$	919

Additionally, on November 3, 2025, the Board declared a quarterly cash dividend of $0.031 per share, payable on November 28, 2025 to holders of record on November 17, 2025.

Stock-Based Compensation

The Company has stock awards outstanding under its 2016 Omnibus Incentive Plan and 2022 Omnibus Incentive Plan.

Stock Option Activity

A summary of stock option activity for the three months ended September 30, 2025 is as follows (in thousands, except weighted-average exercise price).

			*Weighted-*
	*Common*		*Average*		*Aggregate*
	*Shares*		*Exercise Price*		*Intrinsic Value*
Outstanding at beginning of period		90	$	20.34
Granted		—		—
Exercised		—		—
Expired		—		—
Forfeited		—		—
Outstanding at end of period		90	$	20.34	$	711
Exercisable at end of period		90	$	20.34	$	711

The weighted average remaining contractual term of options outstanding at September 30, 2025 was 5.2 years.

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HEALTHSTREAM, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Restricted Share Unit Activity

A summary of Restricted Share Unit ("RSU") activity for the three months ended September 30, 2025 is as follows (in thousands, except weighted-average grant date fair value):

				*Weighted-*
	*Number of*			*Average Grant Date*		*Aggregate*
	*RSU’s*			*Fair Value*		*Intrinsic Value*
Outstanding at beginning of period		485		$	26.46
Granted		40			29.00
Vested		(15	)		24.60
Forfeited		(2	)		24.66
Outstanding at end of period		508		$	26.72	$	16,852

As of September 30, 2025, total unrecognized compensation expense related to non-vested RSUs was $6.7 million, net of estimated forfeitures, with a weighted average expense recognition period remaining of 2.7 years.

Total stock-based compensation expense recognized in the Condensed Consolidated Statements of Income is as follows (in thousands):

	*Three Months Ended September 30,*				*Nine Months Ended September 30,*
	*2025*		*2024*		*2025*		*2024*
Cost of revenues (excluding depreciation and amortization)	$	50	$	49	$	154	$	152
Product development		199		200		626		599
S

SEC Form 10-Q filed by HealthStream Inc.