A Nashville-based software company that builds online tools for the healthcare workforce, helping hospitals and clinics handle staff training, credentialing, and scheduling through its hStream platform and products like CredentialStream. Founded in 1990 as a dot-com-era startup focused on online healthcare education, it grew into one of the larger healthcare workforce software makers. Fun fact: it launched as an early internet venture and its name reflects its focus on the "flow" of information across healthcare.
Revenue rose 12.5% to $83.7M, the fastest growth in the data provided, as acquisitions and a one-time catch-up added $5.1M.
growth accelerated to its fastest pace in the data provided. Revenue rose 12.5% to $83.7 million and widened 2.0 points to 9.9%, driven by $3.1 million from acquisitions and a $2.0 million from a resolved . The quarter's growth rate was amplified by one-time items, leaving the underlying trajectory to be tested as those contributions annualize.
Key takeaways
rose 12.5% to $83.7 million, with subscription revenue up 11% and professional services up 53%, including $3.1 million from the Virsys12 and MissionCare acquisitions and a $2.0 million from a resolved .
rose 41.4% to $8.3 million and widened 2.0 points to 9.9%, as the increase flowed through while cost of revenues remained stable at 35% of revenue.
rose 23.8% to $6.7 million and rose 27.8% to $0.23, reflecting the higher and a lower share count from repurchases.
Section summaries
Management's Discussion and Analysis
Q2 2026 revenue rose 12.5% to $83.7M, operating income up 41.4%, driven by acquisitions and a $2M cumulative catch-up.
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Total revenues grew 12.5% to $83.7M, with subscription up 11% and professional services up 53%, including $3.1M from Virsys12 and MissionCare acquisitions and a $2.0M from a resolved .
rose 167.4% to $13.4 million, bringing the first-half total to $40.6 million, while rose 362.7% to $12.5 million.
The company repurchased $9.3 million in common stock and paid $2.1 million in dividends, ending the quarter with $46.2 million in cash and $20.6 million in marketable securities and no debt.
Management reiterated that federal budget reconciliation and macroeconomic pressures may negatively impact healthcare customer demand and lengthen sales cycles.
What changed
The Q1 2026 watch item on whether the 10.5% growth rate was sustainable is partially answered: growth accelerated further to 12.5%, but $5.1 million of the increase came from acquisitions and a one-time catch-up, so the rate remains masked.
The Q1 2026 watch item on was resolved favorably: gross margin widened 0.5 points to 65.8% in Q1 and held at 65.3% in Q2, reversing the multi-quarter contraction that bottomed at 63.8% in Q4 2025.
The Q1 2026 watch item on whether could remain near 9% once sublease income ends remains open: Q2 operating margin reached 9.9%, but the $2.0 million provided a one-time lift that will not recur.
The FY 2025 watch item on whether the $3.8 million CEO stock gift charge was one-time appears confirmed: no similar charge appeared in Q1 or Q2 2026.
Share repurchases continued at a measured pace: $7.5 million in Q1 and $9.3 million in Q2, totaling $16.8 million in the first half, with cash and investments declining to $66.8 million from $97.2 million at year-end 2024.
What to watch
Whether growth decelerates in Q3 2026 as the $2.0 million and the Virsys12 and MissionCare acquisitions begin to annualize, revealing the underlying rate.
Whether retreats from 9.9% in Q3 2026 once the one-time catch-up benefit is absent, or whether cost discipline and scale sustain the level.
The pace and total size of additional share repurchases, and whether the company authorizes a new program or shifts capital toward acquisitions with its remaining $66.8 million in cash and investments.
Whether the 53% increase in professional services represents a sustainable shift or a one-time fluctuation tied to the catch-up, and how it affects the subscription revenue mix going forward.
increased 41.4% to $8.3M, while rose 23.8% to $6.7M, and grew 16.9% to $20.6M.
Cost of revenues rose 10% to $29.0M, driven by higher third-party software, labor, cloud hosting, and royalties, but remained stable at 35% of .
Product development and sales & marketing expenses grew 12% and 14% respectively, primarily due to increased labor costs, commissions, and acquisition-related expenses, each holding steady as a percentage of .
Net increased $8.5M to $40.6M; the company held $46.2M in cash and $20.6M in marketable securities, with no outstanding borrowings on its $50M .
The company repurchased $9.3M of common stock and paid $2.1M in dividends, while noting that recent federal budget reconciliation and macroeconomic pressures may negatively impact customer demand.
Quantitative and Qualitative Disclosures About Market Risk
The company has no debt or commodity risk; main exposures are foreign-currency revenue/expenses and strategic investments in early-stage healthcare tech firms.
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As of June 30, 2026, the company had no outstanding debt, so interest-rate risk is limited to cash and investment balances of $66.7 million.
A hypothetical 10% decline in interest rates would reduce annualized interest income from cash and investments by approximately $0.2 million.
Foreign-currency risk arises from and operating expenses in Canadian, New Zealand, and Australian dollars, with natural partial offsets between them.
The company has not entered into any foreign-currency hedging contracts but may do so if international operations grow.
Investment risk is concentrated in a portfolio of strategic stakes in privately held, early-stage healthcare technology companies, which could cause material volatility or impairments.
Information required by this Part II, Item 1, is included in Note 10 to the Condensed Consolidated Financial Statements herein, which is incorporated by reference herein.
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Information required by this Part II, Item 1, is included in Note 10 to the Condensed Consolidated Financial Statements herein, which is incorporated by reference herein.