HealthStream, Inc. ($HSTM)

Good morning, and welcome to HealthStream's First Quarter 2026 Earnings Conference Call. At this time, I would like to inform you that this conference is being recorded. [Operator Instructions] I will now turn the conference over to Mollie Condra, Head of Investor Relations and Corporate Communications. Please go ahead, Ms. Condra.

Thank you, and good morning. Thank you for joining us today to discuss our first quarter 2026 results. Also in the conference call with me is Robert A. Frist, Jr., CEO and Chairman of HealthStream; and Scotty Roberts, CFO and Senior Vice President of Finance and Accounting. I would also like to remind you that the conference call may contain forward-looking statements regarding future events and the future performance of HealthStream that could involve risks and uncertainties that could cause the actual results to differ materially from those projected in the forward-looking statements. Information concerning these risks and other factors that could cause the results to differ materially from those forward-looking statements are contained in the company's filings with the SEC, including Forms 10-K, 10-Q and our earnings release. Additionally, we may reference certain non-GAAP financial measures relating to the company's past and future expected performance on this call. The most directly comparable GAAP financial metrics and reconciliations are included in the earnings release that we issued yesterday. So with that start, I'll now turn the call over to CEO, Bobby Frist.

Good morning, everyone. We do have a lot to cover this morning, and I'll ask Scotty and Mollie on guard in case I have a coffee set, working off a bit of a cold. That's my issue. I'm going to get through it though, just in case Mollie ready. All right. Well, good morning, everyone, to our first quarter 2026 earnings call. We have a lot to go over starting with the strong financial growth we delivered in the quarter, which included record-setting revenues of $81.2 million. That's up 10.5% year-over-year and record-setting adjusted EBITDA, which has just pushed through the $20 million to $20.1 million. That's up 24.1% year-over-year. Operating income grew 71.6% year-over-year. The strong performance in Q1 is allowing us to increase investment kind of beyond our original plan as we started the year, including in growth initiatives related to our current products, new products on the horizon, and accelerated use of AI. I'm going to talk about some of those investments towards the end of my section. We're reaffirming our 2026 full year guidance and continue to anticipate revenue between $323 million to $330 million, net income between $20.4 million and $22.8 million and adjusted EBITDA between $73 million and $77 million. Our strong cash balance of $66.5 million and untapped line of credit and no long-term debt continue to position us well to take advantage of M&A opportunities as they arise as well as other capital deployment strategies that we believe will benefit our shareholders. As a reminder, last quarter, I described 4 reasons why HealthStream's sees real opportunity in today's rapidly expanding AI environment. As AI continues to develop, I am pleased to reaffirm our increasing belief in each of those 4 reasons today. First, our health care user base continues to expand. Unlike companies facing seat compression from AI agents, health care keeps hiring and keeps growing with roughly 1/4 of all new U.S. jobs over the next decade projected to come from the health care industry. And nurses, our largest user base, are leading that growth. AI is not expected to reduce demand for nurses if anything, it should free them to spend more time with patients and less time documenting. Second, our data profile remains a meaningful differentiator. Our customers utilize our enterprise applications as a system of record for managing their learning, credentialing and scheduling programs. The data in these applications serves as a source of truth for our customers as they carry out their operations. I believe they'll use that source truth and training their own AI. Third, in parallel -- well, in addition, around the data profile, in parallel, our career networks, which is going to be an area of investment, generate proprietary individual-level data that we believe is valuable for finding, developing, retaining and engaging the health care workforce. NurseGrid alone, for example, now reaches roughly 1 in 5 U.S. nurses, telling us where, when and for whom they want to work. Third, our HealthStream platform is built to incorporate AI as a core element rather than bolting it on. Platform elements like the hStream ID, which we've talked about extensively in the past. And our growing API footprint serve as essential infrastructure to help enable AI-driven innovation in health care workforce technology. Fourth, our ecosystem ties it all together. Millions of caregivers, thousands of health care organizations and dozens of industry partners, combined with more than 30 years of domain experience and the hStream technology platform creates something difficult to replicate. AI cannot manufacture an ecosystem like HealthStream, but it can enhance it and turn our ecosystem. In turn, our ecosystem can enhance AI in what we believe will be a virtuous loop of value creation for our customers and investors alike. Building on that foundation, I'm pleased to share that we have meaningfully expanded our internal rollout of AI across the company and are making great progress. Adoption is broadening across teams. Our employees are putting these tools to work in their day-to-day and we are encouraged by the early productivity and quality benefits we are already seeing. It's still early days in terms of realizing the benefits of AI and with driving innovation as one of our company's 6 constitutional values, I believe our employees are on the front foot of ensuring that HealthStream is an innovator in this promising area. Before we go further in our call, I want to briefly summarize our business for the benefit of anyone who's new to the HealthStream story, and I hope there's lots of you on the call today. First and foremost, HealthStream is a health care technology company dedicated to developing, credentialing and scheduling the health care workforce through technology solutions, each of which are becoming more valuable because of the interoperability they're achieving through our hStream technology platform. We have also started to open our sales channels directly to health care professionals and nursing students through our 3 career networks. These help nurses, CNAs and students throughout their career journey. The company holds 20 patents for its innovative products, which have been awarded over 40 Brandon Hall Awards. Historically, we sell our solutions on a subscription basis under contracts that average 3 to 5 years in length, which makes our revenues recurring and predictable. In fact, 97% of our revenues are subscription-based. We are profitable, have no interest-bearing debt and reported a strong cash balance of $66.5 million at the end of the first quarter of 2026. This strong cash balance allows us to allocate capital to product development, M&A, share repurchases and dividends. We are solely focused on health care and more specifically, the health care workforce and those preparing to enter it. The 12.5 million health care professionals and nursing students in the United States comprised the core total addressable market for our solutions. At this time, I'll turn it over to Scotty Roberts, will turn our attention to our financials and hear a report from Scotty. Scotty, take a look at 2026 first quarter and give us your financial outlook.

All right. Thanks, Bobby, and good morning, everyone. I'll be happy to cover our financial results for the first quarter with you this morning. And for the first quarter, our revenues were a record of $81.2 million, which was up 10.5%, operating income was $7.5 million and it was up 71.6%. Net income was $5.9 million, up 36.4%. Earnings per share came in at $0.20 per share, which is up from $0.14 per share, and adjusted EBITDA was also a new record of $20.1 million, which was up 24.1%. Our revenues increased by $7.7 million or 10.5% and were $81.2 million compared to $73.5 million in the prior year. Revenues from subscription products were up $7.6 million or 10.7%, while professional service revenues were up $0.1 million or 4.3%. Our organic revenue growth rate was 5.8%, and the inorganic growth rate was 4.7% in the first quarter. Inorganic revenues are associated with the versus 12 and Mission Care collective acquisitions that we completed in the fourth quarter of 2025. The first quarter of 2026 is the first full quarter with both operating as part of HealthStream. I'm pleased to report that both post-acquisition integrations are progressing well. Versus 12 is extending our reach into payer credentialing, a meaningful expansion of our addressable market and my CNA jobs is building momentum, connecting CNAs and home care providers with the organizations that need them. Together, these 2 acquisitions contributed $3.4 million in revenue in the first quarter, and we continue to see compelling opportunities to cross-sell and integrate their capabilities into the broader HealthStream platform. In addition to the revenue contributions from these 2 recent acquisitions, our core business was supported by strong subscription growth performance from CredentialStream, which grew by 19%; ShiftWizard Wizard, which grew by 29% and competency suite, which grew by 17%. Revenues from our legacy credentialing and legacy scheduling products approximated $7.6 million of our first quarter revenues and declined by 16% compared to the first quarter of last year, as we continue our efforts to migrate customers from those solutions. Our remaining performance obligations were $687 million as of the end of the first quarter compared to $613 million for the same period of last year. We expect approximately 39% of the remaining performance obligations will be converted to revenue over the next 12 months and that 67% will be converted over the next 24 months. Gross margin was 65.8% compared to 65.3% in the prior year quarter and this improvement was primarily related to the growth in revenues and including contributions from the recent acquisitions. Operating expenses, excluding cost revenues, increased by 5.3% or $2.3 million and product development increased by $1.6 million or 12.9%. Sales and marketing increased by $0.8 million or 6.7%. Depreciation and amortization increased by $0.6 million or 5.7%, while G&A expenses declined by $0.7 million or 7.7%. These operating expense increases were partially impacted by the recent acquisitions, while the G&A expense decline resulted from our office sublease. To wrap up, our net income was $5.9 million and was up 36.4% over the prior year, and adjusted EBITDA improved to a record high of $20.1 million and was up 24.1% and the adjusted EBITDA margin was 24.8% compared to 22% last year. So we ended the quarter with cash and investment balances of $66.5 million compared to $57 million last quarter. And during the first quarter, we paid $7.5 million for capital expenditures. We returned $1 million to shareholders through our dividend program, and we repurchased $7.5 million of our common stock under the share repurchase program that we announced in November of 2025 and March of 2026. In addition, we made $1.8 million of the minority investments in companies that we expect to leverage our ecosystem and our platform. Our days sales outstanding were 39 days for the first quarter compared to 37 days in the prior year first quarter. Our objective is to maintain our DSO in the 40- to 45-day range or better and I'm pleased with our continued progress in this area. Cash flows from operations came in at $27.1 million for both the current year and the prior year first quarter. Cash flows were partially impacted by the minor increase in DSO that I just mentioned as well as higher payments for sales commissions following the strong bookings that we achieved in the fourth quarter of last year. Our free cash flow was $19.7 million, which is up from $18.2 million from last year, which is an increase of 7.9% and our capital expenditures came in at $7.5 million compared to $8.8 million last year, ending the quarter with $66.5 million of cash and investments, free cash flows and no debt, we are well positioned to deploy capital to improve our shareholder value. As a reminder, we maintain a disciplined approach to capital allocation and how we prioritize our use of capital. Our utmost priority is making organic investments back into the business, which is evident by our annual capital expenditure and R&D plans. The second is pursuing acquisition opportunities, which we have a long track record of executing. The third is returning a portion of profits back to shareholders in the form of cash dividends and our fourth priority is that our Board may authorize share repurchase programs. Yesterday as announced in our earnings release, our Board of Directors declared a quarterly cash dividend of $0.035 per share to be paid on May 29 to holders of record on May 18. And during the first quarter, we made share repurchases of 7.5 million under 2 board authorized share repurchase programs. We repurchased the remaining 5 million under a $10 million share repurchase program that was authorized by the Board of Directors in November of 2025. And in March 2026, the Board authorized a new $10 million repurchase program, and we made 2.5 million of repurchases under this plan during the first quarter, and we've continued to make repurchases during the second quarter. This program will terminate on the earlier of September 12, 2026 or when the maximum dollar amount under the program has been extended. We may suspend or discontinue making purchases under the program at any time. And I'll finish up this morning by just recapping our financial outlook for 2026, which we are reiterating the guidance that we previously announced in February. We continue to expect our consolidated revenues to range between $323 million and $330 million; net income to range between $20.4 million and $22.8 million; adjusted EBITDA to range between $73 million and $77 million; and capital expenditures to range between $31 million and $34 million. For the second quarter, we expect our revenue growth rate will approximate 9.5% and adjusted EBITDA margin will approximate 23%. Consistent with our operating budget for the year, we have several planned operating expenses that will begin in the second quarter, including higher labor costs, higher marketing costs from trade show, sponsorship and attendance and new technology investments to support our infrastructure, among others. In addition, our strong performance in the first quarter provides us with additional capacity to accelerate investments towards several initiatives, such as our career networks. These guidance expectations do not include the impact of any acquisitions or dispositions that we may complete during the year, gains or losses from changes in the fair value of nonmarketable equity investments or contingent consideration or impairment of long-lived assets that we may complete during the year. That's all I have for today. Thanks for your time this morning. And Bobby, I'll go ahead and turn the call back over to you for some more updates.

Thank you, Scotty. I'm going to start this section of the call as we usually do with some business updates that highlight successes we've achieved in the learning credentialing and scheduling areas, along with updates on our career networks. Let's start with the learning product family, which includes the competency suite. Many customers are increasingly taking advantage of the opportunity to purchase a bundle of several of our most popular workforce applications and content libraries, which we call the competency suite. Customers purchase a subscription of the competency suite for all of their employees that are applicable, particularly the clinical staff, which comes with unlimited use. We saw strong momentum of this product in the first quarter with a 17.3% increase in revenues achieved. Our American Red Cross Resuscitation Suite continues to be in demand by customers. In the first quarter, we provided the marketplace with 18 updated courses, which included education content in our BLS, ALS and PALS programs. The updated content was deployed simultaneously across the entire customer network in a single day, all aligned to the new core science guidelines. Among the sales successes we had in Q1 with the resuscitation suite was a decision by Cedars-Sinai Medical Center to renew and expand their number of users by 50%. We also informed us that the expansion will be beneficial as they have been named the official medical provider to the 2028 L.A. Olympic and Paralympic games. That's super exciting for our teams as well. Now let's move to credentialing where our flagship product CredentialStream continued its strong menu in the first quarter. Revenues from sales of CredentialStream in the first quarter were up approximately 19% over the same quarter last year. One thing we love to see is to see our customers growing along with us and some of our customers meaningfully expanded through the M&A last year. In fact, 2 of our largest CredentialStream sales in the quarter were significant expansions due to M&A and enterprise-wide standardization, on CredentialStream. We take it as a strong but of confidence on our customers trust and rely on CredentialStream so much as a system of record that they choose to stop using solutions from our competitors and standardize on CredentialStream when they expand their operations. We are dedicated to repaying that mode of confidence by helping these customers improve their operating results by reducing the time it takes to onboard enroll credential and privilege their physicians. There's just huge economic benefit when a health system or one of our customers can show demonstrable improvement in the time to revenue on these physicians. We believe our software plays an essential role in getting that outcome. Virsys12, which we recently acquired in order to expand our market share, that product offering and expertise in the payer credentialing space also delivered one of our top 3 credentialing wins in the quarter. We're still in the earlier phases of our expansion to the payer market, and we are pleased to see Virsys12 already contributing to that effort. Let's move to scheduling, where our core product, ShiftWizard, continues to deliver strong revenue growth with first quarter revenues up approximately 29% versus the first quarter of the previous year. It continues to be our top-performing product in our scheduling application suite. Our top 2 ShiftWizard deals in the quarter were once again take out of a competitor that is horizontally focused that is only focused on health care. Our sales leaders attribute these wins to the fact that our growing ShiftWizard customer base is increasingly touting the value of the health care specific solution that ShiftWizard provides. When the rubber hits the road, scheduling and staffing clinicians are simply different than scheduling, the labor pool for retail or factory shifts and the market is taking note of that. Now let's turn to our career networks. They include my myClinicalExchange, NurseGrid and my CNA jobs. Importantly, career networks directly benefit both individual health care professionals as well as the health organizations seeking to employ and engage them. For individuals, HealthStream career network serve as a career catalyst through every stage of their pre-professional and professional journey. Last year alone, myClinicalExchange connected over 364,000 nursing and allied health students to clinical placements. NurseGrid, the #1 app for nurses in the Apple App Store, engaged over 683,000 monthly active users and myCNA jobs, which connected approximately 70% of of America's direct care workforce in the home space. In doing so, these solutions guided caregivers through every stage of their career journey, helping them discover their path and build meaningful professional relationships, access focused learning and advance to what's next in their career. For health care organizations, our career networks provide employers with direct access to the largest, most engaged audience of nurses and caregivers through targeted recruitment, development pathways and in-app promotion. myClinicalExchange served as the first touch point for helping over 715 health organizations and over 1,900 schools seeking to place nurses and allied health students into clinical rotations. NurseGrid was utilized by nurses in approximately 37,000 unique clinical sites as NurseGrid users manage their professional calendars and engagement across those sites. Finally, myCNA jobs helped over 8,000 health care organizations access our home caregiver CNA community to promote work and learning opportunities. To date, the usage of our career networks has created over 450,000 hStream IDs and counting among students, nurses and allied health workers. In aggregate, Career Networks contributed approximately $3.8 million in the quarter. While this is modest compared to the company's total revenue, we believe that growth potential, differentiation and diversification of Career Networks makes them an important area for incremental investment. We are already enrolling some of the profits from the quarter's outperformance into new sales hires for this area, the Career Networks and into scaling the 3 solutions. I'm pleased to announce the promotion of Michael Collier as we wrap up this quarter's news from Executive Vice President, Corporate Strategy Development and Operations to Chief Operating Officer and Executive Vice President. In this expanded role, Michael will lead Enterprise Operations across HealthStream, including customer experience, corporate development and M&A, implementations, legal, human resources and other critical areas, he's taken on a lot. He also served as executive sponsor for the company's AI transformation, driving AI readiness across operational teams. Since joining HealthStream in 2011, Michael has been instrumental in our growth, including leading more than 2 dozen successful acquisitions. We look forward to his continued leadership in this expanded capacity. Before we move on, I want to remind our shareholders and investors that if you're already a shareholder, then you know that our Annual Shareholders Meeting is scheduled to take place virtually on Thursday, May 28, at 2:00 p.m. Central. Notifications of the meeting and access to the proxy statement, 10-K and show a letter were sent out on April 13. We encourage you to vote your shares and participate in the future of our company. And now I want to close the same reminder I share with you every quarter. If you are interested in a highly and recurring revenue, a profitable health care technology company that expects to deliver growth that HealthStream may be the right investment for you. If you're interested in a company whose core user base, the clinical workforce expanding faster than any other sector in the job market then maybe HealthStream is the right investment for you. if you like a company whose software serves in the system of record on behalf of health care customers in HealthStream may be a company for you. If you favor ecosystems over point solutions then maybe HealthStream is the right investment for you. For all of these reasons, HealthStream is positioned for another exciting year, helping the nation's top health systems find, develop, credential, schedule, onboard and retain this growing health care workforce. Maybe HealthStream is the right investment for you. I'll turn it over to our sponsor and the operator to begin the Q&A session. Thank you.

[Operator Instructions] Our first question today is from Matt Hewitt with Craig-Hallum Capital Group.

Congratulations on the strong start of the year. Maybe first up, obviously, a nice pop in gross margin sounds like some of the acquisitions or the acquisitions we're aiding in that. Should we anticipate a little bit more lift here in Q2? And longer term, how could that play out? I mean, are you anticipating annual improvement in gross margins? Or is it more about driving operating leverage as you kind of go forward?

Scotty, I'll let you take that one to start.

Yes. Really, Matt, no significant expectation of improvement in gross margin. I think the 65.8% what we delivered in Q1 was probably a little bit ahead of where we expected to be in the quarter, and it's just revenue mix got a little bit of improvement in revenue in the first quarter, a variety of things. Some of that's timing things that we anticipated to come in and say, Q2 or Q3 kind of move forward in the year. Some of that's just early activations from customers that we had sold in Q4 some consumption-based revenue, things like that, we're pulling forward. So we got a little bit of improvement in margin because of that. Some other ambitions for moving to the cloud could compare margins a little bit over time as it makes some of those transitions, but that's still a good ways in front of us to see how that plays out, but that's just something that's on our to-do list for this year to begin this year anyway.

Got it. And then maybe a question for you, Bobby, since you addressed it in your prepared remarks, but you spoke to how AI is expected to drive increasing efficiencies with nurses. What do you think will be the downstream effect of that? Will that allow them more time to care for patients? Will that allow more time for them to work on their training and education and those types of things from a hospital's perspective? Does that mean if the nurses are becoming more efficient, maybe they don't need to hire as many? I'm just trying to think what the downstream effects of AI adoption by the nursing group would be.

Yes. Overall, we see a shortage of nurses and we see the early successes of the deployment of AI in our customer base are around ambient listening and ambient listening definitely frees up more time for the nurses and caregivers to spend with patients, which I think is greatly appreciated by all patients and helping the health systems put a more friendly face on their adoption of technology. So I think the early use and adoption is in areas that will directly impact the patient experience in a positive way. As far as demand for nurses go, I and every report that I read, seem to think that there's far more demand than there will be supply for the next 5 years plus. And so I don't see fewer caregivers. I see more and a better opportunity to be more personalized in the care delivery. So we view that as an opportunity to be a close allied to all those health systems. We've kind of continued to expand the value that we provide by these career networks, helping house tools not just develop and retain the ones they have and, say, for example, through our learning capabilities, but now helping find, identify, match new talents for them to employ. So we're certainly seeing more of the continuum of the workforce need and at a time of great need for more workforce. So we think we're well positioned with the mixture of our product sets to be a great ally to these health systems.

Our next question is from John Pinney with Canaccord Genuity.

It's Richard Close here. Just Scott, maybe a question on the revenue, $3.4 million acquired revenue. I'm curious, is it okay to annualize that to get to $13.6 million expected contribution from the acquisitions this year? I'm just trying to get a sense of like the organic growth that is embedded in the annual guidance.

Yes. I believe our expectation we mentioned this, I think on last quarter's call was for the 2 acquisitions, we were targeting around $13 million for the full year. So maybe the annualization of Q1 might be slightly ahead of that $13 million, but I think $13 million is where we would still try to forecast it too.

Okay. Great. That's helpful. And then you've been providing some, I guess, commentary on the legacy license drag in the past. I'm just curious if there's any update in terms of what the impact there was in the first quarter?

Yes. I think let me pull up my remarks, but I think it was around total -- one thing we did disclose this quarter was the amount of revenue from those legacy applications in the quarter. I think it was around $7.6 million. The decrease was, I think, around just 16%, 17% versus first quarter of last year. So I'll try to give a little more color on the magnitude of that bucket of revenue relative to consolidated revenue and also the continued rate of decline. But again, we continue to look for opportunities to migrate those customers to the new applications. So we do see some trade-offs there in that decline. Some of that's moving into the credential stream and ShiftWizard, but there's still some attrition going on as well.

Okay. And then I guess my final question, clearly, if you annualize the first quarter EBITDA gets you above the high end of the annual range. So I appreciate you calling out investments. Maybe a little bit more details on those investments and the timing of them? Is it like spread out all throughout the year? Just trying to better understand like what the cadence of EBITDA will be 2Q through 4Q.

Yes, let me start and then Scotty can add some color to it. I think the first area of investment we looked at was we had a budgeted plan as we ended the year to hire in the sales organization. And specifically, we've decided after this Q1 performance that we're going to add to that original plan. And so -- and even more specifically in the Career Networks area, we think the products warrant a stronger and bigger sales organization. So we're going to go ahead and start building that in the first half of the year, particularly in Q2. So from a timing standpoint, we're going to post some new positions in the sales area around our Career Networks and try to hire them. Secondarily, the area is a high-growth area for us. And to keep it current and stay with it, we're going to increase our planned investments in the technology infrastructure specifically around my clinical exchange. We've got some work to do there. That was an acquired product originally. We've continued to enhance it. This will give us a chance to enhance it even faster and expand it. The constituent base for that is growing rapidly. And we want to make sure that it meets the needs of that expanding market. We've had some unique opportunities in the market, where we think we're well positioned against some competitors there. And so now is the time to both invest in the sales organization and the technical infrastructure for that category of product and even more specifically -- so that's career networks in general, but more specifically, even my clinical exchange, we're looking for putting more into the tech stack there as well. So remember, that's interesting software. It has 3 constituent audiences. The students are a user, the nursing schools are a user and the health care orgs are users. So it's an interesting kind of network effect piece of software that has a kind of a market effect as the school adopted by hospitals in the region adopted and not get the students to use it as well. So there's a lot there to do technologically, and we're going to go ahead and increase our rate of investment in that tech stack.

Is that front loaded into the second quarter? Or is all that spread out sort of through...

At that part of the spread out, it will include a mixture of CapEx and OpEx to enhance the platform, the application suite. The sales team will be as fast as we can hire and onboard them. So -- and we already have several open positions in the sales team, we're trying to fill. So we're we're using some outside recruitment to go faster there as well as our incredible internal teams to try to find the talent we need to staff it up. I'd like to see that be front half loaded on the sales organization so that we might get some back half benefit. Certainly, we'll get benefit early next year, but sales people take a little bit of time to ramp up and get productive and closing deals.

[Operator Instructions] And our next question comes from Vince Colicchio from Barrington Research.

Bobby, what differentiated ShiftWizard in the competitive takeout wins? And were any of the large -- any of the wins involving large enterprises of ShiftWizard in the quarter?

On a relative basis, we did have some larger wins. They're not massive systems, but a 10,000 employee system went are ShiftWizard in the quarter. That was a huge win. And so yes, we're seeing more of the larger to medium-sized -- medium, large, I'll call them, not the super sized health systems make that decision. That was nice to see a couple of wins there, yes. So just in general, we think the -- as I mentioned on the call, the vertical specific nature of the software, is just, we think, more appropriate for the environment. And we have a great long-term vision for the software as well. We're starting to outline a little bit more of that on some of the work we're doing to work to integrate our career networks with our scheduling systems, which aren't done yet, but I think we're getting some excitement around the future direction of where we're going with this platform, integrating both our applications and hopefully, also our career networks. And so there's some positive energy around that messaging as well.

And can you give us an update on your bundling effort in the small hospital market and somewhat related, how is the competency suite doing in the competency center doing in that part of the market?

In the small market, we're seeing a little bit of uptake. We have -- we created several what we call market bundles. These are specific to the skilled nursing space, the long-term care space, the small hospital space that are called the critical access hospitals. We're seeing some uptake. We're wrapping. We're investing in the sales team there and getting some good bundle selling. And so we're pleased with that. It's the bigger bundle as you point out in the company suite that are really helping drive growth. But I like adding the users of those smaller clinics facilities because we're an ecosystem. We want all these health care professionals because they may change jobs over time. We want them in our network even at the small hospitals, but the revenue growth is coming from, say, the bundling of the competency suite to the mid-market and bigger health systems where we're seeing an uptick in the resuscitation suite when we see a medium to large health system switch to the Red Cross solution. And so the actual -- I think the revenue growth contributions are coming from the mid-market and above. But the small markets are very important to us. We're getting much better at both having the appropriate mix of products for them. And we view the market holistically like I think a physician in an urban or rural market are important to have in our network as well as the nurses in these rural centers, because, again, they do -- they are mobile over their careers, and we think of it as servicing the totality of the health care workforce, not just the urban centers.

I'm showing no further questions at this time. So I would now like to turn it back to CEO, Bobby Frist, for closing remarks.

Well, thank you, everyone, and especially to our -- a little over 1,100 employees who are delivering these great results. We have an exciting year in front of us and look forward to reporting the next earnings report here in another 90 days or so. Thank you all. We'll see you throughout the quarter.

Thank you for your participation in today's conference. This does conclude the program, and you may now disconnect.